Common Stock Investments Case Summary

An estate freeze with respect to Phyllis and Freddie’s family business corporation allows them to fix the value of their shares in the business at a particular date and create an opportunity for Phyllis and Freddie to transfer the future growth of a business, investments, or other assets to other taxpayers, children or other designated beneficiaries. By freezing a beneficiary’s estate, they will have to pay tax on the growth which results in a tax deferral until the beneficiary passes away or they will have to dispose of his/her shares.

What potential tax problems might result if an individual pursues his plan to transfer 40% of the corporate stock to his two children as gifts? Would it make any difference if an individual received all voting stock and had the new corporation transfer nonvoting stock to his children?

While grantor trusts are commonly created as part of an estate plan, estate planners may inadvertently be creating income tax issues that trustees and tax preparers must deal with during the administration. When the grantor of a grantor trust dies, or the grantor trust status terminates during the life of the grantor, for the most part the tax consequences are well established. What is unclear is what happens if the grantor trust had an outstanding liability to the grantor at the death of the grantor. This paper addresses the issue and how it may be treated. Part I of this paper will briefly address the history of

Fred Smith seems to be the most interesting choice to receive part of the inheritance. Fred has has had a troubled past with the law, but has changed for the better. Fred has completely left his crime days behind him.

her estate. If they ever came to harm and died, he would be a very rich young

Sadly, this isn't the case, as every estate goes through the process, as it must be determined who gets his or her assets. Debts must be paid, assets distributed and the final wishes of the deceased respected, when possible. There are laws governing the process, and they tend to be complex.

The American Taxpayer Relief Act of 2012 created a combined estate and gift tax rate of 40% while raising the estate tax exemption to $5.43 million in 2015. The gift exclusion stays at $14,000 in 2015. These changes generate some estate-planning benefits that most people haven’t yet realize. For example, many wealthy people didn 't bother trying to minimize capital gains in the past because the lower tax rate of 15% was better than paying 50% in estate taxes. Now people can benefit by choosing which assets they keep until death more carefully. Appreciated assets can be held until death and might fall within the $5.43 million exemption. This could be especially important when realizing capital gains could be subject to a higher, nearly 24%

Our office represents Dearing Dee English. Ms. English declines to act as a successor trustee of the Survivor’s Trust, Meyers Family Trust Agreement dated April 10, 1992. Attorney Jerry Cluff represents David Meyers, successor trustee of the Decedent’s and Q-Tip Trusts, Meyer’s Family Trust Agreement dated April 10, 1992. Mr. Cluff’s office phone number is (619) -222-0503.

Willis and Wanda Notimeleft have a net estate of $8.5 million dollars. They are 87 and 86 years of age, respectively. They have 3 children, Daryl (56 YOA), Darlene (54 YOA), and Derelict (49 YOA). They desire to pass their property on to their children and do not believe in giving money to charities. Daryl is a priest who recently was honored by the Pope at a ceremony at the Vatican. He has one child, Ohio, who nobody knows about except the immediate family.

Thankfully, there are ways to minimize the amount of probate your family and friends will have to go through. Work with an estate lawyer to find alternate ways to divide your

Assuming no other gifts have been previously made, Ann and Bob can use the unified credit toward part of their gift. Ann and Bob can combine their exclusion and give each donee $28M each year. If Ann and Bob give any amount to one individual over $28M in one year, as the donnee, Ann and Bob will be required to file a federal gift tax return. The excess above the annual exclusion results in the donee incurring the gift tax and offsets the life exclusion of $5.34M per donee. If they give each child and grandchild $1MM, that equals $22MM in gifts. Regardless of whether or not Ann and Bob split the gift, they have exceeded the exemption equivalent of $5.43MM per donee. Therefore, the tentative tax is $345,800 plus 40% of the excess over $1MM.

Bruce and Faith Johnston are 64 and 58 respectively and plan to retire within the next 2 years. They have a combined net worth of $456,990 and if they accomplish their goals of paying off their outstanding debt and their mortgage, their net worth will increase. Their current monthly income sums to $5,666 and their total monthly expenses totals to around $4,500 with $1,000 of it as expenses for subsidizing living expenses for their two children as a result of a “late parenthood”. With the idea of retiring within the next two years, their main source of income following retirement is the $235,000 in Bruce’s company profit sharing plan, and the potential inheritance of $150,000 from Faith’s father.

The living revocable trust is the one used most often. The benefits of a trust like this include: helping dodge probate, reduce estate taxation, and maintain asset management when the owner or initiator of the trust becomes incapacitated or dies. Yes, technically trusts don't have official owners, but this description makes it much easier to understand. Today we are going to focus on establishing and

Sadly, they don't stop to take into consideration the fact that doing so makes the asset a part of the recipient's estate, thus the child's partner may be entitled to a share of it. For this reason, it is best to place these assets in a trust, naming the desired recipient as the sole beneficiary of the trust. This ensures the spouse will not receive any portion of it, and it is best to consult an attorney together with the person providing the asset to ensure all steps are carried out properly.

Estate planning enables individuals and business owners to plan for the future in cases when unforeseeable events occur. If an unforeseeable demise does occur, the business will continue to thrive and business assets will be protected from creditor and government seizure. A few of the more prominent benefits of estate planning include the following: succession planning, future planning, and minimizing tax liability. All three benefits significantly correlate with one another since deciding business successors lead to anticipated future success and figuring out what to do with future assets in the present helps minimize future tax liability. By creating trusts, business owners can still appreciate assets without the need to pay heavy taxes on the additional value. However, it is crucial to understand that estate planning differs among business entities in terms of minimizing tax liability (Agu 2016).