Inheritance Tax Analysis

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

VII. Implement financial planning recommendations, or refer clients to someone who can assist them with plan implementation.

Furthermore, since some articles in this blog indicated that property left in a will may be sold to cover expenses, this article reveals the process of how that happens. The executor doesn’t get to pick which beneficiary loses a bequest. The decedent or probate court makes that decision through the will or legal statute.

Estates and interests in land are usually recognised by common law, although there many other interests that are secured and enforceable in accordance with equitable rights.

This is the reason the IRS will not include the assets in the estate because legally speaking, they are no longer owned by the trustor. In addition, irrevocable trusts must be planned to avoid the IRS finding the trust invalid. On average, trusts must be established at least 3 years before death. There are some exceptions, but this is the general rule.” (IRS publication 559)

At the core of an estate plan is a will. A will allows a person to specify who will receive their assets after their death. It also

There are four primary forms of entities available to Penelope, Mark, and John. Notably, they include a limited liability company option, partnership, or a corporation (especially S-Corporation). The sole proprietorship option is not ideal in this case as it is run by an individual. In most cases, it is limited to sole benefits (Schwidetzky & Brown, 2015). However, the three are highly specialized and knowledgeable in their areas of expertise. Besides, the liabilities associated with sole proprietorship are personal. The

We usually think of a person’s will as a financial document used to make sure his or her estate is distributed according to his or her wishes. The will can also be used as a constructive tool or a destructive weapon to reach other goals, which often do not involve money. Eddy M. Elmer, in his article, “The Psychological Motives of the Last Will and Testament” describes the use of wills. Used positively, a will can be used to foster a sense of continuity for the survivors and to preserve family relationships. Used negatively, through imposed conditions, disinheritance, unequal treatment, and attaching “strings,” a will can be used to control from the grave and continue dysfunction in a family.

Additionally, a living trust can help to keep your affairs and the affairs of your family out of court and out of the papers. However, a living trust is more expensive to enact and requires maintenance from its enactment through its conclusion. If your elderly loved one’s estate can be managed and distributed simply, in other words if there is little property and assets to be distributed, then a drawing up a will can suffice. If, however, there are multiple properties and assets, an abiding need for privacy and to keep the estate out of the courts, or the need to distribute property and assets over time to heirs who are currently minors, than a living trust may be the best choice. Either way, estate planning should not be put

Finally, the estate was at the point where I could distribute estate property. Since the beneficiaries weren’t expecting much from the estate, they were about to receive an unexpected surprise. However, I couldn’t let the excitement affect the work that still remains.

The estate tax is unique in that it is payable one time and only after the grantor is gone. The effect of the tax falls on the survivors and is not a burden while the grantor is alive. The IRS Code prevision allows a federal estate tax marital deduction, which is when a person transfers property at death to his or her surviving spouse free of federal estate tax. The deduction is available when property passes to the surviving spouse either as an outright gift in the Will or when property is left in a marital trust as a benefit for the surviving spouse. It is considered by many to be the most important estate tax saving device available. The following provides a depiction of the history of the estate tax in the US as well as the

A Will assists your family members and a solicitor during periods of unexpected ailment. In the Will, you can appoint a trusted person to make significant decisions on medical care or funeral expenditures. Moreover, you can include the name of the individual whom you would wish to be an executor of your bequest. An executor is an important person in the allocation of the inheritance, and he or she will work together with a solicitor, to ensure appropriate execution of your desires.

1) Generation skipping: Generation skipping is exactly as it sounds. In countries that allow it, many people will often choose to transfer a portion of their estate assets to their grandchildren rather than transferring the full estate directly to their immediate children. This strategy skips the second generation, and transfers the assets straight to the third generation, which saves the assets from being eventually taxed twice. Normally the assets would be taxed once when transferred from you to your children (second generation) and again when your children transfer it eventually to your grandchildren (third generation).

A living will also allows a person to state with particularity the forms of treatment are wanted and not wanted. For example, if a one does not want artificial life support, then sign the living will stating that desire. It is also important to discuss your beliefs and wishes with you family, spouse and other people whose opinions you respect, such as clergy,

Advising the customer on the relative merits of investing in (insert investment name), and to arrange such investments, meets the customer’s demands and needs.