Often, advisors ask me to help explain the benefits and uses of trusts to their clients. In response, I’ve developed a
It appears that the Section 7520 rate has never been this low. Coinciding with what may be the waning of the $5,120,000 lifetime gift tax exclusion, this presents a tremendous transfer tax planning opporutunities for the second half of 2012.
On December 21, 2011, Governor Kasich signed Senate Bill 117 into law. The bill became effective March 21, 2012. In addition to changes in state trust and probate laws, the bill adopts the Uniform Power of Attorney Act (UPOAA) with a few additions that are specific to Ohio. As a result, financial advisors can add value to their clients by making sure their client’s POA’s are updated to reflect the changes in the law.
IRC Section 7520 Rate = 1.4% AFRs Annual Semi-Annual Quarterly Monthly Short-Term (0-3) 0.25% 0.25% 0.25% 0.25% Mid-Term (3-9)
Current tax law provides for Estate/Gift/GST Tax exemptions of $5 million per person ($10 million for married couple) through 2012. This means that individuals can transfer significant amounts of wealth free of estate, gift and GST tax. However, these exemptions are scheduled to be significantly reduced to $1 million ($2 million) beginning on Jan 1, 2013, leaving only a limited time to optimize any gifting strategies to capitalize on the high exemptions. However, many people aren’t comfortable giving away such large amounts, concerned that they may need it for themselves in the future. This post outlines some irrevocable trusts strategies to help deal with that concern.
Rev. Rul. 2011-28 Clarifies that Power of Substitution creating Grantor Trust treatment does not also cause inclusion of life insurance in gross estate under facts presented in the Ruling.
Ohio Estate Tax repeal presents many new planning opportunities and requires a review and evaluation of pre-repeal planning. This posts discusses some new options.
Section 7520 Rate = 1.6% AFRs Annual Semi-Annual Quarterly Monthly Short-Term (0-3) 0.20% 0.20% 0.20% 0.20% Mid-Term
Long notorius for having the lowest estate tax exemption of the 17 states with estate taxes separate from the federal estate tax, this repeal provides an obvious and significant tax benefit. From a more technical perspective, Ohio estate tax repeal also has many opportunities to better accomplish a client’s goals. This post outlines the need to carefully review formula provisions in existing trusts to be sure they accomplish the client’s goals.
Rev. Proc. 2011-52 was issued setting forth the inflation adjustmehts required under various sections of the Internal Revenue Code. A few of the more important adjustments for estate planning are listed in this post.