All too often, we see cases where failure to properly document a transaction or keep good records is a taxpayer’s undoing. A case recently handed down by the Tax Court illustrates how that can happen. In Moore v. Commissioner the taxpayer sought to expand his tax preparation business. To finance that expansion, Mr. Moore was able…
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For a few months, the short and mid-term applicable federal rates have been on the heels of one another. These rates ride with treasury rates and the economy in general. For some reason, here lately the mid-term rates have been lower on occasion than the short-term rates. I even caught myself thinking, is this a…
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Offshore and domestic asset protection trusts (“APT”) have been around for a while. Currently, there are seventeen states that allow a person to contribute assets to trust for their own benefit (i.e. a self-settled trust) and exempt those assets from claims of their own creditors subject to certain statutes of limitations and exception creditors. Other than…
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Overview The United States Supreme Court issued a unanimous opinion on June 21, 2019 in North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust ruling that a trust beneficiary’s residence alone is not sufficient grounds for a state to tax a trust’s undistributed income. This decision disallowed the assessment of more than…
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This week, I have decided to take a break from our normal more technical writing and discuss some recent celebrity estate planning blunders that have come to light. Not only are these cases interesting and entertaining, but they also can provide valuable lessons when it comes to estate planning. In a previous article, I wrote…
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After the Tax Cuts and Jobs Act which came into effect in 2018, charitable deduction planning has changed. This is a result of a handful of changes, but the primary changes for purposes of this discussion relate to a doubling of the standard exemption, elimination of most itemized deductions, and reduction in individual income tax…
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Are assets transferred by your parents into a trust for your benefit subject to your tax liabilities? In general, no, provided the trust has the proper spendthrift language. Longstanding common law has recognized spendthrift clauses in trusts which restrain voluntary alienation of trust assets, thereby preventing a beneficiary’s creditors from reaching trust assets to satisfy…
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The Ninth Circuit recently upheld a 2016 Tax Court case that the charitable deduction for estate taxes was limited to the post-death value of the property actually received by the charity rather than the value of such property that was included in the decedent’s gross estate. Following its decision in Ahmanson Foundation v. U.S., 674…
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The Mississippi House of Representatives is currently considering a pair of bills that could have a major impact on trust and estates in Mississippi. The bills, H.B. 1375 and H.B. 1425, are the product of a study committee formed by the Secretary of State and touch on a broad range of subjects, including non-probate transfers, transfer…
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Whenever I attend a large conference, I try to take some time afterwards to consider the most important takeaways. Having just returned from the 53rd Annual Heckerling Institute of Estate Planning which was held from January 14-19, 2019, I spent the last week reviewing the conference materials and my notes. From this, I have compiled…
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