Thursday, October 30, 2014

The IRS has released inflation-adjusted numbers for several estate and gift transfer tax items for 2015. The following items are included within this release:

• The “unified credit” or lifetime gift tax and estate tax exclusion will increase from $5,340,000 to $5,430,000 in 2015.

• The generation-skipping transfer tax exemption will also increase from $5,340,000 to $5,430,000 in 2015.

• The gift tax annual exclusion will not increase for 2015 and remains at $14,000.

• The gift tax annual exclusion for gifts to non-citizens spouses will increase from $145,000 to $147,000 for 2015.

Additional information on these and other inflation-adjusted numbers for 2015 can be found in Revenue Procedure 2014-61.

Thursday, October 30, 2014

82980840In the case, In re Indenture of Trust dated January 13, 1964, the Settlor’s grandson Milton learned that, just like on the playground, there are no take backs, even when the trust for his benefit contained a spendthrift provision that prohibited voluntary and involuntary transfer of his interest. As the blog, Dumb Little Man Tips for Life, describes the rule, “Once you give something, you can’t ask for it back. Whether it’s a physical gift, a gift of money, or a gift of time, asking for a takeback is pointless. It shows bad faith and makes you untrustworthy.”

While it may seem counter-intuitive to the purpose of a spendthrift provision, in certain circumstances, it may be desirable for a beneficiary of a spendthrift trust to make an assignment of his or her interest in the trust to accomplish other estate planning goals.

The trust at issue was created for the benefit of the Settlor’s three grandchildren, Milton, Steven and Carrie, and included a spendthrift provision prohibiting voluntary and involuntary transfer of a beneficiary’s interest in the trust. In 2000, Milton assigned his entire interest in the trust to his siblings, as trustees of a continuing trust for the benefit of their children, and the trustee distributed $75,000 to Milton in return for this assignment. (more…)

Wednesday, October 22, 2014

The 7520 rate for November is holding steady at 2.2%.

The November 2014 Applicable Federal Interest Rates can be found here.

Tuesday, October 21, 2014

We would like to congratulate Steve Daiker, who is succeeding Frank McGaughey as leader of the Private Client CSG. Steve focuses his practice on estate and gift tax planning for high net-worth individuals and succession planning for owners of privately-held businesses.

Congratulations to Steve and thank you to Frank for his years of leadership.  Click here for a full list of internal leadership changes at Bryan Cave.

Daiker.8378McGaughey.8256W

 

Monday, October 13, 2014

On Thursday, Federal Reserve Vice Chairman Stanley Fischer announced the Fed will likely start raising interest rates around the middle of next year. The Fed has kept rates near zero since 2008 and has nearly quadrupled its balance sheet to more than $4 trillion through a series of bond purchase programs in an effort to push borrowing costs down further and boost hiring. The Fed is expected to wrap up its bond buying program later this month. Minutes of the Fed’s September policy meeting, released on Wednesday, showed several officials worried that troubling global growth and a stronger dollar could undercut the U.S. recovery.

Friday, October 10, 2014

samesexmarriageIn light of all of the changes in same-sex marriage laws happening over the past couple of weeks, we thought we’d share some of the information presented by our attorneys at the CLE presentation in our St. Louis office on Wednesday morning, “Same Sex, Different Day:  Estate Planning for Same Sex Married Couples (Post Windsor decision), co-sponsored by the Bryan Cave LGBT Affinity Group.  Presenters were Kimberly Civins, Stephen Daiker, and Douglas Stanley, along with Tony Rothert from the ACLU of Eastern Missouri.

Get income tax advice regarding amending returns and filing returns going forward

The sooner the better, as there is a 3 year statute of limitations for amending returns if filing as married achieves a better tax result!

Get estate documents reviewed/updated to take advantage of spousal tax reduction opportunities

Double-check beneficiary designations for retirement plans

Remember–spouses have to consent on some retirement plans to someone else being named as beneficiary!

Review any marital or co-habitation agreements regarding income tax benefits affecting property rights

Thursday, October 9, 2014

guysheartsIn light of all of the changes in same-sex marriage laws happening over the past couple of weeks, we thought we’d share some of the information presented by our attorneys at the CLE presentation in our St. Louis office on Wednesday morning, “Same Sex, Different Day:  Estate Planning for Same Sex Married Couples (Post Windsor decision), co-sponsored by the Bryan Cave LGBT Affinity Group.  Presenters were Kimberly Civins, Stephen Daiker, and Douglas Stanley, along with Tony Rothert from the ACLU of Eastern Missouri.

Plan, plan, plan:

  • Will/Living Trust
  • Healthcare Directives
  • Pre-nuptial Agreement
  • Beneficiary Designations
  • Asset re-titling

Consider income tax consequences

Consider whether various federal agencies will honor marriage based on residence state

Consider state of residence laws regarding other family issues such as adoption and divorce

Consider ceremony jurisdiction (California, Delaware, DC, Hawaii, Minnesota and Vermont are favored because of favorable divorce laws)

  • These states will issue divorces for couples married in the state even if they don’t reside there at the time of the divorce, which could be important if your state of residence doesn’t recognize same-sex marriage and, therefore, may not issue you a divorce
Friday, October 3, 2014

conservationThe increasingly popular conservation easement charitable deduction allows a landowner to deduct a portion of the value of a piece of land by limiting the land’s use.  In a typical scenario, a landowner records a conservation easement on the land and then donates the conservation easement to a conservation organization.  The landowner receives an appraisal of the value of (i) the developable land and (ii) the land once the conservation easement has been recorded.  The landowner then deducts the difference as a charitable contribution.  In such a scenario, Section 170 of the tax code allows a deduction as long as the easement is perpetual, made to a qualified organization, and for a valid conservation purpose.

The typical scenario is changing, however, as more and more landowners are holding their property in trust.  When the land is held in trust, it is more difficult to deduct a conservation easement. (more…)

Thursday, September 25, 2014

Originally posted on BryanCaveFiduciaryLitigation.com

A recent case from Connecticut, Tyler v. Tyler, involved a claim to modify a trust based on undue influence. Few details are provided in the opinion about the requested modification but it is a curious claim. If undue influence is exerted over the grantor, then isn’t the contested trust or amendment invalid? Why or how should a trust that is the product of undue influence be modified to reflect the true intent of the grantor? (more…)

Friday, September 19, 2014

On Wednesday, the Federal Reserve renewed its pledge to keep interest rates near-zero for a “considerable time,” but the Fed also indicated it could raise borrowing costs faster than expected.  In a statement after a two-day meeting of its policy-setting Federal Open Market Committee, the Fed announced a further $10 billion reduction in its monthly bond purchases, leaving the program on course to be shuttered next month.  The Fed also released a new blueprint for how it plans to exit the extraordinary monetary stimulus it put in place to combat the 2007-09 financial crisis and recession.