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Treasury Green Book Proposal — Limit Duration of GST Exemption

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 183 of the Green Book and is re-printed here for your convenience:

LIMIT DURATION OF GENERATION-SKIPPING TRANSFER (GST) TAX EXEMPTION

Current Law

GST tax is imposed on gifts and bequests to transferees who are two or more generations younger than the transferor. The GST tax was enacted to prevent the avoidance of estate and gift taxes through the use of a trust that gives successive life interests to multiple generations of beneficiaries. In such a trust, no estate tax would be incurred as beneficiaries died, because their respective life interests would die with them and thus would cause no inclusion of the

Treasury Green Book Proposal — GRATs and Other Grantor Trusts

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 180 of the Green Book and is re-printed here for your convenience:

MODIFY TRANSFER TAX RULES FOR GRANTOR RETAINED ANNUITY TRUSTS (GRATS) AND OTHER GRANTOR TRUSTS

Current Law

Section 2702 provides that, if an interest in a trust is transferred to a family member, any interest retained by the grantor is valued at zero for purposes of determining the transfer tax value of the gift to the family member(s). This rule does not apply if the retained interest is a “qualified interest.” A fixed annuity, such as the annuity interest retained by the grantor of a GRAT, is one form of qualified

Treasury Green Book Proposal — Consistency in Values

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 179 of the Green Book and is re-printed here for your convenience:

EXPAND REQUIREMENT OF CONSISTENCY IN VALUE FOR TRANSFER AND INCOME TAX PURPOSES

Current Law

Section 1014 provides that the basis of property acquired from a decedent generally is the fair market value of the property on the decedent’s date of death. Similarly, property included in the decedent’s gross estate for estate tax purposes generally must be valued at its fair market value on the date of death. Although the same valuation standard applies to both provisions, until the enactment on July 31, 2015, of the Surface Transportation and Veterans Health

California’s New Transfer On Death Deed

February 24, 2016

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As of January 1, 2016, California allows the use of a “transfer on death” deed for real property.  A TOD deed essentially allows a person to execute and record a revocable deed, which grants real property to a beneficiary upon the grantor’s death.  Introduced by Assemblyman Mike Gatto (D-Glendale) via AB 139, the TOD is effective by operation of law, the primary purpose of which is to avoid the probate process (which is onerous and expensive in California) and to reduce the need for a revocable trust for certain individuals.

San Bernardino County has posted a sample form.

While the TOD deed may be useful in limited circumstances, it does not supplant the importance of having a revocable trust plan for many individuals.

Bryan Cave Shortlisted For 2016 Magic Circle Awards

Bryan Cave has made the shortlist for the prestigious Magic Circle Awards for 2016 under the category of “International Law Firm of the Year – USA”.

The Magic Circle Awards are held annually each Spring to recognize the best advisors in the financial sector on a global scale.

Treasury Green Book Proposal — Reversion to 2009 Laws

The Department of the Treasury has released the Treasury Green Book  for Fiscal Year 2017, which provides explanations of the President’s budget proposals.  One such proposal (remember…these are just proposals, not actual changes in the law) that may affect your estate planning, if passed, is found on page 177 of the Green Book and is re-printed here for your convenience:

RESTORE THE ESTATE, GIFT, AND GENERATION-SKIPPING TRANSFER (GST) TAX PARAMETERS IN EFFECT IN 2009

Current Law

The current estate, GST, and gift tax rate is 40 percent, and each individual has a lifetime exclusion of $5 million for estate and gift tax and $5 million for GST (indexed after 2011 for inflation from 2010). The surviving spouse of a person who dies after December 31, 2010, may be eligible to increase the surviving spouse’s exclusion amount for estate and gift tax purposes by the portion of the predeceased spouse’s exclusion

Congratulations to London Private Client Services Partner, Dyke Arboneaux

dyke

 

Private Client Services Partner in London, Dyke Arboneaux, has been selected as both a speaker at the STEP Global Congress and as a judge for the 2016-2017 STEP Awards.

Dyke advises individuals, families and financial institutions on international estate planning and U.S. tax matters, with a particular emphasis in planning for clients who are exposed to both the U.S. and U.K. tax systems.

Congratulations!

IRS Postpones Filing Deadline for New Basis Reporting Requirements AGAIN

ThinkstockPhotos-186176261As part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, signed into law by President Obama on July 31, 2015, Sections 1014(f) and 6035 were enacted.

Section 1014(f) provides rules requiring that the basis of certain property acquired from a decedent may not exceed the basis of that property as finally determined for federal estate tax purposes, or, if not finally determined, as reported on a statement made under section 6035.

Section 6035 imposes new reporting requirements  for the executor of an estate of a decedent where a federal estate tax return is required to be filed.  The executor must furnish, to both the IRS and to each person who holds a legal or beneficial interest in the property listed on the estate tax return,  a statement “identifying the

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