Bryan Cave  Life Death and Taxes

Trust Bryan Cave

Gifting

Main Content

Missouri Court Of Appeals Holds That Attorney-In-Fact Violated Fiduciary Duty

With research and drafting assistance from Washington University School of Law student, Kelsey DeLong.

In Estate of Lambur, the Missouri Court of Appeals addressed the issue of whether an attorney-in-fact is permitted to gift the principal’s property to herself when the gift is not expressly authorized in the power of attorney.

In 2005, Verna Irene Lambur (“Irene”) executed a durable power of attorney naming her nephew’s wife, Anna Stidham (“Anna”), and Jackie Johnson (“Jackie”) as her attorneys-in-fact. The power of attorney granted Irene’s attorneys-in-fact the following power:

“To establish, change or revoke survivorship rights in property or accounts, beneficiary designations for life insurance, IRA and other contracts and plans, and registrations in beneficiary form; to establish ownership of property or accounts in my name with others in joint tenancy with rights of survivorship and to exercise any right I have in joint property; to exercise or decline to exercise

Federal Tax Consequences of Trust Modification/Reformation: Score One for the IRS

When is a modification or reformation of an irrevocable trust given effect for Federal tax purposes? In each of two recent private letter rulings, the government addressed the impact of a reformation and of a modification on Federal taxation of the trusts in question.  Here, we will look at a ruling favorable to the IRS.  Come back next week when we discuss a ruling in favor of the taxpayer.

In PLR 201243001, on advice of his own attorney, the Decedent’s son requested that Decedent amend her trust to eliminate the outright distribution of his inheritance, and instead to have that portion of her trust fund a continuing trust for the benefit of the son and his descendants during his lifetime, and, upon his death, to be distributed outright to his descendants upon reaching age 45. The purpose of this trust amendment was to avoid having the property that would fund

Will SCOTUS Eviscerate DOMA? What Effects Could That Have on Tax Planning?

Today and tomorrow, the U.S. Supreme Court will be hearing oral arguments in two cases that could change the scope of marriage in the United States. Today, the Court is hearing oral arguments in Hollingsworth v. Perry, and tomorrow, the Court will be hearing oral arguments in the case of United States v. Windsor.

The cases contain a myriad of questions, but if the Court decides to get past the procedural questions and issue rulings on the substance, significant changes could be in store regarding the Defense of Marriage Act (“DOMA”) and the federal treatment of same-sex marriages. For a discussion of all of the various constitutional issues the Court may address in these cases, see Erwin Chemerinsky’s article, “Chemerinsky: Same-sex marriage battle goes before the Supreme Court“.

I Want My Exemption Back! Reconsidering Gift Splitting after The American Taxpayer Relief Act of 2012

In 2012, the federal estate and gift tax exemption, which is the amount a person can give in life or pass at death before having to pay estate and gift tax, was $5,120,000 per individual. As the infamous “fiscal cliff” approached, the federal exemption was set to drop back to $1,000,000 per individual on January 1, 2013 if Congress did not pass new tax legislation. At that time, most commentators believed that Congress would compromise by lowering the exemption to $3,500,000, which was part of the Obama Administration’s tax plan.

Based on these assumptions, many clients entered into gifting plans in 2012, the primary goal of which was to use as much of the $5,120,000 exemption, or combined exemption of $10,240,000 for married couples, as possible before it was lost. Many married couples who could not give $10,240,00, transferred assets to a single spouse to allow that spouse to give

Effects of the American Taxpayer Relief Act of 2012 on Estate Planning

Unless you have been living on a tropical island with no television, cell service, or internet for the past few days, you have probably heard that the Federal government passed a new law this week, averting the “fiscal cliff” by the skin of their teeth (well, at least with respect to tax reform, it remains to be seen what will happen with spending cuts). While there are many portions of the “American Taxpayer Relief Act of 2012” (the “2012 Act”) that may apply to you (for example, see our prior post on the effects of the 2012 Act on charitable gifting), our focus now is on how the new law affects your estate planning.

The New Law

Since 2001, the transfer tax laws have been in a state of flux, with ever-changing exemptions, rates, expirations and sunsets. Now, for the first time in over a decade, the 2012 Act

To Do: Year-End Gifting. Check (or Not)

With nine days left in the year, many people are still planning how to make 2012 gifts, whether by making “annual exclusion” gifts of $13,000 per beneficiary, or by taking advantage of the 2012 gift tax exemption amount of $5,120,000. Maybe they couldn’t make up their mind before now, maybe they were waiting for the election results, or maybe they wanted to see whether the Mayan calendar was accurate before making any gifts. Whatever the reason for the last minute gifting, as the end of the year approaches, people may be tempted to make a “quick and easy” gift to their beneficiaries by simply writing a check. As the year draws to a close, however, if your gift is dependent on utilizing 2012 tax law, beware of the potential trap of making a gift by check.

A gift is not complete for tax purposes until the gift is no longer

When Should You Look a Gift Horse in the Mouth?

Contrary to the old saying, on occasion it does pay to look a gift horse in the mouth. That is the lesson learned by the donees in United States v. MacIntyre, 109 AFTR 2d 2012-XXXX, (6/7/2012), one of a number of cases brought by the government involving a 1995 sale by J. Howard Marshall II of stock in Marshall Petroleum, Inc. back to the company shortly before his death. The issue in this case is not about who is liable for the unpaid gift tax as that issue was decided in other cases discussed below and referred to as MacIntyre I and MacIntyre II. Since this case seemed to be the third strike against the donees of this indirect gift, this case is referred to as “MacIntyre III”.

The initial gift tax

Wandry v. Commissioner is a Big Win in a Defined Value Case

Wandry v. Commissioner is a Big Win in a Defined Value Case

November 13, 2012

Authored by: Tiffany McKenzie and Alan Singer

UPDATE: On November 13, in an Action on Decision (“AOD”) appearing at 2012-46 IRB, the IRS did not acquiesce to the Tax Court’s decision in Wandry upholding fixed dollar gifts of LLC interests. An AOD is a formal memorandum prepared by the IRS Office of Chief Counsel that announces the future litigation position the IRS will take with regard to the court decision addressed by the AOD.

UPDATE:  On October 17, an Order dismissing the appeal was filed, following a stipulation by the parties on October 16 that the case be dismissed with prejudice.

UPDATE:  Notice of Appeal of the Wandry case was filed with the Tax Court, with the Appeal going to the 10th Circuit Court of Appeals.  Read about the initial holding here.

For the first time, in Wandry v. Commissioner, the Tax Court approved a defined value formula clause without a charitable component. In this federal gift tax

Gifting Real Estate: A Comparison of QPRTs and Intentional Grantor Residential Trusts

As discussed in our prior post, “2012 Gift Tax Opportunities: Wait to Gift, but Do Not Wait to Plan“,  we discussed how the 2010 Tax Relief Act has provided a great opportunity for lifetime gifts to family members with a temporary increased estate and gift tax exemption of $5.12 million making these gifts potentially free of ever incurring gift or estate tax. The exemption will return to $1 million on January 1, 2013 unless Congress acts, and although most commentators think a return to $1 million is unlikely, there is a good possibility the exemption will be reduced.  However, many people are reluctant to make gifts of their liquid assets, in case they might have need of them as the get older.  Many people, therefore, are looking for ways of making a gift on a non-liquid asset, such as their home or another piece of real estate, such as

Revenue Procedure 2012-41 Sets 2013 Annual Exclusion Gift Amounts

The IRS recently released Rev. Proc. 2012-41, which, in part, announces the inflation adjusted figures for annual exclusion gifts in 2013.

According to the Revenue Procedure, “For calendar year 2013, the first $14,000 of gifts to any person (other than gifts of future interests in property) are not included in the total amount of taxable gifts under § 2503 made during that year.”

In addition, for those with a non-citizen spouse, “For calendar year 2013, the first $143,000 of gifts to a spouse who is not a citizen of the United States (other than gifts of future interests in property) are not included in the total amount of taxable gifts under §§ 2503 and 2523(i)(2) made during that year.”

The attorneys of Bryan Cave LLP make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.