Posts in Estate and Gift Tax.

While there are many new tax policy implementations that may be imminent with the new Biden administration, there are two changes in particular that estate planning attorneys are watching closely. These include (1) a reduction in the estate tax exemption and (2) an elimination of the basis step-up for inherited property. Unfortunately, there is still no way to predict exactly what will happen or when those changes will take effect, but the current climate does provide individuals with a unique opportunity to take advantage of some wealth transfer planning strategies, such as ...

Many people are aware of the federal gift tax and the federal estate tax (sometimes referred to as the ‘death tax’).  These are the transfer taxes which are imposed on transfers during life, by gift, or at death.  In 2019, a U.S. Citizen may transfer assets valued of up to $11,400,000 during their lifetime or, to the extent not used during lifetime, upon their death without paying a gift or estate tax.  The third federal transfer tax, the Generation-skipping Transfer Tax (“GST”), is often overlooked but may be of significant importance.  The applicable exclusion amount for GST ...

Authored by: John M. Jolley, Sherri L. McGirt, and Jennie Cerrati

When the 2017 Tax Cuts and Jobs Act was passed, significant changes were made to the Federal Estate, Gift and Generation Skipping Tax, the most prominent of which is the increased applicable exclusion amount, which is the amount that is excluded from a decedent's gross estate for federal estate tax purposes. The applicable exclusion amount was $5.49 million for decedent's dying and gifts made in 2017. This amount is doubled for decedent's dying and gifts made after 2017 and before 2026. It is currently $11.18 million and ...

In today's digital age, we are seeing more individuals concerned about what happens to their digital assets at their death. For example, a Broadway aficionado wanting to be certain their collection of show tunes, purchased on iTunes makes it to their grandchild. Like most areas of technology, advances in digital currency and music are outpacing the legislative change, while the Courts struggle to keep up.

An increasingly popular question posed by estate planning clients is the question of who can inherit your iTunes account? The short answer is - no-one. iTunes is a service provider ...

The Consumer Price Index was released by the Labor Department in August 2017. Not everyone anxiously awaits the release of these numbers but the experts have now made estimates of how they will impact estate, gift, and generation-skipping transfer taxes for 2018. These are not official numbers - the Internal Revenue Service will publish the official numbers later this year.

Transfer Tax Free Money - The cumulative amount you can pass tax-free (by gift or at death) is projected to increase to $5,600,000.00 per U.S. citizen (from $5,490,000.00 in 2017). In 2018 and beyond, a couple (U.S ...

There are 12.9 million acres of commercial forestland in South Carolina. More than half of the forestland is family-owned, and 82% of private owners live on the land. The state also has about 25,000 farms, which encompass 4.9 million acres. Many landowners would like to maintain their property as farmland or forestland but are tempted to capitalize on appreciating land values as development moves towards their property. Conservation easements can help owners monetize development rights while preserving property as farmland or forestland.  A conservation easement is a voluntary ...

When contemplating marriage and estate planning, frequently, individuals will enter into prenuptial (premarital) agreements to address their rights and obligations during the marriage and in the event of a divorce or death. A prenuptial agreement is a very useful tool to create a clear understanding and avoid future conflicts in either the event of divorce or death. The requirements for the enforcement of a prenuptial agreement vary from state to state, and the rules governing the rights and obligations between spouses during marriage and at death are state specific. However, in ...

Most people remember the late Leona Helmsley as the convicted tax felon famous for uttering the words "only little people pay taxes", but she is also remembered for having a will that left a $12 million trust fund for her Maltese dog, Trouble. While that is extreme, we all know the strong bond between pet and owner - such that many people refer to a pet as their child. While legally pets are considered property, to their owners, pets may be best friends and family -- and in some cases, a pet may be a person's only friend or family member. Therefore, when a person considers his or her estate ...

In June of 2016, the Internal Revenue Service (IRS) changed its procedure for granting discharges of estate tax liens and implemented centralized handling of applications for discharge. Historically, Specialty Examination Estate & Gift and Specialty Collection Advisory (Advisory) shared the responsibility for processing applications for discharge of the estate tax lien, depending on the circumstances. In June 2016, the responsibility for working all applications for discharge of the estate tax lien was transferred to Advisory and centralized in the Estate Tax Lien Group ...

This blog is intended to highlight certain aspects of the South Carolina Uniform Gift to Minors Act (the "SCUGMA"), which is found in Article 5 of Chapter 5 of Title 63 (the Children's Code) of the South Carolina Code of Laws.

In general, the SCUGMA allows a donor to make a gift of assets, such as securities, to be held in a custodian's name for the benefit of a minor without the legal expense of setting up a trust. Under the SCUGMA, the custodian must deliver or pay over the assets to the minor on his attaining the age of twenty-one (21) years. Notwithstanding this requirement, the SCUGMA also ...

The annual federal exemption amount for the estate and gift tax has been adjusted to $5,490,000.00 per individual for 2017. This means a married couple will have a combined $10,980,000.00 in 2017. The $5,490,000.00 represents the amount that each U.S. Citizen may pass, transfer tax free, in 2017. (This is the cumulative amount that may be passed during lifetime by gift and at death without federal gift or estate taxes being imposed.) Not included in this total are annual exclusion gifts, certain gifts for education and certain gifts for medical expenses. The annual exclusion amount is ...

Partnerships and LLCs are common choices of entity for family-owned businesses, due to their flexibility and the many uses to which they can be put - including pooling of family assets, succession planning, asset protection, and confidentiality of ownership.

The transfer of partnership and LLC interests among family members is subject to gift and estate tax based on the fair market value of the interests. Valuation discounts are typically applied to reduce the value (and thus the tax cost) of the transferred interests because of various restrictions imposed on the interests that ...

Over the past few years, we have seen a dramatic increase in the number of clients interested in holding assets in trust for their children. This is a trend we are noticing across the board, regardless of the size of the estate. This is not due to younger generations' lack of financial savvy or level of sophistication, but more related to the housing market bubble's bursting, uncertainty in the stock market and the fifty percent divorce rate. Parents have shown an increased concern in insulating their children's inheritance from these more prevalent pitfalls. Particularly when the ...

Family limited partnerships have long been a valuable tool of the estate planner. Although historically recognized as providing estate tax planning benefits through the discounted value of assets, these limited partnerships can also implement succession planning goals for the closely-held or family-run business, including the transition of management/leadership for the business.

Limited partnerships provide three key benefits to the business owner:

  1. a limited partnership is not subject to income tax - it is a "flow-through" entity for income tax purposes;
  2. in organizing the ...

On June 9, 2016, South Carolina became the 21st state in the country to enact a version of the Uniform Power of Attorney Act ("UPAA") when Governor Nikki R. Haley signed the South Carolina Uniform Power of Attorney Act ("SCUPAA"). The UPAA was approved by the National Conference of Commissioners on Uniform State Laws in 2006 and was intended to provide a simple way for people to deal with their property through the use of a power of attorney in case of their future incapacity.

A power of attorney creates an agency relationship in which a principal appoints or nominates an agent to perform ...

I was very saddened to hear of the passing of recording artist Prince on April 21, 2016. As I watched my social media accounts surge with tributes and song lyrics, I allowed myself to reminisce and feel nostalgic about the 1980s. Most recently, I was quite surprised to learn along with the rest of the world, that Prince died without a Will.

If a person dies without a valid Last Will and Testament it is known as dying "intestate." In each state there are laws which dictate how property passes when someone dies without a valid Will. These are commonly referred to as laws of "descent and ...

On July 31, 2015, President Obama signed into law H.R. 3236, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the "Act"). The Act now requires personal representatives/executors of an estate and other persons who are required to file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return; Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return Estate of nonresident not a citizen of the United States; or Form 706-A, United States Additional Estate Tax Return, to report the final estate tax value of ...

We have previously discussed the advantages of using a revocable trust to implement your estate plan. In this post we will discuss in greater detail the advantages of ease of administration, flexibility in valuation, discretion in the management, and lower cost. These advantages can be best understood by comparing the probate process to the administration of the typical revocable trust.

First and foremost, the administration of the revocable trust is much more efficient because accounting for the activities of the trust can be managed through the cooperation of the trustee and ...

Federal and South Carolina law provide income tax incentives to make it easier to save for college. Contributions made to a 529 plan (technically known as a "qualified tuition program" or "QTP") may be deductible for South Carolina income tax purposes. Earnings on contributions made to a 529 plan are not subject to federal or South Carolina income tax if they are used for qualified education expenses.

A 529 plan is a plan operated by a state designed to help families set aside funds for future college costs. Each state can establish its own 529 plan and plans differ from state to state. South ...

Is a revocable trust for you? There are a number of factors for you and your attorney to consider. One considerations is the most efficient and cost-effective way to transfer assets at death to your beneficiaries. In many cases, the revocable trust is the most efficient path. A well-drafted revocable trust agreement should provide greater flexibility in carrying out the wishes of the decedent and protecting the interests of the beneficiaries.

The transfer of assets owned by someone at his death occurs through a court-supervised process generally referred to as "probate" or "estate ...

One of the issues attorneys assess in evaluating an appropriate estate plan for a client is whether a revocable trust, also known as a living trust, is the best vehicle for implementing the client's wishes. The revocable trust is frequently used with a Last Will and Testament to direct assets to intended beneficiaries but may also minimize the expense and delays of the probate process. A revocable trust does not change the disposition of the estate, but in many cases the trust is a more efficient path to achieve the transfer of assets.

As with all legal issues, many factors play a role in this ...

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