It’s official. On October 30, 2014, the IRS issued Rev.Proc. 2014-61. That document set all of the tax rates for all of the different schedules, such as “Married Individuals Filing Joint Returns and Surviving Spouses.” The ones we tend to focus on are gift, estate and generation-skipping taxes and taxes on trusts. The annual gift…
Beneficiary Can File Later Will After Accepting Earlier Will’s Benefits
Billye died on October 16, 2011. Her 1985 will was admitted to probate, which divided her estate equally between Beverly and Barry. Her home was conveyed to Barry under that will. Later, Barry filed an October 2010 will (which gave almost all of the estate to him) for probate and sought to have the 1985…
529 Plans – Taxation Off the Table
President Obama, as part of a broader tax plan outlined just days before the State of the Union address, included plans to repeal or redirect tax incentives for 529 plans and Coverdell education plans. But there was a significant backlash from both Democrats and Republicans. As a result, the President has decided to leave the…
February Applicable Federal Rates
The rates stayed low for this month. The 7520 rate used extensively in estate planning is at 2.0%, down from 2.2% last month. The mid-term AFR is down to 1.70%.
Powers of Attorney
A Blow to Powers of Attorney The Texas Supreme Court denied a motion for rehearing in the case of The Finance Commission of Texas, et al vs. Norwood, et al. The Finance Commission and the Credit Union Commission of Texas had rules and regulations allowing home equity loans to be closed using a power of…
Probate Court Sticks Estate with Legal Fees
In a case arising out of Dallas County, an executor sued to regain possession of property held by another person, spending $27,000 before being successful. Sadly, the executor was denied a request that the court impose those attorneys’ fees on the person who wrongfully withheld the assets from the estate. The court said that there…
Capitalized Interest Not Deductible
A couple got behind on their mortgage. They refinanced in 2010, borrowing an additional $45,000 to pay the past due on their mortgage. The mortgage company issued a 1098 for that year saying it had received less than $10,000 in interest, but the couple claimed that they had paid $48,000 in mortgage interest. The IRS…
Asset Protection in Texas
In a recent ABA webinar, groups of attorneys from an “asset protection state” and a long-term trust state and from Texas offered their different versions of what their state laws allow terms of asset protection. While Texas does not clearly allow self-settled asset protection trusts (where you put your assets into trust and they are…
December Applicable Federal Rates
December Applicable Federal Rates. The rates stayed low for this month. The 7520 rate used in estate planning extensively is at 2.0%. Surprisingly, that is down 0.2% from the prior several months. The mid-term AFR is also down significantly to 1.72%. Last month it was 1.9%.
Employment Taxes
In many cases, people pay for domestic and other help, and do not withhold any employment taxes. Then they die. Some say that the executor should ignore the problem. But the problem with that approach is that the executor, or the successor trustee of the living trust, has an obligation to pay taxes including the…