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…
Inflation Adjustments for Income, Estate, Gift and GST Taxes Coming
In November, Treasury and the IRS are expected to announce the inflation-adjusted rates for all income tax brackets, estate and gift tax exemptions, and the generation-skipping transfer tax exemption. Many commentators have already estimated that the 2015 estate and gift tax exemption, and GST exemption, will be $5,430,000 and the annual gift tax exclusion will…
One-Year GRATs?
The regulations for grantor retained annuity trusts say that GRATs must be for a “specified term of years.” The word “years” seems to tell us that a GRAT must be for more than one year, but, then again, saying “specified term of year” is an odd phrase. Would one year be OK? It would certainly…
Higher Income, Capital Gains and Medicare Taxes – and What to Do
Beginning January 1, 2013, for tax years that end in 2013, the new 3.8% Medicare tax on net investment income goes into effect for single taxpayers with $200,000 or more of adjusted gross income, and married taxpayers filing jointly of $250,000 or more of adjusted gross income. Tax Applies to ALL Profit on Real Estate…