IRS Announces Changes to Federal Transfer Tax Exemption

The IRS recently published Rev. Proc. 2014-61, which announces the annual inflation adjustments for certain federal tax provisions for 2015.  Among many other adjustments, the federal estate, gift and generation-skipping transfer tax exemption was increased from $5.34 million to $5.43 million.  Accordingly, the estate of a person dying in 2014 will only incur federal estate tax if the value of … Continue reading »

Estate Planning Update One Page

2014 Estate Planning and Tax Update

How have federal income tax laws changed recently? While the 2012 Tax Act did not change income tax rates for most taxpayers, those individuals with incomes over $400,000 and married couples filing jointly with incomes over $450,000 are now subject to a highest marginal rate of 39.6%, up from 35%. A 20% rate now applies to long-term capital gains and … Continue reading »


Fifth Circuit Decision Affirms Importance of Documenting Valuation Discounts

In the recent decision Estate of James A. Elkins, Jr. v. Comm’r, the Fifth Circuit Court of Appeals ruled that artwork owned by an estate was entitled to a significant 45% valuation discount, resulting in an over $14 million estate tax refund.  At the time of his death, James Elkins, the decedent, owned a 50% or 73% interest in 63 … Continue reading »

U.S. Supreme Court Rules Inherited IRAs Are Not Exempt From Bankruptcy

The U.S. Supreme Court recently ruled that inherited individual retirement accounts (IRAs) are not exempt assets for bankruptcy purposes, and thus can be used to satisfy the claims of bankruptcy creditors.  In Clark v. Rameker, the debtor had inherited an IRA from her deceased mother.  When the debtor and her husband filed for bankruptcy nine years later, they identified the IRA … Continue reading »

Tax Court Case Demonstrates Importance of Proper Trust Funding

A recent Tax Court case, Estate of Olsen v. Comm’r, T.C. Memo 2014-58, demonstrates the importance of proper trust funding after the first spouse’s death. In Olsen, a married couple established two revocable trust agreements during their lives as their primary estate planning documents. At the first spouse’s death, each trust agreement required certain new trusts to be created and … Continue reading »

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