Star liquidating trust
But now, most wealthy people’s estates are below the $5,430,000 (2015) estate tax exemption amount. Absent the IRS regulatory change the IRS could argue that the FLP/LLC interest must be discounted so that the assets in your estate will not receive the same quantum of basis step up.
How will the cost and complexity of trust administration change if you as a trustee cannot assume that the governing instrument can be relied upon as the governing instrument? Taxes, while unquestionably an exciting cocktail party topic, are just not as important for many folks as more complex fuzzy personal topics.Campfire Estate Planning Chat Newsletter Word Template Single Spaced Times Roman New 10 point bold MONTH YEAR: Lead Article: 1 ¾ pages [2nd page about 45 lines] [Category: Lead Article Title: Things to think about Summary: Summer at the beach, barbeques, flying kites and S’mores.What you need to keep the young ones smiling is some good estate planning chatter.Hopefully the following estate planning tidbits will make you the hit at the next campfire.■ FLP discounts: – The IRS is continuing its onslaught against partnership discounts.Domestic asset protection trusts (“DAPTs”) are trusts that you set up (you’re the settlor) but you are a beneficiary of, called “self-settled” trusts.
Although there have been a number of court cases suggesting that self-settled trusts might not work, the facts on all of those cases have been pretty ugly.
■ Basis: Estate planning has taken on a new focus on the search for basis, i.e., maximizing the assets included in your estate (or others you select) so that the tax basis on which gain or loss is increased on death to the fair value of those assets (i.e., capital gains are eliminated).
While there is lots of talk about this how much cost and complexity are you willing to tolerate to accomplish this?
If decanting makes sense, pay careful attention to the statutory requirements under which the decanting is achieved. Planning for the inevitable of aging is emotionally difficult to face.
One common restriction on decanting is not adding new beneficiaries, as confirmed in a recent case. Practical steps such as consolidating assets, organizing and computerizing records, involving children or others who will serve in fiduciary capacities so that they are aware of their roles, and more, is essential.
There are also a host of modifications or precautions you can consider: defer your right to receive any distributions for 10 years (the bankruptcy laws permit a trustee in bankruptcy to set aside transfers to self-settled trusts with 10 years); instead of having yourself listed as a beneficiary let a trusted person acting in a non-fiduciary capacity (i.e., not a trustee or trust protector) have the power to appoint descendants of your grandparents.