Repeal of Estate and Gift Taxes is Attempted Again

Congressman Mac Thornberry filed his first bill of the 114th Congress on its opening day. The Death Tax Repeal Act (H.R. 173)” will completely and permanently repeal the Federal estate, gift, and generation-skipping taxes. The bill already has garnered 36 cosponsors.  Without any reasonable chance of passing either House, the bill is symbolic in nature and likely meant to curry political support at home.

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For Advisors: Actec Detailed Summary of Asset Protection Jurisictions

David Shaftel, Esq, has done a great job of highlighting the differences among the fifteen states that now offer full asset protection laws, along with another ten states that offer limited protection via Inter Vivos QTIP Trusts. http://www.actec.org/public/Documents/Studies/Shaftel-Comparison-of-the-Domestic-Asset-Protection-Trust-Statutes-Updated-through-April-2014.pdf

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Inflation Adjustments are in for 2015

Unified estate and gift tax exclusion amount. For gifts made and estates of decedents dying in 2015, the exclusion amount will be $5,430,000 (up from $5,340,000 for gifts made and estates of decedents dying in 2014). Generation-skipping transfer (GST) tax exemption. The exemption from GST tax will be $5,430,000 for transfers in 2015 (up from $5,340,000 for transfers in 2014). Gift tax annual exclusion. For gifts made in 2015, the gift tax annual exclusion will be $14,000 (same as for gifts made in 2014). Increased annual exclusion for gifts to noncitizen spouses. For gifts made in 2015, the annual exclusion for gifts to noncitizen spouses will be $147,000 (up from $145,000 for 2014). Reporting foreign gifts. If the value of the aggregate “foreign gifts” received […]

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Japan First in Integrating Digital and Physical Death Planning

As Reported in The Digital Beyond: Yahoo Japan recently launched a new service, Yahoo Ending, which on the surface appears to be their own version of Google’s Inactive Account Manager. On second look, the Ending service is much more. The basic service, free to all Yahoo Japan users, allows users to deactivate their Yahoo Japan accounts upon death. The service will also delete files from Yahoo Box accounts and cancel subscriptions using Yahoo Wallet. In accordance with Yahoo’s stance on accounts after death, there is not an option to share files with your family, as with Google’s solution. Yahoo Ending is also a posthumous email system and online memorial. For a small fee, Yahoo will send a pre-written email to to 200 addresses. For the […]

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Trust Income Taxes and Deducting Expenses

Irrevocable Trusts, other than the special “grantor trusts” which we typically use for life insurance and other gifts, are taxed at the highest rate after just $12,150 of taxable income, so the effect of deductible expenses on the tax are significant. Unfortunately, many expenses that are not specific to the administration of the trust are not deductible unless and to the extent they exceed the threshold of 2% of (adjusted) gross income (AGI) for the Trust. Final regulations have been issued to clarify this fairly recent (and punitive) interpretation of the tax code. Specific Expenses Investment management fees. Investment management fees will be subject to the 2% floor, since individuals often incur such fees. If, however, a portion of the investment management fees are attributable […]

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Looking for the MONEY? Here is is!

From IFC, we were amazed by the following: “China has surged into second place for the country with the most millionaires propelling Asia towards becoming the wealthiest continent in the world, reports Yahoo News. North America (at US$50.3 trillion) and Western Europe (US$37.9 trillion) have maintained their stronghold as the wealthiest regions in the world but Asia-Pacific (excluding Japan) is closing in at US$37.0 trillion. A new report released by Boston Consulting Group (BCG) shows that private wealth in the Asia-Pacific region (excluding Japan) jumped 31 per cent to US$37 trillion in 2013, representing the fastest-growing region worldwide. Private wealth on a global scale has also peaked, reaching a staggering US$152 trillion. This amount jumped by US$19.3 trillion in 2013, nearly twice the increase of […]

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Survey Reports: Americans Remain Unwilling to Create Wills

A CBS News Poll, conducted by telephone from April 16-20, 2014 among 1,017 adults nationwide, concluded that 40 percent of Americans sampled had created a will. Not surprisingly, age plays a factor. Among those 18-49 years of age only 22 percent have a will, rising to 62 percent for those 50 and older. By comparison, a 2013 Harris Poll  doesn’t indicate much change, finding that 39% of Americans had a will. It appears that far less of a percentage of Americans have thought about disposing of their “virtual” assets and accounts. The Harris Poll confirms this, finding that “93 percent of Americans who have digital assets were unaware of or misinformed about what would happen to their digital assets should they die.”  We are hoping […]

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New York Modifies Taxes for Estates, Gifts, Trusts

Estate Tax Threshold Increases, effective immediately: Purportedly designed to stem taxpayer flight from the state, effective April 1, 2014, the estate tax exclusion will rise substantially — via a four-year phase-in — from the current $1 million to $5,250,000 by 2017. Increases will be indexed for inflation afterwards. However, there will be little benefit for those with larger estates. If the estate exceeds the exclusion by more than 5%, the entire taxable estate (i.e., there is no exclusion) is subjected to the NY estate tax. Further, while the rates are graduated, those with larger estates should also be aware that the maximum NYS estate tax rate remains unchanged at 16%. Gifts Within Three Years of Death are Taxed (Again) Gifts made by a NY resident […]

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Obama’s 2015 Budget Includes Serious Planning Loophole Closures

The Administration’s 2015 Budget, Dept. of Treas. “General Explanations of the Administration’s Fiscal Year 2015 Revenue Proposals,” (March, 2014), includes some drastic, previously submitted proposals of significance to estate planners, including: (a) Requiring a person who buys an interest in an existing life insurance contract with a death benefit of $500,000 or more to report the purchase and report any payment of the policy benefits;(b) Modifying the transfer-for-value rule by eliminating the exception for transfers to a partner of the insured, a partnership in which the insured is a partner, or a corporation in which the insured is a shareholder or officer, and adding an exception for a transfer to a partnership or corporation in which the insured is a 20% owner;(c) Restoring the estate, […]

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