“The Sensible Estate Tax Act of 2014,” introduced by House Ways and Means Committee member Jim McDermott (D-Wash.), would reduce the estate tax exclusion amount to $1 million, raise the top estate and gift tax rate (and the sole GST tax rate) to 55% (on amounts over $10 million), and make numerous other changes in the estate, gift, and GST taxes. This has not chance of passage, but reflects the continued efforts of progressive democrats to keep the discussion alive, in view of emerging issue of financial inequality in coming elections.

As you sit with your attorney and plan your estate, you are attempting to arrange a plan which will properly meet your objectives.  Helping you figure out what those objectives might be is one of the most important services the Will Doctor can provide to our clients.  New research into our identity by experimental philosophers and others points out that there really is a good reason to come back and see us regularly, because the person who comes back in a few months, or years later, is going to be very different.  It seems, more different than we suspect.   A great discussion and video fleshes this out, in the following link:  http://www.brainpickings.org/index.php/2014/02/26/josh-knobe-self/ Maria Popova ( see last Post) in the review of David DeSteno’s […]

Alot of ink, real and virtual,  is being spilled about the need for managing our digital assets after our demise. Of course, there are many digital activities (social, political, and sexual) that we fully intend to take to the grave with us, and we demand complete confidentiality and proper handling by the administrators of those assets.  The Terms of Service, (“TOS”) Agreements which come with all our cyber accounts are evolving to give us more choices over the handling of these resources upon death or incapacity, but for the most part, take the cautious road and terminate all access to accounts by heirs, agents, and fiduciaries.   That was a good starting point, but as our physical and on-line lives become more enmeshed, more options […]

The probability of these provisions becoming the law of the land is uncertain, at this point, and perhaps unlikely.  “Permanent” in estate tax  lingo is, apparently, a transitory term.  Since the new law does not have a built in expiration, we have called it permanent, and the structure of the transfer tax regime appears settled-but see below! These provisions are significant: A return to the estate tax exemptions of 2009 ($3.5 million at death, with a limit of $1 million during life) Exemptions would NOT be indexed for inflation Estate and Gift Tax rates going from 40% to 45% Limit on the GST Exemption to 90 years Limit on GRAT terms to no less than ten years Limits on retirement plans to $3 million Mandated […]

The is a growing group of tools and resources on line (see prior post) to help people express their thoughts and feelings digitally for use at their passing.  Of course, serious problems can arise if the personal representatives of the deceased don’t have access to appropriate logins and passwords.  So, the law is slowly grappling with this:  Adding to the list of states that have passed laws pertaining to digital estates, the Virginia Legislature passed HB 1752 today affording parents of deceased minors access to their social media accounts. The bill’s description reads: Powers of personal representatives; digital accounts. Provides that the personal representative of a deceased minor has the power to assume the deceased minor’s terms of service agreement with an Internet service provider, […]

We expect that 350 estate and gift tax examiners in the IRS will have a hard time reviewing the estimated 500,000 gift tax returns which will be filed for gifts last year.  The Will Doctor will accordingly try to file such returns for our clients on or before the filing date, without extensions.  The thinking is that we should get the three year statute of limitations running early so the IRS can focus on filers between April and October 15, 2013. Of course, the actual number of estate tax returns filed has dramatically decreased in recent years along with the size of the estate and gift tax exemptions.  Of the filed returns, there are a much smaller number of  taxable returns.  So we can expect that […]

Our relief after learning of the continuation of the existing tax regime on December 32nd (true, right?) is tempered by the recognition that $3.63 Trillion needs to be added to revenues in the coming decade to pay for the tax benefits we enjoy.  Obama’s estate and gift tax proposals in this area are still on the table, including: Elimination of the discounts on fractional gifts of business interests for “marketability”.  Marketability is the largest component by far in our discount planning, and this would be very painful.  Discounts for “lack of control”, also called the minority interest discount, would remain. Unification of the estate/gift and income tax regimes by terminating the use of Grantor Trusts-the foundation of many of our most treasured planning techniques; Limit […]

Forty Percent Estate, Gift, and GST Tax Rate The highest marginal FEDERAL estate and gift tax rate has increased from 35% to 40%-half way to the 45% originally promoted by the Obama Administration in its proposals over the last two years.  The 40 percent rate is the only change from 2012 federal transfer tax law. Note: Remember, for New Yorkers, the addition of NY Estate Taxes adds about 10% to the Federal rate, bringing aggregate estate taxes to a 50% level for taxable estates above the exemption amounts.  New York continues to have NO gift tax. The 40 percent Federal rate is reached at a taxable estate or cumulative gifts of $1 million. The 40 percent gift tax rate translates into a 28.57 percent tax-exclusive rate if […]