Estates, Wills & Trusts

Articles of interest on Estates, Will & Trusts

New Estate Tax Regime

After bumbling about, trading political favors, Congress has arrived at a $5 million inflation adjusted amount exempt from Federal Estate Tax. This is a “combined” estate and gift tax, with the CPI adjustment, it is now $5.34 per person – but only applicable to US Citizens. 

Horse-trading in Washington

Among the horse-trading in Washington leading to our present Gift and Estate Tax, was the implementation of "Portability." This allows the retention of unused "tax credits" upon the death of the first of a married couple. It isn't automatic, requires the filing of the complex Federal Estate Tax Return (Form 706) in order to establish the portability amount, and in itself has many Byzantine elements to confuse and befuddle.

Defusing Emotional Timebombs

When is a Dollar not equal to a Dollar? For those who have dealt with estate or trust distributions, it is found in the difference in the theoretical value and the true value received in distributions. Would you prefer $1,000 in cash or $1,000 in the present value of a US Savings Bond? Both are worth $1,000, but the US Savings Bond has "built-in" accumulated taxable interest. Knowing that you will have to pay income tax on the accumulated interest, are the values the same?

A will is not the only piece of the puzzle

This is one of those almost tragic misconceptions. We hate to bring out the bad news, but our job is to be truthful and realistic. It is simply less certain that your wishes will be carried out if you have no Will. There will still be an Estate Administration, called a Probate.