THE TOOLS AND TECHNIQUES OF ESTATE PLANNING
14th Edition
Educational Objectives
CHAPTER 1 OVERVIEW OF ESTATE PLANNING
Upon completion of the chapter, the student will be able to:
1. To describe what is meant by estate planning
2. To characterize who needs estate planning.
3. To identify the most common estate planning mistakes.
4. To explain how to avoid such mistakes.
CHAPTER 2 DATA GATHERING AND ANALYSIS
Upon completion of the chapter, the student will be able to:
1. To explain the importance of data gathering.
2. To identify some changes to check for in an annual review.
3. To describe useful categories of data to gather, including personal, family, business, and insurance information
CHAPTER 3 DEATH-SENSITIZATION FOR THE ESTATE PLANNER
Upon completion of the chapter, the student will be able to:
1. understand the psychological aspects of death and estate planning
2. describe the role of the “personification” of property in the estate planning process and how it inter-relates with the client’s disposition of such property
3. explain what the estate planner can do for the client who is dying
CHAPTER 4 THE UNAUTHORIZED PRACTICE OF LAW
Upon completion of the chapter, the student will be able to:
1. discuss the reasons the practice of law is regulated and limited to attorneys
2. explain what is and is not the practice of law
CHAPTER 5 ETHICS
Upon completion of the chapter, the student will be able to:
1. explain what “ethics’ is
2. describe the “power” vested in the estate planner and how ethics requires that power to be exercised solely for the benefit of the client
CHAPTER 6 MALPRACTICE IN ESTATE PLANNING
Upon completion of the chapter, the student will be able to:
1. describe who are likely “targets of opportunity” for malpractice claims
2. explain the concept of “privity” and to whom is the estate planner liable
3. discuss various steps the planner can take to reduce the risk of malpractice suits
4. explain how to evaluate malpractice insurance coverage
CHAPTER 7 - OWNERSHIP AND TRANSFER OF PROPERTY
Upon completion of the chapter, the student will be able to:
1. To identify the various ways that property can be owned and transferred.
2. To distinguish between the various forms of ownership.
3. To explain how property is transferred by will.
4. To describe intestate succession.
CHAPTER 8 WILLS
Upon completion of the chapter, the student will be able to:
1. discuss wills
2. explain when to use a will
3. describe the requirements for a will, or a change or revocation of a will
4. explain the tax implications of wills
CHAPTER 9 – HOW TO REVIEW A WILL
Upon completion of the chapter, the student will be able to:
1. To learn the tools necessary to examine a will.
2. To identify what may be wrong with a will.
3. To explain major will clauses.
CHAPTER 10 POWER OF APPOINTMENT
Upon completion of the chapter, the student will be able to:
1. explain what a power of appointment is
2. describe when to use such a power
3. discuss the requirements for such a power
4. explain the tax implications of various powers of appointment
CHAPTER 11 DISCLAIMERS
Upon completion of the chapter, the student will be able to:
1. define what a disclaimer is
2. describe the factors involved in deciding when to use such a technique
3. discuss the requirements for an effective disclaimer
4. explain the tax implications of a disclaimer
CHAPTER 12 – SELECTION OF EXECUTOR, TRUSTEE, AND ATTORNEY
Upon completion of the chapter, the student will be able to:
1. To describe the duties and attributes of an executor.
2. To describe the duties and attributes of a trustee.
3. To describe the duties and attributes of an attorney.
CHAPTER 13 – PROBATE
Upon completion of the chapter, the student will be able to:
1. To describe the general role of an executor in the probate process.
2. To distinguish between executors and administrators.
3. To describe the appointment of the personal representative.
4. To examine the duties of an executor.
CHAPTER 14 – EXECUTOR’S PRIMARY DUTIES
Upon completion of the chapter, the student will be able to:
1. To describe the general duties of an executor with regard to an estate.
2. To describe the income tax duties of an executor.
3. To describe the estate tax duties of an executor.
4. To describe other duties of an executor.
CHAPTER 15 – ESTATE TAX
Upon completion of the chapter, the student will be able to:
1. To describe property includable in the gross estate.
2. To describe available deductions.
3. To describe available credits.
4. To describe calculation of estate tax.
CHAPTER 16 EXTENSIONS OF TIME TO PAY FEDERAL ESTATE TAX
Upon completion of the chapter, the student will be able to:
1. discuss the various methods for obtaining an extension of time to pay federal estate tax
2. describe when to use such an extension
3. discuss the requirements for obtaining an extension
4. explain the tax implications of obtaining an extension
CHAPTER 17 – GIFT TAX
Upon completion of the chapter, the student will be able to:
1. To identify gifts subject to gift tax.
2. To describe exclusions and deductions.
3. To describe available credits.
4. To describe calculation of gift tax.
CHAPTER 18 GENERATION-SKIPPING TRANSFERS
Upon completion of the chapter, the student will be able to:
1. describe generation-skipping transfers
2. understand the effect of the generation-skipping transfer tax on various types of generation-skipping transfers
3. discuss the various planning techniques for reducing generation-skipping transfer tax while incorporating generation-skipping transfers into an estate plan
CHAPTER 19 FEDERAL INCOME TAX ISSUES
Upon completion of the chapter, the student will be able to:
1. Explain the concept and function of “distributable net income” (DNI)
2. Describe the difference between a “simple” and “complex” trust
3. Discuss the “grantor-trust” rules
4. Explain what is meant by “income in respect of a decendent” (IRD)
5. Define the term “basis” and discuss its importance for taxation of sales of property
CHAPTER 20 NON U.S. PERSONS (PLANNING FOR)
Upon completion of the chapter, the student will be able to:
1. explain the special planning opportunities and problems present when one or more family members are not U.S. citizens
2. describe when such international or multinational planning is indicated
3. discuss the requirements for such planning
4. explain the tax implications of such planning
CHAPTER 21 – POST MORTEM TAX ELECTIONS
Upon completion of the chapter, the student will be able to:
1. To identify post mortem income tax elections.
2. To identify estate and generation-skipping transfer tax elections.
3. To consider post mortem issues for employee benefits.
4. To consider the use of disclaimers.
CHAPTER 22 GIFTS
Upon completion of the chapter, the student will be able to:
1. define what a gift is
2. explain the income tax, estate tax, and nontax advantages of making gifts
3. describe various techniques for reducing or eliminating gift tax while incorporating gifts into an estate plan
CHAPTER 23 UNIFORM GIFTS/TRANSFERS TO MINORS ACTS
Upon completion of the chapter, the student will be able to:
1. describe gifts and transfers under the Uniform Gifts/Transfers to Minors Acts
2. discuss when to use such transfers
3. describe the requirements for such transfers
4. explain the tax implications of such transfers
CHAPTER 24 TRUST – MARITAL DEDUCTION AND BYPASS
Upon completion of the chapter, the student will be able to:
1. explain marital deduction and bypass trusts
2. describe when to use such trusts
3. discuss the requirements for such trusts
4. explain the tax implications of such trusts
5. describe the coordination of such trusts in an estate plan
CHAPTER 25 TRUST – SECTION 2503(b) AND 2503(c)
Upon completion of the chapter, the student will be able to:
1. define what Section 2503(b) and 2503(c) trusts are
2. describe when to use such trusts
3. discuss the requirements for such trusts
4. explain the tax implications of such trusts
CHAPTER 26 TRUST – GRANTOR RETAINED INTERESTS (GRAT, GRUT, QPRT)
Upon completion of the chapter, the student will be able to:
1. define grantor retained income trusts, grantor retained annuity trusts, grantor retained unitrusts and qualified personal residence trusts
2. discuss when to use such trusts
3. describe the requirements for such trusts
4. explain the tax implications of such trusts
CHAPTER 27 TRUST – DEFECTIVE
Upon completion of the chapter, the student will be able to:
1. explain what a defective trust is
2. describe when to use such a trust
3. discuss the requirements for such a trust
4. explain the tax implications of such a trust
CHAPTER 28 TRUST – REVOCABLE
Upon completion of the chapter, the student will be able to:
1. define what a revocable insurance trust is
2. describe when to use such a trust
3. discuss the requirements for such a trust
4. explain the tax implications of such a trust
CHAPTER 29 TRUST – TAX BASIS REVOCABLE
Upon completion of the chapter, the student will be able to:
1. define what tax basis revocable trusts are
2. describe when to use such trusts
3. discuss the requirements for such trusts
4. explain the tax implications of such trusts
CHAPTER 30 LIFE INSURANCE
Upon completion of the chapter, the student will be able to:
1. discuss life insurance
2. describe when to use life insurance
3. distinguish the various types and features of life insurance policies
4. explain the tax implications of life insurance
CHAPTER 31 TRUST – IRREVOCABLE LIFE INSURANCE
Upon completion of the chapter, the student will be able to:
1. define what an irrevocable life insurance trust is
2. describe when to use such a trust
3. discuss the requirements for such a trust
4. explain the tax implications of such a trust
CHAPTER 32 CHARITABLE CONTRIBUTIONS
Upon completion of this chapter, the student will be able to:
1. distinguish between various charitable contribution vehicles
2. describe the factors involved in deciding which vehicle to use
3. discuss the steps involved in making a charitable contribution
4. explain the tax implications of such contributions
CHAPTER 33 CHARITABLE SPLIT INTEREST TRUSTS
Upon completion of the chapter, the student will be able to:
1. distinguish between trusts established solely for the benefit of charity and trusts which have both charitable and noncharitable beneficiaries
2. describe the factors involved in deciding when to use split interest trusts and which kind
3. discuss the steps involved in setting up these trusts
4. explain the income and estate tax implications of such trusts
CHAPTER 34 CONSERVATION EASEMENT EXCLUSION
Upon completion of the chapter, the student will be able to:
1. define what the conversation easement exclusion is
2. describe the factors involved in deciding when to use this technique
3. discuss the requirements for obtaining an exclusion
4. understand the estate tax implications of such an arrangement
CHAPTER 35 INSTALLMENT SALES AND SCINS
Upon completion of the chapter, the student will be able to:
1. examine an installment sale and a self-cancelling installment note (SCIN)
2. describe when to use such techniques
3. discuss the requirements for such sales
4. explain the tax implications of installment sales and SCINs
5. understand how to use life insurance to enhance the installment sale
CHAPTER 36 PRIVATE ANNUITY
Upon completion of the chapter, the student will be able to:
1. define what a private annuity is
2. discuss when to use such a device
3. describe the requirements for such an annuity
4. explain the tax implications of a private annuity
5. describe how life insurance can be used to enhance this planning tool
CHAPTER 37 INTEREST-FREE AND BELOW MARKET RATE LOANS
Upon completion of the chapter, the student will be able to:
1. explain interest-free and below market rate loans
2. describe when to use such techniques
3. discuss the requirements for such loans
4. explain the tax implications of such loans
CHAPTER 38 SPLIT INTEREST PURCHASE OF PROPERTY (SPLIT)
Upon completion of the chapter, the student will be able to:
1. analyze a split interest purchase of property
2. describe when to use a split interest purchase
3. discuss the requirements for such a purchase
4. explain the tax implications of a split interest purchase
CHAPTER 39 SALE (GIFT) – LEASEBACK
Upon completion of the chapter, the student will be able to:
1. illustrate a sale (gift) – leaseback
2. describe when such a leaseback might be used
3. discuss the requirements for such a leaseback
4. explain the tax implications of such a transaction
CHAPTER 40 BUY-SELL (BUSINESS CONTINUATION) AGREEMENT
Upon completion of this chapter, the student will be able to:
1. describe the various types of buy-sell agreements
2. discuss the factors involved in deciding which type to use
3. explain the steps involved in setting-up a buy-sell agreement
4. understand the tax implications of such an agreement
CHAPTER 41 SECTION 303 STOCK REDEMPTION
Upon completion of the chapter, the student will be able to:
1. define what a Section 303 stock redemption is
2. describe when to use such a redemption
3. discuss the requirements for such a redemption
4. explain the tax implications of such a redemption
CHAPTER 42 FAMILY-OWNED BUSINESS DEDUCTION
Upon completion of the chapter, the student will be able to:
1. define what the family-owned business deduction is
2. describe the factors involved in deciding when to use the deduction
3. discuss the requirements for obtaining the deduction
4. explain the tax implications of obtaining such a deduction
CHAPTER 43 FAMILY LIMITED PARTNERSHIPS
Upon completion of the chapter, the student will be able to:
1. define what a family limited partnership is
2. describe when to use such a partnership
3. discuss the requirements for a family limited partnership
4. explain the advantages of the family limited partnership
5. understand the tax implications of using this technique
CHAPTER 44 LIMITED LIABILITY COMPANIES
Upon completion of the chapter, the student will be able to:
1. describe what a limited liability company is
2. discuss its advantages and requirements
3. explain the tax implications of such an entity
CHAPTER 45 PERSONAL HOLDING COMPANY
Upon completion of the chapter, the student will be able to:
1. define what a personal holding company is
2. describe when to use such a company
3. discuss the requirements for a personal holding company
4. explain the tax implications of such a company
5. describe how life insurance can be used to enhance this planning tool
CHAPTER 46 S CORPORATION
Upon completion of the chapter, the student will be able to:
1. examine an S corporation
2. describe the factors involved in determining when to make an S election
3. discuss the requirements for an S corporation
4. explain the tax implications of making the election
CHAPTER 47 INCORPORATION
Upon completion of the chapter, the student will be able to:
1. discuss incorporation
2. explain the advantages and disadvantages of incorporation
3. describe the elements which determine whether an organization is taxed as a corporation
4. understand the tax implications of being treated as a corporation
CHAPTER 48 DEFERRED COMPENSATION (NONQUALIFIED)
Upon completion of the chapter, the student will be able to:
1. define what a nonqualified deferred compensation arrangement is
2. describe the factors involved in deciding when to use such a technique
3. discuss the steps involved in setting up such an arrangement
4. explain the tax implications of such compensation
CHAPTER 49 EMPLOYEE STOCK OWNERSHIP PLAN
Upon completion of the chapter, the student will be able to:
1. define what an employee stock ownership plan is
2. describe when to use such a plan
3. discuss the requirements for the plan
4. explain the tax implications of a plan
CHAPTER 50 HR-10 (KEOGH) RETIREMENT PLAN FOR THE SELF-EMPLOYED
Upon completion of the chapter, the student will be able to:
1. describe an HR-10 (Keogh) retirement plan for the self-employed
2. discuss when to use such a retirement plan
3. explain the requirements for this type of plan
4. understand the tax implications of using a Keogh plan
CHAPTER 51 INDIVIDUAL RETIREMENT PLANS (AND SEPS)
Upon completion of the chapter, the student will be able to:
1. describe traditional individual retirement plans (IRAs), Roth IRAs, simplified employee pensions (SEPs), and SIMPLE plans
2. discuss when to use such retirement plans
3. describe the requirements for such plans
4. explain the tax implications of these plans
CHAPTER 52 PROFIT-SHARING/PENSION PLAN
Upon completion of the chapter, the student will be able to:
1. explain a profit sharing or pension plan
2. describe when to use such plans
3. discuss the requirements for such plans
4. explain the tax implications of such plans
5. describe the use of life insurance in such plans
CHAPTER 53 SURVIVOR'S INCOME BENEFIT PLAN
Upon completion of the chapter, the student will be able to:
1. define what a survivor's income benefit plan is
2. describe when to use such a plan
3. discuss the requirements for such a plan
4. explain the tax implications of a survivor's income benefit plan
CHAPTER 54 MEDICAL EXPENSE REIMBURSEMENT PLAN
Upon completion of the chapter, the student will be able to:
1. define what a medical expense reimbursement plan is
2. describe when to use such a plan
3. discuss the requirements for such a plan
4. explain the tax implications of such a plan
CHAPTER 55 ELDERLY AND DISABLED (PLANNING FOR)
Upon completion of the chapter, the student will be able to:
1. discuss the specific health care and financial planning aspects of the elderly and disabled
2. describe when this planning should be utilized
3. explain the requirements for this specific type of planning
4. describe what federal programs are available to assist the elderly and disabled
5. discuss the requirements of Medicare and Medicaid
CHAPTER 56 DURABLE POWER OF ATTORNEY
Upon completion of the chapter, the student will be able to:
1. define what a durable power of attorney is
2. describe the factors involved in deciding when to use such a technique
3. discuss the characteristics of an effective durable power of attorney
4. explain the tax implications of such a device
CHAPTER 57 PLANNING FOR NON-TRADITIONAL RELATIONSHIPS
Upon completion of the chapter, the student will be able to:
1. To describe what is meant by non-traditional relationships.
2. To describe why planning is needed.
3. To identify tax benefits available to married persons that are not available to domestic partners.
4. To identify tax opportunities available to domestic partners that are not available to related persons.
CHAPTER 58 VALUATION PLANNING
Upon completion of the chapter, the student will be able to:
1. describe various methods of valuing property and interests in property
2. explain the tax implications of such methods
3. discuss the use of valuation planning in an estate plan
CHAPTER 59 FREEZING TECHNIQUES – CORPORATIONS AND PARTNERSHIPS
Upon completion of the chapter, the student will be able to:
1. explain the concept of freezing an estate
2. describe the complex tax valuation rules which affect freezing techniques for corporations and partnerships