THE TOOLS AND TECHNIQUES OF ESTATE
INSURANCE PLANNING
(14th Edition)
Outline
CHAPTER 1 OVERVIEW OF ESTATE PLANNING
A. What Is Estate Planning?
B. Who Needs Estate Planning?
C. The Ten Most Common Estate Planning Mistakes
(And How to Avoid Them)[1]
D. Optional Checklist For Discussion
CHAPTER 2 DATA GATHERING AND ANALYSIS
A. Forms
1. Sample Information Request Letter
2. Data Gathering Forms
CHAPTER 3 DEATH-SENSITIZATION FOR THE ESTATE PLANNER
A. Why Should The Estate Planner Think About Death And Dying?
1. Reduction Of Client’s Anxiety
2. Free Client’s Energy To Life-Related Matters
3. Additional Psychological Factors Encouraging Testamentary Process
4. The Estate Planner’s Responsibility By Definition Or Default
5. Resolution Of Professional’s Own Anxieties Necessary To His Utility
6. Rewards Of Openness To The Estate Planner And Client
B. Why The Word “Death” Is Unspoken
C. The Estate Planning Interview – An Opportunity To Touch, To Feel, To Help
1. Coming To Grips With Life And Death
2. The Process Of Human Counseling
3. Objectives Of The Estate Planning Interview
4. The Role Of Property In The Testamentary Process
D. What Is Death And What Does It Mean?
1. Death – Multifaceted Meanings And Effects
2. Dying – How It Colors Perceptions Of Death
3. Interaction Between The Estate Planner And The Dying Client
E. The Dying Client – Expressions Of Grief
F. What The Estate Planner Can Do For The Dying Client
1. The Importance Of Providing The Client With Control
2. Helping The Client To Feel Useful By Encouraging The Completion Of Unfinished Business
3. Development Of A Support System Of Advisors
G. Effect Of Death On The Survivors
H. About The Will And Probate – What They Mean To The Survivors
I. Choice Of Executor – What It Means
J. What Can – And Should – The Executor Do?
K. Summary
CHAPTER 4 THE UNAUTHORIZED PRACTICE OF LAW
CHAPTER 5 ETHICS
A. Why Ethics?
CHAPTER 6 MALPRACTICE IN ESTATE PLANNING
A. “Target Of Opportunity” – Why Me?
B. Simple Liability Vs. Compound Liability
C. To Whom Is One Liable?
D. What Can Get The Advisor Into Trouble?
E. How Does One Stay Out Of Trouble?
F. The “Engagement Letter”
G. Put It (All) In Writing
H. Limits Of The Relationship
I. Records And Systems
J. Quality Control
K. External Communications
L. Avoiding (Or Neutralizing) Problems
M. About Your Malpractice Insurance
N. The Total Cost
O. Summary
CHAPTER 7 OWNERSHIP AND TRANSFER OF PROPERTY[1]
A. Ownership Of Property
1. Outright Ownership
2. Life Estate / Remainder
3. Tenancy In Common
4. Joint Tenancy With Right Of Survivorship
5. Tenancy By The Entirety
6. Community Property
7. Totten Trust, Pod, Tod
B. Transfers Of Property
1. Lifetime
2. At Death
a. Wills
b. Limitations
c. Intestate Succession
3. Trusts
a. Rule Against Perpetuities
b. Spendthrift Provisions
CHAPTER 8 WILLS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How Does One Choose The Terms Of A Will?
E. How Is A Will Changed Or Revoked?
F. What Are The Death Tax Implications?
G. What Are The Income Tax Implications?
H. Issues And Implications In Community Property States
I. Questions And Answers
CHAPTER 9 HOW TO REVIEW A WILL: A CHECKLIST FOR THE ESTATE AND FINANCIAL PLANNER
A. Introduction
B. Introductory Clause
C. Debts Clause
D. Tax Clause
E. Tangible Personal Property Clause
F. Devises Of Real Estate Clause
G. Specific Bequests Of Intangibles And Cash
H. Residuary Clause
I. Powers Clause
J. Appointment Of Fiduciaries Clause
K. Testator’s Signing Clause
L. Attestation Clause
M. Other Clauses
N. Summary
CHAPTER 10 POWER OF APPOINTMENT
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 11 DISCLAIMERS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?[1]
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 12 SELECTION OF EXECUTOR, TRUSTEE, AND ATTORNEY
A. Introduction
B. Part I–Selecting An Executor
1. Duties Of The Executor
2. Attributes Of A Good Executor
C. Part Ii-Selecting A Trustee
1. Duties Of The Trustee
2. Attributes Of A Good Trustee
D. Cotrustees
1. Removal And Succession Of Trustees
E. Part Iii-Selecting An Attorney
1. Duties Of The Attorney
2. Attributes Of A Good Attorney
CHAPTER 13 PROBATE[1]
A. General Role Of An Executor
B. Distinction Between Executor And Administrator
C. Funeral Arrangements
D. Appointment Of The Personal Representative
E. Employment Of The Attorney For The Estate
F. Collecting The Assets
G. Handling The Business
H. Investing And Protecting The Assets
I. Payment Of Taxes, Debts, And Expenses
J. Distributing Remaining Assets
K. Summary
L. Chapter Endnotes
CHAPTER 14 EXECUTOR’S PRIMARY DUTIES
A. Checklist Of Executor’s Primary Duties
CHAPTER 15 ESTATE TAX
A. General
B. Ascertaining The Gross Estate (Lines 2 - 4)
1. (1) Property Owned Outright (§2033)
2. (2) Certain Property Transferred Gratuitously Within Three Years Of Death (§2035)
3. (3) Gratuitous Lifetime Transfers Where The Decedent Retained The Income Or Control Over The Income (§2036)
4. (4) Gratuitous Lifetime Transfers Conditioned On Surviving The Decedent (§2037)
5. (5) Gratuitous Lifetime Transfers In Which The Decedent Retained The Right To Alter, Amend, Or Revoke The Gift (§2038)
6. (6) Annuities Or Similar Arrangements Purchased By The Decedent And Payable For Life To Both The Annuitant And Specified Survivor (§2039)
7. (7) Jointly Held Property Where Another Party Will Obtain The Decedent’s Interest At Decedent’s Death By Survivorship (§2040)
8. (8) General Powers Of Appointment (§2041)
9. (9) Life Insurance In Which The Decedent Possessed Incidents Of Ownership Or Which Was Payable To Or For The Benefit Of The Decedent’s Estate (§2042)
10. (10) Assets That Have Qualified For Qualified Terminable Interest Property (QTIP) Treatment And Must Be Included In The Surviving Spouse’s Estate (§2044)
11. Qualified Conservation Easement Exclusion (Line 3)
12. Valuation
C. Determining The Adjusted Gross Estate (Line 9)
D. Determination Of Taxable Estate (Line 14)
E. Estate Tax Payable Before Credits (Line 19)
F. Determining The Federal Estate Tax Payable
G. Example
H. Filing A Return And Payment Of The Estate Tax
I. Implications And Issues In Community Property States
CHAPTER 16 EXTENSIONS OF TIME TO PAY ESTATE TAX
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
1. A. Section 6159
2. B. Section 6161
3. C. Section 6163
4. D. Section 6166
D. How It Is Done–An Example Of Section 6166
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 17 GIFT TAX
A. (1) Purpose, Nature, And Scope Of Gift Tax Law
1. Purpose
2. Nature
3. Scope
B. (2) Advantages Of Lifetime Gifts
1. Nontax-Oriented Advantages
2. Tax-Oriented Advantages
C. (3) Technical Definition Of A Gift
1. Elements Of A Gift
2. Adequate And Full Consideration In Money Or Money’s Worth Defined
3. Types Of Gifts
D. (4) Gratuitous Transfers That Are Not Gifts
1. The Requirement That Property Or An Interest In Property Be Transferred
2. Transfers In The Ordinary Course Of Business
3. Sham Gifts
E. (5) Exempt Gifts
F. (6) Requirements For A Completed Gift
1. When Delivery Is Complete
2. Cancellation Of Notes
3. Incomplete Gifts In Trust
G. (7) Valuation Of Property For Gift Tax Purposes
1. Indebtedness With Respect To Transferred Property
2. Restrictions On The Use Or Disposition Of Property
3. Transfers Of Large Blocks Of Stock
4. Valuation Of Mutual Fund Shares
5. Valuation Of Life Insurance And Annuity Contracts
H. (8) Computing The Tax On Gifts
1. Gift Splitting
2. The Annual Exclusion
3. Gift Tax Marital Deduction
4. Gift Tax Charitable Deduction
5. Calculating Gift Tax Payable
6. Credits
I. (9) Reporting Of Gifts And Payment Of The Tax
1. Split-Gifts
2. Future-Interest Gifts
3. Present-Interest Gifts
4. Gifts To Charities
5. Liability For Payment – Net Gift
6. Time Tax Is Due
J. (10) Relationship Of The Gift Tax System To The Income Tax System
K. (11) Determination Of The Basis Of Gift Property
L. (12) Relationship Of The Gift Tax System To The Estate Tax System
M. (13) Factors To Consider In Selecting Appropriate Subject Of A Gift
CHAPTER 18 GENERATION-SKIPPING TRANSFER TAX
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
1. Generation-Skipping Transfer Tax
a. General Rules
b. Generation Assignment
c. Skip Persons
d. Taxable Distribution
e. Taxable Termination
f. Direct Skips
g. Exemptions and Exclusions
h. Computing the Tax
i. Liability for Payment of GST Tax
j. Special Provisions
2. Planning For GST Tax
a. Allocation of the GST Exemption
b. Split-Gifts and the Reverse QTIP Election
c. Grantor Retained Income, Annuity, and Unitrust ETIP
d. Multi-Generational Planning
e. Planning to Pay Estate Tax Rather than GST Tax
f. Exclusion for Nontaxable Gifts
g. To Skip or Not to Skip?
h. Other Planning Considerations
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 19 FEDERAL INCOME TAX ISSUES
A. Income Taxation Of Trusts And Estates
1. General Scheme Of Taxation
2. Income Taxation Of Trusts
a. Sec. 671 – Substantial Owner Rules
b. Sec. 673 – Reversionary Interest Rules
c. Sec. 674 – Beneficial Interest Rules
d. Sec. 675 – Administrative Powers Rules
e. Sec. 676 – Power to Revoke Rules
f. Sec. 677 – Income for Benefit of Grantor Rules
g. Sec. 678 –“Person Other than Grantor” Rules
3. Income Taxation Of Estates
a. Decedent’s Final Return
b. Income in Respect of a Decedent (Section 691 Income)
c. Taxation of the Estate
B. How Basis Is Determined
1. What Basis Is And Why It Is Important
2. Basis At Death
a. No Step-up in Basis Where Decedent Had Acquired Property by Gift Within a Year of Death If Property Is Left To Donor or Donor’s Spouse
b. Effect of Step-up in Basis Rules on Stock Redemptions and Cross Purchase Agreements
c. Overall Effect
d. EGTRRA 2001
e. Implications and Issues in Community Property States
C. Questions And Answers
D. Chapter Endnotes
CHAPTER 20 NON U.S. PERSONS IN THE ESTATE PLAN
A. What Is It?
B. When Is The Use Of Such A Plan Indicated?
C. What Are The Requirements?
D. How It Is Done - An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 21 POST MORTEM TAX ELECTIONS
A. Post Mortem Tax Elections Checklist
1. Part A: Income Tax Elections
2. Part B: Estate Tax Elections
3. Part C: Employee Benefits (Chapters 49, 50, 51, 52)
4. Part D: Disclaimers (Chapter 11)
5. Part E: Generation-Skipping Elections (Chapter 18)
CHAPTER 22 GIFTS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
1. Gift Tax Annual Exclusion
2. Qualified Transfer Exclusion
3. Split Gift
4. Marital Deduction
5. Gift Tax Unified Credit
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 23 UNIFORM GIFTS/TRANSFERS TO MINORS ACTS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 24 MARITAL DEDUCTION AND BYPASS TRUSTS
A. What Is It?
1. Current Planning Techniques
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
1. A – The Survivor’s Property Trust Or Power Of Appointment Trust
2. B – The Bypass Trust
3. Q – The Qtip Trust
E. How Do The Mechanics Of The A-B Or A-B-Q Trust Plan Work?
1. A Typical Pre-1981 A-B Trust
2. A Typical Post-1981 A-B Or A-B-Q Trust To Reduce The Tax At The First Death To Zero
3. Comparison Of Plans
4. Electing To Pay Some Tax
F. Impact Of The Reverse Qtip Election
G. Ab Trust Versus Abq Trust
H. What Are The Tax Implications?
I. Implications And Issues In Community Property States
J. Questions And Answers
K. Chapter Endnotes
CHAPTER 25 SECTION 2503(B) AND 2503(C) TRUSTS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. What Are The Disadvantages?
E. How It Is Done – An Example
F. What Are The Tax Implications?
G. Implications And Issues In Community Property States
H. Questions And Answers
a. QSST
b. Section 678 Trust
c. Estate Tax Implications
I. Chapter Endnotes
CHAPTER 26 GRANTOR RETAINED INTEREST TRUSTS (GRAT, GRUT, QPRT)
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. What Are The Advantages?
E. What Are The Disadvantages?
F. How It Is Done – An Example
G. What Are The Tax Implications?
1. Section 2702
a. Qualified Annuity Interests (GRATs)
b. Qualified Unitrust Interests (GRUTs)
c. Qualified Remainder Interests
d. Personal Residence Trusts (PRTs)
e. Qualified Personal Residence Trust (QPRTs)
f. Subsequent Transfers of Retained Interests
H. Implications And Issues In Community Property States
I. Questions And Answers
J. Chapter Endnotes
CHAPTER 27 DEFECTIVE TRUST
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 28 REVOCABLE TRUST
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 29 TAX BASIS IRREVOCABLE TRUST
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 30 LIFE INSURANCE
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Various Types Of Life Insurance?
1. Term Insurance
2. Whole Life Insurance
3. Endowment Insurance
4. Universal Life Insurance
5. Variable Life Insurance
6. Variable Universal Life Insurance
7. Survivorship Life Insurance
8. First-To-Die Life Insurance
9. Single Premium Whole Life Insurance
D. What Are The Various Features Of A Life Insurance Policy?
E. What Are The Tax Implications?
1. Taxation Of Death Benefits
2. Taxation Of Premiums And Dividends
3. Taxation Of Living Benefits
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 31 IRREVOCABLE LIFE INSURANCE TRUST
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
1. Requirements For Life Insurance Gift Trust
2. Requirements For Crummey Withdrawal Power
D. How Is It Done?
E. Issues And Implications In Community Property States
F. What Are The Gift Tax And Estate Tax Implications?
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 32 CHARITABLE CONTRIBUTIONS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 33 CHARITABLE SPLIT INTEREST TRUSTS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. Issues And Implications In Community Property States
E. Questions And Answers
F. Chapter Endnotes
CHAPTER 34 CONSERVATION EASEMENT EXCLUSION
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 35 INSTALLMENT SALES AND SCINS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications Of The Installment Sale?
1. Special Rules For Disposition Of Property Between Related Parties
2. Special Depreciable Property Rule
F. What Are The Tax Implications Of The Scin?
G. How Life Insurance Can Enhance This Planning Tool
H. Implications And Issues In Community Property States
I. Questions And Answers
J. Chapter Endnotes
CHAPTER 36 PRIVATE ANNUITY
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. How Can Life Insurance Enhance This Tool?
G. Implications And Issues In Community Property States
H. Questions And Answers
I. Chapter Endnotes
CHAPTER 37 INTEREST-FREE AND BELOW MARKET RATE LOANS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 38 SPLIT INTEREST PURCHASE OF PROPERTY (SPLIT)
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done–An Example
E. What Are The Tax Implications?
1. Section 2702
a. Retained Annuity or Unitrust Interests
b. The Tangible Property Exception
2. Planning Implications
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 39 SALE (GIFT) – LEASEBACK
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 40 BUY-SELL (BUSINESS CONTINUATION) AGREEMENT
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
1. Stock Redemption Plan
2. Cross-Purchase Agreement
E. What Are The Tax Implications?
1. Stock Redemption Agreements
2. Cross-Purchase Agreements
3. Business Continuation Plans For S Corporations
4. Business Continuation Plans For Partnerships
5. Special Rules For Family Business Enterprises
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 41 SECTION 303 STOCK REDEMPTION
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 42 FAMILY-OWNED BUSINESS DEDUCTION
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 43 FAMILY LIMITED PARTNERSHIPS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. Providing Management And Control
E. Ensuring Family Ownership
F. Reducing Transfer Taxes
G. Securing Valuation Discounts
H. Protecting Assets
I. Income Tax Aspects
J. Implications And Issues In Community Property States
K. Detriments
L. Comparing Flps With Other Business Entities
M. How Is It Done – Examples
N. Flp Success Checklist:
O. Valuation Quality Control Checklist:
P. Questions And Answers
Q. Chapter Endnotes
CHAPTER 44 LIMITED LIABILITY COMPANIES
A. What Is It?
B. What Are The Requirements?
C. How It Is Done – An Example
D. What Are The Tax Implications?
E. Community Property Considerations
F. Questions And Answers
G. Chapter Endnotes
CHAPTER 45 PERSONAL HOLDING COMPANY
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. How Can Life Insurance Enhance This Tool?
G. Implications And Issues In Community Property States
H. Questions And Answers
I. Chapter Endnotes
CHAPTER 46 S CORPORATION
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 47 INCORPORATION
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
1. Disadvantages Of The Corporate Form
C. How It Is Done – An Example
D. Implications And Issues In Community Property States
E. Questions And Answers
F. Chapter Endnotes
CHAPTER 48 DEFERRED COMPENSATION (NONQUALIFIED)
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done–An Example
E. What Are The Tax Implications?
1. Irc Section 409a
a. Initial Guidance and Proposed Regulations
2. The Employer’s Tax Position
3. The Employee’s Tax Position
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 49 EMPLOYEE STOCK OWNERSHIP PLAN
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – Examples
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 50 HR-10 (KEOGH) RETIREMENT PLAN FOR THE SELF-EMPLOYED
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 51 INDIVIDUAL RETIREMENT PLANS (AND SEPS)
A. What Is A Traditional Ira?
1. Rollovers
B. What Is A Roth Ira?
C. What Is An Esa?
D. When Is The Use Of Such A Device Indicated?
E. What Are The Requirements?
F. How It Is Done – An Example
G. What Are The Tax Implications?
H. Implications And Issues In Community Property States
I. Questions And Answers
J. Chapter Endnotes
CHAPTER 52 PROFIT SHARING/401(K)/PENSION PLAN
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
1. Eligibility
2. Vesting
3. Contributions And Benefits
a. Defined Contribution Plans
b. Defined Benefit Plans
c. Target or Assumed Benefit Plan
4. Deduction Of Contributions
5. Actuarial Assumptions
6. Retirement Age
7. Social Security Integration
8. Top Heavy Plans
a. Vesting
b. Contributions and Benefits
D. How It Is Done – An Example
E. What Are The Income Tax Implications?
F. What Are The Estate Tax Implications?
G. Implications And Issues In Community Property States
H. Questions And Answers
I. Chapter Endnotes
CHAPTER 53 SURVIVOR’S INCOME BENEFIT PLAN
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. How It Is Done – An Example
D. What Are The Tax Implications?
1. The Employer’s Tax Position
2. The Employee’s Tax Position
3. The Beneficiary’s Tax Position
E. Implications And Issues In Community Property States
F. Questions And Answers
G. Chapter Endnotes
CHAPTER 54 HEALTH REIMBURSEMENT ARRANGEMENT
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done
1. Example 1
2. Example 2
E. Implications And Issues In Community Property States
F. Questions And Answers
G. Chapter Endnotes
CHAPTER 55 ELDERLY AND DISABLED (PLANNING FOR)
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. What Are The Tax Implications?
E. Implications And Issues In Community Property States
F. Questions And Answers
1. Long-Term Care Planning
2. Disability Planning
3. Incapacity Planning
G. Chapter Endnotes
CHAPTER 56 DURABLE POWER OF ATTORNEY
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How Is It Done?
E. What Are The Tax Implications?
F. Issues And Implications In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 57 PLANNING FOR NONTRADITIONAL RELATIONSHIPS
A. What Is It?
B. When Is The Use Of Such Planning Indicated?
C. What Are The Requirements?
D. Transfer Tax Implications
1. Spouses Receive Some Tax Benefits That Nonspouses Do Not
a. Gift Tax Marital Deduction
b. Split Gifts
c. Estate Tax Marital Deduction
d. Generation Skipping
e. Joint Tenancy
f. IRAs and Qualified Plans
g. Terminating Relationships
2. Transfer Tax Opportunities For Unmarried Couples
a. Tax-Free Gifts
b. Bypass (Credit Shelter) Trusts
c. Trusts to Avoid Double Taxation
d. Life Insurance
3. Valuation Freezes – Sections 2701 Through 2704
a. Section 2701 – Business Interests
b. Section 2702 – Transfers in Trust
c. Section 2703 – Options and Restrictions
d. Section 2704 – Lapses and Restrictions
e. Section 2704(a) – Lapsing Rights
f. Section 2704(b) – Restrictions on Liquidation
4. Providing For Children
E. Income Tax Strategies For Transferring Wealth
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes
CHAPTER 58 VALUATION PLANNING
A. What Is It?
B. What Are The Requirements
C. How It Is Done – An Example
D. What Are The Tax Implications?
1. Introduction
2. General Valuation Rules
3. Determining Value
4. Date Assets Are Valued
5. Valuation Of Real Property
6. Special Valuation Of Certain Farm And Business Real Property
7. Valuation Of Life Insurance
8. Valuation Of U.S. Government Bonds
9. Valuation Of Household And Personal Effects
10. Valuation Of Annuities, Life Estates, Terms For Years, Remainders, And Reversions
11. Valuation Of Listed Stocks
12. Valuation Of Corporate Bonds
13. Valuation Of Interests In Closely Held Businesses
14. Valuing Stock And Partnership Interests For Estate Planning Purposes
a. (1) Book Value
b. (2) Valuation by Reference to Comparable (Traded Securities) Companies
c. (3) Capitalization of Income
d. (4) Valuation of a Business as a “Going Concern”
e. Discount for Loss of Key Employee
f. Buy-Sell Agreements
15. Valuing A Professional Practice
a. A Complex Task
b. Why a Professional Practice is Different
c. Why the Differences are Important
d. Valuing Business-Oriented Goodwill and Future Income Flow
e. Valuation Methods
f. Rough Rules of Thumb for Valuations
g. Data Needed in the Valuation Process
16. Planning For Valuation Discounts In Closely Held And Family Businesses
a. Minority Interest Discounts
b. Lack of Marketability Discounts
c. Lock-In Discount
d. Other Discounts
e. Chapter 14
f. Fractional Interest Discounts
g. Using Fractional Interests with Family Partnerships
h. Avoiding Pitfalls
i. Control and the Swing Vote Issue
j. Costs of Liquidation as a Valuation Factor
k. The Partition Theory
l. Obtaining Valuation Discounts
m. Conclusion
17. References
E. Implications And Issues In Community Property States
F. Chapter Endnotes
CHAPTER 59 FREEZING TECHNIQUES – CORPORATIONS AND PARTNERSHIPS
A. What Is It?
B. When Is The Use Of Such A Device Indicated?
C. What Are The Requirements?
D. How It Is Done – An Example
E. What Are The Tax Implications?
1. Section 2701
a. How Retained Interests Are Valued for Gift Tax Purposes
b. The Minimum Value Rule
c. Transfer Taxation of Cumulative Unpaid Distributions
d. Value of the Retained Frozen Interests for Purposes of Subsequent Transfers
e. Is the Freeze a Viable Planning Alternative?
f. Alternatives to the Freeze
2. Section 2704
F. Implications And Issues In Community Property States
G. Questions And Answers
H. Chapter Endnotes