Recommendations for drafting tax clauses for wills (or revocable trusts) specifying what kinds of estate and inheritance taxes should, and should not, be paid from the residue of the estate (or revocable trust).
Continue readingDaniel Evans
When medical information is needed for a will contest, it may be necessary to deal with the privacy requirements of the regulations adopted under the Health Insurance Portability and Accountability Act of 1996.
Continue readingWhen a married settlor creates a charitable remainder trust with himself or herself as a non-charitable beneficiary, the settlor’s spouse may have elective rights under Pennsylvania law upon the death of the settlor that will disqualify the trust as a charitable remainder trust unless the settlor complies with Rev. Proc. 2005-24.
Continue readingGenerally speaking, the Pennsylvania inheritance tax is applied to the pre-tax estate and not the estate after payment of the tax, and the pre-residuary gifts is paid from the residue. The Commonwealth Court has held that, when the residue is depleted by the tax on pre-residuary gifts, the tax rate to apply to the residue is the same rate that applies to the pre-residuary gifts, and the same rationale could apply to estate in which the residue is not depleted by the tax.
Continue readingAn introduction to the federal regulations under the Health Insurance Portability and Accountability Act of 1996 that lawyers helping clients plan for future medical decisions should be aware of.
Continue readingGifts in trust normally do not qualify for the federal gift tax annual exclusion, but can qualify if beneficiaries are given limited rights to withdraw gifts from the trust. These withdrawal rights, usually known as “crummey powers,” are rarely exercised, and should be carefully drafted both to qualify for the annual exclusion and to avoid adverse gift tax consequences to the beneficiaries when the powers lapse without being exercised.
Continue readingTax deferral is usually good, but really only for income taxes. Generally speaking, gift and estates taxes are not minimized through deferral, and the most important consideration is usually the rate of tax to be paid, and not the timing of the tax payment.
Continue readingThe decision whether to create a trust for the surviving spouse in order to minimize federal estate tax can be a difficult one, but in most cases the decision can be deferred until after a death has occurred, because the creation of the trust can be dependent on a “qualified disclaimer” by surviving spouse. This allows tax planning to be done “post mortem, but only if the will or revocable trust has been drafted to include “disclaimer trust” provisions, so that a disclaimer by the surviving spouse results in a trust for the surviving spouse.
Continue readingBy Daniel B. Evans Copyright 1993, 2003. All rights reserved. [Note: This article was originally published by the Law Practice Management Section of the American Bar Association in Law Practice Management, Vol. 19, No. 7, p. 26 (October 1993).] I … Continue reading