A beneficiary who is entitled to an annuity of $2,400 each year for life from a trust did not have have a “direct, immediate and substantial” interest in transactions reported in the trustee’s account covering a period during which the trust fund increased from about $5.56 million to about $73 million and so did not have standing to object to those transactions or to petition for the appointment of a co-trustee, but did have standing to object to the division of the trust into separate trusts, only one of which would be used to pay the annuity. Trust under Will of Augustus T. Ashton, Deceased, Dated January 20, 1950, 233 A.3d 869, 2020 PA Super 130 (6/3/2020), rev’d in part, ___ Pa. ___, ___ A.3d ___, 36 EAP 2020 (Pa. 10/4/2021), (with concurrence by Wecht, J.), and aff’g in part, No. 1039 ST of 1952 (Philadelphia O.C. 2/25/2019).
The article “Low-Interest Estate Planning Strategies” described several estate planning strategies that should be considered now that interest rates have reached record lows. One of the strategies that is described in the article is a “long-term GRAT,” meaning a GRAT for a term of 50 to 100 years or more.
A new calculator has been added to Webcalculators to illustrate the benefits of that kind of trust, which can be used to a exclude significant portion of the assets of the GRAT from the grantor’s gross estate. Here is a sample of the output from the calculator, and the overview of the calculators is below:
A new calculation has been added to Webcalculators to determine the portion of trust that is included in the grantor’s gross estate for federal estate tax purposes when the grantor has retained an annuity interest or unitrust interest (such as a GRAT, CRAT, or CRUT), the overview for which is below:
My Webcalculators service has a new feature, which is that emails are now being sent out monthly with new federal rates under IRC sections 1274 and 7520 as soon as those new rates are announced by the Internal Revenue Service. Those rates are used in calculations for different kinds of estate planning strategies and estate administration valuations. See “Low-Interest Estate Planning Strategies” for some comments on the effects of the historically low interest rates that were announced on Friday.
It will be necessary to register at the Webcalculators site to receive these emails, but registration is free. (Webcalculators is a subscription service, but some features require only the free registration, including the emails announcing new rates.)
Charts of current and historical applicable federal rates and §7520 rates will continue to be maintained on this site, but it was found to be difficult to create emails to announce new rates, and it was not clear whether all subscribers to this site would want to get these emails, which is why it was decided to send the emails through Webcalculators.
Webcalculators registration also allows free access to the following calculators:
- Annuity factors which can be determined under tables published by the IRS under IRC §7520 (but not factors requiring custom calculations). So a calculation requiring a two-life factor is free, but a calculation for three lives, or the shorter of a term of years and two lives, requires a subscription.
- Income and remainder factors which can be determined under tables published by the IRS. (See comments about annuity factors, above.)
- Unitrust factors which can be determined under tables published by the IRS. (See comments about annuity factors, above.)
- Interest on unpaid federal taxes (which compounds daily).
- Interest on unpaid Pennsylvania taxes (which is simple interest).
- Weighted average maturities (which is needed for loans that are amortized or pay principal in installments in order to determine whether short-term, mid-term, or long-term federal rates should apply).
The Internal Revenue Service has announced federal rates for the month of June that will be the lowest in the histories of sections 1274 and 7520 of the Internal Revenue Code (“IRC”). The §7520 rate, which is used to value…
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The Orphans’ Court did not have jurisdiction under 20 Pa.C.S. § 3521 to reopen the adjudication of the informal account of the guardian of the estate of a minor merely because of allegations that the investments of the guardian underperformed. In re: Estate of Ryan Wagner, a Minor, 2020 PA Super 112 (5/11/2020).
[9/28/2020 Update: Final regulations have been adopted and a section has been added at the end of this article briefly describing the few differences between the proposed and final regulations.] The Internal Revenue Service has published proposed regulations on the…
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Evans Estate Law Resources has been reconfigured to accept credit card (or debit card) payments directly, rather than having to go through PayPal.
For those subscribers who are satisfied to continue to use PayPal for subscription payments, no action is needed. The system should continue charge your PayPal account (or the bank account or credit card associated with your PayPal account) on the same date each quarter.
For those subscribers who do not wish for payments to continue to be charged through PayPal, you should be able to change your payment method by going to the Membership Billing menu choice under Login/Membership.
Thanks for your support, and let me know if there are any problems.
Dan Evans (dan@evans-legal.com)
The IRS has updated its “Economic Impact Payment Information Center” FAQ to include the following new Q10:
“Q10. Does someone who has died qualify for the Payment? (added May 6, 2020)
“A10. No. A Payment made to someone who died before receipt of the Payment should be returned to the IRS by following the instructions about repayments. Return the entire Payment unless the Payment was made to joint filers and one spouse had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent. This amount will be $1,200 unless adjusted gross income exceeded $150,000.”
There is no other explanation or citation of any authority, and it is not clear why an individual who was alive on 1/1/2020 is not entitled to a credit for the 2020 tax year.
See “Economic Impact Payments for Decedents” for additional information on the payments provided by new IRC added by the CARES Act.
New A41 provides the following instructions for returning payments:
If the payment was a paper check:
- Write “Void” in the endorsement section on the back of the check.
- Mail the voided Treasury check immediately to the appropriate IRS location listed below.
- Don’t staple, bend, or paper clip the check.
- Include a note stating the reason for returning the check.
If the payment was a paper check and you have cashed it, or if the payment was a direct deposit:
- Submit a personal check, money order, etc., immediately to the appropriate IRS location listed below.
- Write on the check/money order made payable to “U.S. Treasury” and write 2020EIP, and the taxpayer identification number (social security number, or individual taxpayer identification number) of the recipient of the check.
- Include a brief explanation of the reason for returning the EIP.
See Q41 for the list of addresses to which checks should be mailed.
[5/6/2020 Update: The IRS has updated its “Economic Impact Payment Information Center” FAQ to include the following new Q10: “Q10. Does someone who has died qualify for the Payment? (added May 6, 2020)”A10. No. A Payment made to someone who died…
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