Amounts paid by estate to children of prior marriage were deductible as claims supported by consideration

Article Abstract:

The US Court of Appeals for the 11th Circuit overturned the Tax Court in Estate of Kosow in finding that funds paid by the decedent's estate to children he had with his ex-wife were deductible from the estate as claims. The Court found sufficient evidence that the decedent had received consideration for the promise he made to provide for the children. The record showed that his ex-wife had forgone requesting additional spousal and child support in exchange for his assurances that the children would receive an inheritance.

United States, Taxation, Husband and wife, Husband-wife relations, Claims against decedents' estates, Divorce settlements

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Estate did not include assigned interests in revocable trust

Article Abstract:

The Eighth Circuit ruled in Kisling that interests in a revocable trusts that had been irrevocably assigned to beneficiaries were not included in the grantor's estate, even though the grantor still had the right to modify the original revocable trust. The transfers were made within three years of death. The court ruled the act of transferring the shares was the same as withdrawing cash from an estate and giving it away, thereby lessening the value of the estate by the transferred amount.

Cases, Estate tax, Estate taxes, Revocable trusts

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