Despite IRS disagreement, TC confirms approval of Crummey powers
Article Abstract:
Two 1997 Tax Court memos which accepted the IRS's theoretical argument that Crummey trust powers can be disregarded for lack of substance are of little practical significance because of the IRS's heavy burden of proof. Crummey powers are trust powers given to beneficiaries and result in completed gifts of trust properties. The IRS argues these powers are illusory because grantors and beneficiaries agree the beneficiaries in fact will not exercise the powers. The Tax Court's requirement that the IRS show evidence of such agreements substantially weakens the IRS's position in future cases.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1997
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What are limitations on conditional bequests?
Article Abstract:
Recent litigation over conditional bequests reflects the various interpretations that can be applied in determining their validity. Most conditional bequests are upheld, but some are challenged on the basis of violating public policy. One man did not want his son-in-law to have access to his money because the son-in-law was irresponsible. The court upheld the clause, not giving his daughter the money until her husband was dead. The courts struck down a conditional bequest that would have withheld property if a deceased man's fiancee married or lived with another man.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1993
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Identity of settlor of special needs trust
Article Abstract:
The Michigan Supreme Court in In re Hertsberg Inter Vivos Trust addressed the often arising issue of reimbursement rights of government agencies for expenses incurred in caring for disabled persons who are trust beneficiaries. The court held that the Michigan Department of Mental Health should be reimbursed from the trust where the settlor was the beneficiary. The court's majority determined that the disabled person was the settlor and relied upon traditional trust law in finding that creditors may reach the trust funds.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1998
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