Telling gramps that one or two just won't do

Article Abstract:

The traditional generation skipping trust planning could prevent couples from using their total $2 million generation skipping tax exemption when they die during different tax years. Only a portion of the deceased's estate is subject to generation skipping tax because the surviving spouse retains some property, leaving less than $1 million in the first estate. Therefore, the traditional marital and nonmarital qualified terminable interest property (QTIP) trusts do not fulfill a couples' needs and so a reverse QTIP trust is necessary. Other exemption planning opportunities are described.

Planning, Generation-skipping transfer tax, Qualified terminable interest property, Qualified terminable interest property trusts, Generation-skipping trusts

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Final estate freeze rules "simplify" subtraction method

Article Abstract:

The Treasury issued final regulations on Jan 28, 1992 concerning estate freezing under IRC section 2701 to clarify and simplify the valuation method for split interest estate transfers. The old rules used a subtraction method that assumed both parties would be working in their own self-interest when valuing the gifts which allowed abuse in cases where parents gift their children. The new regulations prevent such abuses and the best way to deal with them is to avoid estate freezing altogether by preserving voting rights rather than transferring a split interest.

Transfer (Law)

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Section 2701 valuation issues in a transfer of family business interests

Article Abstract:

Proper planning prior to transferring family business interests to children can limit tax liability under I.R.C Section 2701 and Chapter 14, by using available discounts, valuation methods, and qualified appraisers. Although 2701 restricts estate freezes, certain valuation techniques help reduce liability incurred by transferring interests and recapitalization. A summary of planning suggestions lists methods for avoiding unintentional gifts and other consequences of transfers.

United States, Taxation, Valuation, Family-owned business enterprises, Family-owned businesses, Stock transfer, Family corporations, Business registration

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