Courts favorably construe bequests conditioned upon surviving until receipt

Article Abstract:

Bequests conditioned on the beneficiary surviving until receipt have been attacked by the IRS, but two courts have upheld favorable tax treatment in instances where survival was required. In Comerica Bank, N.A., the US Court of Appeals for the Sixth Circuit upheld generating skipping transfer tax exemptions on gifts that were conditioned on survival. The Tax Court ruled in Estate of Bond that the marital deduction still applied to bequests to the decedent's spouse despite of the presence of a survival clause by finding the spouse's interest to vest immediately.

Decedents' estates, Generation-skipping transfer tax, Inheritance and succession

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Rethinking old planning in light of the new regulations on disclaiming joint property

Article Abstract:

The IRS issued regulations in 1996 allowing a surviving party in a joint tenancy to disclaim the their additional property interests within nine months of the first joint owner's demise. The surviving joint owner can disclaim the interest regardless of the survivor's contribution even up to the entire purchase price. Planners can disclaim interests in joint bank and brokerage accounts as well.

Economic aspects, Disclaimer of gifts, Spouse's share, Joint tenancy

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Back to basics: avoiding creativity in marital deduction planning

Article Abstract:

Estate planners must be wary when drafting gifts meant to qualify for the federal estate tax marital deduction. The Tax Court in Estate of Walsh disallowed a surviving spouse a lifetime income interest in a joint revocable trust made with her husband. The court considered an incompetency clause as voiding the survivor's right to income and principal.

Cases, Estate tax, Estate taxes

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