“Asset protection is a legitimate, legally sanctioned objective; though one that has limitations of its own.” The timing of asset protection planning can be critical when it comes to these “limitations.” By the time a creditor is reasonably foreseeable, the creditor may be able to stop or unwind transfers of assets whether through obtaining an…
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In a recent case out of the Tax Court, a surviving spouse’s Estate was denied the portability of the Deceased Spouse’s Unused Exclusion (“DSUE”) from the decedent’s spouse who had passed away two years before the survivor.[1] The Estate Tax Return (“706”) for the decedent’s spouse, while filed, was not “complete and properly prepared” and…
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In 2014, Mississippi enacted the Mississippi Qualified Disposition in Trust Act,[1] which amended the former provisions of the Mississippi Trust Code to allow the creation of a “qualified disposition trust,” also known as a domestic asset protection trust (“DAPT”). Generally, assets placed in trust by someone other than a beneficiary are protected from such beneficiary’s…
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The recent Mississippi Supreme Court case, In re Estate of Effie Mae Autry (2023-CA-01300-SCT), provides an important reminder of the pitfalls associated with undue influence in estate planning. This case illustrates how family dynamics and diminished mental capacity can complicate the execution of Wills and related estate documents, including lifetime gifts. Background Decedent, Effie Mae…
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Litigation involving estates and trusts, while sometimes impossible to avoid, is usually exhausting to all parties involved, especially given that such litigation is often among family members and/or is following the death of a loved one. Alternative dispute resolution (“ADR”) is an alternative to traditional litigation, encompassing various methodologies, including mediation and arbitration, aimed at…
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When receiving a bequest, many people question whether they will be subject to income tax.[1] As a basic matter, an individual’s income “does not include the value of property acquired by gift, bequest, devise, or inheritance.”[2] However, that does not mean the individual receiving assets by bequest has no income tax consequences to consider. Those consequences…
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As of the release of iOS 15.2, December 13, 2021, Apple released a new feature for its users, “Legacy Contacts”.[1] Historically, estate fiduciaries could receive this information with a court order, but the new process is designed to minimize the expense of time and money associated with getting access to a decedent’s account information. So,…
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In a recent decision, the Tax Court addressed the complexities of gift tax and qualified terminable interest property (“QTIP”) rules, providing important insights for estate planning professionals and taxpayers alike.[1] The case centered on the interpretation of provisions related to the taxation of transfers between spouses, and in this context, termination of QTIP interests and…
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In a previous writing, I discussed the potential of an executor to be personally liable for a decedent’s tax obligations.[1] That discussion was based on lessons learned from a Tax Court opinion,[2] outlining certain steps for executors to consider in minimizing exposure to such personal liability. In 2023, in a split decision, the Ninth Circuit…
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On February 8, 2024, the Mississippi Supreme Court issued its opinion[1] regarding an issue of first impression regarding Mississippi’s Principal and Income Act of 2013 (the “Act”).[2] As a worthwhile note, the Court noted that this is an issue of first impression and acknowledged as well as appeared to oblige the parties so as to…
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