“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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Clients often ask about the protections that their children and/or other beneficiaries of their estate plan possess, particularly when discussing their fiduciary appointments and the safeguards in place to ensure such fiduciary fulfills their duties to the beneficiaries. While the specific discussion and citations in this article are limited to rights of beneficiaries in Mississippi,…
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Anyone paying attention knows that stock markets have been volatile. As a simple example, the Dow Jones Industrial Average saw an increase of over 600 points (1.56%) on April 11 after dropping over 1,000 points (2.5%) on April 10. Similarly, the S&P 500 gained 9.5% on April 9, but dropped 3.5% on April 10. Generally,…
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We have previously written about the requirements to file a Report of Foreign Bank and Financial Accounts (“FBAR”) for foreign bank accounts held by US taxpayers pursuant to the Bank Secrecy Act.[1] In a recent case out of the United States District Court for the District of Idaho, the Court ruled that a decedent’s widow…
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In a recent Tax Court decision, the Court again approached the critical issues surrounding loss deductions and tax compliance.[1] This case involves Heather and Stewart Weston, a married couple from California, who claimed a $2.1 million loss deduction on their 2017 tax return tied to failed business ventures in Indiana. The Internal Revenue Service (“IRS”)…
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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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Small business corporations, aka S corporations[1], have been much more common than their C corporation counterparts since 1997.[2] S corporations are taxed much differently than their C corporations, with the defining characteristic being that S corporations are flow-through entities, as they are not taxed at the entity level and avoid the widely known “double taxation”…
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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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The practice of “estate planning” covers a broad range of topics, one of which is accounting for gift and estate taxes. From the inception of the estate tax until the early 2000s, when the exemption amount was less than a million dollars, this was a facet of estate planning that practitioners had to evaluate in…
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