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Harris H. "Trip" Barnes, President of the firm, has been named a Mid-South Super Lawyer by Super Lawyers magazine. The Super Lawyer list is published annually to include the top attorneys in Tennessee, Arkansas, and Mississippi based on high peer recognition, ethical standards, and professional achievement. Trip has attained this status through a lifetime commitment to professional excellence.
Click here to read more about S. Gray Edmondson, J.D., LL.M.
04 October 2010
Certain estate planning transactions are sensitive to interest rates that are established each month by the IRS. One of the primary rates for estate planning techniques is known as the Section 7520 Rate. Beginning on October 1, 2010, the 7520 Rate for various estate planning techniques will be at an all-time low of 2%!
Due to the all-time low 7520 rate, now is the time to engage in estate planning techniques that work well when the Section 7520 Rate is low. This is because the IRS uses this rate to compute the value of the gift made on certain transactions, so the lower the rate, the lower the deemed gifts for many estate planning techniques, which means persons are able to transfer more assets to future generations without incurring more gift taxes!
Examples of the techniques that benefit from a low 7520 rate include grantor retained annuity trusts ("GRATS"), charitable lead annuity trusts ("CLATS"), installment sales to grantor trusts, and intra-family loans. Installment sales and loans use different interest rates than the 7520 Rate, but these rates are also near the all-time low. If you already have an intrafamily loan, you may consider refinancing the loan in October to take advantage of these all-time low rates.
05 February 2010
Interests in Family Limited Partnership Escape Estate Tax and Marital Deduction Challenge
Contributed by the ACTEC Business Planning Committee.
In Estate of Shurtz v. Commissioner, T.C. Memo 2010-21 (Feb. 3, 2010), the Tax Court rejected attempts by the Internal Revenue Service (i) to include in the decedent’s gross estate the value of the limited partnership’s underlying assets (ii) but to limit the marital deduction only to the discounted value of the decedent’s general and limited partnership interests. The Tax Court determined that, because the decedent formed the limited partnership in part to protect her investment in Mississippi timberland from litigation risks, and in part to facilitate continued efficient management of the timberland even after transferring partial ownership interests to other family members, Section 2036(a) of the Internal Revenue Code did not apply even though the decedent also wanted to reduce estate taxes. Since the Tax Court held that Section 2036(a) did not apply, it concluded that there was no mismatch between the value of the decedent’s interests for estate-tax inclusion purposes and their value for marital deduction purposes.
Click here to read more about Lacey L. Bailey, J.D., LL.M.