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Unformatted text preview: ESTATE & GIFT – BROAD ISSUES ESTATE TAX 1) GROSS ESTATE: a) Property D Owned At Death – FSA. §2033 i) RULE: Prop D (1) owned; (2) transferred. ii) Litigation- State law controls ownership. See p. 1 highest state ct binding on fed. iii) D didn’t Own: Gifted property, state death benefits, legal title alone. iv) D Did Own: Prop owed to D; Econ Equivalence; Declined value prop in exe’s hands; newly discovered property; fractional interests (ten in common, NOT JT); Spousal rts: (1/2 CP, 100% Dower, Curtsey); Contingent remainders Count! b) Joint Tenancy . §2040 p. 4 i) Gen- 100% interest includible. (1) Except: Orig Contribution by JT. Not gifts from D, but from others OK. (a) Exception: capital contribution by JT. (b) Exception: 1031 exchange- no orig contribution. (2) Allocation: On subsequent contribution. Do calc every time there is contribution. P. 5 (3) Qualified Joint Interest bet H&W. ½ property to each sp. (4) Death-Bed Severance of JT to tenancy in common OK. c) General Power of Appointment §2041 p. 5 i) Gen- Gen pwr includible in estate whether exercised, or unexercised (lapse, release). As long as D held gen pwr at time of death . 2041(a)(2) (1) 100% includible in D’s estate if: X A (life) B. D has gen prw appt to appoint to anyone including himself. ii) Nature Of Power: (1) Power to- Appoint to D, D’s estate, CR or CR’s of estate (a) Includes: Discharge of D’s obligations, support of another D is legally obligated to support. (2) DONATED POWER . Not retained. But poss 2035-2038. (3) No SPECIAL POWER . X D (life) D’s issue as D appts. (a) But poss 2035-2038 (b) Limitation- D has gen pwr + special pwr. Exercise of special pwr= exercise of gen pwr (includible). (4) Contingent pwr- beyond D’s control may block D’s ability to ex. May not be incl. (5) Capacity- D ex as TTE or he is incompetent - Irrelevant. iii) Disclaimer: treated as if D never had gen power. iv) Joint Power : Treated as if D had power alone. (1) Except- where D shares with: (1) donor; (2) sub, adverse interest in prop. (a) Permissible appointees? Apportion D’s interest. v) Ascertainable Standard : No gen pwr if for D’s health, maint, support. (1) Happiness: No. Std of living: possibly depends on state law req of good faith/necessities. (2) Limit- D’s support of another D is legally obligated to support. If by acert std, still gen pwr. vi) Lapse- = release. (includible). §2041(b)(2) 1 (1) RULE: If D exercised or released gen pwr during life, includible if in estate if brought back under 2035, 2036, 2037, 2038. Pretend D owned prop outright & apply 2035-2038. (2) 5 or 5 Power Exception- (i) lapse, (ii) non-cumulative, (iii) 5K or 5%. (a) 5 or 5 of what? Of income? Entire Trust?...
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This note was uploaded on 04/04/2008 for the course LAW ALL taught by Professor Multiple during the Fall '06 term at NYU.
- Fall '06