Happy New Year

Tuesday, January 2, 2018

2018 heralds perhaps the most dramatic change in the federal and Maine estate tax in memory. The tax legislation (effective January 1, 2018) immediately doubles the federal estate, gift and generation skipping tax exemption to almost $11.2 million per decedent. The exemption will continue to be indexed annually, and although the actual amount of the adjusted exemptions for 2018 has not yet been announced officially, we believe the calculation yields an exemption of $11.180 million. Thus couples will be able to pass on over $22 million free of estate and gift tax.

Potential Changes in Federal Estate Tax

Friday, January 27, 2017

The federal estate tax system has undergone significant changes over the past 20 years, but the next 20 months may see even more significant change. When George W. Bush was elected in 2000, estates over $675,000 were subject to estate tax and the top marginal rate was 55%. From 2001 to 2010, the exemptions went up and the rates came down, culminating in 2010 when, for one year, there was no estate tax. In December 2010, Congress re-enacted the estate tax with a $5 million exemption (indexed for inflation) and a flat rate of 35%. Presently, there is a flat, 40%, federal estate tax on estates over $5,490,000 (an 813% increase in the exemption from 2000).

Proposed Rules May Impact Interests in Family Business Entities

Friday, October 28, 2016

The IRS has issued long awaited proposed regulations under Section 2704 of the Internal Revenue Code that would make sweeping changes to the valuation of interests in family business entities for estate, gift, and generation-skipping transfer tax purposes. If they are adopted, the proposed regulations will reduce the availability of certain valuation discounts used in valuing transfers of business interests between family members. Thus, clients considering transfers of interests in family businesses may want to consider implementing those transfers before the regulations are finalized to facilitate more favorable valuations.

College Checklist: Computer, Laundry Supplies and . . . a Power of Attorney!

Friday, July 22, 2016

Sending a child off to college is a daunting task for many parents: lists of things to buy, details to button down, all the while knowing your son or daughter will be embarking on one of the most exciting and independent ventures of a lifetime.

Change in Maine Estate Tax

Tuesday, August 4, 2015

January 2016 will herald a very important change in the Maine estate tax. The Maine estate tax exemption, now $2 million (the amount that may pass free of estate tax in addition to what may pass to a spouse or charity), will increase to match the level of the federal exemption – this is a dramatic increase!

Concerns About TOD and POD Accounts

Thursday, September 11, 2014

We have seen an increasing number of situations where a decedent had designated beneficiaries of a bank or investment account, apparently to “avoid probate” and in some cases (according to family members) to avoid the claims of his or her creditors after death. Although beneficiary designations are necessary for IRAs, retirement accounts and life insurance, they are not necessary and are often undesirable for other accounts.

Gift Tax Returns for Annual Exclusion Gifts

Wednesday, February 19, 2014

When do annual exclusion gifts require the filing of a gift tax return?

New Planning Opportunities for Same-Sex Couples

Wednesday, July 10, 2013

The recent Supreme Court case, United States v. Windsor, declaring portions of the Defense of Marriage Act (“DOMA”) unconstitutional, has created some dramatic new planning opportunities for same-sex couples who are married in states such as Maine that recognize same-sex marriage.

A New Year’s Resolution for Our Estate Tax Conundrum

Saturday, January 19, 2013

“For those of us who have been involved in any estate planning projects within the last few years, either as a client or as a professional, the path has been uncertain and at times frustrating. The federal estate tax laws have been in flux for an uncomfortably long time, making planning difficult. The laws that were passed in 2001 were, by definition, short-lived, and until the legislation passed in the early hours of New Year’s Day 2013, congressional efforts to enact something more permanent had failed. We saw numerous pieces of legislation introduced, yet only interim measures managed to obtain the votes necessary to become law. Thus it is with great pleasure and relief that we write about a law that we dare describe as permanent.”

So begins our 2013 newsletter currently in progress, to be finalized and posted shortly.

Maine Tax Forum—Estate Tax Materials

Monday, October 22, 2012

The Maine estate tax is about to change dramatically. In November, I’ll be presenting a talk at the Maine Tax Forum to discuss these changes. You can read the materials online now.