2.4.1.1 A decedent’s gross estate for federal purposes includes the value of the revocable trust. I.R.C. Sec. 2038 (retained power to revoke); I.R.C. Sec. 2036(a)(1) (decedent’s retention of the income rights); I.R.C. Sec. 2036(a)(2).
2.4.1.1.1 A revocable trust may be drafted to provide for a credit shelter disposition, so a revocable trust may be designed to secure the same federal estate tax advantages of a properly drafted will.
2.4.1.2 Basis Step-Up Treatment.
2.4.1.2.1 The income tax basis result is likewise parallel. I.R.C. Sec. 1014.
2.4.1.2.2 A current theory holds that joint spousal trusts can step-up the basis of the entire amount of the property held by both spouse. PLR 200101021 ruled in favor of the taxpayer on a joint trust but did not give a full “green light” to the technique. Also, of course, letter rulings cannot be relied upon. Nevertheless, it is a technique that may gain currency.
Articles
- 1. Background
- 5.1.2 The Traditional Role of Fiduciary Duty in the Partnership Relationship
- 2.3.4 S Corporation Stock
- 2.3.5 Flexibility as to Tax Year/ Estimated Tax Payments
- 5. Issues
- The Estate Planning Implications of Stripping Fiduciary Duty from the Uniform Partnership Acts in Maryland and D.C.
- 1. The Historic Roots and Development of Tenancy by the Entirety
- 6.7 Plain Meaning and Inter Vivos Trust
- Overview of Family Limited Partnerships
- 11.1 The Non-Probate “Revolution”
- 5. The Maryland/ D.C. Experience
- Estates & Trusts 101: Planning for Minor Children
- 1.2 The “Terms of the Trust”
- Relevant Vocabulary
- 5.3 Joint Action Necessary
- 2.1 Common Law Rule
- 10.2 Management Rights; Fiduciary Obligations
- 1.1.4 Efficacy of Revocable Trusts as Will Substitutes
- 10.5 LLCs
- 9.4 UTC Approach
- IV. Health Care Directives
- 1.2 The Federal Regarding the Tax Burden
- 2.5 The Statutory Enumeration of Powers
- 11.4 Revocable Trusts
- 2.1 Introduction
- 4.3 Good Faith in the Performance of the Deal
- 3.1.1 The Minimum Distribution Rules
- 3.2.1 Required in Every Case Involving Extended Discretion
- Choice of Law: Tenancy by the Entirety Across State Lines
- 3.2.2 Only Certain Trusts to be Permitted as a Designated Beneficiary
- 1. Overview of Fiduciary Relationships
- 3.5 Spendthrift Clauses and Trust Termination
- 1. General Background
- 2.2 Actions Against Trustees in General
- 1.4.3 The Contractarian Worldview
- 2.6 Ascertainable Standards and Estate Planning
- The Insolvent Estate (Select Topics from the Maryland Perspective)
- 2.3.3 Other “Exceptions” to the Plain Meaning Rule
- 6.2 The Uniform Trust Code Codifies the Common Law
- Duties of a Personal Representative
- 1.4 Fiduciary Duty as a Separate and Stand-Alone, Non-Contract Principle
- 1.3.1 Implied Bargain
- 1.1 Planning for Minor Children After the Parents’ Death
- Selected Issues Regarding the Orphans Court Jurisdiction
- 2.2 Advocate of a Contractarian View of Trusts
- 4. Preserving the Assets
- 2.2 The Prudent Investor Act
- 3.1 IRC § 721 (b)
- 5.2 Limits to Exculpatory Clauses
- 6.6 Other “Exceptions” to the Plain Meaning Rule
- 1.5 Examples of Tax Clauses
- 4.1.2 Commissions and Legal Expenses
- 1.2 Fiduciary Duty in Law of Partnership
- 10.3 Proposed Changes to MRULPA
- 6.3 Exceptions to the Plain Meaning Rule
- 3.4.1 Exercise of Fiduciary Duty
- 3.3 Enforceable Rights to Beneficiaries
- 3.1.1 Good Faith Test
- 1.4.1 The Uniform Trust Code
- 3.2.1 Dead Man’s Statute is Strictly Construed
- 2.1 Fiduciary Duty Owed by the Trustee
- 2.11 Beneficiary Right to Enforcement and the Supplemental Needs Trust
- 10.1 The Charging Order
- 5.5 Diversification and the Modern Portfolio Theory
- 4.2 UTMA Accounts
- 3.3 MUDOPIA
- The “Terms of the Trust” Extrinsic Evidence of Settlor Intent The Intersection of Planning and Litigation Highlighting Differences Among the Jurisdictions
- 2.3 Even with the Plain Meaning Rule Under the Common Law, There were Exceptions or “Workarounds” Around the Rule
- 3.1.2 Settlor’s Intent
- 8.5 The Beneficiary as Trustee of Third Party Trusts
- 4.1 The Maryland “General” Power
- 2.3.3 Other Losses During Administration
- 3.2 The Maryland Law
- 4.7 The Rights of Remainder Beneficiaries and Ascertainable Standards
- 8.1 The Maryland Dead Man’s Statute
- 2.5 Retaining the Categories in the Maryland Trust Code Proposal
- 2.4.1 Federal Estate Tax
- 2.3 “Respectable” Asset Protection Planning
- 1.3 Contractarian Basis
- 1.2.2 Irrevocable Trust
- 7.1 The State of Mind/Intent Exception to the Hearsay Rule
- 7.2 Exception Covers the Declarant’s Later Action
- 1.3 Fiduciary Duty Generally
- 8.2 Creditors and Limited Powers of Appointment
- 4.2 The Support/Discretionary Trust Distinction in Maryland
- 1.3.4 Joint Trusts/Joint Wills Issues
- 4.5 Ascertainable Standards and Estate Planning
- 2.3.1 The Latent Ambiguity Exception
- 1.2 The Importance of the Right to Information
- 4.2.1 Prohibiting Conduct That Frustrates the Explicit Agreement
- 5.7 The Craft Case
- 1.3.3 Joint Trusts and Entireties Property
- 5.2 Power of Attorney With the Ability to Disclaim
- 7.1 In General
- 4. Bankruptcy Reform
- 12.1 Enforcement of Liens
- 2.4 The Handling of the Plain Meaning Rule Under the U.T.C.
- 1.1 The Origin of the Duty Owed
- 1.1.5 Separation of Beneficial and Equitable Titles
- 4.3 Creditors and General Powers of Appointment
- 4.8 Extended Discretion and Court Enforcement of Distributions
- 6.4 The Latent Ambiguity Exception
- 5.2 The Prudent Investor Rule
- 8.5 Opening the Door to Excluded Evidence
- 6.3 Domestic Asset Protection Trusts
- 2.3.11 Election Under IRC Sec. 645 to Treat Revocable Trusts as Part of Probate Estate
- 10.4 Partnership Interests in Bankruptcy
- 1.2 Impact of Evidentiary Rules in General
- 3.4 Traditional Trust Sense
- 5.4 Creating or Adding to Entity Property
- 2.8 The Rights of Remainder Beneficiaries and Ascertainable Standards
- 1.1.6 Lack of Separation
- 1.1.2 Whether an express trust has been created is a factual determination
- 3.1 “Transfer Creating the Interest”
- 1.1.3 Trustee and Cestui Que
- 1.1 The Tax Clause as a Bequest
- 2.10 Extended Discretion and the Uniform Trust Code
- 1.2.1 Definition
- 1.3 Maryland Common Law
- 2.1 Uniform Disclaimer of Property Interests Act
- 4.1 Fraudulent Conveyance Look-Back Period
- 4.3 Limits on Homestead Exemption
- 4.1 “Good Faith and Fair Dealing”
- 1.2.1 Common Law
- 8.4 Creditors and Non-Testamentary General Powers of Appointment
- 2.2 Medicaid
- 3.1 Background
- 2.6 Tortious Interference with an Inheritance
- 5.2 The 1997 Revised Uniform Partnership Act and The 2001 Revised Uniform Limited Partnership Act
- 3.2 QTIP Rule
- 7.3 Future Action May Include No Action
- 2.3.4 Regardless of the Plain Meaning Rule for Testamentary Trusts, the Plain Meaning Rule Never Applied to Inter Vivos Trusts
- 3.2.4 Opening the Door to Excluded Evidence
- 3.1 The Statutory Reformation of the Traditional Dead Man’s Statute in Washington, D.C. and Virginia
- 7.3 Special Status Creditors
- 8.1 In General
- 8.2 Formalities of Will Substitutes
- 5.2.1 Limited Mandatory Rules Governing Partner Relations
- 9.1 Confidential Relation and the Burden of Proof
- 11.2 Joint Tenancy
- 4.3 Trusts for Children
- 10.7 Family Entities and Divorce
- 5. Conduct in Investing
- 2.3 The Support/Discretionary Trust Distinction in Maryland
- 2.2 Settlor Intent: Support/Discretionary Trusts
- 4. The “New” Uniform LLC Approach: Fiduciary Duty Restored
- 3.3.2 “Misinterpretation” Or “Abuse” of Discretion
- 3. The Duty of Prudence
- 3.3 Special Status Creditors
- 3.2 Theoretical Underpinning
- 9.1 In General
- 2.3.2 Passive Activity Loss Treatment
- 2.1 The Maryland Rule of Professional Conduct
- 9.3 The Restatement (Third) Approach
- 2.1 Natural Parents Are Guardians
- 2.2.1 Impact Upon Creation of the Trust
- 3.2 Reasonableness Standard
- 1.5.3 Power of Attorney v. Trust
- 4.2.3 Litigation/Dispute Considerations
- 3.3.1 Family Relationship
- 2.2 Under the Common Law, the Plain Meaning Rule Generally Excludes Extrinsic Evidence for Testamentary Trusts But Not for Inter Vivos Trusts
- 1. Introduction
- 1.4 The Maryland Uniform Estate Tax Apportionment Act
- 4.1 Introduction
- 1.5 The Common Law and the Codification of the Law of Trusts
- 1.6.2 The Impact of the Marketing on Responsible Planning
- 5.1 General Rule
- 4.2 Creditors and Limited Powers of Appointment
- 4. Kaouris – Jurisdiction to Construe Written Documents
- 9. Powers of a Personal Representative
- 2.5 The Impact of Exculpatory Clauses
- 11. Special Post-Mortem Issues
- 6.1 A Good Faith Standard within the Context of Broad Fiduciary Duty
- 1.1 Asset Protection With Tenancy By The Entireties
- 1.4 Fiduciary Standards and Trustee Identity
- 2.4 Cost of Suit
- 8.4 A “Transaction” for Purposes of the Statute
- 4.2 Forum Shopping
- 3.3.1 Settlor’s Intent
- 3.1 The Nature and Scope of the Trustee’s Duty: the Johnson Decision
- 1.1 Definition of Fiduciary Duties
- 2. Limited Jurisdiction – History
- 2.3.2 Exception to Plain Meaning for Surrounding Circumstances
- 5.1 The “Prudent Man Standard”
- 1.2 Concept of Fair Market Value
- 8. Timeliness
- 1.1.1 Fiduciary Relations in Various Settings
- 3.3.2 Constructive Notice of Fraud
- 2.1 The Common Law Rules of Construction and Settlor Intent
- 3.2 The Maryland Dead Man’s Statute
- 3.3 Badges of Fraud
- 2.3.1 In General, Section 645 Election
- 6.3 The Uniform Trust Code Permits Traditional Norms
- 1.6.1 Living Trusts are Heavily Marketed
- 9.2 Trustee Standards
- 7. Duty Not to Delegate
- 3.2.1 Final Regulations
- 4.3 Disclaimer of the Survivorship Interest
- I. Estate Planning
- 3.1 Introduction/ Basic Pattern
- 6. Maintaining Accurate Records
- 1.2.2 Economic Interest
- 10.6 Corporations
- 4.2 The Craft Aftermath
- 6.1 Rules of Construction and Settlor Intent
- 1.3 The IRS Has Attempted to Derail Family Limited Partnership Planning
- 7.2 Theoretical Underpinning
- 2.1 Attractive Attributes To Motivate Use
- 5.3 Maryland’s Version of the Prudent Investor Rule
- 3.4 Tortfeasor Access
- 2. State Variations
- 1.2.3 Revocable by the Grantor
- 7.5 Spendthrift Clauses and Trust Termination
- 2. The Duty of Loyalty
- 8.3 Credible Witnesses
- 2.7 Deductibility of Investment Advice
- 5.4 The Last Uniform Business Entity Act That Addressed This Issue
- 2. The Estate Planning Implications
- 4.2.2 Spousal Election
- 4.3 Eliminating the Categories under the UTC and Restatement (Third)
- 1.5.2 Durable Power of Attorney
- 5.1 Validity in General
- 9.5 The UTC/Restatement Controversy
- 4.6 Ascertainable Standards are Measurable
- 3.2.2 Examples of Strict Construction
- 2. Extrinsic Evidence and the Terms of the Trust, the Plain Meaning Rule
- 2.1 Equity Jurisdiction for Actions Against Trustees
- 5.2.2 Not Effective Substitutes for a Broad Fiduciary Duty
- 5.6 Other Spousal Property
- 3.1 Duty to Supply Copy of Trust Instrument
- 10.1 The Privilege and the Attorney for a Trust
- 1.1 The “Terms of the Trust”
- 4.1.1 The “Probate Fee”
- 3.2 The Nature and Scope of the Trustee’s Duty
- 3.3 The Nature and Form of the Accounting
- 8.2 Dead Man’s Statute is Strictly Construed
- 2.9 Extended Discretion and Court Enforcement of Distributions
- 11.3 Transfer of Death Accounts
- 4.1 A Close Look at Drye and Craft
- 6. Proceedings in Multiple Courts
- 5.1.1 The Fiduciary Obligation of Partners
- 6.5 Exception to Plain Meaning for Surrounding Circumstances
- 2.3 Remedies
- 8.3 Examples of Strict Construction
- 2.1.1 Trust Income is Taxable to the Grantor
- 5.2 Nature of the Tenancy
- 3. The Stripping Out of Fiduciary Duty
- 2.3.9 Charitable Set Asides
- 1.1.1 An Express Trust
- 1.3.1 Definition
- 1.3.2 Revocation of Joint Trusts
- 1.4.1 Referred to as “Living Trusts”
- 1.5.1 Definition
- 2.1.2 Filing Requirements
- 2.2.2 The Gift From the Trust Problem Solved
- 2.3.6 Separate Share/65-Day Rules
- 2.3.7 Throwback Rules
- 2.3.8 Personal Exemptions
- 2.3.10 Joint Tax Return
- 2.4.2 State Inheritance Tax
- 3.1.2 Death Before the Required Beginning Date
- 4.2.1 Time Considerations
- 4.2.4 Medicaid Considerations
- 4.2.5 Title Insurance
- 4.2.6 Maintaining Privacy
- 4.2.7 Planning for Disability
- 1.4.2 The Revised Uniform Partnership Act
- 5.1 No Size Fits All in Estate and Asset Protection Planning
- 4.1 Settlor Intent: Support/Discretionary Trusts
- 1.1 Trust Law in General
- 8.3 Creditors and General Testamentary Powers of Appointment
- 8.1 The Maryland “General” Power
- 2.2 Civil Conspiracy and Other Cases
- 2.6 Powers in the Instrument
- 2.3 The “Legal List” of Investments
- 1. Introduction
- 5.3 Weakness of a Good Faith/Bad Faith Analysis
- 2.4 Eliminating the Categories Under the UTC and Restatement (Third)
- 5.1 The Law of Partnership Folded into the Law of Contract
- 4.5 529 Plans
- 6.1 The Maryland View
- 3.1 Duty “To Act in Good Faith …”
- 4.2 Not Subject to a Qualified Disclaimer
- 4.4 Retaining the Categories Under the Maryland Trust Code Proposal
- 3.1 In General
- 3.1.3 “State of Mind Not Contemplated” Standard
- 7.4 Tortfeasor Access
- 4.1 General Comments
- 4.9 Extended Discretion and the Uniform Trust Code
- 4.1 Disclaimed Property
- 4.2 The Inherently Subjective Nature of Good Faith
- 1.1 The Use of Family Limited Partnerships in Estate Planning
- 6.2 The Plain Meaning Rule and Testamentary Trusts.
- 3.2 Accountings and Revocable Trusts
- 4.1.1 Law and Economics Practitioners View
- 5.5 Maryland Tenants by the Entirety Trusts
- 3. Tenants by the Entirety and Bankruptcy
- 5.4 The Theoretical Underpinnings of the New Rule
- 6.2 Offshore Trusts
- 3.2 Maryland Does Not Recognize De Facto Parent Status
- 11.3.2 Standby Trusts
- 5. Planning in Full Bar Jurisdictions: Post Judgment Transfers and/or Disclaimers in Full Bar Jurisdictions Appendix
- 2.4 Statutory Powers in General
- 3.1 Grandparent Visitation Right Statute
- 3. Limited Jurisdiction – Statutory Framework
- 1.3.2 Contract Standard of Good Faith Dealings
- 3.4 Disclaimer as Transfer
- 3.2.3 A “Transaction” for Purposes of the Statute
- 2.7 Ascertainable Standards are Measureable
- 4.4 IRAs; Insurance
- The Terms of the Trust: Extrinsic Evidence of Settlor Intent
Franke Beckett, LLC
Annapolis, Maryland
An Estates & Trusts Law Firm
Website: fredfranke.com
© 2024
