Simplifying Your Estate
Book: 303
Table of Content
1. YOUR “GROSS ESTATE” 1-1
Transfer Tax Imposed 1-2
Unified Exemption Amounts 1-4
Gross Estate Defined 1-6
Schedule A—Real Estate 1-7
Schedule B—Stocks, Bonds, Etc. 1-9
Schedule C—Mortgages, Notes, & Cash 1-10
Schedule D—Life Insurance 1-11
Schedule E & F—Other Property Items 1-13
Schedule G—Transfers During Life 1-14
Schedules H & I—Powers & Annuities 1-16
Other Items on Form 706 1-17
2. A FEW BAD EXAMPLES 2-1
Small Estate: No Executor 2-2
Critique No. 1 2-3
Joint Trust: No Thought 2-4
Critique No. 2 2-6
U.S. Executrix: Foreign Heirs 2-7
Critique No. 3 2-9
Major Death Bed Change 2-10
Critique No. 4 2-11
Toughing It with the IRS 2-12
Critique No. 5 2-14
The Common Denominator 2-15
3. GOALS TO PURSUE 3-1
Get Form 706 Now 3-2
Prepare Your Executor 3-3
Coordinate with Spouse 3-5
Discuss the Marital Deduction 3-7
Read the “Yes-No” Questions 3-8
Resurrect “Contemplation” Transfers 3-10
More on Contemplations 3-12
Percentile your Distributable Estate 3-14
Establish Liquidity Ratio 3-15
Organize Your Records 3-16
4. CULLING REAL ESTATE 4-1
Canvass Your Children’s Wants 4-2
Offer to Sell to Children 4-4
Example of Culling Need 4-5
The “Never Sell” Plan 4-8
Do Culling in 5 Phases 4-10
Phase 1: Undeveloped Land 4-12
Phase 2: Low Income Rentals 4-13
Phase 3: Single Unit Rentals 4-14
Phase 4: Multiple Property Exchanges 4-15
Phase 5: Trust Designated Property 4-17
5. SLIMMING PORTFOLIO ASSETS 5-1
The “Unit Value” Problem 5-2
What If No Market 5-4
Converting Fractions to Cents 5-5
Descriptive Details Required 5-7
The “Accrued Dividend” Problem 5-10
Other Schedule B Instructions 5-11
Dispositions Before Alternate Date 5-14
Anticipate Via Form 1040 5-15
Tax Now (20%), or Tax Later (37%) 5-17
6. CLARIFYING CO-OWNERSHIPS 6-1
Basic Law: Section 2033 6-2
Husband & Wife Property 6-3
Joint Tenancy vs. Tenancy in Common 6-5
Overview of Schedule E 6-6
Part 2 Inclusions Are Daunting
Joint Tenancy Examples 6-11
Tenants in Common Example 6-12
Close Corporation Example 6-14
The Ultimate Clarification: Sale, Etc. 6-16
7. PURGING COLLECTIBLES, ETC 7-1
Schedule F: The Focus 7-2
Articles Having Intrinsic Value 7-4
The “Safe Deposit” Question 7-6
Household Furniture & Things 7-8
Personal Clothing & Memorabilia 7-10
Vehicles, Machinery, & Equipment 7-11
Depreciable Business Assets 7-12
Assist Parents & Relatives 7-14
Executor Experience Preferred 7-15
8. COMPILING PRIOR TRANSFERS 8-1
Umbrella Law: Section 2043 8-2
Addressments on Schedule G 8-4
Inclusions & Exceptions 8-5
Certain More Than 3 Years 8-7
Include “Lapsing Rights” 8-9
Three Compilation Periods 8-10
Powers of Appointment 8-12
Inclusion of Annuities 8-15
9. FILING GIFT TAX RETURNS 9-1
Death Bed Usage 9-2
Overview of Form 709 9-4
Transfers Subject to Form 709 9-6
Schedule A, Part 1 Listings 9-7
Columns B, E, & C Explained 9-9
How Gift Tax Computed 9-11
Prior Gifts on Schedule B 9-14
Tax Effect of Prior Gifts 9-15
10. BUILDING NEEDED LIQUIDITY 10-1
Estimating the Tax 10-2
Filing Thresholds & Credits 10-4
Overcoming Sticker Shock 10-6
Assign Liquidity Ratings 10-7
Prepare to Sell Assets 10-10
The Ultimate Liquidity Plan 10-11
Tax Reduction Efforts 10-13
Acceptance Letter by IRS 10-15
11. UPDATING YOUR WILL 11-1
Have Separate Instruments 11-2
Check Preamble Paragraphs 11-4
Verify Heirs & Legatees 11-6
Instruct Your Executor 11-7
Clarify Property Interests 11-9
Prior Transfers & Disclaimers 11-10
Property Intended for Trust 11-12
Treat Will as “Centerpiece” 11-14
Editing & Witnessing 11-14
12. INITIATING YOUR OWN 706 12-1
Fill Out Part 1 on Page 1 12-2
Three Checkboxes in Part 1 12-4
Four Elections by Executor 12-5
Importance of “Letters Testamentary” 12-6
Overview of Part 4 12-9
General Information: Continued 12-10
Schedules A through U 12-12
Part 5: Recapitulation Now 12-14
The GST Tax Explained 12-16
Schedules R and R-1 12-17
Putting It All Together 12-20
Completion and Conclusion 12-22 |
