Gift-Splitting When Spouse is Trust Beneficiary

Wife transfers property to a trust for the benefit of Husband. The trust is intentionally structured so as not to qualify for the gift tax marital deduction. Wife files a gift tax return in connection with the gift, and Husband consents to split the gift. Husband is the primary beneficiary of the trust during his life. When Husband dies, will any part of the trust be includible in his estate for federal estate tax purposes?

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Estate Tax under the Tax Bill

If the Tax Cuts and Jobs Act passes, the number of estates subject to the death tax is about to get even smaller, at least temporarily.

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Estate and Gift Tax Exemptions Will Rise in 2018

The IRS recently announced inflation adjustments to various estate and gift tax items for 2018.

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Joint Revocable Trust: Gift on Creation?

Not if the non-contributing spouse has the unilateral power to revoke:

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Health Insurance and Gift Tax

Are payments of health insurance premiums for a child, grandchild, or other party subject to federal gift? No, provided the payment is made correctly. I.R.C. ยง 2503(e)(2) excludes from gift tax any amount paid on behalf of an individual: (A) as tuition to an educational organization described in section 170(b)(1)(A)(ii) for the education or training of such individual, or (B) to any person who provides medical care (as defined in section 213(d)) with respect to such individual as payment for such medical care. For this purpose, medical care is defined under Section 213(d) as amounts paid for: for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body, […]

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Gift Tax Consequences on Distribution when Beneficiary is also Trustee

Client established a trust for the benefit of her son and his descendants. Client also named son as trustee. Under the terms of the trust, the trustee can make distributions to son for “health, support, and maintenance” and to son’s descendants for “health, support, education, and happiness.” Son, as trustee, exercises his power under the trust to distribute assets to his daughter for her happiness. What is the result? The gift tax regulations state the following: If a trustee has a beneficial interest in trust property, a transfer of the property by the trustee is not a taxable transfer if it is made pursuant to a fiduciary power the exercise or nonexercise of which is limited by a reasonably fixed […]

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