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On December 20, Congress passed the Tax Cut and Jobs Act, the most sweeping tax reform since 1986. I am writing to mention a few highlights of the Act. The estate, gift and generation-skipping transfer tax exemption will increase from $5,490,000 in 2017 to $11.2 million per person in 2018. The exemption will be adjusted each year until 2026 based upon inflation.  In 2026, the exemption will be divided in half (i.e., it will be…
Today, the GOP Tax Bill, H.R. 1 was introduced in the House of Representatives.  The Bill is 429 pages long and covers many tax areas that we will cover in future blogs. As promised, the Bill repeals estate and generation-skipping transfer taxes.  You must live at least six more years in order for your heirs to benefit from this full repeal, because the full repeal will only be effective for decedents dying after December 31,…
Tennessee eliminated its “death tax” in 2016.  This is great news for Tennessee residents.  However, if you own property such as a vacation home in another state, you may owe “death taxes” in that estate when you die.  The following 18 states still impose a death tax: Connecticut Delaware District of Columbia Hawaii Illinois Iowa Kentucky Maine Maryland Massachusetts Minnesota Nebraska New Jersey New York Oregon Pennsylvania Rhode Island Vermont Washington If you own property…
Seventeen states now recognize asset protection trusts.  Steve Oshins, who prepares an annual ranking of these statutes, ranks Tennessee’s statute as the third best in the country.  Dave Shaftel has done a very thorough comparison of the various statutes, including a Comparison Map of the various states that allow asset protection trusts. As time has gone by, we have found several ways in which these trusts can help our clients and are now establishing…
A number of our clients have already changed their residency to a state with no income taxes – most often Florida, or have been considering making such a change.  They have moved to avoid paying the Tennessee Hall Income Tax which applies to dividends and certain interest. If you have already moved, you can start making plans to move back in the year 2021.  The Tennessee legislature has just passed the Improve Act, which will…
Today, one of my clients called me because his Trustee is moving to Colorado.  Five years ago, he established a Tennessee Investment Services Trust, a/k/a asset protection trust.  The creditor protection provided by these trusts is dependent upon the Trustee being a Tennessee resident or trust company. Tennessee Community Property Trusts have the same requirement.  You need a Tennessee trustee if you want to obtain the benefits provided by these trusts. When your Trustee…
This is the third article in a series discussing various tax planning opportunities that should be considered in the wake of the recent elections.  For the prior articles see: Postponing Sales Until 2017; and Should you Accelerate Charitable Gifts to 2016? President-Elect Trump has made it clear that he intends to repeal federal estate taxes.  In light of the Republican majorities in the House and Senate, prognosticators believe that estate tax repeal will…
This is the second article in a series discussing various tax planning opportunities that should be considered in the wake of the recent elections.  The prior article discussed postponing sales until 2017. There are at least three aspects of President Elect Trump’s tax plan that favor accelerating charitable gifts to 2016. First, income rates will likely go down in 2017.  If you can make a gift in 2016 and reduce your taxes by 40% of…
I have learned from experience that significant changes in Washington create tax planning opportunities.  Tax laws always change significantly when the party affiliation of the President flips.  It might seem prudent to wait for the laws to change before making major decisions.  However, waiting for certainty may result in foregone opportunities. In the last few days, I have received numerous calls from clients about various tax issues that are impacted by the results of the…
In 2008, Kelley Cannon murdered her husband.  She was later convicted of first degree murder and is currently serving a lengthy prison sentence.  While serving her sentence, she has attempted to benefit financially from her husband’s death by claiming a share of his estate and an insurance trust that he had established.  Paul Gontarek and Kelly Caissie, two attorneys in our firm, recently convinced the Tennessee Court of Appeals to rule against Mrs. Cannon based…