Trusts and Estates

What Is Federal Estate Tax?


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The federal estate tax (sometimes called the death tax) is a one-time tax that is imposed at death.  If you die with a certain dollar amount of assets, an estate tax return may be required and a tax may be due.  If a return is required, it is due 9 months after the date of death.

Sometimes clients confuse the estate tax with an income tax, but it is not a tax on income.  It is a transfer tax.  Essentially, it is a tax on the wealthy imposed at death.

When does it apply?

In 2019, a federal estate tax is due for all estates with assets of $11,400,000 or more.  If you die with a gross estate under $11,400,000, no estate tax is due.  If your gross estate is over $11,400,000, you pay a tax on the overage.  In general, the tax rate is between 18% and 40%, but it gets to 40% pretty quickly.

The large exemption amount is due to the recent changes in the tax laws that took effect in 2018.    The federal estate tax amount used to be $5 million adjusted for inflation.  It is now $11 million adjust for inflation so it increases … Keep reading


trust shieldHi there,

I continue to be amazed by the distinguished group of divorce and probate lawyers I have the privilege to work with at Burns & Levinson. Today’s decision on Pfannenstiehl v. Pfannenstiehl, a case which will guide family financial planning across the country, is a credit to their hard work and dedication. We’re proud to bring you part two of this story which our contributor Tiffany Bentley brought to our attention back in April. This case was deemed “unwinnable” by many, so it is hugely important to our client as well as a celebrated achievement for our team.

Best,
Nancy

Almost exactly four months ago, I blogged with great pride about the compelling arguments from my colleague, Bob O’Regan, to the Supreme Judicial Court in the matter of Pfannenstiehl v. Pfannenstiehl. Today, I blog with even greater pride about the SJC’s unanimous decision in our client’s favor.

In Pfannenstiehl, initially both the Trial Court and the Appeals Court went to great lengths to ensure that the wife would benefit from an irrevocable trust established by her (now former) husband’s father. The husband had no access to or control over the trust. Assets and … Keep reading

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On April 5, 2016, the collective eyes of Massachusetts divorce attorneys and estate planners were fixed on the Supreme Judicial Court, where the highly-anticipated oral arguments on “further appellate review” of Pfannenstiehl v. Pfannenstiehl took place.

The 2015 Appeals Court decision received national attention for its potential detrimental impact on the estate planning goals of families who desire to shield trust assets from divorce claims. In Pfannenstiehl, both the Trial Court and the Appeals Court went to great lengths to ensure that the wife would benefit, at least indirectly, from an irrevocable trust established by her soon-to-be-ex-husband’s father even though the husband had no control over the trust and could receive distributions only at the discretion of the trustees. The husband had no present, guaranteed, enforceable interest to receive or use assets or income from the trust. The trustees’ discretion was limited to making distributions under an “ascertainable standard” for a beneficiary’s health, education, maintenance and support. The Trial Court and Appeals Court decisions failed to account for the fact that the trustees did not make distributions to the husband for most of the marriage, and that the husband received distributions only during the final two years of … Keep reading

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to do list estate plan
To do: Create or update your estate plan!

Hi there,

I just learned that this is National Estate Planning Awareness Week. One of our terrific attorneys, Christine Fletcher, has written a quick piece explaining the importance of having your estate planner working on a team with your other “people” when making financial decisions. Some may consider this a dry or morbid topic, but in reality it’s a hugely important one. Post-divorce, everyone should immediately change their will, change the beneficiaries on their retirement accounts and, if you haven’t already, change your health care proxies and durable powers of attorney.… Keep reading
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Hi there,

Christine Fletcher is back to provide more of her knowledgeable estate planning advice. Her help is always welcome but especially this week as I’m on vacation 🙂

Best,
Nancy

 

Christine Fletcher Burns & LevinsonLast week Nancy posted about the importance of updating your estate plan after you divorce.  Unfortunately, I have seen the effects of what not doing this can have on a family.  Many clients are so drained, both emotionally and financially, from a divorce that they find it difficult to deal with anything else.  Or perhaps, having an ex-spouse named in a will as an executor or as a beneficiary is the last connection to that person that you are having trouble severing. But it is important to understand the effects that not updating your estate plan will have.

If you have a will or trust that predates your divorce and names your now ex-spouse as a fiduciary or a beneficiary, some states will treat that spouse as if they predeceased you or refused to accept the asset.  The same may apply to ex-spouses named as a beneficiary of a life insurance policy or a retirement plan.  However, not all states take this approach.  You need to check … Keep reading

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The Importance of Estate Plans Post-Divorce


Hi there,

If your divorce has just ended, you probably feel like you NEVER want to talk to a lawyer again. However, there are a number of financial steps you should take after you divorce, and one requires a lawyer:  You need to change your estate plan, or if you don’t have one, create an estate plan.

Not only does this require good professional assistance, it costs money. Maybe money you feel you can’t spend because you are now “divorce poor.”

I get that. The divorce process drains you of energy and time and money. Regardless, you are at a new beginning and you need to get this one piece done right.

In addition, and it might not happen as part of your estate planning, you need to be sure you have dealt with the possibility that something might happen to your adult (over age 18) unmarried children as well. We tend to assume that when children leave the nest that’s it. In tragedy, it often isn’t.

Best,

Nancy… Keep reading

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Christine Fletcher Burns & Levinson


Hi there,

Last week was a happy news week with all the royal baby reporting going on. I wasn’t willing to be left behind, so here’s a post from my very able colleague, Christine Fletcher.

Best,

Nancy

 

Christine Fletcher Burns & Levinson Now that the royal baby has arrived, William and Kate will be dealing with many of the issues that all new parents deal with – late night feedings, diaper changing, potty training, etc.  After all, they have expressed their intention to be hands-on parents.  I wonder if after a few months of sleepless nights and spit up, they change their minds. (Having been a hands-on parent, myself, I can certainly see the benefits of royal life!)  But they must also be thinking about what every parent undoubtedly thinks of: who will care for their little prince if something unforeseen happens to them.  And who will watch out for his financial well-being.

Now I imagine that Will and Kate do not need to worry themselves much with the financial well-being of their new baby.  And they may or may not have much input as to who would raise the little guy in the event of their untimely demise.  But what about … Keep reading

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Guest post by Lisa M. Cukier, Esq., Partner at Burns & Levinson LLP.  Ms. Cukier concentrates her practice in all aspects of probate litigation, fiduciary litigation, planning & litigation for blended families, same-sex couples, guardianship, conservatorship, mental health law, elder law and domestic relations.

You are divorced …. but wait, if you unexpectedly pass away, does your ex still have rights to your estate?

One spouse’s waiver, in a divorce or separation agreement, of an interest in beneficiary designations is not sufficient to bind the plan administrator, who is obligated to distribute the funds according to the beneficiary designation, even if the parties are divorced at the time of death. In fact, a spouse’s waiver of her or his interest in the other’s life insurance or retirement plan or assets designated as “TOD” (“Transfer On Death”), which assets are retained in the division of property in the divorce, will likely be ineffective. On the death of the person who made the beneficiary designation, the former spouse will receive the death benefit. You must take the additional step of revoking or changing the designation of your former spouse as beneficiary of such accounts, assets, and plans.

Although a divorce … Keep reading

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