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Handicapping the Future Estate Tax Exemptions

Gift-Tax-RulesBy: Mark L. Dodds, Esq., Partner at Grant Morris Dodds

So here we are, more than one year after the change in the estate tax law which temporarily at least has repealed the 2010 repeal of the estate tax, replacing it with a $5 million exemption. But the $5 million exemption is not all bad, considering most estate tax pundits never would have predicted the repeal would have seen the light of day, even for the one year for which the repeal actually was effective.

There were several high profile deaths in 2010 where the heirs really hit the jackpot,  among the most notable being the heirs of George Steinbrenner who inherited the $1.5 billion New York Yankees franchise entirely free of estate tax. If Mr. Steinbrenner had died one year earlier, the heirs would have had the federal government as a 55% partner in the storied New York team; had Steinbrenner died a year later, in 2011, the federal government would have been only a 35% partner. Either way, Mr. Steinbrenner got it just right, assuming there can be a right time to die.

Upside-Down Property at Death

Mark Dodds, Esq. discusses your estate planning process and options when dealing with real property that is upside down:

upside down houseIf the property is upside-down, it is best to leave the property out of a trust. Then, when the person with the trust dies, the trustee has no obligation as to the mortgage because the mortgage is not a debt of the trust as long as the trust is not a guarantor on the mortgage (and it is rare that the trust is a guarantor, but if it were, then the trustee would have to follow the procedure described below.)

So where the trust does not own the real estate and has no obligation on the mortgage, the trustee can do his normal notice to creditors, which gives creditors of the trust 90 days to file their claim, and if no claims are filed, or after any claims are filed and paid, then the trustee can distribute the trust estate. It is unlikely that the mortgage holder will pick up on the notice to creditors, and since the estate, which holds the upside down property, is a separate legal entity from the trust, the trustee has no duties concerning the mortgage, and can proceed to distribute the trust estate even though the home is upside down.

Wealth Planning and Asset Protection Seminar

SECURE YOUR LEGACY You have worked long and hard to achieve success and build wealth for you and your family. Now, your focus is likely to start shifting to preserving your wealth for your family and philanthropic causes. This seminar is designed to provide you with the information and estate planning tools you need to help you preserve, protect and transfer your wealth to your family or other beneficiaries. Grant Morris Dodds along with wealth planning advisors Mitchell and Jessica Horst from Morgan Stanley Smith Barney invite you to attend this Wealth Planning and Asset Protection Seminar. Admission is free, however, seating is...

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A New Law Firm, A Continuing Tradition of Service

From the time Mark Dodds began his practice of estate planning and probate in Nevada more than 20 years ago, and continuing through his 6 and 7 years of association with Robert L. Morris and David M. Grant, respectively,  the attorneys of Grant Morris Dodds have had the opportunity of working with literally thousands of clients and their families, from the initial preparation of estate planning documents and, for many, all the way to the administration of those estate plans they helped their clients to initiate. Their many years of combined experience give David, Bob and Mark each a unique and comprehensive...

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