Author's articles

Author's articles

The New Portability Rules and Disclaimer Trusts

By Julius Giarmarco, Esq. · 13 years ago

Portability: The Tax Relief Act of 2010 provides for a $5 million exemption (indexed for inflation in 2012) per person from federal estate and gift taxes, and a top tax rate of 35%. In addition, ...

Beneficiary-Controlled Trusts

By Julius Giarmarco, Esq. · 14 years ago

Estate planners use trusts to protect beneficiaries from their inability, their disability, their creditors and their predators. Included under "creditors" are the IRS and divorced spouses. Most traditional trusts distribute the assets when the beneficiary ...

Using a VUL Policy in Place of a Roth IRA or Section 529 Plan

By Julius Giarmarco · 14 years ago

How does a variable universal life (VUL) insurance policy stack up as an alternative to a Roth IRA (for retirement planning) or a Section 529 Plan (for college tuition planning)? Using a VUL policy in ...

Trust-Owned Annuities

By Julius Giarmarco · 14 years ago

IRC Section 72 governs the income taxation of annuity contracts. IRC Section 72(u)(1) taxes the income on an annuity contract owned by a "non-natural" person by treating it as though it was received by the ...

Switching Irrevocable Life Insurance Trusts

By Julius Giarmarco · 14 years ago

Irrevocable life insurance trusts ("ILITs") are commonly used to keep insurance proceeds outside the estates of the grantor-insured, the grantor's spouse, and the grantor's descendants (if a generation-skipping trust is used). As the name indicates, ...

Qualified Personal Residence Trusts

By Julius Giarmarco · 14 years ago

A Qualified Personal Residence Trust (QPRT) is an excellent tool for persons with large estates to transfer a principal residence or vacation home at the lowest possible gift tax value. The general rule is that ...

Private Annuities and Self-Cancelling Installment Notes

By Julius Giarmarco · 14 years ago

Private annuities and self-canceling installment notes ("SCINs") are both effective wealth transfer planning techniques. There is a present lapse in the estate and generation-skipping transfer taxes, but it’s likely that Congress will reinstate both taxes ...

Nonqualified Deferred Compensation Plans for Family Businesses

By Julius Giarmarco · 14 years ago

Broadly defined, a nonqualified deferred compensation (NQDC) plan is a contractual agreement in which an employer agrees to pay an employee later for services rendered currently. The NQDC benefits typically commence upon the employee’s retirement ...

Intentionally Defective Beneficiary Trusts

By Julius Giarmarco · 14 years ago

The benefits of an intentionally defective grantor trust ("IDGT") are well known. First, the grantor’s payment of the trust’s income taxes is essentially a tax-free gift to the beneficiaries of the trust. Rev. Rul. 2004-64. ...

How to HEET Up an Estate Plan

By Julius Giarmarco · 14 years ago

Under IRC Sections 2503(e) (concerning gift taxes) and 2611(b)(1) (concerning generation skipping transfer ("GST") taxes) (hereafter the "IRC exclusion provisions") all "qualified transfers" for tuition or medical expenses are excluded from both gift and GST ...

Grantor Retained Annuity Trusts

By Julius Giarmarco · 14 years ago

A Grantor Retained Annuity Trust or "GRAT" is one of the most powerful and tax efficient wealth transfer tools available today. A GRAT allows a person to transfer the future appreciation of an asset to ...

Estate Planning for Unmarried Couples - Part Three

By Julius Giarmarco · 14 years ago

Part One of this article addresses non-tax estate planning issues confronted by unmarried couples; and Part Two this article deals with basic gifting strategies for unmarried couples. This article discusses several advanced gifting strategies that ...

Disclaimer Trusts

By Julius Giarmarco · 14 years ago

While there is a present lapse in the estate and generation-skipping transfer taxes, it’s likely that Congress will reinstate both taxes (perhaps even retroactively) some time during 2010. If not, on January 1, 2011, the ...

Avoiding the Three Year Life Insurance Transfer Rule

By Julius Giarmarco · 14 years ago

Under Internal Revenue Code Section 2035, if the insured gifts a life insurance policy to a third party (such as an irrevocable life insurance trust, or "ILIT") within three years of his or her death, ...

Buy-Sell Agreements

By Julius Giarmarco · 14 years ago

There are several reasons for business owners to enter into buy-sell agreements with their partners or co-shareholders: (1) to create a market for the owner’s business interest at certain triggering events such as death, disability ...

Three Levels of Business Succession Planning

By Julius Giarmarco · 14 years ago

One of the chief concerns facing family business owners is how to effect an orderly and affordable transfer of the business to the next generation and/or key employees. Failure to properly plan for a smooth ...