White Paper

Marital Deductions - GST, Estate and Income Tax Implications

 
Marital Pecuniary – John, a married person, created a revocable living trust to be divided upon his the death into a Marital (QTIP) Trust and a Credit Shelter Trust. The Marital and Credit Shelter Trusts are to be funded based on a marital pecuniary formula (sometimes referred to as a true worth pecuniary formula). The generation-skipping transfer tax formula provides that, upon the Settlor’s demise, any available GST Tax exemption of the Settlor will be applied first to the Credit Shelter Trust. Any remaining GST Tax exemption will be applied to the Marital Trust. (The Marital and Credit Shelter Trusts may each be further divided, if necessary, into exempt and non-exempt trusts for inclusion ratio purposes, and for a reverse QTIP election). At the time of John’s death in year 2016, his available applicable exclusion amount and exemption amount are each $5.45 Million. Assuming that the total value of the trust assets exceeds John’s available applicable exclusion amount, that all of the trust assets are available for trust funding and would qualify for the federal estate tax marital deduction, and that all advisable tax elections/allocations are made, the assets used to satisfy the pecuniary allocation:

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T. James Lee, Esq. is a partner and director in the Phoenix office of Fennemore Craig, P.C. He practices in the areas of estate planning, business design and structuring, and commercial transactions, including tax planning, corporate, partnership, LLC, real estate, and international matters. Mr. Lee advises clients on planned giving methods, and establishing charitable trusts, foundations, and other tax-exempt organizations. He conducts regular seminars and workshops on estate planning, tax and probate topics.

Faculty

T. James Lee, Esq.

T. James Lee, Esq.

Fennemore Craig, P.C.

Agenda

Faculty

T. James Lee, Esq.

T. James Lee, Esq.

Fennemore Craig, P.C.

  • Partner and director in the Phoenix office of Fennemore Craig, P.C.
  • Practices in the areas of estate planning, business design and structuring, and commercial transactions, including tax planning, corporate, partnership, LLC, real estate, and international matters
  • Advises clients on planned giving methods, and establishing charitable trusts, foundations, and other tax-exempt organizations
  • Achieved the highest rating with Martindale-Hubbell Law Directory
  • Conducts regular seminars and workshops on estate planning, tax and probate topics
  • Writer of several articles related to estate planning
  • Member of ACTEC and the ABA, Taxation Committee, and listed in Best Lawyers
  • J.D. degree, with honors, Brigham Young University, J. Reuben Clark Law School; B.S. degree, Brigham Young University
  • Can be contacted at [email protected]

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