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Estate And Trust Planning Services

Are you ready for tax season? We help executors and trustees in administering estates and trusts, including preparing the estate tax return, fiduciary income tax returns and court accountings.

We work with other professionals in estate plan design as well as attorneys who prepare wills and trusts. We also help executors and trustees in administering estates and trusts, including preparing the estate tax return, fiduciary income tax returns and court accountings. Preserving the family business is also an important concern where we can provide guidance.

"My mother died about a year or so before (I met Mike) and I had to get through all her estate stuff. She had a lawyer in Elko, Nevada and Salt Lake City, and it was tough. I got her estate in a total mess. I had all kinds of problems. (Mike) squared it away for me." -L. Richard Olsen

Abusive Trusts.

The IRS has warned that it will be cracking down on certain transactions structured as trusts for which certain represented benefits aren't available. (These are not typical revocable living trusts used for estate planning.) None of the trusts that we handle fit this profile, but there are some promoters of trusts that aren't legitimate. Be sure to get competent professional assistance when using trusts in tax planning.

(Notice 97-24)

Do It Yourself Estate and Trust Administration - A Potential Tax Trap.

Several years ago, a client came in to have us prepare her income tax returns. She was a fairly new client whose husband had been ill, and she had a bout with breast cancer. We'll call her Deanna and her husband, Bart.

During our conversation, I learned her husband had passed away. I asked her what had happened since then. She showed me a list of account changes she had made.

I held up my hand and said "STOP!!"

Deanna and Bart had a combined estate of about $1 million, an "only" adult daughter, we'll call her Charlotte, and "simple momma-poppa wills" leaving all of their property to each other, or to Charlotte if there was no surviving spouse.

This was the perfect opportunity to use an estate planning technique called a disclaimer. A disclaimer tells the government, "I won't take it." When a beneficiary of a will or trust makes a disclaimer, he or she is treated as dying before the decedent, and the property goes to the next beneficiary. In this case, the next beneficiary was Charlotte. Deanna was in a financial position to let Charlotte have the property.

Deanna's attorney handled the disclaimer, "cured" some of the erroneous transactions, and wrote a revocable living trust so that her estate would avoid probate.

Within two years, Deanna's health suddenly took a turn for the worse. Her breast cancer came out of remission, and she passed away.

We had successfully kept her estate at close to her lifetime exemption equivalent, virtually eliminating estate tax for Deanna and Bart, saving about $55,000 of estate taxes for the family. The administration of Deanna's estate was also handled faster and easier because of the trust.

It pays to get competent professional help whenever you are dealing with a significant transaction or a life-changing experience, such as a divorce or death.

If you would like help planning your estate or trust, call Dawn Gray at (408) 918-3166 to find out if we are the right CPAs for you!

For more information about Investment Requirements for California Trustees, visit our article.

For more articles and information about new tax real estate tax developments, subscribe to our newsletter, Michael Gray, CPA's Real Estate Tax Letter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Are you ready for tax season? We help executors and trustees in administering estates and trusts, including preparing the estate tax return, fiduciary income tax returns and court accountings.

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Michael Gray, CPA
2190 Stokes St., Suite 102
San Jose, California 95128-4512
(408) 918-3162
Fax (408) 998-2766
email: mgray@taxtrimmers.com
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