Creative Estate Planning Strategies for Using Lifetime QTIPs
12 PM GMT
Why You Should Attend:
Lifetime QTIPs, once used infrequently, are now increasing in popularity as planners see their tremendous benefits. In fact, lifetime QTIPs are perhaps one of the best and most under-utilized estate planning techniques.
Recent changes to the income and transfer tax laws contribute to the utility of lifetime QTIPs, catapulting it into the main stream of every-day planners. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 and the American Taxpayer Relief Act introduced portability and generally increased the income tax rates relative to the estate tax rates. As a result of these changes, lifetime QTIPs can be used to ensure higher exclusions of both spouses are used notwithstanding the order of deaths and to achieve better income tax results, but that is just the tip of the iceberg!
Lifetime QTIPs must provide a qualifying interest for life to the beneficiary spouse, notwithstanding the possibility of divorce. The panel will sort through the post-divorce income tax and marital law implications that must be considered when establishing a lifetime QTIP.
What You Will Learn:
The possible uses of a lifetime QTIP are so extensive that they should be ubiquitous in estate planning. This program highlights them so that planners understand why lifetime QTIPS are a more viable tool today than in years past; will educate the audience on implementation; and dispels misunderstandings about the complicated nature some perceive around lifetime QTIPS. Topics of discussion will include:
· Funding the less wealthy spouse’s by-pass trust;
· Enabling the creation of a by-pass trust upon the deceased spouse’s death that is a “grantor trust” for income tax purposes as to the surviving spouse;
· Planning for minority interest discounts – i.e., no aggregation under Mellinger;
· Structuring QTIPs as recipient trusts for “excess” assets that pass under formula allocation gift or sale;
· Structuring QTIPs as an alternative to formula allocation or defined value clauses by using a fractional disclaimer by donee spouse;
· Using QTIPs to create self-settled asset protection trusts in certain states that have not adopted full Domestic Asset Protection Trust legislation
· Structuring QTIP trusts to reduce exposure to outright elective shares;
· Using QTIPs in Pre-Separation/Divorce Planning;
· The intersection of marital law and lifetime QTIPs
· The role of companion marital agreements to address marital property rights;
· The program will also cover practical pointers to establishing, funding and drafting lifetime QTIPs; and
· Gifts, sales and section 2519 transfers with QTIP interests to achieve state and federal estate tax benefits.