Gifts by Fiduciaries by Tax Options and Elections
Probate and Property, November/December 2004, Volume 18, Number 6
By Jonathan G. Blattmachr, Stephanie E. Heilborn, and Mitchell M. Gans
Jonathan G. Blattmachr is a partner at Milbank, Tweed, Hadley & McCloy LLP, New York, New York. Stephanie E. Heilborn is an associate at Milbank, Tweed, Hadley & McCloy LLP, New York, New York. Mitchell M. Gans is a professor at Hofstra University School of Law, Hempstead, New York. The sample language contained at the end of this article is derived from Wealth Transfer Planning SM, a computerized document assembly and expert advice system published by Interactive Legal Systems (www.ilsdocs.com) and is published here with its permission.
Fiduciaries often face many tax options and elections during the administration of an estate or trust. The manner in which the fiduciary exercises, or does not exercise, tax elections and options will significantly affect one, some, or all of the beneficiaries. In some cases, it may cause the fiduciary to have made a gift for federal gift tax purposes. This article explores some of the ways in which a fiduciary might be treated as making a gift by exercising or not exercising certain tax elections or options.