Estate Planning with Selected Issues – 20 hrs. CPE
This exceptional course surveys wills, living trusts, gifts, marital property, and probate avoidance. Will and trust forms are explored along with living wills, durable powers of attorney, and nominations of conservator. Designed to eliminate estate problems and death taxes, the emphasis is on practical estate planning solutions that are cost effective.
Course No. 9014
Format: Online pdf (497 pages). Printed book available.
Instructional Delivery Method: QAS Self-Study
Prerequisites: General understanding of federal income taxation
CPE Credit: 20 hrs.
Field of Study: Taxes
Course expiration: You have one year from date of purchase to complete the course.
Course Revision Date: March 2017
Learning Assignments & Objectives
At the start of Chapter 1, participants should identify the following major topics for study:
* Build, preserve, & distribute
* Legal documents
* Estate planning team
* Estate administration
* Transfers within probate
* Transfers outside probate
* Transfers using a trust
* Special planning tools
After reading Chapter 1, participants will be able to:
1. Identify basic estate planning elements noting the importance of well-drafted legal documents and specify the key team participants in-cluding their roles in estate planning process.
2. Determine the major steps in the probate process, identify ways to make transfers outside the probate system including the use of a trust, specify estate tax techniques that save death taxes while retaining max-imum control, and identify estate-planning facts.
After studying the materials in this chapter, answer the exam questions 1 to 6.
At the start of Chapter 2, participants should identify the following major topics for study:
* Taxable estate
* IRS valuation
* Estate tax return & payment
* Tax basis for estate assets
* Generation-skipping transfer tax
* Application of gift taxes and valuation
* Gift tax annual exclusion
* Gift tax marital and charitable deductions
* Gift tax advantages and disadvantages
* Shifting income & gain
After reading Chapter 2, participants will be able to:
1. Identify potential death taxes including federal estate tax as it applies to various size estates, specify the principal taxes that impact death tax-ation, and determine the expiration of the death tax credit.
2. Determine what constitutes a taxable estate under §2501 noting what assets are included in a gross estate using basic categories of property and transfers.
3. Specify estate deductions allowed under federal estate tax law noting their tax advantages and disadvantages.
4. Determine the value of a decedent’s assets using permitted elections, recognize the use of the Form 706 to pay any estate tax due, select the tax basis of estate assets noting how common transactions affect prop-erty basis under §1014.
5. Recall the advantages of gift planning including estate reduction noting the impact of the GST, specify the steps to compute gift tax identifying the gift tax exclusion amount, and determine the value of gifts including those that are split.
6. Identify the various gift tax exclusions, specify the tax treatment of below-market loans, recall the gift tax marital deduction requirements, determine the tax consequences of giving various assets noting factors to consider when gifting, and recognize the use of the Form 709 to compute and pay federal gift tax.
After studying the materials in this chapter, answer the exam questions 7 to 26.
At the start of Chapter 3, participants should identify the following major topics for study:
* Provisions of wills
* Requirements of wills
* Executors and guardians
* Types of wills
* Title implications
* Changes to a will
* Advantages of a will
* Simple will
* Probate pros and cons
* Probate avoidance
After reading Chapter 3, participants will be able to:
1. Specify types of wills noting functions a will can perform, identify types of bequests, determine the duties of executors and guardians, and recall ways to hold title and their tax ramifications.
2. Identify advantages of a properly drafted will, determine the distri-bution flow of simple wills, and specify the pros and cons of probate proceedings.
After studying the materials in this chapter, answer the exam questions 27 to 32.
At the start of Chapter 4, participants should identify the following major topics for study:
* Purpose of trusts
* Common elements of trusts
* Types of trusts
* Living trusts
* Income tax & trusts
* Gift tax & trusts
* Estate tax & trusts
* Identification, recital, & property transfer clauses
* Income and principal & revocation and amendment clauses
* Trustee & trust termination clauses
After reading Chapter 4, participants will be able to:
1. Identify the relationship of parties in a trust, reasons to establish a trust, and types of trusts noting their estate planning function.
2. Specify recommended living trust provisions, identify the application of gift and income tax including the use of a grantor trust and an un-limited marital deduction, and determine what constitutes an “A-B” and “A-B-C” trust format.
After studying the materials in this chapter, answer the exam questions 33 to 42.
At the start of Chapter 5, participants should identify the following topics for study:
* Individual ownership & sole proprietorships
* Trusts & co-tenancies
* Co-tenancy taxation, percentage interests, & partition
* Partnership taxation & recapitalization
* Family partnerships
* Limited liability companies
* Retirement plans
After reading Chapter 5, participants will be able to:
1. Identify tax and legal title formats noting the differences among these entity formats by:
a. Specifying the advantages and disadvantages of holding property individually and through a sole proprietorship or a corporation not-ing how to avoid associated title pitfalls;
b. Selecting primary groups of C corporations noting the estate-planning problems associated with each; and
c. Recalling advantages that partnerships can have over corpora-tions.
2. Determine S corporation rules noting tax advantages and disad-vantages and also specify disadvantages and advantages of incorporat-ing a farm.
3. Identify title holding benefits of trusts, co-tenancy, partnerships, and limited liability companies and the tax characteristics of each.
4. Specify types of retirement plans used to provide lifetime benefits to a business owner and to employees, identify how title can be held on behalf of minors and the tax treatment of custodianships, and recall the tax treatment of a probate estate.
After studying the materials in this chapter, answer the exam questions 43 to 50.
At the start of Chapter 6, participants should identify the following topics for study:
* Types of life insurance
* Life insurance trusts
* Deferred annuities
* Private annuities
* Buy-sell agreements
* Purchase price & terms
* Community property
* Professional corporations
* S corporations
* Sole shareholder planning
After reading Chapter 6, participants will be able to:
1. Specify persons in which rights are placed by life insurance and rea-sons to purchase life insurance.
2. Identify the tax treatment of life insurance proceeds by:
a. Determining the treatment of premiums for personally owned life insurance and related benefits and specifying exceptions to this treatment including the transfer for value rule;
b. Select variables that influence whether life insurance is taxable for federal estate tax purposes; and
c. Recalling the gift tax associated with transfer of life insurance poli-cies.
3. Specify the pros and cons of various types of life insurance policies to guide clients in choosing a suitable policy.
4. Identify reasons for establishing an irrevocable life insurance trust to achieve estate tax planning advantage, specify considerations in estab-lishing life insurance trusts, and determine the differences between de-ferred and private annuities.
5. Determine what constitutes an entity purchase agreement and a cross purchase agreement noting tax and legal advantages.
After studying the materials in this chapter, answer the exam questions 51 to 64.
At the start of Chapter 7, participants should identify the following topics for study:
* Business valuation of tangible & intangible assets & goodwill
* Business valuation of qualified family-owned businesses
* Business valuation of land subject to conservation easement
* Business valuation discounts
* Buy-sell agreements
* Death of spouse
* Stock redemptions
* Stock recapitalization
* Deferred compensation agreements
After reading Chapter 7, participants will be able to:
1. Identify reasons why a business interest must be valued in an estate that is subject to federal estate tax, specify factors used to determine the net value of a business under the regulations, and recall the valua-tion factors in R.R. 59-60 noting their impact.
2. Determine how tangible assets are normally valued identifying those assets whose valuation is based on values other than book value, and specify the steps in R.R. 68-609’s valuation formula for intangible as-sets noting the effect such amount can have on the total value of a business.
3. Identify special business valuation issues including redemptions un-der §303 by:
a. Determining what constituted the now repealed qualified family-owned business estate tax deduction;
b. Recalling the terms of the election that allows clients to exclude from their taxable estate 40% of the value of land subject to a quali-fied conservation easement;
c. Determining the value of a minority stock interest and fractional interests in order to obtain applicable valuation discounts, and
d. Citing the §303 exception to the dividend treatment of redemp-tions noting qualifications.
4. Determine the tax consequences in leaving an estate to a surviving spouse, specify the elements of buy sell agreements, stock redemptions, and stock recapitalizations in order to dispose of business interests be-fore death, and identify deferred compensation agreements noting their estate planning impact.
After studying the materials in this chapter, answer the exam questions 65 to 73.
At the start of Chapter 8, participants should identify the following topics for study:
* Application of estate tax freeze rules
* Corporations, partnerships & exceptions
* Qualified payment exception to zero value rule
* Minimum valuation of a junior interest
* Capital contributions, redemptions, & recapitalizations
* Attribution rules
* Transfers of interests in trust
* Term interests & joint purchases
* Buy-sell agreements & options
* Lapsing rights & restrictions
After reading Chapter 8, participants will be able to:
1. Determine the benefits of an estate freeze and its ability to reduce the value of a business interest, identify transactions to which Chapter 14 rules apply and terminology used in the Chapter 14 valuation rule that applies to corporations and partnerships, and specify exceptions to §2701.
2. Identify the “zero value” rule under §2701 by:
a. Recalling the qualified payment exception and the consequence of being excepted;
b. Specifying variables that impact the application of §2701 noting how to avoid taxable events when valuing a distribution right;
c. Determining the transfer tax when a taxpayer fails to make a quali-fied payment on time noting the election into or out of qualified payment treatment when appropriate; and
d. Specifying a junior equity interest according to §2701 rules and determining the value of other rights held together with an extraor-dinary payment right.
3. Determine the application of §2701 provisions by:
a. Recalling the treatment of a capital contribution, a redemption, or a recapitalization under §2701;
b. Identifying when an individual is deemed the owner of an interest that is held indirectly through a corporation, partnership, trust or other entity based on the §2701 attribution rules;
c. Specifying when transfer tax adjustments will be made to transfers or inclusions in the gross estate;
d. Identifying the split of an applicable retained interest allowing value to be given to a participating feature of a participating pre-ferred interest; and
e. Specifying the stepped computation under the subtraction method to determine an amount of a gift resulting from a transfer to which §2701 applies.
4. Recall the terms used in §2702 concerning transfers of interests in trust, identify the application of the zero value rule to a transfer of in-terest in trust, and specify exceptions to §2702, determine the transfer of an interest in property when there is one or more term interests as a transfer of an interest in a trust, and specify the treatment of joint pur-chases.
5. Recognize the requirements and exceptions of §2703 to ensure property is valued appropriately, identify lapses as a transfer by gift or as includible in the decedent’s gross estate under §2704, recall the key terminology of §2704 under the evaluation rules, specify the amount of the transfer noting which lapses or restrictions qualify as an applicable restriction.
After studying the materials in this chapter, answer the exam questions 74 to 91.
At the start of Chapter 9, participants should identify the following topics for study:
* Managing the estate
* Medicaid & countable assets
* Medicaid & non-countable assets
* Medicaid & inaccessible assets
* Private insurance
* Health care decisions
* Supplemental security income
* Income & assets
* Disability benefits
After reading Chapter 9, participants will be able to:
1. Recall estate management techniques for the elderly and disabled by:
a. Identifying joint tenancy and the benefits and drawbacks of using such a method for asset management;
b. Specifying levels of conservatorship that can influence manage-ment and protection of an estate and/or personal care and disad-vantages of this tool; and
c. Determining what constitutes a durable power noting advantages of establishing a revocable living trust as a way to manage assets in an estate.
2. Cite the eldercare benefits of Medicare, Medicaid, and Supple-mental Security Income, identify disadvantages of the Medicaid pro-gram noting how to divide income into asset groups, specify the dan-gers and benefits of gifting to family members, including how individu-als might use private insurance for catastrophic illness.
3. Identify tools that can allow patients to refuse treatment even when incompetent, determine Supplemental Security Income noting how it relates to elderly and disability planning, and specify the requirements that must be met in order to receive disability benefits.
After studying the materials in this chapter, answer the exam questions 92 to 101.
At the start of Chapter 10, participants should identify the following topics for study:
* After death planning
* Federal returns
* Decedent’s estate tax
* Preparation of the Form 706
* Estate income tax return
* Filing requirements of decedent’s final income tax return
* Included income
* Exemptions & deductions
* Filing the gift tax return
* Special applications & traps of the gift tax return
After reading Chapter 10, participants will be able to:
1. Determine post-mortem estate planning action in the face of funeral and administrative expenses using elections and disclaimers.
2. Cite the due dates of post-mortem federal forms, specify the filing requirements of a decedent’s estate tax return, and identify exceptions to the general rule of estate tax payment.
3. Determine the processes and procedures necessary in preparation and filing of the Form 706.
4. Identify the filing requirements for estate income tax and decedent’s final income tax returns by:
a. Determining the estate income tax under available tax accounting methods and tax years; and
b. Specify the use of Form 1310 for a decedent or a joint return for a decedent and his or her surviving spouse.
5. Determine total income to be included on the decedent’s final in-come tax return using available exemptions or deductions.
6. Identify how to avoid penalties when filing a gift tax return, recog-nize gift splitting to reduce gift taxes, and recall special gift applications and traps noting ways to avoid their tax consequences.
After studying the materials in this chapter, answer the exam questions 102 to 120.