Estate Planning for Forest Landowners - South Dakota Department ...

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Chapter 7. Disclaimers, Settlements, and Elections to Take Against the Will Page General Considerations................................................................................................................................ 43 Disclaimers................................................................................................................................................... 43 Disclaimer Requirements...................................................................................................................... 43 Interaction of State and Federal Law.................................................................................................... 43 Disclaimer Provisions in the Will......................................................................................................... 44 Disclaimers by the Surviving Spouse................................................................................................... 44 Disclaimers in Favor of a Surviving Spouse......................................................................................... 44 Charitable Disclaimers................................................................................................................................. 44 Will Settlements........................................................................................................................................... 44 Election Against the Will............................................................................................................................. 44 Chapter 8. Gifts of Forestry Assets Overview...................................................................................................................................................... 45 Some Reasons for Gifts........................................................................................................................ 45 Gifting Tax Considerations.......................................................................................................................... 45 Incomplete Gifts.................................................................................................................................... 46 Gift Tax Rates, Credits, and Exclusions............................................................................................... 46 Split Gifts.............................................................................................................................................. 48 Basic Gifting Strategies................................................................................................................................ 48 What Type of Property to Give............................................................................................................. 48 Income Tax Basis.................................................................................................................................. 49 Installment Sales and Gifting of Installment Notes.............................................................................. 49 Gifts to Minors............................................................................................................................................. 49 Custodianship........................................................................................................................................ 50 Guardianships....................................................................................................................................... 50 Trusts for Minors.................................................................................................................................. 50 Gifts within 3 Years of Death....................................................................................................................... 51 Charitable Gifts............................................................................................................................................ 51 Overview............................................................................................................................................... 51 Charitable Income Tax Deduction........................................................................................................ 51 Charitable Estate Tax Deduction........................................................................................................... 52 Gifts with Retained Interest—Charitable Remainders......................................................................... 52 Qualified Conservation Contribution.................................................................................................... 54 Chapter 9. Role of Trusts Overview...................................................................................................................................................... 57 Basic Considerations.................................................................................................................................... 57 Trust Provisions.................................................................................................................................... 57 Nontax Benefits..................................................................................................................................... 57 viii
Page Tax Treatment of Trusts............................................................................................................................... 58 Income Taxes........................................................................................................................................ 58 Estate Taxes........................................................................................................................................... 59 Gift Taxes.............................................................................................................................................. 60 Types of Trusts and Applications................................................................................................................. 60 Living Trusts......................................................................................................................................... 60 Testamentary Trusts.............................................................................................................................. 62 The Importance of Flexibility............................................................................................................... 62 Use of Trusts and Disclaimers in Marital Deduction Planning.................................................................... 63 QTIP Trust............................................................................................................................................ 63 Power of Appointment Trust................................................................................................................. 64 Estate Trust........................................................................................................................................... 64 Disclaimer............................................................................................................................................. 65 Trustees........................................................................................................................................................ 65 Individual versus Institutional Trustee.................................................................................................. 65 Family Co-Trustees............................................................................................................................... 65 Successor Trustees................................................................................................................................ 65 Trustee Powers...................................................................................................................................... 65 Chapter 10. Life Insurance Role of Life Insurance.................................................................................................................................. 67 Insurance Program................................................................................................................................ 67 Estate’s Needs....................................................................................................................................... 68 Uses....................................................................................................................................................... 68 Types of Insurance....................................................................................................................................... 68 Term Insurance...................................................................................................................................... 68 Whole Life Insurance............................................................................................................................ 69 Other Insurance..................................................................................................................................... 69 Estate and Gift Tax Considerations.............................................................................................................. 69 Proceeds................................................................................................................................................ 69 Transfer of Ownership.......................................................................................................................... 69 Choice of Primary and Contingent Beneficiaries......................................................................................... 70 Tax Liability.......................................................................................................................................... 70 Beneficiary Designation........................................................................................................................ 70 Insurance Trusts.................................................................................................................................... 70 Other Considerations.................................................................................................................................... 70 Settlement Options................................................................................................................................ 70 Replacing Policies in Force.................................................................................................................. 71 ix
Page 1 and 2: United States Department of Agricul
Page 3: Estate Planning for Forest Landowne
Page 7 and 8: Contents Page Abstract ............
Page 9: Chapter 5. The Legal Process Page B
Page 13 and 14: Page Continued Ownership Within the
Page 15 and 16: Page Loss of Capital...............
Page 17: PART I INTRODUCTION
Page 20 and 21: The Importance of Forestry Estate P
Page 23 and 24: Chapter 2 Estate Planning Objective
Page 25 and 26: Chapter 2 Illiquidity of Land and T
Page 27 and 28: Chapter 2 objectives completely, so
Page 29: Chapter 2 provided rather than on t
Page 32 and 33: The Federal Estate and Gift Tax Pro
Page 34 and 35: The Federal Estate and Gift Tax Pro
Page 37 and 38: Chapter 4 Valuation of Assets for E
Page 39 and 40: Chapter 4 Depending on the circumst
Page 41 and 42: Chapter 4 substance for Federal est
Page 43 and 44: Chapter 4 is accomplished using an
Page 45 and 46: Chapter 4 flows forward to the pres
Page 47 and 48: Chapter 5 The Legal Process Basis o
Page 49: Chapter 5 Probate Administration an
Page 53 and 54: Chapter 6 Use of the Marital Deduct
Page 55 and 56: Chapter 6 his (her) life (this inco
Page 57 and 58: Chapter 6 for two reasons. First, i
Page 59 and 60: Chapter 7 Disclaimers, Settlements,
Page 61 and 62:
Chapter 8 Gifts of Forestry Assets
Page 63 and 64:
Chapter 8 children ultimately recei
Page 65 and 66:
Chapter 8 Problem property—If for
Page 67 and 68:
Chapter 8 principal portion a gift
Page 69 and 70:
Chapter 8 Charitable remainder trus
Page 71:
Chapter 8 of the property for timbe
Page 74 and 75:
Role of Trusts beneficiaries of bot
Page 76 and 77:
Role of Trusts Gift Taxes A transfe
Page 78 and 79:
Role of Trusts Testamentary Trusts
Page 80 and 81:
Role of Trusts Two Estate Transfers
Page 82 and 83:
Role of Trusts may not produce inco
Page 84 and 85:
Life Insurance of the policy’s gi
Page 86 and 87:
Life Insurance Premiums paid by the
Page 89 and 90:
Chapter 11 Installment Contracts Ge
Page 91 and 92:
Chapter 11 Disadvantages There also
Page 93:
PART III APPLICATION OF FORESTRY- S
Page 96 and 97:
Special Use Valuation Qualified Hei
Page 98 and 99:
Special Use Valuation contracted wi
Page 100 and 101:
Special Use Valuation make a protec
Page 102 and 103:
Special Use Valuation the “Multip
Page 104 and 105:
Special Use Valuation interest disp
Page 106 and 107:
Deferral and Extension of Estate Ta
Page 108 and 109:
Deferral and Extension of Estate Ta
Page 111 and 112:
Chapter 14 Sole and Joint Ownership
Page 113:
Chapter 14 property held by the dec
Page 116 and 117:
Partnerships Withdrawals—The abil
Page 118 and 119:
Partnerships in chapter 4, minority
Page 120 and 121:
Corporations of directors to be ele
Page 122 and 123:
Corporations can be shareholders. N
Page 124 and 125:
Corporations permitted for stock in
Page 126 and 127:
Limited Liability Companies would h
Page 128 and 129:
State Tramsfer Taxes Table 18.1—S
Page 130 and 131:
State Tramsfer Taxes Table 18.3—S
Page 132 and 133:
State Tramsfer Taxes Overall, 32 St
Page 134 and 135:
The Benefit of Planning a Forest Es
Page 137 and 138:
Appendix I Sources by Order of Appe
Page 139 and 140:
Appendix I Chapter 7 Internal Reven
Page 141 and 142:
Appendix I Chapter 11 Internal Reve
Page 143 and 144:
Appendix I Internal Revenue Code se
Page 145 and 146:
Appendix II Glossary Adjusted gross
Page 147:
Appendix II Marital deduction: The
Page 151 and 152:
Appendix III Form 706 (Rev. August
Page 153 and 154:
Appendix III Form 706 (Rev. 8-2008)
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Appendix IV IRS Form 709—United S
Page 194 and 195:
IRS Form 709—United States Gift (
Page 196:
IRS Form 709—United States Gift (
Page 200:
The Forest Service, United States D
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