President’s budget proposal attempts to curb use of Intentionally Defective Grantor Trusts *

USA - August 2 2012
For the first time a President’s budget has included a proposal to deter use of Intentionally Defective Grantor Trusts (“IDGT”).

---

U.S. v. Johnson, Case no. 2:11-CV-00087, U.S. District Court (May 23, 2012) court holds representatives personally liable for estate tax despite having an indemnity agreement *

USA - August 2 2012
Decedent was survived by four children, two of whom were the personal representatives of her estate.

---

New net investment tax will afflict almost all non-grantor trusts *

USA - August 2 2012
Starting in 2013, all non-grantor trusts and estates with income of over $11,200 (indexed for inflation) (note the Wall Street Journal recently stated that $12,000 is the threshold) will be subject to a new net investment tax of 3.8%.

---

Wimmer v. Commissioner, T.C. Memo 2012-157 (June 4, 2012) gifts of limited partnership interests qualified as present interests for annual exclusion *

USA - August 2 2012
Three cases prior to Wimmer denied annual exclusions for gifts of limited partnership interests.

---

Portability regs *

USA - August 2 2012
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“TRUIRJCA”) allowed portability of the applicable exclusion amount ($5,120,000 in 2012) between spouses.

---