Bulk of tax imposed on beneficiary of advance distribution
Article Abstract:
An heir of Mary Lea Johnson Richards and the Johnson & Johnson Corp. fortune who, through his attorney, arranged for unequal advance trust distributions was ruled liable for the bulk of the trust's income tax liability. Since his disproportionate tax liability was for distributions made under an agreement between all beneficiaries, NJ laws on inequitable results were ruled inapplicable. The NJ Supreme Court held that the trust beneficiary who received the unequal advance distribution had to bear a disproportionate tax burden when the other beneficiaries received income tax refunds.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1996
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Estate could recover taxes attributable to inclusion of QTIP
Article Abstract:
A decedent's estate could be reimbursed for qualified terminable interest property (QTIP) trust beneficiaries' taxes, under a ruling by the Wisconsin Supreme Court. Absent a specific provision shifting tax burden away from QTIP trust beneficiaries, the court ruled that a standard will clause authorizing estate tax payments did not require the executors to pay estate taxes on QTIP trust assets. A testator's specific tax allocation intentions, if any, must be clearly stated in the will and related documents.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1996
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Disclaimers could not reform defective marital trust
Article Abstract:
The Tax Court determined in Estate of Bennett that disclaimers written in an attempt to qualify a trust for the marital deduction altered the intent of the trust. The trust had assigned discretionary powers to the trustees to pay for medical bills and educational expenses over and above the the income to paid to the decedent's spouse. The disclaimers were an attempt to avoid the provisions of IRC 2056(b)(7)(B)(ii) barring anyone but the spouse from having the power to grant trust property to another.
Publication Name: Estate Planning
Subject: Law
ISSN: 0094-1794
Year: 1993
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