Estate Tax Planning examines the various aspects of planning for the estate tax liability. The course begins with a discussion of the genesis of estate taxation in English common law and continues with an examination of the estate and its administration.
The subjects discussed in the course are a) the estate and its administration, b) federal gift and estate taxes, c) common estate planning trusts, d) calculating federal estate taxes, e) state inheritance and estate taxation, and f) estate tax payment. The text serves as an introduction to the issues of estate settlement and includes a discussion of the probate estate and the federal gross estate.
The steps taken to calculate federal estate tax liability are discussed. In that discussion, the federal gross estate, tentative taxable estate, taxable estate and tentative tax are examined. The various estate tax credits and deductions are considered and their place in the federal estate tax calculation is explained.
The role of trusts in estate tax minimization is considered. The common trusts employed in estate tax planning are explained, and the uses of credit shelter trusts, QTIP trusts and irrevocable life insurance trusts are demonstrated. State death taxes are considered, and inheritance taxes are compared to estate taxes with respect to the party liable for payment and the role of decedent/beneficiary relationships in inheritance taxation. Finally, the traditional sources of estate tax payment are examined and compared.
Course Publication Date:
July 18, 2023
This course is available with
NO ADDITIONAL FEE if you have an active
self study membership or
all access membership or can be purchased for
$25.00!
| Author: | Paul Winn |
| Course No: | CFP-ESTPLAN-3203 |
| Recommended CPE: | 2.50 |
| Delivery Method: | QAS Self Study |
| Level of Knowledge: | Overview |
| Prerequisites: | None |
| Advanced Preparation: | None |
| Recommended Field of Study: | Estate Planning
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Learning Objectives
- Explain the differences between the probate estate and the federal gross estate.
- Identify the components of a decedent’s probate estate.
- Describe the assets that comprise a decedent’s federal gross estate.
- Explain the duties of an executor or administrator of a decedent’s estate.
- Identify the principal estate tax provisions of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Act) and the American Taxpayer Relief Act of 2012 (2012 Tax Act).
- Describe how the current annual gift tax exclusion permits the tax-free transfer of property ownership.
- List the deductions allowed in calculating the federal estate tax liability.
- Define the estate tax unified credit and its exemption equivalent.
- Explain how the portability provision operates to reduce federal estate tax liability.
- Describe how a credit shelter trust works to reduce federal estate tax liability in suitable estates.
- List the client estate planning objectives met through a qualified terminable interest (QTIP) trust.
- Explain how an irrevocable life insurance trust (ILIT) facilitates the use of life insurance to pay estate tax and settlement costs without increasing the federal gross estate.
- Identify the components of the federal gross estate.
- List the deductions that may be taken from the federal gross estate to arrive at the tentative taxable estate.
- Explain how state estate taxes are accounted for in calculating the federal estate tax liability.
- Calculate the value of adjusted taxable gifts that must be added to a decedent’s taxable estate.
- Describe the use of the estate tax unified credit, the credit on prior transfers and the foreign death tax credit in determining federal estate tax liability.
- Calculate the federal estate tax liability under various estate tax fact patterns.
- Describe the principal differences between state estate taxes and inheritance taxes.
- Identify the factors that affect the amount of state inheritance tax liability.
- Explain how the familial relationship of a beneficiary to a decedent determines the applicable inheritance tax class.
- Describe the four methods generally available for payment of estate settlement costs.
- Identify the factors that need to be considered when evaluating the relative effectiveness of the various methods of paying estate settlement costs.
- Determine the parties that should normally own life insurance when designed to be used solely to pay estate settlement costs.
- Explain how life insurance death benefit proceeds payable to an irrevocable life insurance trust are used by a decedent’s estate to pay estate taxes and settlement costs.