Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Marital Trusts are more popular than ever with the adoption of portability between spouses and the historically generous estate tax exemption. Unintended tax consequences can be triggered when funding a Marital Trust depending on the language of the trust document.
This course will provide examples of commonly used language and illustrate how the Marital Trust should be funded when a variety of assets are available as part of the estate. The proper reporting requirements for qualified terminable interest property transfers (QTIP) and allocation of generation skipping transfer (GST) tax to a reverse QTIP marital trust will also be discussed. Attendees should have a general understanding of estate tax before taking this course.
Publication Date: November 2022
Designed For
Attorneys, CPAs, and Enrolled Agents.
Topics Covered
- Why Marital Trusts?
- Overview of Marital Trusts
- Portability & Surviving Spouse's Estates
- Formulas for Funding the Marital Share
- Types of Funding Mechanisms & Tax Consequences of Funding
- Best Practices
Learning Objectives
- Identify how to analyze the terms of trust documents to determine how to fund a marital trust
- Recognize how to explain the differences associated with various funding provisions and which funding methods are preferable for a client's situation
- Identify how to advise clients on how to optimally fund the marital trust based on the language of the trust agreement and the assets owned by the decedent
- Identify the importance of properly funding the marital trust to avoid adverse income tax consequences
- Describe the reporting requirements for QTIP transfers and the optimal allocation of GST tax exemption
- Identify the gift or estate tax percent that transfers via gift or at death are subject to
- Identify a discretionary distribution for HEMS
- Identify the amount of income the surviving spouse must have a right to payable at least annually for the spouse's entire life under a QTIP Marital Trust
- Identify the funding method that is typically used for clients with estates exceeding the estate tax credit threshold
- Identify under which IRC Section the estate/trust will be subject to capital gain tax if appreciated assets are transferred to fund the marital share under the pecuniary formula
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
A general understanding of estate tax before taking this course.
Advance Preparation
None
Instructor
Klaralee R. Charlton
Klaralee Charlton is a Partner at 3i Law in Denver, Colorado. She practices fiduciary tax, estate administration, and business transactional law. As part of her practice, she guides clients through the process of administering a loved one’s estate including the collection, valuation, management and transfer of assets including financial accounts, real estate, and business interests with a focus on minimizing estate and income tax liability. Klaralee also works closely with trustees of ongoing trusts to ensure compliance and prepares clients’ fiduciary income tax returns annually.
Klaralee has written and lectured on topics including estate and gift tax, fiduciary income tax reporting and U.S. regulations governing the valuation of small family businesses. She is an active member of the Colorado Bar Association, Tax Section and Adjunct Profession at the University of Denver, Graduate Tax Program.
She earned her J.D. in 2011 from the University of Utah, S.J. Quinney College of Law, her LL.M. in Tax Law from the University of Denver in 2013, and her B.A. in political science in 2009 from Bryn Mawr College. She is admitted to practice in both Colorado and Montana.