SIDEBAR Spring 2018 - 29

MONTGOMERYBAR.ORG

SPOUSAL LIFETIME ACCESS TRUSTS
Married couples who want to take advantage of the
temporary elevated exclusion but are concerned about loss of
control over their finances or that lifetime current or expected
lifestyle should decide whether a spousal lifetime access trust
(SLAT) could strengthen their estate plan.
A SLAT allows a donor spouse to make aggregate gifts up to
$11.2 million free of gift taxes to a non-reciprocal, irrevocable
trust that names their beneficiary spouse as a lifetime beneficiary
of the trust. The beneficiary spouse or the couple's children
may serve as the trustee if his or her discretion is limited by an
ascertainable standard. The gift constitutes a completed gift to
remove the asset from the donor spouse's estate, but ensures that
the donor spouse will still have access to trust assets through
the beneficiary spouse as long as the couple remains married to
each other. Importantly, the SLAT may also give the beneficiary
spouse a limited power of appointment to distribute assets
among the couple's children after the death of a beneficiary
spouse. Attorneys should counsel their clients to establish and
fund a SLAT before the increased exemption amounts expire.

CONCLUSION
Tax law remains a moving target. The vast majority of Americans
are no longer subject to the federal estate tax. However, a change
in administration or control in Congress may lower the estate
tax exemption to 2017 levels or even lower. Attorneys have the
opportunity to provide significant value for their clients through
well-drafted plans that contain the necessary flexibility.
"Reprinted [as an abridged version] with permission from the February issue
of Legal Intelligencer's Special Edition Wealth Management / Trust & Estate. ©
2018 ALM Media Properties, LLC. Further duplication without permission is
prohibited. All rights reserved."

Delaware Valley Golden Retriever Rescue

Tuesday, Aug. 7, 2018
RiverCrest Golf Club
and Preserve

POWER OF APPOINTMENT PLANNING
Structuring appropriate powers of appointment has
always been a valuable technique in estate planning. Powers
of appointment give the flexibility necessary to alter asset
disposition if there is a change in the beneficiaries' circumstances
such as a future divorce, disparate income among siblings or
addiction. With the effect of the Act, practitioners should
discuss using general power of appointments as a tool for basis
reapportionment, as holding such power would cause inclusion
of the property subject to the power in an individual's gross
estate for tax purposes. The inclusion of those assets allows those
assets to receive a step-up in basis.
Clients concerned about capital gains may benefit from
utilizing a power of appointment by giving an older, trusted
relative a general power of appointment for basis step-up
purposes. The step-up in basis will only relate to assets held
by the trust and be valued at the death of the elderly relative.
Prior to the Act, this may not have been a suggested strategy
as the relative's taxable estate may have exceeded the exclusion
after combining their estate with assets given by a power of
appointment. Now the $11.2 million exclusion for an individual
allows many more clients to take advantage of this strategy.

Phoenixville, PA
Join us for a day full of
golfing fun and great food while
raising money to enable us to
continue rescuing more Goldens,
Doodles, and Labs.
$225/golfer, includes greens fees, cart, range
balls, gift bag, lunch, cocktail reception, dinner.
Dinner-only reservation: $50.00/person
includes after-golf reception, raffles, silent
auction, open bar, hors d'oeurvres, and dinner.
10 a.m.- Registration begins
11 a.m. - 12 p.m. - Delicious buffet lunch
12 p.m. - 4-person scramble; shotgun start.
5 p.m. - Cocktail reception

Great Tournament Prizes including
a hole-in-one $30,000 cash prize.
Le arn more & re giste r:

w w w.DVGRR.org
SPRING 2018 29


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SIDEBAR Spring 2018

Table of Contents for the Digital Edition of SIDEBAR Spring 2018

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https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSpring2020
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARWinter2019-2020
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARFall2019
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSummer2019
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSpring2019
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARWinter2018-19
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARFall2018
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSummer2018
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/LRSINSIGHT
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSpring2018
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARWinter2017-18
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSummer2017
https://www.nxtbook.com/hoffmann/MontgomeryBarAssociation/SIDEBARSpring2017
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