TELESEMINAR: Formula and Defined Value Clauses in Estate Planning: An Update – A National Perspective
March 26, 2013
12:00 – 1:00 p.m.
1.00 MCLE hours
Formula and defined value clauses are used in estate planning to attempt to “fix” the value of property transferred in a lifetime gift, testamentary transfer, or in a sale. These clauses are also frequently used in marital deduction and credit shelter trusts, and in GST allocations. Carefully drafted formula clauses can withstand IRS scrutiny and optimize tax outcomes for a client’s estate. But the IRS has recently issued new guidance in this area and has become more aggressive in challenging formula clauses as not reflecting economic reality and understating the value of property transferred. This program will provide you with an in-depth discussion of the uses of formula clauses in trust and estate planning, recent regulatory and case law developments, and practical guidance in drafting clauses to avoid red flags and withstand IRS scrutiny.
- Understanding formula and defined value clauses and how they are used in estate and trust planning
- How clauses are used in marital deduction and credit shelter trusts, and in Generation Skipping Transfer Tax allocations
- Formula clauses with gifts involving charity (Christiansen) and not involving charity (Wandry)
- Recent regulatory and case law developments
- Red flags for IRS challenges and new lines of IRS attack
- Special considerations in “de-coupled” states
Blanche Lark Christerson, Deutsche Bank Private Wealth Management, New York
Jennifer A. Pratt, Venable, LLP, Maryland
Renee M. Gabbard, Bryan Cave, LLP, California