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    Repeal and Uncertainty Impacts Estate Administration

    WealthManagement.com
    an 06, 2017

    Martin M. Shenkman, Andrew T. Wolfe, Alan A. Davidson 

    The situation described in the preceding two articles in this 4-part series could
    significantly affect both estates and beneficiaries. Strict application of formula
    bequests (tied to federal and/or state estate tax exemption amounts) in a will or
    revocable trust that was drafted before the repeal legislation may lead to results not
    intended by the testator. The qualified terminable interest property and credit
    shelter (bypass or family part) trust are defined by estate tax references that have
    new (and different) meanings. The results may prove to be inconsistent with the
    testator’s intent. This is why practitioners need to advise clients of the varying
    impact to put them on notice.

    In a “friendly” family situation, the resulting issues with how assets are
    unintentionally allocated under a new tax regime might be resolved amicably by
    using a combination of disclaimers and having beneficiaries alter the disposition
    under a will or revocable trust by agreement (assuming that the rights of creditors
    and tax authorities are unaffected). However, in strained or complex family settings
    that abound, this could cause uncertainty and result in protracted litigation.

    Read their commentary here.

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