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2023 Heckerling Estate Planning Conference - Notes from Day One

Citrin Cooperman will be providing daily updates during this year’s Heckerling Estate Planning Conference. Four Citrin Cooperman partners are attending and what follows are our notes and comments from day one.

The day started with some fundamentals on using the marital deduction and the Deceased Spouse Unused Exemption (DSUE).

  • There was a reminder that the DSUE has value, and an executor may be found in breach of fiduciary duty for failure to claim it. Courts are saying the executor must file to claim the exemption but may charge the surviving spouse’s share with the costs of filing. This is usually an issue when there are children from a previous marriage/subsequent spouse situation.
  • It was also recommended that DSUE should be included in any pre-nuptial agreement.

The day continued with the current events section:

  • Secure Act 2.0 (Signed into law December 29, 2022) – Updates to the SECURE Act are coming:
    • The time to start required minimum distributions (RMDs), for those who have not taken them, is 73. The penalty for failing to timely take the RMD is reduced as long as there is a timely correction.
    • There is an increase limit to the catch-up contribution.
    • When a beneficiary of a 529 Plan, which has been in existence for at least 15 years, fails to fully deplete the fund for education, the Plan may be rolled over into a Roth IRA for that beneficiary without triggering income taxes.
    • On a one-time basis, the owner of an IRA may make a one-time gift of 50K to a charitable remainder trust (CRT) or charitable gift annuity.
  • Some additional recent updates:
    • The IRS has issued proposed new mortality tables. Until those tables have been approved, you have the choice of using either the new or existing tables, whichever benefits your client.
    • There have been some changes to what expenses are permissible on the Form 706.
    • Case law is evolving. Make sure that all grantor trusts are revisited for potential income tax issues when handling a divorce.
    • An additional issue was discussed involving grantor trust rules where the trust is a shareholder in an S Corp. When there are multiple grantors to a trust and one dies, the surviving grantor may be treated as the grantor of only one-half of the Trust. This could result in an inadvertent termination of S Corp status unless the trust is carefully drafted.
    • A private foundation can make a distribution to a donor advised fund to satisfy the five percent distribution requirement only if the donor advised fund distributes the funds by the end of the following year.

And finally, our esteemed colleague, Beth Shapiro Kaufman, believes we may be seeing the annual exclusion rise to $18,000 by next year.

Please check back in tomorrow for more on what your Citrin Cooperman team has heard at Heckerling.

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