■ Roth Conversions: If you converted your IRA to a Roth, call your CPA and re-evaluate. Some folks converted to get the income tax out of their estate and to thereby reduce their estates for estate tax purposes. This may no longer be relevant in light of the $5M exemption. If this was your motivator, consider recharacterizing back to a regular IRS and saving the tax. Some planned on paying income tax immediately on conversion because of the anticipated increase in income tax rates over the next two years. That never happened so review the ability to defer tax over 2 years with your CPA.
■ 2010 Gift Tax Returns: These will have more traps than the Augusta National so proceed with caution. The end of 2010 had some funky generation skipping transfer tax planning opportunities that may require special treatment. The deadlines are also rather confusing in that it appears that gifts must be reported on time but the GST consequences of those same gifts might be reported at a later date. Transfers to certain trusts in 2010 may not require an allocation of GST exemption (but some will!) so evaluate each and determine if an affirmative election out of the GST automatic allocation rules is required. Given the uncertainty of what 2013 might bring, and a possible lapse in the GST automatic allocation rules (your CPA will translate this!) you might want to affirmatively elect to allocate GST exemption on all gift tax returns to gifts that should be covered, regardless of what is presently required. 2010 gift tax returns are not for the faint of heart to prepare.
■ Court Proceedings for 2010 Decedents: Even if your have a veritable Cleaver family and everyone gets along a court proceeding may be required to interpret what a will for a 2010 decedent means. How should a formula clause be interpreted? What impact does the retroactive estate tax have? What about a state law passed to deal with the uncertainty of 2010? Will a disclaimer be effective? Time may really be of the essence in these proceedings.
■ Special Grandchildren Trusts: Funky trusts set up in 2010 to take advantage of the unique GST planning opportunities may have to be invested differently then other similar trusts, distributions may differ from what would otherwise be anticipated, and no further gifts should be made to certain of those trusts. So identify these trusts and be sure all your advisers understand their special status.
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