Planning Potpourri


What's Scarier then the Crypt Keeper?  Not en-crypting your laptop! 10,000 laptops are stolen from airports every week. If you have valuable data on your laptop (or perhaps your accountant or estate planner have your data on their laptop) encrypt it.  Don't stop there.  Here's another Tale from the Crypt -- About 40,000 PDAs a year are left in Chicago area taxis! No avoiding Chicago isn't a solution.  What about all those confidential emails you send to your attorney? Password protect your Blackberry (and be sure your lawyer does too).

Unintended GST Allocations:  So you have an old insurance trust that owns policies on your life. You're one of three people in the country that heeded their estate planner's advice and you religiously prepared Crummey powers for each gift to the trust (to make sure the gifts qualify for the annual gift tax exclusion, $13,000 in 2009). Other than that you have the Alfred E. Neuman attitude of "What, Me Worry?" So start worrying. Has your CPA addressed GST allocation to the trust? Might be that the rules the IRS enacted to "simplify" (you know what happens when anyone simplifies the tax laws!) the allocation of GST exemption to trusts, has a nasty surprise for you. These rules were enacted in 2001 as part of the Economic Growth and Tax Relief Reconciliation Act (sorry, Barack, this catchy name is already taken). These automatic GST allocation rules (Code Section 2632) can allocate (waste) your valuable GST exemption by automatically allocating it to your insurance trust when that is really not your intent, or what is optimal for your plan. If your old insurance trust meets the requirements to be classified as a "GST trust" your exemption has been automatically allocated every year you've made gifts to your trust unless your CPA filed a return electing not to have the allocation made. What to do? Well meet with your CPA now and get the election made on your 2008 return to avoid further waste of GST exemption. Next, consult with your estate planner about seeking a private letter ruling from the IRS fixing the issue. Before heading down that path, be sure the legal fees will be worth the GST exemption that was wasted (assuming you are in fact successful).

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