Table of Contents
CHAPTER 1 - Estate Planning1-1
| Build, Preserve & Distribute | 1-2 |
| Legal Documents | 1-3 |
| Estate Planning Team | 1-4 |
| Attorney | 1-5 |
| Accountant | 1-6 |
| Insurance Agents | 1-6 |
| Financial Planner | 1-6 |
| Estate Administration | 1-6 |
| Probate Court | 1-6 |
| Executor | 1-7 |
| Internal Revenue Service (IRS) | 1-9 |
| Trustee | 1-9 |
| Family Members | 1-9 |
| Things to Be Done When Death Occurs | 1-9 |
| Estate Planning Techniques & Devices | 1-10 |
| Transfers within Probate | 1-10 |
| Disposition of Property without a Will | 1-11 |
| Disposition of Property with a Will | 1-11 |
| Transfers Outside Probate | 1-11 |
| Joint Tenancy with Right of Survivorship | 1-12 |
| Tenancy in Common | 1-12 |
| Retirement Plan & Individual Retirement Accounts | 1-12 |
| Life Insurance | 1-13 |
| Gifts | 1-13 |
| Payable on Death Accounts (POD) | 1-13 |
| Transfers Using a Trust | 1-13 |
| Special Planning Tools | 1-14 |
| Spending | 1-14 |
| Annual Gift Tax Exclusion | 1-14 |
| Applicable Exclusion Amount | 1-16 |
| Spousal Portability of Unused Exemption Amount | 1-16 |
| Unlimited Marital Deduction | 1-18 |
| Installment Payment of Estate Taxes - §6166 | 1-18 |
| Private Annuities | 1-18 |
| Regs Restrict Private Annuity Tax Benefits | 1-18 |
| Installment Sale to Family Member | 1-18 |
| Self-Canceling Installment Notes | 1-19 |
| Irrevocable Life Insurance Trust | 1-19 |
| Special Valuation of Farms and Businesses - §2032A | 1-19 |
| Crummey Trusts | 1-20 |
| Charitable Remainder Trusts | 1-20 |
| Minor Trusts | 1-21 |
| Family Limited Partnerships | 1-21 |
| Grantor Retained Income Trusts | 1-21 |
| Qualified Personal Residence Trusts (QPRTs) | 1-22 |
| Grantor Retained Annuity Trusts (GRATs) | 1-22 |
| Grantor Retained Unitrusts (GRUTs) | 1-22 |
| Buy-Sell Agreements | 1-22 |
| Estate Planning Facts | 1-23 |
| Family | 1-23 |
| Property | 1-23 |
| Domicile | 1-23 |
| Objectives | 1-23 |
| Existing Estate Plan | 1-24 |
CHAPTER 2 - Estate & Gift Taxes2-1
| Federal Estate Tax | 2-2 |
| Persons Subject to Federal Estate Tax | 2-2 |
| Applicable Exemption (or Exclusion) Amount | 2-2 |
| Spousal Portability of Unused Exemption Amount - §2010(c)(2) | 2-3 |
| Estate Tax Rates | 2-4 |
| Progressive or Flat Rate | 2-4 |
| State Inheritance Tax | 2-6 |
| State Death Tax Credit Turns into Deduction – §2011 & §2058 | 2-6 |
| Taxable Estate - §2051 | 2-7 |
| Gross Estate - §2031 | 2-7 |
| Owned Property - §2033 | 2-9 |
| Interests Terminating At Death - Life Estates & Joint Tenancies | 2-10 |
| Interests Created After Death | 2-10 |
| Remainder Interests | 2-11 |
| Dower & Curtsey - §2034 | 2-12 |
| Community Property Comparison | 2-12 |
| Gifts within Three Years of Death - §2035 | 2-12 |
| Transfers from Revocable Trusts | 2-13 |
| Retained Life Interest - §2036 | 2-13 |
| Retained Voting Rights | 2-14 |
| Lifetime Transfers With Reversionary Interests - §2037 | 2-15 |
| Revocable Transfers - §2038 | 2-16 |
| Annuities - §2039 | 2-16 |
| Joint Interests - §2040 | 2-17 |
| Qualified Joint Interests Between Spouses - §2040(b) | 2-18 |
| Powers of Appointment - §2041 | 2-18 |
| Ascertainable Standard - The Safe Harbor Limitation | 2-18 |
| 5/5 Power | 2-19 |
| Life Insurance - §2042 | 2-20 |
| Incidents of Ownership | 2-20 |
| Community Property Issue | 2-22 |
| Deductions from Gross Estate | 2-24 |
| Estate Expenses & Claims - §2053 | 2-24 |
| Inclusion of Administrative Expenses on Non-Probate Assets | 2-26 |
| Casualty & Theft Losses during Administration - §2054 | 2-26 |
| Charitable Transfers - §2055 (§170 & §2522) | 2-26 |
| Immediate Contributions | 2-27 |
| Split-Interest Contributions | 2-27 |
| Charitable Remainder Trusts | 2-28 |
| Charitable Lead Trusts | 2-35 |
| Insurance Related Contributions | 2-37 |
| Unlimited Marital Deduction - §2056 | 2-37 |
| Requirements | 2-37 |
| Net Value Rule | 2-39 |
| Non-Citizen Spouse | 2-39 |
| Qualified Domestic Trust | 2-40 |
| Gifts to Non-Citizen Spouses | 2-42 |
| Valuation | 2-44 |
| IRS Valuation Explanation - §7517 | 2-44 |
| Alternate Valuation - §2032 | 2-45 |
| Special Valuation - §2032A | 2-45 |
| Estate Tax Return & Payment - §6018 | 2-45 |
| Installment Payment of Federal Estate Taxes - §6166 | 2-46 |
| Computation | 2-46 |
| Eligibility & Court Supervision | 2-47 |
| Closely Held Business | 2-47 |
| Acceleration of Payment | 2-47 |
| Stepped-up Tax Basis for Estate Assets - §1014 | 2-48 |
| Community Property Cost Basis | 2-49 |
| GST Tax - §2601 | 2-49 |
| Predeceased Parent Exception | 2-50 |
| Exemption | 2-52 |
| Allocation | 2-52 |
| Retroactive Allocation | 2-53 |
| Gift Taxes - §2501 to §2524 | 2-55 |
| Gift Tax Computation | 2-56 |
| Calculation Steps | 2-56 |
| Applicable Exemption Amount for Gift Tax - §2505 | 2-56 |
| Application | 2-56 |
| Entity Rule | 2-57 |
| Valuation | 2-57 |
| Real Property | 2-57 |
| Stocks & Bonds | 2-58 |
| Annuities, Life Estates, Terms for Years, Remainders, & Reversions | 2-58 |
| Split Gifts - §2513 | 2-58 |
| Community Property States | 2-58 |
| Annual Exclusion | 2-59 |
| Per Donee/Per Year | 2-59 |
| Gifts in Excess of the Annual Exclusion | 2-60 |
| Gifts Within the Annual Exclusion | 2-60 |
| Gifts within 3 Years of Death | 2-60 |
| Uniform Gifts to Minors Act | 2-61 |
| Exception for Minor's Trusts - §2503(b) & (c) | 2-61 |
| Medical & Tuition Exclusion - §2503(e) | 2-64 |
| Qualifying Transfers | 2-64 |
| Interest-Free or Below-Market Loans | 2-64 |
| Gift Tax Marital Deduction | 2-64 |
| Nondeductible Terminable Interests | 2-65 |
| Gift Tax Charitable Deduction | 2-65 |
| Partial Interests | 2-66 |
| Selecting Gift Property | 2-67 |
| Gift Advantages | 2-68 |
| Gift Disadvantages | 2-68 |
| Gift Tax Returns | 2-69 |
| Inclusion of Gifts in the Estate | 2-69 |
| Shifting Income & Gain | 2-71 |
| Gifts before Sale | 2-71 |
| Transfers into Trust Prior to Sale | 2-71 |
| Installment Obligations | 2-71 |
| Transfer to Obligor at Death | 2-73 |
| Income in Respect of a Decedent | 2-73 |
| Reporting of Foreign Gifts - §6039(f) | 2-74 |
CHAPTER 3 - Wills & Probate3-1
| What Is A Will? | 3-1 |
| Provisions & Requirements | 3-1 |
| Specific & General Bequests | 3-2 |
| Residual Bequests | 3-2 |
| Conditional Bequests | 3-3 |
| Executor | 3-3 |
| Guardian | 3-3 |
| Types of Wills | 3-4 |
| Title Implications | 3-4 |
| Individual | 3-5 |
| Joint Tenancy | 3-6 |
| Tenants in Common | 3-8 |
| Tenants by the Entirety | 3-8 |
| Community Property | 3-8 |
| Tax Basis Advantage | 3-9 |
| Untitled Assets | 3-10 |
| Changes to a Will | 3-10 |
| Advantages of a Will | 3-10 |
| Intestate Succession | 3-11 |
| Periodic Review | 3-12 |
| Continuing Business Operations | 3-12 |
| Simple Will | 3-13 |
| Probate | 3-14 |
| Advantages | 3-15 |
| Disadvantages | 3-15 |
| Probate Avoidance | 3-16 |
| Joint Tenancy | 3-16 |
| Community Property | 3-16 |
| Totten Trust Accounts | 3-18 |
| Life Insurance & Employee Benefits | 3-18 |
| Living Trusts | 3-18 |
CHAPTER 4 - Trusts4-1
| What is a Trust? | 4-1 |
| Why a Trust? | 4-1 |
| Types of Trusts | 4-3 |
| Common Elements | 4-3 |
| Revocable Trust | 4-3 |
| Irrevocable Trusts | 4-4 |
| Testamentary Trust | 4-4 |
| Foreign Trusts - §679 | 4-5 |
| Family Trusts | 4-5 |
| Medicaid Trust | 4-5 |
| Living Trust | 4-5 |
| Reversion | 4-6 |
| Advantages of a Living Trust | 4-6 |
| Disadvantages | 4-7 |
| Priority | 4-7 |
| Pour-Over Will | 4-7 |
| Trust Taxation | 4-7 |
| Income Tax | 4-7 |
| Grantor Trusts - §671 to §678 | 4-7 |
| Grantor Retained Income Trust | 4-10 |
| Revocable Trusts Included in Estate - §646 & §2652(b)(1) | 4-10 |
| Election for Income Tax Purposes | 4-11 |
| Irrevocable Trust Taxation | 4-12 |
| Throwback Rules | 4-12 |
| Capital Gains | 4-13 |
| Deduction of Estate Planning Expenses | 4-13 |
| Deductibility of Death Expenses | 4-13 |
| Gift Tax | 4-14 |
| Estate Tax | 4-14 |
| Unlimited Marital Deduction | 4-15 |
| Outright to Spouse | 4-15 |
| Marital Deduction Trust | 4-15 |
| Qualified Terminable Interest Property (QTIP) Trust | 4-15 |
| ―A-B‖ Format | 4-17 |
| ―A-B-C‖ (QTIP) Format | 4-20 |
| Valuation & Tax Basis | 4-20 |
| Alternate Valuation | 4-22 |
| Fundamental Provisions - Revocable Living Trust | 4-24 |
| Identification Clause | 4-24 |
| Recital Clause | 4-24 |
| Property Transfer Clause | 4-24 |
| Income & Principal Clause | 4-25 |
| Revocation & Amendment Clause | 4-25 |
| Trustee Clause | 4-25 |
| Trustee's Acceptance | 4-25 |
| Choice of a Trustee | 4-25 |
| Factors for Corporate Trustees | 4-26 |
| Factors for Individual Trustees | 4-26 |
| Trust Termination Clause | 4-27 |
CHAPTER 5 - Entities & Title5-1
| Basic Entity Formats | 5-1 |
| Individual & Sole Proprietorship | 5-2 |
| Marital Property | 5-3 |
| Timing & Domicile | 5-3 |
| Corporate | 5-4 |
| Categories of C Corporations | 5-4 |
| Personal Holding Company - §541 | 5-4 |
| Attribution Rules | 5-5 |
| Penalty Tax | 5-5 |
| Regular C Corporation | 5-5 |
| Corporate Tax Rate | 5-5 |
| No Pass-Through | 5-6 |
| Getting Money Out of the C Corporation | 5-6 |
| Passive Loss Restrictions | 5-9 |
| Partnership vs. Corporation | 5-11 |
| Personal Service Corporation - §269A | 5-11 |
| S Corporation - §1361 | 5-12 |
| Minors as Shareholders | 5-12 |
| Bequests & Estate Ownership | 5-13 |
| Trusts as Shareholders | 5-13 |
| S Corporation Assets | 5-17 |
| Built-In Gains Tax - §1374 | 5-17 |
| Incorporation of a Farm | 5-18 |
| Land Partnership Advantage | 5-19 |
| Leasebacks | 5-20 |
| Trusts | 5-20 |
| Title Holding | 5-21 |
| Business Trusts | 5-21 |
| Co-Tenancy | 5-21 |
| Taxation | 5-22 |
| Percentage Interests | 5-22 |
| Partition | 5-23 |
| Partnership | 5-25 |
| Partnership Taxation | 5-25 |
| Allocation of Income & Deduction | 5-26 |
| Partnership Recapitalization | 5-26 |
| Two Class Format | 5-26 |
| Valuation | 5-26 |
| Guaranteed Payment | 5-27 |
| Control & Management | 5-27 |
| Estate Issues | 5-28 |
| Family Partnerships | 5-28 |
| Estate Savings | 5-29 |
| Income Tax Savings | 5-29 |
| Family Partnership Requirements | 5-29 |
| Recognizing a Partner | 5-30 |
| Control | 5-30 |
| Transferability | 5-31 |
| Donee as a Partner | 5-31 |
| Trusts as Partners | 5-31 |
| Minor as a Partner | 5-32 |
| Purchased Interests | 5-32 |
| Capital Interest in the Partnership | 5-32 |
| Capital as a Material Income-Producing Item | 5-33 |
| Source of Capital | 5-33 |
| Family Partnerships Not Within §704(e) | 5-34 |
| Real Estate Family Partnerships | 5-34 |
| Business Family Partnerships | 5-34 |
| Structuring the Family Partnership | 5-35 |
| Limited Liability Company | 5-35 |
| Outside Basis & Debt Share Advantage | 5-37 |
| Substantial Economic Effect Rules | 5-37 |
| Discharge of Indebtedness Income | 5-38 |
| Suggested Uses | 5-38 |
| Professional Firms | 5-38 |
| Joint Ventures | 5-38 |
| Substitute for Family Limited Partnership | 5-38 |
| Retirement Plan | 5-39 |
| Employer Costs | 5-39 |
| Profit-Sharing Plan | 5-41 |
| Money Purchase Pension Plan | 5-41 |
| Defined Benefit Pension Plan | 5-42 |
| Custodianship | 5-42 |
| Estate | 5-42 |
CHAPTER 6 - Life Insurance, Annuities & Buy-Sell Agreements6-1
| Purpose | 6-1 |
| Tax Overview | 6-3 |
| Income Tax | 6-3 |
| Transfer for Value Rule | 6-3 |
| Employee Death Benefit - §101(b) (Repealed) | 6-4 |
| Premiums | 6-4 |
| Lifetime Benefits | 6-4 |
| Section 72 | 6-5 |
| Estate Taxes - §2042 & §2035(a) | 6-6 |
| Ownership | 6-6 |
| Gift Taxes | 6-7 |
| Community Property Gift Danger | 6-7 |
| Types of Life Insurance | 6-9 |
| Term Insurance | 6-9 |
| Whole Life (Permanent) Insurance | 6-10 |
| Straight Life v. Limited Payment | 6-10 |
| Modified v. Preferred | 6-10 |
| Endowment Insurance | 6-10 |
| Universal Life | 6-11 |
| Charges | 6-11 |
| Premium Payment | 6-11 |
| Variable life | 6-11 |
| Investment Accounts | 6-12 |
| Taxation | 6-12 |
| Survivor Life | 6-12 |
| Single Premium Whole Life | 6-12 |
| Dividends | 6-13 |
| Life Insurance Trust | 6-13 |
| Considerations | 6-14 |
| Annuities | 6-16 |
| Deferred Annuity | 6-16 |
| Private Annuity | 6-16 |
| Unsecured Promise | 6-17 |
| Regulations Restrict Private Annuity Income | 6-18 |
| Buy-Sell Agreements | 6-20 |
| Definition | 6-20 |
| Contractual Format | 6-22 |
| Funding | 6-22 |
| Life Insurance Funding | 6-22 |
| Term vs. Whole Life | 6-23 |
| Policy Ownership & Premium Payment | 6-23 |
| Entity & Cross-Purchase Agreements | 6-23 |
| Tax Consequences - Cross-Purchase Agreements | 6-24 |
| Non-Deductible Premiums | 6-24 |
| No Dividend Danger | 6-24 |
| Tax Consequences - Entity Purchase Agreements | 6-24 |
| Non-Deductible Premiums | 6-24 |
| Dividend Danger - §302 | 6-25 |
| Exception to Dividend Treatment | 6-25 |
| Constructive Ownership (Attribution) Rules | 6-26 |
| ―Estate/Beneficiary‖ Rule | 6-26 |
| ―Family/Trust/Corporation‖ Rule | 6-26 |
| No Gain on Sale | 6-28 |
| Estate Tax Valuation | 6-28 |
| Using the Buy-Sell Agreement to Set Value | 6-29 |
| Enforcement of Contract Price | 6-29 |
| Purchase Price & Terms | 6-29 |
| Valuation | 6-29 |
| Community Property | 6-30 |
| Professional Corporations | 6-30 |
| Marketability Problems | 6-30 |
| Controlled Disposition | 6-30 |
| S Corporations | 6-31 |
| Sole Shareholder Planning | 6-31 |
| Complete Liquidations | 6-31 |
| Alternative Dispositions | 6-31 |
| Use of Life Insurance | 6-32 |
| Estate Valuation | 6-32 |
| One-Way Buy-Outs | 6-32 |
CHAPTER 7 - Special Business Issues7-1
| Business Valuation | 7-2 |
| Relevant Facts | 7-2 |
| Revenue Ruling 59-60 | 7-3 |
| Tangible Assets | 7-4 |
| Special Real Estate Election - §2032A | 7-4 |
| Limitations | 7-7 |
| Related Party Cash Lease | 7-7 |
| Intangible Assets & Goodwill | 7-7 |
| R.R. 68-609 | 7-8 |
| Land Subject To Conservation Easement - §2032A(c)(8) | 7-10 |
| Family Member | 7-11 |
| Indirect Ownership of Land | 7-11 |
| Qualified Conservation Easement | 7-11 |
| Qualified Real Property Interest | 7-11 |
| Qualified Organization | 7-11 |
| Conservation Purpose | 7-12 |
| No Additional Income Tax Deduction | 7-12 |
| Valuation Discounts | 7-12 |
| Minority Interests | 7-13 |
| Special Valuation Plus Minority Discount | 7-14 |
| Fractional Interests | 7-15 |
| Lack of Marketability | 7-15 |
| Swing Vote Premium | 7-16 |
| Buy-Sell Agreements | 7-16 |
| Redemptions Under §303 | 7-17 |
| Requirements | 7-18 |
| Corporate Accumulation For §303 Redemption | 7-19 |
| Accumulation in Anticipation of Shareholder's Death | 7-19 |
| Death of a Spouse | 7-20 |
| Bypass Trust | 7-20 |
| Lifetime Dispositions | 7-21 |
| Stock Redemptions Under §302 | 7-21 |
| Substantially Disproportionate Redemption - 80/50 Rule | 7-21 |
| Redemptions Not Essentially Equivalent to a Dividend | 7-22 |
| Complete Redemptions | 7-22 |
| Constructive Ownership - §318 | 7-22 |
| Double Attribution | 7-23 |
| Stock Attribution in Complete Redemptions | 7-23 |
| Stock Recapitalization | 7-24 |
| Section 306 Taint | 7-24 |
| Deferred Compensation Agreements | 7-25 |
| Installment Payment of Federal Estate Taxes - §6166 | 7-26 |
| Computation | 7-26 |
| Eligibility & Court Supervision | 7-26 |
| Closely Held Business | 7-26 |
| Acceleration of Payment | 7-27 |
CHAPTER 8 - Estate Freeze Rules8-1
| Application | 8-3 |
| Corporations & Partnerships - §2701 | 8-3 |
| Definitions | 8-3 |
| Member of the Family | 8-3 |
| Applicable Family Member | 8-3 |
| Applicable Retained Interest | 8-5 |
| Control | 8-8 |
| Exceptions To §2701 | 8-8 |
| Zero Value Rule | 8-11 |
| Qualified Payment Exception to Zero Value Rule | 8-11 |
| Valuation of Qualified Payments - Lowest Value Rule | 8-11 |
| Cumulative but Unpaid Distributions - Compounding Rules | 8-12 |
| Taxable Events | 8-13 |
| Amount of Increase | 8-13 |
| Limitation | 8-14 |
| Applicable Percentage | 8-14 |
| Transfer Tax Adjustment | 8-14 |
| Election into Qualified Payment Treatment | 8-15 |
| Election Out of Qualified Payment Treatment | 8-15 |
| Minimum Valuation of a Junior Interest | 8-16 |
| Definitions | 8-16 |
| Junior Equity Interest | 8-16 |
| Equity Interest | 8-16 |
| Value of Other Rights | 8-16 |
| Capital Contributions, Redemptions, & Recapitalizations | 8-19 |
| Attribution Rules | 8-20 |
| Corporation | 8-21 |
| Partnership | 8-21 |
| Estate & Trust | 8-22 |
| Siblings & Lineal Descendants | 8-23 |
| Transfer Tax Adjustments | 8-23 |
| Splitting Retained Interests | 8-23 |
| Subtraction Method | 8-24 |
| Three-Step Computation | 8-25 |
| Valuation Adjustment | 8-26 |
| Transfers of Interests in Trust - §2702 | 8-29 |
| Definitions | 8-29 |
| Applicable Family Member | 8-29 |
| Member of the Family | 8-29 |
| Transfer in Trust | 8-29 |
| Term Interest | 8-29 |
| Retained | 8-30 |
| Zero Value Rule | 8-30 |
| Qualified Interest | 8-31 |
| Exceptions to §2702 | 8-31 |
| Incomplete Gift | 8-32 |
| Term Interests | 8-32 |
| Successive v. Concurrent | 8-32 |
| Leasehold | 8-32 |
| Joint Purchases | 8-32 |
| Term Interests in Tangible Property | 8-34 |
| Transfers of Interest in Portion of Trust | 8-35 |
| Buy-Sell Agreements & Options - §2703 | 8-35 |
| Exceptions to §2703 | 8-35 |
| Arm's Length Bargain | 8-35 |
| Substantial Modifications | 8-36 |
| Exceptions | 8-36 |
| Lapsing Rights & Restrictions - §2704 | 8-37 |
| Definitions | 8-38 |
| Member of the Family | 8-38 |
| Lapse | 8-38 |
| Voting Right | 8-38 |
| Liquidation Right | 8-38 |
| Control | 8-38 |
| Amount of Transfer | 8-38 |
| Restrictions on Liquidations Disregarded | 8-39 |
| Attribution Rules | 8-40 |
CHAPTER 9 - Elderly & Disabled Planning9-1
| Managing the Estate | 9-1 |
| Joint Tenancy | 9-2 |
| Conservatorship | 9-2 |
| Durable Power | 9-3 |
| Revocable Living Trust | 9-4 |
| Catastrophic illness | 9-4 |
| Medicare | 9-4 |
| Medicaid | 9-5 |
| Countable Assets | 9-7 |
| Non-Countable Assets | 9-7 |
| Personal Residence | 9-8 |
| Gifting the Residence - General Rule | 9-8 |
| Exceptions | 9-9 |
| Inaccessible Assets | 9-10 |
| Gifts | 9-10 |
| Spousal Transfers | 9-10 |
| Spousal Allowance | 9-11 |
| Medicaid Trusts | 9-12 |
| Limited Trust Exceptions | 9-13 |
| Criminalization of Medicaid Asset Transfers | 9-14 |
| Private Insurance | 9-14 |
| Health Care Decisions | 9-15 |
| Supplemental Security Income | 9-17 |
| Income | 9-18 |
| Unearned Income | 9-18 |
| Earned Income | 9-18 |
| Exempt Income | 9-18 |
| Assets | 9-19 |
| Countable Assets | 9-19 |
| Non-Countable Assets | 9-19 |
| Disability Benefits | 9-19 |
| Blind | 9-20 |
| Kidney Disease | 9-21 |
| AIDS | 9-21 |
CHAPTER 10 - Post-Mortem Planning & Tax Return Requirements10-1
| After Death Planning | 10-1 |
| Alternate Valuation Election | 10-1 |
| Special Use Valuation | 10-1 |
| Election to Defer Payment | 10-2 |
| Final Medical Expenses | 10-2 |
| Administration Expenses | 10-2 |
| QTIP Election | 10-2 |
| Disclaimers | 10-2 |
| Federal Returns | 10-3 |
| Form 1040 - Decedent's Income Tax | 10-3 |
| Form 1041 - Estate's Income Tax | 10-3 |
| Form 706 - Decedent's Estate Tax | 10-3 |
| Decedent's Estate Tax - Form 706 | 10-4 |
| Filing Requirements | 10-4 |
| Paying the Estate Tax | 10-5 |
| Section 6161 | 10-5 |
| Section 6166 | 10-6 |
| Section 6163 | 10-6 |
| Overview of Form 706 | 10-6 |
| Definitions | 10-8 |
| Preparing Form 706 | 10-10 |
| Form 706, Part 1, Page 1 - Decedent & Executor | 10-10 |
| Form 706, Part 3, Page 2 - Elections by the Executor | 10-11 |
| Form 706, Part 4, Pages 2 & 3 - General Information | 10-11 |
| Schedule A, Page 5 - Real Estate | 10-11 |
| Schedule A-1, Pages 6 through 9 - Section 2032A Valuation | 10-12 |
| Schedule B, Page 10 - Stocks and Bonds | 10-12 |
| Schedule C, Page 11 - Mortgages, Notes, and Cash | 10-12 |
| Schedule D, Page 12 - Insurance on Decedent's Life | 10-13 |
| Schedule E, Page 13 - Jointly Owned Property | 10-13 |
| Schedule F, Page 14 - Other Miscellaneous Property | 10-13 |
| Schedule G, Page 15 - Transfers During Decedent's Life | 10-14 |
| Schedule H, Page 15 - Powers of Appointment | 10-14 |
| Schedule I, Page 16 - Annuities | 10-14 |
| Schedule J, Page 17 - Funeral and Administration Expenses | 10-14 |
| Schedule K, Page 18 - Debts of Decedent, and Mortgages and Liens | 10-15 |
| Schedule L, Page 19 - Net Losses During Administration and Expenses Incurred in Administering Property Not Subject to Claims | 10-16 |
| Schedule M, Page 20 - Bequests to Surviving Spouse | 10-16 |
| Schedule O, Page 21 - Charitable Gifts and Bequests | 10-16 |
| Schedule P, Page 22 - Credit for Foreign Death Taxes | 10-16 |
| Schedule Q, Page 22 - Credit for Tax on Prior Transfers | 10-16 |
| Schedules R & R-1, Pages 23 thru 27 - Generation-Skipping Transfer Tax | 10-16 |
| Old Schedule T Gone - Qualified Family-Owned Business Interest | 10-16 |
| Schedule U, Page 28 - Qualified Conservation Easement Exclusion | 10-17 |
| Form 706, Part 5, Page 3 - Recapitulation | 10-17 |
| Form 706, Part 6, Page 4 - Portability of Deceased Spousal Unused Exclusion (DSUE) | 10-17 |
| Form 706, Part 2, Page 1 - Tax Computation | 10-17 |
| Schedule PC, Pages 29 - 31 - Protective Claim for Refund | 10-18 |
| Discharge from Personal Liability | 10-18 |
| Estate Income Tax Return - Form 1041 | 10-20 |
| Filing Requirements | 10-21 |
| Schedule K-1 | 10-21 |
| Tax Computation | 10-22 |
| Exemption Deduction | 10-22 |
| Contributions | 10-22 |
| Statute of Limitations | 10-23 |
| Accounting Methods | 10-23 |
| Taxable Year | 10-23 |
| Double, Split & Solo Deductions | 10-23 |
| Decedent's Final Income Tax Return - Form 1040 | 10-25 |
| Preceding Year Return | 10-25 |
| Filing Requirements | 10-25 |
| Refund | 10-25 |
| Form 1310 | 10-25 |
| Joint Return with Surviving Spouse | 10-26 |
| Request for Prompt Assessment | 10-26 |
| Included Income | 10-27 |
| Partnership Income | 10-27 |
| S Corporation Income | 10-28 |
| Self-Employment Income | 10-29 |
| Community Income | 10-29 |
| Interest & Dividend Income | 10-29 |
| Exemptions & Deductions | 10-29 |
| Medical Expenses | 10-30 |
| Election for Decedent's Expenses | 10-30 |
| Making the Election | 10-30 |
| AGI Limit | 10-31 |
| Medical Expenses Not Paid By Estate | 10-31 |
| Insurance Reimbursements | 10-31 |
| Deduction for Losses | 10-31 |
| At-Risk Loss Limits | 10-32 |
| Passive Activity Rules | 10-32 |
| Gift Tax Return - Form 709 | 10-34 |
| Penalties | 10-35 |
| Filing | 10-35 |
| Extension of Time to File | 10-35 |
| Extension of Time to Pay | 10-36 |
| Split Gifts | 10-36 |
| Special Applications & Traps | 10-37 |
| Bargain Sales | 10-37 |
| Below Market Loans | 10-37 |
| Exception | 10-38 |
| Net Gifts | 10-38 |
| Promises to Make a Gift | 10-39 |
| Checks | 10-39 |
| Stock Certificates | 10-39 |
| Promissory Notes | 10-39 |
| Powers of Appointment | 10-39 |
Appendix A - Sample Revocable Living "A-B" Trust AgreementA-1
| ARTICLE I | A-2 |
| A. RIGHT TO ADD PROPERTY TO TRUST | A-2 |
| B. RIGHT TO AMEND OR REVOKE TRUST | A-3 |
| C. RIGHT TO DIRECT TRUSTEE RE INVESTMENTS, ETC | A-3 |
| A. DURING THE JOINT LIFETIMES OF BOTH TRUSTORS. | A-3 |
| B. UPON THE DEATH OF EITHER TRUSTOR SURVIVED BY THE OTHER | A-4 |
| C. SIMULTANEOUS DEATH OF BOTH TRUSTORS | A-9 |
| D. TERMINATION OF TRUST | A-9 |
| E. CONTEST OF TRUST | A-9 |
| ARTICLE II | A-9 |
| A. GENERAL POWERS | A-10 |
| B. NO PHYSICAL DIVISION REQUIRED | A-12 |
| C. PAYMENTS TO MINORS OR INCOMPETENTS | A-12 |
| D. ADDITION OF ASSETS TO TRUST | A-12 |
| E. RETENTION OF ASSETS | A-12 |
| F. TRANSACTIONS WITH ESTATE OF TRUSTOR | A-12 |
| G. LOANS TO TRUST ESTATE | A-13 |
| H. ENUMERATION OF POWERS NOT LIMITATION | A-13 |
| I. PURCHASE OF TREASURY BONDS | A-13 |
| J. POWERS CONSISTENT WITH MARITAL DEDUCTION | A-13 |
Appendix B - Family Limited Partnership AgreementB-1
Appendix C - Buy & Sell AgreementC-1
Appendix D - Care DocumentsD-1
| GUIDELINES AND DIRECTIVE | D-1 |
| GUIDELINES FOR SIGNERS | D-1 |
| SUMMARY AND GUIDELINES FOR PHYSICIANS | D-4 |
| INTRODUCTION | D-4 |
| SIGNATURE AND WITNESSES | D-4 |
| EFFECT OF A DIRECTIVE | D-4 |
| REVOCATION | D-5 |
| OTHER RIGHTS | D-5 |
| PRECAUTIONS | D-5 |
| SUMMARY | D-5 |
| Recording Requested By: | D-6 |
| When Recorded Return To: | D-6 |
| RECORDING REQUESTED BY | D-8 |
| AND WHEN RECORDED MAIL TO | D-8 |
| WARNING TO PERSON EXECUTING THIS DOCUMENT* | D-8 |
| STATEMENT OF WITNESSES | D-13 |
| REQUIREMENTS | D-14 |
| RECORDING REQUESTED BY | D-16 |
| AND WHEN RECORDED MAIL TO | D-16 |
Course Details
Author: Danny Santucci, J.D.
Danny earned his Bachelor of Arts in Political Science from the University of California at Irvine in 1969. He received his Juris Doctorate from Boalt Hall School of Law, University of California at Berkeley in 1972, at which time he began practice as a tax attorney in Southern California.
His legal career was initiated with the business and litigation firm of Edwards, Edwards and Ashton. Later he joined the Century City entertainment firm of Bushkin, Gaims, Gaines & Jonas working for many well-known celebrities. In 1980, Danny established the law firm of Santucci, Potter and Leanders, in Irvine, California. With increasing lecture and writing commitments, Danny went into sole practice in 1995. His practice emphasizes business taxation, real estate law and estate planning.
Danny has been an officer and active member in various organizations including the Glendale Bar Association, Century City Bar Association, Orange County and Los Angeles County Bar Associations, California State Bar Association, Toastmasters and Lions Club. He also avidly supports the American Association for the Advancement of Science. He has been admitted to practice before all California and federal courts including the United States Tax Court and the United States Supreme Court.
Serving as a lecturer for the Continuing Education of the Bar of California, Golden Gate University, and numerous state C.P.A. societies, Danny teaches a variety of tax, business and real estate courses. Danny has been in demand all across the country as a speaker for all levels of professional and civic organizations and numerous major seminar circuits. Danny spoke to over 2,000 people per month and traveled more than 150,000 miles annually.
In 2015, he withdrew from the lecture circuit to devote himself to tax research and writing. The author of numerous texts, he is listed in "Who’s Who in Creative Real Estate" and is admitted to the American Exchangor’s Hall of Fame.
Publication/Revision Date: 5/13/2026
Course Exam Questions (online): 120 (multiple-choice)
Program Delivery Method: Self-Study (NASBA QAS Self-Study)
Available Formats of Course Text: Downloadable PDF, Printed/Mailed
Course Level, Prerequisites, and Advance Preparation Requirements
| License | Course Level | Prerequisites | Advance Preparation Requirements |
|---|
| CPA | Overview | None | None |
| CFP® | Intermediate | None | None |
| EA/OTRP | Overview | None | None |
* This program is appropriate for professionals at all organizational levels.
Sponsor ID Numbers
National Registry of CPE Sponsors I.D.: 107615
CFP Board Sponsor I.D.: 1008 — Course I.D.: 310425
IRS Qualified Sponsor I.D.: FWKKO — Course I.D.: FWKK0-T-00773-26-S
State CPA Board Sponsor ID Numbers (where applicable)
Florida Division of Certified Public Accounting: 0004761
Hawaii Board of Public Accountancy: 14003
New York State Board for Public Accountancy: 002146
Ohio Accountancy Board: CPE .51 PSR
Pennsylvania State Board of Accountancy: PX178025
Texas State Board of Public Accountancy: 009349
Learning Objectives
Chapter 1: Estate Planning
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Identify basic estate planning elements, recognizing the importance of well-drafted legal documents and specify the key team participants, including their roles in the estate planning process.
- Determine the estate tax techniques that save death taxes while retaining maximum control, and identify estate-planning facts.
After studying the materials in this chapter, answer exam questions 1 to 6.
Chapter 2: Estate & Gift Taxes
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Identify potential death taxes, including federal estate tax, as they apply to various size estates and persons, and determine what constitutes a taxable estate under §2501, specifying what assets are included in or excluded from a gross estate.
- Specify allowable estate deductions, recognizing their tax advantages and disadvantages, and determine the value of a decedent's assets using permitted elections, recognize the use of Form 706 to pay any estate tax due, and select the tax basis and holding periods of estate assets.
- Recall the advantages of gift planning, including estate reduction, recognizing the impact of the GST, specify the steps to compute gift tax, identifying the gift tax exclusion amount, and determine the value of gifts, including those that are split.
- Identify the various gift tax exclusions and specify the tax treatment of medical expenses or school tuition.
After studying the materials in this chapter, answer exam questions 7 to 26.
Chapter 3: Wills & Probate
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Specify types of wills, citing the functions a will can perform and recall ways to hold title and their probate and estate tax ramifications.
- Identify the advantages of a properly drafted will and specify the pros and cons of probate proceedings.
After studying the materials in this chapter, answer exam questions 27 to 32.
Chapter 4: Trusts
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Identify the relationship of parties in a trust, specifying their planning relationship, reasons to establish a trust, and types of trusts.
- Recognize the application gift and income tax in trust taxation and specify recommended trust provisions such as a "pour over" clause, retained income provisions, and a termination clause.
After studying the materials in this chapter, answer exam questions 33 to 42.
Chapter 5: Entities & Title
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Identify tax and legal title formats listing differences, specify the advantages and disadvantages of holding property in these entities, and recall the use of retirement plans and custodianships.
After studying the materials in this chapter, answer exam questions 43 to 49.
Chapter 6: Life Insurance, Annuities & Buy-sell Agreements
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Recognize the function of life insurance, its funding with low-cost dollars, taxation, and the purchase for value rule, identify the tax treatment of life insurance proceeds, select variables that influence whether life insurance is estate taxable purposes, recalling the gift tax associated with the transfer of life insurance policies.
- Specify the pros and cons of various types of life insurance policies, including the use of an insurance trust, determine the differences between deferred and private annuities, and recognize the types of buy-sell agreements, identifying their tax and legal advantages.
- Determine the advantages of a stock redemption, being careful to avoid family attribution and recognize the importance of valuing closely held business interests.
After studying the materials in this chapter, answer exam questions 50 to 64.
Chapter 7: Special Business Issues
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Identify fair market value for purposes of business evaluation and recall the factors in R.R. 59-60 specifying their impact.
- Determine how tangible assets are valued, identifying the use of book value, specify the steps in R.R. 68-609's valuation formula for intangible assets, and recognize the purpose and use of buy-sell agreements.
After studying the materials in this chapter, answer exam questions 65 to 72.
Chapter 8: Estate Tax Freeze Rules
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Determine transactions to which Chapter 14 rules apply and the terminology used in the Chapter 14 valuation rule that applies to business interests.
- Identify the "zero value" rule, recognizing its impact on estate and gift taxes, application of ownership attribution, and the qualified payment exception.
- Specify when transfer tax and value adjustments will be made to transfers, determine the stepped computation under the subtraction method to the gift resulting from a transfer, and identify lapses or restrictions that qualify as an applicable restriction.
After studying the materials in this chapter, answer exam questions 73 to 90.
Chapter 9: Elderly & Disabled Planning
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Identify estate management techniques for the elderly and disabled, including probate avoidance, joint tenancy, conservatorship, and powers of attorney.
- Cite the eldercare benefits of Medicare, Medicaid, and Supplemental Security Income, recognize the use of private insurance for catastrophic illness, and identify tools that can allow patients to make healthcare decisions.
After studying the materials in this chapter, answer exam questions 91 to 101.
Chapter 10: Post-mortem Planning & Tax Return Requirements
Learning Objectives
As a result of studying the course material, you should be able to meet the objectives listed below:
- Determine post-mortem estate planning action, including elections and disclaimers, and cite the requirements of post-mortem federal forms.
- Determine the processes and procedures necessary in the preparation and filing of Form 706.
- Identify the filing requirements for estate income tax and decedent's final income tax returns, determine the total income to be included on the decedent's final income tax return using available exemptions or deductions.
- Identify how to avoid penalties when filing a gift tax return, and recognize special gift applications and traps, stating ways to avoid their tax consequences.
After studying the materials in this chapter, answer exam questions 102 to 120.
