The following are some recent developments from 2017 which are of interest to the estate planning community.
Valuation Discounts Update:
In 2017, the estate planning community expected to see big changes regarding the ability to do valuation discounts under Sec. 2704 of the Internal Revenue Code. Briefly, Sec. 2704 was set up by Congress in order to try to limit discounting done for gift and estate tax purposes for intra-family transfers of family-owned, or closely-held, corporations or partnerships. In 2016, the IRS released proposed new regulations which would have largely taken away the ability to do discounting for gifts of these interests.
The IRS has pulled back from making the proposed changes and considers the proposed new regulations unworkable and as such has withdrawn the proposed regulations.
The general consensus is that we will not see a reiteration any time soon to change how valuation discounts are done. At this time, valuation discounting is still a viable option in appropriate gifting situations.
Digital Assets Update:
In Ajemian v. Yahoo, 478 Mass. 169 (2017), the Massachusetts Supreme Judicial Court (the SJC is the highest court in MA) addressed whether a personal representative (PR) of a person’s estate had a right to access a decedent’s Yahoo e-mail account.
The SJC acknowledged that an email account is an estate asset over which the PR can seek access and control.
Update on FinCEN Final Regulations:
When you open an account at a financial institution, the Financial Crimes Enforcement Network (FinCEN) regulations require that the financial institution obtain information on the identity of beneficial owners, and an individual who controls certain types of legal entities.
Trusts are not included in this regulation. A financial institution will want to identify the trustee(s) and the grantor (or those who have authority or control of the account), but it is not required to look through a trust to identify its beneficiaries.
