TITLE

Clinton Targets Estate Planning and Life Insurance

AUTHOR(S)
Brody, Lawrence
PUB. DATE
June 1998
SOURCE
Journal of Financial Planning;Jun98, Vol. 11 Issue 3, p38
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article discusses a budget proposal submitted by the administration of U.S. President Bill Clinton on February 2, 1998 which, if adopted, would affect future estate planning, and in some cases, even existing estate plans, as of June 1998. The most important of the proposals for estate planners include proposals to eliminate nonbusiness entity valuation discounts, eliminate the Crummey withdrawal rule for gift tax annual exclusion purposes and eliminate the gift tax exemption for personal residence trusts. Proposals that would affect life insurance directly, include proposals to reduce investment of a policy holder in the contract for mortality and expense charges, modify the deductibility of interest rules for corporate-owned life insurance and tax exchanges of variable insurance contracts and re-allocation of assets within variable life insurance contracts. Of the estate planning proposals, probably the most controversial is the proposed repeal of the Crummey rule, which, again, if adopted as proposed, would be effective for any gifts made in 1999, even to pre-existing insurance or other irrevocable trusts. The proposal to eliminate the exception to Section 264(f) for policies covering officers, directors and employees, the proposal to treat both exchanges in and out of variable contracts as not qualifying for Section 19025 nontaxable exchange treatment and the related proposal to tax transfers among variable policy accounts are extremely controversial and are vigorously opposed by the insurance industry.
ACCESSION #
769229

 

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