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Decoupled State Estate Tax Planning in InterActive Legal

October 31, 2022 @ 12:00 pm 1:00 pm EDT

Teresa L. Bush Esq.
Drafting Webinar

Subscriber Drafting Webinars provide continued training on various aspects of using the InterActive Legal software, usually focusing on drafting particular documents or using certain drafting options.  These webinars are free to ILS subscribers. They provide insight and training regarding specific documents and options available within the drafting systems. Subscribers will receive an email outlining the topic of each drafting webinar with instructions for registration.

Webinar Description

This month’s subscriber drafting webinar will focus on estate tax planning in states that have a separate state estate tax system with a state exemption that is lower than the federal exemption.  In that situation, there is an added layer of complexity when planning for a married couple – how to maximize the use of both exemptions, but pay no estate tax at all at the first spouse’s death.  If the federal exemption is fully utilized, state estate tax will be owed, but if only the state exemption is utilized, the clients may not receive full benefit of the remaining federal exemption.

We will discuss the common ways to plan for two situations:  (1) where the clients’ net worth is more than the state exemption but less than the federal, and (2) where the clients’ net worth exceeds the (higher) federal exemption.  For both scenarios, we will show the InterActive Legal options for creating either a formula-based plan or a contingency plan.  Contingency plan options include a disclaimer plan, a Clayton QTIP plan, or an “all to QTIP” plan, and in each case, the surviving spouse or the fiduciary must take some action after the first spouse dies to trigger the tax planning.  Formula based plans allow the drafter to create a state-only bypass trust and a residual QTIP trust (that can be further divided, if necessary, to create a state-only QTIP).  Wealth Transfer Planning includes an additional option to create a formula-based state-only QTIP for clients whose net worth exceeds the federal exemption, which we will also demonstrate.

This planning is relevant for practitioners in a limited number of states, but is available in all three primary InterActive Legal drafting systems.  We will demonstrate the available options in all three systems – Essential Estate Planning, Elder Law Planning, and Wealth Transfer Planning – and discuss briefly how you can create a default set of interview answers for your most common drafting situations. 

Please join us, particularly if you practice in a decoupled state!

Continuing Education Credits

InterActive Legal is not an approved Continuing Education (CE) Sponsor. However, several states and regulatory agencies for a variety of professionals that participate on our teleconferences may still receive continuing education credit for their participation. If a participant wishes to receive CE credit for their participation in these teleconferences, they must apply to receive credit on their own and through their individual states and regulatory authorities. It is the responsibility of the participant to file for CE credit and is not guaranteed by the webinar sponsors.

Speaker Bio

Teresa Bush, Esq.
Teresa Bush joined InterActive Legal in 2007 and serves as Director of Education and Support Services. Ms. Bush has been licensed to practice law since 1991, and focused her practice exclusively on issues of estate and gift tax planning, probate, charitable planning, and estate and trust administration. She began her practice in a small law firm, planning for clients of all levels of wealth. Thereafter, she practiced for a number of years in the Tax Section of Kelly, Hart and Hallman, P.C. in Fort Worth, Texas, and as an estate and gift tax consultant for the Dallas office of Ernst & Young, in both cases focusing on planning for very high net worth clients. Ms. Bush received her J.D. from the University of Texas School of Law, where she was a research assistant for Professor Stanley M. Johanson. She studied at Edinburgh University and the London School of Economics prior to obtaining a B.A. in Economics and Political Science from Rice University in Houston. While studying abroad, she worked as an intern for a Member of Parliament in the British House of Commons. Ms. Bush taught legal research and writing as a Teaching Quizmaster in law school, and later taught estate planning extension courses for American College of Financial Services CLU candidates. She has presented several online webinars on estate planning and drafting topics, and is the author or co-author of a variety of estate planning articles.

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