T he estate and gift tax
rules surrounding QSTPs are unique and the planning considerations are anything but
straightforward. The gift tax provisions contained in Code section 529 create a result
that flies in the face of the general gift tax rules contained elsewhere in the Internal
Revenue Code.
…. Consider the couple with large taxable estates who have four
children who will someday inherit the remnants (after estate taxes). With each parent
contributing $50,000 to the QSTP account of each child, this couple can effectively remove
$400,000 from their combined estates in one day without using a single dollar of their
unified lifetime estate and gift tax exemptions. Not only is the value removed from their
taxable estates, but it is invested in an account that should grow nicely over time
without the drag of income taxes (because earnings are tax-deferred). And so the estate
tax savings will grow even more substantially. That’s effective estate planning!
…. Even more significant is the fact that the parents will
continue to have nearly complete control over the accounts. |
Chapter
9 - Estate Planning With QSTPs
