Increased Federal Tax Exemptions (effective January 1, 2004)
Applicable Exclusion Amount: $1,500,000
Internal Revenue Service Acquiesces in Walton Decision
In Walton v. Commissioner, 115 T.C. 589 (1993), the Tax Court determined that a taxpayer could structure a Grantor Retained Annuity Trust so that there was no gift tax. It invalidated the infamous Example 5 under §25.2702-3(e) of the Regulations, which the Service had interpreted to ascribe some actuarial gift interest regardless of the terms of the trust. Although the Service's appeal of Walton was cautiously anticipated, it never materialized. Instead, the Service issued Notice 2003-72, 2003-44 IRB 964, acquiescing in the Walton holding (that Example 5 was invalid) and promising to revise the Regulations. Former Question 187 (Spouse Annuity Interest) has been deleted; Law and Strategy has been revised at Questions 124, 188, and 189.
Updated Product Features
New Intangible Tax Trust Cover Letter
Although you may continue to include an Intangible Tax Trust in the general “Sending Documents” letter, a new cover letter specific to Intangible Tax Trusts is now available which is much more detailed and contains important client warnings with respect to multi-year trusts. In most circumstances you will want to use the new letter instead. Question 9.
Intangible Tax Trust Grantor Restricted from Removing Trustee “for any reason.”
The Grantor of an ITT may only be given the power to remove a Trustee “for reasonable cause” to avoid jeopardizing the validity of the trust. Question 757.
Term for Evergreen Intangible Tax Trust Extended by One Year
Previously, specifying that an ITT will terminate “in five years” or “in ten years” generated a termination date in the fifth or tenth year from the creation date. For example an ITT created December 15, 2004, would terminate in 2009. One year has been added to these termination dates. Our example would now terminate in 2010. Question 578.
New Automatic Identification of Minor Children in Medical Power of Attorney for Minor Child
The program will now automatically calculate and present a list of all the minor children of the party for whom you are drafting a Medical Power of Attorney for minor child (and the spouse’s minor children as well if you have selected “Treat Spouse Children as Own?” at Question 51). You may select any subset of this list for inclusion in the document. Question 1122. Former Question 1122 (Reference to Minor(s)) has been deleted as no longer necessary.
Additional Documents Included in Sending Documents Cover Letter
The Medical Power of Attorney for minor child, Affidavit re continuing validity of DPOA and Affidavit by physician re incapacity of Principal may now be included as enclosures in the Sending Documents cover letter. Question 1290.
New AutoSave Function
You should continue to save your answer file as you work, especially before you exit the program. Lawgic continues to prompt you to do so. However sometimes you may forget, or a power outage may shut down your computer when you have not saved for some time. A new AutoSave feature can help you recover more of your work. Lawgic now automatically saves a separate copy of your answer file to LGCTMP.ANS roughly every fifteen questions. Please read Help, Help, Advanced Features, Recovering Your Work, for detailed instructions on using this file. If you are using a flag file the AutoSave feature will also save a separate copy of your flag file to LGCTMP.FLG.
New Warning Message when Lawgic is Already Running
Only one instance of Lawgic may run at a time. Previously, an inadvertent attempt to start a second instance would open a new Lawgic window but the “Select Title/File” box would never appear. Now, an attempt to start a second instance of Lawgic will display a “Lawgic Already Running” warning box.
New Option to Cancel Application Close Button
Selection of application close button (the X in the upper right corner of the Lawgic window) now displays the same save dialog as the File, Exit and File, Close menu items when a save is needed. The dialog now displays 3 buttons, No, Yes, and Cancel. Previously only a No and Yes button were displayed when application close button was selected.
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To view those questions that are new in this update, or whose Law & Strategy, choices, or default answers have changed, use the "Up_Mar04" flag file. From inside Lawgic, open any existing answer file; on the Flags menu, click Open Flags, select the appropriate Title (click OK), and next select the "Up_Mar04" flag file (and click OK). To view all flagged questions, click Expand All on the Answers menu and scroll the Navigator. Flagged questions will be indicated with bold text.
Please continue to send us your suggestions on existing or new products. Contact our Technical Support Department at 1-877-2-LAWGIC (252-9442) or e-mail us at support@lawgic.com.
Copyright (c) 2004 Lawgic, LLC, a Florida limited liability corporation (“Lawgic”). All Rights Reserved. Lawgic and Intelligent Legal Technology are registered trademarks of Lawgic, LLC.