Module 8- Achieving Tax And Estate Planning Objectives In Retirement Flashcards
Chapter 1: Taxation of Distributions from Taxable Accounts
Mutual Funds Distributions
Mutual Funds are flow through entities who are not taxed
Three Types of Distributions:
- Qualified Dividends:
- Dividends from common stocks and qualifying foreign corps
- Long-term Capital Gain (meeting holding period) - Long-Term Cap Gains vs Short
- Long= Result of sale, capital gains rate that is usually lower than ordinary income
- Short= Ordinary dividends, ordinary income rate - Ordinary or Nonqualified dividends
- Interest and non-qualified dividends - expenses of fund
- Taxable at ordinary income rate
Each shareholder receives a 1099-Div indicating what was received
Taxable regardless of whether it is reinvested or not
Mutual Fund Sales
Which shares were sold?
Are the shares short or long?
Three Methods Acceptable for determining which shares were sold:
1. FIFO- Default, probably least tax efficient
- Average Cost- Total of purchases/ Shares, Also not tax efficient
- Specific Identification- Extra record keeping but most tax efficient
Financial institutions required to track based on Emergency Economic Stabalization Act of 2008
Gain/Loss is not recognized till a sale occurs, may only recognize $3,000 of loss
Cost basis= Cost to buy asset, and to own the asset (i.e. Commissions
Homes are also increased by expenses for improvements
Capital Assets acquired through inheritance
- Basis is FMV of asset on descendants death
- Can either be stepped up or down
- Generally all assets received are long term
- For property, may use alternative valuation date (6 months after DOD)
Capital Assets acquired as gifts
Lesser of donor’s cost basis or FMV on date of gift
Basis would be increased by any gift tax paid
Should sell the stock and take the loss before gifting
For property, if its gifted at a FMV less than the donor’s adjusted basis, then a gain or loss is measured based on adjusted basis
There is a no gain area when the donor sells an asset that was received under FMV
If taking FMV on gift, then start of holding period is when donor receives
Long term capital gains rate
15% for the 25%, 28%, 33%, and 35% tax brackets
20% for 39.6% bracket
0% if in 10 or 15% bracket
Short term gains are taxed at normal bracket rates
Short term is 12 months or less, determined based on time of sale (not settlement
Real Estate- Top bracket is 25% for straight line depreciation
Collectibles: 28% top bracket, gold and silver etf’s are collectibles
Netting Gains and Losses
Net Shorts vs Shorts and Longs vs Longs
Then net Shorts vs Longs
Max loss is $3,000… the rest is carried forward
Only allowed $1,500 if married filling separately
Exchanges of mutual funds
Tax strategy
Still taxed on gains for exchanges even though you are not receiving the distribution
Almost always makes sense to fill up to 15% tax bracket to take advantage of not paying anything on long-term capital gains
Taxation of Stock Dividend Distributions
Cash Dividends:
- Long term capital gains rate
- Not available for bonds, CDs, mutual funds, REIT, tax exempt entities
- If not held for 61 days of 121 (60 before, 60 after ex-dividend date
- Includes date sold, but not purchase
Dividend Reinvestment Plans:
- Taxed as if cash dividends
- Amount is FMV of security + service charges upon receipt
- Cost basis of new security is FMV on date received, even if bought at discount
Stock Dividends:
- Not a taxable event
- Lowers cost basis based on amount of new shares
Charitable Donations of Appreciated Stocks:
-Charitable donation is the amount of the stock. No Cap Gain recognized
Taxation of Non-Gov Bonds
- Capital Gain/Loss occurs if selling before maturity
- Dividend payments (semi-annual usually) are taxed at ordinary income
- If bought at discount to Face, then pay extra ordinary income at maturity
- If bought at premium, the loss:
1. Taxable Bonds: Loss is amortized and offsets part of dividend income OR becomes part of capital gain/loss at sale or redemption
- Tax Exempt Bonds: Straight line amortization, but no tax benefit
ZERO COUPON BONDS
-Annual accretion of bond value is taxable as interest (ordinary income)
Taxation of US Treasury Securities
T-Bills:
- 1 year or less, zero coupon
- Taxed in year that the T-Bill matures
- Exempt from Local and State Tax
T-Notes and Bonds:
- Same as corporate bonds
- Interest is exempt from state and local tax
- Discount is accrued annually instead of paid in final year
Treasury Inflation Indexed
- Taxed when received
- Inflation adjustment of Face is taxable in year of adjustment
- Exempt from state and local tax
Chapter 1 Review
- Explain Concept of Cost Basis
- Amount you paid for securities - Taxation of Capital Gains and Loss
- 0% for 10 and 15% tax brackets
- 15% for middle tears
- 20% for 39.6%
- 25% on Real Estate using straight line
- 28% Collectibles - Three Methods for determining cost basis for MFs
- FIFO
- Average cost
- Identification
- Taxation of zero-coupon
- Taxed on accretion of value over term
Chapter 2: Distributions from Tax-Deferred Accounts
IRAs
Deductible IRAs:
-Have a $0 basis because contributions are deductible
Nondeductible IRAs:
- Taxes are owed on earnings
- Distributions are on a pro-rata basis for tax
- Can be used as a backdoor IRA as assets can be converted to a Roth regardless of income
Minimum RMD Penalty Tax: 50% Premature Withdraw (before 59.5): 10%
No RMD for Roths
No early distribution penalty for nongovernmental 457 plans
Premature Distributions Exceptions for IRAs
- Death
- Disability
- Medical expenses over 10% of AGI (7.5% if over 65)
- Medical insurance premium while unemployed
- Qualified higher education expenses
- Qualified first time homebuyer up to $10,000 (no principal residence for last 2 years)
- National guard or reservist called to active duty for more than 179 days
- Disaster related
- Substantially equal payments
Also under HIPAA no penalty if:
Separation from Employment must be 12 weeks unemployed before allowing premium pay
Substantially Equal Pay (72t): -Later of 5 years or reaching 59 1/2 -Distribution amount may not be altered 3 Methods of calculating distribution 1. One of the RMD tables, but cannot change between tables after selected
- Fixed Ammortization:
- Amount determined by years and elected interest rate (under 120% of fed mid-term rate of 1.8%)
- Calculate by finding payment based on PV, N, and I/YR - Fixed Annuitization:
- Use annuity factor based on owner’s age and mortality table in Revenue Ruling 2002
- Must be reasonable
- Divide account balance by the annuity factor
Allowed to switch from 2 or 3 to 1 if investment performance is weak
Minimum Distribution Requirements
Must begin by April 1st of the following year in which turning 70 1/2
Full RMD must be taken by that date
IRAs, SEPs, and SIMPLE IRAs must follow this path
Qualified Plans, 403(B) and 457 plans may begin in year after retirement unless 5% owner of company
If no longer employed by Qualified Plan company, then must begin with IRAs
Chapter 2 Review
- Deductible IRA tax Treatment?
- Fully taxable - Nondeductible IRA?
- Taxed on earnings - Backdoor Roth IRA?
Nondeductible IRA being rolled into a Roth, though must pay taxes on rollover amount and any before - RMD rules apply to IRAs?
- Must begin in year following turning 70 1/2 by April 1st
Chapter 3: Distributions from Tax Exempt Accounts
Roth IRA
- May take out contributions at any time tax free and penalty free
- If qualified, then no tax on earnings, and no 10% penalty
Qualified if:
- After hitting 59 1/2, death, or disable, or first time home buy up to 10k
- Five year holding period is met
Non qualified is both taxed income and earnings
Exceptions applying on IRAs also apply to Roth’s for earnings
-First time home buy on earnings up to 10k is tax free if meeting 5 yr hold period (dont need to be 59 1/2)
Five Year Rule for Roth distributions
Starts January 1st in year of contribution
Any subsequent contributions also are on initial clock or any new Roths
5 year period holds even after death so beneficiaries must wait on earnings
Ordering Rules
- Contributions first, earnings second
- Does not apply to nondeductible IRAs
3 Possible IRA Distributions in this order:
- Return of contributions (no tax)
- Return of conversion amount (have own 5 year period, so 10% may apply)
- Return of earnings
- Not taxed if qualified
- Income and 10% early withdraw if non qualified
Chapter 3 Review
- Requirements for a qualified distribution form a Roth IRA
- 59 1/2 and 5 years (exceptions may apply) - Explain 5 year clock
- Starts January 1 of year first contribution is made and continues.
- Conversions start their own clock - Ordering rules for distributions from Roth?
- Unlike non-deductible IRAs, distributions are ordered: Contributions (non taxed), Conversions (possibly 10% penalty depending on hold period), Earnings
Chapter 4: Taxation of Annuities
- Deposits into a Roth annuity or nonqualified annuity are not tax deductible
- Into an IRA are deductible or pretax
- Withdrawls come from gains first and if in an IRA would all be taxed. If in a Roth, not taxed
- If withdrawing before 59 1/2, it is taxed
Annuity Payments
Nonqualified Annuity Payments
- If annuitized, each monthly payment is partially gain, partially return of principal
- No 10% penalty if annuitizd
Tax-Favored Plans
- Non-deductible IRA partially taxed
- Deductible IRA fully taxed
- Roth not at all taxed
Chapter 4 Review
- Taxation of lump sum or periodic distributions from a nonqualified annuity
- Taxed on gains first and then tax free on contribution repay - Taxation of annuity payments from a nonqualified annuity?
- Partial tax on earnings and partial non tax
Chapter 5 Taxation of Home Sales, Social Security, Life Insurance and Tax Diversification
Section 121
- Created after Taxpayer Relier Act of 1997
1. Capital gains up to $500,000 for joint and $250,000 for single taxpayers are excluded if it is your primary residence - Property that is used most is considered principal
2. Business/Rental property does not apply, and is taxed on gain (higher due to depreciation reductions)
3. Must have owned and lived in the home for 2 out of 5 years. Vacations are counted as use.
4. Exclusion may not be used twice in a 2 year span - Pro-rata reduction if move is due to a new job, health, or unforeseen circumstances (6 months = 25%)
5. No age limitation
6. Taxed on gains over 500k for joint or 250k singles
7. Qualifying widow or widower (surviving spouse for taxes) may exclude full $500k if sold in two years following spouse’s death. - Both spouses must have used the property for two years, while only one must have owned it for the full time
- If only one spouse is eligible for the exclusion, then may deduct 250k
Determination of Primary Residence
Several Factors Considered Including:
- Where taxpayer works
- Principal place of family members
- Address on tax returns, drivers license, voter registration
- Where car is registered
- Location of taxpayers bank
- Location of clubs and church affiliated
Basis and adjusted basis of a home
Sale price - Adjusted basis = Actual gain
Qualified capital expenditures can move the basis upwards
UNRECAPTURED 1250 GAINS:
Can move into a home that you had rented for two years and have it become part of exclusion. Depreciation taken in past years is taxed though.
If part of the house is used for tax purposes as an office, then will pay taxes on that depreciation
Partial Exclusion Resulting From Nonqualified Use
Housing Assistance Tax Act of 2008 banned NonQualified Use property
- NonQualified includes using property for a vacation home or rent
- If used for vacation home AFTER 2008, then must use following fraction
Years of Qualified Use/ Years of Own
-If partial exclusion is attached, must take into account partial exclusion of both
EXAMPLE Bought for 400k Rented out for 2 years out of 5 Depreciated 20K Sold for 300k gain
Taxed on NonRecaptured 20k and able to exclude 180k (3/5ths of 300k)
Taxation of Social Security Benefits
-Up to 85% of Social Security benefits are taxable
Taxed based on two factors:
- Total Social Security Received
- Amount of other income
If MAGI in the tax year exceeds the base amount then must include lesser of these in gross income:
- 50% of SS benefits received over the threshold or
- 50% of provisional income exceeding the base amount
MAGI includes Provisional Income= Tax-exempt income + 50% of SS benefits received
- $32,000 is base for married joint
- $25,000 for all others
- Cap is 44k for married, 34k others
- Take 50% between base and cap
- Take 85% of above cap number
- Add together and compare to 85% of total benefit
- If amount is above 85%, then lower to 85%
Life Insurance Proceeds
- Nontaxable if received by beneficiary in a lump sum
- Interest on proceeds left with insurance company is taxable
- Proceeds from a policy owned by the decedent at death are included in gross estate though
The Importance of Tax Diversification
- Important to have a mix of tax-deferred, roth accounts, and taxable investments to limit tax exposure in retirement
- RMDs are required from 401(k)s and IRAs at 70 1/2.
- Taxable accounts provide a place of penalty free withdrawls (though taxed on gains)
Order of Saving: QP Match, Roth, tax deferred, tax
Order of Spend-Taxable, tax deferred, tax free
Chapter 5 review
- Under section 121, what amount is excludable if meeting other conditions?
- 500k Joint, 250k single - Rules and Requirements for home sale exclusion?
- 2 out of 5 years lived there
- 250k single, 500k joint
- Depreciation is taxed in event exclusion applies
- Both joint must have lived in house for exception apply
- May only use once every two years - Relation of Tax-exempt income and SS benefits.
- Used to calculate provisional income (tax exempt + 50% of SS) which is added to MAGI
- If MAGI is above 32k for married or 25k, part of SS can be taxable
- 50% between base and 44k for joint or 34k for single is taxable
- 85% above those caps is taxable up to 85% of SS total benefit
Chapter 6: Introduction to estate planning
- Trying to transfer property amongst generations while minimizing cost and taxes.
- Exercise of preservation, and maximization of net assets to heirs
- Also ID’s client health care decisions
- 80% of adult Americans do not have a will
Defining Estate
All rights, titles or interests a person has in any property
Three classifications of property:
- Real property- Land
- Tangible personal property- Car
- Intangible personal property- Stock
Two types of Estates:
- Probate Estate- Property not automatically transferred and property moved based on will
- Gross Estate- All property subject to taxation
Chapter 6 review
- Identify three ways in which estate planning can help clients meet their objectives.
- Fulfilling transfer wishes, minimizing taxes and costs, maximizing net assets to heirs - Define basic terms related to estate planning.
A. Estate- All rights, titles, interest in property
B. Estate Planning- Arranging for conservation and transfer of property from one person to others - Probate vs gross estate
- Probate is property actually moving to heirs while gross estate is the amount that is taxable - Describe the activities that must be avoided by counselors.
- Avoid answering legal questions if not properly registered to answer under law
Chapter 7: Transferring Property by Will and Will Substitutes
Estate transfer defined
Act of conveying title to property interests from one party to another
Wills
- Legally enforceable declaration of how property is to be distributed at death
- Revocable by the maker (testator) until death, as long as mentally competent
- Wills can be altered through a condicil
- Old wills should be disposed of to avoid confusion
Probate
-Court-supervised process for administering a decedent’s probate estate
Purposes:
1. Validates a will. If a will misses certain assets (partial intestacy), then assets are distributed according to lows of intestate succession
- Appoints an executor of the probate estate.
- Provides process of how decedent receives and how a final tax is met
Disadvantages:
- Everything is public
- Delay in transfer due to paperwork
- Legal and Admin Costs
Will Substitutes Examples
Forms include:
- Jointly held property
- Insurance proceeds named to beneficiaries
- Naming beneficiaries for retirement accounts
- Trusts funded during owners life
- Payable on death Accounts
- Transfer on death accounts
Property Ownership Alternatives to Wills
Joint tenancy- Wife would receive ownership
Fee Simple- One person has all ownership rights. Can pass through a will, but still has to go to probate
Tenancy in Common- Each person owns a distinct title. Not a will substitute as decedents ownership goes to estate
Community Property- Husband and wife only. Each spouse owns half, regardless of how it was purchased. Must be in the will who beneficiary is.
Joint Tenancy- Undivided equal interest in property. Auto goes to other people.
-Should be careful, as others have access to equal claim to assets. Especially in marriage.
Tenancy by entirety- Only between spouses in certain states.
-Unable to sell or gift assets without other tenant’s consent
ALL qualify for unlimited marital deduction, but must be included in gross estate value
Contribution rule applies to joint tenancy. If no money put in, no ownership break for inclusion in gross estate.
Insurance
If initial ownership of the insurance policy is in the name of the beneficiary, no taxes are ever paid
Can help pay for funeral expenses, medical bill, probate costs, and living expenses for those with no liquidity
Escapes Probate
\
Individual and Qualified Retirement Plans
Paid directly to the beneficiary
Pensions must provide benefit to a spouse unless they consent otherwise
Escapes Probate
Trusts
Trustee manages property for a beneficiary
Grantor (creator of trust) does not have to be beneficiary
If it is a living trust, then it is a will substitute as the property has already been transferred
Payable on Death and TOD accounts
Allows bank accounts to be transferred without going through probate
POD- Payable on death to a designated beneficiary. Depositor has complete control. Beneficiary is revocable.
TOD- Usually limited to securities and debt obligations
Dying Inestate
Dying without a will or will substitutes
Relying on state statute will result in the following:
-Only blood relatives will receive property, possible exception for registered domestic partners
- Most if not all will go to spouse and/or children
- Children may receive part of estate instead of all going to spouse. Court could appoint someone other than parent for minors
- Income or use of property cannot be specified to go to charity after beneficiaries death
- Transfer tax planning would be nearly impossible
Chapter 7 Review
- Define the following:
A. Will- Legal document transferring property at death
B. Probate- Rights to property that are transferable
C. Intestate- Dying with out a will or will substitute
D. Personal Rep- Executes the will
E. Executrix/Executor- appointed by court - Disadvantage of probate
- Public, Costly, Delayed - Disadvantage of intestate
- Only goes to blood relatives, may not all go to spouse, costly - Explain following will substitutes
A. Property held joint tenant WROS- Property is auto transferred to other joint parties. Part of estate tax based on contribution rule
B. Insurance proceeds paid to named beneficiary- Depends on how it was bought. Could be includable in estate if purchased in name of dead
C. Proceeds of Qualified Plans/IRAs- Go to beneficiary and excluded from probate
D. Trusts- If living trust then excluded from probate - Value included in Gross Estate, Probate:
A. Fee Simple: 100%, 100%
B. Tenancy in Common: % owned
C. Joint Tenancy: % contributed, 0%
D. Tenancy by Entirety: 50% deemed contribution, 0%
E. Community Property: 50%, 50%
Chapter 8: The Federal Gift and Estate State
Evolution of Federal Transfer Tax System
First form of Estate Tax came in 1916
Gift tax implemented in 1932
In 1977, the two were combined to form the unified federal transfer tax
Top gift and estate tax is 40%
Federal Estate tax
Federal Gift Tax
Generation Skipping Tax
- Tax on property transfer at death
- Gross Estate - Deductions = Taxable Estate
Taxable gifts are added to find tax rate, and then credits are. Taken out
FEDERAL GIFT TAX
-Gifting during life that may be taxable after deductions and exclusions
Generation-Skipping Transfer Tax
- Would give second generation an income claim on trust assets for third generation
- Eliminated by GST Tax, which is 40%
The Federal unified Transfer Tax System
Gift and estate tax are progressive
Rate range from 18%-40%
Over $1,000,000 is taxed at 40%
Cumulative tax as each gift must be added all the way back to 1932 or 1976 for transfers of wealth
Tax credit is currently $2,141,800
150k now vs later is taxed same way
Applicable exclusion amount= 5.9MM, able to give without having a tax liability out of pocket
Applicable credit amount (2141800) is actual dollar amount of tax liability avoidable
Portability of exclusion amount
If a spouse dies and does not use the total tax exclusion in their life, it can be now added to other spouse
known as deceased spousal unused exclusion amount
Valuation of assets transferred
FMV is used on date of death to determine federal transfer taxes
FMV= Willing exchange between buyer and seller
GIFTS: Valuation date is on date transfer is completed
ESTATES: Date of Death or 6 months later (alternative valuation date)
Property that is expected to depreciate overtime is not allowed to use Alt date
The Federal Gift Tax
- Transfer of wealth while still alive
- Referred to as inter vivos (during life)
Occurs when:
1. Receive less the FMV for property transferred
- Donor gives up control over the property
Not included in Gift Tax if payment is made directly and exclusively for:
- Helping children or grandchildren pay for college
- Medical Expense Payments
Annual Exclusion: $14,000, $28,000 if Gift Splitting (parents)
Must be a present interest (immediately usable) to qualify as a Gift
Gifts to charity are tax free if:
- Outright gift to a qualified charity
- Partial interest in property to a qualified charity
Calculating the Federal Gift Tax
Calculation
- Gifts from previous years are added together to create a tax base
- Calculate current tax on all gifts
- Subtract current year tax amount for past gifts (not this year)
- Determine credit available by subtracting past credit used from max ($2,141,800)
Prior gifts excludable under the $14,000 excludable amount do not affect $2,1441,800 available
Gift tax is paid upon filing return
The Federal Estate Tax
- Collected at death
- Based on gross estate (total value subject to estate tax, includes life insurance payable to decedent’s estate)
Also included in gross estate:
- Gift tax paid on gifts made in prior three years
- Value of property gifted within last three years
- Life insurance policy gifted in last three years of life
- Income not received until after death (also included on final income tax return)
- Charitable and marital deduction apply though.
Calculating the Estate Tax
Taxable estate + all transfers of property sing 1976 = Estate tax base
Usually must pay within 9 months of death after filing Form 706
GST tax is also reported on the form
Advantages and Disadvantages of lifetime gifting over death-time transfer
Advantages:
1. Annual exclusion of 14,000
- Direct payment of EDU and Medical expenses is exempt
- Removes future appreciation
- Taxable income generated is moved to a potentially lower tax bracket
- No out of pocket expense as long as not going over exclusion
Disadvantages
1. Possible out of pocket tax if gifting too much
- No step-up in basis at death
- Possibly more favorable environment in future
Chapter 8 Review
- Gift tax consequences of transfer of property to spouse
- No tax consequences - Tax rule on annual exclusion, and two types of transfer that are tax free
- 14,000 a year unless electing to split gifting with spouse which gets to 28,000
- May gift education and medical expenses if directly paying for it - US Treasury determination of value
- FMV or the amount a buyer would be willing to pay a seller in normal conditions - Valuation dates for Gift and Estate tax?
- Gift= Date of original purchase
- Estate= Date of Death or 6 months later (alternative valuation date) - Define
- Unified- Gift and estate tax were combined in 1977
- Applicable exclusion amount- Amount that can be gifted without paying federal estate tax (5.49MM)
- Applicable Credit Amount- Dollar amount of tax liability excludable (2,141,800)
- What is meant by income in respect of a decedent, and how is it taxed?
- Income that was earned before the decedent passed, and it is taxed twice. Once from the estate perspective, and the estate’s fiduciary income tax return. Can be used as a deduction from the estates income.
Chapter 9: Estate Planning Strategies for the Retiree
What is a trust
-Grantor instructs trustee on how the trust is to be distributed and the trustee executes it
2 types of beneficiaries:
1. Income Beneficiaries- Benefit from trust while in existence
- Remainder Beneficiaries- Take title to trust assets when trust ends
Roles of a Trust:
- Provide management of assets for grantor or incapacitated beneficiaries
- Asset protection from creditors
- Accumulate income for later distribution
- Provide income for a beneficiary and remainder to another
- Income., gift and estate tax savings
- Eliminate need for probate
Types of Trusts
- Living Trust
- Established during life of grantor
- Revocable or irrevocable
- Can name a successor trustee for when the grantor dies
- Revocable version would be includable in the gross estate and would be taxable to grantor during life - Testamentary:
- Funded after life of grantor
Estate Planning for Married Couples
Unlimited Marital Deduction
And
Portability
Only qualifies if:
- Included in the decedent’s gross estate
- Transferred to surviving spouse
- Interest must not be contingent
PORTABILITY
-Deceased spousal unused exclusion is usable by surviving spouse
- Timely filling of Form 706 from the estate is good enough to elect
- DSUE amount is applied before the surviving spouse uses their own
- Not a permanent law, and is dependent on deceased return being filed on time
- May not remarry and use both DSUE’s
Custodianship Arrangements
UGMA or UTMA depending on state
Irrevocable transfer of assets
Property is received by child upon reaching age (18 or 21)
Child is assessed the kiddie tax
Kiddie Tax= Taxed at parents rate on earnings above $2,100 until 18 or 24 if full time student
IF DONOR IS CUSTODIAN IT IS INCLUDABLE IN ESTATE IF PARENT DIES
Qualified Tuition Plans
529 plans
Tax free accumulation and beneficiary can change
If earnings are removed for non-education expenses then assessed 10% penalty and are taxed
Entitled to 14,000 gift tax, but taxed as if done in 5 year period
Not assessed GST tax
Not included in estate tax unless they die before extra amount in 5 year period
Coverdell Education Savings Account (IRC Section 530)
Annual contribution limit of $2,000
Earnings are usable for education expenses
Distributions not for education are assessed 10% penalty
Must be completely distributed by age 30
Chapter 9 Review
- How can a married couple avoid estate tax?
- Transferring all assets to spouse and then using portability to combine 5.49MM exclusion amounts - Drawbacks of transferring all to surviving spouse?
- Portability could not be a thing upon death of second spouse - Inter vivos vs testamentary
- Living vs dead, part of estate if not irrevocable living trust - Describe roles that trust can play
- Have another manage assets, asset protection, accumulate income, tax savings
