Kent Larsson writes about the proper use of wills, advance directives, trusts, and other estate planning tools, and how how they play a vital role in you receiving proper medical care and helping you to preserve and pass on your assets to your loved ones.
The state was attempting to collect tax without consideration for residency.
A tax court has decided that Minnesota’s trust taxation is unconstitutional, according to the Wills, Trusts & Estates Prof Blog in "Tax Refunds for Trusts With Minnesota Grantors? Minnesota Income Tax Statute Ruled Unconstitutional."
Minnesota’s income tax statute makes 100% of a trust's assets taxable in that state, if the trust became irrevocable when the settlor was a resident of Minnesota.
This rule applies regardless of where the trust beneficiaries reside or where any trustees reside.
The court looked at trusts that had an out-of-state trustee, beneficiaries who lived in Minnesota and beneficiaries who lived in other states.
It determined that these trusts could not be considered resident trusts of Minnesota and, therefore, the state could not tax intangible assets. Presumably, the same logic could be applied to some other trust situations.
This ruling could lead to refunds for some trusts.
However, it appears likely that Minnesota will appeal to the Supreme Court.
Reference: Wills, Trusts & Estates Prof Blog (June 7, 2017) "Tax Refunds for Trusts With Minnesota Grantors? Minnesota Income Tax Statute Ruled Unconstitutional."
New Jersey considers blood and organ donation tax credit.
A lack of organ donations can cause unnecessary deaths. The New Jersey Assembly is considering another idea to increase donations, according to the Tax Foundation in "Organ Donation Tax Credits: A Life or Death Proposal?."
Getting people and their families to agree to donate organs has proven to be exceptionally difficult. In some cases, it is even difficult to find enough blood donors.
There have been many awareness campaigns, but they normally only have a short-term effect, if they have any at all.
The state is considering offering donors small tax credits for donating blood or organs. In the case of a deceased donor, the tax credit could be used on their final tax return filed by the estate.
Whether these credits would do very much to increase donations is uncertain.
These proposals could also be in violation of federal law, which makes it illegal to profit from organ donations. Other states have gotten around that problem, by offering tax exemptions for any expense incurred while donating.
It is important to find more blood and organ donors. However, it appears that these New Jersey proposals are likely not going to be solutions, unless federal laws are changed.
Reference: Tax Foundation (June 7, 2017) "Organ Donation Tax Credits: A Life or Death Proposal?."
When you think taxes, you might think estate plan.
Since you have already done much of the work when you gather the financial material needed for taxes, you might consider following up filing by setting up an estate plan or updating your current plan, according to CTV News in "The mistakes of not having a will.
To do your taxes, you have to get out many of your financial documents. You have also been thinking about how much money you have and where it is all located. Doing those things is one of the main steps to getting an estate plan.
You could put all of your financial documents away and think about other things. However, if you later decided to do estate planning, you will have to start all over again.
Why not just go ahead and get an estate plan now, while things are still on your mind?
Contact an estate planning attorney for guidance on creating your own plan to meet your unique circumstances.
Reference: CTV News (March 21, 2017) "The mistakes of not having a will."