Types of Post-Mortem Elections
What is a post-mortem election?
A post-mortem ("after death") election is an estate planning technique that can help minimize federal transfer tax or income tax liabilities. Post-mortem elections are usually made by an estate's personal representative. Each election must be timely made in the required fashion.
Transfer-tax-related
elections
Disclaimers
A disclaimer is a refusal to accept a gift,
bequest, or other form of property transfer. This
allows the beneficiaries to redistribute estate
property without incurring transfer taxes on the
redistribution. The alternative
valuation date Assets in an estate are generally valued on the
date of death. By electing the alternative valuation
date, the assets in an estate that qualifies are
valued either (1) six months after the date of death
or (2) as of the date the asset is disposed of. This
is advantageous if assets depreciate after death.
QTIP
electionWith a QTIP election, all or a portion of the
assets that qualify for treatment as qualified
terminable interest property (QTIP) pass free from
estate tax under the unlimited marital deduction. Income-tax-related
election Selection of
fiscal year The election of the tax year (either fiscal or
calendar) for an estate allows the personal
representative to divide income into as many taxable
years as possible, prevent bunching of income in the
first taxable year, or otherwise adopt the taxable
year that results in minimizing the tax costs as much
as possible. Note:
Business owners have additional post-mortem
elections available to them.
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