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Show y dan i Page Four t Crippling Inheritence Tax Can Be Eased Or Avoided Unce upon a time estate taxes and trusts were a concern for the rich. Thanks to inflation and the taxing of life insurance, you dont have to be rich to be soaked by estate taxes. Many people may be relatively poor in life, yet rich in death. Back in 1939 when the $60,000 estate tax exemption was THE SALT LAKE TIMES FRIDAY, MAY 21, 1976 estab- lished, this was a lot of money. Now with inflation and the appreciation of land values, a $60,000 tax exemption is not too much. Many farmers who were scratching a living out of 40 acres or so suddenly find the old farm worth several thousand dollars an acre and realtors knocking at their door to buy it for various real estate projects and resale. If the farmer should die before planning his estate, his instead of inheriting family substantial assets to provide for their future may And they are faced with forced sales to pay the State Inheritance and Federal Estate taxes which must be paid nine months after death. Life insurance formerly was not taxed by the Federal Estate Tax. Then the law was changed to allow a $40,000 exemption. Finally it was changed again, so now all proceeds of a persons life insurance must be included in his estate for taxation just the same as other assets. Federal Estate taxes start at 4 and go as high as 77. It is possible, of course, for a mans life to be insured under a policy owned by someone other than himself, and this is frequently advisable. For example, a policy could be owned by a wife, and if premiums were paid out of her own independent funds and the husband had no control over the policy, then it is not an asset of the husband whose life is insured. It need not be listed as an asset on the tax return when he is deceased, and the proceeds of the policy are not subject to any tax at all. Gifts made in contemplation of death are taxable in a mans estate just as though the gift had not been made. This brings up the very difficult question of when a gift is or is not made in contemplation of death. When federal estate taxes were first imposed many years ago, there was no such thing as a gift tax; therefore when a wealthy man got old or sick, he proceeded to reduce the taxes on his estate by giving a large share of his assets to his wife and children. It seems that every time a taxpayer finds a loophole, the tax collector gets Congress to change the laws so as to plug the loophole. In 1950 the law was amended to provide that the Treasury Department could claim that a gift was made in contemplation of death only if that gift were made within the last three years of the taxpayers life. Therefore, if you want to reduce taxes by gifts, plan on living three years after a gift is made. This brings up the question of estate planning so as to avoid this tax bite on the property you would want your spouse and children to use and enjoy. Your attorney, trust officer, accountant or life underwriter can assist you in planning your estate to reduce these taxes considerably. You may say, I have a will, and if I should die, my estate goes into a trust for my familys benefit." This is a "testamentary trust," or a trust under a will. If planned properly, it will effect the desired tax savings. However, such testamentary trusts must be probated before the estate can ever be put into trust. It is probated like any other will, and then the executor is directed by the court to place the estate in trust in accordance with the terms of the will. Moreover, this will becomes a matter of public record through probate, which means anyone and everyone (including you competitor) can see the provisions of the trust for your family. Furthermore, and even more serious, the operation of the testamentary trust will be open to the public (including your competitors) every year as long as it is in effect because the trustee must file an account each year with the court. This public spotlight of probate can be avoided by setting up a "Living Trust. It is called living because it is set up while the trustor is alive with plans for today as well as for the future. A trust under a will, or a testamentary trust, is a plan for the future only. The Living Trust or "Inter Vivos Trust is set up to serve the trustor while he lives as well as take care of his estate and beneficiaries after . his death. Many people think that once a trust is set up, the trustors hands are tied; that he has no say-s- o over what is done with the property. A trustor actually maintains control in a Living Trust. Ee can change it, add to it, or revoke it in part or entirely. ' If the trustee is a "corporate fiduciary (such as a bank or trust company), the trust is provided with management of funds and investments. Real estate management and tax assistance are also available for the trust, and should the trustor become ill or incapacitated, the trustee can keep the estate functioning to provide funds for his care and support for his family. The "Living Trust is a confidential arrangement between the trustor and his trustee which bars public scrutiny, since it avoids probate. It functions immediately upon death without the delay and expense of probate. In effect, it allows the trustor to "probate" his own estate while he lives. Martin Submits Drunk Driver Bill Loren D. Martin, Republican candidate for Attorney General, said this week that as Attorney General he would submit a bill to the legislature, suggesting that the classification of the offense of Drunk Driving be changed from a Class B misdemeanor to a Class A misdemeanor, removing jurisdiction to the District Courts. Martin said that three major problems confront the people of the State relative to the enforcement of the law against Driving Under the Influence of Intoxicating Liquor: (1) recent Utah Supreme Court decisions, (2) the legal technicality of and (3) avoidance of legal penalties in some city courts under what those courts call their First Offender Program. Martin said that what is needed is positive dialogue and suggestions as to solutions to the problem. He said that under the theory of o Utah law permits a person charged with Driving Under the Influence to have two jury trials rather than just one. As to the courts Martin said that he would expect that any judgf who had been arrested or convictec of Driving Under the Influence or related offenses would at least have the courtesy of voluntarily disqualifying himself and should neither be involved in hearing or deciding any trial-de-nov- o, trial-de-nov- of these matters. Changing the offense from a Class B misdemeanor to a Class A misdemeanor would cause the maximum penalty that could possibly be imposed for such offense from $299 and 6 months in jail to a maximum of $1000 and 1 year in jail, giving greter authority and discretion to the courts in dealing with repeat offenders. 200 Years Ago This Week Moss Proposes Bill To Protect Public Safety Workers Families By Congressman Allan T. Howe Senator Frank E. M,oss, said the nation owes a debt of gratitude and a memorial tribute to firemen as public safety officers well as law enforcement officers who give their lives in the line of duty. Moss testified before the Senate Subcommittee on Criminal Laws and Procedure which is conducting hearings on Moss Public Safety Officers Benefits Act. The Moss bill is designed to pay death benefits to dependents of public safety officers killed in the line of duty. "We can best pay that debt and make that tribute by carrying out our responsibility to insure the future of the dependents of public a future which is safety officers now often placed in jeopardy because the provider lost his life protecting the people and property of this nation, he said. From 1970 through 1975 there were 735 law enforcement officers killed in the United States and Puerto Rico, Moss said. "There have also been approximately 943 firemen who lost their lives during the same period of time. Thus far in 1976 there have been 12 police officers killed in ech month through March. If the trend continues, there will be 144 law enforcement officers killed in our nation in 1976 more than ever before. Moss said public safety officers know and expect that their occupations will be will involve taking abuse and risks. In spite of these disadvantages, he said, those men and women who serve as public safety officers do so because they are highly dedicated. However, he continued, public safety officers are being caught on both sides: not only do they receive a low salary, but, because of the high risk inolved in their jobs, the rate for their life insurance policies are often very exorbitant. The American forces, fleeing their position near Quebec after reinforcements had arrived to assist the British troops holding that city, ran into trouble as they retreated from Quebec. On May 16, about 30 miles downriver from Montreal a disorganized patriot band of about 500 men was surrounded by British troops. The Americans were forced to surrender after they put up only slight resistance. The action took place at The Cedars, Canada. Action was renewed at The Cedars on May 19, when Benedict Arnold and 900 Americans recaptured one British post and released some of the American prisoners taken by the British on May 16. American forces won a naval engagement in action at Nantasket Roads, Massachusetts on May, 17, as the result of ignorance on the part of the British. Captain James crew aboard Mugford and a the schooner USS Franklin (one of the ships in "Washington's navy) captured the British transport HMS Hope. The Hope was headed for Boston, its commander ignorant of the fact that Washington had forced the British to evacuate Boston two months earlier. 21-m- D-Uta- low-payin- BIRTH DCFCCTS RRFORVR. unless VOU HIR ITIORCH Of Dimes h, public safety officer not only sacrifices pay in order to serve the community, but he also must sacrifice enough money to pay the additional cost necessary for the high risk insurance premiums. Moss 3 aid his bill provides a death benefit for both law enforcement officers and firemen in the amount of $25,000 and allows the benefit to be paid for death in the line of duty. In addition to the death benefit, which is payable immediately, there also will be awarded a scholarship to the dependent survivors of the public safety officer who meet a violent death. "By providing both an indemnity and a scholarship, we are meeting the immediate and future needs of the dependents of public safety officers, Moss said. He said one - of the most important benefits of his bill would be in encouraging the recruitment of new public safety officers. New 4-- Council Officers Elected g, H CounNew Salt Lake County were elected this week. The new President if Reeva Stevens; Vice President, Tracy Hender-TreasureAlice Anne Bunker; Service Chairman, Terry Black; Party Chairman, Koko Morgan; Publicity Chairman, Eilene Wit-becYouth Exchange Chairman is Marriane Wit beck. These young people are from all section of Salt Lake City and County. They will serve for one year. The age for teens are 13 through 19 and every boy and girl in Salt Lake who belongs to a club are invited to participate in their fun program. 4-- H cil officers r, k; 4-- H 4-- i i : H r i I I I i i DO WE HAVE A i FOR YOU! 1 GET ONE FR FROM YOUR LOCAL ARRAY REPRESENTATIVE HE IS LOCATED AT: 135 South State Street Federal Building Annex Salt Lake Telephone: City, Utah 524-40- 26 Join the people who've joined the Army. |