Beware of pre-October 22, 1942 general powers of appointment. Are assets subject to a general power of appointment (GPOA) includible in the powerholder’s estate? Generally, yes.However, for trusts established before October 22, 1942, there’s an exception in which the assets subject to the GPOA aren’t necessarily includible in the estate of the powerholder.Practitioners should be aware of this as these trusts wind down.Co-authored with Emily B.
In this recent New York Times reprint, Chief Wealth Strategist Alvina Lo shares her insights. With the rule on alimony and deductions changed, so must the strategy of couples parting ways.In particular, couples going through a divorce should re-examine their tax strategy, as well as their cash flow and spending needs.Wealthier families should consult with their tax advisors to fully understand the tax implications of the new law.
This marital agreement alert was recently published in the American Academy of Matrimonial Lawyers® – May 2019 Newsletter. As a result of changes to the law that came into effect on January 1, 2019, trusts created during a marriage can have adverse tax consequences long after divorce. Accordingly, the tax impact of every trust created during the marriage should be carefully considered when negotiating a divorce settlement, or presenting the evidence to a court.
