Article About Using Remainder Trusts For Transfers

Michael Duffy (Goldman Sachs Strategic Wealth Advisory Team Member, Atlanta, Georgia) recently published an article entitled, Using Remainder Purchase Marital Trusts to Transfer Works of Art, Probate & Property, May /Jun., 2013 at 60. Provided below is the introduction to the article: 

Art collectors routinely ask their tax advisors about strategies that will allow them to make inter vivos completed gifts of some or all of their artwork to remove the art (and any future appreciation) from their taxable estates while at the same time permitting them to retain possession of the art until a later date-which they most often describe as “until the death of the surviving spouse.”

The main obstacle to engaging in such strategies is the IRS’s ability to include the transferred works in a decedent-collector’s taxable estate by invoking IRC Sec.2036(a), which requires inclusion in the gross estate if the decedent-collector retained possession and enjoyment of the art and there was no bona fide sale for adequate and full consideration in money or money’s worth.