Trusts and Estates: End of 2008 Tax Changes

Clients should be aware of the following changes to federal and Minnesota law as the end of 2008 approaches:

• The Emergency Economic Stabilization Act of 2008 included a provision that retroactively extended a law allowing individuals to make qualified charitable distributions from a traditional or Roth individual retirement account directly to charity without recognizing the distribution as income. The provision is available for distributions of up to $100,000 per year for donors who have attained the age of 70 ½ at the time of distribution. It was previously set to expire for calendar years beginning after 2007, but will now continue to be available for calendar years 2008 and 2009. In order to receive the benefits of this law for calendar year 2008, the charitable distribution must be made by December 31, 2008.

• The federal annual exclusion allowable for gifts of present interests in property is scheduled to increase to $13,000 on January 1, 2009.

• The Minnesota Legislature recently enacted a law requiring limited partnerships to file Annual Registration forms beginning in 2008. If the annual report is not filed on time, the limited partnership will be administratively dissolved by the Secretary of State in 2009. While this can be corrected by filing a late report and paying a fee, it is advisable to file the report on time. Reports for 2008 are due by December 31, 2008.

We recommend that you contact an attorney in our wealth management practice if you would like to discuss your particular situation with regard to any of these matters.