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Long-term irrevocable trusts may need to be fixed at some point because of poor design, sloppy implementation, negligent maintenance, changes in tax laws, changes in beneficiaries, improvements in drafting techniques, [...]

Life insurance is one of the most important tools in modern financial planning, but it is not always the most appreciated. It has a role to play in virtually all [...]

In Brief CPAs have a tremendous responsibility to provide individuals with timely and accurate information, especially in the realm of life insurance and estate planning. The authors examine issues related [...]

An important exception exists to the general rule of Internal Revenue Code [section] 101 that Life insurance proceeds are excluded from the gross income of the recipient. This exception is [...]

The IRS issued a letter ruling endorsing a private split-dollar arrangement. Basically, two parties in a split-dollar insurance plan agree to buy a life insurance policy on the life of one of the two parties, both of whom share in the premium costs, cash values and death benefits. Usually reserved for executive compensation, this arrangement can also be used in non-employment settings, in which case it is referred to as a private split-dollar plan. IRS Letter Ruling 9745019 holds that such a plan can also be used to achieve transfer tax savings. This ruling involved a couple who opened an irrevocable trust for their children and financed it with a cash gift used to buy a second-to-die life insurance policy. They created a split-dollar arrangement for future funding of the policy premiums. The IRS ruled that no 'incidents of ownership' in the policy existed for the taxpayers that would make the proceeds taxable in the gross estate of the second to die.

Irrevocable inter vivos life insurance trusts can leverage transfer tax exemptions. Life insurance is a common funding vehicle in this context, but the credit shelter trust also can be used to accomplish the same task. Credit shelter trusts can show significant advantages over irrevocable trusts, partly since there is no gift tax issue associated with release of the limited power of appointment.

A family bank, or dynasty trust, can be used to avoid the generation-skipping transfer (GST) tax and ensure asset growth for successive generations. An individual transferor's $1 million GST tax exemption can be allocated to gifted assets such as life insurance trust premiums, creating a family bank for sheltering the asset pool from transfer taxes.

In the usual case, an unfunded irrevocable life insurance trust will rely on gifts from the trust grantor to provide the funds necessary to pay future premiums. The IRS had argued that because the family had discussed the intended use of the Crummey-gift funds, prior to any transfers by the grantor, there existed an informal agreement that the Crummey powers would not be exercised. Reg. § 25.2511-2(b) to irrevocable life insurance trusts containing Crummey powers that gave the sole beneficiary of each trust a general power of appointment over all trust property (including the lapsed property). [Extracted from the article]

Life insurance trusts have become important estate planning tools since the advent of the generation-skipping tax, or GST. The GST's million-dollar exemption makes life insurance an attractive way to pass on wealth while minimizing taxes. However, careful planning is required to avoid tax consequences due to lapsing Crummey powers, to properly allocate and leverage the exemption, and to use contingent powers of appointment.

AbstractWe consider a time varying analogue of the Erdős–Rényi graph and study the topological variations of its associated clique complex. The dynamics of the graph are stationary and are determined by the edges, which evolve independently as continuous-time Markov chains. Our main result is that when the edge inclusion probability is of the form p=nα, where nis the number of vertices and α∈(-1/k, -1/(k+ 1)), then the process of the normalised kth Betti number of these dynamic clique complexes converges weakly to the Ornstein–Uhlenbeck process as n→∞.

The article offers on the U.S. Internal Revenue Code 101's exemption transfer for value rule, which exempts life insurance proceeds from income tax. Exceptions to the transfer for value tax are mentioned including ownership of a life insurance policy to be deemed a transfer for value if the policy is transferred at a time when policy is subjected to a policy loan.

Studying the geometry generated by Gaussian and Gaussian-related random fields via their excursion sets is now a well-developed and well-understood subject. The purely non-Gaussian scenario has, however, not been studied at all. In this paper we look at three classes of stable random fields, and obtain asymptotic formulae for the mean values of various geometric characteristics of their excursion sets over high levels. While the formulae are asymptotic, they contain enough information to show that not only do stable random fields exhibit geometric behaviour very different from that of Gaussian fields, but they also differ significantly among themselves.

Let Xtbe a Feller (branching) diffusion with drift ax. We consider new processes, the probability measures of which are obtained from that of Xvia changes of measure involving suitably normalized exponential functions of with ? > 0. The new processes can be thought of as ‘self-reinforcing’ versions of the old.Depending on the values of a, Tand ?, the process under the new measure is shown to exhibit explosion in finite time. We also obtain a number of other results related to the new processes.Since the Feller diffusion is also the total mass process of a superprocess, we relate the finite-time explosion property to the behaviour of superprocesses with local self-interaction, and raise some interesting questions for these.

We study the limiting behaviour of large systems of two types of Brownian particles undergoing bisexual branching. Particles of each type generate individuals of both types, and the respective branching law is asymptotically critical for the two-dimensional system, while being subcritical for each individual population.The main result of the paper is that the limiting behaviour of suitably scaled sums and differences of the two populations is given by a pair of measure and distribution valued processes which, together, determine the limit behaviours of the individual populations.Our proofs are based on the martingale problem approach to general state space processes. The fact that our limit involves both measure and distribution valued processes requires the development of some new methodologies of independent interest.

We consider two distinct models of particle systems. In the first we have an infinite collection of identical Markov processes starting at random throughout Euclidean space. In the second a random sign is associated with each process. An interaction mechanism is introduced in each case via intersection local times, and the fluctuation theory of the systems studied as the processes become dense in space. In the first case the fluctuation theory always turns out to be Gaussian, regardless of the order of the intersections taken to introduce the interaction mechanism. In the second case, an interaction mechanism based on kth order intersections leads to a fluctuation theory akin to a :f k: Euclidean quantum field theory. We consider the consequences of these results and relate them to different models previously studied in the literature.

We study the sample path behaviour of ?2processes in the neighbourhood of their level crossings and extrema via the development of Slepian model processes. The results, aside from being of particular interest in the study of ?2processes, have a general interest insofar as they indicate which properties of Gaussian processes (which have been heavily researched in this regard) are mirrored or lost when the assumption of normality is not made. We place particular emphasis on the behaviour of ?2processes at both high and low levels, these being of considerable practical importance. We also extend previous results on the asymptotic Poisson form of the point process of high maxima to include also low minima (which are in a different domain of attraction) thus closing a gap in the theory of ?2processes.

For a d-dimensional random field X(t) define the occupation measure corresponding to the level α by the Lebesgue measure of that portion of the unit cube over which X(t)⩾α. Denoting this by M[X, α], it is shown that for sample continuous Gaussian fields P{M[X,α]>β}=exp{−12α2kβ(1+0(1))}as α→∞, for a particular functional kβ. This result is applied to a variety of fields related to the planar Brownian motion, and for each such field we obtain bounds for kβ.

For an n-dimensional random field X(t) we define the excursion set Aof X(t) by A= [t? S: X(t) ? u] for real uand compact S ? Rn.We obtain a generalisation of the number of upcrossings of a one-dimensional stochastic process to random fields via a characteristic of the set Arelated to the Euler characteristic of differential topology. When X(t) is a homogeneous Gaussian field satisfying certain regularity conditions we obtain an explicit formula for the mean value of this characteristic.

The ‘scanning process' Z(t), t ? Rkof the title is a Gaussian random field obtained by associating with Z(t)the value of a set-indexed Brownian motion on the translate t+ A0of some ‘scanning set' A0. We study the basic properties of the random field Zrelating, for example, its continuity and other sample path properties to the geometrical properties of A0. We ask if the set A0determines the scanning process, and investigate when, and how, it is possible to recover the structure of A0from realisations of the sample paths of the random field Z.

The aim of the current paper is twofold. Primarily we wish to extend some of our earlier results on excursions of random fields and introduce a more powerful technique for obtaining the mean value of a certain characteristic of these excursions. Since these results can also be used to tie together the scattered results of previous authors we also include a full review of earlier work in this field.

In this paper, we investigate the behaviour of a Gaussian random field after an ‘upcrossing' of a particular level. In Section 1, we briefly discuss model processes and their background, and give a definition of an upcrossing of a level for random fields. A model field is constructed for the random field after an upcrossing of a level by using horizontal window conditioning in Section 2. The final section contains asymptotic distributions for the model field and for the location and height of the ‘closest' maximum to the upcrossing as the level becomes arbitrarily high.

We give explicit expressions for the Slepian model process of non-stationaryGaussian processes following level crossings and local maxima. We also include a detailed analysis of the high-level case.

We study the sample path properties of ?2random surfaces, in particular in the neighbourhood of their extrema. We show that, as is the case for their Gaussian counterparts, ?2surfaces at high levels follow the form of certain deterministic paraboloids, but that, unlike their Gaussian counterparts, at low levels their form is much more random. This has a number of interesting implications in the modelling of rough surfaces and the study of the ‘robustness' of Gaussian field models. The general approach of the paper is the study of extrema via the ‘Slepian model process', which, for ?2fields, is tractable only at asymptotically high or low levels.

Focuses on family limited partnerships (FLP) as a vehicle for transfering family wealth. Details on how FLP works; Attitude of the United States Internal Revenue Service toward FLP; Practical impact of technical advice memorandum (TAM) 9751003. INSET: Partnership pluses.

The estimation is considered, of a certain function of the second-order spectral moments of a Gaussian process whose ‘time’ parameter lies in the plane. Two types of estimate are considered, both based on the level crossings of the process. The first is applicable when the values of the process are recorded continuously over the plane, the second when the values are known only on a planar lattice. The consistency of both estimators is studied.