Estate planning with tenancy by the entireties property.

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Estate planning with tenancy by the entireties property.

Estate planners were given one more reason to celebrate last New Year's Eve when the IRS issued its final regulations under I.R.C. [sections] 2518 regarding disclaimers of tenancy by the entireties property. What we were too jubilant to see at first glance, however, is that there is yet one more problem that must be resolved before a survivorship interest in tenancy by the entireties property can be disclaimed by a surviving spouse in Florida.

The purpose of this article is to address the various transfer tax consequences involved with tenancy by the entireties property and to identify both pre-mortem and post-mortem estate planning opportunities with such property. We will also briefly summarize the history of disclaimers, including the recently promulgated final regulations. Furthermore, we will point out a significant problem under state law and a potentially viable solution that may allow us to take advantage of the IRS' belated holiday gift.

Gift Tax and Estate Tax Consequences

Generally, there are no gift tax consequences upon the creation of a joint tenancy between spouses (either as a tenancy by the entireties (TBE) or as a joint tenancy with rights of survivorship (JTWROS)) because of the unlimited marital deduction.[1] This may not be true if the d...

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