Use them to gain “extra” marital benefits.
The great comedian Richard Pryor is quoted as saying, “Marriage is really tough because you have to deal with feelings ... and lawyers.”1 Which isn’t all that bad, because the law and the lawyers also bring certain advantages for married individuals that single individuals don’t have. With respect to property rights, in those jurisdictions that allow it, the most important property law benefit attributed to marriage is the ability to own property as tenants by the entirety (TBE). When a married couple owns property as TBE, such property is protected from the claims of each spouse’s creditors (but not from a joint creditor of both spouses). Property owned as TBE avoids probate on the death of the first spouse. Further, thanks to portability, one of the negative implications of spousal survivorship property—the loss of estate tax exemption as a result of the marital deduction—is neutralized. Let’s explore the differences among the various forms of joint ownership and how to take advantage of TBE.
Joint Ownership Primer
Joint ownership of property is often misunderstood. Many believe that if property is jointly owned by two individuals, then, on the death of one of the co-owners, the surviving co-owner always becomes the sole owner of the property. This, however, isn’t always the case because there are different types of jointly owned property, each with its own important attributes.
To understand TBE is to understand the different forms of joint ownership. There are three categories of joint ownership of property: (1) tenants-in-common (TIC), (2) joint tenants with rights of survivorship (JTWROS), and (3) TBE.2 On a co-owner’s death, JTWROS and TBE pass ownership automatically to the surviving co-owner or co-owners, whereas with TIC property, the deceased co-owner’s share of the property becomes part of his probate estate.
TIC. Property held as TIC has no survivorship feature—each co-owner owns an undivided interest in the property that’s freely transferable without the consent of the other co-owner.3 In most states, a conveyance to unmarried individuals in joint names, without any further description, titles the property as TIC.4 As stated above, when an individual co-owner dies, the co-owner’s share becomes part of his probate estate and is devisable under his will.
JTWROS. On the death of a co-owner, property held as JTWROS passes ownership to the surviving co-owner. Because the property passes to the survivor by operation of law, the property avoids passing through the deceased owner’s probate estate. However, on the surviving co-owner’s death, absent other planning, the property will be included in the survivor’s probate estate.
In general, for property to be held as JTWROS, five property concepts—called “unities”—must be present at the creation of the joint tenancy: (1) Time—the property must be acquired by the joint tenants at the same time;5 (2) Title—the interests of the co-owners must arise out of the same instrument (for example, the deed);6
(3) Interest—the co-owners must have the same interest in the property;7 (4) Possession—the co-owners must have the same right to possess the entire property notwithstanding the joint ownership; and (5) Survivorship—the survivor co-owner(s) must succeed to the interests on the death of another co-owner.
TBE. In two-thirds of U.S. jurisdictions, the law provides some form of special property ownership with respect to married individuals. Such special property ownership takes the form of either TBE or community property rights. TBE is recognized in 25 of the 51 jurisdictions,8 and community property is the exclusive approach for marital property rights in nine other jurisdictions.9
By definition, TBE requires a sixth unity: Marriage. The owners must be married at the time that title is conveyed.
How TBE is created, though, may vary by jurisdiction. For example, in states such as Florida and Maryland, so long as the co-owners are married at the time that title is taken, simply taking title in their individual names—even without reference to their marriage —is sufficient to create a TBE.10 In other states, such as Virginia and Illinois, intent for TBE is manifested by a designation of a husband and wife as TBE.11
An important element is that titling must occur after the marriage. Property acquired by two unmarried individuals as JTWROS doesn’t automatically become TBE on their marriage because they weren’t married at the time that title was acquired. Recall above that all unities must be present at the time title is taken. Given this concept, it makes sense why JTWROS isn’t converted to TBE on the marriage because the sixth unity—marriage—wasn’t present when title was initially taken. To change the form of ownership, the parties must execute a new document of title conveying the property to themselves as TBE.12
Distinguishing TBE Characteristics
In addition to the unity of marriage, TBE has certain other characteristics that help distinguish it from JTWROS property.
Inability to partition. TBE property can’t be severed unless both spouses join in the severance. By comparison, the co-owners of TIC or JTWROS property can unilaterally sever or partition the property’s co-ownership at any time.
Creditor protection. As alluded to earlier, the most important attribute of TBE property is the creditor protection feature. With TBE property, a creditor of one spouse (but not a creditor of the other spouse) can’t place a lien on the TBE property. Only creditors of both spouses as to the same claim can place a lien on TBE property. The theory behind this asset protection benefit is that spouses are considered to be “one” and hence a conveyance to the spouses created only one estate. Each is owner of the whole estate, and neither can dispose of the estate without the consent of the other.13 Under this approach, the ability to attach a lien against one spouse’s interest is akin to allowing that spouse to unilaterally convey his interest in the property, which, as stated above, is prohibited by TBE status. By comparison, with JTWROS or TIC property, because the co-owners aren’t viewed as being one, the creditors of any co-owner can obtain a lien against such co-owner’s interest. This can result in a partition and sale of the property to enforce the judgment.
More Than Just Real Estate
Not as well-known—but just as important—is the concept that TBE may expand beyond real estate. In 18 of the 25 TBE jurisdictions (72 percent), TBE is also available for personal property, meaning that bank accounts, investment accounts and even tangible personal property can be titled as TBE.14
Statutory authority for TBE in personal property isn’t always clear. Some states have specific statutes as to TBE in personal property; others have general statutes in which the intent is clarified through case law analysis; and still others only grant TBE status in personal property through case law.
For example, Virginia’s statute expressly states authority: “any husband and wife may own real or personal property as tenants by the entireties for as long as they are married.”15 (Emphasis added.)
In other states, such as Maryland, the analysis is somewhat technical. For example, the Maryland statute that recognizes TBE—Section 4-108—is found in the Maryland Real Property Code. Even though the particular statute is found within the real property provisions, the statutory language in the Maryland statute elected not to limit the property covered by the statute to only real property—the statute uses the general term “property.”16 Case law in Maryland supports the analysis that the general use of “property” refers to both real and personal property.17
Finally, in states such as Florida, TBE in personal property is recognized, but only as a result of case law.18 For the past few years, the Estate & Trust Tax Planning Committee within the Florida Bar’s Real Property Probate & Trust Law Section has been working on a proposed statute that would codify the principle of TBE in personal property.19
One issue that often arises is how to create TBE in personal property, such as a bank or brokerage account. Because such ownership isn’t a universally adopted concept, and because historically TBE was limited to real property, many banks and financial institutions may not have an option for titling an account as TBE.20 Sometimes, even when such institutions have the option, based on historical practice, they may simply default to JTWROS.21 Generally, TBE must be specifically requested. The best option is to present the institution with a signed letter indicating that it’s the account owners’ intention to have the account held as TBE.22
Concerns About TBE Status
TBE status, however, isn’t a panacea. Certain circumstances can cause TBE status, and the protection that comes with it, to be lost.
TBE is marital property for divorce purposes. TBE is jointly owned property. Should the spouses’ marriage end, TBE is likely to be considered a marital asset for property settlement purposes.23 In TBE states, on a divorce, marital property is subject to division by “equitable distribution.”24 If the married couple acquires a new property using joint funds, the classification is neutral as to the parties. This is because, regardless of the TBE titling, the property would be a marital asset because it was acquired with joint funds. Such a designation could, however, be detrimental if one spouse acquires the property with his own separate property and subsequently re-titles the property as TBE. The re-titling of separate property into TBE causes a transmutation of the separate property to marital property. Had the designation not been changed to TBE, then, on a divorce, the property would have been the acquiring spouse’s separate property and generally not classified as marital property (and therefore not subject to division).25 Furthermore, if the property settlement doesn’t require any transfer or change of title of the property, then, on completion of the divorce, the property is deemed to be held by the former spouses as TIC. This can become confusing especially if the legal title still specifically refers to TBE. The result, though, makes logical sense because, to be TBE, the parties must be married.26
Creditors can still have their say. Just because TBE has creditor protection status doesn’t mean that all TBE property will be exempt from creditors’ claims. If the transfer into TBE is an attempt to hinder, delay or defraud a past, present or future creditor under the jurisdiction’s applicable fraudulent transfer or fraudulent conveyance statutes, the property likely won’t be protected. In general, under fraudulent transfer or fraudulent conveyance laws, if a debtor effects a transfer or incurs an obligation with the actual intent to hinder, delay or defraud any creditor of the debtor or without receiving something of roughly equal value in exchange for the transfer or obligation, the transfer or obligation is fraudulent. The result is the same regardless of whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred.27
The following examples better explain this concept:
Example 1: C has a pending breach of contract claim against H, who’s married to W. W wasn’t a party to the contract. After the breach of contract action is
commenced, H re-titles certain real property that he owns, called Blackacre, from his individual name into TBE with W.
As stated above, TBE property is outside a particular creditor’s reach unless the creditor has a claim against co-owners of the TBE and the claim arose from the same transaction. C’s claim for breach of contract is only against H, and, because W wasn’t a party to the contract, if C is successful in his claim and receives a judgment against H, presumptively C can’t attach the judgment against Blackacre because it’s TBE property. If, however, C can demonstrate that H’s transfer of Blackacre into TBE was done with the actual intent to avoid C’s claim, the transfer can be undone, and C can attach his judgment against Blackacre.
Example 2: As a variation, consider the result if H had transferred Blackacre into TBE with W 18 months before meeting and entering into the contract with C. C may still have recourse against H, as fraudulent transfer or conveyance law can apply to future creditors, but C will have an uphill battle trying to prove that H undertook the transfer with actual intent to avoid his future creditors and, specifically, C’s future claim.
Example 3: For an additional variation, assume that both H and W were parties to the contract, and C’s cause of action was against both of them. Under this scenario, regardless of when H transferred Blackacre into TBE, because C’s action was against both H and W on the same action, that is, the contract, C should be able to proceed against Blackacre.
Internal Revenue Service can still have a lien authority. Within the law, certain creditors have standing above other creditors and may not be subject to the same set of rules as such other creditors. Such creditors may even be able to reach certain exempt property (such as TBE property). In bankruptcy, these creditors are referred to as “superpriority” creditors and often include federal, state and local governments. Perhaps the most prominent superpriority creditor is the IRS.
Applying this concept to general debtor/creditor law, with respect to TBE property, a 2003 U.S. Supreme Court opinion held that the IRS’ lien authority may, under certain circumstances, supersede TBE protection. In United States v. Craft,28 the IRS assessed a deficiency against Don Craft for outstanding income taxes and sought to foreclose the lien against his interest in TBE property (which, although created after the IRS liens came into existence, was held not to be a fraudulent transfer under Michigan law). The Supreme Court stated that, while state law determines the nature of the rights of the taxpayer, federal law decides whether those rights are “property” or “rights to property.” While it recognized that Michigan makes a different choice with respect to state law creditors, the Supreme Court held that because this is a federal lien, it’s a federal question, which isn’t dictated by state law. Because the IRS was a superpriority creditor as to Don, it was able to attach the TBE property notwithstanding the Michigan law protections afforded to TBE property.
Planning Opportunities
“Marriage is popular because it combines the maximum of temptation with the maximum of opportunity.”
George Bernard Shaw
Many married couples with jointly owned property may not have such property titled as TBE. Instead, they may have taken title to their properties as TIC or JTWROS, or, in some cases, they may have property titled individually or in one spouse’s revocable trust. There’s no time better than the present for counsel to re-examine the manner in which their clients currently hold title to their property and determine whether any changes should be made.
Portability has changed lifetime planning. Prior to the introduction of portability (or the ability to transfer a deceased spouse’s unused applicable exclusion amount to the surviving spouse), it was common for planners to advise married clients to divide jointly owned property and transfer the property into one (or both) spouse’s individual name or revocable trust. The historical reason for giving that advice was to ensure that the estate tax exemption of the first spouse to die wouldn’t be wasted. Thus, planners recommended dividing assets so that so-called “credit shelter” trusts could be funded to fully use the estate tax exemption amount of the first spouse to die. Now, with the introduction of portability, it’s possible to transfer any remaining estate tax exemption of the deceased spouse to the surviving spouse by having the deceased spouse’s executor make the portability election. Plus, with the doubling of the applicable exclusion amount, most individuals won’t pay estate taxes, so credit shelter trust planning may not even be necessary.29 Given the asset protection benefits of TBE ownership, together with the fact that most married couples are more comfortable owning their property together (as opposed to having assets held separately by one spouse or one spouse’s revocable trust), a case could be made for owning property as TBE. Of course, all other factors should be considered, such as the marital law implications mentioned above.
Avoiding probate on simultaneous death—the TBE trust. On the death of the first spouse, TBE property passes to the survivor in the survivor’s individual name. Without any further action, the property would be subject to probate on the survivor’s death. After the first spouse dies, usually the surviving spouse would then transfer the property into his revocable trust so that the property avoids probate. In most situations, this is sufficient; the only situation in which this wouldn’t be feasible is if there’s a simultaneous death, in which case the property would be subject to probate in at least one of the spouse’s estates.
In some jurisdictions, pre-death planning is possible to allow the TBE property to be transferred to one or more revocable trusts and still maintain the benefits of TBE. Under these types of trusts, called “TBE trusts” or “qualified spousal trusts,” the spouses transfer the property to their respective revocable trusts (in which title is technically severed into two separate undivided shares). The authorizing statute overrides the separate shares and treats them as one share for TBE purposes, thereby retaining the TBE benefits (and thereby deeming all of the requisite unities to still be present).
On the death of the first spouse, the shares are reunified in the survivor’s revocable trust. The requirements to maintain TBE status under most of the applicable statutes are somewhat uniform: (1) the spouses must remain married; (2) the trust or trusts are, while both settlors are living, revocable by the respective settlors (or, if the trust is a joint trust, revocable by both settlors, acting together); (3) both spouses are permissible current beneficiaries of the trust or trusts while living; and (4) the trust instrument, deed or other instrument of conveyance must reference the particular statute.
TBE trusts are specifically authorized in nine states: Delaware, Illinois, Indiana, Maryland, Missouri, North Carolina, Tennessee, Virginia and Wyoming.30 In Florida, while there’s no statutory authority, there’s the suggestion that a joint TBE trust may be allowable under Florida law.31
Post-mortem planning. On the death of the first spouse, TBE property passes to the survivor. Death destroys the TBE nature of the property; therefore, the TBE asset protection benefits disappear at the first spouse’s death. A properly crafted estate plan, however, can allow the survivor to disclaim his interest in the TBE property and allow the decedent’s one-half interest in the property to pass into a protected trust for the surviving spouse and/or other family members (for example, children, grandchildren and more remote descendants).32 Review client plans to determine whether TBE and disclaimers should be part of the testamentary strategy.
Unique Form of Ownership
If available in a particular jurisdiction, TBE is a unique form of ownership that can provide certain extra marital benefits. Some spouses may already own their property as TBE and not even realize it. TBE, however, isn’t bullet proof, as the transfer into TBE must still satisfy the applicable state’s fraudulent transfer law and may nevertheless still be reachable by the IRS. TBE can also have the negative effect of converting separate property into marital property (as to this issue, it’s best to consult with a local family law attorney to confirm the implications in the particular jurisdiction). There are opportunities to take advantage of TBE until the first spouse’s death, and other opportunities to further protect assets, while still maintaining estate tax benefits for the survivor and other family members.
—The original version of this article appeared as a Franklin Karibjanian & Law PLLC “Client Alert” dated Oct. 27, 2017, which authorized the repurposing of the contents for this article.
Endnotes
1. www.brainyquote.com/quotes/richard_pryor_384864.
2. It may be argued that community property (CP) is a fourth form of joint ownership, but CP is a property right as opposed to a form of ownership. CP doesn’t require both spouses to be listed as co-owners of property so that a spouse may have a CP right in the other spouse’s property even if the property is titled in the other spouse’s individual name.
3. For purposes of discussion in this article, assume that there are only two owners. If there are multiple owners, which can happen, if one owner dies, the other owners take such owner’s share and divide it among themselves with the last standing owner becoming the full fee owner of the property.
4. See, for example, D.C. Code Section 42-516(a); Fla. Stat. Section 689.15; Md. Real Property Code Section 2-117; Mo. Rev. Stat. Section 442.450; Ohio Rev. Code Section 5302.19; and Va. Code Section 55-20.1.
5. At common law, this unity of time would be difficult to satisfy if an individual owning 100 percent of the property wished to convey the property to herself and another individual to establish the joint tenants with rights of survivorship (JTWROS); this unity couldn’t be satisfied because the owner would have owned an interest in the property before the new co-owner, which fails the unity of time. The only way to rectify this anomaly would be to transfer the property to a straw person, who would immediately re-convey the property back to the owner and the new co-owner, thereby vesting title in the owners at the same time. Some jurisdictions deem the unity of time in any transfer to co-owners, including from one of the co-owners, to be satisfied, thereby eliminating the need for a straw person. See, for example, D.C. Code Section 42-516(b)(2); Fla. Stat. Section 689.15 (as interpreted by Ratinska v. Estate of Denesuk, 447 So.2d 241 (Fla. 2nd Dist. Ct. App. 1983)); 765 Ill. Con. Stat. 1005/1c.; Mass. Gen. Law Ch. 184, Section 8; Md. Real Property Code Section 4-108(a) (which specifically references the negation of the need for a straw person); N.Y. Real Property Law Section 240-b.1; and Va. Code Section 55-9. Similar provisions may even be found in CP states; see Cal. Civil Code Section 683(a).
6. This unity is almost always satisfied because the deed conveying the real estate interest recites the ownership form.
7. In the common scenario for this unity, co-owners have an undivided full fee interest in the property; this unity wouldn’t be satisfied if, for example, one owner had an interest for only a term of years and the other had an undivided full fee interest.
8. The tenancy by the entirety (TBE) jurisdictions are: Alaska, Arkansas, Delaware, District of Columbia, Florida, Hawaii, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia and Wyoming.
9. The traditional CP jurisdictions are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Beginning with Alaska in 1998, three other states have opt-in provisions for CP with the creation of CP trusts: Alaska (Alaska St. Ch. 34-77); Tennessee in 2010 (Tenn. Code Ann. Section 35-17-101 et al.); and South Dakota in 2016 (S.D. Cod. Laws Section 51A-6A-1). Groups in other states, such as North Carolina and Florida, are studying whether CP trusts should become part of their jurisprudence.
10. See American Central Ins. Co. of St. Louis, Mo. v. Whitlock, 165 So. 380 (Fla. 1936) and M. Lit, Inc. v. Berger, 170 A.2d 303 (Md. 1961).
11. See Va. Code Section 55-20.2.A. and 765 Ill. Con. Stat. Section 1005/1c.
12. Such a conveyance satisfies the unity of time in the same manner as the more traditional approach with the use of a straw person. See supra note 5.
13. See Black’s Law Dictionary, “estate by the entirety.” See also, as to D.C. law, In re Estate of Wall, 440 F.2d 215 (D.C. Cir. 1971).
14. The 18 jurisdictions that allow TBE for personal property are: Alaska, Arkansas, D.C., Delaware, Florida, Hawaii, Maryland, Massachusetts, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia and Wyoming. The seven TBE jurisdictions that don’t allow TBE for personal property are: Illinois, Indiana, Kentucky, Michigan, New York, North Carolina and Oregon. Most states that prohibit TBE in personal property don’t explicitly negate TBE status; rather, the statute granting TBE status is limited to real estate. See, for example, N.Y Real Prop. Law Section 240-b. See also Ore. Rev. Stat. Section 105.920, which provides for joint tenancy in personal property, but doesn’t reference TBE.
15. Va. Code Section 55-20.2.A. It’s important to acknowledge that, while a statute may require a “husband and wife,” based on the U.S. Supreme Court 2015 decision in Obergefell v. Hodges, 576 U.S. ___ (2015), any limitation of marriage to only a man and a woman or husband and wife is unconstitutional as a violation of the Fourteenth Amendment to the U.S. Constitution. Therefore, any statute providing any such limitation is unconstitutional and should be read as gender neutral. In Virginia, same-sex marriage became legal with the U.S. Court of Appeals for the Fourth Circuit decision in Bostic v. Rainey, 760 F.3d 352 (4th Cir. 2014).
16. Md. Real Prop. Code Section 4-108(b): “Any interest in property held by a husband and wife in tenancy by the entirety may be granted.” (Emphasis added.)
17. See Diamond v. Diamond, 467 A.2d 510 (Md. 1983).
18. See Beal Bank, SSB v. Almand & Associates, 780 So.2d 45 (Fla. 2001).
19. Such statute, if eventually adopted, would be Fla. Stat. Section 689.151.
20. See, e.g., John Ritchie III, “Tenancies by the Entirety in Real Property with Particular Reference to the Law of Virginia,” Virginia Law Review, Vol. 28, No. 5 (March 1942), at pp. 608-622, 612.
21. Because the laws in the various jurisdictions vary widely on a particular property right like TBE, some financial institutions—especially those with a national footprint—may not provide a TBE option. Other factors involved in not providing this option are the risk and exposure to such financial institutions by having a form indicating TBE is available, which is then used in a jurisdiction where TBE isn’t available.
22. It should be noted that, even if the financial institution is offered such letter, it may not respect the letter and simply title the account as a JTWROS, listing the spouses as co-owners. Should the status of the account ever be questioned, the issue becomes whether the spouses’ intent for TBE status will be respected by third parties or the courts.
23. For example, Md. Family Law Section 8-201(e)(2) provides that marital property includes “any interest in real property held by the parties as tenants by the entirety unless the real property is excluded by valid agreement;” Va. Code Section 20-170.3.A.2.(i), as part of its definition of marital property, includes “all property titled in the names of both parties, whether as joint tenants, tenants by the entirety or otherwise”; and Fla. Stat. Section 61.075(6)(a)2 provides that marital property includes “all real property held by the parties as tenants by the entireties, whether acquired prior to or during the marriage.”
24. Under most equitable distribution provisions, the assumption is that marital property would be divided equally, but if the spouse who contributed the TBE can prove certain factors, it may be possible to effect a disproportionate division. Such factors may include the contribution to the marriage by each spouse, including contributions to the care and education of the children and services as homemaker, the economic circumstances of the parties, the duration of the marriage and any interruption of personal careers or educational opportunities of either party. See generally D.C. Code
Section 16-910; Md. Family Law Section 8-205; Va. Code Section 20-107.3; and Fla. Stat. Section 61.075(1).
25. Usually, all aspects of separate property remain separate property unless the other spouse’s efforts contribute to the growth or appreciation of the property. See, for example, Md. Family Law Section 8-201, as interpreted by Merriken v. Merriken, 590 A.2d 566 (1991); Va. Code Section 20-170.3.A.3.a.; and Fla. Stat. Section 61.075(6)(a)1.b. Such provision isn’t stated under D.C. statutory law, and no case has yet determined whether such efforts are marital property; see McDiarmid v. McDiarmid, 649 A.2d 810 (D.C. 1994).
26. For this reason, to avoid confusion, divorce or property settlement agreements should always require a formal re-titling of all TBE assets.
27. This is the general concept from Section 4 of the Uniform Fraudulent Transfer Act (UFTA). For example, with the jurisdictions comprising the Capital Beltway region, the UFTA has been adopted in D.C. but hasn’t been adopted in Maryland or Virginia, which have their own fraudulent conveyance statutes. UFTA Section 4 has been codified in D.C. as D.C. Code Section 28-3104. The Maryland equivalent statutes are Md. Comm. Law Sections 15-206 and 15-207, and the Virginia equivalent statute is Va. Code Section 55-80; note, however, that Virginia’s fraudulent conveyance statute may not apply to all future creditors. See Landon C. Davis III, Isaac A. McBeth and Elizabeth Southall, “Essay: A Distinction Without a Difference? An Examination of the Legal and Ethical Difference Between Asset Protection and Fraudulent Transfers Under Virginia Law,” 47 U. Rich. L. Rev. 381 (2012); Joseph E. Ulrich, “Fraudulent Conveyances and Preferences in Virginia,” 36 Wash. & Lee L. Rev. 51 (1979). UFTA Section 4 has also been enacted in Florida as Fla. Stat. Section 726.105. In 2014, the National Conference of Commissioners on Uniform State Laws revised and renamed the UFTA to the Uniform Voidable Transactions Act (UVTA); the changes made in the UVTA intentionally, or unintentionally, present certain detriments to certain estate planning strategies.
28. United States v. Craft, 535 U.S. 274 (2002), rev’g. 233 F.3d 358 (6th Cir. 2000).
29. See generally Lester B. Law and George D. Karibjanian, “Just Say “NO” … to the Credit Shelter Trust! Revisiting Existing Estate Plans in Light of the 2018 Tax Act! (Part 1),” LISI Estate Planning Newsletter #2622 (Jan. 25, 2018); in particular, see endnote 21, citing the Joint Committee on Taxation, History, Present Law, and Analysis of the Federal Wealth Transfer Tax System, March 16, 2015, JCX 52-15, wherein the Joint Committee of Taxation reported that, with a basic exclusion amount of $5.43 million, 99.8 percent of taxpayers were immune from the federal estate tax.
30. See Delaware—12 Del. C. Section 3334; Illinois—765 Ill. Con. Stat Section 1005-1c; Indiana—Ind. Code Section 30-4-3-35; Maryland—Md. Est. & Tr. Law Section 14-113; Missouri—Mo. Rev. Stat. Section 456.950 (Missouri only allows for one joint trust, but it may be severed into two separate shares); North Carolina—N.C. Gen. Stat. Section 39-13.7; Tennessee—Tenn. Code. Ann. Section 35-15-510; Virginia—Va. Code Section 55-20.2; and Wyoming—Wyo. Stat. Ann. Section 4-10-402(c)-(e).
31. See R. Craig Harrison, “Trusts: TBE or Not TBE,” 87 Fla. Bar. J., No. 5 (May 2013).
32. Disclaimers are a way to renounce certain property received on death. State law and federal transfer tax law work to deem the intended recipient as having predeceased the decedent, thereby allowing property to pass to the next intended recipient without effecting any gift for gift tax or state law purposes.