The American College of Trust and Estate Counsel (ACTEC) has just released a detailed response on Treasury’s proposed regulations under Section 2704 regarding valuation discounts for estates. The ACTEC is a nonprofit association of over 2,700 lawyers and law professors with experience in the preparation of wills and trusts and estate planning.
A summary of the ACTEC’s comments and recommendations to treasury is provided below, however you can view the entire document by clicking here.
  • Continuation of fair marker value: The ACTEC requests that Treasury ensure that the price that a third party, unrelated purchaser would be willing to pay for an interest continues to be the appropriate measure of fair market value for federal transfer purposes.
  • Continuation of discounts for marketability and control: Request that specific features such as illiquidity, fiduciary duty to other owners, and other causes of inability to liquidate will continue to be treated as legitimate factors that a third party purchaser would into account when determining the price that he or she is willing to pay.
  • Revise three year “look-back” rule to one year with further exceptions: The proposed three-year rule which subjects certain lifetime transfers to estate tax as lapses occurring upon death would be altered to a one-year rule with a further exception when there is a low chance of a death occurring.
  • Overall Clarification: The ACTEC criticizes the new regulations for its overall vagueness and seeks further clarification on subjects including treatment of entities other than partnerships and corporations, transfers at death to multiple persons, and entities in which all owners have put rights along with various other examples.