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Bone McAllester Norton Expands Emphasis on Estate Planning, Elder Law and Taxation

[caption id="attachment_11376" align="alignleft" width="200"]Jonathan R. Burns Jonathan R. Burns


Bone McAllester Norton PLLC is pleased to announce that Jonathan R. Burns has joined the firm.

Jonathan concentrates his law practice in the areas of estate planning, probate, elder law, corporate law, mergers and acquisitions, real estate and taxation.

“Adding Jonathan contributes to our strategic growth plan for the firm,” said Chairman Charles W. Bone. “He brings significant experience in the estate planning and taxation areas of law which is increasingly important to our clients.  He’s a welcome new member of our dynamic group of highly skilled attorneys.”

Jonathan received his J.D. from the University of Mississippi in 2010 and received his L.L.M. in Taxation from Washington University in St. Louis in 2011.  He graduated cum laude from Middle Tennessee State University in 2006 with a Bachelor in Business Administration degree.  Jonathan is licensed to practice in both Tennessee and Mississippi.

Before joining Bone McAllester Norton, Jonathan practiced law with Watkins & McNeilly where he was able to develop his skills in the areas of business law and estate planning.
Jonathan has prepared the following information about Tennessee Community Property Trusts that might be of interest to our clients and friends. - Charles W. Bone




TENNESSEE COMMUNITY PROPERTY TRUSTS



I have been honored by many clients who have entrusted their assets earned and retained over many years to my skills and advice.  We have many options to consider as we help clients with their important decisions, so we look for all possible ways to be of assistance.

In addition to having a proper estate plan in place that will minimize or eliminate federal estate taxes, a married couple can also incorporate into their estate plan an income tax savings mechanism that is unknown to most clients.

The Tennessee Community Property Trust Act of 2010 allows a married couple to establish a trust to hold property that will be treated as "community property."  The Internal Revenue Code provides for a step up in cost basis to fair market value for the entire amount of community property owned by a married couple upon the death of the first spouse.

In contrast, for a married couple that has joint property but does not live in a community property state or does not hold such property in a Tennessee Community Property Trust, at the death of the first spouse, only one-half of the joint property will receive a step up in cost basis to fair market value.

The benefit of a Tennessee Community Property Trust can be easily shown through example.  If a married couple in Tennessee jointly owns, not within a Tennessee Community Property Trust, stock worth $1,000,000 with a cost basis of $100,000, at the death of the first spouse, half of the stock will get a step-up in basis to fair market value for income tax purposes leaving the surviving spouse with a total cost basis in the stock of $550,000 ($500,000 for the step-up in basis to fair market value at the first spouse's death and $50,000 for the surviving spouse's half of the original cost basis).  If the surviving spouse sells the stock the day after the first spouse's death when the stock presumably still has a fair market value of $1,000,000, the surviving spouse will recognize gain upon the sale in the amount of $450,000 ($1,000,000 - $550,000), and with a potential capital gains tax rate of 20%, the surviving spouse would owe $90,000 in tax.

If instead the married couple transfers the stock worth $1,000,000 with a cost basis of $100,000 to a Tennessee Community Property Trust, at the death of the first spouse, all of the stock will get a step-up in basis to fair market value for income tax purposes.  If the surviving spouse sells the stock the day after the first spouse's death when the stock presumably still has a fair market value of $1,000,000, the surviving spouse will not have any gain to recognize as the surviving spouse's cost basis is equal to the stock's fair market value and therefore no tax will be owed.

We have found this relatively new concept to be very beneficial to many families in Tennessee.




Jonathan's Impact on the Middle Tennessee Community
"Jonathan has been a great legal adviser over the last few years.  I use his advice on everything and trust his opinion."
“Jonathan’s expertise and dedication to our Families' legal concerns and overall goals is truly exceptional based on my experiences as a Financial Advisor and individual.  Jonathan has taken the time to be there at the Hospital when an urgent change needed to be made, has provided exceptionally prompt answers to any and all legal questions we have ever had, and has served my family and Client’s with absolute integrity.
Jonathan has shown absolute dedication to our needs, incredible expertise in estate & trust planning, and above all Jonathan possesses a unique level of integrity like no attorney I have ever worked with.”
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