I will write this all down now, while it is still fresh. A thought is a liquid thing, prone to flowing into the cracks of the mind and taking a shape not originally intended. But if you force it into ink and paper, it is fixed, for good or ill. The written word is the prison we employ to keep our thoughts from putting on disguises and escaping us.
At the time I was in Estate Planning. It was a paradigmatic example of the class: Dodson sat at the front, elucidating for us the best way to evade the Federal and State inheritance taxes, and I sat in the back, trying now and then to act like I was downloading all of it.
There is a $5,000,000 Federal lifetime gift tax exclusion.
He always spoke with a stern tenor. Some professors, you can tell that they know the material, but they don’t have the talent for teaching it. They fall into telling war stories, about how this one time they had this case out in Cheatam County, where the defense attorney did this or that. Not Dodson. He’s taught this class for more than thirty years. He taught Dad. He wrote his own textbook. If you send him a notice every year he’ll mail you the newest edition, so you can keep updated on the tax law.
Remember that for gift tax purposes only in Tennessee we still have Class A and Class B beneficiaries.
I tilted my chair onto its hind legs and leaned my back against the wall. The best perk of sitting at the very back was the ability to recline. No one else on the back row does it, but then most people are too busy updating their facebook or keeping track of the March Madness scores. You can’t very well tell your facebook friends that class is boring if you’re leaning back from your laptop.
Tennessee recognizes an unlimited marital deduction on gifts.
Earlier that night, in between classes, I stood outside with the smokers and listened to their gossip. They sneered at other students in our class, making comments like, “I worry that she’s going to embarrass our school when she gets out and starts practicing,” or “When she said that I looked back at Ben, and he was just as shocked as I was.” Banal noise. Then they discussed how many absences they had left, and how they intended to use them to avoid coming to the last three weeks of class. I stood with them, empty handed, and said nothing. I smiled, and snickered at the appropriate time, and muttered “Wow,” right on cue. In the end, I guess I can’t escape the need for social interaction. Do they think of me as I of them? Are we all but appliances necessary to satisfy the herding instinct?
The Tennessee estate tax was rendered ineffective by the 2001 Act changes to the federal tax laws, and is not now in effect.
In three years of leaning back against the wall never once have I fallen. I consider it a small victory, something praiseworthy. Often while I’m reclining I pull my smartphone from my pocket and check my own facebook. The vices we hate in others are the ones we covet ourselves. This evening, however, I did not pull out my phone. For one, the battery was dead from when I was playing with it during the last class, and for another I had to pay more attention in Dodson’s class since the Federal tax code is less than intuitive. At the beginning of the semester, Dodson told the class that when Congress wants to modify the tax law, they merely pass new statutes and resolutions, rather than actually edit or remove the outdated parts of the code. The end result of this wonderful system is that you need a ball of string and a smitten princess to navigate it.
In the audit of the tax return, Tennessee is not bound by any decision made by the Internal Revenue Service on valuation or other matters.
I don’t think I’ll ever do any serious estate planning work. It seems boring and technical. So much of it is devoted to evading taxes, and juggling the interaction between the State and Federal tax codes. My delight is to work with words, artfully constructing arguments and using the language of the law to support a position. Reading and re-reading tax codes and writing a will to carefully dance between the cracks in the law does not strike me as a fun or particularly fulfilling endeavor.
The purpose of these rules is to prevent valuation abuses in the family context.
But I digress. As I said, I was leaning against the wall, and I did not have my smartphone handy to check whether my friend from high school was going out to dinner that night, so my mind wandered. Always a dangerous prospect. Luckily this time my mind chose to venture back to the farm, which I had just returned from the day before. But for the obligations of work and school, I might well have stayed there another two or three days.
If Section 2701 applies, and the retained interest is valued at zero, then there is an up-front, taxable gift of the entire amount supposedly retained.
It was the first weekend I had been back to the farm since New Years, and when I got there I realized how much I missed it. It is as much a part of me as anything. Even though I have only spent about fifteen weekends a year there, I have always considered myself a child of the country, more at home in fields and forests than among streets and skyscrapers. So strange to me, those people who are creatures of the city, who find no comfort or beauty in unbridled nature, and who shriek with terror at the thought of being bitten by a tick.
If it is a family transaction, then you need to be able to establish that it is a bona fide business arrangement and that the terms are comparable to similar arrangements reach by arm’s length negotiators.
I reached back into those fresh memories. I found myself at the Twin Falls, where two creek branches, not twenty yards apart, dash onto sheets of limestone worn smooth by centuries before mingling together. On Saturday I hiked there, accompanied by my mother, my aunt, and my aunt’s girlfriend. This time, when I visited the Falls in my mind, I was alone, and rather than the echo of conversation there was only the soft splash of my boots as I made my way up the creek bed, and the faint chatter of the water as it leapt off the cliffs.
At the point where the branches met I turned right and made for the fall. I do not know the cardinal directions, but since I always approach the falls from the same direction I think of them as being on the right and on the left. The left fall is slightly taller and broader, and the water descends by way of several shelves of rock, so that it is more like a wide trickle than a strong flow. At its base is a broad sheet of limestone, with deep channels cut into the face where most of the water collects. The stream is clear of debris and detritus, and the whole bed for several yards out from the fall is a smooth surface of deep green.
Her sister, on the right, could not be more different. That we call them the Twin Falls is because of their proximity, not because of their similarity. Her fall is swift and narrow, running sideways down a small outcropping of rock and free-falling to the bed. The bed is a graveyard of cracked and broken slabs of rock. The fall itself is largely obscured by two huge tables, one leaning against the other, both covered in green mossy carpet. Considering how the rock face around the fall is sheer, one can imagine that some great event, Nature in her fierceness, tore the sheet of limestone in half and dumped the shards in the bed. There is more gravel in this branch, and the bed is not limestone save for the enormous sheets of broken rock. In one or two places tree limbs and branches have fallen and snagged in the bed, and those snags have grown into puffballs of dead leaves and rotting timber.
I worked my way upstream, climbing my way over the leaves and jumping from table to table, and when I reached the fall I went around the rock to put my hand in the water. It was cool, but not icy. In the real world, it probably was icy cold, as the creek always is in March, but my memory warmed it somewhat. I scrambled up one of the huge slabs to the earthy slope between the falls, and carefully worked my way to the top of the fall. For some reason I have never once gone to this part of the fall, and I can’t recall ever walking the branch above.
When I reached the bed, even though it was memory and I could not be surprised, I was still in awe of it. The water, rather than flow wide in the bed as in the other fall, here had cut a deep, narrow channel into the limestone layers. The stream was barely one foot wide, and ran down the V-shaped crevice in the rock swiftly and deliberately, as if it was unaware that it has no other choice. Over thousands of years it has fashioned its own confines.
I sat down on a small bench of limestone next to the fall. Six inches to the right there was spray and open air. At my feet the water chattered, though its voice was muffled by the imperfection of my memory. I closed my eyes, and listened, and breathed, and tried to sharpen my memory enough to smell wet leaves and fresh spring growth. As the recalled details in my mind came into focus, and the sound of the water became clearer, I heard something else, soft and quiet.
I opened my eyes, and sitting across from me in the creek bed was a Naiad.