Posted On: MARCH 2023
Are you concerned that some of your beneficiaries might squander their inheritances or simply aren’t equipped to handle the financial responsibilities that come with large sums of money? You don’t have to hold on to your assets until the day you die with the hope that your heirs will change their ways by that time. Instead, consider using a spendthrift trust that can provide protection, regardless of how long you live.
Read MorePosted On: MARCH 2023
Once upon a time, life insurance played a much larger part in an estate plan than it does now. Why? Families would use life insurance payouts to pay estate taxes. But with the federal gift and estate tax exemption at $12.92 million for 2023, far fewer families currently are affected by estate tax.
Read MorePosted On: FEBRUARY 2023
If you made gifts last year you may be wondering if you need to file a gift tax return. The short answer: There are many situations when it’s necessary (or desirable) to file Form 709 — “United States Gift (and Generation-Skipping Transfer) Tax Return” — even if you’re not liable for any gift tax. Let’s take a closer look at the reasons why.
Read MorePosted On: FEBRUARY 2023
Even though it may not be top of mind when you’re developing or revising your estate plan, it’s important to consider how bequeathing assets to your family might affect them. Why? Because when your heirs receive their inheritance, it becomes part of their own taxable estates. Giving a loved one permission to create an inheritor’s trust can help avoid this outcome.
Read MorePosted On: FEBRUARY 2023
Generally speaking, owning property jointly benefits an estate plan. Indeed, joint ownership offers several advantages for surviving family members. However, there are exceptions and it’s not the solution for all estate planning problems.
Read MorePosted On: FEBRUARY 2023
A revocable trust — sometimes known as a “living trust” — can provide significant benefits. They include the ability to avoid probate of the assets the trust holds and facilitating management of your assets in the event you become incapacitated. To obtain these benefits, however, you must fund the trust — that is, transfer title of assets to the trust or designate the trust as the beneficiary of retirement accounts or insurance policies.
Read MorePosted On: FEBRUARY 2023
If you own an interest in a closely held business, a buy-sell agreement should be a critical component of your estate and succession plans. These agreements provide for the orderly disposition of each owner’s interest after a “triggering event,” such as death, disability, divorce or withdrawal from the business. This is accomplished by permitting or requiring the company or the remaining owners to purchase the departing owner’s interest. Often, life insurance is used to fund the buyout.
Read MorePosted On: FEBRUARY 2023
Estate planning can be tricky for a family that includes a disabled loved one. Why? Because the family doesn’t want to lose eligibility for means-tested government benefits, such as Medicaid or Supplemental Security Income (SSI).
Read MorePosted On: FEBRUARY 2023
A tax-advantaged savings plan, such as an IRA or 401(k) plan, is designed to help you fund your retirement. But to the extent that you don’t need the funds during your golden years, they can be a valuable supplement to your estate plan. To preserve the tax-deferred growth of these funds, it’s best to avoid early withdrawals (before age 59½), which can trigger a 10% penalty, on top of ordinary income taxes.
Read MorePosted On: JANUARY 2023
If you’re reading this, you’ve likely put a great deal of time, effort and expense into designing and implementing an estate plan that meets your goals. But unless your loved ones know that these documents exist — and how to find and access them — your well- laid plans can be derailed. Following are some tips on how, and where, to store critical estate-planning documents.
Read MorePosted On: JANUARY 2023
Do your assets include unregistered securities, such as restricted stock or interests in hedge funds or private equity funds? If so, it’s important to consider the securities law implications of various estate planning strategies.
Read MorePosted On: JANUARY 2023
According to the Pew Research Center, nearly a quarter (23%) of U.S. children under the age of 18 live with one parent. This is more than three times the share (7%) of children from around the world who do so. If your household falls into this category, ensure your estate plan properly accounts for your children.
Read MorePosted On: JANUARY 2023
Are you charitably inclined? If so, you probably know that donations of long-term appreciated assets, such as stocks, have an advantage over cash donations. But in some cases, selling appreciated assets and donating the proceeds may be a better strategy.
Read MorePosted On: JANUARY 2023
Over your lifetime, you may have accumulated a wide variety of tangible assets, including automobiles, works of art and property, that you’ve accounted for in your estate plan. But intangible assets can easily be overlooked.
Read MorePosted On: DECEMBER 2022
Many people include health care powers of attorney or living wills in their estate plans so they have some influence over critical medical decisions in the event they’re incapacitated and unable to make decisions themselves. A psychiatric advance directive (PAD) is less well known, but worth considering, especially if your family has a history of mental illness.
Read MorePosted On: DECEMBER 2022
If you wish to leave a charitable legacy while generating income during your lifetime, a charitable remainder trust (CRT) may be a viable solution. In addition to an income stream, CRTs offer an up-front charitable income tax deduction, as well as a vehicle for disposing of appreciated assets without immediate taxation on the gain. Plus, unlike certain other strategies, CRTs become more attractive as interest rates rise. In the current environment, that makes them particularly effective.
Read MorePosted On: DECEMBER 2022
Life insurance can provide peace of mind, but it’s important to not own the policy at death. The policy’s proceeds will be included in the taxable estate and may be subject to estate tax. To avoid this result, a common estate planning strategy is to draft an irrevocable life insurance trust (ILIT) to hold the policy.
Read MorePosted On: DECEMBER 2022
If you’re like many people, a significant portion of your wealth can be found in IRAs and other tax-deferred retirement accounts. Traditionally, these accounts have been viewed as off limits when it comes to funding lifetime gifts, given the negative income tax implications.
Read MorePosted On: DECEMBER 2022
There’s a common misconception that owning assets jointly with a child or other heir is an effective estate planning shortcut. While this strategy has a certain appeal, it can invite a variety of unwelcome consequences that may quickly outweigh any potential benefits.
Read MorePosted On: DECEMBER 2022
A smart estate plan should leave no doubt as to your intentions. Writing a letter of instruction can go a long way toward clearly communicating all of your thoughts and wishes. Even though the letter, unlike a valid will, isn’t legally binding, it can be valuable to your surviving family members.
Read MorePosted On: DECEMBER 2022
Estate planning typically focuses on what happens to your children and your assets when you die. But it’s equally important (some might say even more important) to have a plan for making critical financial and medical decisions if you’re unable to make those decisions yourself.
Read MorePosted On: DECEMBER 2022
You’d be surprised how often people fail to disclose foreign assets to their estate planning advisors. They assume that these assets aren’t relevant to their “U.S.” estate plans, so they’re not worth mentioning. But if you own real estate or other assets outside the United States, it’s critical to address these assets in your estate plan.
Read MorePosted On: NOVEMBER 2022
You create an estate plan to meet technical objectives, such as minimizing gift and estate taxes and protecting your assets from creditors’ claims. But it’s also important to consider “softer,” yet equally critical, goals.
Read MorePosted On: NOVEMBER 2022
If you’re taking a second trip down the aisle, you may have different expectations than you did when you got married the first time — especially when it comes to estate planning. For example, if you have children from a previous marriage, your priority may be to provide for them. Or perhaps you feel that your new spouse should have limited rights to your assets compared to those of your spouse from your first marriage.
Read MorePosted On: NOVEMBER 2022
Did you know that one of the most effective estate-tax-saving techniques is also one of the simplest and most convenient? By making maximum use of the annual gift tax exclusion, you can pass substantial amounts of assets to loved ones during your lifetime without any gift tax. For 2022, the amount is $16,000 per recipient. In 2023, the amount will increase by $1,000, to $17,000 per recipient.
Read MorePosted On: NOVEMBER 2022
Among the many decisions you’ll have to make as your estate plan is being drafted is who you will appoint as the executor of your estate and the trustee of your trusts. These are important appointments, and, in fact, both roles can be filled by the same person. Let’s take a closer look at the duties of an executor and a trustee.
Read MorePosted On: OCTOBER 2022
The death of a spouse is a devastating, traumatic experience. And when it happens, dealing with taxes and other financial and legal obligations are probably the last things on your mind. Unfortunately, many of these obligations can’t wait and may have to be addressed in the months to follow. One important issue for the surviving spouse to consider is whether to file a joint or separate income tax return for the year of death.
Read MorePosted On: OCTOBER 2022
There’s no shortage of online do-it-yourself (DIY) tools that promise to help you create an “estate plan.” But while these tools can generate wills, trusts and other documents relatively cheaply, they can be risky except in the simplest cases. If your estate is modest in size, your assets are in your name alone, and you plan to leave them to your spouse or other closest surviving family member, then using an online service may be a cost-effective option. Anything more complex can expose you to a variety of costly pitfalls.
Read MorePosted On: OCTOBER 2022
Because the federal gift and estate tax exemption amount currently is $12.06 million, fewer people need life insurance to provide their families with the liquidity to pay estate taxes. But life insurance can still play an important part in your estate plan, particularly in conjunction with charitable remainder trusts (CRTs) and other charitable giving strategies.
Read MorePosted On: OCTOBER 2022
Whether the economic climate is stable or volatile, one thing never changes: the need to protect your assets from risk. Hazards may occur as a result of factors entirely outside of your control, such as the stock market or the economy. It’s even possible that dangers lie closer to home, including the behavior of your heirs and creditors. In any case, it’s wise to consider taking steps to mitigate potential peril. One such step is to set up a trust.
Read MorePosted On: OCTOBER 2022
Are you planning to move to a different state? It may be due to a change in jobs, a desire for a better climate, an opportunity to downsize or to be closer to your kids. In any event, you’ll have to cope with some hassles, including securing motor vehicle registrations, finding new physicians and updating financial records.
Read MorePosted On: SEPTEMBER 2022
The term “probate” is one you have probably heard and might associate with negative connotations. But you may not fully understand what it is. For some people, the term conjures images of lengthy delays waiting for wealth to be transferred as well as bitter disputes among family members. Others, because the probate process is open to the public, worry about their “dirty laundry” being aired out. The good news is that there are strategies you can employ to keep much or all of your estate out of probate.
Read MorePosted On: SEPTEMBER 2022
If you have a family member who’s disabled, financial and estate planning can be tricky. You don’t want to jeopardize his or her eligibility for means-tested government benefits such as Medicaid or Supplemental Security Income (SSI). A special needs trust (SNT) is one option to consider. Another is to open a Section 529A account, also referred to as an ABLE account, because it was created by the Achieving a Better Life Experience (ABLE) Act.
Read MorePosted On: SEPTEMBER 2022
To ensure that a trust operates as intended, it’s critical to appoint a trustee that you can count on to carry out your wishes. But to avoid protracted court battles in the event that the trustee isn’t doing a good job, consider giving your beneficiaries the right to remove and replace a trustee. Without this option, your beneficiaries’ only recourse would be to petition a court to remove the trustee for cause.
Read MorePosted On: AUGUST 2022
As you create your estate plan, your main objectives likely revolve around your family, both current and future generations. Your goals may include reducing estate tax liability so that you can pass as much wealth as possible to your loved ones.
Read MorePosted On: AUGUST 2022
Providing for the educational needs of your children, grandchildren and even future generations is an honorable estate planning objective. What are your options for achieving this goal? A 529 plan can be a highly effective tool for funding tuition and other educational expenses on a tax-advantaged basis. But after your death, there’s no guarantee that subsequent plan owners will continue to use it to fulfill your original vision. An alternative strategy is to create a family education trust that invests in one or more 529 plans.
Read MorePosted On: AUGUST 2022
No one likes to contemplate his or her own mortality. But ignoring the need for an estate plan or procrastinating in the creation of one is asking for trouble. If you haven’t started the process, don’t delay any longer. For your estate plan to achieve your goals, avoid these four pitfalls:
Read MorePosted On: AUGUST 2022
Let’s assume you have a legally valid will but you’ve decided that it should be revised because of a change in your family’s circumstances. Perhaps all you want to do is add a newborn grandchild to the list of beneficiaries or remove your adult child’s spouse after a divorce. These are both common reasons to revise your will. However, resist the temptation to revise your will yourself.
Read MorePosted On: AUGUST 2022
In 2022, for most people, it may seem like planning for gift and estate taxes is unnecessary because of the $12.06 million federal gift and estate tax exemption. But even if your net worth is only a fraction of the current exemption amount, there are good reasons to adopt strategies — such as making regular annual exclusion gifts — to reduce the size of your taxable estate.
Read MorePosted On: AUGUST 2022
Much of estate planning focuses on transferring your wealth to loved ones in a tax- efficient manner. But for many people, it’s equally important to protect that wealth against frivolous lawsuits or baseless creditors’ claims.
Read MorePosted On: AUGUST 2022
If you and your spouse have decided to retire to another country, or perhaps you’re pulling up stakes to move overseas for a job opportunity, it’s in your best interest to consider the income, gift and estate planning tax consequences of making such a move.
Read MorePosted On: JULY 2022
If you’ve been named as executor of the estate of a friend or family member, be sure you understand the responsibilities and potential risks before you agree to serve. You’re not required to accept the appointment, of course, but once you do it’s more difficult to extricate yourself should you change your mind.
Read MorePosted On: JULY 2022
There’s a common misconception that only married couples with children need an estate plan. In fact, estate planning may be even more important for single people without children. Why? Because for married couples, the law makes certain assumptions about who should make financial or medical decisions on their behalf should they become incapacitated and who should inherit their property if they die.
Read MorePosted On: JULY 2022
Personal items — which may have modest monetary value but significant sentimental value — may be more difficult to address in an estate plan than big-ticket items. Squabbling over these items may lead to emotionally charged disputes and even litigation. In some cases, the legal fees and court costs can eclipse the monetary value of the property itself.
Read MorePosted On: JULY 2022
Portability allows a surviving spouse to apply a deceased spouse’s unused federal gift and estate tax exemption amount toward his or her own transfers during life or at death. To secure these benefits, however, the deceased spouse’s executor must have made a portability election on a timely filed estate tax return (Form 706). The return is due nine months after death, with a six-month extension option.
Read MorePosted On: JULY 2022
If you’re approaching retirement or have already retired, one of the biggest challenges is balancing the need to maintain your standard of living with your desire to preserve as much wealth as possible for your loved ones. This balance can be difficult to achieve, especially when retirement can last decades. One strategy to consider is the split annuity, which creates a current income stream while preserving wealth for the future.
Read MorePosted On: JULY 2022
Here’s a not-so-fun fact: The generation-skipping transfer (GST) tax is among the harshest and most complex in the tax code. So, if you’re planning to share some of your wealth with your grandchildren or great grandchildren — or if your estate plan is likely to benefit these generations — it’s critical to consider and plan for the GST tax.
Read MorePosted On: JUNE 2022
“Thanks, but no thanks.” If you expect to receive an inheritance from a family member, you might want to use a qualified disclaimer to refuse the bequest. As a result, the assets will bypass your estate and go directly to the next beneficiary in line. It’s as if the successor beneficiary, not you, had been named as the beneficiary in the first place.
Read MorePosted On: JUNE 2022
The best laid plans can go awry. After your death, events may transpire that you hadn’t anticipated or couldn’t have reasonably foreseen. There’s no way of predicting the future, but you may want to supplement your existing estate plan with a trust provision that gives a designated beneficiary a “power of appointment” over some or all of the trust property. Essentially, this person will have the discretion to change distributions from the trust or even add or subtract beneficiaries.
Read MorePosted On: JUNE 2022
If you’ve received, or will soon receive, a significant inheritance, it may be tempting to view it as “found money” that can be spent freely. But unless your current financial plan ensures that you’ll comfortably reach all your goals, it’s a good idea to have a plan for managing your newfound wealth.
Read MorePosted On: JUNE 2022
A health care directive is a critical piece of your overall estate plan. Why? It allows you to communicate your preferences in advance for medical care in the event you’re incapacitated and cannot express your wishes.
Read MorePosted On: JUNE 2022
A primary goal of estate planning is to ensure that your wishes are carried out after you’re gone. So, it’s important to design your estate plan to withstand potential will contests or other challenges down the road. The most common grounds for contesting a will are undue influence or lack of testamentary capacity. Other grounds include fraud and invalid execution.
Read MorePosted On: JUNE 2022
For many business owners, estate planning and succession planning go hand in hand. As the owner of a closely held business, you likely have a significant portion of your wealth tied up in the business. If you don’t take the proper estate planning steps to ensure that the business lives on after you’re gone, you may be placing your family at risk.
Read MorePosted On: JUNE 2022
For many business owners, estate planning and succession planning go hand in hand. As the owner of a closely held business, you likely have a significant portion of your wealth tied up in the business. If you don’t take the proper estate planning steps to ensure that the business lives on after you’re gone, you may be placing your family at risk.
Read MorePosted On: JUNE 2022
Estate planning experts usually cite the need to include advance health care directives in a comprehensive estate plan. But there may be different legal names given to those directives, depending on one’s jurisdiction.
Read MorePosted On: JUNE 2022
Gift splitting can be a valuable estate planning tool, allowing you and your spouse to maximize the amount of wealth you can transfer tax-free. But in some cases, it can have undesirable consequences, so be sure that you understand the implications before making an election to split gifts.
Read MorePosted On: JUNE 2022
A Health Savings Account (HSA) can be a powerful tool for financing health care expenses while supplementing your other retirement savings vehicles. And it offers estate planning benefits to boot.
Read MorePosted On: JUNE 2022
For those who’ve received, or will soon receive, a significant inheritance, it may be tempting to view it as “found money” that can be spent freely. But unless one’s current financial plan ensures that he or she will comfortably reach all their goals, it’s a good idea to have a plan for managing the newfound wealth. This article answers several questions that should be considered after receiving an inheritance. A brief sidebar explains how to handle an inherited retirement plan.
Read MorePosted On: JUNE 2022
A health care directive is a critical piece of one’s overall estate plan. Why? It allows a person to communicate their preferences in advance for medical care in the event of incapacitation and the loss of the ability to communicate health care wishes. However, depending on one’s jurisdiction, a directive can go by several different names, including living wills, advance medical directives and directives to physicians. This article defines various terms associated with a health care directive.
Read MorePosted On: MAY 2022
A primary goal of estate planning is to ensure that a person’s wishes are carried out after he or she is gone. So, it’s important to design one’s estate plan to withstand potential will contests or other challenges down the road. The most common grounds for contesting a will are undue influence or lack of testamentary capacity. Other grounds include fraud and invalid execution. This article details strategies to use to reduce the chances of one’s will being challenged after death.
Read MorePosted On: MAY 2022
When it comes to estate planning, not all assets are created equal. For those who own one or more guns, careful planning is required to avoid running afoul of complex federal and state laws. Without proper planning, there’s a risk that the government will confiscate the guns or that an estate’s executor, trustees or beneficiaries will inadvertently commit a felony. This brief article explores the complications of incorporating one’s gun collection in his or her estate plan.
Read MorePosted On: MAY 2022
Families that have children who are adopted, or stepchildren who haven’t been legally adopted, may face unique estate planning challenges. Additional consideration must be taken when a family includes an unmarried couple in a long-term relationship and one person has biological or adopted children. If your family’s makeup is as such, it’s important to understand your estate planning options.
Read MorePosted On: APRIL 2022
Estate planning experts usually cite the need to include advance health care directives in a comprehensive estate plan. But there may be different legal names given to those directives, depending on one’s jurisdiction.
Read MorePosted On: APRIL 2022
Intrafamily loans allow you to provide financial assistance to loved ones — often at favorable terms — while potentially reducing gift and estate taxes. But what about families that lack the liquid assets to make such loans? Are there other options if they have a trust?
Read MorePosted On: APRIL 2022
Are you, or is your spouse, a non-U.S. citizen? If so, several traditional estate planning techniques won’t be available to you. However, if you’re a U.S. resident, but not a citizen, the IRS will treat you similarly to a U.S. citizen.
Read MorePosted On: APRIL 2022
If you wish to share some of your wealth with your grandchildren or great grandchildren — or if your estate plan is likely to benefit these generations — it’s critical to consider and plan for the generation-skipping transfer (GST) tax. Designed to ensure that wealth is taxed at each generational level, the GST tax is among the harshest and most complex in the tax code.
Read MorePosted On: APRIL 2022
If you made gifts last year you may be wondering if you need to file a gift tax return. The short answer is that there are many situations in which it’s necessary (or desirable) to file Form 709 — “United States Gift (and Generation-Skipping Transfer) Tax Return” — even if you’re not liable for any gift taxes. Let’s take a closer look at the reasons why.
Read MorePosted On: MARCH 2022
When you leave property to charity in your will or revocable trust, it’s reasonable to assume that it won’t be subject to estate tax. After all, the charitable estate tax deduction excludes the value of donated property from your estate. But if you split a charitable bequest of property among two or more charities, your heirs may be in for an unpleasant tax surprise.
Read MorePosted On: MARCH 2022
Life insurance is a powerful tool for providing for your loved ones in the event of your untimely death. The amount of life insurance that’s right for you depends on your personal circumstances, so it’s critical to review your life insurance needs regularly in light of changing circumstances.
Read MorePosted On: MARCH 2022
The unified gift and estate tax exemption is set at an inflation-adjusted $12.06 million for 2022, up from $11.7 million for 2021. This means that for many families, estate tax liability isn’t a factor. However, for others, the annual gift tax exclusion continues to be an important estate planning strategy — especially since future tax law changes could lower the gift and estate tax exemption. For this reason, using a Crummey trust in your estate plan remains an important estate planning strategy.
Read MorePosted On: MARCH 2022
Inattention to beneficiary designations and jointly titled assets can quickly unravel your estate plan. Suppose, for example, that your will provides for all of your property to be divided equally among your three children. But what if your IRA, which names the oldest child as beneficiary, accounts for half of the estate? In that case, the oldest child will inherit half of your estate plus a one-third share of the remaining assets — hardly equal.
Read MorePosted On: MARCH 2022
For 2022, the federal gift and estate tax exemption has reached its highest level ever. In fact, you can transfer up to $12.06 million by gift or bequest without triggering federal transfer taxes. This is a limited time offer, however, as the exemption amount is scheduled to drop to $5 million (adjusted for inflation) in 2026. (However, Congress could pass legislation to reduce it even sooner or to extend it longer.)
Read MorePosted On: MARCH 2022
Precise language is critical in wills, trusts and other estate planning documents. A lack of clarity may be an invitation to litigation. An example of this is the dispute that arose after Tom Petty’s death, between his widow and his two daughters from a previous marriage. (The two parties have since resolved their differences and dismissed all litigation matters.)
Read MorePosted On: MARCH 2022
One goal of estate planning is to avoid or minimize probate. This is particularly important if you own real estate in more than one state. Why? Because each piece of real estate titled in your name must go through probate in the state where the property is located.
Read MorePosted On: FEBRUARY 2022
If you’re concerned about the impact of transfer taxes on your gifts, consider making “net gifts” to your loved ones. A net gift is simply a gift for which the recipient agrees to pay the gift tax, thereby reducing the value of the gift for tax purposes. It may also be possible to reduce its value further through the “net, net gift” technique.
Read MorePosted On: FEBRUARY 2022
If charitable giving is important to you, consider a donor-advised fund (DAF). A DAF — typically sponsored and managed by a community foundation or commercial investment company — offers many of the benefits of a private foundation at a fraction of the cost.
Read MorePosted On: FEBRUARY 2022
The deadline for filing your federal income tax return is April 18, 2022. Keep in mind that the gift tax return deadline is on the very same date. So, if you made large gifts to family members or heirs last year, it’s important to determine whether you’re required to file Form 709.
Read MorePosted On: FEBRUARY 2022
If you own an interest in a closely held business, a buy-sell agreement should be a critical component of your estate and succession plans. These agreements provide for the orderly disposition of each owner’s interest after a “triggering event,” such as death, disability, divorce or withdrawal from the business. This is accomplished by permitting or requiring the company or the remaining owners to purchase the departing owner’s interest. Often, life insurance is used to fund the buyout.
Read MorePosted On: FEBRUARY 2022
Even though it may not be top of mind when you’re developing or revising your estate plan, it’s important to consider how bequeathing assets to your family might affect them. Why? Because when your heirs receive their inheritance, it becomes part of their own taxable estates. Giving a loved one permission to create an inheritor’s trust can help avoid this outcome.
Read MorePosted On: JANUARY 2022
If you’re charitably inclined, you probably know that donations of long-term appreciated assets, such as stock, have an advantage over cash donations. But in some cases, selling appreciated assets and donating the proceeds may be a better strategy. That’s because adjusted gross income (AGI) limitations on charitable deductions are higher for cash donations. Plus, if the assets don’t qualify for long-term capital gain treatment, the deduction rules are different.
Read MorePosted On: JANUARY 2022
Many people include health care powers of attorney or living wills in their estate plans to have some influence over critical medical decisions in the event they’re incapacitated and unable to make those decisions themselves. A psychiatric advance directive (PAD) is less well known, but worth considering if your family has a history of mental illness. Or, you may simply want to memorialize your wishes in the event a psychiatric episode renders you unable to make decisions about your treatment.
Read MorePosted On: JANUARY 2022
Designing an estate plan can be a delicate balancing act. On the one hand, you want to preserve as much wealth as possible for your family by protecting it from estate taxes and creditors’ claims. On the other hand, you want to have some control over your assets during your life.
Read MorePosted On: JANUARY 2022
If you’ve worked a lifetime to build a large estate, you undoubtedly would like to leave a lasting legacy to your children and future generations. Educating your children about saving, investing and other money management skills can help keep your legacy alive.
Read MorePosted On: JANUARY 2022
A primary purpose of estate planning is to ensure that your wealth is distributed according to your wishes after you die. But if a family member challenges the plan, that purpose may be defeated. If the challenge is successful, a judge will decide who’ll inherit your property.
Read MorePosted On: JANUARY 2021
It’s difficult for many people to think about their mortality, so it’s not surprising to learn that many put off planning their own funerals. Unfortunately, this lack of planning may result in emotional turmoil for surviving family members when someone dies unexpectedly.
Read MorePosted On: JANUARY 2022
The “stretch” IRA generally no longer exists. But if you have a substantial balance in a traditional IRA, a properly designed charitable remainder trust (CRT) can allow you to replicate many of its benefits.
Read MorePosted On: DECEMBER 2021
Although your will or revocable trust governs the distribution of many or most of your assets, certain assets — such as retirement plans, insurance policies, and bank or brokerage accounts — require you to name a beneficiary (or beneficiaries). This can be an advantage, because when you die, the funds can pass directly to your beneficiaries without going through probate. But to avoid unpleasant surprises, it’s critical not only to choose your beneficiaries carefully, but to also name contingent beneficiaries in case a primary beneficiary dies before you.
Read MorePosted On: DECEMBER 2021
If you’ve recently divorced, your time likely has been consumed with attorney meetings and negotiations, even if everything was amicable. Probably the last thing you want to do is review your estate plan. But you owe it to yourself and your children to make the necessary updates to reflect your current situation.
Read MorePosted On: DECEMBER 2021
The death of a spouse is a devastating, traumatic experience, and if it happens, dealing with taxes and other financial and legal obligations are probably the last things on your mind. Unfortunately, many of these obligations can’t wait and must be addressed in the months to follow. One important issue for the surviving spouse to consider is whether to file a joint or separate tax return for the year of death.
Read MorePosted On: DECEMBER 2021
If you’re getting remarried, you may have very different expectations than you did when you married the first time, especially when it comes to estate planning. For example, if you have children from a previous marriage, your priority may be to provide for them. You may feel that your new spouse should have more limited rights to your assets than your children from your first marriage.
Read MorePosted On: NOVEMBER 2021
If you have a traditional IRA that designates your child or grandchild as beneficiary, be sure to consider the potential tax impact of the SECURE Act, which took effect in 2020. Previously, if you named someone other than your spouse as beneficiary, the recipient would have the ability to spread distributions over his or her life expectancy. He or she could then maximize tax-free growth while deferring, and often reducing, income taxes on distributions.
Read MorePosted On: NOVEMBER 2021
Among the many decisions you’ll have to make as your estate plan is being drafted is who’ll you appoint as the executor of your estate and the trustee of your trusts. These are important appointments, and, in fact, both roles can be filled by the same person. Let’s take a closer look at the duties of an executor and a trustee.
Read MorePosted On: NOVEMBER 2021
To ensure that a trust operates as intended, it’s critical to appoint a trustee that you can count on to carry out your wishes. But to avoid protracted court battles in the event things don’t work out as planned, it’s a good idea to give your beneficiaries the right to remove and replace a trustee. Without this option, your beneficiaries’ only recourse would be to petition a court to remove the trustee for cause.
Read MorePosted On: NOVEMBER 2021
An estate plan is a legal document, and because of that its language can be rather technical. If you wish to communicate your estate planning intentions in plain language, consider writing a letter of instruction to your family and including it with your plan.
Read MorePosted On: NOVEMBER 2021
If you’re charitably inclined, it may be desirable to donate assets held in a trust. Perhaps you’re not ready to let go of assets you hold individually. Or maybe the tax benefits of donating trust property would be more attractive than an individual donation. Before making such a donation, it’s important to understand the differences, for tax purposes, between individual and trust donations and the circumstances under which donations by a trust are deductible.
Read MorePosted On: NOVEMBER 2021
The IRS recently announced next year’s cost-of-living adjustment amounts. For 2022, the federal gift and estate tax exemption has cracked the $12 million mark: $12.06 million to be exact. Arguably more notable, the annual gift tax exemption has increased by $1,000 to $16,000 per recipient ($32,000 for married couples). It’s adjusted only in $1,000 increments, so it typically increases only every few years.
Read MorePosted On: NOVEMBER 2021
Estate planners generally tout the virtues of owning property jointly — and with good reason. Joint ownership offers several advantages for surviving family members. But this shouldn’t be viewed as a panacea for every estate planning concern. You must also be aware of all the implications.
Read MorePosted On: NOVEMBER 2021
The need for a will as a key component of your estate plan may seem obvious, but you’d be surprised by the number of people — even affluent individuals — who don’t have one. A reason for this may be a common misconception that a revocable trust (sometimes called a “living trust”) obviates the need for a will.
Read MorePosted On: OCTOBER 2021
Valuation and estate planning go hand in hand. After all, the tax implications of various estate planning strategies depend on the value of your assets at the time they’re transferred.
Read MorePosted On: OCTOBER 2021
Events of the last decade have taught us that tax law is anything but certain. So how can young, affluent people plan their estates when the tax landscape may look dramatically different 20, 30 or 40 years from now — or even a few months from now? The answer is by taking a flexible approach that allows you to hedge your bets.
Read MorePosted On: OCTOBER 2021
Haste makes waste. Or, in the case of estate planning, it can lead to other problems and, possibly, financial loss. Notably, if you don’t take enough time to choose the best executor for your estate, this “wrong call” can cost your family.
Read MorePosted On: OCTOBER 2021
A generous gift and estate tax exemption means only a small percentage of families are currently subject to federal estate taxes. But it’s important to consider state estate taxes as well. Although many states tie their exemption amounts to the federal exemption, several states have exemptions that are significantly lower — in some cases $1 million or less.
Read MorePosted On: OCTOBER 2021
Your estate plan may include a power of attorney for property that appoints another person to manage your investments, pay your bills, file your tax returns and otherwise handle your property if you’re unable to do so. But not all powers of attorney are created equal. Thus, it’s a good idea to periodically review your power of attorney with us to ensure that it continues to serve its intended purpose. Questions to consider can include:
Read MorePosted On: SEPTEMBER 2021
Your estate plan may include a power of attorney for property that appoints another person to manage your investments, pay your bills, file your tax returns and otherwise handle your property if you’re unable to do so. But not all powers of attorney are created equal. Thus, it’s a good idea to periodically review your power of attorney with us to ensure that it continues to serve its intended purpose. Questions to consider can include:
Read MorePosted On: SEPTEMBER 2021
In 2021, the federal lifetime gift and estate tax exemption amount is a whopping $11.7 million. So, for most people, it may seem like planning for gift and estate taxes is unnecessary. But even if your net worth is only a fraction of the current exemption amount, there are good reasons to adopt strategies — such as making regular annual exclusion gifts — to reduce the size of your taxable estate.
Read MorePosted On: SEPTEMBER 2021
No one likes to contemplate his or her own mortality, but ignoring the need for an estate plan or procrastinating in the creation of one is asking for trouble. If you haven’t started the process, don’t delay any longer. However, for your estate plan to achieve your goals, there are six pitfalls that must be avoided:
Read MorePosted On: SEPTEMBER 2021
If you’re approaching retirement or have already retired, one of the biggest challenges is balancing the need to maintain your standard of living with your desire to preserve as much wealth as possible for your loved ones. This balance can be difficult to achieve, especially when retirement can last decades. One strategy that can offer greater peace of mind is the split annuity, which creates a current income stream while preserving wealth for the future.
Read MorePosted On: SEPTEMBER 2021
As your child heads off to college, with little or no assets in his or her name, estate planning is probably the last thing on your mind. But while it may be difficult to think about, it’s a good idea for your child to have at least a basic plan in place to ensure that his or her wishes are carried out should the unthinkable happen.
Read MorePosted On: SEPTEMBER 2021
With most tax planning, there are certain strategies that are generally effective and shouldn’t be ignored. The same holds true for estate planning. Here are three essential estate planning strategies to consider that may help you achieve your goals.
Read MorePosted On: SEPTEMBER 2021
As many states remain struggling with the current surge in COVID-19 cases, the “new normal” demands social distancing in many areas of life. What does this mean for estate planning? Clearly, estate planning is as important today — or arguably more important — than ever. But how do you plan your estate and execute critical documents if you’re uncomfortable with face-to-face meetings or are required to self-quarantine?
Read MorePosted On: SEPTEMBER 2021
If your estate includes significant real estate investments, the manner in which you own these assets can have a dramatic effect on your estate plan. One versatile estate planning option to consider is tenancy-in-common (TIC) ownership.
Read MorePosted On: AUGUST 2021
Some people make video recordings of their will signings in an effort to create evidence that they possess the requisite testamentary capacity. For some, this strategy may help stave off a will contest. But in most cases, the risk that the recording will provide ammunition to someone who wishes to challenge the will outweighs the potential benefits.
Read MorePosted On: AUGUST 2021
If you’re the type who would rather order ala carte rather than a set entree, you might prefer a “self- directed” IRA. With this option, you may be able to amp up the benefits of a traditional or Roth IRA by enabling them to hold nontraditional investments of your choosing that can potentially offer greater returns. However, self-directed IRAs present pitfalls that can lead to unfavorable tax consequences.
Read MorePosted On: AUGUST 2021
Gift splitting can be a valuable estate planning tool, allowing you and your spouse to maximize the amount of wealth you can transfer tax-free. But in some cases, it can have undesirable consequences, so be sure that you understand the implications before making an election to split gifts.
Read MorePosted On: AUGUST 2021
In the early days of the COVID-19 pandemic, lawmakers enacted the CARES Act to provide some relief to the ailing economy. One of its provisions, meant to encourage charitable giving, temporarily suspended limits on tax deductions for certain charitable gifts made in 2020.
Read MorePosted On: AUGUST 2021
A will or revocable trust may form the core of your estate plan, but for most people, a substantial amount of wealth bypasses these traditional estate planning tools and is transferred to their loved ones through beneficiary designations. These “non-probate assets” may include IRAs and certain employer-sponsored retirement accounts, life insurance policies, and some bank or brokerage accounts.
Read MorePosted On: AUGUST 2021
If you have money invested in the stock market, you’re well aware of potential volatility. Needless to say, this volatility can affect your net worth, thus affecting your lifestyle. Something you might not think about is the potential effect on your estate tax liability. Specifically, your family might unexpectedly owe estate tax on your death if it occurs before the value of stocks or other assets drops precipitously. One strategy to ease estate tax liability is to allow your executor to elect to use an alternate valuation date.
Read MorePosted On: AUGUST 2021
Because of the COVID-19 pandemic and the resulting economic turndown in some areas, you may have family members in need of financial support. If you’re interested in lending money to loved ones in need, consider establishing a “family bank.” These entities enhance the benefits of intrafamily loans, while minimizing unintended consequences.
Read MorePosted On: AUGUST 2021
Although probate can be time consuming and expensive, one of its biggest downsides is that it’s public — anyone who’s interested can find out what assets you owned and how they’re being distributed after your death. The public nature of probate may also draw unwanted attention from disgruntled family members who may challenge the disposition of your assets, as well as from other unscrupulous parties.
Read MorePosted On: JULY 2021
Many people, when planning their estates, simply divide their assets equally among their children. But “equal” may not necessarily mean “fair.” It all depends on your family’s circumstances. Specifically, providing for grandchildren is one area where equal treatment may inadvertently result in unfairness.
Read MorePosted On: JUNE 2021
Estate planning isn’t just about what happens to your assets after you die. It’s also about protecting yourself and your loved ones. This includes having a plan for making critical medical decisions in the event you’re unable to make them yourself. And, as with other aspects of your estate plan, the time to act is now, while you’re healthy. If an illness or injury renders you unconscious or otherwise incapacitated, it’ll be too late.
Read MorePosted On: JUNE 2021
The “sandwich generation” is a large segment of the population. These are people who find themselves caring for both their children and their parents at the same time. As a result, estate planning — which traditionally focuses on providing for one’s children — has expanded in many cases to include one’s aging parents as well.
Read MorePosted On: JUNE 2021
You’ve likely spent a lot of time working with your advisor to plan your estate. While documents such as your will, various trusts and a power of attorney are essential, consider adding a “road map” to your plan.
Read MorePosted On: JUNE 2021
Owning assets jointly with one or more of your children or other heirs is a common estate planning “shortcut.” But like many shortcuts, it may produce unintended — and costly — consequences.
Read MorePosted On: MAY 2021
One benefit of the current federal gift and estate tax exemption amount ($11.7 million in 2021) is that it allows most people to focus their estate planning efforts on asset protection and other wealth preservation strategies, rather than tax minimization.
Read MorePosted On: MAY 2021
If you have minor children, choosing a guardian to care for them should you die unexpectedly is one of the most important estate planning decisions you must make. It’s also one of the most difficult. So difficult, in fact, that avoiding it is one of the most common reasons people put off drafting an estate plan.
Read MorePosted On: MAY 2021
Although much of estate planning deals with what happens after you die, it’s equally important to have a plan for making critical financial or medical decisions if you’re unable to make them for yourself.
Read MorePosted On: MAY 2021
For 2021, the federal gift and estate tax exemption has reached its highest level ever. Individuals may transfer up to $11.7 million by gift or bequest without triggering federal transfer taxes, while married couples can shield up to $23.4 million from tax.
Read MorePosted On: MAY 2021
One goal of estate planning is to avoid or minimize probate. This is particularly important if you own real estate in more than one state. Why? Because each piece of real estate titled in your name must go through probate in the state where the property is located.
Read MorePosted On: MAY 2021
Well-crafted, up-to-date estate planning documents are an imperative for everyone. They also can help ease the burdens on your family during a difficult time. Arguably, the most important document is your will.
Read MorePosted On: MAY 2021
Interest rates remain extremely low, enhancing the benefits of intrafamily loans. These loans allow you to provide financial assistance to loved ones — often at favorable terms — while potentially reducing gift and estate taxes. But what about families that lack the liquid assets to make such loans? Are there other options?
Read MorePosted On: MAY 2021
Even though the federal gift and estate tax exemption is currently very high ($11.7 million for 2021), there are families that still have to contend with significant federal estate tax liability. Plus, the exemption is scheduled to drop significantly in 2026, and reducing it sooner has been proposed.
Read MorePosted On: APRIL 2021
Our Virtual Symposium Last October was such a success and we received overwhelming feedback from our members to create two virtual symposiums this year as an opportunity for members to gain credits, learn and network with one another.
Read MorePosted On: APRIL 2021
Now that the federal gift and estate tax exemption has reached an inflation-adjusted $11.7 million for 2021, fewer estates are subject to the federal tax. And even though President Biden has proposed reducing the exemption to $3.5 million, it’s uncertain whether that proposal will pass Congress. If nothing happens, the exemption is scheduled to revert to an inflation-adjusted $5 million on January 1, 2026. Nonetheless, estate planning will continue to be essential for most families. That’s because tax planning is only a small component of estate planning — and usually not even the most important one.
Read MorePosted On: APRIL 2021
One advantage of inheriting an IRA from your spouse is that you are entitled to transfer the funds to a spousal rollover IRA. The rollover IRA is treated as your own IRA for tax purposes, which means you need not begin taking required minimum distributions (RMDs) until you reach age 72. This differs from an IRA inherited from someone other than a spouse, when the entire IRA balance must be withdrawn within 10 years of the original owner’s death. (Note that different rules apply to IRAs inherited before January 1, 2020.)
Read MorePosted On: APRIL 2021
If your family owns a vacation home, you know what a relaxing refuge it can be. This is especially true these days due to the limited travel options you may have because of COVID-19 pandemic restrictions. However, without a solid plan and ground rules that all family members agree to, conflict and tension may result in a ruined vacation — or worse yet, selling the home.
Read MorePosted On: MARCH 2021
A revocable living trust is often used to complement a will. For instance, you might transfer specific securities to the trust. Notably, these assets generally don’t have to go through the probate process, which can be time-consuming and expensive.
Read MorePosted On: MARCH 2021
It’s tax-filing season and you’re likely focused on your income or business tax returns. But don’t forget about another type of return. In 2020, if you made substantial gifts of wealth to family members you may have to file a gift tax return.
Read MorePosted On: MARCH 2021
For many people, the first thing they think of when they hear the words “estate plan” is a will. And for good reason, as it’s the cornerstone of any estate plan. But do you know what provisions should be included in a will and what are best to leave out? The answers to those questions may not be obvious.
Read MorePosted On: MARCH 2021
For many people, an important goal of estate planning is to leave a legacy for their children, grandchildren and future generations. And what better way to do that than to help provide for their educational needs? A 529 plan can be a highly effective tool for funding tuition and other educational expenses on a tax-advantaged basis. But when the plan’s owner (typically a parent or grandparent) dies, there’s no guarantee that subsequent owners will continue to use it to fulfill the original owner’s vision.
Read MorePosted On: MARCH 2021
Did you know that you can put restrictions on charitable donations you make through your estate? If you want the peace of mind that your donations are used to fulfill your intended charitable purposes, you’ll need to take the steps to add restrictions.
Read MorePosted On: FEBRUARY 2021
People sometimes keep assets hidden without letting their families know about their location or even that they exist. Similarly, they may have life insurance policies no one knows about. Using a fictional example, here’s why full disclosure of your assets to your family is recommended.
Read MorePosted On: FEBRUARY 2021
To gift or not to gift? It’s a deceptively complex question. The temporary doubling of the federal gift and estate tax exemption — to an inflation-adjusted $11.7 million in 2021 — is viewed by some people as a “use it or lose it” proposition. In other words, you should make gifts now to take advantage of the exemption before it sunsets at the end of 2025 (or sooner if lawmakers decide to reduce it earlier).
Read MorePosted On: JANUARY 2021
Now that the gift and estate tax exemption has risen to $11.7 million for 2021, you may be less concerned about these taxes. But if you have children or grandchildren in college or with medical expenses, you may want to take advantage of the exemption for direct payments of tuition and medical expenses. It can provide a valuable opportunity to reduce your potential gift and estate tax exposure down the road.
Read MorePosted On: JANUARY 2021
Did you know that the United States has the highest rate of children living in single parent households? According to the Pew Research Center, nearly a quarter (23%) of U.S. children under the age of 18 live with one parent. This is more than three times the share (7%) of children from around the world who do so. If your household falls into this category, ensure your estate plan properly accounts for your children.
Read MorePosted On: DECEMBER 2020
We live in uncertain times. There’s uncertainty about the economy as well as the possibility of tax increases to address the rising federal debt. For example, there’s renewed interest in proposals that would slash the historically high gift and estate tax exemption. In light of this uncertainty, it’s a good idea to consider estate planning tools that offer asset protection as well as flexibility to adjust your plans to changing circumstances. One such tool is the special power of appointment (SPA) trust.
Read MorePosted On: DECEMBER 2020
Valuation and estate planning go hand-in-hand. After all, the tax implications of various estate planning strategies depend on the value of your assets at the time they’re transferred.
Read MorePosted On: DECEMBER 2020
It’s often said that a main reason people put off creating an estate plan is because of the difficulty in choosing a guardian for their children. However, that decision is one of the most important estate planning decisions you must make.
Read MorePosted On: DECEMBER 2020
The need for a will as a key component of your estate plan may seem obvious, but you’d be surprised by the number of people — even affluent individuals — who don’t have one. A reason for this may be a common misconception that a revocable trust — sometimes called a “living trust” — obviates the need for a will.
Read MorePosted On: DECEMBER 31st 2020
If you’ve worked to build a large estate, you undoubtedly would like to leave a lasting legacy to your children and future generations. Educating your children about saving, investing and other money management skills can help keep your legacy alive.
Read MoreSenior Living Options, Knowing When Is The Right Time And Getting Prepared.
Read MorePosted On: DECEMBER 23rd 2020
Precise language is critical in wills, trusts and other estate planning documents. A lack of clarity may be an invitation to litigation. An example of this is the dispute that arose after Tom Petty’s death between his widow and his two daughters from a previous marriage. (The two parties have since resolved their differences and dismissed all litigation matters.)
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