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Estate Planning

Friday, January 29, 2021

Consider all the Angles of Joint Ownership


CONSIDER ALL THE ANGLES OF JOINT OWNERSHIP

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 woe. You must also be aware of all the implications.

2 types of joint ownership

As the name implies, joint ownership requires interests in property by more than one party.
Read more . . .


Friday, January 29, 2021

Does a Qualified Charitable Distribution Make Sense This Year?


DOES A QUALIFIED CHARITABLE DISTRIBUTION MAKE SENSE THIS YEAR?

A unique provision in the tax code allows certain retirees to avoid tax on transfers made directly from a traditional IRA to a qualified charitable organization. Although one of the main attractions of a qualified charitable distribution (QCD) has been negated for 2020, there are still several viable reasons for making a QCD this year.

At the same time, charities that are in dire need of funding during the COVID-19 pandemic will greatly appreciate your generosity.

The back story

Normally, distributions from traditional IRAs are taxable at ordinary income tax rates, currently reaching as high as 37%. If you take money from an IRA and donate it to a qualified charity, it’s deductible on your annual tax return if you itemize deductions.
Read more . . .


Friday, January 29, 2021

Silent Trusts


     

Shh!

THIS IS A SILENT TRUST, LET'S KEEP IT QUIET!

Generally, estate planning advisors recommend that you be upfront with family members about how you plan to divide your assets. For example, you might hold a family meeting or write a letter to accompany your will. However, if you’re using a “silent trust,” sometimes referred to as a “quiet trust,” you’ll have keep it to yourself.

A silent trust limits the amount of information shared with beneficiaries or, in some cases, keeps the existence of the trust secret. This trust type offers many benefits, but also a few drawbacks.
Read more . . .


Friday, October 16, 2020

HEALTH SAVINGS ACCOUNT (HSA)


HSAs

Understanding the health savings and estate planning benefits

In addition to being a viable option to reduce health care costs, a Health Savings Account (HSA) can positively affect your estate plan because its funds grow on a tax-deferred basis. An HSA is similar to a traditional IRA or 401(k) plan in that it’s a tax-advantaged savings account funded with pretax dollars. Funds can be withdrawn tax-free to pay for a wide range of qualified medical expenses.

ABCs of an HSA

To provide these benefits, an HSA must be coupled with a high-deductible health plan (HDHP). For 2020, an HDHP is a plan with a minimum deductible of $1,400 ($2,800 for family coverage) and maximum out-of-pocket expenses of $6,900 ($13,800 for family coverage).
Read more . . .


Friday, October 16, 2020

HOW DOES THE SECURE ACT AFFECT ESTATE PLANNING


HOW DOES THE SECURE ACT AFFECT ESTATE PLANNING

The Setting Every Community Up for Retirement Enhancement (SECURE) Act is the biggest retirement planning law in decades. However, when all is said and done, the new law may have just as significant an impact on estate planning, especially if younger individuals are in line to inherit IRA or qualified retirement plan accounts.

Key SECURE Act Provisions

The SECURE Act includes noteworthy provisions for both individuals and businesses. (See “Nothing personal, strictly business” at X for business-related provisions.) Here’s a summary of the key tax law changes for individual retirement-savers.
Read more . . .


Friday, October 16, 2020

TO FILE OR NOT TO FILE?


TO FILE OR NOT TO FILE?

A gift tax return doesn’t always have to be filed.....
Read more . . .


Wednesday, September 30, 2020

Letter of Instructions


Letter of Instructions

Make your thoughts crystal clear to your family

Generally, every estate plan requires a will, but this main attraction may be complemented by other documents, like a letter of instructions. The letter, unlike a valid will, isn’t legally binding, but can be valuable to surviving family members.

If you haven’t done so already, draft a letter of instructions and, most important, make sure that others know where and how to locate it.

The basic elements

Although the content can vary from person-to-person, one of the main purposes of a letter of instructions is to provide details on final wishes that haven’t been covered in the will. Think of the letter as a way to fill in some of the “gaps” or resolve matters left open to interpretation.
Read more . . .


Wednesday, September 30, 2020

Beware of the Generation-Skipping Transfer Tax


Beware of the Generation-Skipping Transfer Tax

Thanks to recent tax law changes, most families can avoid liability for federal estate and gift taxes. However, there’s a lesser-known tax whammy that can hit wealthy individuals without warning: the generation-skipping transfer (GST) tax. As its name implies, the GST tax generally applies to transfers that “skip” a generation.

Nevertheless, with astute estate tax planning, including the use of a generous lifetime gift tax exemption, you may able to sidestep any dire consequences under the GST tax, or at the least minimize its impact.

History of the GST Tax

The genesis of the GST tax goes back to the 20th century.
Read more . . .


Wednesday, September 30, 2020

7 Deadly Estate Planning Sins


7 Deadly Estate Planning Sins

According to literature, the "seven deadly sins” are lust, gluttony, greed, laziness, wrath, envy and pride. Although individuals may be guilty of these from time to time, other types of “sins” can be fatal to an estate plan if you’re not careful. Here are seven transgressions to avoid.

Sin #1: You don’t create an estate plan. The first estate planning sin is the most basic.
Read more . . .


Thursday, July 23, 2020

ESTATE PLANNING PITFALL


Estate Planning Pitfall

You Haven’t Addressed Pets in your Estate Plan

Is your pet like a member of the family? If so, you may want to revise your estate plan in the event that your pooch or feline outlives you, just like other family members. The optimal approach may be to use a so-called “pet trust.”

Pet trusts have been around for decades, but they’ve been gaining in popularity the last few years. Minnesota recently became the last state in the union to approve these arrangements. Now, a pet trust can be established anywhere in the country.
Read more . . .


Thursday, July 23, 2020

THINKING ABOUT A ROTH IRA CONVERSION


Thinking about a Roth IRA Conversion?

Now may be the Ideal Time

Roth IRAs offer significant financial and estate planning benefits. If you have a substantial balance in a traditional IRA and are considering converting it to a Roth IRA, there may be no better time than now. The Tax Cuts and Jobs Act (TCJA) reduces individual income tax rates through 2025. By making the conversion now, the TCJA both enhances the benefits of a Roth IRA and reduces the cost of converting.

Roth IRA Estate Planning Benefits

The main difference between traditional and Roth IRAs is the timing of income taxes.
Read more . . .


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