Top 10 (11?) Dangers Facing Senior Citizens
Here is a great little slideshow on top estate planning priorities to avoid tragedy and missed opportunity (“Top 10 Dangers Facing Senior Citizen Clients”) which I summarize below (adding a little California-relevant detail of my own), with a link...HEET Trust Can Avoid GST Tax Heat, Teach Grandkids How to Pack Heat, and Help the NRA too!
[UPDATE 30 September 2024 — The Fall of the Republic and likelihood of reduced exclusions from death tax are leading to renewed interest in this technique. While there remains little guidance, if used conservatively it should work for extremely large...Should An Aging Parent Transfer the House to Her Kids?
This Virginia attorney writes a very good article summarizing some of the problems of transferring real estate to a child as an alternative to actual estate planning. Capital gains tax due to loss of basis step-up, medicaid lookback (California’s medi-cal...California’s new Uniform Trust Decanting Act brings Opportunity, Risk
California recently (9/14/18) joined a few other states that have enacted the Uniform Trust Decanting Act. A lot of states have decanting statutes, several dozen in fact, but they vary greatly and this uniform act is more restrictive than those in some of the more...Life Insurance Planning After Tax Reform
In addition to changes in life insurance purchase reporting requirements and basis calculation, the recent Tax Cuts and Jobs Act brings the following changes to life insurance planning: The doubling of the estate tax exemption will eliminate the need for most...FPC 20180327: Property Tax Reassessment
One of the hidden costs of cheap estate planning is the unexpected and very unpleasant surprise of property tax reassessment. We’ll focus on this topic at our Family Protection Clinic (aka estate planning seminar) lunch meeting on Tuesday, March 27, 2018. (Our...FPC 20180313: Flexibility to Avoid Taxes & Gun Control
When it comes to taxes and gun control, it’s hard to keep up with Sacramento and DC. One way is to have your estate planning attorney on speed dial. A smarter way is to have that attorney draft with flexibility in mind, so you can have peace of mind. We’ll focus...FPC 20180123: Inherited IRA Protection
For many families, a large portion of the estate rests in a retirement plan which, on its own and without further planning, is essentially a separate estate plan with assets left completely unprotected. How do you protect and preserve the inheritance of retirement...Clawback Under New Tax Law
Under either formulation of purpose, that is, the “unified” approach or the “fairness” approach, in issuing its regulations, the IRS would be compelled to use the basic exclusion amount in effect the time of the decedent’s death for purpose of computing the...Tax Act Signed — what does it mean for Estate Planning?
The Tax Cuts and Jobs Act((In both the House and Senate versions, the bill was called the “Tax Cuts and Jobs Act.” Due to a last-minute change in response to a procedural issue, the official title was changed to “To provide for reconciliation pursuant to titles...A modest proposal re estate tax: Get self-defense training!
The expected new Tax Cut and Jobs Act (not the official title anymore, but i’m sticking with it) doubles the applicable exclusion amount for estate tax but reverts to current law on January 1, 2026. That sunset provision reminds me of this funny old video...Strategic Estate Planning in Uncertain Times
Don’t just sit there, plan but plan flexibly! Article here: Your clients may think that their best course of action is to hold tight until the political landscape becomes clear. This is an attitude that could cost them. Now is not the time to wait for...Rumors of Trust Demise Greatly Exaggerated
Some of the reasons listed here: Despite the proposed high estate, GST and gift tax exemptions and whether there’s repeal, trusts will remain extremely popular for many non-tax reasons, including: family governance/succession/education; ability to override the...House GOP Tax Plan Avoids Carryover Basis Regime
So far, the House GOP’s proposed tax plan avoids the carryover basis regime that would have been necessary if it would have imposed a capital gains tax at death to replace the estate and generation skipping transfer taxes, as the Trump campaign seemed to favor....California Supreme Court Holds Localities Can Apply Documentary Transfer Tax to Transfers of Interests in Property-Holding Entities
The California Supreme Court, in a 6-1 decision, has held that a city or county may impose documentary transfer tax on the transfer of the ownership interests in a legal entity that owns real property located in the locality. In 926 North Ardmore Avenue, LLC v....Rev Proc 2017-34 simplifies getting extension for portability election
Rev. Proc. 2017-34 SECTION 1. PURPOSE This revenue procedure provides a simplified method for certain taxpayers to obtain an extension of time under § 301.9100-3 of the Procedure and Administration Regulations to make a “portability” election under §...Latest State To Repeal Estate Tax: Delaware
Despite facing a $400 million budget hole, Delaware is the latest state to repeal its estate tax—as of Jan. 1, 2018. Democratic Governor John Carney Jr. signed a stand-alone estate tax repeal bill today, just two days after signing the 2018 state budget, which...Steve Oshins’ State Rankings Charts Fight Big State Gov Attacks on Trusts
Pick the best state for your dynasty trust, while you fight state income tax drag, protect assets from creditors, and decant to your heart’s content with Steve Oshins’ state rankings charts: Steve Oshins | State Rankings Charts Steve is a nice guy...5 Ways Trusteed IRAs Can Keep A Good Thing Going
Just so we’re clear — I don’t sell IRA’s, I draft trusts, including the type that will make your IRA’s actually work as intended. Read the article, but keep in mind that although “trusteed IRAs” are an improvement over the...Eleventh Circuit Limits Valuation Discounts
The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a Tax Court’s ruling regarding a discount for lack of control and lack of marketability.1 The Tax Court had rejected an estate’s expert’s 31.7 percent discount conclusion and agreed with the...Trump’s Tax Plan Raises Questions for Estate Planners
The tenuousness of the President’s plan raises a whole host of additional questions. These include: (1) whether the President’s plan would be coupled with a step-up in basis at death versus carryover basis (carryover basis would effectively increase total taxes...Six Times A Financial Advisor Should Call An Estate Planner
If advisors don’t understand estate planning as well as they think they do (and tell their clients they do) then why do we as estate planning attorneys ingratiate ourselves to them by perpetuating the myth that “they are the quarterbacks” who...Ten Estate Planning Strategies While Waiting for Tax Reform
The election of Donald J. Trump to the presidency and Republican control of both houses of Congress make estate tax reform extremely probable in the next two years. However, given the new administration’s other proclaimed priorities, including the repeal of...SLATs Provide Flexible Plans for Many Clients
In the current environment of uncertainty, many married clients should consider implementing non-reciprocal spousal lifetime access trusts (SLATs). This strategy can provide a flexible framework for a wide range of clients. The technique can be adapted for more...Professionals Could Have Lower Tax Rates Than Their Employees
The way things ought to be! Under the Trump plan, the top income tax rate of 35 percent would be reduced to 15 percent for pass-throughs. The pass-through rate under the W&M plan would be 20 percent (instead of a top rate of 35 percent). Source:...Is It Never or Now?
And for those with qualified retirement plans, it may be time to seriously consider charitable remainder unitrust (CRUT) planning. In the case of qualified long-term appreciated property, outright gifts can be used to offset other taxable income, while bypassing the...Offshore Considerations For Non-UK Domiciliaries
On April 6, comprehensive tax changes went into effect in the United Kingdom (U.K.) that impact wealth planning considerations for certain individuals who spend a significant amount of time in the U.K., but who are domiciled outside of the country. Source:...President Trump Signs Financial Services Executive Orders – YouTube
QDOT-ting I’s and Crossing T’s: Estate Tax Planning for Non-United States Citizen Spouses
Good examples in this article on QDOT planning: The examples above illustrate the general rules applicable to gratuitous lifetime transfers of property, or gifts. The following examples illustrate the general rules applicable to transfers at death: Source:...What Is Community Property, and What Are Community Property Trusts?
Community property is treated preferentially by the tax code — it gets a full step-up in basis at death, instead of only stepping up the decedent’s half as in joint tenancy. (Could also step down if the market timing is unlucky, but that is rare.)...Tax Havens Can Be Surprisingly Close to Home
Nations lose hundreds of billions of dollars every year through tax evasion and avoidance facilitated by havens. Gabriel Zucman, an economist at the University of California, Berkeley, has estimated that as of 2013, about 10 percent of the world’s...New Commodity ETFs Structured to Avoid Need for K-1 Filing
ETF Securities Group, a U.K.-based asset manager, launched three ETFs on the NYSE Arca exchange that track the Bloomberg Commodity Indices, on March 31. The funds are among thousands traded on the exchange but stand out because they are broad-based and...The flexibility of stretch IRAs: Learn how your IRA can benefit your spouse and other beneficiaries
IRA stretch is great in theory, but your beneficiary can withdraw the principal at any time and there is no asset protection. As an estate planning attorney, I can make the stretch real by using an asset-protected standalone IRA Beneficiary Trust, separate from...States With the Highest (and Lowest) Taxes for Retirees
In general, the most tax-friendly states for retirees are, in order, Alaska, Delaware, Georgia, Nevada, and Wyoming, according to the J.P. Morgan report. The least tax-friendly states, in order, are New Jersey, Connecticut, New York, Maine, and Vermont. Property taxes...Should you use your retirement savings to pay for kids’ college? – MarketWatch
The kids can work their way through college like we did. ‘Should I dip into my retirement account to pay for college?’People do it, but most financial professionals advise against it. At the very least, experts say, you should limit such withdrawals, so as not...IRS Recognizes Retroactive Validity of GRAT Based Upon Court Reformation
In this matter, the draftsman failed to include language prohibiting the trustee from issuing a note, other debt instrument, option or other similar financial arrangement in satisfaction of the annuity obligation as required by § 25.2702-3(d)(6) of the Gift Tax...Estate Planning Pitfall: You reside in a state with high estate tax
Sacramento is at this moment plotting to bring back the estate tax here. Also, you might own property, or plan to retire, in one of these states. Do you have a flexible estate plan? Reforms being debated by Congress could repeal the federal estate tax with...Conflicted Art Appraisals Lead to $1.77 Million Estate Tax Deficiency
Recently, in Estate of Kollsman v. Commissioner (T.C. Memo. 2017-40), the U.S. Tax Court held that an art collector’s estate significantly underreported the value of two artworks for estate tax purposes. The problem: the estate relied on appraisals by an...Make GRAT Payments to Avoid Subjecting Assets to Gift Tax
A GRAT must be drafted to comply with the requirements set forth in the applicable Treasury Regulations under Section 2702. Unfortunately, the regulations don’t resolve all issues, such as whether there’s a minimum or maximum term for a GRAT, or whether a GRAT...Do You Still Need An Estate Plan If There Is No Estate Tax?
In other words, a repeal of the estate tax would really only impact those clients with a net worth north of $11 million. That’s why Natanya told me that most of her moderately wealthy clients have already rounded the corner from thinking about taxes to focusing...Dynastic Gamesmanship: Did David Rockefeller’s Crafty Trust Work Leave the IRS Holding the Bag?
The trust rules have evolved over the last eight decades. For one thing, depending on the state, a trust created now for David’s own grandchildren and beyond may never need to terminate.It could theoretically run forever, eternally beyond IRS reach if run...Term Life Insurance and Pre Liquidity Planning
From a planning perspective, illiquid shares provide a challenging dilemma. Restricted shares can generate a high balance sheet net worth and high estate value, but oftentimes without the corresponding liquidity to fund the shareholder’s estate tax liability....FATCA Repeal On Agenda Of U.S. Republicans
“FATCA has wrecked [sic] havoc on the global financial system, turned 8 million Americans overseas into financial pariahs, violates other countries’ sovereignty, and is damaging for American jobs and therefore the American and global economies,” he said....Tax Reform Bill On the Front Burner
In short, the ground has been laid for quick action in the House of Representatives the moment the health care debate concludes. Source: Tax Reform Bill On the Front BurnerCharitable Divorce Planning?
Charitable planning coordinated with dissolution planning merits serious examination. The work involved is well worth the effort to assure divorcing parties have maximized the use of all marital assets in a tax-efficient manner. The four techniques are...Tax Law Update: April 2017
The loss of income tax revenue would be the product of income tax saving strategies that would become viable in the wake of gift tax elimination. For example, without a gift tax, the use of a “straw taxpayer” would likely become a prevalent income tax planning...Avoid Taxable Gifts in 2017
Even though in our current environment, paying gift taxes could save estate taxes, and is therefore a rational strategy, our clients won’t view it this way if, this year or next, the estate tax is repealed. And this is so, even if the estate tax is repealed...Re-examining Your Client’s Trust-Owned Life Insurance Policy
Unfortunately, many wealth management professionals fail to view the underlying asset inside the trust—the life insurance policy itself—the same way they would consider other assets (e.g., stocks, bonds and real estate) and rarely re-examine the life insurance...McConnell: Tax reform unlikely by August
Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday poured cold water on the Trump administration’s goal of completing tax reform by the August recess. Source: McConnell: Tax reform unlikely by August | TheHill
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