Posts Tagged Estate Planning

How The Portability Provision Can Double Your Exemption From Federal Estate Tax

On December 24, 2020   /   Blog  
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How The Portability Provision Can Double Your Exemption From Federal Estate Tax

For legally married couples, the portability provision allows for the transfer of the federal estate tax exemption from the estate of a spouse who passes away to the estate of the surviving spouse. Given that the maximum federal estate-tax exemption in 2019 is $11.4 million per person, by making use of the portability provision, the federal exemption upon the second spouse’s death can increase from $11.4 million to $22.8 million. Portability was first introduced as part of the Tax Relief, Unemployment Re-authorization, and Job Creation Act of 2010 (“TRA 2010”), and became effective for married persons dying on or after January 1, 2011. While the winds of political change have led to calls for a reduction in the exemption over the years, there is no plan to phase out the portability provision any time soon. In order to take advantage of the portability provision, IRS Form 706 should be filed

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Think Twice Before Deciding To Serve As Trustee

On December 22, 2020   /   Blog  
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If you have been asked to serve as a trustee, chances are you were initially flattered by the request. After all, it is quite an honor—a parent or other loved one thinks highly enough of you to entrust you with the management of a major portion of their life’s savings. However, before agreeing to serve as trustee, it is important to consider the responsibilities involved. Administering a trust typically involves all of the following duties, and sometimes many more: Locating and protecting trust assets Collecting life insurance policies, annuities, and retirement accounts that name the trust as the primary beneficiary Coordinating settlement of the estate with the personal representative if a probate administration is necessary Obtaining the values of all trust assets at the time of the trustmaker’s death. These assets include real estate and business interests Ascertaining and paying off all of the trustmaker’s debts from funds remaining in

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The Benefits and Risks of Giving Children Their Inheritances While You Are Alive and Well

On December 15, 2020   /   Blog  
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The Benefits and Risks of Giving Children Their Inheritances While You Are Alive and Well

According to a Merrill Lynch retirement study, 60 percent of people over the age of 50 would rather give inheritances sooner rather than later. Why? Many say they simply want to be there to enjoy helping their children pursue their dreams and realize their goals. If you are interested in giving inheritances to your children while you are alive rather than after you pass away, you must consider a number of issues. For example, one of your children might need assistance now to pay off student loans or other debt, while his or her siblings may not. Or, perhaps one of your children is starting a business and would benefit greatly from your gift. The question is, if you give money to one child now, do you have a responsibility to give the same gift to your other children? The key to solving this thorny issue is to speak openly

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Planning Tips For Singles

On December 8, 2020   /   Blog  
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Planning Tips For Singles

The 2013 United States Census indicated that 54 percent of women over the age of 65 were not married. The figure for men over 65 was 27 percent. There are many reasons for this, of course, including divorce, the death of a spouse and changes in the way couples today view marriage. However, one thing unmarried people seem to have in common is that their planning needs can be quite different from those of married couples. And, according to an article in the Wall Street Journal, many singles are unprepared for retirement. For example, a Rand Corporation study showed that 20 percent of married couples will not save enough for retirement, whereas 35 percent of single men and 49 percent of single women will enter retirement financially unprepared. Why is there such a large disparity. One reason is that there are factors working to lower singles’ income and investible resources.

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Is It Better To Buy Or Rent A Home In Retirement?

On December 1, 2020   /   Blog  
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Is It Better To Buy Or Rent A Home In Retirement?

Maybe you’re looking to relocate to a state you’ve always dreamed about living in. Or perhaps you just want to downsize to a more manageable property. Whatever the reason, the decision whether to buy or rent a home in retirement is a difficult one. A recent article in Consumer Reports Magazine offers some helpful advice on making this decision. One of the most important factors to consider is how long you expect to live in your new home. Retirement does not necessarily mean you’ll never want (or need) to move again. The shorter you reside in the home, the less financially attractive purchasing it becomes. You will have less time to recoup closing and moving costs, and if you finance the home, you will have little equity in the new property when you sell it. In addition, the federal income tax reduction on mortgage interest may be less advantageous if

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Make Sure Your Revocable Living Trust Is Properly Funded

On November 24, 2020   /   Blog  
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Make Sure Your Revocable Living Trust Is Properly Funded

You’ve taken the time to plan for the financial well-being of your loved ones and yourself. You’ve created a customized estate plan to address your goals and concerns. Your plan includes one of the most powerful estate planning tools out there, the Revocable Living Trust, which allows your heirs to avoid probate upon your death and provide for management of your assets without interference from the court should you become disabled or otherwise incapacitated. All is well and good—unless you have not taken the steps necessary to fund your trust. Without proper funding, your trust is worth no more than the paper it is written on. It’s hard to believe, but many families take the time to create a comprehensive estate plan, together with a Revocable Living Trust, then fail to properly fund the trust. And even though a Will may provide that all assets pour over into your trust

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An Introduction to Special Needs Trusts

On November 17, 2020   /   Blog  
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An Introduction to Special Needs Trusts

For many families with a special needs child, a special needs trust is one of the most important components of the family’s overall estate plan. A properly designed and implemented special needs trust can provide a number of important benefits. Maximize quality of life while protecting eligibility for government assistance. A special needs trust allows you to provide funds that can help improve the quality of life for your special needs loved one without jeopardizing eligibility for necessary government assistance, such as Supplemental Security Income (SSI). Funds in the trust can be used for all of the following and more: Medical procedures or therapies not available through government assistance Supplemental nursing home care and private companion services Travel expenses Entertainment expenses such as movies, concerts or electronic equipment Fees for guardians and attorneys Other expenses, services or products not provided by a government assistance program Lower costs for healthcare services.

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Family Feuds—When Heirs Fight Over Assets With Sentimental Value

On November 10, 2020   /   Uncategorized  
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Family Feuds—When Heirs Fight Over Assets With Sentimental Value

When we think about heirs fighting over assets, it is the big ticket items that typically come to mind, such as the family home, investments, bank accounts and the like. However, it is often items of sentimental value—a mother’s necklace, for example, or a father’s watch—that cause the most contention. This is particularly true in the case of blended families. Worse, battles over sentimental assets often lead to hard feelings that can last for years or even permanently sever relationships between family members. How can you prevent your heirs from fighting over items with sentimental value? Many people believe that a statement in a will or trust that basically says ‘tangible personal property should be divided as my heirs see fit’ will solve the problem. However, this can lead to a host of potential conflicts. A better approach is to put specific items that you believe are of interest to

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Do You Need A Prenuptial Agreement?

On November 3, 2020   /   Blog  
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Do You Need A Prenuptial Agreement?

Okay, so you popped the big question, and he or she said yes! Whew, what a relief! Now there’s so much to do, so many plans to make: the guest list, the invitations, the reception, the band, the cake, the honeymoon…  the prenup? While it is hardly the most glamorous aspect of planning a wedding and a life together, many couples should at least discuss it. Why? A prenuptial agreement can protect you from financial loss in case your relationship breaks down—no small concern when you consider that half of all marriages end in divorce. Is a prenuptial agreement a good idea for you and your intended spouse? Probably, if any of the following scenarios apply: Either of you has children from a previous marriage You own a business or are involved in a family-run company Either of you has significant assets that you want to keep separate One of

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Planning Options For Parents of Troubled Adult Children

On October 27, 2020   /   Blog  
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Planning Options For Parents of Troubled Adult Children

For parents of adult children who suffer from mental illness or addiction to drugs or alcohol, the planning challenges combined with the strong emotions involved can seem overwhelming. The last thing you want to do is provide your loved one with assets that enable addiction or, in the case of mental illness, violate limitations on the number of assets a person can have and still qualify for government benefits. A major problem faced by parents of troubled adult children is admitting that their son or daughter is not simply “going through a phase” and will “come around” over time. Another is trying to picture the child’s future. When children suffer from addiction or a mental illness such as schizophrenia, it is very difficult to make any type of prediction about what they will need financially or the type and level of care that will be required down the road. Periods

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