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Wednesday, December 12, 2018

Estate Planning Red Flag


Estate Planning Red Flag

You’re using an online form to draft your will

These days, you can do practically anything online that used to require a face-to-face contact. For example, you can buy clothing, do your banking and even download a form to write your own will. But a “do-it-yourself” will” is a risky proposition, especially if you have considerable wealth.

Even in days of yore, some people famously drafted their own wills, often with disastrous results. A will that isn’t executed properly under state law isn’t legally binding.
Read more . . .


Wednesday, December 12, 2018

Basis Consistency Rules May Come Into Play When Inheriting Property


BASIS CONSISTENCY RULES MAY COME INTO PLAY WHEN INHERITING PROPERTY

If you’re in line to inherit property from a parent or other loved one, it’s critical to understand the basis consistency rule. The tax law provides that the income tax basis of property received from a deceased person cannot exceed the property’s fair market value (FMV) as finally determined for estate tax purposes.

Current law

The current tax law regarding the basis consistency rule, passed in 2015, prohibits beneficiaries from arguing, as they did with some success in the past, that the estate undervalued the property and, therefore, they’re entitled to claim a higher basis for income tax purposes. The higher the basis, the lower the gain on any subsequent sale of the property.

The law also requires estates to furnish information about the value of such property to the IRS and the person who inherits it.


Read more . . .


Wednesday, September 19, 2018

Securities Laws Can Derail Your Estate Plan


Securities Laws Can Derail Your Estate Plan

It’s not uncommon for high-net-worth individuals to hold their assets in trusts, family limited partnerships or charitable foundation. If the assets held in this manner include interests in hedge funds or other “unregistered” securities, it’s important to ensure that the entity is qualified to hold such investments. Exemptions under federal securities laws require that investors in private funds and other unregistered securities qualify as “accredited investors” or “qualified purchasers.”

Learn the exemptions

Generally, companies or funds that offer securities for sale are subject to burdensome (and costly) registration and reporting requirements under the Securities Act of 1933, unless they fall within one of several exemptions. Perhaps the most common exemption is Rule 506(b) of Regulation D, which exempts sales of securities to an unlimited number of accredited investors plus up to 35 nonaccredited, “sophisticated” investors.
Read more . . .


Thursday, August 16, 2018

Understanding the Tax Angles of Self-Settled Trusts


NING, DINGS and WINGS

UNDERSTANDING THE TAX ANGLES OF SELF-SETTLED TRUSTS

NINGs, DINGs and WINGs may sound like characters in a new Pixar animated film. In reality, they’re the names bestowed on certain self-settled trusts (sometimes referred to as nongrantor trusts) in states providing a favorable tax environment for these trusts. The acronyms stand for Nevada Incomplete-gift Nongrantor Gift (NING) trusts, Delaware Incomplete-gift Nongrantor Gift (DING) trusts and Wyoming Incomplete-gift Nongrantor Gift (WING) trusts, respectively

If you’re noticing a trend — none of these three states impose an income tax on its residents — it’s no coincidence. The use of NINGs, WINGs and DINGs is tied directly to tax savings on the state level for high-income individuals.

Current tax landscape

Despite tax cuts implemented by the Tax Cuts and Jobs Act (TCJA), effective for 2018 through 2025, high wage earners can still face a hefty income tax bill.
Read more . . .


Thursday, August 16, 2018

Who Needs an Estate Plan?


WHO NEEDS AN ESTATE PLAN?


Quick answer: everyone

Despite what you might think, estate planning isn’t limited to only the rich and famous. In fact, your family is likely to benefit from a comprehensive plan that divides your wealth, protects your well-being and provides a compass for your family’s future.

Previously, avoiding or minimizing federal estate tax liability was a primary motivation for creating an estate plan. This isn’t as critical for most people now that the Tax Cuts and Jobs Act (TCJA) has doubled the federal gift and estate exemption from $5 million to $10 million, and the inflation adjusted amount for 2018 is $11.18 million.
Read more . . .


Monday, July 30, 2018

Understanding the Contents of a Will


Understanding the contents of a will

You probably don’t have to be told about the need for a will. It’s been said over and over again. But do you know what provisions should be included and what’s best to leave out? The answers to those questions may not be as obvious.

Basic provisions

Typically, a will begins with an introductory clause, identifying yourself along with where you reside (city, state, county, etc.).
Read more . . .


Monday, July 30, 2018

Should a Tax Apportionment Clause be in Your Estate Plan?


Should a tax apportionment clause be in your estate plan?

Even though the Tax Cuts and Jobs Act doubled the gift and estate tax exemption to $10 million beginning this year (when indexed annually for inflation, the amount is $11.18 million for 2018), there are many families that still have to content with significant federal estate tax liability. Plus, there may be taxes levied on your estate by your state. If that’s the case with your estate, it’s important to consider a tax apportionment clause in your will or revocable trust.

How to apportion estate tax

An apportionment clause specifies how the estate tax burden will be allocated among your beneficiaries.
Read more . . .


Monday, July 30, 2018

Estate Planning Pitfall


   

Estate Planning Pitfall

You’re not paying enough attention to state estate tax laws

The Tax Cuts and Jobs Act (TCJA) provides greater flexibility in estate planning for many taxpayers. Under the TCJA, the federal gift and estate tax exemption is increased from $5 million to $10 million, subject to inflation indexing. The indexed amount for 2018 is $11.18 million.

The exemption is effectively doubled to $22.
Read more . . .


Wednesday, May 16, 2018

CHARITABLE GIVING IN A POST-TCJA WORLD


Insight on Estate Planning

CHARITABLE GIVING IN A POST-TCJA WORLD

What you need to know in the wake of the new tax law

The Tax Cuts and Jobs Act (TCJA) represents the biggest overhaul of the tax code in more than three decades. Tax experts are still sorting out all the intricacies. But this much is clear: the TCJA will have a significant impact on estate planning and related aspects, such as charitable giving.

Even though the TCJA reduces tax incentives for making charitable donations for some people, it encourages contributions for others. Let’s take a closer look at the new tax landscape and how it relates to charitable giving.
Read more . . .


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