By Christine Collins Madrid, CPA, Tax Director
The past few years have been a roller coaster between the pandemic, the California wildfires, and the political climate. We have seen massive tax acts enacted, including the Tax Cuts and Jobs Act of 2017 that doubled the estate and gift tax exemption to $11.7 million for single filers and $23.4 million for joint filers (indexed for inflation). (more…)
It’s been said repeatedly: Don’t put all your eggs in one basket. Yet many individuals often disregard this saying. And it comes back to haunt them or their heirs at a future date.
If you’ve built up a substantial nest egg over the years, it’s likely you feathered it through various investments. This growth may have been fueled by one or two specific stocks. For instance, if you acquired Amazon or Apple before those stocks took off, you may be sitting on a goldmine. (more…)
Maybe you thought that a member of your immediate family — perhaps your spouse or oldest child — would serve as the executor of your estate. Or you may have planned for a close friend to handle these duties. But the person you assumed would be the obvious choice turned out not to be the best one for the job.
Notably, choosing the “wrong” executor could cause a multitude of problems. For example, missteps by this person could lead to financial or logistical troubles. He or she may make mistakes that hinder the probate process or jeopardize estate planning benefits. And the executor might make decisions that defeat your intentions. (more…)
By Anu Joshi, CPA, Senior Tax Manager
ASL Family Wealth & Individual Tax Group
California Proposition 19 – Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment (2020) – was approved on November 3, 2020, with a slim margin of 51.1% of voters supporting it. The proposition eliminates two provisions of Proposition 13 that were very beneficial to property owners. The effective date of the changes made by Proposition 19 are:
What do these changes mean for property owners? (more…)
There are many obstacles in the path to estate planning. One of the more difficult to overcome is when an elderly parent or family member refuses to cooperate or even acknowledge the need for estate planning measures. And this could lead to problems — such as family feuds and potential financial disasters — down the road.
You’ve probably spent a lot of time creating documents for your estate plan, including a will, trusts and a power of attorney. While these documents are essential for your plan, your family could also use a “road map” to navigate the aftermath.
Typically, the road map will be in the form of a “letter of instructions” or similar missive that isn’t legally binding. But it can still be a valuable source of information in trying times. This is especially true if your family is devastated by a loss due to COVID-19 or some other unexpected calamity. (more…)
Have you chosen the executor of your estate? How about the trustee for trusts you intend to establish? It’s important to select someone who’s capable of handling these duties on your family’s behalf.
In some cases, the executor of your estate and the trustee of your trusts will be the same person. In any event, it’s vital to designate a successor to both of these positions. (See Sidebar below, Provide a stand-in for these roles) (more…)
Many individuals incorporate charitable giving into their estate plans, providing assistance to their favorite charities while preserving sufficient assets for their heirs. Typically, the charitable donations are structured to maximize the tax benefits on the books.
Now, the Coronavirus Aid, Relief and Economic Security (CARES) Act increases those tax incentives. Under the CARES Act — adopted to address the fallout from the COVID-19 pandemic — taxpayers of all stripes may realize additional tax savings from charitable donations in 2020. (more…)
Whether you made intrafamily loans years ago or perhaps this year in response to a loved one’s financial troubles due to the COVID-19 pandemic, consider forgiving those loans. Why? A record-high gift and estate tax exemption amount and a low-interest-rate environment add up to an ideal time to forgive intrafamily loans.
Under the right circumstances, an intrafamily loan can be a powerful estate planning tool because it allows you to transfer wealth to your loved ones free of gift or generation-skipping transfer (GST) taxes — to the extent the loan proceeds achieve a certain level of returns. (more…)
