Trusts come in all shapes and sizes. However, from an income tax perspective, there are basically two types: grantor trusts and nongrantor trusts. Generally, with a grantor trust all trust income is taxed directly to the grantor — the person establishing the trust — and assets in the trust may or may not be included in the grantor’s estate. (more…)
Insight on Estate Planning
A blog to spur thought and family conversations around managing and transferring family assets and wealth.
NextWhat’s New with the Kiddie Tax?
One of the outcomes of the Tax Cuts and Jobs Act is that children with unearned income may find themselves in a higher tax bracket than their parents. This is because, under the “kiddie tax,” as it’s sometimes referred to, a child’s unearned income is taxed according to the tax brackets for trusts and estates, under which the highest tax rates kick in at far lower income levels. The good news is that there are strategies to allow for family income shifting. (more…)
Q&A Regarding Guardianship
If you’re the parent of a newborn or toddler, you may be thinking about naming a guardian for your child. This can be a difficult decision, especially if you have a plethora of choices or, on the other hand, no one you can trust. Or perhaps you plan on petitioning the court for guardianship of a child. In either event, you must adhere to the legal principles under state and local law. (more…)
How Your Business AND Estate Plan Can Benefit from a Buy-Sell Agreement
A buy-sell agreement provides for the disposition of each owner’s business interest after a “triggering event,” such as death, disability, divorce, termination of employment or withdrawal from the business. However, to be effective, the agreement must include the appropriate provisions.
It also should be part of your estate plan if you have an interest in a family-owned or other closely held business. (more…)
Protect Your Will from Legal Challenges
You’ve probably seen it in the movies or on TV hundreds of times: A close-knit family gathers for the reading of the will of a wealthy patriarch or matriarch. When the terms are revealed, someone benefits at the expense of someone else, causing a ruckus. It may even come to blows. This “bad blood” continues to boil between estranged family members, who won’t even speak to one another. (more…)
Foreign Financial Accounts and How FBAR Reporting Can Affect Estate Planning
If you have a financial interest in, or signature authority over, foreign financial accounts with an aggregate value exceeding $10,000 at any time during the calendar year, you must file FinCEN Form 114, “Report of Foreign Bank and Financial Accounts” (FBAR). The Financial Crimes Enforcement Network (FinCEN) and the IRS have been stepping up enforcement of foreign account reporting requirements. Thus, it’s important to closely follow compliance rules to avoid penalty. (more…)
Estate Planning Pitfall - You Haven’t Made Formal Funeral Arrangements
It’s difficult for many people to think about their own mortality, and it’s not surprising to learn that many put off planning their funerals. Unfortunately, this lack of planning can result in emotional turmoil for surviving family members when someone dies unexpectedly.
Also, a death in the family may cause unintended financial consequences. Why not take matters out of your heirs’ hands? By planning ahead, as much as it may be disconcerting, you can remove this future burden from your loved ones. (more…)
The Ins and Outs of Electing to Use an Alternate Valuation Date
The stock market goes up, the stock market goes down. Just consider recent history. In 2018, stocks took one of their worst beatings since the Great Depression, with the Dow Jones Industrial Average (DJIA) falling 5.6% for the year and the S&P 500 down 6.2%. But the markets rebounded early in 2019, with both the DJIA and S&P 500 posting gains of more than 7% during the first six weeks of this year. (more…)
Charitable Remainder Trusts (CRTs) Continue to Be a Viable Estate Planning Strategy
Are you a multitasker? If so, you may appreciate an estate planning technique that can convert assets into a stream of lifetime income, provide a current tax deduction and leave the remainder to your favorite charity — all in one fell swoop. It’s the aptly named charitable remainder trust (CRT).
CRTs have been around for decades, and they continue to be a viable estate planning strategy in the wake of the Tax Cuts and Jobs Act (TCJA) and other recent tax legislation. (more…)