By Anthony Grant, CPA, Tax Senior
ASL Family Wealth & Individual Tax Group
Imagine it’s your last day at work. You enter a crowded breakroom and share a giant cake with your friends and colleagues as you celebrate your retirement together. You pack up your things and step out the door one last time, the building you spent so many hours in, behind you. As you look out on the horizon you start to imagine what your golden years will look like. Perhaps you dream of that trip you’ve put off for so long, or spending more time with your kids and grandchildren, or staying up-to-date on the latest changes to retirement legislation… OK, maybe not that last one. Not to worry, we are here to help! (more…)
By Chris Madrid, CPA, Director, Tax & Advisory
ASL Family Wealth & Individual Tax Group
“Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes“. This is a famous quote by Benjamin Franklin and it still holds true today. However, what is currently uncertain is what will happen to the amount of estate and gift lifetime exemption and how to effectively estate plan now in light of that uncertainty. (more…)
Did you know that one of the most effective estate-tax-saving techniques is also one of the simplest and most convenient? By making maximum use of the annual gift tax exclusion, you can pass substantial amounts of assets to the younger generations without any gift tax.
In fact, by giving the maximum gifts in December 2021 and again in January 2022, you can reduce your estate by six figures if you’re being generous to multiple beneficiaries. (more…)
We regularly use the term “estate” when discussing planning and estate tax issues. However, we are speaking about a taxable estate in these circumstances. A “probate estate” is very different from a taxable estate, and is legally administered by state law. (more…)
The temporary reprieve is over. Due to the COVID-19 pandemic, Congress suspended the rules for required minimum distributions (RMDs) in 2020, including inherited accounts. But the rules have been restored for the 2021 tax year. Essentially, participants in qualified plans and IRAs who’ve reached their required beginning date must take 2021 distributions or potentially pay a hefty penalty.
The deadline for RMDs is December 31, 2021 (later for those that reach the required age in 2021), but you should get your ducks in a row before then. (more…)
A family with a disabled child faces difficult planning challenges. For many years, the most effective estate and financial planning tool for parents of a disabled child was a special needs trust (SNT). This trust type provides resources for the care of disabled children while preserving their eligibility for means-tested government benefits, such as Medicaid and Supplemental Security Income (SSI).
Another option available to families is the ABLE account. The Achieving a Better Life Experience (ABLE) Act was signed into law in 2014. It created Internal Revenue Code Section 529A, authorizing states to offer tax-advantaged savings accounts for the blind and severely disabled. (more…)
Life insurance is often an integral part of an estate plan. By acquiring life insurance coverage, you can provide liquidity when your family might need it the most, particularly if you’re relatively young. The policy’s proceeds can be used to help pay your mortgage, college tuition for your children, or various other expenses.
Of course, you also must account for taxes. Generally, you can avoid dire federal estate tax consequences, based in part by using your gift and estate tax exemption. However, the exemption is scheduled to decrease after 2025, creating more complications. For many families, creating an irrevocable life insurance trust (ILIT) to hold your life insurance policy is a common solution. (more…)
Are you inclined to help a charity for a period of time without ultimately giving up the property? Consider the benefits of a charitable lead trust (CLT). This type of trust is essentially the opposite of the charitable remainder trust (CRT), a better-known alternative (see Is a CRT A Better Option? below). With a CLT, the property reverts to family members — not the charity.
At the same time, the CLT provides a stream of annual income to the charity for a term of years. So everyone wins. (more…)
An art collection is a special asset to account for in an estate plan.
It goes without saying that your art collection, including paintings, sculptures, and other pieces of art, can represent a significant portion of your estate. Thus, it’s critical to account for these assets in your estate plan.
While you can apply many traditional estate planning strategies to an art collection, this asset type can present unique challenges. Of course, you’ll want to preserve the value of your collection and avoid unnecessary taxes but knowing how your collection will be managed and displayed after your death may also be of importance. (more…)