Individual Retirement Accounts (IRAs) allow investments to grow tax-free over time and can be an effective way to pass wealth to future generations. Distributions from an IRA are subject to income tax in the year of withdrawal. Required minimum distributions (RMDs), which are calculated based on the value of your IRA and your life expectancy, must be taken when you reach age 70 ½. (more…)
Insight on Estate Planning
Beginning in 2018, the Tax Cuts and Jobs Act (TCJA) effectively removed gift and estate tax liability concerns for many families. However, the favorable estate tax changes in the TCJA are currently scheduled to sunset after 2025, unless Congress takes further action. Notably, the TCJA provision that doubled the gift and estate tax exemption from $5 million to $10 million (adjusted annually for inflation) will revert to pre-2018 levels after 2025. (more…)
Obviously, qualified retirement plans such as 401(k) plans and IRAs are meant to provide retirement savings. However, if you’re fortunate and don’t have to draw heavily, if at all, on plan and IRA assets, you can preserve a tidy nest egg for your heirs.
In fact, if handled correctly, distributions can be stretched over the lifetimes of several generations. Thus, these vehicles become estate planning tools, as well as retirement planning tools. (more…)
The Tax Cuts and Jobs Act (TCJA) has reduced estate tax concerns for many families, but estate tax liability remains a concern for some. Notably, you may implement strategies in the wake of the TCJA that are designed to reduce future exposure to federal and state estate taxes.
One such option, a Crummey trust, remains a viable option. Despite its odd-sounding name, derived from the landmark case authorizing its use, the results are anything but crummy. (more…)
An estate planning rule of thumb is to review (and, if necessary, revise) your estate plan in light of major life events. Such events include a marriage, birth of a child and a divorce. A second marriage also calls for an estate plan review. You’ll want to provide for your current spouse but not inadvertently benefit your former spouse. And if you have children from each marriage, juggling their interests can be a challenge. (more…)
If you’re in line to inherit property from a parent or other loved one, it’s critical to understand the basis consistency rules. 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. (more…)
Today, you can do practically anything online that used to require face-to-face contact. For example, you can buy clothing, do your banking or 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. (more…)
The Tax Cuts and Jobs Act (TCJA) doubled the federal gift and estate tax exemption amount from $5 million to $10 million, adjusted annually for inflation. Combined with the unlimited marital deduction and other estate tax provisions, including portability of the exemption, a married couple can easily shelter more than $20 million from federal estate tax. (more…)
Virtually everyone needs an estate plan, but this isn’t a one-size-fits-all proposition. Even though each person’s situation is unique, general guidelines can be drawn depending on your current stage of life.
The early years
If you’ve recently embarked on a career, gotten married, or both, now is the time to build the foundation for your estate plan. And, if you’ve recently started a family, estate planning is even more critical. (more…)