Despite what one might think, estate planning isn’t limited to only the rich and famous. Previously, avoiding or minimizing federal estate tax liability was a primary motivation for creating an estate plan. But with a generous gift and estate tax exemption of $11.18 million for 2018, this is less of a worry for most families. This article details other important benefits of having an estate plan. (more…)
Insight on Estate Planning
A blog to spur thought and family conversations around managing and transferring family assets and wealth.
NextEstate Planning Pitfall - You Haven’t Properly Funded Your Revocable Living Trust
A revocable living trust is often used to complement a will. For instance, you might transfer specific securities to the trust. Notably, these assets generally don’t have to go through the probate process, which can be time-consuming and expensive. They’re also generally protected from creditors and may be managed by professionals.
Thus, a living trust enables your beneficiaries to receive some of your wealth upon your death, with no complications. However, it won’t do anybody any good if the trust isn’t properly funded. (more…)
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 foundations. 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.” (more…)
NINGs, 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. (more…)
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 $22.36 million for a married couple. Thanks to the portability provision, the estate of a surviving spouse can use the unused portion of the exemption from the estate of the first spouse to die. (more…)
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.). It should also state that this is your official will and replaces any previous wills. (more…)
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 contend 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. (more…)
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. (more…)
The New Form 1040 - Navigating the Postcard
By Chris Madrid, CPA, Senior Tax Manager
ASL Family Wealth & Individual Tax Planning Group
The IRS recently released a draft of the new Form 1040, which has had a dramatic makeover. The new form is a large postcard-size document (half the normal page size), which may be a nod to President Trump’s campaign promise to simplify the tax code to the point that an average American could fill out their form on a postcard. Forms 1040EZ and 1040A have been eliminated, so all taxpayers will be using this new Form 1040 beginning with the 2018 tax year. (more…)