Articles

Life || Insurance

Who should own your life insurance policy?

If you own life insurance policies at your death, the proceeds will be included in your taxable estate. Ownership is usually determined by several factors, including who has the right to name the beneficiaries of the proceeds. The way around this problem is to not own the policies when you die. However, don’t automatically rule out your ownership either.

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A Crummey Trust Can Preserve the Annual Gift Tax Exclusion

A Crummey Trust Can Preserve the Annual Gift Tax Exclusion

Traditionally, taxpayers have looked for ways to make the most of the $14,000 annual gift tax exclusion, and using a Crummey trust is one way to do that.

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Estate

Tax Law Uncertainty Requires an Estate Plan That Can Roll With The Changes

Events of the last decade have taught us that taxes are anything but certain. Case in point: Congress is mulling abolishing gift and estate taxes as part of tax reform.

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Donating Artwork

Charitable giving pièce de résistance: Artwork donations

Charitable giving is a key part of estate planning for many people. If you’re among them and own valuable works of art, they may be ideal candidates for charitable donations during your life.

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Estate-Tax

Tax basis planning worth a look if estate taxes aren’t a threat

For many people today, income tax planning offers far greater tax-saving opportunities than gift and estate tax planning. A record-high gift and estate tax exemption — currently $5.49 million ($10.98 million for married couples) — means that fewer people are subject to those taxes.

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Estate-Tax

Estate tax relief for family businesses is available

If a substantial portion of your wealth is tied up in a family or closely held business, you may be concerned that your estate will lack sufficient liquid assets to pay federal estate taxes. If that’s the case, your heirs may be forced to borrow funds or, in a worst-case scenario, sell the business in order to pay the tax.

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Power of Attorney small

Have you properly funded your revocable trust?

If your estate plan includes a revocable trust — also known as a "living" trust — it’s critical to ensure that the trust is properly funded. Revocable trusts offer significant benefits, including asset management (in the event you become incapacitated) and probate avoidance. But these benefits aren’t available if you don’t fund the trust.

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Power of Attorney small

Powers Of Attorney

Estate planning typically focuses on what happens to your assets when you die. But it’s equally important (some might say more important) to have a plan for making critical financial and medical decisions if you’re unable to make those decisions yourself.

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Use a noncharitable purpose trust to achieve a variety of goals

Use a noncharitable purpose trust to achieve a variety of goals

Generally, trusts must have one or more human beneficiaries, but there’s an exception for certain "purpose" trusts. One type of purpose trust that you may be familiar with is the charitable trust. But don’t overlook the noncharitable purpose (NCP) trust as a potential tool for achieving your estate planning goals. (Read more...)


Beware the GST tax when transferring assets to grandchildren

Beware the GST tax when transferring assets to grandchildren

As you plan your estate, don’t overlook the generation-skipping transfer (GST) tax. Despite a generous $5.49 million GST tax exemption, complexities surrounding its allocation can create several tax traps for the unwary. (Read more...)


Don’t overlook tax apportionment when planning your estate

Don’t overlook tax apportionment when planning your estate

If you expect your estate to have a significant estate tax liability at your death, be sure to include a well-thought-out tax apportionment clause in your will or revocable trust. An apportionment clause specifies how the estate tax burden will be allocated among your beneficiaries. Omission of this clause, or failure to word it carefully, may result in unintended consequences. (Read more...)


The stretch IRA: A simple yet powerful estate planning tool

The stretch IRA: A simple yet powerful estate planning tool

The IRA’s value as a retirement planning tool is well known: IRA assets compound on a tax-deferred (or, in the case of a Roth IRA, tax-free) basis, which can help build a more substantial nest egg. But if you don’t need an IRA to fund your retirement, you can use it as an estate planning tool to benefit your children or other beneficiaries on a tax-advantaged basis by turning it into a "stretch" IRA. (Read more...)


IRS Simplifies Procedure For Obtaining Extension To Make Portability Election

IRS Simplifies Procedure For Obtaining Extension To Make Portability Election

Last month, the IRS issued a Revenue Procedure that allows certain estates to make a late portability election without first filing a ruling request. (Read more...)


Leaving specific assets to specific heirs

Leaving specific assets to specific heirs is an estate planning no-no

Planning your estate around specific assets is risky and, in most cases, should be avoided. If you leave specific assets — such as a home, a car or stock — to specific people, you could end up inadvertently disinheriting someone. (Read more...)


fraudulent transfer laws

Are you familiar with fraudulent transfer laws?

A primary goal of your estate plan is to transfer wealth to your family according to your wishes and at the lowest possible tax cost. However, if you have creditors, be aware of fraudulent transfer laws. In a nutshell, if your creditors challenge your gifts, trusts or other strategies as fraudulent transfers, they can quickly undo your estate plan. (Read more...)


Charitable Lead Trust

Is now the time for a charitable lead trust?

Families who wish to give to charity while minimizing gift and estate taxes should consider a charitable lead trust (CLT). These trusts are most effective in a low-interest-rate environment, so conditions for taking advantage of a CLT currently are favorable. Although interest rates have crept up in recent years, they remain historically low. (Read more...)


Videotaping your will signing may not produce the desired outcome

Videotaping your will signing may not produce the desired outcome

Some people make video recordings of their will signings in an effort to create evidence that they possess the requisite testamentary capacity. For some, this strategy may help stave off a will contest. But in most cases, the risk that the recording will provide ammunition to someone who wishes to challenge the will outweighs the potential benefits. (Read more...)


Are your retirement savings secure from creditors?

Are your retirement savings secure from creditors?

A primary goal of estate planning is asset protection. After all, no matter how well your estate plan is designed, it won’t do much good if you wind up with no wealth to share with your family. (Read more...)


It’s a matter of principle and trust when using a principle trust

It’s a matter of principle — and trust — when using a principle trust

For many, an important estate planning goal is to encourage their children or other heirs to lead responsible, productive lives. One tool for achieving this goal is a principle trust. (Read more...)


Prepaid funeral plans may not provide peace of mind

Prepaid funeral plans may not provide peace of mind

The cost of a funeral has increased steadily during the past two decades. In fact, once all funeral-related costs are factored in, the typical traditional funeral service will cost an average family $8,000 to $10,000. (Read more...)


dgfd

Worried about challenges to your estate plan? Make it no contest

Estate planning is all about protecting your family and ensuring that your wealth is distributed according to your wishes. So the idea that someone might challenge your estate plan can be disconcerting. One strategy for protecting your plan is to include a "no-contest" clause in your will or revocable trust (or both). (Read more...)


Asset valuations and your estate plan go hand in hand

Asset Valuations And Your Estate Plan Go Hand In Hand

If your estate plan calls for making noncash gifts in trust or outright to beneficiaries, you need to know the values of those gifts and disclose them to the IRS on a gift tax return. For substantial gifts of noncash assets other than marketable securities, it’s a good idea to have a qualified appraiser value the gifts at the time of the transfer. (Read more...)


Life insurance and an estate plan may not always mix well

Life insurance and an estate plan may not always mix well

A life insurance policy can be an important part of an estate plan. The tax benefits are twofold: The policy can provide a source of wealth for your family income-tax-free, and it can supply funds to pay estate taxes and other expenses. (Read more...)


Family joint title to property

Be aware of the ins and outs of holding joint title to property

Owning assets jointly with one or more children or other heirs is a common estate planning "shortcut." But like many shortcuts, it can produce unintended — and costly — consequences. (Read more...)


Will your favorite charity accept your donation?

Will your favorite charity accept your donation?

If your estate plan includes charitable donations, be sure to discuss any planned gifts with the intended recipients before you finalize your plan. This is particularly important for donations that place restrictions on the charity’s use of the gift, as well as donations of real estate or other illiquid assets. (Read more...)


Grandchild

Direct tuition payments benefit your grandchild and your estate plan

Grandparents often want to play a role in financing their grandchildren's education. If you're one of them, it's important to consider the impact that different financing options will have on your estate plan. (Read more...)


Family

Divorce necessitates an estate plan review

There are few events that can completely upend a person's life more than divorce. Of course, there's the emotional toll on you and your family to contend with, but you also have to consider the divorce's impact on your estate plan. (Read more...)


Family

Keep family matters out of the public eye by avoiding probate

Although probate can be time consuming and expensive, perhaps its biggest downside is that it’s public — anyone who’s interested can find out what assets you owned and how they’re being distributed after your death. The public nature of probate can also draw unwanted attention from disgruntled family members who may challenge the disposition of your assets, as well as from other unscrupulous parties. (Read more...)


Health Care

Make health care decisions while you’re healthy

Estate planning isn’t just about what happens to your assets after you die. It’s also about protecting yourself and your loved ones. This includes having a plan for making critical medical decisions in the event you’re unable to make them yourself. And, as with other aspects of your estate plan, the time to act is now, while you’re healthy. If an illness or injury renders you unconscious or otherwise incapacitated, it will be too late. (Read more...)


Irrevocable life insurance trust

Use An ILIT As A Wealth Preserver

If you’re concerned about your family’s financial well-being after you’re gone, life insurance can provide peace of mind. Going a step further and setting up an irrevocable life insurance trust (ILIT) to hold the policy offers additional estate planning benefits. (Read more...)


Spouse

Are you leaving your IRA to someone other than your spouse?

An IRA can be a powerful wealth-building tool, offering tax-deferred growth (tax-free in the case of a Roth IRA), asset protection and other benefits. But if you leave an IRA to your children — or to someone else other than your spouse — these benefits can be lost without careful planning. (Read more...)


Single Parent

2016 Charitable Deductions: Substantiate Them Or Lose Them

Sharing your wealth with a favorite charity can benefit those in need and reduce your taxable estate. In addition, your donations can ease your income tax liability. But you must meet IRS substantiation requirements. If you fail to do so, the IRS could deny the corresponding deductions you're claiming. Let's take a look at the requirements for different asset types. (Read more...)


Single Parent

5 questions single parents should ask about their estate plans

In many respects, estate planning for single parents of minor children is similar to estate planning for families with two parents. Single parents want to provide for their children's care and financial needs after they're gone. But when only one parent is involved, certain aspects of an estate plan demand special attention. If you're a single parent, here are five questions you should ask: (Read more...)


trust friendly state

2 postmortem estate planning strategies for married couples

It’s crucial to review and update your estate plan in light of significant life changes or new tax laws. It’s equally important to be aware of strategies that can be implemented after your death to achieve your estate planning goals. (Read more...)


trust friendly state

Should you set up trusts in a more "trust-friendly" state?

While it’s natural to set up trusts in the state where you live, you may be losing out on significant benefits available in more "trust-friendly" states. For example, some states: (Read more...)


executor of your estate

Explore all of your options when appointing the executor of your estate

The executor’s role is critical to the administration of an estate and the achievement of estate planning objectives. So your first instinct may be to name a trusted family member as executor (also referred to as a personal representative). But that might not be the best choice.(Read more...)


asset protection

Going back to basics with asset protection strategies

Asset protection trusts — both offshore and domestic — can be effective vehicles for protecting your wealth in today’s litigious society. But these trusts can be complex and expensive, so they’re not right for everyone. For those seeking simpler asset protection strategies, there are several basic, yet effective, tools to consider.(Read more...)


difficult decisions

A difficult decision: Having an elderly parent declared incapacitated

If your elderly parent’s mental state is deteriorating to the point where he or she is unable to manage day-to-day activities, it may be time to make the difficult decision to have him or her declared incapacitated. But how do you know if such action is necessary?(Read more...)


Estate planning

Get smart when tackling estate planning for intellectual property

If you own intellectual property (IP), such as a patent or copyright, you need to know how to account for it in your estate plan. These intangible assets can be highly valuable, and you’ll want them to be handled according to your wishes after you die.(Read more...)


charitable donations

2016 charitable donations offer both estate planning and income tax benefits

During the holiday season your thoughts likely turn to helping those in need by making charitable donations. Doing so will benefit your favorite organizations and help you achieve your estate planning goal of reducing the size of your taxable estate. In addition, by donating during your lifetime, rather than at death, you’ll receive an income tax deduction. But to take a 2016 deduction, you must make the gift by December 31, 2016.(Read more...)


Should you keep your trust a secret

Family matters: Stepchildren and your estate plan

If you have unadopted stepchildren, estate planning is critical to ensure that your property is distributed the way you desire. Stepchildren generally don’t have any inheritance rights with respect to their parents’ new spouses unless the spouse legally adopts them. If you have stepchildren and want them to share in your estate, one option is to adopt them. Another is to amend your estate plan to provide for them expressly.(Read more...)


Should you keep your trust a secret

Relocating into or out of a community property state requires extra estate planning

When a married couple lives in a community property state, the money earned and property acquired by either spouse during their marriage generally belongs to the "community."(Read more...)


Should you keep your trust a secret

Should you keep your trust a secret?

When planning their estates, many people agonize over the negative impact their wealth might have on their children. To address these concerns, some people establish quiet trusts, also known as silent trusts. In other words, they leave significant sums in trust for their children; they just don’t tell them about it. An interesting approach, but is it effective? (Read more...)


The wrong life insurance beneficiary can wreak havoc with your estate plan

The wrong life insurance beneficiary can wreak havoc with your estate plan

Life insurance can be a powerful financial and estate planning tool, but its benefits may be reduced or even eliminated if you designate the wrong beneficiary or fail to change beneficiaries when your circumstances change. (Read more...)


Have you addressed elderly parents in your estate plan?

Have you addressed elderly parents in your estate plan?

Your estate plan likely accommodates your spouse, children and grandchildren. But have you overlooked your parents? How can you best handle their financial affairs in the later stages of life? You may want to incorporate their needs into your own estate plan while tweaking, when necessary, the arrangements they’ve already made. (Read more...)


Family mission statements promote a harmonious estate plan

Family mission statements promote a harmonious estate plan

Typically, much of the estate planning process focuses on money. But the most successful estate plans are founded on relationships. Building and preserving family wealth isn’t an end in itself. Rather, it’s a tool for promoting shared family values or encouraging family members to lead responsible, productive, healthy lives. Drafting a family mission statement can be an effective way to define and communicate these values. (Read more...)


Make a will

Reaffirmation Agreements in Chapter 7 Bankruptcy

When you file for Chapter 7 bankruptcy your goal is to discharge, or erase, outstanding debts that have become burdensome due to job loss, serious illness, or other financial setbacks. But life continues after bankruptcy, and you may want to keep your car, since you need transportation, and your house even though you are upside-down on your mortgage. (Read more...)


Make a will

Understanding Holographic Wills In California

Most of us don’t spend much time thinking about what will happen to our property when we die. Even some multimillionaires, like pop icon Prince, die intestate, that is, without a will. (Read more...)


Understanding Capacity: How it Affects Consent and Drafting An Estate

Understanding Capacity: How it Affects Consent and Drafting An Estate

California's aging population is growing and so are their health care related needs. Governor Jerry Brown signed a new budget into law this week. The budget touches on several issues related to mental health, like the mental health tax on California millionaires and how it is spent (hint: not on yoga or horseback riding).The budget also sets aside a one-time $2.5 million allocation for Alzheimer's research. The money will be go to early detection and diagnosis of the disease. This expenditure is another in a series of steps in recent years to make California a leader in Alzheimer's care, including legislation last year to update physician guidelines for Alzheimer's, which include guidance on legal issues for Alzheimer's patients.
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Table Of Bankruptcy Exemptions

Table Of Bankruptcy Exemptions

Exemptions in bankruptcy allow you to keep certain assets. You may be eligible to select either the federal or the state set of exemptions. Your eligibility to select one set exemption versus the other will depend on the nature and extent of your assets as well as your residency eligibility. (Read more...)



Famous Cases of Bankruptcy

5 Famous Cases of Bankruptcy

Bankruptcy is common, and even celebrities and people who have earned millions of dollars need to file for it to get out of debt. Here are 5 famous cases of bankruptcy that may surprise you, as well as what to do if you and your own family are overwhelmed with debt. (Read more...)


Reasons to Contest Your Loved Ones Will

3 Reasons to Contest Your Loved One's Will

Few things are more emotionally challenging than a loved one's passing. The process of administering the estate of a deceased individual also adds to the stress.
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California Probate FAQ

California Probate FAQ

After an individual dies, probate may be necessary. The California probate process isn't as complex as it is in many other states, but it can still be a drawn-out and expensive ordeal. (Read more...)


How To Stop Creditors From Calling You Today

How to Stop Creditors From Calling You Today

If you are struggling to make ends meet and satisfy your creditors' payments, you're not alone. Many people across the state of California are having difficulties paying their bills as a result of today's changing economy. (Read more...)


California Chapter Bankruptcy FAQ

California Chapter 13 Bankruptcy FAQ

In today's tough economy, it's easy to become overwhelmed with bills that you can't pay. However, if your income is too high to meet the qualifications for Chapter 7 bankruptcy, you may feel like you have no options left. (Read more...)


Bankruptcy Myths Proven Wrong

5 Bankruptcy Myths Proven Wrong

Being overwhelmed with debt and unable to pay your bills can be a frustrating experience. While bankruptcy can be a viable option for many families who struggle with debt, many people still believe outdated notions about how negative bankruptcy can be. (Read more...)


California Chapter Bankruptcy FAQ

California Chapter 7 Bankruptcy FAQ

If you have more bills than you can afford to pay, you're likely feeling overwhelmed and frustrated with your finances. While getting ahead on your payments and stopping the collection calls can seem impossible, you may be able to do just that with the help of a skilled California bankruptcy lawyer. (Read more...)