Wealth Planning News
This Newsletter describes some of the most important goals associated with maintaining your lifestyle and developing your own wealth plan. Rather than sticking to the basics of Estate Planning, we keep the playing field wide open by enabling you to hope, dream, and work with us towards assuring a result.
Transfer taxes are imposed on wealth transferred from one generation to another via gift or inheritance. People who do little or only partial planning allow their descendants to pay most or all of the transfer taxes. People who take advantage of planning techniques allow their descendants to drastically reduce or entirely avoid the transfer taxes.
Vol. II, No. 3
Many people think life insurance passes free of taxes. It does pass free of income taxes in most cases, but is subject to death taxes when the insured owner dies. In fact, life insurance is added to everything else you own and pushes an estate into the taxable range, or to higher rates of taxation.
Nothing about GRATs, NIMCRUTs, or FLPs in this issue. Just a conversation that helps you to understand what we do.
A family limited partnership is an entity owned mostly by family members. The owners are parents (or a single parent), and one or more children (or even better, gifting trusts created for children or their descendants.) State law sanctions the entity, so it is a legal person under the law, with federal tax law implications.
Valuation Discounts that apply to assets gifted or transferred at death can drastically reduce gift and estate taxes.
A tax you can avoid by planning is a voluntary tax. Given a choice between keeping our assets or giving them to the IRS, we choose to keep our assets. We also have a choice for those loved ones who will receive our assets when we die. We can choose to let our loved ones give some of our assets to the IRS, or we can choose to let them keep the assets.
For many families death taxes are "voluntary" because parents can take actions to avoid the taxes for their descendants. This issue discusses reasons we fail to plan, with a view to getting you off your assets and into the office of a competent planner.
A QPRT is a Qualified Personal Residence Trust. Find our reasons for its use and the relevant tax issues.
Outright gifts can cause future problems. Potential to diminish incentive for loved ones to earn a living, and risk that the gift may be lost in a lawsuit or divorce are some of the big reasons it's better to gift in a protected manner. Gifting trusts of various kinds can ensure your beneficiaries receive in the ways in which you intend. Our newsletter may assist you with figuring out your own goals when making gifts.
We live in a litigious society. We face liabilities in the workplace from "hot assets" we own, from a "hot" business or profession, and for a myriad of other reasons. "Hot" assets or "hot" professions generate liability claims. Claims are often not covered by insurance or only partly covered. We have to protect ourselves from catastrophic liability claims.
You need full control of your assets before disability. But you also need to allow for private and inexpensive management of your assets if you become disabled, under instructions you give in advance. The best way to meet this goal is by using a fully funded revocable living trust. Read our newsletter to learn about Disability Planning Goals.
Naming a Guardian is one of the most important legal decisions you will make as a parent. Remember what Santa does: He makes a list and checks it twice. This step is just as important for you when choosing potential guardians. Read our newsletter to find out what factors should be involved when you are considering any potential guardian for your minor children.
What to do when a personal residence is owned in part, or in whole, by a complex trust.
Put out of your mind for the time being the question of why you would want a bunch of money going to someone when you die. We discuss that in another issues. For now we focus on how to obtain life insurance.
Something that may influence your decision to buy instead of rent life insurance are the favorable tax breaks given to owned life insurance.
To find the real purpose of life insurance, planners (lawyers, financial advisors, accountants, and insurance professionals) have to help you focus on the reasons you want or need a bunch of money going to someone when you die.
Newsletter 4.11 discussed Needs Insurance, Liquidity Insurance, Theft Insurance, and Wealth Replacement Insurance. We continue with some other purposes for insurance.
There are three basic colors of money you can give to those you love. One goal should be to leave the best color of money possible, and to take steps to change the color of money left to descendants where that change would be beneficial to them.
We live in the most litigious society in history. Asset segregation is needed because a claim could arise against an owner merely because of ownership (as opposed to a personal injury claim for some other reason). In this important newsletter you'll learn why asset segregation is a crucial part of any well rounded estate plan, and how to move forward.
Elsewhere we suggest that if you love someone you may want to disinherit that loved one. Not totally, but just enough to give the loved one control of the inheritance without having to put it into his or her own name. Coupled with giving that loved one control is the risk that it could be taken from them. The Trust Protector solution is a mighty barrier against intrusiveness into your loved ones inheritance.
Wealth Planning involves a wide range of human needs, hopes, dreams, and desires. It is planning for now, for yourself. It is planning for a way of life for yourself and those you love. It is planning for the future, for you and for your loved ones. Our newsletter discusses the steps to take towards getting your plan in order, and things to avoid, such as piecemeal planning.
Trust creation and implementation is not limited to the elderly and advantaged among us. A Revocable Living Trust ensures you have the maximum amount of say over what happens to you if you become disabled, or if you die. Some advantages are described in our newsletter.
Do you ever see in your local newspaper a type of legal notice titled 'Notice to Creditors,' in which anyone with a claim against a person who has died is invited to file notice of the claim against an estate? The topic now turns to what such a public notice means.
Many professionals, and especially lawyers, choose to price their services based on time they spend. The idea is that any time one devotes to a job is valuable and a convenient way to price services to clients. At best this approach rewards only time spent, while ignoring results in a particular matter, and value produced for a client. Learn why we choose not to sell time in this newsletter.
A periodic review of your estate plan and estate planning issues is needed for several reasons. Each client for whom we help with planning is invited periodically to review their estate planning. Learn why a Periodic Review of your own estate plan is essential in this newsletter.
Wouldn't you like to give your descendants the maximum dignity of control while promoting personal responsibility for them and anyone they marry? Wouldn't you also like to protect their inheritance so that it might pass to as many generations as possible? Instead of dumping an inheritance into someone's hands, we'll show you how you can protect it for their life and the lives of their children and grandchildren.