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Friday, September 03, 2010 Press Coverage of Estate Planning this Week (September 3, 2010)
Kelli B. Grant of SmartMoney offers six suggestions for cutting the cost of a funeral. Many families spend too much, according to the article, because they are not prepared, not informed, and in no mood to bargain. Suggestions include learning your rights when dealing with funeral homes, planning ahead to set a reasonable budget for a funeral, and shopping around for a casket. See How to Cut Funeral Costs Now (Aug. 30, 2010).
Paul Sullivan of the New York Times discusses taking advantage of 2010’s relatively low 35 percent gift tax rate in anticipation that the tax will rise next year. Because of the uncertainty, some planners are advising clients to determine a course of action on gifts now, then wait until the final weeks of this year to enact it, in light of any federal legislation that could pass between now and the beginning of 2011. See A Year to Give to Your Heirs, and Save on Taxes (Aug. 27, 2010). Friday, August 27, 2010 Press Coverage of Estate Planning this Week (Aug. 27, 2010)
Deborah L. Jacobs of Forbes points out steps to take if a family member dies in 2010. Although there is no federal estate tax this year, in its place are new rules for income taxes on inherited assets, also known as the carryover basis rules. The article lists seven steps, including having assets appraised, finding cost basis records, delaying the selling of appreciated assets, and other steps to avoid costly mistakes. See Seven Steps for 2010 Heirs (Aug. 23, 2010).
Ms. Jacobs also writes about estate planning strategies known as estate freezes, which remove assets and their future appreciation from the owner’s estate and can be particularly effective during periods of low interest rates. Options include intentionally defective grantor trusts, grantor retained annuity trusts (GRAT), and charitable lead annuity trusts (CLAT), among others. See Five Ways to Freeze Out Uncle Sam (Aug. 25, 2010).
Tara Siegel Bernard of the New York Times addresses six questions regarding writing a will, including whether a will is necessary, whether it’s advisable to write your own will, and whether a revocable trust makes more sense than a will. See Getting a Will: Six Common Questions (Aug. 26, 2010). Friday, August 20, 2010 Press Coverage of Estate Planning this Week (August 20, 2010)
Seth R. Kaplan, Esq. writes in Forbes about Grantor Retained Annuity Trusts (GRAT), why GRATs are a great estate planning tool for passing money on to the next generation, and why short-term GRATs may soon be disallowed by Congress. While short-term rolling GRATs might be upended by Congressional action, mid-term and long-term GRATs are still useful, particularly when the Applicable Federal Rate (or the §7520 Rate) is low, as it is now. See The Great GRAT Debate (Aug. 18, 2010).
Joseph Nowinski, Ph.D, writes in the Huffington Post about a widower who managed to get his estate and financial affairs in order and have the necessary conversations with his children about health care directives and powers of attorney. Such conversations are not easy, but they are nevertheless important. See End of Life Planning – A Necessary Conversation (Aug. 18, 2010). Friday, August 13, 2010 Press Coverage of Estate Planning this Week (August 13, 2010)
Chuck Jaffe of Marketwatch discusses conversations with his late brother, who advised that people should get their estate planning affairs in order so that they can focus on more meaningful issues when death is near. The brother, who contracted an illness and died 46 days later, suggested that talking about estate planning with an attorney when everyone is healthy is easy, talking about death when one is dying would be unimaginable. See 46 Days to Live: What’s Your Plan? (Aug. 2, 2010).
Floyd Norris of the New York Times recounts how the Bush tax cuts of 2001 came into being, and how politics will affect whether the estate tax comes back in 2011 at a threshold of $1 million. Congressional factions, even more partisan now than in 2001, remain in no mood to compromise, and a return to the $1 million estate tax threshold and higher tax rates appears increasingly likely. See Taxes No Longer So Certain (Aug. 12, 2010).
Pamela Yip of the Dallas Morning News points out that estate planning is not just for the rich. She states that everyone should have a will, and reviews some common estate plan mistakes that people make, including not knowing the value of everything you own, failing to update your plan, leaving everything to your spouse, over-relying on joint tenancy, and picking the wrong people as executors and trustees. See Estate Planning Lets Your Will Rule After You’re Gone (Aug. 6, 2010).
Jeffrey McKenna, Esq., writes in the Lincoln County Record that almost always a financial account that has a beneficiary designation will overrule provisions in a will that would have the account pass to someone other than the listed designated beneficiary. Beneficiary designations are common on life insurance, annuities, and IRAs, all of which are contracts. The associated beneficiary designations are a part of the contract, and a provision in a will cannot change the contract. Reviewing your beneficiary designations every couple of years on these and other accounts is essential to ensure your estate plan works the way you intended it to. See What Controls: The Will or “The Box” (Aug. 13, 2010).
Irving Blackman, Esq., writes in ContractorMag.com, about the estate planning issues that arise when a client is planning for second or third marriages. Types of issues that are prevalent include age differences between the new spouses, health issues, kids from prior marriages, lack of a premarital agreement, and how to provide for the surviving spouse without disinheriting your children. See Estate Planning for Second, Third Marriages, Etc. (Aug. 9, 2010). Friday, August 06, 2010 Press Coverage of Estate Planning this Week (Aug. 6, 2010)
Samantha Maziarz Christmann of the Buffalo News answers questions about estate planning, addressing issues such as whether your estate plan is up to date and consistent with beneficiary designations on your insurance and financial accounts, whether you can access a deceased parent’s financial accounts to pay for funeral expenses, and if insurance proceeds are taxable, among others. See A Plan for Ever After (Aug. 2, 2010).
Kimberly Palmer of U.S. News and World Report discusses how to talk to your parents about the estate tax and estate planning. Some bits of advice: don’t be afraid to raise the issue, many parents increasingly look to their children for help managing their finances; emphasize the importance of financial stability, because the elderly want to ensure they don’t outlive their resources; and suggest some simple steps to take now, such as making lifetime gifts if your parents are wealthy, or completing basic estate planning documents if they are less well off. See How to Talk to Your Parents About the Estate Tax (Aug. 3, 2010). Friday, July 30, 2010 Press Coverage of Estate Planning this Week (July 30, 2010)
Mary Pilon of the Wall Street Journal discusses the problems of passing art, jewelry and other family heirlooms to children this year when the federal estate tax has been replaced by the modified carryover basis regime. Under the carryover basis rules, children inherit items at their original cost basis, rather than a stepped-up cost basis, and are subject to capital gains taxes if they later sell the item. One silver lining: estates qualify for at least $1.3 million of basis step-up. Nonetheless, inheriting items from decedents dying in 2010 is far more complicated than it was last year. See Looking a Gift Horse in the Mouth (July 23, 2010).
Kelly Greene of the Wall Street Journal reviews what to consider when contemplating a trust for IRA accounts. The benefits include being able to pass on large IRA accounts and limit a child’s distributions so that the child will have a lifetime of income, rather than a one-time cash windfall. However, creditor protection and whether to use an accumulation trust or a conduit trust are issues to be discussed with an estate planning attorney. See When Trusts Meet Retirement Accounts (July 24, 2010). Friday, July 23, 2010 Press Coverage of Estate Planning this Week (July 23, 2010)
Conrad de Aenlle of the New York Times discusses estate planning in the context of people who live in more than one country, noting that sometimes two wills are necessary to cover both local law, and the laws of the country of permanent residence. He also stresses coming to grips with the last step you will ever take, death, and having at least some basic instructions in place. See Estate Planning Step 1: Recognize You Are Going to Die (July 15, 2010).
Sandra Block of USA Today contrasts the fate of George Steinbrenner’s heirs with what could happen to heirs of decedents in 2011 and beyond. Because Steinbrenner died in 2010, his estimated $1.15 billion estate escaped approximately $500 million in federal estate taxes; beginning in 2011, under current law, decedents will face taxes of up to 55 percent on estates over $1 million. Block also discusses the current status of estate tax reform in Congress. See Estate Tax to Return in 2011, And It Could Hurt Ordinary Folks (July 22, 2010). Friday, June 25, 2010 Press Coverage of Estate Planning this Week (June 25, 2010)
Deborah L. Jacobs of Forbes points out that estate planning is usually more important for women than for men, in part because women live longer and tend to marry older mates. In addition, because women typically have lower lifetime earnings, they will be more likely suffer the consequences of poor money management in later years if proper estate planning isn’t accomplished before their husband dies. She offers six issues for women to consider regarding estate planning. See Six Estate Planning Questions for Women (June 22, 2010).
Liz Davidson contributed two articles to Forbes, the first providing some tips on how to leave a legacy during your lifetime and at death. It begins with defining your values, encourages teaching life’s lessons, and identifying a charitable organization you wish to support after your death. See Estate Planning, As Told By Clint Eastwood in ‘Gran Torino’ (June 21, 2010).
In the second of Davidson’s contributions, she discusses issues to consider when leaving an inheritance to beneficiaries who may not be old enough or financially savvy enough to use it wisely. Actions to consider include educating your heirs and giving them some assets now to build their experience in managing money, limiting access to principal through use of trusts, and maintaining flexibility through the use of trustees who can oversee asset distributions after you die. See Giving and Inheritance the Right Way (June 24, 2010).
Laura Saunders of the Wall Street Journal raises the question of whether the federal government could reverse course and later tax Roth IRAs. If that were a valid fear, then converting a traditional IRA to a Roth IRA could end up being a big mistake. Her conclusion is that while possible, a later tax on Roth IRAs is highly unlikely, and today's risk may be outweighed by the benefits of Roth IRAs, which can be substantial. See Is a Roth IRA Safe From Taxes? (June 18, 2010). Friday, June 18, 2010 Press Coverage of Estate Planning this Week (June 18, 2010)
Daisy Maxey of the Wall Street Journal offers some reasons why college students ought to have wills, including ensuring that their parent’s estate planning is not disrupted. Absent a will, intestacy laws in most states would pass assets back to the parents where the son or daughter is not married and has no children. Passing money up a generation may lead to its being needlessly taxed when the parents pass on. See Planning for the Unthinkable (June 14, 2010).
David Kocieniewski of the New York Times questions the real impact of a return to the estate tax threshold of $1 million in 2011, suggesting estate planning and favorable tax provisions for small businesses make fewer estates liable for estate taxes. Furthermore, even with the low estate tax threshold, the number of affected estates would be low by historical standards. See What An Estate Tax Looks Like to the Taxman (June 11, 2010).
Paul Sullivan of the New York Times finds that the one-year repeal of the estate tax is making this a busy time for estate planners, both to fix older estate planning documents that didn't anticipate repeal of the estate tax, and to take advantage of estate planning methods that will likely soon be less appealing because of new legislation. See Confusion Over the Dormant Estate Tax Keeps Advisors Busy (June 11, 2010).
Annie Gasparro of the Wall Street Journal recounts some of the reasons that converting a traditional IRA to a Roth IRA may not make sense. She lists large near-term tax increases, owners too close to retirement, and potentially higher tax brackets during retirement. See Why You Shouldn’t Convert to a Roth IRA (June 14, 2010).
Kristen McNamara of the Wall Street Journal reviews actions taken by various states to attract trusts, including relaxing or voiding limits on how long a trust can last, eliminating income taxes for trusts, and enhancing asset protection features. See States Want Your Trust (June 14, 2010). Friday, June 11, 2010 Press Coverage of Estate Planning this Week (June 11, 2010)
David Kocieniewski of the New York Times reports that Dan L. Duncan may be the first American billionaire able to pass his fortune to his heirs estate tax free. The estate, estimated at $9 billion, will likely give Congress pause in attempting to reinstate the estate tax retroactive to January 1, 2010, as the Duncan heirs would have ample means to fight such a law in the courts. See Legacy for One Billionaire: Death, but No Taxes (June 8, 2010).
Deborah L. Jacobs of Forbes suggests taking some steps now in preparation for the return of the estate tax in 2011, including reviewing life insurance policies, ensuring not all assets are jointly owned with your spouse, considering annual gifts, funding college savings plans, and converting to a Roth IRA. See Prepare For the Return of the Estate Tax (June 9, 2010).
Ashlea Ebeling of Forbes reviews the status of state-imposed estate and inheritance taxes for 2010. Currently, 19 states impose an estate and/or inheritance tax. That could change abruptly in 2011, depending on what happens to the federal estate tax. See The State Estate Grab, 2010 Edition (June 9, 2010).
Stephanie Fitch of Forbes discusses Qualified Personal Residence Trusts as a means for protecting the family vacation home so that your children and grandchildren can enjoy it as much as you do. These trusts, informally known as QPRTs, make sense when property valuations are low both to pass along sizable assets and reduce final estate taxes. See How to Pass Down Your Family Vacation Retreat (June 9, 2010).
Mark Maremont and Leslie Scism of the Wall Street Journal tell the story of an elderly wealthy investor who purchased $56 million of life insurance and then assigned or sold the rights to the death proceeds to investors. The decedent’s spouse claims this violates public policy and New York laws, and thus she should be named the beneficiary. The case will likely impact the viability of what is known as “stranger owned life insurance.” See Lawyer’s Heirs Fight Insurers in $56 Million Policy Intrigue (June 11, 2010). | |
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Welcome to NorthEast Estates and Trusts, PLLC (NEET). NEET assists clients with Estate Planning, Probate and Estate Administration, Special Needs Planning and Advanced Estate Planning matters in Shelburne, Vermont (05482) as well as Charlotte (05445), South Burlington (05403, 05407), Burlington (05401, 05402, 05405, 05406), Hinesburg (05461), Essex (05451), Essex Junction (05452, 05453), Colchester (05439, 05446, 05449), Winooski (05404), Cambridge (05444), Huntington (05462), Richmond (05477), Williston (05495), Jericho (05465), Underhill (05489), Underhill Center (05490) and Fairfax (05454). NEET also serves clients in Chittenden County, Addison County, Washington County, Lamoille County, Franklin County and Grand Isle County.
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