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Family Transfers and Loans
Friday, October 22, 2010 Press Coverage of Estate Planning this Week (October 22, 2010)
Deborah L. Jacobs of the New York Times discusses the benefits of passing your residence to your children while you are still alive. Additionally, because gift taxes might be an issue, she recommends four strategies for minimizing or avoiding gift taxes on the transfer, including giving partial interests, using a grantor trust, creating a qualified personal residence trust (QPRT), and putting real estate into an LLC or other legal entity. See Leave the Children the House, Without a Hefty Tax Bill (Oct. 20, 2010).
Anne Tergesen of the Wall Street Journal writes about grantor retained annuity trusts (GRAT) and why low interest rates and depressed real estate values make this estate planning tool particularly timely. Congress has recently discussed tightening restrictions on GRATs, providing further incentive to consider a GRAT before new laws make them less appealing. See Hurry Up and Fund That Trust (Oct. 16, 2010). Friday, October 15, 2010 Press Coverage of Estate Planning this Week (October 15, 2010)
Arden Dale of the Wall Street Journal points out that heirs and estate planners do not always know what is in a decedent’s estate, which can lead to disappointment and additional administration costs. The lack of a full accounting can be caused by the decedent not providing all asset information to the attorney, lack of updated information when assets are acquired or sold, and failure to communicate among attorneys and financial advisors, among other reasons. See Estate Planning: It’s an Art, Not a Science (Oct. 12, 2010).
Ashlea Eberling of Forbes notes that some wealthy elderly people are trying to capitalize on 2010 being a good year to make gifts, given the relatively low 35 percent gift tax rate. One drawback to making gifts now, however, would be if the gift giver died this year, when there is no estate tax. In that situation, any gift taxes paid would have proven unnecessary. To get around this, many elderly are drawing up the paperwork now to make gifts on December 31. See How to Ask Grandma for $1 Million (Oct. 8, 2010).
Timothy Burke writes in FiGuide about what to consider when lending to family members. He suggests that the loan be documented, that the loan earn interest at no less than the IRS’s Applicable Federal Rate, and that crystal clear expectations be set for the loan repayment. See 5 Things to Consider When Lending To a Family Member (Oct. 13, 2010). Friday, October 01, 2010 Press Coverage of Estate Planning this Week (October 1, 2010)
Bob Carlson of Retirement Investing discusses issues surrounding probate avoidance, such as the disadvantages of probate in most states, but also why probate might be a good option for some assets, the differences between what constitutes your probate estate and your taxable estate, and why living trusts are often used to avoid probate. See Avoiding Probate – Or Not (Sept. 27, 2010).
Ashlea Ebeling of Forbes notes that the Applicable Federal Rate (AFR) used for various estate planning and family loans hit historically low rates in October. The AFR is used for Grantor Retained Annuity Trusts (GRAT), which allow you to pass assets to your children estate and gift tax free so long as the appreciation of the asset in the GRAT exceeds the AFR rate. October’s AFR is 2.0 percent for GRAT purposes, and as low as 0.41 percent for family loans of three years or less. See October Opportunity for GRATs and Family Loans (Sept. 27, 2010). Friday, October 30, 2009 Press Coverage of Estate Planning This Week (October 30, 2009)Ashlea Ebeling of Forbes.com writes about how to lend money to your children in ways that satisfy IRS requirements. See How to Arrange a Loan Between Family Members (Oct. 29, 2009).
Deborah L. Jacobs of the New York Times writes about no contest clauses in wills and trusts, which provide that if a person contests a will or trust in court and loses, they do not receive an inheritance. Standards for applying these clauses, and whether to use them, are discussed in this article. See Clauses Aimed at Keeping the Heirs Quiet (Oct. 29, 2009).
Sandra Block of USA Today writes about common misperceptions regarding wills, such as the myth that if you have a will, your estate will avoid probate. See 5 Myths About Wills and What You Should Really Do (Oct. 23, 2009).
Philip Moeller of U.S. News & World Report writes that the economic turmoil has resulted in an increase in litigation regarding estate planning and intra-family relations. He offers some advice on lessening the chances your estate plan will be contested. See 8 Tips to Avoid Nasty Estate Surprises (Oct. 23, 2009).
Kelly Greene of the Wall Street Journal discusses inheriting a Roth IRA, both the benefits and how to title the account correctly. See The Gift That Keeps on Giving: A Roth IRA (Oct. 24, 2009). | |
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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 as well as Charlotte, South Burlington, Burlington), Hinesburg, Essex, Essex Junction, Colchester, Winooski , Cambridge, Huntington, Richmond, Williston, Jericho , Underhill , Underhill Center and Fairfax. NEET also serves clients in Chittenden County, Addison County, Washington County, Lamoille County, Franklin County and Grand Isle County.
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