If you own a small business, make sure you include your interest in the business in your estate plan. Even if you plan to leave all your interest in the business to a family member, failing to structure the transfer of your interest in the business in the right way could subject the value of the interest to estate or gift taxes. With proper planning, you may be able to minimize or eliminate estate or gift taxes by using one of the numerous business succession options. Sale of Your Business: … [Read more...] about Estate Planning: Essential for Small Business Owners
Advanced Estate Planning
Ins and Outs of Inheriting an IRA
What are the tax implications of an inheriting an IRA? The answer depends on several factors: Is it a traditional IRA or a Roth IRA? The funds in a traditional IRA have never been taxed and will be taxed as they are withdrawn. Roth IRAs contain post-tax dollars and are not again taxed upon their withdrawal. Is the beneficiary of the IRA a spouse, a non-spouse person, or a charity? When the beneficiary of an IRA is the spouse of the IRA owner, the spouse will have a number of … [Read more...] about Ins and Outs of Inheriting an IRA
Do I Need an Estate Plan? I’m Not That Old
We are often asked by prospective clients: “Do I need an estate plan?” This is particularly the case for folks under 40 or 50, who just can’t imagine themselves dead or incapacitated. We are also often asked about planning by our clients who have adult children with assets and children of their own. As we all know, we can't and don’t know the future. Should a premature death or disability occur due to an unexpected injury or illness, having an appropriate plan in place will reduce needless … [Read more...] about Do I Need an Estate Plan? I’m Not That Old
An Update On ABLE Accounts
We have previously wrote about the long-awaited arrival in California of the so-called ABLE accounts. Formally, known as an Achieving a Better Life Experience (ABLE) account, they are a low-cost, easy-to-access plan established by federal law that began rolling out in 2016 and is now available in California. Modeled after the so-called “529 accounts”, an educational savings program offered by individual states, ABLE accounts let children or adults with disabilities incurred before age 26 … [Read more...] about An Update On ABLE Accounts
Trusts — Irrevocable Versus Revocable
Trusts are often an important tool used in the creation of an estate plan given the versatility and variety offered by a trust. At their core, all trusts are the same. You, as the trustor, must name at least one beneficiary, appoint a trustee to manage trust assets and designate assets that you will use to fund the trust. Beyond the basics, trust can be as complicated, or as simple, as your needs require. The first decision you must make is whether to create a revocable or an irrevocable … [Read more...] about Trusts — Irrevocable Versus Revocable
Let’s Talk About Charitable Trusts
Typically, charitable lead trusts and charitable remainder trusts are implemented when your estate exceeds the federal estate tax exemption. This qualifies both charitable trusts as “advanced” estate planning tools. Besides lessening or totally avoiding the federal estate tax, there are income tax, capital gains tax, and charitable intent benefits as well. Simply put, the charitable lead trust provides an income stream to your favorite public charity for a period of years (up to 20) or … [Read more...] about Let’s Talk About Charitable Trusts
Do You Need Life Insurance?
Periodically, sit down and reevaluate your need for life insurance. It’s often an essential part of an estate plan. Life insurance can be used to: Replace income Fund a business buy – sell agreement Create an estate Pay federal estate taxes Equalize an estate Provide an inheritance for a child not in the family business General life insurance tips: Only pay premiums that won’t take food off your table. If you are insurance poor, you’ll end up dropping it. Term … [Read more...] about Do You Need Life Insurance?
If You’re in a Second Marriage, It is Important to Plan to Protect Your Children
If you’re in a blended family, such as a second marriage with children from a previous relationship, you can do much to keep the peace in your family with your estate plan. One way to keep the peace, using your estate plan, is to specifically consider and plan for your children. This could include not making your children wait until your second spouse dies before they will inherit. Waiting and putting the children second may cause hurt feelings and a breakdown of relationships that you’ve … [Read more...] about If You’re in a Second Marriage, It is Important to Plan to Protect Your Children
Answers To Your Living Trust Questions (1 of 3)
Trusts have been around for hundreds of years; specifically, the living trust gained popularity in the 1970s as a probate avoidance technique. Today, living trusts are often used as a foundational document in estate plans. We’ve found that many folks have both questions and misconceptions about the living trust; so, in this three part series, we answer your living trust questions. I am confused about the different types of trusts. Is a living trust always called “living trust”? Great … [Read more...] about Answers To Your Living Trust Questions (1 of 3)
What is a Qualified Personal Residence Trust?
If you’re like most people, you haven’t heard of qualified personal residence trusts. They are abbreviated “QPRT” for short; and, pronounced “Q – Pert.” They are irrevocable (can’t change them) split interest (you benefit and your children benefit) trusts. You benefit by living in your home rent free for a period of years. Your children benefit because federal estate taxes are eliminated and they get the house. QPRTs have a role in California planning where the high value of real estate … [Read more...] about What is a Qualified Personal Residence Trust?
