2. You changed jobs and rolled over your retirement plan. When you move money from your former employer’s retirement plan into your new one or into an IRA, your beneficiaries lose any claim to those assets. So you’ll want to ensure they’re named as beneficiaries on the new account.
Friday, December 27, 2013
6 Reasons to Update Beneficiary Designations
2. You changed jobs and rolled over your retirement plan. When you move money from your former employer’s retirement plan into your new one or into an IRA, your beneficiaries lose any claim to those assets. So you’ll want to ensure they’re named as beneficiaries on the new account.
Thursday, December 12, 2013
You don't have to be rich to leave an estate gift
Below is an excerpt from an article posted in MyFoxDetroit regarding the including charitable giving in your will.
As we enter the season of giving, many people consider how year-end charitable donations can benefit their favorite nonprofits as well as their own income taxes.
More than 85 percent of Americans donate to charity while they are alive, but less than six percent leave an estate plan that benefits these same charities, according to the Partnership for Philanthropic Planning. Most people believe they do not have an "estate" large enough to create a legacy gift.
Fortunately for all concerned, they are mistaken. The Planned Giving Roundtable of Southeast Michigan is working to educate the public about the impact that private sector gifts can make to mission-driven nonprofits in an era of dwindling corporate support.
"It seems the word "impact" defines itself in the minds of many as something on the order of, just for example, $100,000," explains Bill Winkler, Roundtable communications director. "We believe impact can be defined in many ways and want to change the prevailing view that it is something only the wealthy can do."
Read entire article
Tuesday, November 19, 2013
The Gift of Education
In the National Law Review, Terri Stallard, a Kentucky estate planning attorney talks about ways grandparents can give to their grandchildren.
Many grandparents want to enrich the lives of their grandkids, but are not sure the best way to accomplish this with their estate plan. I encourage clients to consider helping their grandchildren with the future costs of education. The proper planning can help grandkids avoid hefty loans and be tax-efficient for the donor.
A grandparent may currently gift up to $14,000 per grandchild (or to anyone) per year tax free ($28,000 if a married couple gift-splits). Any gift over that amount requires the filing of a gift tax return.
However, if you pay for a grandchild's education expenses directly to the provider (i.e., educational institution), the gift is excluded from your annual exclusion amount. For purposes of this exclusion, the term "educational institution" covers a broad range of schooling, such as primary, preparatory, vocational or university institutions. This kind of payment is also exempt from the generation-skipping tax (which is too complicated to explain herein, but can significantly reduce a grandparent's gifting amount). In short, if you pay $40,000 to cover your grandchild's tuition directly to the school, you can still gift up to $14,000 tax free to him or her in the same year. Some institutions may even allow a donor to pay upfront the applicable years of education at a locked-in tuition rate, so as to avoid rate hikes.
Another option to consider is a 529 college-savings plan. One of the biggest benefits of this plan is that it can continue operation when the grandparent is no longer around to write checks to an institution. A grandparent can gift up to the annual exclusion per year tax free, or make up to five years' worth of the annual exclusion gift ($70,000 per single donor or $140,000 per couple) in one year to benefit a single individual. However, this has its drawbacks. If you gift the five year maximum amount in one year, any other annual exclusion gifts to that beneficiary for the next five years will incur gift tax consequences. Further, if you die within five years of the date of the gift, a prorated portion of the gift will be included in the estate tax calculation.
Friday, November 8, 2013
Planning can help prevent estate tax issues
When actor James Gandolfini, best known for his role as Tony Soprano in The Sopranos, died in Italy earlier this year, it took many people by surprise. While his family and his fans mourned, reports arose indicating that nearly half of Gandolfini's estate, worth approximately $70 million, was set to be paid in estate taxes. Unfortunately, it appeared that Gandolfini, who was survived by his wife and two young children, had not taken steps to draft an estate plan that would have ensured the maximum transfer of his wealth to his family.
As further reports surfaced, experts determined that their initial assessment of Gandolfini's estate had been based on incomplete information. In fact, many people had estimated the actor's estate tax bill based solely on assets listed in his will. Fortunately, Gandolfini had taken the time to work with professionals to set up other estate planning vehicles. Although specifics have not been made public, many believe that Gandolfini had made arrangements for members of his family to have access to funds held in irrevocable trusts, life insurance policies and other accounts. At the end of 2012, Gandolfini had even drafted a new will designed to take advantage of the federal gift tax exemption, worth $5.12 million, that expired at the end of that year. It appears that early estimates that the actor owed approximately $30 million in estate taxes were significantly overstated.
Gandolfini's estate was larger than most families in the U.S., but case illustrates an important point for everyone. It is not enough to hope that everything turns out for the best when it comes to transfers of wealth. No matter the size of the estate, planning is essential. This may involve not only drafting a will, but also trusts, retirement accounts and other vehicles, as well.
For more information, contact an attorney like myself who specializes in estate planning, who can explain your options and help you achieve your goals.
Wednesday, October 23, 2013
Talking To Your Parents About Estate Planning
A recent article in Huffington Post’s Business Canada suggests that getting a plan together when your parents are still in good health will prevent any stress or confusion that could result should their health falter later in life.
Sunday, October 6, 2013
"What do you mean I don't get it all? We were married".
Unfortunately, a spouse can find themselves having to share a deceased spouse's estate in unanticipated ways.First, it is important to understand the difference between probate and non-probate assets. Non-probate assets are assets that are jointly owned, have a beneficiary designation or are owned by an entity such as a trust. Bank accounts that are in joint names or that have a payable on death beneficiary listed are examples of non-probate assets.
Probate assets are those that are title solely in the decedent's name and don't have a beneficiary designation. Since these assets don't have an obvious designated post-mortem owner, their ownership needs to be determined.
Saturday, September 21, 2013
Should you give your kids their inheritance before you die?
Leaving money to family earlier than expected isn't uncommon. But is it for you?
Read the full article
The bottom line: Like most financial choices, giving an early inheritance isn't always the right move. If it's on your mind, contact me to help you decide which option can best help you provide for your loved ones without compromising your own financial health.