Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.A new proposal regarding estate taxes has been introduced in the U.S. Senate. S.B. 309, the “For the 99.8% Act,” is sponsored by Senator Bernie Sanders (I-VT). The bill would exempt the first $3.5 million of an individual’s estate from estate taxation. (Under current law, the exemption is $5 million, doubled to $10 million through 2025, and is adjusted for … [Read more...]
State Income Taxation
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.In this article, I’ll explain state income taxation in general.Everyone knows (or should know) that the federal government taxes the income you earn. But, depending where you live and how you earn money, states may tax your income, too.States run the gamut in the income taxation of individuals. Seven states don’t tax you at all: Alaska, Florida, Nevada, South … [Read more...]
ABLE Accounts
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.This is the third article in a series. The first article focused on the use of UTMA / UGMA accounts. The second article focused on 529 plans. This third article focuses on ABLE accounts. ABLE accounts are like Section 529 plans. But, while 529 plans are for education expenses, ABLE accounts (under Section 529A) are for qualified disability expenses.While a 529 … [Read more...]
When You Love Your New Spouse, But You Love Your Kids More
Whether You Should Disinherit Your New Spouse andHow California Law Protects Your Omitted Surviving Spouseby Magdalena A. LaBranch-GonzalesLitherland, Kennedy & Associates, APC, Attorneys at LawWhat happens if you marry your spouse after you created your estate plan but they are not mentioned in your plan when you die? California considers that person an “omitted spouse.”[i]An “omitted spouse” is a spouse who married the decedent after the estate plan was already created but … [Read more...]
What Are 529 Plans and What Are Their Advantages?
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.The prior article in this series examined the use of UTMA and UGMA accounts. This article will focus on 529 plans. The next article in the series will examine ABLE accounts.A 529 plan, otherwise known as a qualified tuition plan, is a tax-sheltered way of saving for education. 529 plans are sponsored by states, state agencies, or educational institutions. For a … [Read more...]
What are UGMA and UTMA Accounts?
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.UGMA and UTMA accounts are accounts in which a custodian holds assets for a minor. An UGMA account is one under the Uniform Gift to Minors Act. An UTMA account is one under the Uniform Transfers to Minors Act. States which have such accounts have rules which can vary slightly.UGMA accounts must end when the minor reaches age 18 (or other age in the state statute), … [Read more...]
New Tax Proposals
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Representative Alexandria Ocasio-Cortez (D-NY), one of the new class of legislators in the House of Representatives, has suggested the rate of income taxation for high-earners be raised. She is suggesting a top rate for those making over $10 million per year be increased to 60% or 70%. She’s suggesting the proceeds could be used for a “Green New Deal” or other … [Read more...]
Beneficiary Designations, etc., Aren’t a True Substitute for a Trust
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.TOD (Transfer on Death) designations, POD (Pay on Death) designations, and beneficiary designations can be useful in the right circumstances. Each of these tools allows for an automatic transfer to the named beneficiary at the death of the owner. But these tools can have a few shortfalls. First, if the named person predeceases the owner, typically it will not be … [Read more...]
Good News for those interested in Medi-Cal Eligibility who have 529 Education Accounts
by Justin M. KennedyLitherland, Kennedy & Associates, APC, Attorneys at LawEffective January 1, 2019 the principal and interest of 529 education accounts (college savings plans) are exempt assets for Medi-Cal eligibility purposes (AB 1785).Let’s look at an example:Ten years ago, Margaret set up 529 education accounts for each of her four grandchildren and each year Margaret deposited $5,000 per grandchild into the 529 education accounts. Currently, these 529 education accounts … [Read more...]
Selecting an Agent
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.A Secret Agent may be very important to protecting the nation. Your Agent is just as important for your protection. An Agent is the person who makes financial decisions for you under a Financial Power of Attorney or makes medical decisions for you under a Health Care Power of Attorney. The Agent under your Financial Power of Attorney may act for you when you aren’t … [Read more...]
