Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.When considering different estate planning strategies and which direction to take, it’s important to consider the impact on basis. “Basis” is the benchmark used for income taxation.What does income tax basis have to do with estate planning? Lots! Property included in your taxable estate at your death gets a “step-up” in basis to its value at your death. (Certain … [Read more...]
Estate Planning: Simple is not Always Better
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Estate planning contemplates two different general time periods: During life and after your death. Estate planning needs also vary based on the goals you are trying to achieve. For example, after death, do you simply wish to transmit your assets, or do you wish to provide your loved ones with asset protection, tax protection, divorce protection, or other … [Read more...]
Estate Planning: The Simplest Plan is Usually Not the Best
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Estate planning contemplates two different general time periods: During life and after your death. Estate planning needs also vary based on the goals you are trying to achieve. For example, after death, do you simply wish to transmit your assets, or do you wish to provide your loved ones with asset protection, tax protection, divorce protection, or other … [Read more...]
Planning for Retirement Plans and IRAs: Asset Protection
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.As I discussed in last week’s blog, retirement assets, including 401(k)s, IRAs, etc., comprise a large portion of the average American’s wealth. Planning for these assets is critical, not just due to their value, but also due to their special nature.Traditional IRAs and 401(k)s and the earnings on them are tax-deferred. Roth IRAs and 401(k)s are tax-free. However, … [Read more...]
Planning for Retirement Plans and IRAs: Beneficiary Designation
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Retirement assets, including 401(k)s, IRAs, etc., comprise a large portion of the average American’s wealth. Planning for these assets is critical, not just due to their value, but also due to their special nature.Retirement plan assets may be tax-deferred (like a traditional IRA or 401(k)) or tax-free (like a Roth IRA or Roth 401(k)). But, there may be very good … [Read more...]
Donor Advised Funds: IRS Issues New Ruling
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.In prior blogs, I explained how a donor advised fund works in detail. Basically, you make a contribution to the fund now and take a deduction in the year you make the contribution. In future years, you, as the adviser, can direct distributions to the public charity of your choice. A donor advised fund may be useful to aggregate charitable gifts into one year to enable … [Read more...]
Sager Family Shows Perils of Blended Families
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Blended families require special planning. Sometimes, the children from the prior marriage bond with the new spouse and the family moves forward in a happy, newly modified form. However, frequently, the new marriage brings conflict between the new spouse and the children of the prior marriage. Such is the case with the Sagers.In 1980, sports reporter Craig Sager … [Read more...]
New Tax Law May Affect State Income Tax, Too!
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.As you likely know, in the final days of 2017, Congress passed, and the President signed, a new tax law. It substantially changes the federal income taxation of individuals and couples. As I blogged in December, the biggest changes are the near-doubling of the standard deduction amount and the cap on the state and local income tax deduction. The result is that most … [Read more...]
Basics of Estate Planning: Powers of Appointment – Part 1
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.This is another in a series of blogs on the basics of estate planning.Trusts have many potential benefits. One of those benefits is that they can be very flexible. One way to increase the flexibility of a trust is by including powers of appointment.A power of appointment is giving someone the ability to direct the assets of the trust. There are many different … [Read more...]
Law in the U.S. can be Participatory
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.In some countries, like a dictatorship or a true monarchy (not a constitutional monarchy such as the United Kingdom), people do not really participate in making the law. The law is handed down by fiat. In the United States, our laws are enacted by our elected representatives. Sometimes, those laws may be viewed as violating the fundamental rights guaranteed to all … [Read more...]
