Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, IncWhen problems arise in an estate plan, often the source is a lack of clarity.Tom Petty died in 2017 and left a fortune estimated by Newsweek to be around $38 million. Petty did some things right, but he could have done better.What did Tom Petty do right? First, he planned. Most people just let nature take its course and fail to plan. There’s an old adage: when … [Read more...]
How Much is Too Much?
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, IncWe all want to help our kids financially, but how much is too much? Businessman billionaire Warren Buffet was quoted in a 1986 Fortune article that, even if you had ample wealth, one should leave your kids “enough money so that they would feel they could do anything, but not so much that they could do nothing.”Bill Gates, Warren Buffett, and other philanthropists … [Read more...]
Many Reasons to Plan
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Whether or not we plan to do so, each of us will face death eventually. However, by planning, we can make our passing easier and better in many ways for those we leave behind. This is the first of a series on the ways we can ease the transition through planning. This first article focuses on privacy. The next article will focus on how you leave assets to your loved … [Read more...]
What is a GST Trust?
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.What if you could give your children assets in a trust and they could use them and yet they’d avoid estate taxation at their death? That’s what a “Generation-Skipping Transfer” Trust, or “GST” trust does. It is a trust which is designed to avoid estate taxation at the death of the beneficiary.During the life of the beneficiary, the assets in the trust are used … [Read more...]
Kiddie Tax is Worse Than Ever
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.The “Kiddie Tax” is a tax on the “unearned” income of a child. In other words, it applies to the child’s income from interest and dividends, but not from wages from a job like their paper route or McDonald’s. The Kiddie Tax has been around since 1986 and applies to the unearned income of a child over a certain small amount. In 2019, that amount is $2,200. Prior to … [Read more...]
Staying Current on Estate Planning
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.Estate planning is a complicated area of the law. It’s the nexus of several substantive areas of law, including taxation, property law, family law, and other substantive areas. The American Academy of Estate Planning Attorneys held its semi-annual conference in May in Atlanta. The members of the Academy learned the latest developments in the law and estate planning … [Read more...]
Modifying an Irrevocable Trust
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.In the past, trusts often were drafted with little flexibility. Now, more and more, trusts tend to be drafted with increased flexibility and there are even ways to change “irrevocable” trusts. This is the third part of a three-part series. The first part examined ways of building flexibility into a trust. The second part examined using Trust Protectors to add … [Read more...]
Trust Protectors Add Flexibility
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.In the past, trusts often were drafted with little flexibility. Now, more and more, trusts tend to be drafted with increased flexibility and there are even ways to change “irrevocable” trusts. This is the second part of a three-part series. The first part examined ways of building flexibility into a trust. This second part examines using Trust Protectors to add … [Read more...]
Making Trusts More Flexible
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.In the past, trusts often were drafted with little flexibility. Now, more and more, trusts tend to be drafted with more flexibility and there are even ways to change “irrevocable” trusts. This is the first of a three-part series. This first part examines ways of building flexibility into a trust. The second part examines using Trust Protectors to add flexibility to a … [Read more...]
When and Where You Die Matters
Blog Author: Stephen C. Hartnett, J.D., LL.M. (Tax), Director of Education,American Academy of Estate Planning Attorneys, Inc.The federal estate and gift tax exclusion is set “permanently” to $5 million, adjusted for inflation. However, if you die between now and the end of 2025, the exclusion is doubled to $10 million, adjusted for inflation. Its inflation adjusted to $11.4 million in 2019. But, the federal estate and gift tax is the same regardless of where you live when you die. You could … [Read more...]
