A grantor retained annuity trust (GRAT) could potentially be useful if you are exposed to the federal estate tax. Before we explain the value of these trusts, we should provide some information about the estate tax so that you can determine whether or not you are exposed. Federal Estate Tax Parameters Everyone does not pay the federal estate tax, because there is a relatively large credit or exclusion. The portion of the estate that exceeds the amount of this exclusion would potentially be … [Read more...] about What Is a Grantor Retained Annuity Trust?
Do Young Adults Need an Estate Plan?
Researchers periodically conduct studies that ask people about their estate planning preparedness. Time after time, the results are not encouraging. The majority of American adults do not have a comprehensive estate plan in place. Many older people are remiss, but as you may imagine, younger adults are more likely to put estate planning on the back burner. This is certainly understandable on one level. You may feel somewhat invincible when you are in your 20's, 30's, or 40's. At the same time, … [Read more...] about Do Young Adults Need an Estate Plan?
Advantages and Disadvantages of a Conservatorship in San Jose
When you are planning ahead for the future, you should prepare yourself for each stage of life. There are the active retirement years, and there are the twilight years that will inevitably follow. It may not be the most pleasant thing to consider, but you may become unable to handle all of your own day-to-day needs when you reach an advanced age. Incapacity is not uncommon among elders. The term "oldest old" is used to describe those who are at least 85 years of age. Around 40 percent of the … [Read more...] about Advantages and Disadvantages of a Conservatorship in San Jose
What Is a Qualified Domestic Trust?
Before we explain the purpose of a qualified domestic trust, we should provide some background information about the federal estate tax and the unlimited marital deduction. Estate Tax Parameters There is a federal estate tax that is potentially applicable on large asset transfers. During the current calendar year, the amount of the federal estate tax credit or exclusion is $5.34 million. You can leave behind as much as $5.34 million tax-free. Anything that you pass along that exceeds this … [Read more...] about What Is a Qualified Domestic Trust?
Power of Attorney vs. Conservatorship (An Elder Law Today Blog)
One of our readers recently contacted our office to ask if we had literature on the difference between a Durable General Power of Attorney and a Conservatorship. Due to the number of times our office has been asked that question, we chose to make it the topic of this month’s Elder Law Today. What is a Power of Attorney? A power of attorney is a legal document where one person (the principal) authorizes another (the agent) to act on the principal’s behalf. There are financial powers of attorney … [Read more...] about Power of Attorney vs. Conservatorship (An Elder Law Today Blog)
Is Medi-Cal Relevant to the Health-Conscious?
Everyone is aware of the fact that they should plan ahead for retirement. You typically envision retirement as a time when you can travel, engage in leisure activities, and spend quality time with your family. Since you will be qualified for Medicare as a senior citizen, you may never even think about Medi-Cal. Medi-Cal is a need-based health insurance program that is jointly administered by the state government along with the federal government. If you have never had financial need, Medi-Cal … [Read more...] about Is Medi-Cal Relevant to the Health-Conscious?
What Is the Generation-Skipping Transfer Tax?
Estate planning for high net worth individuals can be complicated because of taxes on asset transfers. We have an estate tax, a gift tax, and a generation-skipping transfer tax. All of these taxes are considered to be unified by the Internal Revenue Service. As a result, you can't really understand one of them without understanding all of them. Before we explain the generation-skipping transfer tax, we will look at the other two federal taxes on asset transfers. Federal Estate Tax The federal … [Read more...] about What Is the Generation-Skipping Transfer Tax?
Estate Planning for Small Business Partners
Estate planning can be somewhat confusing for small business partners. You may not be sure about how (and when) you want to exit the business. If you do have ideas, you may not know how to make your vision for the future become a reality. Small business partnerships come in various different forms. The partners could be family members, or they could simply be business partners who are not related. One of the concerns would be the matter of liquidity and inheritance balancing. Let's assume that … [Read more...] about Estate Planning for Small Business Partners
What Is the Five-Year Medi-Cal Look-Back?
The Medi-Cal program is in place to provide a health care safety net for people with limited financial resources. Unlike Medicare, it is not specifically designed for senior citizens, but many senior citizens do qualify for Medi-Cal. This program is administered by the federal government along with each respective state government, so each state has some latitude with regard to how the program is administered. Our firm practices in the state of California. Here in California, the program is … [Read more...] about What Is the Five-Year Medi-Cal Look-Back?
Irrevocable Life Insurance Trust in San Jose: What Is an ILIT?
We like to unravel the alphabet soup of estate planning acronyms on our blog from time to time. Today we will look at the legal device called the ILIT. In an estate planning context, an ILIT is an irrevocable life insurance trust. Federal Estate Tax Before we explain the value of an ILIT, you must understand some things about the federal estate tax. There is a federal estate tax credit or exclusion. If the value of your estate exceeds the amount of this credit, the estate tax is potentially … [Read more...] about Irrevocable Life Insurance Trust in San Jose: What Is an ILIT?
