Trusts can be very flexible in meeting a family’s needs. But, needs can change over time. The key to a trust is flexibility. Let’s look at a couple fairly common situations and some solutions. John and Jane consulted with an attorney who drafted a trust for them which started out revocable and became irrevocable upon the death of the survivor of them. The trust worked seamlessly while John and Jane were both alive. Then, when John died the trust continued for Jane’s life. At Jane’s death, … [Read more...] about Trusts Can Be Very Flexible
An Estate Plan Takes Care
Planning an estate takes care and precision. There are many different ways that a plan which is not drafted appropriately may not achieve the client’s goals. The estates may be large or small. Most people understand that clients with large, complicated estates with tax issues require careful consideration and drafting of the plan. But, we’ll look at several examples of clients of more middle class means who had goals in mind whose goals were not achieved by their plan. In the first situation, … [Read more...] about An Estate Plan Takes Care
Long-Term Care Planning: Good for Elder and Child
Life expectancies are getting longer and longer. And, not coincidentally, the risk we will need long-term care (“LTC”) is greater than ever. An interesting article in Forbes discussed the likelihood of needing LTC. It examined the research and concluded that most people would need LTC at some point during their life. Needing LTC is not the exception, it is the rule. This is not just an interesting point to ponder. LTC is a very expensive proposition that can torpedo a person’s financial … [Read more...] about Long-Term Care Planning: Good for Elder and Child
The Selection of Trustees and Their Discretion
Clients often don’t put much thought into the importance of the selection of trustees and the standards for distributions used by the trustee. Truth be told, these are some of the most important decisions clients will make. The trustee is the CEO of the trust. They make the decisions regarding how to invest the assets and exercise whatever discretion is in the trust regarding distributions to beneficiaries. First, who makes a good trustee? Clients often choose a trustee simply based on birth … [Read more...] about The Selection of Trustees and Their Discretion
Selling Large Asset and Minimizing Taxes
Most of us have a broad range of clients in our practices. Some of our clients have large assets and now want to dispose of those assets. They might have started a business with sweat equity and now want to retire or exit the business. They might have purchased a publicly-traded stock, such as Amazon, Apple or Microsoft in the early days and hold a very large position in the stock. They may want to diversify their portfolio due to the inadvertently large concentration of assets in one stock. … [Read more...] about Selling Large Asset and Minimizing Taxes
Failure to Plan is a Disaster for Clients and their Advisors
Savvy planners know that failing to plan is not desirable. Benjamin Franklin is often quoted, “If you fail to plan, you are planning to fail.” Few financial planners would guess how many of their clients might not have a plan in place. According to a recent survey by Harris Poll, 64% of Americans do not even have a will. Here’s a link to an article in USA Today which discusses the survey. Many would guess their wealthier or more sophisticated clients would not be among those without a plan. But, … [Read more...] about Failure to Plan is a Disaster for Clients and their Advisors
Planning for Retirement Benefits: Get it Right the First Time
Retirement assets comprise a large portion of most Americans’ total wealth. By March 2015, retirement assets hit $24.9 trillion. That’s a lot of money! The key to maximizing and maintaining that large chunk of your clients’ wealth is to keep the money in the retirement plan for as long as possible. There are two reasons it is normally best not to withdraw retirement assets for as long as possible. The first reason is asset protection. As long as the assets are in a retirement plan (like a … [Read more...] about Planning for Retirement Benefits: Get it Right the First Time
ABLE Accounts: A New Planning Tool for Persons with Disabilities
Persons with disabilities have been seeking a way to save for college, medical equipment and health care expenses, and retirement without being disqualified from government assistance programs such as Medicaid and SSI (Supplemental Security Income) for decades. Generally speaking, a disabled person receiving needs-based government assistance cannot have more than $2,000 in a bank account or other assets. There are exceptions for a personal residence, one car, certain work-related equipment, and … [Read more...] about ABLE Accounts: A New Planning Tool for Persons with Disabilities
Estate Tax Repeal in 2017?
Now that the election of Donald J. Trump has become a reality, the question is how that will affect estate taxes and estate planning. The simple answer is that for most Americans there will be no change, as currently 99% of taxpayers are not subject to the estate tax. If the law remains unchanged, the amount a taxpayer can pass free of estate tax in 2017 will be $5,490,000, or $10,980,000 for married taxpayers. President-Elect Trump has proposed the complete elimination of the estate tax. In … [Read more...] about Estate Tax Repeal in 2017?
Ambiguities Can Lead to Litigation
Tom Clancy was a prolific scrivener of action novels. Upon his death at age 66, he left a substantial estate. His Will divided his estate into three shares – one share to his wife, one share for his wife to use during her life (with the remainder to go the daughter of their marriage), and one share to go to his children from previous relationships. Weeks before he passed away, Clancy executed a Codicil to his Will which included the following sentence: “No asset or proceeds of any assets shall … [Read more...] about Ambiguities Can Lead to Litigation
