According to Forbes, the budget troubles and rising deficits hitting nearly every state are making them more aggressive about finding revenue wherever they can – including taxing your estate. Illinois recently became the latest state to impose an estate tax, making it retroactive to the beginning of the year. All told, 12 states and the District of Columbia now impose a state estate tax of some sort. Eight states enforce an inheritance tax and two states (New Jersey and Maryland) impose both an estate and an inheritance tax. “It’s a very confusing situation,” says Anita Sarafa, a managing director and…
Roth IRAs have become the darling of the financial media recently. Of course much of the chatter has been about using a Roth as part of your retirement planning strategy, and the superb conditions for Roth conversions. But what about the Roth IRA and your estate planning, what happens if you leave your Roth IRA to your estate? Marketplace Money guru for American Public Media, Chris Farrell, recently fielded the question. “When it comes to estate planning, the Roth ranks among the best of the retirement savings plans,” says Farrell. Why? Unlike a traditional IRA, a Roth does not have…
Forbes.com notes the circumstances surrounding Anna Nicole Smith and her protracted legal siege as an example of what not to do. 2010 marked the fifteenth year of fighting, and the Supreme Court’s ruling that it will hear her case once more, of whether or not her late 90-year-old husband left his estate to her. Some allege the young model was financially exploiting her (wealthy) elderly husband. This year the first of the baby boomers will turn 65, along with approximately 2.5 million of their peers. Exploitation of those 65 and older is a growing epidemic: a study by Met Life…
Your wills, trusts, powers of attorney and other documents (including health care directives) should be reviewed and updated every few years – or whenever you experience significant life events like a marriage, divorce, move to another state, birth of a child or grandchild, etc.
The New Year is well underway, and we’re two months into a new estate tax law as well. Now is a good time to review your estate plan, and Forbes.com provides some “motivation” for proper legal planning by recounting tips we could all learn from last year’s highly-publicized celebrity estates. Familiarize Yourself with 2011 Estate Tax Laws. George Steinbrenner, as you may recall, timed his death well by passing away in 2010 when there was no estate tax. Of course, while his estate was highly publicized, other wealthy people died last year, too – and now their heirs can elect…
As the old saying goes, “If you’re giving while you’re living, then you’re knowing where it’s going.” But the new tax legislation passed in December makes gifting even more attractive for wealthy families. A recent article in the Wall Street Journal, “The $5 Million Tax Break,” points out why lifetime gifting is suddenly so attractive under the new laws. It’s a good article, worth reading, but here are the high points, in a nut-shell: For the next two years, the gift-tax exemption jumps to $5 million from $1 million for individuals, and to $10 million (up from $2 million) for…
The tax cut extension package does dramatically change the game for everyone – married couples and singles alike – in terms of estate tax planning. In fact, that tidbit is probably the most important thing you should remember about the new legislation – it made significant changes to the estate tax law. The very fact that things have changed (again) means your estate planning probably should be reviewed.The federal estate tax exemption is now $5 million, with a 35 percent applicable tax rate on the remainder. This means that if you are a single person with an estate of less…
The IRS has issued a statement clarifying an otherwise confusing situation for retirees hoping to make charitable donations directly from an Individual Retirement Account (IRA). The confusion began when Congress extended the timeframe to make a 2010 charitable donation from your IRA. The deadline should have been December 31, 2010 –but recognizing that their own delays had caused problems, Congress extended the deadline to January 31 of this year. The IRA charitable donation is a popular rule, which had expired at the beginning of 2010, allowing taxpayers age 70-1/2 or older to donate up to $100,000 a year of IRA…
Sometimes the estate tax isn’t all that bad, and according to a recent Smart Money article it may actually be better to choose it over no tax at all! Why would anyone want to subject an estate to taxes if they could opt out? There actually are some pretty sound reasons to consider this. The new tax law gives estate executors (for 2010 estates) the choice between estate taxes and the right to use the new estate tax law. Here’s why some executors may choose to use the new federal estate tax law instead of avoiding estate taxes altogether: stepped-up…
The number of unmarried couples is on the rise, and with them a myriad of legal snarls and entanglements. In fact, if you are not married to your partner, but have shared assets or living arrangements, the Wall Street Journal article says you may experience a sort of (un)marriage penalty. According to the Census Bureau, the number of opposite-sex unmarried couples living together in the U.S. jumped some 13% in 2010 from the previous year, to about 7.5 million. The bureau also estimates the number of same-sex couples living together rose roughly 30 percent, to about 620,000 this year from…
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