A trustee is the person or institution appointed to manage a trust. A trust is a legal arrangement through which a trustee holds legal title to property for another person, called a “beneficiary.” The trust document will name the trustee. Being a trustee is a big responsibility. A Trustee(s) must act in the best interests of the trust beneficiaries at all times. A trustee’s duties include locating and protecting trust assets, investing assets prudently, distributing assets to beneficiaries, keeping track of income and expenditures, and filing taxes. A Brief Overview of a Trustee’s Duties If you have been appointed the…
When planning your estate it is important to understand the difference between probate and non-probate assets. Probate is the process through which the Register of Wills determines how to distribute your property after you die. Some assets are distributed to heirs by the Register of Wills (probate assets) and some assets bypass the process and go directly to your beneficiaries (non-probate assets). The probate process includes filing a will and appointing an executor or administrator, collecting assets, paying bills, filing taxes, distributing property to heirs, and filing a final account. This can be a costly and time-consuming process, which is…
A trust is a legal arrangement through which one person (s) (or an institution, such as a bank), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” Trusts fall into two basic categories: testamentary and inter vivos. A testamentary trust is one created by your will, and it does not come into existence until you die. In contrast, an inter vivos trust, starts during your lifetime. You create it now and it exists during your life. There are two kinds of inter vivos trusts: revocable and irrevocable. Revocable Trusts Revocable Trusts are often referred to…
There are some serious drawbacks to many options for giving gifts to grandchildren. Either there are no tax or estate planning advantages, or you have no control of the funds (or lose control after a certain point), or the money could affect a grandchild’s eligibility for financial aid. An option that overcomes many of these problems involves transferring money into a trust established to benefit a grandchild. We can draft a trust that reflects your express wishes about when the income and principal will be available to the grandchild, and even how the funds will be spent. Transferring funds into…
What Is A Trust? A trust is a legal arrangement through which a person (s) (or an institution, such as a bank), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” The rules or instructions under which the trustee operates are set out in the trust instrument. Trusts have one set of beneficiaries during their lives and another set — often their children — who begin to benefit only after the first group has died. The first are often called “life beneficiaries” and the second “remaindermen.” There can be several advantages to establishing a trust,…
Another way to remove assets from an estate is to make a contribution to a charitable gift annuity (CGA). A CGA enables you to transfer cash or marketable securities to a charitable organization or foundation in exchange for an income tax deduction and the organization’s promise to make fixed annual payments to you (and to a second beneficiary, if you choose) for life. A portion of the income will be tax-free. Please visit our website at www.davidwingate.com. Peace of mind is only a call or click away! For an Initial Consultation call Estate and Elder Planning by David Wingate at (301)…
Making Gifts: The $16,000 Rule One simple way you can reduce estate taxes or shelter assets in order to achieve Medicaid eligibility is to give some or all of your estate to your children (or anyone else) during their lives in the form of gifts. Certain rules apply, however. There is no actual limit on how much you may give during your lifetime. But if you give any individual more than$16,000 in 2022, you must file a gift tax return reporting the gift to the IRS. Also, the amount above $16,000 will be counted against a lifetime tax exclusion for…
Congress sets the amount that an individual can transfer tax-free either during life or at death. The current estate tax exemption is so high that very few estates will have to pay an estate tax. In 2017, Republicans in Congress and President Trump doubled the federal estate tax exemption and indexed it for inflation. In 2022, the exemption is $12.06 million ($24.12 million for couples). That means that as long as your estate is valued at under the exemption amount, it will not pay any federal estate taxes. The lifetime gift tax exclusion – the amount you can give away without incurring…
Transferring funds into such a trust offers the following benefits: (1) You can reduce the size of your estate by transferring up to $16,000 (in 2022) into each trust you create for each grandchild. No gift taxes will be due in connection with the transfers; (2) Although the trust owns the assets, you control them as trustee and can decide what type of investments to make; (3) Income earned by the trust from amounts that you’ve deposited will not be taxed to you; the trust pays the taxes; (4) Amounts deposited in trust, and the income earned from those funds,…
There are some serious drawbacks to many options for giving gifts to grandchildren. Either there are no tax or estate planning advantages, or you have no control of the funds (or lose control after a certain point), or the money could affect a grandchild’s eligibility for financial aid. An option that overcomes many of these problems involves transferring money into a trust established to benefit a grandchild. With the help of an attorney, you can draft a trust that reflects your express wishes about when the income and principal will be available to the grandchild, and even how the funds…
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