Every month, the IRS quietly makes a mostly-unheralded announcement of the current Applicable Federal Rate (AFR) for determining the present value of an annuity, an interest for life or a term of year, or a remainder or reversionary interest under Section 7520. Ha! If you made it through that sentence, then you already know why this announcement goes mostly un-noticed by most mainstream media! However, if you are charitably-inclined, or want to make a large, nontaxable gift to your heirs, it could be very important for you to know that the November rate is set at an all-time low of…
To become a more effective advocate for your loved one with special needs: v Follow through on your instincts and investigate anything that you think may not be on the up and up. v Put it in writing and save a signed copy for your records, specifically lay out what is bothering you or your family member. The more focused you are in your letter it’s easier for the caregiver or supervisor to resolve it. v Whether your loved one lives with you, in a group home, or in a long-term care facility, you must be physically present in order…
One area where it is crucial to make sure the premarital agreement is integrated with the estate plan is with regard to the residence. For example, while many premarital agreements provide that the surviving spouse may remain in the residence, the house may be in a revocable living trust that goes directly to the children. To avoid such conflicts, Ganderson tries to have the estate plan completed before the marriage. One option for clients who want to allow a surviving spouse to continue to reside in the home is for the wealthy spouse to set up a trust to provide…
A client who is considering a second (or third or more) marriage often has more complicated estate planning needs than a single client or a client who has been married only once. A premarital agreement can be key to protecting a client's assets, but the attorney must make sure the agreement is integrated with the client's estate plan. At the National Academy of Elder Law Attorneys' 2010 Elder and Special Needs Law Annual Meeting in Orlando, Florida, earlier this year, Virginia estate planning attorney Martin J. Ganderson discussed how to plan for a second marriage and outlined the various estate…
Only 0.6 percent of those dying in the U.S. in 2008 owed any estate tax, according to new data released by the IRS. This means that 99.4 percent of estates were too small to pay an estate tax, which the Republican party and some wealthy individuals have been fighting to repeal entirely.
Do not name your special needs child directly as a beneficiary of a retirement plan if your child receives or may later need SSI, Medicaid, or other benefits such as Section 8 assistance or food stamps. The distributions from the retirement account will either reduce the entitlements or eliminate them entirely. Instead, if you want your child to receive your retirement benefits, the named beneficiary on the account can be the special needs trust for your child. Even so, this trust should contain special provisions not typically found in special needs trusts to insure the most favorable stretch-out and tax…
The number of opposite-sex couples living together jumped 13% this year to 7.5 million, according to an article I read this week in USA Today. In fact, researchers estimate that half of all married couples now live together before they get married. Why? Some blame the sluggish job market, but others suggest that couples who choose to live together frequently do so to avoid what they consider “legal hassles,” especially those associated with a potential break-up. However, the truth is that for unmarried couples who break-up, the fall-out can be worse than a messy divorce. USA Today suggests that unmarried…
Strategic use of life insurance frequently is a key aspect of comprehensive estate planning, solving a wide variety of estate planning challenges from providing liquidity to pay estate taxes, to charitable bequests and ensuring the continuation of a closely-held business. One of the key characteristics of life insurance, however, making it such a versatile estate planning tool, is preferential tax treatment. Properly structured, life insurance proceeds pass tax-free to beneficiaries, and earnings on investments held within certain types of “permanent” life insurance also generally accrue tax-free. According to a recent article in The Wall Street Journal, there is some national…
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