Estate Administration

July 15, 2008   Estate Administration

Portability of the Federal Estate Tax Exemption - What does it Mean?

With the political and economic climate as it is in the summer of 2008, we are not likely to see total repeal of the federal estate tax in the foreseeable future. However, both Republican and Democratic Presidential candidates support estate tax reform. Realistically, such reform is at least one year away, but the outlines are already clear. And while the top estate tax rate and the exemption amount are not yet established, both candidates support making the exemption "portable" for spouses.On its face, exemption portability is a good thing. However, like many "good" things from Congress, this one may not be all that it is cracked up to be.What is "Portability"? Under current law, if a spouse dies without having planned for his or her exemption, that exemption...
October 10, 2008   Estate Administration,   Business Planning

The Importance of Treating Your LLC as a Business

By Cecil Smith, J.D. & Carol Gonnella, J.D.
Now that you have formed an LLC for your client, the LLC as an independent and separate entity from his other affairs. Among other things, your client’s goals are to:       • Protect his assets from future creditors;     • Protect his other assets from any claims made against the LLC;     • Have centralized management for future generations;     • Protect the assets against failed marriages;     • Facilitate transfers among family members;     • Obtain discounts for estate and gift tax purposes, or for purposes of a sale to family       members or trusts for their benefit.   The IRS often attacks these discounts in LLC planning. Their a...
July 13, 2009   Estate Administration

Roth Conversions 2.0 (The Roth Revolution!)

By John Bledsoe, CFP, CLU, ChFC, MSFS
From the very beginning of Roth IRAs there has been an income limitation on Roth conversions. Only people who had modified adjusted gross incomes of $100,000 or less could convert to a Roth whether married or single. This substantial limitation prevented the majority of people who could benefit from this conversion to a Roth from being able to convert. Ru­mor has it that some people even quit their jobs and a few even got divorced just so they could qualify for the Roth conversion. Well happy days are ahead because beginning January 1, 2010 the income limit is lifted for Roth conver­sions. This opens the conversion field to everyone with an IRA and a pulse; so I wanted to give a few general tips on the new (2.0) age of Roth conversions.   1.  Roth IRAs are better than reg...
July 15, 2009   Estate Administration

When Is It Time to Service Your Estate Plan?

If you own a car, then you know it requires regular servicing in order to perform well and be reliable. More than likely, your car came with a recommended schedule for service, based on how many miles it has been driven. After a certain number of miles, you need to change the oil, replace the brake pads, rotate the tires, and so on.If you have a newer car, you probably have an irritating dash light that comes on when it's time for service and stays on until the mechanic resets it. Either way, whether you pay attention to the odometer or rely on that dash light, it's pretty easy to know when it's time to service your car. And if you keep driving it without servicing it, it's a sure bet your car will let you down.Like your car, your estate plan needs "servicing" if...
January 5, 2010   Estate Administration

Estate Planning for Your Online Identity

By Peggy Hoyt, J.D., M.B.A. and Sarah AuMiller, J.D.
What happens to your online legacy when you die? This includes your websites, email, usernames, passwords, banking information, LinkedIn, Twitter, Facebook accounts, and even blogs. It is a question most people have not even considered, although you should. Without proper planning and documentation your information may become inaccessible and eventually everything you have invested into the Internet may cease to exist.Almost everyone has some type of online account. You may communicate online, pay bills online, do banking online, have an online personality, some people even date online. You are careful to make sure that the passwords which allow you to conduct these aspects of your online life are protected and that only you have access to the accounts. This is good in most instances, but...
May 15, 2012   Estate Administration

Can You Trust Your Trust? Why an Online Will or Trust Could Be the Dumbest Mistake You Ever Make

By David Hiersekorn, J.D.
In this article, WealthCounsel member David Hiersekorn discusses the hidden dangers of consumers using online legal forms, often referred to as “do it yourself (DIY) wills and trusts.” Hiersekorn notes at the end of his article that “You only get to use an estate plan once. If you screw it up, you’ll never know, but your family will.” Online legal document services offer an enticing bargain. Most people realize that they need an estate plan to manage their affairs if something happens to them. And, let’s face it, estate planning attorneys are expensive. That’s why many consumers are now questioning whether it’s possible to skip the attorney fees and use a low-cost website to prepare estate planning documents. The short answer is that, yes,...
May 25, 2012   Estate Administration

Why You Should Name a Retirement Trust as Beneficiary (For IRAs and Other Tax-Deferred Retirement Accounts)

IRAs and other tax-deferred retirement accounts allow your savings to grow tax-free until you retire. At that point, typically the year after you become age 70 ½, you must begin taking required minimum distributions, on which you pay ordinary income taxes. The rest of the money in your account continues to grow tax-free until it is distributed to you. If you die before depleting your account, the balance of your account will go to the beneficiary you have named.Naming the right beneficiary is critical. Most people want to continue the tax-deferred growth for as long as possible, paying the least amount in income taxes. This is called “stretching out” the account. Distributions after you die will be based on the new beneficiary’s age and life expectancy, so the youn...
November 12, 2012   Estate Administration

The Best Estate Plan is No Match for Unprepared Heirs

By Nancy L. Powers, Esq.
Over the course of my career, I have encountered many families who were unprepared for the inevitable aging and loss of parents.   These families experienced unexpected rivalries that threatened to  cripple or destroy the very family unity and wealth that the parents and their estate planning attorney hoped to protect.   Well-drafted estate plan documents are designed to reflect clients’ instructions for passing their legacies to the right beneficiaries and providing for care of  clients and their families.  However, the best estate plan is no substitute for preparing heirs to deal with:  changing care needs of aging parents and other family members, the complexities of estate and trust administration, and how to avoid elder financial abus...
July 1, 2013   Estate Administration

What Will Your Paper Trail Say About You?

By Wendi Temkin
As with many people of their generation, my Great-Uncle Marcus managed the family finances, thinking he was doing my Aunt Bobbie a favor by leaving her out of this chore entirely.  When he died last year, she was left with the problem of having to reconstruct their financial lives based on random pieces of paper stuffed in drawers, buried beneath 40 years’ worth of miscellany.   While it took weeks to try to figure this all out, imagine how much harder it would have been if there had been no paper trail at all for some of their accounts.  How much of your life is lived on-line?  Do you have bills that you pay automatically, based on emailed invoices and on-line payments directly out of your checking account? Are your paychecks automatically deposited into your che...
August 12, 2013   Estate Administration

What Exactly Happens to an Estate After a Person Dies?

Estate administration is the process that occurs after a person dies. During this process, a person’s probate assets are collected, his or her creditors are paid, and then the remaining assets are distributed to his or her beneficiaries in accordance with his or her will. Probate assets are all assets that the decedent owned, in his or her name alone, when he or she died. If a person left a will, the will determines the distribution of those assets.   In order to determine who the decedent selected to administer his or her estate, locate the decedent’s will. The person named as the administrator must file the will with the court and petition to open the process of probate. When the administrator’s petition is granted, the process of probate officially begins.  ...
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