Common Mistakes in Estate Planning – Part II
When people think about an Estate Plan, they often have tunnel vision and focus on just a few of the many considerations that influence the plan. Most individuals focus on their assets and figuring out to whom they want those assets to pass. While those things matter, thinking about the intended beneficiary and their individual circumstances also matters. Certain types of beneficiaries require additional planning.
Common Mistakes in Estate Planning – Part I
Despite knowing that they should have an estate plan, many individuals look for shortcuts to creating an Estate Plan. They rely upon advice from seemingly well-intentioned individuals that if avoiding probate is their main goal and they don’t have a taxable estate, they need not seek out an attorney to create an Estate Plan. While options exist to avoid probate, probate avoidance is just one of many considerations in creating an Estate Plan.
Just When You Thought You Understood the 10-Year Rule, Think Again
IRAs have become ubiquitous components of estate plans. The SECURE Act of 2019 altered the landscape for IRAs significantly by eliminating the stretch benefit for most designated beneficiaries and forcing all designated beneficiaries other than Eligible Designated Beneficiaries to use the 10-year rule for distributions. The 10-year rule was thought to operate much like the 5-year rule that existed before the passage of the SECURE Act. Recently issued proposed Treasury Regulations dispute that and instead require annual distributions for any beneficiary subject to the 10-year rule.
Creating a Durable Power of Attorney
Why might you create and grant a power of attorney? Let’s consider some common scenarios: military personnel may grant power of attorney in anticipation of an overseas tour of duty. Likewise, those taking extended vacations will need someone to look after their interests in their absence. Health reasons, either in anticipation of extended physical rehabilitation […]
Talking Trusts… and Taxation
Estate planning attorneys need to understand and explain taxation of trusts in order to properly advise clients. Individual clients need to understand the implications of the plan their attorney suggests in order to properly file their own taxes. Determining whether a trust qualifies as a grantor trust or a nongrantor trust is the first step in determining tax liability for a particular year.
Transfer for Value and the Sale of Life Insurance
Even individuals with modest estates purchase life insurance which means that Estate Planning attorneys must understand the rules regarding taxation of life insurance. Retention of certain powers or certain transactions could cause negative income, gift, or estate tax consequences.
Easy Business Succession Planning
Many Estate Planning attorneys shy away from business succession planning, but if you approach it like you do any other asset, it’s not so scary! First, it’s important to understand that entities involve not just the business relationship, but family relationships as well. Often, businesses start with one or maybe two members of a senior generation who have the funds, desire, and connections to create the business. It’s not always clear, though, what will happen when that senior generation retires, or worse yet, dies unexpectedly.
International Estate Planning
As the world shrinks due to increased mobility and interconnectedness, estate planning has become more complex. Now estate planning requires understanding issues that arise when a client owns assets in another country or resides in the U.S. but lacks citizen status. Things change for clients who neither reside in the U.S., nor have U.S. citizenship, but who own U.S. property.