Now that the Democratic party has taken control of the White House and both chambers of Congress, there may be new legislation passed that impacts the way inheritances are taxed. We will provide some insight in this post. Elimination of Stepped-Up Basis Let’s say that your rich uncle passes away, and he leaves you a thousand shares of stock. The stock is worth $100 a share, but he bought it years ago when it was valued at $10 a share. Your uncle paid $10,000 for the stock, and it grew in … [Read more...] about Dem Control Could Impact Taxes on Inheritances
There are many different facets to the estate planning process, and questions arise when you start to ponder the details. With this in mind, if you have an individual retirement account (IRA), you may wonder about the rules for the beneficiary or beneficiaries. We will provide some clarity in this post, and it is important right around now, because there have been some relatively recent changes that have altered the playing field. Traditional Individual Retirement Accounts The traditional … [Read more...] about What Are the Rules for Inherited IRAs?
We are going to provide some information about taxes on living trust distributions in this post. But before we address this central question, we should provide some general information about the benefits that these trusts provide. Lump Sum Inheritance Concerns You may have concerns about leaving a direct, lump sum inheritance to someone that is on your list. Some folks have a proven history of poor money management, and there are young people that simply may not be prepared to handle a … [Read more...] about Are Living Trust Payouts Taxed?
When you think about the role of an attorney, you probably envision the presentation of legal arguments, negotiations, and the execution of documents. These endeavors are part of the vocation in a general sense, and there are areas of specialization. As an elder law firm, we help people create legal devices that serve certain purposes, but there is another facet. Our attorneys got into this particular area of the law because we sincerely want to help elders and their families manage difficult … [Read more...] about What Is Life Care Planning?
Estate planning mistakes can yield negative consequences, but when you are aware of the traps that are out there, you will be ready to steer clear of them. With this in mind, we will look at three commonly made estate planning errors in this post. Do-It-Yourself Estate Planning You can buy generic, boilerplate legal documents on the Internet, including wills and trusts. The sites that sell them contend that it is simple to use the downloads and worksheets to create your own estate plan. If … [Read more...] about Steer Clear of These Estate Planning Mistakes
Mortality is a subject that people generally try to avoid, and it may not seem very relevant to you when you are still young or relatively young. At the same time, people of all ages contract catastrophic illnesses every day, and there are thousands of accidents. Sometimes a highly publicized event will serve as an eye-opener, and the tragic Kobe Bryant helicopter crash would fit into this category. The people that passed away were young and healthy, so it really demonstrated the way … [Read more...] about Pandemic Illustrates the Importance of Advance Planning
In our last post, we looked at three different reasons why you may want to use a trust instead of a will. We promised a second installment, and this is the conclusion of the two part series. Streamlined and Efficient Estate Administration A lot of people assume that the estate administration process is very simple and straightforward if you use a will as your primary vehicle of asset transfer. In reality, there are some rather burdensome steps that must be taken before the assets can be … [Read more...] about When Is a Trust Better Than a Will (Part 2)?
Contrary to popular belief, a will is not a one-size-fits-all estate planning solution. There are many different scenarios that would call for the use of a trust. We are going to look at three of them in this post, and our follow-up entry will add to the list. Nursing Home Asset Protection Most seniors will qualify for Medicare when they reach the age of 65. This program will provide a strong health insurance safety net, but there are out-of-pocket expenses, including premiums, deductibles, … [Read more...] about When a Trust Is Better Than a Will (Part 1)
Our Elder Law and Estate Planning attorneys are deeply committed to the well-being of our clients and their families. Estate planning can be confusing and overwhelming, not to mention there are many different types of trusts that exist. There are reasons why you may want to use one trust rather than another trust. Each situation is different, and this is why personalized attention is so very important. This is exactly what you will get when you choose our firm as your estate planning … [Read more...] about A Look at Two Commonly Used Trusts
We get a lot of questions about the taxes that can impact inheritances, and people are usually surprised when they hear the answers. Believe it or not, you do not have to report an inheritance as taxable income on your federal or state tax returns. Another positive element to the rules for taxation on bequests is the step-up in basis. The best way to explain this is through the use of a simple example. Let’s say that your grandfather passes away, and he leaves you 1000 shares of stock that … [Read more...] about Is There an Indiana Estate Tax?