There is a legal device called a special needs or supplemental needs trust that is used to provide resources for a person with a disability. We will explain the details in this post with an emphasis on the self-settled or first-party trust. Government Benefit Eligibility Obviously, people with disabilities are going to need health insurance. Most Americans get insurance through their employers, and many folks with disabilities are not part of the workforce, so this is not an option. As a … [Read more...] about Can a Person With a Disability Fund a Special Needs Trust?
529 Plans – The “Holy Grail” of Estate Planning
When Estate Planning practitioners talk about the “Holy Grail” of Estate Planning, they generally mean the intentionally defective grantor trust which includes the assets contributed to it in the grantor’s income tax for income purposes but excludes such assets from the grantor’s estate for estate tax purposes. The 529 plan provides yet another example of the “Holy Grail” in Estate planning by allowing tax-free growth, control of the plan until the death of the grantor without estate tax … [Read more...] about 529 Plans – The “Holy Grail” of Estate Planning
What Is the 2023 Gift Tax Exclusion
You can’t understand the relevance of the gift tax unless you have an understanding of the estate tax, so we will start there. Basic Federal Estate Tax Parameters Wealth preservation is key for high-net-worth individuals, and very successful people have to confront a threat in the form of the federal estate tax. The rate of the estate tax is a whopping 40 percent, so it can significantly erode your legacy. There is a federal estate tax exclusion that represents the amount that can be … [Read more...] about What Is the 2023 Gift Tax Exclusion
Is Your IRA Part of Your Estate Plan?
Your individual retirement account can serve as a nest egg during your senior years, but you may find that you do not need the resources. Under these circumstances, the IRA will be included in your estate plan, so you should understand the rules for beneficiaries. We will provide an overview in this post. Traditional Individual Retirement Accounts If you have a traditional IRA, you direct pre-tax earnings into the account. You get a tax break each year because your taxable income is reduced by … [Read more...] about Is Your IRA Part of Your Estate Plan?
Keep Your Estate Plan Current at All Times
When you put your original estate plan in place, you are going to be reacting to a snapshot of your life at that time. There is no other way to go about it, but you should be aware of the fact that revisions are probably going to be necessary as circumstances change over the years. Family Situation An estate plan for a single person will be simple and straightforward. You want to carry enough life insurance to cover your final expenses, and you should execute a simple will or a living … [Read more...] about Keep Your Estate Plan Current at All Times
Is Joint Tenancy a Good Estate Planning Solution?
It is said that a little bit of information can be a dangerous thing, and this certainly enters the picture when it comes to estate planning. There are those that share bits and pieces of what they think they know, and there may be some truth in the mix. However, an incomplete picture is often painted, and this can yield negative consequences in the long run. Probate Avoidance One of the first things you should understand about estate planning is the fact that a will is not administered … [Read more...] about Is Joint Tenancy a Good Estate Planning Solution?
Clearing Up Questions About Taxes on Inheritances
Many people that speak with us about their estate planning concerns bring up the question of taxation right away. This is understandable, because it is natural to assume that taxes can have a significant impact on your legacy. In this post, we will address these questions so you can come away with a more complete understanding of the subject. If you are named in a will, do you have to claim the inheritance when you file your federal income tax return? No, the inheritance would not be looked … [Read more...] about Clearing Up Questions About Taxes on Inheritances
Estate Planning Decisions: Is a Will Right for You?
A lot of people assume that a will is the only document that you need when you decide to plan your estate. The truth is, you ALWAYS need more than just a will. For some, there are situations that call for the utilization of a trust, and we will dissect the subject in this post. Lump Sum Inheritances There are severe limitations when you use a will to serve as your asset transfer vehicle. First, the people that are named as beneficiaries in a will may receive lump sum bequests all at once. … [Read more...] about Estate Planning Decisions: Is a Will Right for You?
The Lessons from Lisa Marie
Regular readers of this blog often see articles regarding the latest celebrity whose death created a mess because their Estate Plan failed to properly protect the celebrity’s family and loved ones. It seems that an individual with fame and money could easily avoid that result; however, that’s not always the case. The fallout caused by inadequate Estate Plans of celebrities provides great lessons for Estate Planning practitioners and their clients because the drama unfolds on a public stage. … [Read more...] about The Lessons from Lisa Marie
The Sky Isn’t Falling
When we learned of the original provisions in the Build Back Better Act, many individuals panicked, rushing to complete Estate Planning or seeking to undo certain aspects of their estate plan. As the Build Back Better Act has evolved, many wondered if they should have waited before making significant changes to their estate plan. No matter what happens with the Build Back Better Act, an estate plan centered on long-term goals will serve you well. Read on to learn more. … [Read more...] about The Sky Isn’t Falling
