Year: 2018

Fundamentals: What is a Trust? (And do I need one?)

Posted Friday, March 23rd, 2018
A trust is an arrangement for holding property. When you own an asset outright, that is, in your own name, you have ownership of the property in every sense.  But assets can be held in trust, which means dividing the legal ownership and the beneficial ownership of the property. Legal ownership means that the asset is titled in your name…

Fundamentals: Planning with Advance Directives for Health Care

Posted Thursday, March 15th, 2018
Despite its clunky name, an Advance Directive for Health Care has a simple purpose: to appoint someone to act for you with respect to your medical care.  In some states this document is called a “Living Will.”  It is a crucial document to have. If you are incapacitated, for example, you are in a coma, and cannot express your own…

The Tax Cuts and Jobs Act of 2017 Brings Changes to “Kiddie Tax”

Posted Wednesday, March 14th, 2018
Since 1986, the “Kiddie Tax” has been in place to close a loophole through which some taxpayers were getting investment income taxed at lower rates by transferring assets to their children.  Under the rule between 1986 and 2017, unearned income (stock dividends, interest, and capital gains) gets separated out for any children in the family. If this unearned income exceeded…

Fundamentals: What Documents do I Need for a Complete Estate Plan?

Posted Wednesday, March 14th, 2018
  Thinking about your estate plan can be a daunting task. Luckily, for most people, a complete estate plan involves only a few documents: Last Will and Testament: Your Will is responsible for transferring your probate assets at your death. Probate assets are most assets that you own in your own name.  For many people their homes will be their…

Fundamentals: Do I need a Power of Attorney for Property?

Posted Wednesday, March 14th, 2018
Powers of attorney are a frequently misunderstood and underappreciated piece of an estate plan.  The term “power of attorney” simply refers to any document that you can use to appoint an agent to do something on your behalf.  A power of attorney for property is a document that allows an agent to handle your financial affairs on your behalf.  If…

Strategies: Bunching Charitable Deductions After Tax Reform

Posted Wednesday, March 14th, 2018
While tax reform has not gotten rid of charitable deductions, it has dramatically changed how most taxpayers will use them in figuring their taxes.  In prior years it is estimated that up to 36 million tax payers claimed a charitable deduction. The old system of itemized deductions made charitable deductions valuable for anyone who itemized and did not take the…

Fundamentals: What is an Estate Plan?

Posted Wednesday, March 14th, 2018
What is an estate plan? At its most basic, an estate plan is a written direction regarding how your property passes at your death.  Because it is in society’s best interest for this transfer to happen in an orderly fashion, every American has a default estate plan. This default estate plan is provided courtesy of the legislature in each state,…

How the New Tax Bill Affects High-Income Taxpayers

Posted Friday, February 2nd, 2018
On January 1, 2018, the most significant overhaul to the Internal Revenue Code in decades took effect.  High-income taxpayers stand to benefit from lower tax brackets, higher estate tax exemptions and a less stringent alternative minimum tax.  However, high-income earners face new limitations on some favored deductions and notable revisions in charitable write-offs. Some of the most noteworthy changes are…

Trust and Estate Distributions Before March 6, 2018 Can Reduce Taxes

Posted Tuesday, January 9th, 2018
A trustee may be able to reduce income taxes by making a distribution of income from a trust to beneficiaries by March 6, 2018.  Similarly, an estate that reports its income on the basis of a calendar year may be able to reduce income taxes by distributing income to one or more beneficiaries by March 6, 2018. Trust or estate income that…