Berdon Blogs

T&E TALK: Tax Law Uncertainty Requires Estate Plan Flexibility

Posted by Scott T. Ditman, CPA/PFS on Oct 16, 2017 7:00:00 AM

Events of the last decade have taught us that taxes are anything but certain. Case in point: Congress is again mulling abolishing estate and generation skipping taxes as part of tax reform. So how can people who hope to still have long lifespans ahead of them plan their estates when the tax landscape may look dramatically different 20, 30, or 40 years from now? The answer is by taking a flexible approach that allows you to hedge your bets.

Conflicting Strategies

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Topics: T&E TALK

T&E TALK: An HSA can Benefit Your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Oct 9, 2017 7:05:00 AM

One health care arrangement that has been soaring in popularity in recent years has been the pairing of a high-deductible health plan (HDHP) with a Health Savings Account (HSA). The good news is that not only does an HSA provide a tax-advantaged way to pay for health care costs, but it also can help you achieve your estate planning goals.

How does it Work?

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Topics: T&E TALK

T&E TALK: The Art of Donating Artwork

Posted by Scott T. Ditman, CPA/PFS on Oct 2, 2017 7:05:00 AM

If you own valuable works of art, they may be ideal candidates for charitable donations during your life. Generally, it’s advantageous to donate appreciated property because, in addition to gaining a valuable tax deduction, you can avoid capital gains taxes. Because the top capital gains rate for art and other “collectibles” is 28%, donating art can be particularly effective.

Five Tax-Saving Tips

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Topics: T&E TALK

T&E TALK: Consider Tax Basis Planning if Estate Taxes Aren’t a Threat

Posted by Scott T. Ditman, CPA/PFS on Sep 25, 2017 7:04:00 AM

For some, income tax planning offers far greater tax-saving opportunities than gift and estate tax planning.  A record-high gift and estate tax exemption — currently $5.49 million ($10.98 million for married couples) — means that fewer people are subject to those taxes.

If gift and estate taxes aren’t a concern for your family, it may pay to focus your planning efforts on income taxes — in particular, on basis planning.

Benefits of a “Stepped-Up” Basis

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Topics: T&E TALK

T&E TALK: Deferral - Estate Tax Relief for Family Businesses

Posted by Scott T. Ditman, CPA/PFS on Sep 18, 2017 9:38:07 AM

If a substantial portion of your wealth is tied up in a family or closely held business, you may be concerned that your estate will lack sufficient liquid assets to pay federal estate taxes. In these circumstances, your heirs may be forced to borrow funds or, in a worst-case scenario, sell the business in order to pay the tax.

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Topics: T&E TALK

T&E TALK: Is Your Revocable Trust Properly Funded?

Posted by Scott T. Ditman, CPA/PFS on Sep 11, 2017 7:03:00 AM

If your estate plan includes a revocable trust — also known as a “living” trust — it’s critical to ensure that the trust is properly funded. Revocable trusts offer significant benefits, including asset management in the event you become incapacitated and probate avoidance. But these benefits aren’t available if you don’t fund the trust.

The Basics

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Topics: T&E TALK

T&E TALK: Powers of Attorney - To Spring or Not to Spring

Posted by Scott T. Ditman, CPA/PFS on Sep 5, 2017 7:05:00 AM

Estate planning requires more than just focusing on what happens to your assets when you die. It’s equally important to have a plan for making critical financial and medical decisions if you’re unable to make those decisions yourself. That’s where the power of attorney (POA) comes in.

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Topics: T&E TALK

T&E TALK: Don’t Trigger the GST Tax when Transferring Assets to Grandchildren

Posted by Scott T. Ditman, CPA/PFS on Aug 28, 2017 7:03:00 AM

When planning your estate, don’t overlook the generation-skipping transfer (GST) tax. Despite a generous $5.49 million GST tax exemption, complexities surrounding its allocation can create several tax traps for the unwary.

GST Basics

The GST tax is a flat, 40% tax on transfers to “skip persons,” including grandchildren, other family members more than a generation below you, nonfamily members more than 37½ years younger than you and certain trusts (if all of their beneficiaries are skip persons). If your child predeceases his or her children, however, they’re no longer considered skip persons.

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Topics: T&E TALK

T&E TALK: An NCP Trust Enables You to Achieve a Variety of Goals

Posted by Scott T. Ditman, CPA/PFS on Aug 21, 2017 7:05:00 AM

Generally, trusts must have one or more human beneficiaries, but there’s an exception for certain “purpose” trusts. One type of purpose trust that you may be familiar with is the charitable trust. But don’t overlook the noncharitable purpose (NCP) trust as a potential tool for achieving your estate planning goals.

NCP Trust Defined

Historically, trusts were required to have human beneficiaries. Charitable trusts were the exception: The attorney general of the relevant jurisdiction was authorized to enforce the trust in the public interest.

Over the years, however, many U.S. states and a number of foreign jurisdictions have enacted legislation that authorizes NCP trusts. These trusts may be used to achieve a variety of purposes, such as: maintaining family residences, personal property, and gravesites and funding a family business.

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Topics: T&E TALK

T&E TALK: Don’t Overlook Tax Apportionment in Your Estate Plan

Posted by Scott T. Ditman, CPA/PFS on Aug 14, 2017 7:00:00 AM

If you expect your estate to have a significant estate tax liability at your death, be sure to include a well-thought-out tax apportionment clause in your will or revocable trust. An apportionment clause specifies how the estate tax burden will be allocated among your beneficiaries. Omitting this clause, or failing to word it carefully, may result in unintended consequences.

Your  Options

There are many ways to apportion estate taxes. One option is to have all of the taxes paid out of assets passing through your will. Beneficiaries receiving assets outside your will — such as IRAs, retirement plans or life insurance proceeds — won’t bear any of the tax burden.

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Topics: T&E TALK

About Berdon Blogs

Our experts examine the latest trends, economics, business conditions and industry issues to provide timely information you need to maximize your tax advantages and meet your financial goals.

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