Berdon Blogs

T&E TALK: Make the Holidays Bright with Annual Exclusion Gifts

Posted by Scott T. Ditman, CPA/PFS on Dec 4, 2017 7:02:00 AM

As the holiday season approaches, gift giving will be top of mind. While gifts of electronics, toys, and clothes are nice, making tax-free gifts of cash using your annual exclusion is beneficial for both you and your family. Even in this potentially changing estate tax environment, making annual exclusion gifts before year end can still benefit your estate plan.

Understanding the Annual Exclusion

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Topics: T&E TALK

T&E TALK: Tax Reform and Estate Planning - What’s on the Table?

Posted by Scott T. Ditman, CPA/PFS on Nov 27, 2017 10:30:52 AM

As Congress and President Trump pursue their stated goal of passing sweeping new tax legislation before the end of the year, many taxpayers are wondering how such legislation will affect them. One area of particular interest is estate planning; specifically, the future of gift, estate and generation-skipping transfer (GST) taxes.

Potential Estate Tax Law Changes

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Topics: T&E TALK

T&E TALK: Consider a Letter of Instructions to your Heirs

Posted by Scott T. Ditman, CPA/PFS on Nov 20, 2017 7:03:00 AM

When you draft your estate plan, the centerpiece is your will or living trust. Such a document determines who gets what, where, when, and how, as well as tying up the loose ends of your estate. A valid will or living trust can be supplemented by other legally binding documents, such as trusts (or additional trusts), powers of attorney and health care directives.

But there’s still a place at the table for a document that has absolutely no legal authority: a “letter of instructions” to your heirs. This informal letter can provide valuable guidance and act as a road map to the rest of your estate.

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Topics: T&E TALK

T&E TALK: Leverage the Benefits of a Charitable Remainder Trust

Posted by Scott T. Ditman, CPA/PFS on Nov 13, 2017 7:00:00 AM

If you’re charitably inclined but concerned about having sufficient income to meet your needs, a charitable remainder trust (CRT) may be the answer. A CRT allows you to support a favorite charity while potentially boosting your cash flow, shrinking the size of your taxable estate, reducing or deferring income taxes, and enjoying investment planning advantages.

How a CRT Works

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Topics: T&E TALK

T&E TALK: Who Should Own Your Life Insurance Policy?

Posted by Scott T. Ditman, CPA/PFS on Oct 30, 2017 7:00:00 AM

If you own life insurance policies at your death, the proceeds will be included in your taxable estate. Ownership is usually determined by several factors, including who has the right to name the beneficiaries of the proceeds. The way around this problem is to not own the policies when you die. However, don’t automatically rule out your ownership either.

It’s important to keep in mind the current uncertain future of the estate tax. If the estate tax is repealed (or if someone doesn’t have a large enough estate that estate taxes are a concern), then the inclusion of your policy in your estate is a nonissue. However, there may be nontax reasons for not owning the policy yourself.

Plus and Minuses of Different Owners

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Topics: T&E TALK

T&E TALK: A Crummey Trust Can Preserve the Annual Gift Tax Exclusion

Posted by Scott T. Ditman, CPA/PFS on Oct 23, 2017 7:00:00 AM

Traditionally, taxpayers have looked for ways to make the most of the $14,000 annual gift tax exclusion, and using a Crummey trust is one way to do that. But with the federal gift and estate tax exemption currently at an inflation-adjusted $5.49 million and the possibility of an estate tax repeal, it may seem that the annual exclusion is less relevant than ever before. Or is it?

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Topics: T&E TALK

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

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