The housing market has been white-hot for a number of years, and this has put a smile on the faces of investors and ordinary homeowners. Wealth building is a very good thing, but there is a looming threat from an estate planning perspective. Federal Estate Tax If you have enjoyed a great deal of financial success, you have to be concerned about the federal estate tax. It carries a 40 percent top rate, and it is applicable on transfers that exceed $11.7 million in value. This figure is called …
You Can Learn From These Celebrity Estate Planning Errors
If you are leaving behind significant resources, they may continue to be viable for generations as income accumulates faster than it is distributed. For entertainers, this can include royalties and licensing rights. The estates of some deceased individuals continue to earn extraordinary sums of money year in and year out for decades after their passing. This is certainly true with Marilyn Monroe and Jim Morrison. Let’s look at where all the money went and learn something in the …
What Is the 2021 New York Estate Tax Exclusion?
You may be surprised to hear that you do not have to report an inheritance that you receive through the terms of a will when you file your state and federal income tax returns. This also applies to life insurance proceeds. Distributions of the principal that is held by a revocable living trust would not be taxable, but you would have to report distributions of the earnings. If you inherit assets that appreciated during the life of the person that left you the inheritance, they would get a …
Attend to These Estate Plan Details
Some people have an overly simplistic view of the estate planning process. They think it boils down to the creation of a will, but in reality, there are other things to take into consideration. Choose Your Administrator Carefully If you do in fact use a will to state your final wishes, you would name an executor in the document to act as the administrator. You should be very discerning when you are choosing the executor, because it is not just a ceremonial title that you bestow upon someone …
Can Medicaid Take Your Home?
There are misconceptions that circulate about various elder law and estate planning details. They are usually based on half-truths, and we will look at one of these myths that applies to Medicaid and home ownership in this post. Nursing Home Asset Protection Before we focus on the subject at hand, we should explain why Medicaid should be on your radar if you will qualify for Medicare as a senior citizen. The United States Department of Health and Human Services compiles statistics about …
Proactive Planning Can Prevent a Guardianship
When you are planning your estate, you should see a complete picture. Yes, it is important to state your wishes with regard to the way you want your assets to be distributed after you are gone. At the same time, you should also seriously consider the events that may befall you toward the end of your life. Aging, Alzheimer's & Incapacity We are not trying to reduce unsettling circumstances to mere statistics, but it is important to understand some cold hard facts so you can prepare …
Five Things You Need to Know About Medicaid Planning
The concept of “Medicaid planning” can see seem a bit strange at first until you understand the context. Why would you want to implement a plan to qualify for a benefit that is only available to people with very limited resources? After all, the goal of life is to steer clear of difficult financial circumstances. This is a logical line of thinking on the surface, but there is a very good reason why many people with resources seek Medicaid eligibility late in their lives. Medicare does not …
For the 99.5 Percent Act Would Broaden Estate Tax Exposure
The federal estate tax can take a significant bite out of your legacy if you are exposed. It carries a 40 percent top rate, but most people do not have to pay this tax because there is a rather high exclusion. This is the amount that you can transfer before the estate tax would be applicable on the remainder. When the Tax Cuts and Jobs Act was enacted in December of 2017, it established a record high exclusion for 2018. It was $11.18 million at that time, and there have been adjustments to …
These Trusts Satisfy Advanced Estate Planning Objectives
When you are planning your estate, you may want to consider trusts and acts of charitable giving. Generosity is its own reward, and there are many causes and institutions that can always use help. In addition to the emotional rewards, you can also gain some tax advantages under certain circumstances when you engage in acts of philanthropy. With this in mind, let’s look at the estate planning structure called a charitable remainder trust. Annuity Payments When you create a charitable …
Three Tips to Provide Inheritance Planning Insight
When you have no idea how to proceed or what to expect, taking on a necessary task can be intimidating. Procrastination can set in, and when it comes to estate planning, this is risky business. With this in mind, we will share three tips in this post to clear up some of the unknowns. You probably do not have to be concerned about taxation. An influx of income will typically trigger taxation, so you will naturally be concerned about this when you are thinking about your estate. In fact, when …
Veterans Pension Can Defray Long-Term Care Costs
People that serve in the United States armed forces are entitled to a retirement pension after 20 years of service. The amount that you receive will increase if you stay in the military for a longer period of time. This pension gives military personnel the ability to retire in comfort if they take the right steps. If you are in the service, you could choose to stay in until you are old enough to collect Social Security. You can then get out of the workforce entirely and live comfortably on …
How Can a Special Needs Trust Trustee Use the Funds?
The process of estate planning is a multifaceted endeavor, so it is important to understand the fact that there are different asset transfer methods. There is no one universal approach that is right for everyone. Since there are many tools in the estate planning toolkit, there is an ideal solution for just about any situation. With this in mind, let’s look at estate planning for individuals with special needs. Government Benefit Eligibility Obviously, people with special needs are going to …
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