Articles
- Elder & Disability Law Concerns (11)
- Estate & Trust Planning (19)
- IRA Planning (4)
- Probate Estate Administration (2)
- Tax Planning (17)
- Trust Administration (5)
Proposition 19 Alert
This amendment to the California Constitution passed in the November election, expands property tax savings for homeowners over 55, or who are severely disabled or victims of natural disasters (including wildfire). When purchasing a new home, these owners may now retain their original property tax assessment.
Planning for Estate and Gift Tax changes
The upcoming November election may bring tax changes that impact your estate planning. Tax increases may be needed to raise revenue, including for the COVID-19 federal stimulus spending. Estate and Gift tax increases would surely be considered because they mostly affect wealthy taxpayers, and not those struggling due to the pandemic and its economic impacts.
The SECURE Act and Retirement Beneficiary Designations
A new revenue-generating federal law effective in January 2020 accelerates when your future beneficiaries must pay income tax on inherited retirement account distributions. The Setting Every Community Up for Retirement Enhancement (SECURE) Act eliminates the long-favored “stretch IRA” which allowed the Designated Beneficiary to take payments….
Tax-related provisions in the CARES Act
We hope that you are keeping yourself, your loved ones, and your community safe from COVID-19. Along with those paramount health concerns, you may be wondering about some of the recent tax changes meant to help everyone coping with the Coronavirus fallout. This is an update on the tax-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress…
IRS Confirms Large Gifts Now Won’t Hurt Post-2025 Estates
The IRS has issued final regulations that should provide comfort to taxpayers interested in making large gifts under the current gift and estate tax regime. The final regs generally adopt, with some revisions, proposed regs that the IRS released in November 2018. The Tax Cuts and Jobs Act (TCJA) temporarily doubled the gift and estate tax exemption from $5 million to $10 million for gifts…
Are Electronic Wills Coming to California?
A friend shows you an email received from her father the day before he died, titled “My Will.” The attached document reflects electronic signatures of the signer, plus two witnesses. Can the document be offered for probate as a Will in California? The answer is “not yet.” How about in another State, such as Nevada? The answer is “not without further authentication.”
Protecting Vulnerable Elders with a GV Restraining Order
So-called “red flag laws” are in the news as a tool to prevent mass shootings. The California version, known as the Gun Violence Restraining Order (GVRO) law , was passed in 2014. Under the law, family and household members, or law enforcement, may seek a court order restricting access to firearms for someone in “significant danger” of causing self-harm or injury to others.
Supporting Individuals with Mental Illness
Recently I shared information about “Special Needs Trusts and ABLE accounts” with NAMI of Nevada County. I honor this organization which supports, educates and advocates for families of loved ones with a mental illness. NAMI hosts both a monthly family support group, and an education program (where I was the presenter). A Special Needs Trust (SNT) is designed to plan for future care.
Estate Planning for Your Pets
Creating an estate plan for your beloved companion animals may ensure they receive a continuing, high level of care should you outlive them, or become unable to provide proper care. It also could keep them out of a shelter, which is where many pets end up when their owners die without a plan in place.
The Power of Community Foundations
A Community Foundation serves as an ‘umbrella’ organization to distribute grants for many smaller non-profits which provide direct services where needed most. They offer the benefit of professional staff to analyze and assess the non-profits they fund, as well as lower investment fees for larger pooled funds.
After Life Arrangements
Most of us want to avoid thinking about our own death, or losing loved ones we hold dear. Yet it is an inevitable transition we all will face. When death happens unexpectedly, the emotional impact can lead to hasty decisions, and possible tension within a family. By preparing a Final Arrangements memorandum you can help your loved ones make difficult decisions according to your wishes.
Tax Basis Planning Worth a Look If Estate Taxes Aren’t a Threat
For many people today, income tax planning now offers far greater tax-saving opportunities than gift and estate tax planning. A record-high gift and estate tax exemption — (currently $11.18 million per person is up from $5.49 million in 2017, and sunsets in 2025) — means that fewer people are subject to estate taxes.
ABCs of HSAs: How an HSA can benefit your estate plan
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.
Durable Power of Attorney: Springing vs. Non-Springing
Estate planning typically focuses on what happens to your assets when you die. But it’s equally important (some might say more 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 Durable Power of Attorney (DPOA) comes in. By signing a DPOA, you appoint a trusted representative …
Tax Cuts and Jobs Act: Key provisions affecting estate planning
The Tax Cuts and Jobs Act of 2017 (TCJA) is a sweeping revision of the tax code that alters federal law affecting individuals, businesses and estates. Focusing specifically on estate tax law, the TCJA doesn’t repeal the federal gift and estate tax. It does, however, temporarily double the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption.
Beware the GST Tax When Transferring Assets to Grandchildren
As you plan 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…
The “stretch” IRA: A simple yet powerful estate planning tool
The IRA’s value as a retirement planning tool is well known: IRA assets compound on a tax-deferred (or, in the case of a Roth IRA, tax-free) basis, which can help build a more substantial nest egg. But if you won’t need an IRA to fund your retirement, you can use it as an estate planning tool to benefit your children or other beneficiaries on a tax-advantaged basis by turning it into a “stretch” IRA.
ABLE accounts can benefit loved ones with “Special Needs”
For families with disabled loved ones who are potentially eligible for means-tested government benefits such as MediCal (known as Medicaid in other states) or Supplemental Security Income (SSI), estate planning can be a challenge. On the one hand, you want to provide the most comfortable life possible for your family member.
Extension of time to elect “Portability”
In June 2017, the IRS issued a Revenue Procedure that allows certain Estates to make a late portability election without first filing a ruling request. “Portability” is a useful tax law provision that permits a surviving spouse to take advantage of the deceased spouse’s unused combined gift and estate tax exemption (currently $5.49 million). But portability isn’t automatic…
Leaving Specific Assets to Specific Heirs is an Estate Planning “No-No”
Planning your estate around gifts of specific assets is risky and, in most cases, should be avoided. If you leave specific assets – such as a home, a car or stock – to specific beneficiaries, you could end up disinheriting someone else inadvertently.
Is Now the Time for a ‘Charitable Lead Trust’?
Families who wish to give to charity while minimizing gift and estate taxes should consider a Charitable Lead Trust (CLT). These trusts are most effective in a low-interest-rate environment, so conditions for taking advantage of a CLT currently are favorable. Although interest rates have crept up in recent years, they remain historically low.
Family Loans
If you’re interested in lending money to your children or other family members, it’s best to know the rules. Loans can provide generous assistance to someone in need, or they may be a strategic tax planning tool. With a loan, you expect repayment- either over a period of time, or possibly as a lump sum in the future.
Estate Planning Topics Discussed on KNCO Radio
Jennifer Wilkerson was interviewed about estate planning in April 2017, on KNCO radio. Thanks to show host Seth Leishman, CPA, CFP®, Senior Financial Advisor, partner and partial owner of Ostrofe Financial Consultants, Grass Valley.
Should I include a “No-Contest” clause in my Will or Revocable Trust?
Worried about challenges to your estate plan? Estate planning is about protecting your family and ensuring that your wealth is distributed according to your wishes. So the idea that someone might challenge your estate plan can be disconcerting. One strategy for protecting your plan is to include a “no-contest” clause in your Will or Revocable Trust (or both).
Roth IRA as an Estate Planning Tool
A Roth IRA can be a valuable estate planning tool, offering the opportunity for tax-free growth as long as the account exists and requiring no distributions during your lifetime. These features allow you to pass on greater wealth to your family. While traditional IRAs are more common, there’s no time like the present to consider how a Roth IRA might better help you achieve your estate planning goals.
Are You Leaving Your IRA to Someone Other Than Your Spouse?
Retirement accounts deserve special attention in your estate plan. To encourage saving for retirement, IRAs and other retirement accounts allow tax-deferred growth (tax-free in the case of a Roth IRA). An IRA can be a powerful wealth building tool, also offering asset protection and other benefits.
Use an ILIT as a Wealth Preserver
If you’re concerned about your family’s financial well-being after you’re gone, life insurance can provide peace of mind. For example, purchasing life insurance to support young children may allow the surviving parent to be more available if the primary wage earner dies unexpectedly. Likewise, having life insurance to pay down an existing mortgage gives the surviving spouse more flexibility.
Five Questions Single Parents Should Ask About Their Estate Plans
In many respects, estate planning for single parents of minor children is similar to estate planning for families with two parents. Single parents want to provide for their children’s care and financial needs after they’re gone. But when only one parent is involved, certain aspects of an estate plan demand special attention.
Difficult Decision: Having an Elderly Parent Declared Incapacitated
If your elderly parent’s mental state is deteriorating to the point where he or she is unable to manage day-to-day activities, it may be time to make the difficult decision to have him or her declared incapacitated. But how do you know if such action is necessary? Knowing the answers to these two key questions can help you determine whether it’s necessary…
Tax Consequences of Gifting Retirement Benefits
You can make significant gifts to family members or charitable organizations by using your retirement assets. But it’s vital that you consider the tax aspects of such gifts, as well as their timing. It could make a huge (expensive) difference to you – and to your intended beneficiaries.
A Trustee’s Challenges in Administering DIY Trust Documents
If you are named as Trustee of a ‘do-it-yourself’ (“DIY”) Trust, you need to be on the alert for errors or omissions often found in such Trusts. This is especially true if the deceased failed to seek good legal advice before completing the form s/he may have obtained from an office supply store or some on-line source.
Commonly Used Estate Planning Terms
In this article, I have included basic definitions of some terms frequently used in preparing Estate Planning documents and administering Trusts and Probate Estates. Our body of law relating to Trusts and Estates originates in old English common law, and is now mostly codified in the Probate Code adopted by each state. Hopefully, this list will be helpful in understanding these terms.
Choose a Trustee-Executor Who Can Protect Your Intellectual Property
Selecting the proper trustee or executor is crucial if you wish to protect intellectual properties that are part of your estate plan. That’s because they must be aware of the specific duties necessary to protect that property in your estate after death. In some instances, you might want to consider choosing one person to administer your estate in general, while designating someone with particular expertise and experience to manage intellectual property rights.
Protecting Intellectual Property in Estate Planning- Part I
It is important to include your intellectual property in completing your estate plan. This quick overview will help you understand the basics of intellectual property, and why it should be part of your long-term planning. The United States Patent and Trademark Office offers this simple definition of intellectual property:
When must I file a Decedent’s Original Will in California?
California law requires anyone who holds the original Will of a deceased person to file the Will with the court clerk of the County where the decedent resided. A copy must also be mailed to the Executor named in the Will, or to a beneficiary if the Executor’s whereabouts are unknown. The relevant statute is California Probate Code section 8200. The court clerk will collect a $50 filing fee.
Who Do You Trust With Your Trust? The Importance of Fiduciaries
It’s a sad fact that disputes over a parent’s life care, or the disposition of assets after a death, can severely damage even the most loving family relationships. If you became mentally or physically incapacitated, would you want your affairs managed by a family member, a friend, an attorney, a professional fiduciary, or a corporate trust department?
What It Means to be a Certified Specialist
The California State Bar, Board of Legal Specialization has established Certified Specialist designations to encourage deeper study into selected fields of law, and to allow the public a method for identifying attorneys who have mastered these fields. Certified Specialists are required to have years of successful experience with comprehensive testing that demonstrates their expertise in their areas of focus such as: bankruptcy law, criminal law, family law, immigration law, taxation law and others.
When Should an Aging Parent Stop Driving?
So your Mother admits she had another little fender-bender in a parking lot. Or you notice new scuffs on the side of Father’s car, where he scraped a fence or the side of the garage. Could it be time to have that conversation about whether or not they should be driving? None of us wants to reduce a loved one’s independence as they age. But there may come a time when they really should stop driving – for their own safety, and the protection of others.
The Season of Charitable Giving
This time of year many of us are motivated to share our good fortune. Apart from knowing that people and organizations are in need, giving just makes us feel good. Sharing can take many forms. Some of us donate money; some give our time, and many do both. There are a variety of ways to give, with added tax benefits for you, the donor. Donations may take the form of:
The Czech Republic and Consanguinity
I recently traveled to Prague and the southern Czech Republic. Touring castles and palaces, I learned the history of this “crossroads” between the Slavic and Germanic regions. The ubiquitous wars between Catholic rulers and Protestant “reformers” occurred here as elsewhere in Europe. In estate planning today, you may choose to follow a similar plan by passing property to your lineal descendants. More often, clients have their own ideas for leaving a legacy.
Educating Seniors Project of the Trusts and Estates Section,
State Bar of California
Since my 2010 appointment to the State Bar Trusts and Estates Section Executive Committee, one responsibility for me has been to chair the Educating Seniors Project. This month, I was a featured speaker on the Bay Area KALW radio program “Your Legal Rights” to describe the Project. Here is the link to listen to the program: “Educating Seniors Project.”
How Can a successor Trustee Sell A Vehicle?
Part three of our blog series on tangible personal property covers one of the first tasks a Successor Trustee may need to do–selling a vehicle pursuant to the Trust. One option is to transfer the vehicle’s title into the name of the new trustee-owner, wait for the new title (“pinkslip”) to arrive, and then sell the vehicle.
Transferring High-End Vehicles or Vessels into Your Revocable Trust
As part two of our three-part series on tangible personal property, we explore the issues surrounding the transfer of high-end vehicles into a Revocable Trust. A Revocable Trust provides probate-avoidance and tax benefits only if most assets are transferred to the Trust as the new owner.
Should Tangible Personal Property be Transferred to My Trust?
Tangible personal property refers to things you own that can be touched or moved, such as furniture, artwork, jewelry, antiques, collections, etc. This property is distinct from other assets you may own, such as your home (real property) or securities (intangible personal property).
Estate Planning: Spring 2014 Update
April was a busy month! I was invited to participate in Nevada County Superior Court’s Annual Family Law Update on April 10th. This program covers recent cases and developments for family law attorneys. I was invited to share about Estate Planning considerations during the marital dissolution process.
Meet the Trustee’s Team
Grieving the loss of a loved one can feel overwhelming. For the family member named as Trustee or Executor, there are difficult decisions about making final arrangements, paying immediate bills, securing the property, etc.
Year-end Gifting
Are you feeling generous? Or have market increases pushed you into Estate Tax territory? Here are some ideas and strategies for year-end gifting: Reportable Gifts. Starting on 1-2-2013 with the enactment of the American Taxpayer Relief Act (ATRA), the federal estate, gift and generation-skipping (GST) tax exclusion amounts are now $5 million per taxpayer.
Can ‘Portability’ Simplify Your Estate Planning?
New estate tax laws allow a surviving spouse to elect ‘portability’ and carry forward the Deceased Spousal Unused Exclusion Amount- known as the DSUEA. For estates over $5 million in assets, leaving everything to the survivor and relying on “portability” offers simplicity, and the opportunity for another basis adjustment (hopefully a “step up”) at the surviving spouse’s death.
What Does A Trustee Do?
Perhaps you have agreed to act as Trustee. Or you may have just learned that you are the named Trustee to assist an ailing or deceased family member or friend. What are your responsibilities? A Trustee has many legal duties and time-sensitive tasks to ensure the proper and uncontested administration of a Trust.
“Your Financial Survival,” a presentation by Jennifer L. Wilkerson & Marty Austin
On Saturday, March 16th, Jennifer L. Wilkerson and Marty Austin will present “Your Financial Survival” at the monthly meeting of the American Association of University Women (AAUW) – Nevada County Branch. The event begins at 9:30 a.m. at Peace Lutheran Church in Grass Valley.
ATRA 2013 sets $5 million Estate and Gift Tax Exemption
The American Taxpayer Relief Act (ATRA) enacted on January 2, 2013 answered the uncertainty of the “fiscal cliff” for estate and gift taxes. Without this legislation, the federal estate and gift tax exclusion amount would have reverted to $1,000,000 beginning in 2013.
Should a Trust be the Beneficiary of my IRA?
To avoid probate (which can be a costly and tedious Court proceeding), we often create a Revocable Trust which acts as a container to hold assets. At death, the Successor Trustee distributes the trust assets as directed in the Trust document, with no need for a probate court order.
The “Fiscal Cliff”
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Traveling in Germany last month, it was remarkable to see: no plastic bags or water bottles, lots of wind turbines, and full employment. Perhaps this is what a 19% VAT (value added tax) on everything will supply, although I didn’t study up on Deutschland income taxes.
“Special Needs” Trust
If someone you love has a disability, there are many needs to consider. A disability may be the result of an injury or illness, starting at birth or happening later in life. Planning for the future care needs, such as for a disabled child, grandchild, brother or sister, may be addressed comprehensively by creating a “Special Needs” Trust.
Advance Health Care Directives
At a recent meeting of the Gold Country Estate Planning Council , medical social worker Erin Thomas-Rose shared a different perspective on Advance Health Care Directives. By federal law, hospitals are “mandated educators” and must offer patients assistance in preparing this legal form. At Sierra Nevada Memorial Hospital, Ms. Thomas-Rose counsels patients about the Advance Health Care Directive, and the newer POLST (acronym for “Physician Orders for Life Sustaining Treatment”).
June 23rd Conference for Seniors
Maybe you are not caring for an elderly loved one now, but you might be soon. Millions of Americans are caregivers already navigating the unclear channels where legal issues, medical concerns, and family matters intersect.
‘Access to Justice’ Discussed by Appellate Court Justice
Third District Court (Sacramento) Appellate Justice Ronald B. Robie spoke on barriers to “Access to Justice” at the Holbrooke Hotel last month, accompanied by five Associate Justices including former Nevada County Judge M. Kathleen Butz.
Justice Robie addressed attorneys and guests of the Nevada County Bar Association and Lawyer Referral Service .
New Law increases minimum amount required for California Probate Estate
A full Probate Estate administration in California to transfer assets after death can be quite costly, and may take a year or more to complete. By contrast, Summary probate administration is simpler and cost-effective, using an affidavit procedure or one-time court petition.
Autumn Musings and What’s to Come?
There is still time to consider year-end estate planning strategies to take advantage of the current $5 million gift tax exclusion. Gifts from an IRA to a qualified charitable organization are also possible without incurring federal income tax if you are over age 70-1/2 (limited to $100,000).