29 December

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Estate Planning Tip: Watch Out for State Taxes

When people begin estate planning, they probably think about the federal estate tax (commonly referred to as the “death” tax). However, a lesser-discussed tax issue is state estate and inheritance taxes. This is a complex, state-based issue and it’s advisable for you to sit down with an experienced estate planner to make sure your plan takes into consideration potential state taxes. Some states collect estate taxes and while other states collect inheritance taxes (some actually collect both). You may be thinking, “what the heck is the difference between an estate tax and an inheritance tax?” Well, an inheritance tax is based on who receives a deceased person's property and how the beneficiary is related to the deceased person. An estate tax is based on the value of the deceased person's estate and not on who gets what, according to the Memphis Daily News. State tax laws are always changing, so...

03 December

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As the New Year Approaches, Take Time to Re-Examine Your Estate Plan

Posted by Bobby Feisee

in Bobby's Blog

We’re rapidly approaching 2015 and now is the time that many people take a step back to take inventory of big events in 2014 and plan for the new year. If you have an estate plan, it’s a good rule of thumb to re-examine your plan at least once a year (do NOT put together a plan and throw it into a lockbox for all eternity- it simply will not work). If you do not have an estate plan, you should make it a goal for 2015. Remember, estate planning is not just for you, it is also about making a smooth transition for your loved ones in the event of your disability or death. Here are some important areas to review, or incorporate, into your estate plan: 1. Your preferred medical care. Medical care is an important part of a well-thought-out estate plan. You need to define how...

20 November

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Estate Planning Tip: You May Be Able to Qualify for a Real Estate Tax Exemption

Posted by Bobby Feisee

in Bobby's Blog

Did you know that seniors are eligible to reduce their real estate property tax bill if they meet certain state and local requirements? As part of the estate planning process, proper counseling should also include taking full advantage of tax programs that are available to alleviate the tax on your estate while you are alive as well as after you die. For example, in Maryland, Virginia, and District of Columbia, there are programs allowing credits to be applied against your property tax bill, as long as the property taxes exceed a fixed percentage of your gross income. Basically, this places a limit on the amount of property taxes you must pay based upon your income. However, each state has specific requirements that must be met before you can access this tax exemption program. For example, in Maryland, you must meet the following four requirements: You must own, or have a...

11 November

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Will The Money You Leave Behind Ruin Your Children or Grandchildren?

Posted by Bobby Feisee

in Bobby's Blog

It’s one of those fears many individuals (especially wealthy individuals) have, but rarely speak about. They aren’t worried about the “death tax” or other inheritance taxes. In fact, the concern isn’t heirs receiving too little money; it’s receiving too much. The concern is that inherited wealth can have adverse effects on the people inheriting the money. The beneficiaries could treat it as though they won the lottery and splurge on reckless, irresponsible purchases. Imagine, the money you worked so hard to accumulate ends up being blown on a fleet of fancy cars or, even worse, a drug habit or multiple divorces. People like Warren Buffett, Bill Gates, and T. Boone Pickens have gone on record stating that they do not plan to leave their vast fortunes exclusively to their children. In fact, Mr. Pickens has stated, “I’m not a big fan of inherited wealth. It generally does more harm...

05 November

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No Will Hunting – Robin Williams Used a Living Trust

Posted by Bobby Feisee

in Bobby's Blog

Robin Williams made millions during his career and took steps to protect his wealth so it could be passed down to his three children. Did he just have a simple will based plan? No. Instead, reports indicate that Mr. Williams likely had a plan centered around a revocable living trust. Why would Williams, and other individuals, opt not to have a just a will based plan? First, the probate process can be very complicated and time consuming because it requires the estate be administered through the court system. Think about your experiences that involve the courts or the government in any way. Was it efficient? In our experience, we find it is more complicated and time consuming to have government involvement than having the estate administered privately by people that you hand pick. Revocable Living Trusts combined with properly titled assets can avoid the probate process and...

10 October

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Protecting Your Assets from Unintended Beneficiaries

Posted by Bobby Feisee

in Bobby's Blog

It’s a common, and quite unfortunate, scenario – your child gets married and all seems well. The spouse becomes part of the family. Then, that seven-letter word starts to be bantered about – “divorce”. Suddenly, questions arise as to whether your now ex-son-or-daughter-in-law is entitled to any assets of your estate plan. A simple strategy to avoid this scenario is to set up a revocable living trust. One of the most attractive features of trusts is that they can be shaped to serve a variety of different circumstances and achieve different objectives. In fact, trusts are routinely utilized for gifting, asset management, tax protection, and as a shield against creditors and/or civil lawsuits. Trusts can be established while you are living, or they can be included in a will with a stipulation that the trust is to be established after your passing. How do trusts protect you and your family...

02 October

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Unmarried? No Excuse to Neglect Estate Planning

Posted by Bobby Feisee

in Bobby's Blog

Just because you haven’t tied the proverbial knot doesn't mean you and your significant other should neglect properly planning your estate. Getting your estate organized is not exclusive to elderly folk or married couples. Everyone, including unmarried couples, should take the time to get a plan together. Here are some important tips for couples who have yet to say “I do.” First, if you and your significant other are living together, but aren't yet married, make sure your assets will pass to the other if you suddenly die. You can accomplish this by naming each other as beneficiaries on all pensions, retirement accounts and insurance policies. You should also draft up wills and make sure to name your significant other as the beneficiary. If you fail to have a will, your assets can pass, by default under the laws of intestacy, to a parent, sibling or other family member -...

15 September

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How to Plan Your Estate When Married to a Noncitizen Spouse

Posted by Bobby Feisee

in Bobby's Blog

If your spouse does not possess U.S. citizenship, estate planning becomes somewhat complicated. A unique set of rules applies for noncitizens to inherit property so you should really take the time to sit down with an experienced estate planning attorney to discuss your options. But take comfort in knowing that noncitizen spouses and loved one can inherit your property. So when you draft your will or name beneficiaries for your retirement accounts, you are free to name your noncitizen spouse as a beneficiary. Here’s the rub - for tax purposes, non-citizens who are permanent U.S. residents are categorized as “resident aliens” and resident aliens are unable to access the unlimited marital deduction privilege that most married couples enjoy, according to marketwatch.com . This means that if your resident alien spouse inherits your estate, it could be subject to a huge estate tax bill (depending on the size of the estate). ...

26 August

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Having That Awkward Conversation – Family Inheritance

Posted by Bobby Feisee

in Bobby's Blog

UBS Wealth Management published a report revealing how badly families are talking about inheritance. The report indicates that it’s easier to have a will (83 percent of respondents had one) than discuss the will with children (about half have had a conversation about the will), and it’s even harder to tell children what the assets are in the will (only 34 percent of respondents discussed the will in detail). The issue of not discussing family inheritance spans the economic spectrum including both wealthy and not-so-wealthy people, according to the New York Times. The UBS report showed that only 55 percent of people with more than $1 million talk to their children about an inheritance, while 53 percent of people with less than $1 million take the time to talk about inheritance. Change needs to happen. Financial advisers estimate that $40 trillion will pass from baby boomer clients to their children and...

14 August

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Robert Redford Battling New York Over Massive Tax Bill From 2005 TV Sale

Posted by Bobby Feisee

in Bobby's Blog

One of the most irritating things the IRS can do is seek back taxes for taxes you already paid. That is essentially what Robert Redford claimed happened when he sold a 20 percent stake in the Sundance Channel back in 2005. Mr. Redford was recently assessed a $1.6 million tax bill by the state of New York for the sale. Mr. Redford already paid taxes on the 2005 sale to the state of Utah. Mr. Redford argues in his lawsuit against the tax bill that Sundance Channel had no property, payroll, or receipts in New York and therefore owed no taxes to New York for the sale. Though, the Sundance Channel is a limited liability company registered in New York. Nevertheless, Mr. Redford's stake in the channel was through an "S corporation," which only requires shareholders to claim losses or gains on their income-tax returns, according to Forbes.com Mr. Redford...