06 July

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Real Estate Developers May Be Able to Avoid Gift Taxes When Passing On Developer Units

In February 2016, two Central Park condos owned by then-candidate Donald Trump had an estimated market value of $790,000 and $800,000. In April 2016, Trump sold these condos to his son, Eric Trump, for pennies on the dollar ($350,000 each, to be exact). For most people, this family-friendly sweetheart deal would typically incur hundreds of thousands of dollars in gift taxes. Not so for Donald Trump. Why? Because he was a real estate developer. A real estate owner who sells a piece of property for less than it’s estimated worth typically has to pay gift tax on the difference between the sale price and the true market value, according to MSN.com. Any personal gifts worth more than $14,000 in a given year are subject to a federal tax that could be as high as 40 percent. However, in Trump’s case, since he the building’s developer selling the condos for the first time, he...

10 May

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Streamlining Your Joint Accounts and Your Estate Plan is Critical to Minimize the Risk of a Dispute

Posted by Bobby Feisee

in Bobby's Blog

When a loved one dies, family members often react in one of two different ways – (1) the family comes together during a difficult time to honor the memory of their loved one or (2) members of the family begin disputing who gets what and the family becomes embittered and divided. Estate disputes among family members often occur when the decedent’s estate plan is vague or has conflicting provisions. For example, what happens if the Last Will and Testament or Trust says one thing about an asset, but a joint account is structured in a way that makes it impossible to comply with the directives in the Will or Trust? A common example is if a father has a Last Will and Testament that states everything should be divided equally among or between his children, but also owns a joint bank account with just one child named as the co-owner. Do the...

28 April

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How to Properly Establish a Living Trust

Posted by Bobby Feisee

in Bobby's Blog

One of the best estate planning tools you can utilize is a living trust. Establishing a trust allows your loved ones to avoid lengthy and complicated probate and may save your family money in administrative expenses and taxes. So how do you set up a living trust? The requirements of a trust to be considered legally valid include: You need to have the intent to create a trust. This is a fairly simple requirement to meet by stating your intent in the trust document. You need to have the testamentary capacity to create a trust. This means you need to have the mental capability to create and sign the trust document. Your trust must have a specific, legitimate purpose (e.g., for management of assets in your estate plan). The trust must convey some form of property. This means you cannot simply create a trust and it be barren. Future interests in property...

14 March

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Passing On Your Lessons in a Metaphorical Message in a Bottle

Posted by Bobby Feisee

in Bobby's Blog

Randy Pausch was an accomplished academic who taught computer science at both the University of Virginia and Carnegie Melon University. He became known across the country after giving a heart-wrenching “last lecture” to students at Carnegie Melon making him a Lou-Gehrig-like symbol of the beauty and briefness of life, according to the New York Times. Professors at Carnegie Melon are sometimes asked to give lectures on what wisdom they would impart if they knew it was their last chance. Hence, the title, “last lecture.” Dr. Pausch accepted that challenge after learning he had only a few months left to live. Dr. Paush’s advice to attendees of his “last lecture” was simple and clear – have fun and approach life with childlike wonder. Here is a condensed version of his lecture that he presented on Oprah Winfrey's show: https://www.youtube.com/watch?v=BODHsU3hDo4 Metaphorical Message in a Bottle Dr. Pausch also spoke of the immense love he had his wife and...

03 December

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New Administration May Mean Major Estate Tax Changes

Posted by Bobby Feisee

in Bobby's Blog

The estate tax (also known as the "death tax") may be on the proverbial chopping block with President-elect Donald Trump ascending to Commander-in-Chief, along with a Republican-controlled Congress. Most, if not all, Republicans oppose the estate tax. President-elect Trump’s tax plan expressly calls for an outright repeal of the tax and imposing a capital gains tax on assets left to heirs above $10 million, according to Forbes.com. The estate tax is generally not an issue for most people due to the sizable exemptions afforded under the tax code. However, people often make the mistake that estate planning is the same thing as estate tax planning. Rather, estate tax planning is one component of estate planning but there are many other issues your family must deal with on death as it is a major life event and you still will need to deal with local governments, financial institutions and family dynamics. Here is...

18 November

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Trust Funding – Education is our Goal

Posted by Bobby Feisee

in Bobby's Blog

At InSight Law, our focus is always on education. We are constantly striving to educate our clients, their families, and advisors around the community. One thing we stress is trust “funding”. Trust funding involves the coordination of all your assets with your trust. This is to ensure all the instructions you lay out in your trust will apply to your assets in the event of a disability or a death. We often see clients that have setup a trust several years ago and never done anything with it. It eventually becomes just a pretty binder on a shelf. Then, a disability or death occurs and the family goes into that pretty binder and discovers it is rather useless. However, if your assets are properly coordinated with your trust, the trust assets will be managed by the next person you have named as trustee upon your death or disability. This makes a...

18 November

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Proper Accounting of Business Loans Will Help Save Time and Money Down the Road

Posted by Bobby Feisee

in Bobby's Blog

As new businesses are starting out, it can be difficult to establish a steady cash flow to cover expenses. Business owners often want to “lend” their business money here and there to make sure the company stays operational. In many cases, where the business only has one member or owner, these loans go undocumented and no interest is paid when the principal is paid back. Once you decide to use your personal funds to invest in your business, you’ll need to work with your accountant to determine if the money should be treated as equity or as a loan to the business. Either way, the transfer of funds between owner and business should be well documented in the company’s accounting records. An equity investment, commonly referred to as a capital contribution, is when the owner transfers money into the business only for an increase in the owner’s equity. This is not a...

14 September

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My “Message in a Bottle” to My Daugher Nava Feisee

Posted by Bobby Feisee

in Bobby's Blog

When I sat down to write this letter I did not expect to get emotional, but when I stared at the screen to think about what I would say I realized I will not always be here with you. I love you so much it hurts me to think of not being here with you. You are not even six months old and you have the whole world and rest of your life in front of you. Below are some ideas and lessons that have helped your father. Some of these lessons were taught to me by my parents, siblings, teachers and friends. Others were hard earned lessons that cost me dearly with either time or money. 1. You create your own reality. You can decide to be happy or be sad. You can decide to challenge yourself or waste time. You can achieve as much or as little as you want. You...

25 August

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Time is Running Out for Maximizing the Effectiveness of Family Limited Partnerships in Your Estate Plan

Posted by Bobby Feisee

in Bobby's Blog

Establishing a family limited partnership can be helpful in business succession planning, business continuity plans, and as a component of your estate plan. It is especially helpful if you own real estate, a family business, and concentrated positions of publicly traded stock. However, the IRS is starting to scrutinize these partnerships and has proposed a new regulation, specifically a revised versionof Section 2704 that could have a dramatic impact on your estate planning by eliminating valuation discounts. If you are looking to minimize your future estate tax this is critical and time is of the essence. Once the revised Section 2704 is in effect, which could be around the end of calendar year 2016, the ability to claim discounts might be substantially reduced or eliminated thus curtailing your tax and asset protection planning flexibility. Managing Estate Taxes If you own the aforementioned combination of real estate, a successful business, stock options, etc. you...