As of January 1, 2013, the federal estate and gift tax “exemption amount” will go from $5 million to $1 million. The tax rate will increase from 35% to 55% (in some cases higher than 55%). While Congress may change this before year-end (or make retroactive changes early next year), there is no assurance that
Estate Planning
Asset Protection Planning May Change Your Estate Plan
As I mentioned in a post about a year ago, estate planning and asset protection planning are not the same. They are related. It is often advisable to focus on them at the same time. But they involve different considerations.
Here is one example. A general rule for estate planning is to divide assets…
Estate Planning Checklists Should Include Online Accounts
Most of us now have multiple on-line accounts that require some sort of password in order to access that account. Concerns about privacy and protecting assets make us inclined to keep these passwords secret. Unfortunately, very few people consider what happens if they die and no one can access their on-line accounts.
Your asset protection/estate…
Disclaiming an Inheritance can Constitue a Fraudulent Conveyance
Transferring an asset under certain circumstances can constitute a fraudulent conveyance. Refusing to accept an asset can also constitute a fraudulent conveyance.
Let’s say that you owe a creditor a significant amount of money. You then learn that you have received a substantial inheritance. If you take the inheritance it will go to the creditor. So…
Asset Protection Planning Should Have a Multi-Generational Focus
It is generally estimated that more than half of all Americans have absolutely no estate planning documents. This can potentially create a lot of hassles for your loved ones.
But even those Americans with very good estate planning documents often fail to focus on asset protection for their children and other beneficiaries. If you simply…
An Asset Protection Plan is Different Than an Estate Plan
While estate planning and asset protection planning are related, they are not the same. An asset protection plan is designed principally to protect your assets from creditors during your lifetime. It can also be designed to protect assets you leave to your spouse, children and other family members.
An estate plan is focused more on…
Don’t Forget to File a Gift Tax Return for 2010 Gifts
For anyone who did any asset protection planning in 2010 — If you made a gift of more than $13,000 to anyone other than your spouse, you are required to file a federal gift tax return to report the gift(s). The filing is made on IRS Form 709. A gift tax return for gifts…
Family LLC’s
Family limited liability companies can be a convenient vehicle to hold and administer family investments. They offer significant benefits from both an estate planning and asset protection standpoint. Until recently, the entity of choice for family investments was a family limited partnership (often just called an FLP). While there is nothing wrong with an FLP, we are…
Asset Protection Planning Should Include Careful Estate Planning
Poor (or no) estate planning can lead to catastrophic losses of family assets.
Check out the article by Claudia Buck in The Portland Press Herald with some sad stories of families who wasted lots of money due to poor estate planning. Some simple steps can avoid family fights and save legal fees. These include earmarking…