Not every gift has to be reported to the IRS, nor does every gift trigger a tax; but it’s important to understand when the IRS needs to know about a gift. Here’s a brief summary of the situations in which the federal gift tax applies: Who Receives the Gift, and How Much is it Worth? For gift tax purposes, the IRS looks at gifts to a spouse differently than it does gifts to a non-spouse. Assuming your husband or wife is a United States citizen, the unlimited marital deduction applies, and … [Read more...] about When is a Gift Taxable?
Three Advantages of a Revocable Living Trust
If you’re considering whether to establish a will or a revocable living trust, you might want to consider these three advantages offered by a living trust: 1. A Living Trust Can Help You Avoid Probate. When you have a revocable living trust, any property that is titled in the name of the trust at the time of your death is distributing according to the terms of the trust – no probate necessary. On the other hand, if you don’t have a trust, or if there’s property in your name that’s been … [Read more...] about Three Advantages of a Revocable Living Trust
Is Your Estate Plan Complete?
Making sure you have a truly effective estate plan in place requires a good bit of attention to detail. In a recent Investing Daily post, Bob Carlson points out some important planning issues that tend to be overlooked. For example: Lack of Liquidity. While an estate is being settled, it incurs operating expenses. If you don’t provide a plan for covering these expenses, your heirs could be shortchanged. Many estates are full of non-liquid assets, but they tend to run short on cash. If this … [Read more...] about Is Your Estate Plan Complete?
Making Changes to Your Revocable Living Trust
A few years ago, Bob and Mary established a revocable living trust. They’ve been careful to transfer all the appropriate property into their trust, so they’re confident that their assets will be distributed according to the trust terms when they pass away. Trust Restatement So, what happens when they need to change the terms of their trust? Let’s say Bob and Mary’s only son recently won several million dollars in the lottery, and he has let them know he would prefer that they leave their … [Read more...] about Making Changes to Your Revocable Living Trust
The Gift Tax Doesn’t Always Apply
There are many everyday situations in which we give gifts that aren’t subject to the federal gift tax. On the other hand, there are quite a few situations where gifts are reportable to the IRS, and they may be taxable. It’s important to know the difference. So, what types of gifts are not subject to the gift tax? Gifts to a U.S. Citizen Spouse If your husband or wife is a United States citizen, then you can give him or her an unlimited amount of property, tax-free, regardless of value. If … [Read more...] about The Gift Tax Doesn’t Always Apply
What is a Roth 401(k)?
You’ve undoubtedly heard the term “Roth IRA” – these tax-free retirement accounts are incredibly popular and, if you meet the qualifications, they can be a fantastic retirement planning tool. A less-known retirement planning option is the Roth 401(k). While Roth 401(k)’s are growing in popularity, they are not as widely available as traditional 401(k) plans. Here are a few Roth 401(k) basics: Contribution Limit: A Roth 401(k) has the same annual contribution limit as a traditional 401(k). This … [Read more...] about What is a Roth 401(k)?
Secrecy is Not the Best Estate Planning Strategy
Families differ when it comes to their level of comfort about discussing financial matters, and this can have an impact on their estate plans. If you don’t feel comfortable taking a “full disclosure” approach with your kids (or if this approach simply wouldn’t be wise given the dynamics of your family), it’s especially important to have an effective and well thought out estate plan. Here’s an example of what can happen if you don’t: A recent Canadian case, Barrick v. Lilliste, involved Alvin … [Read more...] about Secrecy is Not the Best Estate Planning Strategy
What Your Pet’s Guardian Needs To Know
What is your plan for taking care of your pet after you’ve passed away? If you are thinking about establishing a pet trust to ensure your pet is well cared for, there are some things you’ll need to let your pet’s guardian know. For instance: Your Pet’s Habits and Quirks You and your pet share a home, so you’re well aware of its feeding schedule, when it needs to go for a walk, and what its favorite toys are. You also know how to deal with your pet’s quirks, whether they include a morbid … [Read more...] about What Your Pet’s Guardian Needs To Know
Safeguarding Your Estate Planning Documents
When it comes to paperwork you need to keep safe and secure, your estate planning documents are at the top of the list. So, where’s the best place to keep them? While there is no single answer to this question, there are some things you’ll want to consider when choosing a storage location for these important papers. For instance: Where will your documents be protected from theft and from the threat of flooding, fire, and other natural disasters? Where’s the best place to keep your documents … [Read more...] about Safeguarding Your Estate Planning Documents
Qualifying for Medicaid: Timing is Everything
If you or your spouse anticipate the need for nursing home care in the future, and particularly if you’re concerned about how you’ll finance that care, you’ll likely want to meet with an elder law attorney sooner rather than later. Given the strict rules that govern Medicaid qualification, the absolute best case scenario is to start planning to qualify for the program at least five years before you actually need apply for benefits. Medicaid imposes a five year “look back” period, which means … [Read more...] about Qualifying for Medicaid: Timing is Everything
