Estate Planning

IRS Offers Tax Daily Tips for 2009

Posted on January 13, 2009
Here are some of the current entries: Choosing a tax preparer Where you can get free tax help How e-file can make filing easier and getting you your refund faster How to file for an extension or to amend your return What tax records to keep First-Time Homebuyer Credit An additional tip will be added each business day until April 15, 2009 In addition to the text tips, some audio files will also be available...

I Inherited a House - Do I have to Refinance the Mortgage?

Posted on January 13, 2009
No - in most cases.  Mortgages generally contain "Due on Sale" clauses, which say that the lender can call the mortgage due upon transfer of property.  However, federal law (12 USC § 1701j-3(d)) provides a number of exceptions (emphasis added):   (d) Exemption of specified transfers or dispositions With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon— (1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property; (2) the creation of a purchase money security interest for household appliances; (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; (4) the granting of a leasehold interest of three years or less not containing an option to purchase; (5) a transfer to a relative resulting from the death of a borrower; (6) a transfer where the spouse or children of the borrower become an owner of the property; (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; (8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board...

Teitel Urges More Favorable IRA Charitable Gift Rules

Posted on January 12, 2009
Conrad Teitel, one of the nation's most foremost charitable gift planning attorneys, has, on behalf of the American Council on Gift Annuities and the National Council on Planned Giving, written Congress urging changes to IRA distribution laws: Removing the $100,000 cap on IRA charitable rollovers Allow similar transfers to charitable gift annuities and charitable remainder trusts Make the law permanent Click "Further Reading" for the full text of the letter and the proposed bill...

Obama Wants to Keep the $3.5 Million Estate Tax Exemption

Posted on January 12, 2009
Today's Wall Street Journal has an article on the latest buzz on what the Democrats would like to do with the federal estate tax.  This summary is courtesy of Stephen Bigge, CPA: -- President-Elect Obama and Democratic Congressional leadership are making a push to keep the estate tax in place before its repeal in 2010...

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Teitell Urges More Favorable IRA Charitable Gift Rules

Posted on January 12, 2009
Conrad Teitell, one of the nation's most foremost charitable gift planning attorneys, has, on behalf of the American Council on Gift Annuities and the National Council on Planned Giving, written Congress urging changes to IRA distribution laws: Removing the $100,000 cap on IRA charitable rollovers Allow similar transfers to charitable gift annuities and charitable remainder trusts Make the law permanent Click "Further Reading" for the full text of the letter and the proposed bill...

Homes and Cars in Living Trusts - Check With Your Insurer

Posted on January 08, 2009
Revocable living trusts are a common estate planning tool for avoiding probate.  It is not uncommon for a home to be transferred to the trust for that purpose, as well as occasionally motor vehicles. I normally advise my clients to check with their insurance company to make sure their coverage will not be affected...

Finance Charity-Owned Life Insurance with your IRA

Posted on January 05, 2009
In a Private Letter Ruling issued late in 2007, the IRS approved a clever technique to leverage a gift  to your favorite charity using your IRA and life insurance.  Developed by Douglas Delaney, a CPA and attorney in South Carolina, the "CHIRA®"  works something like this:  The donor rolls over funds from a regular IRA to a self-directed IRA...

Expatriates Beware - New Taxes Apply

Posted on December 31, 2008
Tired of all the taxes here in the good ole USA and thinking of moving to a tropical isle with little or no taxation?  Besides the emotional and security issues, there tax penalties for leaving the U.S. In addition to providing tax relief to military personnel and veterans, the Heroes Earnings Assistance and Relief Act (HEART Act) of 2008 also contains a couple of provisions regarding expatriate taxation...

Happy New Tax Year - Changes in 2009

Posted on December 31, 2008
Tonight at midnight, of course, will be the start of 2009.  With the change in the calendar year comes several significant tax changes, most of which I have blogged about prior to today: Federal Estate Tax Exemption increases to $3.5 million Federal Gift Tax Annual Exclusion increases to $13,000 Federal Gift Tax Annual Exclusion for Non-Citizen Spouses increases to $133,000 North Carolina Gift Tax repealed Rollover availability from Employer Retirement Plans to Non-Spouse IRAs mandated Required Minimum Distributions from retirement accounts suspended While these changes all favor the taxpayer, keep in mind that unless the law is changed sometime in 2009 or 2010 (when there will be no estate tax), in 2011 the federal estate tax exemption will be only $1 million...

529 College Savings Plan Investments May Be Adjusted Twice Yearly in 2009

Posted on December 29, 2008
The IRS recently announced in Notice 2009-1 that in 2009 the investments in 529 College Savings Plans may be adjusted twice, as opposed to once per year, which has been the rule to date.  The investments may also be adjusted upon a change of the beneficiary...

Bush Signs Worker, Retiree and Employer Recover Act of 2008

Posted on December 24, 2008
This morning President Bush signed H.R. 7327, the “Worker, Retiree and Employer Recovery Act of 2008” (WRERA). The law suspends Required Minimum Distribution (from IRAs and qualified plans) requirements for 2009 and requires employers to offer non-spousal rollovers from qualified plans to inherited IRAs beginning January 1, 2010...

The 12 Keys to Proper Estate Planning

Posted on December 23, 2008
All of us know the Christmas song The 12 days of Christmas.  Keeping with the holiday theme, I have come up with "The 12 Keys to Proper Estate Planning."  This brief but very important listing applies to just about everyone, young or not-so-young,  as well as the wealthy  and the somewhat less-than-wealthy...

Planning with the Wyoming Close LLC

Posted on December 21, 2008
p pbspan style="font-size: 14pt;"What is an LLC?/span/b/p pIn 1977 Wyoming was the first state to enact laws permitting the creation of a Limited Liability Company.nbsp;An LLC combines the best features of a corporation with the best features of a partnership...

IRS Offers Free Tax Guide for Individuals

Posted on December 17, 2008
p pFrom a href="http://www.irs.gov/newsroom/article/0,,id=201359,00.html"IR 2008-142/a:/p pWASHINGTON mdash; The IRS has placed its comprehensive tax guide for individuals onnbsp; IRS.gov, updating it for tax year 2008. The updated on-line version of IRS Publication 17, ldquo;Your Federal Income Tax,rdquo; contains more than 900 interactive links...

Required Minimum Distributions to be Suspended?

Posted on December 12, 2008
This update is courtesy of Barry C. Picker, CPA: It looks as if Congress has passed, and sent to Pres. Bush, H.R. 7237; Worker, Retiree, and Employer Recovery Act of 2008, which among other things, suspends the excise tax on the failure to take a minimum distribution...

It may not seem like it, but Now is the Time to Plan

Posted on December 10, 2008
Difficult topics when planning for your estate is a recent article on the Chicago Tribune's website that discusses the advantages of wealth transfer planning during down market and low interest rate environments such as the one we are experiencing now...

IRS Offers Tips for Year-End Donations

Posted on December 09, 2008
This is from IR-2008-138, issued today by the IRS: WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. One provision offers older owners of individual retirement arrangements (IRAs) a different way to give to charity...

Own Rental Real Estate? You Need an LLC to Protect Yourself

Posted on December 09, 2008
Anyone who owns rental real estate in his or her individual name is taking a tremendous risk.  Suppose your tenant, or one of the tenant's guests, gets hurt on your property and sues the owner of the property.  That's you!  And any judgment against you can be satisfied from other property you own, such as bank accounts, investments, and other real estate, even your home...

Medicare Part D - An Overview

Posted on December 04, 2008
From the most recent NAELA eNewsletter: By Terri Tersteeg Overview After the conclusion of World War II, employer provided health care benefits had become commonplace and employees had come to expect the benefit as part of their overall employment package...

Big Tax Losses in 2008? Consider a Roth Conversion

Posted on December 02, 2008
Self-employed persons or small business owners such as home builders with big tax losses for the year should consider converting their traditional IRAs to Roth IRAs this year to "soak up" some or all of the loss.  This planning could be even more beneficial given that the securities or mutual funds in the original IRA are likely to be depressed in value, which means less income will be realized...

North Carolina Has 4th Highest Beer Tax

Posted on December 01, 2008
As a beer aficionado, I was surprised to learn today that NC has the fourth-highest tax on beer in the nation, at 53 cents a gallon. And, of course, we also have to pay sales tax when we as consumers buy the beer.   The highest tax is Georgia, at $1...

Report Foreign Bank Accounts Totaling Over $10,000

Posted on November 26, 2008
The IRS is increasing its efforts to track  down American taxpayers who have undeclared foreign bank accounts  (including US citizens living abroad). The Department of Justice indicted a UBS  AG senior executive on November 12, alleging tax fraud...

IRS Announces 2009 Standard Mileage Rates

Posted on November 25, 2008
  The Internal Revenue Service has issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be: 55 cents per mile for business miles driven 24 cents per mile driven for medical or moving purposes 14 cents per mile driven in service of charitable organizations Revenue Procedure 2008-72

"Aging in America" Recording Available on NAELA Webiste

Posted on November 21, 2008
A recorded version of the National Academy of Elder Law Attorneys (NAELA)'s public webcast "Aging in America: How to Plan for it" is available for  through November 30 on the NAELA website. During the one-hour program, AARP and NAELA officials discuss talking with one's parents about aging, family issues in elder care, healthcare decision making, long term care insurance, reverse mortgages and more...

Deductibility of Estate Planning Legal Fees

Posted on November 20, 2008
Contrary to what many of my clients assume, legal fees for general estate planning are not deductible for income tax purposes.  Estate planning fees are only deductible to the extent that they represent income, gift, or estate tax planning or advice...

Reverse Mortgage Limits Double

Posted on November 18, 2008
The Housing and Economic Recovery Act of 2008 more than doubled the home value (now up to $417,000) to be used nationwide for establishing the size of loans available from the federal reverse mortgage program.  Loan origination fees were also lowered...

NAELA Announces New Senior Housing Locator Website

Posted on November 11, 2008
The National Academy of Elder Law Attorneys  (NAELA) has unveiled its new Senior Housing Locator powered by SNAPforSeniors®, an online navigational tool designed to help easily find senior housing anywhere in the country. Users can search a database of more than 60,000 senior housing communities, including listings for all licensed senior housing in the U...

Obama and Taxes

Posted on November 07, 2008
A recent article on Obama's tax plan:  How Obama's Tax Plan Could Affect You

NC Has 11th Highest Income Tax Rate in U.S.

Posted on November 05, 2008
Our top rate is now 7.75%, just slightly under Idaho's top rate of 7.8%.  Even New York has a lower top rate.  Before our top rate of 8.25% expired, we were tied for 9th place with Hawaii. The top 10 States (including Washington D.C.): CA - 10...

Tax Policy Center Report on Federal Estate Tax

Posted on November 03, 2008
Here's a recent comprehensive report from the Urban-Brookings Tax Policy Center entitled Back from the Grave: Revenue and Distributional Effects of Reforming the Federal Estate Tax.  An outline of the presidential candidates' and other recent proposals for reform is contained in Table 11 on page 20...

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