Educational Alerts

Planning for Retirement Benefits: Get it Right the First Time

Jan 31, 2017

Retirement assets are a large part of most Americans’ total wealth. The key to maximizing and maintaining that wealth is to keep the assets in the retirement accounts for as long as possible. However, that alone will not shield the retirement assets from the creditors of beneficiaries. Read more to find out how to gain maximum deferral of income taxes as well as protection from the creditors of beneficiaries.

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Estate Tax Repeal in 2017?

Dec 30, 2016

President-Elect Trump has proposed repealing the estate tax and replacing it with a capital gains tax for taxpayers with more than $10 million in assets. Passage of such a proposal remains uncertain for many reasons. Whatever the outcome, having an estate plan reviewed by a knowledgeable estate planning attorney will be crucial once it becomes clear the direction that Congress and the President intend to take.

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Ambiguities Can Lead to Litigation

Oct 31, 2016

Probate litigation commonly involves an argument over what the decedent intended and what a phrase in a Will or trust means. Ambiguities in estate plans of celebrities are often the subject of litigation, often because millions of dollars are at stake. But emotions, greed, and other human frailties leading to litigation are just as prevalent in litigation between families of lesser means. A properly drafted and funded estate plan, combined with the clear communication of your intent and reasons behind decisions being made can greatly reduce the possibility of litigation involving your estate.

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Protect Against Creditor Claims – Even Tax Liens

Aug 22, 2016

Many individuals are interested in protecting their own assets and their children’s inheritances from creditors and divorcing spouses. If properly drafted and correctly administered, an irrevocable trust can protect against even the enforcement of an IRS tax lien.

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Don’t Rely on Government Officials for Information about Medicaid Planning Options

Aug 08, 2016

Failing to plan in advance for long-term care expenses can deplete a senior’s estate rapidly. Be careful where you get your long-term care planning information. Medicaid regulations vary from state to state, so even what may appear to be a reputable internet site may steer you in the wrong direction because what may work in one state may not in another state. Even the officials who run many State government agencies responsible for Medicaid often have incorrect information.

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Electing Portability Treatment

Aug 01, 2016

Failing to make an election of portability on a timely-filed estate tax return for the first deceased spouse can be a costly mistake. Not only could it result in additional estate tax liability potentially in the millions of dollars being owed on the death of the surviving spouse – it could also result in IRS filing fees and legal fees in excess of $9,000, if relief form the IRS is sought.

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Fixing David Bowie’s Will

Jul 27, 2016

The untimely death of David Bowie left many of his fans in shock. It appears that Mr. Bowie wanted to keep things fairly simple, dividing the majority of his estate between his wife and two children. Read further to learn more about David Bowie’s estate plan and how it could have been drafted differently to provide additional benefits.

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Courts Disagree on Intent of Marie Callender Heir

Apr 06, 2016

The co-trustees of the trust of Donald Callender, heir to the Marie Calendar restaurant fortune, brought a petition for the court to interpret how the royalties from the restaurant chain should be divided between his wife and two children. The trial court ruled that the trust was ambiguous. But, the appellate court reversed, holding the trust was clear that Donald’s intent was to split the royalties equally between his heirs.

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New Basis Reporting Requirements

Mar 03, 2016

The filing requirements for Form 8971, causing an executor or trustee to report tax basis for assets distributed to beneficiaries from an estate or trust, have now become a reality. Read further to finds out more about this new requirement for executors and trustees and the consequences of not complying...

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Will Invalid Due to Undue Influence

Feb 09, 2016

Seniors often want to reward caregivers for services by giving the caregiver a gift or bequest. Because a caregiver is in a position of power and trust, such gifts or bequests are often scrutinized and found to have been induced by undue influence. Such was the case with Eva Barnes and her caregivers, Michelle and Dennis Wells.

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New Year’s Resolution Checklist

Feb 09, 2016

A review of their estate plan should be one of your client’s New Year’s resolutions. The following checklist should be of assistance in making sure your client’s financial house is in proper order.

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Fiduciary May Face Personal Liability for Improper Administration of a Trust or Estate

Jun 30, 2015

In Estate of Sarah O’Hare, the mother of a disabled child, serving as the guardian of her estate, was found personally liable for over $400,000. The court found that she used the guardian estate funds to benefit her and other members of the family and did not administer the estate for the sole benefit of her daughter. This case demonstrates the importance of fiduciaries of all types understanding their duties to the beneficiaries who are intended to be benefitted by the funds they are administering.

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Tax Court Approves Monster Crummey Trust

Jun 01, 2015

Annual gifts, especially through trusts with “Crummey powers,” can lead to significant estate tax savings. Read more about a recent taxpayer victory involving a “Crummey Trust” with no less than sixty beneficiaries with withdrawal powers.

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IRS Approves Spousal Rollover of IRA Payable to Testamentary Trust

Mar 31, 2015

The Internal Revenue Code and Treasury Regulations concerning trusts as beneficiaries of retirement plans and IRAs are fraught with traps and contradictions. It seems sometimes the exceptions to the rules outnumber the rules themselves. This month’s E-Alert discusses a recent Private Letter Ruling stating that a spousal rollover of an IRA is not available when the beneficiary of the IRA is a trust, but then stating the exception under which a spousal rollover may be available. It is another example of how careful planning is crucial when dealing with retirement assets.

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Looking After the Little Details Can Pay Off

Feb 28, 2015

This month’s alert covers the importance of planning for tangible and intangible personal property. Often items that are little financial value are of significant sentimental value and the distribution of those items can lead to disputes among children, grandchildren and other relatives who were “promised” the items or otherwise feel entitled to them. On other occasions personal property can have significant value, such as art, collectibles, licenses and royalties. Proper planning can help reduce any problems that may arise in the distribution of this property after death.

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Advance Planning for Long-Term Care is Critical

Feb 13, 2015

A recent New York Times article points out that some nursing homes are using guardianships to gain control of the assets of seniors in order to pay for past due medical bills. While it is sometimes appropriate for a nursing home or hospital to bring a guardianship petition on behalf of a senior, these nursing homes are using the court process as a debt collection mechanism. As we are growing older and living longer, it is vitally important for us to have proper planning in place for incapacity as well as long-term care planning. With a proper plan, the senior can qualify for government assistance to pay for long-term care costs and avoid the possibility of a guardianship being initiated by a nursing home.

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State Court Decisions Not Binding on IRS

Feb 13, 2015

Trust reformations have become more popular to correct mistakes of the attorney and/or the trustors, especially with the adoption of the Uniform Trust Code by many states. However, just because a state court agrees to reform a trust doesn’t mean that the IRS will respect the trust reformation. In this month’s Alert, we discuss several PLRs and cases where the IRS either accepted or DID NOT accept the rulings of the state courts in reforming the trust.

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Trustor’s Intent is Paramount

Nov 05, 2014

This month’s alert demonstrates that it is the trustee’s utmost duty to carry out the intent of the trustor/grantor. The trustee received instructions to pay college tuition for grandson but the trustee argued that the instructions failed to meet the legal requirements for a proper amendment to the trust. Upon petition by the grandson for a finding of breach of trust and fiduciary duties, the court ruled in favor of the grandson.

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Do-It-Yourself Estate Plans: Unintended Results

Sep 03, 2014

Download educational eAlert template A in Microsoft Word format Download educational eAlert template B in Microsoft Word format With the rise of companies such as Legal Zoom, TotalLegal, LawDepot, and, more and more consumers are attempting to create their own estate plans without the assistance of a lawyer.

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Failure to Divide Trust Cost over $400,000

Sep 03, 2014

This month’s alert provides a cautionary tale. It shows how failure to administer a trust according to its terms can cost the remainder beneficiaries hundreds of thousands of dollars in taxes, even when everyone agrees that the way the trust was administered was what was intended by the surviving trustor.

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Supreme Court Rules on Bankruptcy Protection of Inherited IRAs

Jun 30, 2014

While many people plan out their vacations in great detail, they may be forgetting to address what to do if the unexpected happens while their out of town. Find out how setting an estate plan in place, even a basic one, can minimize your worries about those “what if’s,” and enjoy that vacation you’ve been dreaming of.

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The Case of the iPhone Will

Feb 28, 2014

This month’s Alert examines how a "Will" might be in various different forms, like on an iPhone. The Alert also discusses how it may be prudent to use other devices to avoid probate.

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Planning for Retirement Assets Can be Difficult

Mar 29, 2013

This month’s Alert examines the rules regarding distributions from IRAs and retirement plans. In particular, it examines reasons to make a trust the beneficiary and rules regarding who is the measuring life for minimum required distribution purposes.

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More Reasons for Clients to Review Their Estate Plans

Jan 31, 2013

This month’s Alert examines how the “fiscal cliff” legislation could result in changes for estate plans. Depending on the couple, it might mean they could simplify their plan. However, there are many non-tax reasons that they may want to keep a more complex plan.

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Estate Planning for LGBT Couples: Possible Changes on the Horizon

Nov 30, 2012

This month’s Alert gives an overview of developments affecting estate planning for same-sex couples. It recounts how recent elections approved same-sex marriages in several states. It also examines several cases which address the constitutionality of bans on same-sex marriage, including the Defense of Marriage Act.

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Last Chance for Estate Tax Savings?

Oct 31, 2012

This month’s alert focuses on the narrowing window to lock-in the current $5.12 million estate and gift tax exemption by gifting prior to year-end. The alert also examines why it may not be possible to wait and do this planning at the last minute.

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Tax Changes for 2012

Jan 31, 2012

This month's Alert reviews the inflation adjustments applicable to federal taxation in 2012. It examines changes in the estate, gift, and generation skipping transfer taxes, as well as income taxes.

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IRS Issues Instructions for Estate Tax Returns for Decedents Dying in 2011 and 2012

Sep 30, 2011

This month's Alert examines the IRS’ recent release of instructions regarding how to ensure portability of the applicable exclusion amount at the death of the first spouse. Many surviving spouses may see an estate tax return at the death of the first spouse to be unnecessary. This alert shows why advisors should document that they advised the filing of an estate tax return.

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A "Do-It-Yourself" Mystery: The Case of the Neighbor Girl and the Well-Meaning Widow

Aug 31, 2011

Clients occasionally attempt do-it-yourself estate planning. Sometimes they use software assistance, borrow from others’ documents, or amend their professionally prepared documents themselves. This month’s Alert looks at one such story and the havoc it wrought. In the end, the client’s goals were not achieved and her loved ones were pitted against each other in court.

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Doing It Yourself Can Sometimes Lead to Disaster

May 31, 2011

Nowadays, a growing number of consumers attempt to prepare estate planning and other documents of legal significance without professional assistance. These do-it-yourselfers are penny-wise and pound-foolish. This Alert examines several cases in which the decedent attempted to create or modify his own estate plan, with disastrous results.

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Creditor Protection Extended to Inherited IRAs by More Courts

Apr 29, 2011

IRAs and Qualified Plans are an increasing portion of our clients’ wealth. The advantages of the income tax deferral are well-known. This month’s Alert looks at developments regarding the creditor protection such plans provide, not only for the contributor, but also for those who inherit them.

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Annuity Maximization

Feb 28, 2011

This Alert examines how a tax-deferred annuity may not be the best solution for senior clients. It demonstrates how a single premium immediate annuity, or “SPIA” may be a better alternative for clients, especially if the client is in a lower tax bracket than the children who will inherit it.

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TRA 2010 Creates Opportunity for New Planning Strategy - The FlexTrust

Jan 31, 2011

The question of whether to fund a credit shelter trust has long been a central question in estate planning. With the new tax law and it’s temporarily increased exemption, the question is all the more relevant. This month’s alert discusses a new method of adding flexibility to your clients’ trust. The FlexTrust allows an independent Trust Advisor to decide whether and to what extent the credit shelter trust should be funded.

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