Will You Be My Estate Personal Representative?

So, you were asked to be the Personal Representative (PR) of an estate. It seemed like accepting was the right thing to do at the time. How hard can dividing up your parent’s lifelong savings and assets between siblings really be? Consider the following in deciding to be a PR and navigating the estate administration process.

Change of State Residency and Important Considerations

Clients and many taxpayers often wonder whether it might be beneficial in retirement or while still working to change their place of residency as a way to minimize their current and future state tax obligations, or as part of their long-term strategy to minimize estate taxes to a more tax-friendly state. While most states tax all or a portion of the income of their residents, certain states like Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state income tax, and New Hampshire and Tennessee do not tax earned wages. These and other states may not have “state” estate and/or inheritance tax as well, making them very appealing for those looking to change their residency in the long-term. 

Potential Impacts to Estate Tax as a Result of the 2020 Election

The results are in, and regardless of which side you were rooting for, now is a good time to prepare for changes ahead in the new year. While President-elect Joe Biden has not yet provided concrete details on his plans to modify estate taxes, he has indicated that he supports raising estate taxes and changing the taxation of capital assets upon death.

FAQ: Trusts

Trusts are a great way to put conditions on how, when, and to whom your assets will be distributed after you pass away. However, there are several options and specific terms to know when it comes to setting up a trust, and many people aren't sure of the best path forward.

To help explain, I've put together some frequently asked questions and answers on the subject.

Estate Tax Portability - 5 Things You Need to Know

The IRS recently released an update to its federal estate tax regulations, relaxing the rules on making a late portability election to a descendant's estate.

Currently, the federal estate tax exemption is $5.4 million, meaning that when a person dies, they will only pay federal estate tax (up to 40%) if the value of their estate exceeds $5.4 million. In 2011, the IRS introduced a concept called 'portability' to the federal estate tax exemption, and has now added an additional rule to allow for a late portability election. Here's what you should know:

6 Things You Should Know About Irrevocable Life Insurance Trusts

Did you know that if your estate is large enough, up to 40% of your life insurance death benefits can be lost to federal estate tax?

Although life insurance proceeds are not subject to income tax, they are included in your taxable estate, and therefore can be subject to estate tax. To prevent the taxation of life insurance proceeds, many of our clients choose to purchase their life insurance policy using an Irrevocable Life Insurance Trust (ILIT), or gift their existing policy to an ILIT.