Presidential candidates Donald Trump and Hillary Clinton presented their tax plans in the first quarter of this year, but both candidates modified their proposals in September. McManus & Associates Founding Principal and AV-rated Attorney John O. McManus offered his thoughts on the impact that each proposal would have on tax planning and wealth management. To hear discussion on the salient points from each of the candidates’ tax plans, click below:
Tag: estate planning
Conference Call: Proposed Treasury Regulations and Discounting
Proposed IRS regulations were recently issued that would eliminate discounting of transfers of family business interests. Valuation discounting is now time-sensitive, as this opportunity is scheduled to be eliminated, possibly by the end of the year.
Partnerships are sophisticated vehicles for unifying family investments, providing for the orderly transfer of assets, delivering asset protection, and maintaining centralizing control. These partnerships are legitimate entities that facilitate the distribution of wealth to family members and the growth of family assets. Partnerships also afford the opportunity for discounts on asset transfer to family members; while discounting is not the number one reason for creating partnerships, the strategy is worth noting.
The Treasury Department has finally issued its dreaded proposed regulations limiting discounted transfers among family members. This means the clock is ticking until the public hearing on December 1, 2016, which will help determine the strategy’s fate. Final regulations can be issued at any time after that date and will become effective 30 days after their issuance.
Wall Street Journal Cites Tips from McManus for Avoiding and Properly Handling Sweetheart Scams
Wall Street Journal Columnist Veronica Dagher penned a new article this week, “How to Avoid, Detect and Respond to Romance Scams.” The piece provides steps that readers can take to protect themselves (and their parents) from these fraudulent attacks, as well as things to do if the swindling has, unfortunately, already taken place.
As revealed by Dagher, so-called sweetheart scams cost victims nearly $120 million in the first half of 2016, according to the FBI’s Internet Crime Complaint Center. How are these criminals finding success? “The fraudsters are ‘very adept at playing on the vulnerability of human emotions’…With some senior citizens, they are also playing on a lack of tech savvy.”
Dagher buckets the steps to avoid and address these scams, as follows:
1) Check the Connection
2) Check In With Your Parents
3) Check the Pressure
4) Report It
McManus & Associates Founding Principal John O. McManus is cited and quoted in the “Check In With Your Parents” and “Report It” sections. From the article:
“Stay in touch and call your parents often so that they don’t become vulnerable to scammers,” says John McManus, an attorney in New Providence, N.J., who has helped several senior citizens who were victims of fraud…If your parents do fall victim to a scam, show compassion, says Mr. McManus. Help them keep their dignity and understand that anyone can be wrongly manipulated at any age, he says.
McManus Quoted by MarketWatch on Digital Estate Planning
McManus & Associates Founding Principal John O. McManus was recently tapped for insight on digital estate planning by MarketWatch (WSJ), which has over 16 million unique visitors per month. Andrea Coombes’ column, “How to include your digital assets in your estate plan,” explores the importance of accounting for one’s online presence – from email and “bank accounts to Facebook, PayPal and more” – when planning for the transfer and administration of assets.
From the article:
If you fail to account for those digital assets in your estate plan, you risk burying your family or friends in red tape as they try to get access to and deal with your online accounts that may have sentimental, practical or monetary value.
John’s comments make up #5 and #6 on the article’s list of tips:
McManus’ Insight on Modern Estate Planning Featured in NJBIZ Wealth Issue
Last week, McManus & Associates Founding Principal John O. McManus was featured in NJBIZ‘s Wealth Issue. The piece, “A GUIDING HAND – McManus: Estate planning is increasingly complex,” includes a Q&A with John and highlights his insights on trends in how the ultra-wealthy protect their assets and their families.
A GUIDING HAND: McManus: Estate planning is increasingly complex
Wall Street Journal Shares Guidance from McManus in “Wealth Report”
The Wall Street Journal “Wealth Report” recently published a story by Veronica Dagher titled “When an Elderly Parent Has Been Scammed.” The article outlines key steps for an adult child to take if he/she expects that a parent or loved one is the victim of elder financial abuse. McManus & Associates Founding Principal John O. McManus is quoted throughout the piece.
At the outset of the article, Dagher helps readers understand both the obstacles that they’re likely to encounter when trying to help an elderly loved one who has been scammed and the typical feelings of the victim. Empathy and patience are key.
Conference Call: Tax and Estate Planning Considerations for Same-Sex Couples
Nearly a year ago, on June 26, 2015, the U.S. Supreme Court ruled in Obergefell v. Hodges, delivering a historic decision in favor of State recognition for same-sex marriage. Exactly two years prior to this decision, in United States v. Windsor, the U.S. Supreme Court struck down the constitutionality of Section 3 of the Defense of Marriage Act (DOMA), which defined marriage for federal purposes as existing only between one man and one woman.
“In its most basic terms, recognition of same-sex marriage equates to the simple fact that a spouse is now a spouse, irrespective of gender, in the eyes of the law,” commented McManus. “Today, there are opportunities and protections within reach for same-sex couples that were unavailable during most of American history.”
Recently, during a conference call with clients, McManus & Associates Founding Principal John O. McManus shed light on the far-reaching effects of these Supreme Court decisions.
LISTEN HERE for details: “Top 10 Tax and Estate Planning Considerations for Same-Sex Couples”
McManus Pens Letter to the Editor Responding to New York Times Story on Privilege
Recently, the New York Times ran a story by Nelson D. Schwartz, titled “In an Age of Privilege, Not Everyone Is in the Same Boat (A1, April 24).” John O. McManus – McManus & Associates’ founding principal who grew up in the Bronx but has worked with high net worth families for 25 years – penned the Letter to the Editor below in response:
Many Millionaires Are Down on the Stock Market – Should You Be?
Last Friday, Brian O’Connell penned a piece for TheStreet on what millionaires being down on the stock market means for regular investors. Here are thoughts from John O. McManus, founding principal of McManus & Associates:
With the wealthy keeping a tight rein on their dollars, the market remains flat to down. Because millionaires feel poorer, they’re spending less on creature comforts, which can cause the economy to slow. We saw this in the Great Recession – fewer vacations and pricey dinners, less frequently cut lawns and cleaned pools, and fewer wallets opened for cars, high-end fashion, jewelry and more. When millionaires are soured on the market, regular investors should view this as a red flag, because the rich tend to spend the most on guidance from top-notch advisors and can afford to be patient and invest for the long-haul. If millionaires are pulling out of the market or not investing, there’s no reason regular investors should do the opposite. That said, many millionaires may still be invested in the market, because they can afford to take a long view.
MarketWatch Publishes Article on Cutting Capital Gains Authored by McManus
5 ways to protect your estate from capital gains taxes
Published: Dec 25, 2015 6:04 a.m. ET
Traditional estate planning is being turned on its head
By JOHN O. MCMANUS
The time-honored approach to estate planning is being turned on its head by significant tax law changes that have taken effect in recent years.
Long-term capital gains tax rates now range from 25% to 33% (when you add together the top federal, state and local rates and Obamacare’s Medicare surtax). So now that the federal estate tax exemption is $5.43 million ($10.86 million for a couple’s combined exemptions), many Americans may no longer be exposed to federal estate taxes, making taxes on income and capital gains more prominent.
In fact, some legal practitioners who spent the first half of their careers zealously transferring assets out of their clients’ estates to avoid estate taxes now expect to spend the second half pushing assets back into their clients’ estates because the estate planning paradigm has changed.
What are the best ways to strategize around capital gains taxes to keep them as low as possible?
Rundown of the tax rules for gifts
To answer that, it helps to first understand the rules about gifts and taxes.
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