Tag: estate planning

Investment News: “A flightplan for snowbirds”

Investment News has created a helpful, interesting slideshow that anyone attempting to escape cold northern winters (or really anyone who spends a good deal of time in a state that is no longer their primary residence) should check out to avoid issues of residency and, therefore, being taxed in more than one state. Investment News bases the nine tips on guidance from McManus & Associates founding principal John O. McManus. From the slideshow intro:

There’s nothing like a cold, northern winter or a chilly tax environment to inspire American retirees to head south. But if you plan to pack your bags for good, it may be easier to shed your overcoat than your status as resident of your former home state, warns John McManus, the founding principal of the New York area trust and estate planning firm McManus & Associates. He offered the following tips on how to enjoy hot weather without ending up in hot water with tax collectors in your previous domicile.

The feature shares important but sometimes overlooked suggestions like change your gym membership right after you move and use cash when visiting your previous state of residence, if possible. To learn about more steps you can take to shed the double layers and the double tax payments, click through the full slideshow “A flightplan for snowbirds” here.

Article for LifeHealthPro from McManus & Associates: “The Road Ahead for Estate Planning”

Penned by John O. McManus, founding principal of McManus & Associates, the article “The Road Ahead for Estate Planning” is today featured by LifeHealthPro. LifeHealthPro is a go-to resource for advisors, insurance wholesalers, CPAs and estate planning attorneys.

In the piece, John discusses the several surprising outcomes regarding estate planning that emerged as part of the fiscal cliff deal and outlines the new tax rates and exemption amounts. He also recommends several “tactics to try.” From the article:

Here are a few of the trust and non-trust estate planning strategies that married and single persons should explore in 2013:

  1. Foundations: With increased taxes, gifts to charity have a greater tax-deductible value. Gifts to foundations allow full deduction in the year of the gift, whereas transfers out of foundation can be as small as 5 percent on an annual basis, allowing assets in the foundation to continue to grow.
  2. Charitable trust: These enable one to make gifts to charity and receive immediate deductions. One can continue to receive income from the charitable gift for a period of time. Gifts can also be made where the charity gets a distribution each year and the loved ones receive the remainder.
  3. Family mission planning: The family mission and preparing heirs for inheritances are critical to ensuring a successful transfer of wealth and family values, to helping minimize conflict and maximize harmony and to supporting charitable endeavors.
  4. Life insurance trusts: Funding a trust with a life insurance policy is a smart way to get a windfall of cash when someone passes away to pay off estate taxes. It’s also an avenue for getting a big asset off of one’s balance sheet, keeping a large amount of cash safe and protected. Make sure the trust is named as the beneficiary and policy owner (e.g., John Doe Irrevocable Trust). If a house is put into a trust and the house is insured, make sure to get the insurance policy changed to reflect the ownership by the trust. The trust should be the primary insured on the policy, and the individual can be the secondary.

And cautioning readers to be mindful of what’s ahead that could impact estate planning, he shares this observation:

Several valuable opportunities emerged as part of the fiscal cliff negotiations that pleasantly surprised the estate planning community. We are not completely out of the woods, however, with the debt ceiling debates just around the corner. When it comes to safeguarding wealth and family values, it’s important now to look ahead without losing sight of what’s in the rearview mirror.

Read the whole thing at http://www.lifehealthpro.com/2013/02/22/the-road-ahead-for-estate-planning. Also keep an eye out for John’s piece in Monday’s Life Insurance Insider e-newsletter. Next week will be a special estate planning edition.

Courtesy of LifeHealthPro

John McManus called “best guy out there” in estate planning – Avvo client review

McManus & Associates Founding Principal John O. McManus recently received a client rating worth sharing on Avvo.com. According to Avvo’s “About Us” page, the site “empowers consumers by rating lawyers, and having these real lawyers answer their questions – all for free.”

Reviewing John’s services, a client called John the “best guy out there” when it comes to tax and estate planning attorneys. The client gave John a perfect six stars – an “excellent” rating – overall and also when asked to rate him in the categories “Trustworthy,” “Responsive,” “Knowledgeable” and “Kept me in informed.”

Recommending John, here’s what the client had to say:

What a great place to walk into. John was great using metaphors to translate the legal language, but not reducing it to useless pieces. I felt like I was important to creating the plan and could really speak to the fine points of the strategies used when I had completed all my documents. Thanks for a highly personal and professional experience!

We greatly appreciate this feedback, and if you’re a client of McManus & Associates, we welcome your thoughts, too.

Conference Call: Post-Fiscal Cliff Estate Planning – Top 10 Next Steps in Light of the Deal

In the early morning hours of January 1, the United States Senate passed legislation to avoid the ‘fiscal cliff.’ Nearly 20 hours later the House followed suit. Several surprising outcomes regarding estate planning emerged as part of this deal, which according to the Wall Street Journal, is “chock full of goodies” for nearly every interest group. The Estate Planning community was surprised to enjoy the benefit.

John O . McManus, top AV-rated estate planning attorney and founding principal of McManus & Associates, today held a conference call with clients about the new laws and ways to remain protected moving into 2013.

LISTEN HERE: “Post-Fiscal Cliff Estate Planning – Top 10 Next Steps in Light of the Deal”

Below please find the 10 questions that are addressed during the discussion:

1. The new tax rates and exemption amounts are set. What can you expect to pay for estates over $5.25MM?
2. What are the estate-tax “traps” to be wary of?
3. The Connecticut gifting limit of $2MM; is this a warning for future lifetime gifting limits in other states?
4. With the new permanency in the estate tax exemption, what taxpayers should make gifts over $5.25 MM and pay gift tax? (A strategy widely used for many prior generations)
5. For estates below $5.25 MM, who should employ trusts in their wills?
6. What is meant by “spousal portability” and “unification” of the exemption amounts? Does this eliminate the need for certain planning?
7. The Generation Skipping Tax Exemption Amount is also set at $5.25MM; who should take advantage of it?
8. Looking forward to March ’13 and the “debt ceiling” debates, what detrimental effect could such negotiations have on state estate taxes?
9. What are the trust and non-trust estate planning strategies that married and single persons should undertake in 2013?
10. What critical Gift Tax consequences must be avoided for gifts made in 2012? When does the statute of limitations clock begin?

McManus & Associates is here to help you make sure you’re covered. We welcome your call at 908-898-0100.

Bloomberg BNA: Two New Stories Cite Firm’s Founding Principal

 

 

McManus & Associates Founding Principal and top-AV rated Attorney John O. McManus recently spoke with Diane Freda, reporter for Bloomberg BNA’s Daily Tax Report®. The publication is a leading source of legal, regulatory, and business information for professionals covering issues in taxation, pensions, and accounting.

BNAFreda’s December 27th story “IRS Shuts Down Online EIN Applications, Complicating Year-End Gift Transactions” cites John’s thoughts on the IRS’s “planned outage” of online applications for employer identification numbers, from December 27th through January 2nd. It was the publication’s most-read article of the day.

Her second piece, “Fiscal Cliff Unified Estate, Gift Tax Exemptions Seen as Windfall by Advisers,” was published on January 2nd and includes John’s reaction to the passage of provisions in fiscal cliff legislation ensuring estate and gift tax exemptions remain at $5 million for the upcoming year and near future.

To learn more about fiscal cliff unified estate and gift tax exemptions, give our office a call at (908) 898-0100.

Reproduced with permission from Daily Tax Report, 248 DTR G-4 (Dec. 28, 2012). Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Reproduced with permission from Daily Tax Report, 02 DTR G-8 (Jan. 3, 2013). Copyright 2013 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Bankrate.com: “Are these tax proposals fair?”

Jennie Phipps, who has been reporting on retirement for six years, recently spoke with McManus & Associates Founding Principal John O. McManus about estate and retirement planning strategies and based an article for Bankrate.com on the conversation.

In her story, titled “Are these tax proposals fair?” Phipps highlights five estate and retirement planning strategies at which the Obama Administration has taken aim, according to McManus. As she notes in her piece:

Some of the people who are using these strategies as they approach retirement have lots of money to manage. But those using these approaches also include small-business owners and farmers eager to pass their enterprises on to their children without burdening them with a huge tax bill, McManus says.

Phipps summarizes what the government proposes to do to collect more taxes from money passed down via estates and tasks readers with deciding whether the proposals are fair. She calls out the following:

  1. Lower the estate tax exemption.
  2. Retool intentionally defective grantor trusts.
  3. Tax grantor retained annuity trusts, or GRAT.
  4. Limiting generation-skipping transfer tax exemptions to 90 years.
  5. Taxing grantor trusts when Dad still manages the money.

Phipps’ article expands on all five; read more here: http://www.bankrate.com/financing/retirement/are-these-tax-proposals-fair/

The story closes with thoughts from John:

McManus says he believes that taxing estates at 45 percent is unfair and counterproductive. “We are proposing to penalize hardworking people who aren’t making millions. Having to pay a punitive amount in taxes takes away the motivation to start up a business.”

Please give our office a call at (908) 898-0100 if we can help with questions.

Conference Call: Post-election Planning and the ‘Fiscal Cliff’

Now that the elections are over, Congress and the White House have the significant task of directing the country away from the impending “fiscal cliff.” Critical to these negotiations will be tax rates, exemption amounts and political ideologies.

During a conference call with clients, McManus & Associates Founding Principal John O. McManus identifies potential issues and ways to remain protected moving into 2013.

LISTEN HERE: “Post-election planning and the ‘Fiscal Cliff'”

Here’s what the discussion covers:

  1. What risks do the “Fiscal Cliff” negotiations present for estate and gift tax exemptions?
  2. Can compromise be achieved?
  3. What if no compromise is achieved by Dec 31, 2012?
  4. How does the composition of the House and Senate effect these discussions?
  5. What are some of the speculations for the compromise regarding gift tax/estate tax?
  6. How likely is it that a compromise, achieved later in the year, will be made retroactive to January 1, 2013?
  7. How does the emotional power of the argument to abolish the ‘death tax’ play into the debates?
  8. What new taxes will be levied? For example: 3.8% Medicare tax on capital gains, dividends and the top tax brackets.
  9. Estate tax on the ballot. How did it fair this election?
  10. Have you fully funded the trusts that we have set up for you and are all titles correctly named?

Please contact our office at (908) 898-0100 if we can help with any questions.

New Jersey Newsroom: “A tax tip that can save you thousands”

Warren Boroson

Warren Boroson – author of more than 20 books, including “J.K. Lasser’s How to Pick Stocks Like Warren Buffett,” and whose articles have appeared in publications like Reader’s Digest and New York Times Magazine – recently turned to McManus & Associates Founding Principal and top AV-rated Attorney John O. McManus to talk strategies for the looming Fiscal Cliff and rising taxes that 2013 will likely bring.

Boroson’s article “A tax tip that can save you thousands,” published by New Jersey Newsroom, is based on John’s foresight and guidance. Here’s an excerpt:

The gift tax exemption will likely be reduced next year, so something that well-to-do people should consider doing, McManus suggests, is setting up a trust to put assets into, to protect those assets from Uncle Sam. These trusts will give you “flexibility, control, and access.”

To learn more about what you can expect in terms of gift-tax rates and tax benefits “when the battle about the so-called Fiscal Cliff is over,” check out Boroson’s full column to read John’s expert insight: http://www.newjerseynewsroom.com/economy/a-tax-tip-that-can-save-you-thousands

NBC News: “Seniors face retirement ‘perfect storm’ in 2013”

John O. McManus, founding principal of McManus & Associates, recently spoke with CNBC Reporter Mark Koba about whether 2013 is a bad year to retire, with the predicted fiscal cliff and, even if it’s resolved, the larger numbers of workers leaving their jobs for retirement. According to Koba, an estimated 7 million Americans will reach the age of 65 by the start of 2013.

John’s thoughts are found throughout Koba’s article:

As it stands now, the top tax rate on capital gains will jump to 23.8 percent from 15 percent and the top tax rate on dividends nearly triples to 43.4 percent from 15 percent. And any fiscal deal will likely include higher tax rates so seniors had better count on that when they plan for their retirement, said John O. McManus, CEO of McManus & Associates, a trust estates law firm.

“Many seniors may want to postpone retirement in 2013 because they just don’t know what their tax rates will be,” McManus said. “If the markets don’t perform well and tax rates go higher, seniors will have a lot less money to spend. There’s a lot of uncertainty about where this will all end.”

But McManus said even planning for tax increases won’t be easy.

“If someone retires in January but a deal isn’t reached until March, will tax rates be re-retroactive? That’s a big risk for someone thinking about retirement,” said McManus.

And after looking at the thoughts of various experts, Koba gets it right: “While 2013 presents unique problems, analysts say that in the end, planning for retirement never comes at an easy time, fiscal cliff or not.”

A quote from John closes out the piece:

“It’s not to say that 2014 will be a better year to retire,” said McManus. “There are always a lot of things people can’t control, like the markets and global issues. I’m just saying that if you think about retiring in 2013 you need to take care and take caution.”

Read the whole article here.

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