Yesterday, McManus & Associates held a client conference call reviewing several immediate strategies that clients should consider employing before year-end. With the proposed tax reforms listed in President Obama’s budget, certain planning strategies are in the crosshairs and may not be around for long. Although legislation next year could be made retroactive to January 1, 2014, if you act before the end of 2013 such changes will not affect your planning. Get inside the castle walls now.
During the half-hour call, the firm shares effective strategies and highlights maintenance items required to ensure one’s family wealth remains protected. Below are the 10 questions that will be answered by listening to the recording.
LISTEN HERE: “Top 10 Considerations for Estate Planning with Life Insurance”
- Laws could change with new revenue debates. Have you made lifetime gifts in trust? Created a grantor trust?
- Have you made sure to operate your family LLC/Limited partnership as a legitimate business? What should you do before year-end?
- What should you give away? Are you planning to make annual exclusion gifts, gift appreciated securities etc? Have you prepared Crummey notices?
- Should you create lifetime trusts for your children? Have you given your trustees a limited power of appointment?
- What can you prepay? What should you prepay? Home, deductibles, medical expenses, major year-end purchases?
- Have you crossed any major milestones this year? Do you have children who turned 18 this year? Do the fiduciaries and guardians named in your documents still reflect your current wishes? Are your powers of attorney up to date?
- Have you made contributions to your family foundation and/or donated to charity?
- Are you over 70 ½? How to use Required Minimum Distribution to your advantage.
- Create GRATs or QPRTs. Given the current interest rates what should you consider?
- How should you consider harvesting capital gains, timing long-term losses?
Give us a call at 908-898-0100. We can help you identify which strategies you should implement now before the calendar rolls over to 2014.
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:
- Lower the estate tax exemption.
- Retool intentionally defective grantor trusts.
- Tax grantor retained annuity trusts, or GRAT.
- Limiting generation-skipping transfer tax exemptions to 90 years.
- 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.
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:
- What risks do the “Fiscal Cliff” negotiations present for estate and gift tax exemptions?
- Can compromise be achieved?
- What if no compromise is achieved by Dec 31, 2012?
- How does the composition of the House and Senate effect these discussions?
- What are some of the speculations for the compromise regarding gift tax/estate tax?
- How likely is it that a compromise, achieved later in the year, will be made retroactive to January 1, 2013?
- How does the emotional power of the argument to abolish the ‘death tax’ play into the debates?
- What new taxes will be levied? For example: 3.8% Medicare tax on capital gains, dividends and the top tax brackets.
- Estate tax on the ballot. How did it fair this election?
- 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.