With Estate Tax Planning Basically Dead, Here’s a Trust You Should Be Selling to a Lot of Your Clients

By Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law It’s not a Living Trust (but it does have broad application). Nor is it an Asset Protection or Medicaid Trust (though it does have some asset protection features). And, thanks to a recent Supreme Court decision, this Trust has been made even better (or more valuable). Okay, here it is. The Standalone Retirement Trust (or “IRA Beneficiary Trust”, or, as I call it, the “IRA Inheritance Trust®”). It’s simply a trust that acts as beneficiary of a client’s IRAs…

Top Five Reasons to Situs Your Irrevocable Trust in a Different Jurisdiction

By Steven J. Oshins, J.D., AEP (Distinguished) Most estate planners automatically situs their clients’ irrevocable trusts in the jurisdiction in which the client resides without considering the possibility of using a different jurisdiction. This is often done for no reason other than the fact that it is customary to do so. However, in many situations this decision causes a loss of potential benefits that may have been obtained by exploring the use of a different trust situs. Following are some of the common reasons to situs an irrevocable trust in a different jurisdiction: Reason #1: State Income Tax Savings. There…

Trusts Aren’t Just for The Rich Anymore

By Jonathan G. Blattmachr & Matthew D. Blattmachr Many people associate trusts with the very wealthy, because they are often used in the media and pop culture in the context of two other words: “fund” and “baby”. The reality is that a trust is a helpful estate planning instrument for most of your clients, not just the wealthy. Clients with $250,000 to $1 million in investable assets should consider a trust to help tackle their estate and financial planning challenges. Another reason trusts are commonly associated with the rich is because in the past for many families the cost of…

Estate Analyst—Clark v. Rameker: No Bankruptcy Exemption for Inherited IRA

By Robert L. Moshman, Esq. It is not often that the Supreme Court provides a clear rule on any aspect of financial planning (or even graces our niche with a passing reference), so these occasions call for special attention. On June 12, 2014, the Supreme Court’s decision in Clark v. Rameker clarified that an inherited IRA is not a protected retirement fund for bankruptcy purposes. Here, we analyze the decision and its impact on planning issues and review the applicable rules and caveats that apply to inherited IRAs. Note: The following discussion of IRAs is about traditional tax-deferred IRAs only…

Estate Planning for the Middle Class: Overcoming Myths with Reality

By Matthew D. Blattmachr, CFP®, Trust Officer, Alaska Trust Company | Volume 2, Issue 5 (May 2014) Here are a few common misconceptions (or objections) people have about estate planning and trusts – – and how to overcome them. Myth #1: Estate Planning is only important for the very wealthy. Reality: Every client needs some kind of estate plan, because everyone has an estate. The size of your estate does not dictate whether or not you need a plan, but rather what plan you need. If clients don’t create a specific plan, then the state is more than happy to…

The Top Four Mistakes Individual Trustees Make

By Mark Dreschler, CFP®, President & CEO at Premier Trust and Deborah Erdmann, QKA, CISP, Vice President & Trust Officer at Premier Trust | Volume 2, Issue 4 (April 2014) Whatever your connection with a trust, whether it is as an attorney, trustee, beneficiary, trust creator or financial advisor, you need to be aware of the top four mistakes that can derail financial goals and tear families apart. This article is based on the experiences of our trust company’s team members, now more than 38 strong, with more than 150+ years combined experience dealing with estates and trusts of all…

Training on Standalone IRA Beneficiary Trusts

We are holding one of our most popular technical training teleconferences on the IRA Inheritance Trust® tomorrow with our President, estate planning attorney and IRA Inheritance Trust® creator, Philip Kavesh. This teleconference is always one of our most well-attended and popular programs for those looking to add this unique and niche area of planning to their estate planning practice. See below for more information: The Traps and Tricks of Properly Drafting IRA Trusts Speaker: Philip Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, CA State Bar Certified Specialist in Estate Planning, Trust & Probate Law Date: Wednesday, March 5, 2014 Time: 9am…

Understanding Portability

By Robert S. Keebler, CPA, MST, AEP (Distinguished) | Volume 2, Issue 3 (March 2014) An interesting provision within the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (“2010 Tax Relief Act”) allows an executor of an estate of a married decedent the option to transfer any unused estate tax exemption amount to the surviving spouse.[1] Thus, for example, if a decedent used only a portion of his or her estate tax exemption, the estate could elect to have the remaining portion pass to the surviving spouse, giving the surviving spouse a larger estate tax exemption.[2] Although this portability…

Top Ten Reasons Why People with Even Modest Estates Need Estate Planning

By Heidi C. Freeman, J.D. | Volume 2, Issue 1 (January 2014) The American Taxpayer Relief Act of 2012 (actually passed on January 1, 2013), permanently increased the gift, estate and generation-skipping transfer tax exemptions to $5 million per person.  In 2014, adjusted for inflation, the amount is actually $5.34 million per person ($10.68 million for a married couple).  Due to the increased exemption amounts and the addition of portability, significantly fewer clients are in need of transfer tax planning.  This article provides ten reasons why clients who do not have a transfer tax concern still have compelling estate planning…

2013 Year-End Tax Planning Ideas (Part 3)

By Robert S. Keebler, CPA, MST, AEP (Distinguished) As we near the end of 2013, year-end tax planning again takes center stage. In the last two newsletters we covered two of the most important year-end planning strategies in detail—loss harvesting and Roth IRA conversions. In this newsletter we summarize a number of other strategies that may produce substantial tax savings. Making Trust Distributions The tax brackets for trusts are much more compressed than the tax brackets for individuals. Trusts begin being taxed at the top rate of 39.6% when income rises above $11,950. By contrast, individuals filing joint returns don’t…