By George Gray on 6/15/2010 1:58 PM
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By George Gray on 6/9/2010 2:18 PM
When Congress repealed the “death tax”, no one expected that it would actually come to pass even though it was touted as a sure way to save America’s small businesses and to greatly simplify the lives of those who owned them. Now that the tax is repealed (albeit for only one year) one must still wonder if the lives of small business owners (and others) have been simplified . An often overlooked provision of the 2001 Law that repealed the Estate Tax is the creation of the modified “carry-over basis” rules. The concept is simple! Provide the heirs tax relief for up to $1.3 million of inherited property by allowing a “step-up” in basis for those assets to their fair market value at the death of the decedent. Any other property would retain a “carry-over” basis, generally valued at its original cost. This way, the Federal Government could tax the amount of gain on the sale of any inherited property in excess of the $1.3 million threshold.
To place the modified “carry-over... Read More » |
By George Gray on 6/9/2010 2:11 PM
Recently I read an interesting article put out by the Dow Jones Newswires. It reported that Senators seeking a bipartisan deal to handle the Estate Tax mess created by Congress have reached a standstill as several Senate Democrats strongly condemned the efforts to reduce the rates.
President Obama has proposed exempting Estates worth less than $3.5 million, or $7 million for couples, and taxing wealth above that amount at a 45% tax rate. The Obama plan would add to the deficit, since it is a tax cut compared to current law and “pay-as-you-go” budget rules require most tax cuts to be offset with new tax increases or spending cuts. However; Congressional Democrats agreed to waive that requirement for 2011 and 2012 with respect to the President’s Estate Tax proposal.
Senators that want to reduce Estate Tax rates even further have in the past two weeks closed in on a compromise that would start at Obama's proposed levels in 2011, but gradually phase down to a 35% rate and a $5... Read More » |
By George Gray on 4/15/2010 9:34 AM
April Update -- Now that Congress has returned from the Easter recess, it will have a number of tax issues to face. Among them is the Estate Tax "mess" created by its inaction in 2009. While the House passed legislation addressing the Estate Tax in early December 2009; the Senate has not yet taken up the matterRead More » |
By George Gray on 2/2/2010 6:46 PM
Special Needs Planning demands the attention and takes much of the "free" time of parents of a person with a disability. A topic often thought about but not understood is the formation and operation of a Supplemental Needs Trust (a "SNT"). SNT are fully sanctioned by both State and Federal Law and will not affect the Governmental Benefits of an individual with a disability (the "beneficiary"). There are three types of SNT's: a first party trust, a third party trust and a pooled trust. A first party trust is funded with the beneficiaries own money, often a personal injury award or an inheritance. If the money is used to fund the SNT, then it will not be counted as an available resource. This will continue the beneficiary's eligibility for Government Benefits or allow him/her to apply and receive Government Benefits. The big advantage of a first party SNT is that it provides a suorce of funds for goods and services that enhance the life style of the beneficiary, such as, uninsured medical expenses, experimental... Read More » |
By George Gray on 1/14/2010 10:35 AM
1. Good News/Bad News
There is good news and bad news concerning the Senate’s inaction on the Federal Estate Tax in 2009. The bad news is that the confusion concerning the Estate Tax and the uncertainty it entails makes planning all the more difficult. A Columbia University professor calls it “congressional malpractice.” I don’t think anybody believes that the Congress will allow the Estate Tax “go away” for 2010; and, most think an Estate Tax in some form will be enacted in when the Congress reconvenes. At the heart of the matter is the Unified Credit Amount ($3.5mm in 2009) and the Estate Tax Rate (45% in 2009). The good news in all this mess is that the House of Representatives would make permanent the Estate Tax Rate and Unified Credit Amount at their 2009 levels and that some Senators were pushing for the Unified Credit Amount and the Estate Tax Rate to be increased to $5.0mm and 35% respectively. This bodes well that the Estate Tax will remain in a form familiar to most planners.
2. Macabre... Read More » |
By George Gray on 11/17/2009 11:21 PM
Introduction – In New York, a person (known as the "principal") may make a Power of Attorney (a "POA") to authorize another person (known as an "agent) to act on his behalf in financial matters. The POA is widely used for financial and estate planning purposes and for avoiding the expense of guardianship in the event of the principal’s incapacity. POA’s grant to the agent broad authority to spend the principal’s money and sell or dispose of the principal’s property with or without the principal’s prior knowledge! This grant of authority has often been made by principals who did not fully understand the scope of the powers granted, and as a result it has led to much abuse.Read More » |
By George Gray on 11/17/2009 11:19 PM
Revocable Trusts (also called "living trusts") have continued their popularity as an alternative to a traditional Will and to the "probate process". A Revocable Trust is a trust created by a written document signed by a "Grantor" (also called a "Settlor") during his/her lifetime which names a "Trustee" and one or several "Beneficiaries". Typically, the Grantor names him/herself and a spouse as the Co-Trustees and sometimes names an adult child or close family member as an Alternate Trustee. In all instances, the Grantor and his/her spouse are the primary Beneficiaries during their joint lifetimes.
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By George Gray on 11/17/2009 11:16 PM
Since the Estate Plan is only as good as the information upon which it is based, you should gather, write down and share with your advisors (insurance, financial and legal) the essential information about the nature and extent of your assets, your family background and your wishes upon your death. This information, besides providing a record of the essential information for the Estate Plan, is a good jumping off point for discussing the Estate Plan basics with your advisors.Read More » |
By George Gray on 11/17/2009 11:08 PM
A supplemental needs trust (SNT) is a trust established for the benefit of a disabled adult (the "beneficiary") which does not jeopardize the Beneficiary’s eligibility for governmental benefits. The use and purpose of a SNT is to provide funds to the disabled adult for items which supplement but do not supplant, impair or diminish, any benefits, assistance or payment of any governmental entity for which the Beneficiary may otherwise be eligible or which he or she may be receiving. Most importantly, the property and assets in a SNT are disregarded as a resource of the Beneficiary for purposes of determining the beneficiary’s eligibility for Medicaid and Supplemental Security Income Benefits ("SSI").Read More » |