The Importance of “Trust Funding”
One of the significant benefits of utilizing a living trust as part of one’s estate plan is to avoid the necessity of a surviving spouse or heirs from having to probate your assets with a probate court after your death. However, this benefit is not achieved by simply drafting and signing a living trust. The title to assets actually has to be transferred from an individual and/or their spouse to the trust during their lifetime in order to achieve the goal of avoiding probate.
In my practice, I oftentimes meet with clients who are “apologetic” for taking my time given their perception that they “… really don’t have that much [in assets]” but have come to see me based on the encouragement from friends or relatives.
All Adults 18 Years and Older Need Planning
Sometimes I’m asked if I’m concerned that changes to federal estate tax law will result in there being less work for me to do in my practice. I reply that I’m not concerned and that the changes to the federal estate tax law just mean that I’ll be dismantling all the planning during the second half of my career that I spent the first half of my career creating for clients.
This week’s article, “Are Your Beneficiary Designations Current?” is the first in a series of four articles discussing key information on estate planning matters. The following articles will also be included in this series:
Part 2: Updated Planning for Clients with Married Separate Trusts
Over the last several weeks I have written articles concerning various topics of cottage law – succession planning, charitable giving, tax planning and the effect of the new federal estate and gift tax law. As we approach the end of the year I will focus my thoughts and articles on estate planning and related topics that you may find helpful as you reflect on this past year and look forward to the future.
I recently read an article by an attorney who expressed his frustration with clients or potential clients asking him, “What will x or y cost me?” The attorney accurately pointed out that the simple question of what will a legal service cost is not always simple to answer. He compared that question to someone asking a doctor who knows nothing about the person’s medical history or has never examined the person a question like, “Doctor, I’m sick. I don’t know how sick, or what my options are, but how much will you charge to make me better?”
Kick Off Your Charitable Giving Season: Tax Benefits of Incorporating Charitable Giving Into Your Tax and Estate PlanningWed, 11/06/2013 - 10:07 — superadmin
Now that Halloween has come and gone and the end of the year is on the horizon, the time is here to plan your short- and long-term strategies for charitable giving.
Depending on who you listen to, the overall economy is still sluggish; however, many individuals still realized significant stock market gains based on bullish market conditions during the course of 2013. Individuals who have enjoyed success in the market this year have realized gains that will increase their gross income, triggering higher taxes.
Dan’s Perspective: It’s a “New Day” for Estate planning, Or Is It? Recent Developments in Federal Estate Tax Law Have Dramatically Changed Estate PlanningWed, 10/30/2013 - 09:11 — superadmin
In December 2012, Congress made temporary increases on the estate and gift tax credits permanent and adopted further benefits for taxpayers. Those credits resulted in individuals being able to give away during their lifetime, or transfer at death, approximately $5 million in assets to beneficiaries ($10 million for married couples).
One of the most critical issues in any cottage succession plan is “when,” “how” and “to whom” can common owners of the family cottage transfer their ownership interest. Absent specific planning rules to govern these issues, transfers of ownership and decisions of an owner to sell his/her ownership in the family cottage is usually the most significant threat to keeping the cottage in the family.
Restrictions Usually Require “Intra” Family Transfers
Transfers of Ownership and Property Tax Uncapping
As a general rule, when there is a transfer of title of property in Michigan, the value of the property is "uncapped" and increased for the assessment of property tax. This results in a significant increase of property taxes, oftentimes to the point that the next generation of new owners in a family cannot afford to keep the family cottage.