Death/Incapacity Dossier: Records to be Compiled in Contemplation of Death or Incapacity

Think about this situation. You received word that an acquaintance passed away suddenly and you were designated as the person to contact. You met the deceased a few years ago and you maintained a causal friendly relationship. After some time for grief and remembrances, you start to think about the task that awaits you. The deceased never asked you to be his/her personal representative. You ponder: What do I do now? Events like this occur every day. Sometimes the departed is a family member, business associate, friend, neighbor, or your spouse. Handling the affairs of someone who has passed away or who abruptly becomes incapacitated would be so much easier and more effective if there was a frank discussion in advance and there was a file containing the key documents, data, and the location of important items needed to conduct a smooth and orderly transition.
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Social Security and Taxes

social security and taxesAfter contributing through payroll and self-employment taxes for decades of work, many Social Security beneficiaries are astonished when they learn that their benefits may be subject to federal and sometimes state income taxes. When benefits were first paid in 1940, they were explicitly and completely excluded from federal taxable income. However, in the 1970s and in the midst of Social Security’s first funding crisis, it became necessary to contemplate some changes. The National Commission on Social Security, chaired by Alan Greenspan, recom­mended taxing 50% of Social Security benefits. Congress did not like the thought of taxing low-income retirees. In 1983, Congress passed and President Reagan signed into law legislation which would potentially require up to 50% of Social Security benefits to be included in taxable income. As you will see in this article, some low-income taxpayers can exclude some, and in certain cases, all their benefits from taxable income.
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When to File a Gift Tax Return

Federal gift taxIf you give someone money or property during your lifetime, you may be subject to federal gift tax. The federal gift tax exists for one reason: to prevent taxpayers from avoiding the federal estate tax by giving away their money before they die. When it comes into play, the tax is owed by the gift giver and not by the recipient. You probably have never paid it and probably will never have to.
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Should I Give My Home to My Children?

elderlyI am often asked whether it is a good idea for elderly parents to transfer their home to their children. I always ask: “Why do you want to do this?” The most common reason is to protect the house in the event one or both of the parents need nursing home care.

First, I want to emphasize that there is no easy answer to this question without knowing the full asset and income picture, as well as the health status of the parents. If I get all that information, the answer can be easy (for me!).
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Non-Grantor Trust: A Tool for Estate, Asset Protection and Income Tax Planning

estate asset protection

While there are many forms and types of trust, this article highlights some of the various beneficial structures that encompass the use of non-grantor trusts.  The use of non-grantor trusts to achieve estate, asset protection and income tax planning should be customized to address specific facts, assets and needs.

Trusts are a centuries old vehicle originating from England used to allow an individual to transfer assets for the benefit of one or more beneficiaries.  The settlor or grantor of the trust transfers the assets to a trustee to be held in trust.  The trustee is tasked with managing, preserving and growing the assets based on the intent and instructions of the grantor set out in the trust.
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