Kansas & Missouri Estate Planning

Separate Estate Planning Goals, Separate Attorneys In Overland Park, KS?

Marriage is a partnership. Any partnership requires working together and, perhaps, compromise. But what if there is disagreement, especially when it comes to your estate planning?

In Overland Park and elsewhere, marriage counselors stay in business because of marital disharmony. Commonly, they represent both spouses and seek to find common ground in a team approach. When it comes to estate planning, however, attorneys face a potential ethical dilemma. For example, estate planning attorneys cannot favor one spouse over the other, nor can they cannot keep the secrets of one spouse from the other spouse in the course of “dual representation.”

While there is no sense starting trouble, sometimes spouses really do have different estate planning interests. This can create an marital conflict for the spouses and an ethical conflict for their estate planning attorney, as explored in a recent Forbes article titled “Ethics in Estate Planning for a Married Couple.” This certainly is an issue of concern for attorneys (and their malpractice carriers), not to mention for their clients to understand and appreciate. 

Indeed, at certain junctures it might be necessary for spouses to even engage separate attorneys to wrangle their way through an estate planning impasse. This happens many times with prenuptial and postnuptial agreements, but in other places besides.

Perhaps you do not need separate counsel? Great! In the end, however, proper estate planning requires planning for the wishes of each spouse and their marriage, as well as the loved ones and others impacted in the process.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Forbes (April 26, 2013) “Ethics in Estate Planning for a Married Couple”

Kansas and Missouri Estate Planning Weekly Digest - Overland Park, KS

In case you missed them, here are our five blog posts from this past week for your convenience. I welcome your feedback regarding any of these posts and your input regarding any areas of particular interest you would like for me to cover.

Blessings,

 

 

 

Obama Budget Proposal Targets Estate Planning Tools In Overland Park, KS

Have you been tracking the budget battle storm clouds forming on the horizon? Estate planning attorneys certainly are keeping a wary sailor's eye cast in the direction of the President’s budget proposal. Why? It targets a number of important estate planning techniques in Overland Park and across the nation.

Time To "Spring Clean" Your Estate Plan In Overland Park, KS

We all are familiar with the annual family ritual known as “spring cleaning.” With the changes in the estate tax laws, this may be a good time for some “spring cleaning" when it comes to your estate plan, too.

IRS Scrutinizing Pass-Through Entities In Overland Park, KS

Trusts can incredibly powerful tools. They can accomplish many goals and, depending on the type of trust, can secure some legitimate tax advantages. Little wonder ObamaCare may be changing all of that in the hunt for revenue to pay for the program.

Mind The Post-Mortem RMD On Inherited IRAs In Overland Park, KS
When an elderly loved one passes away their legal and financial affairs come to an end. However, there is an important exception – their final RMD on their IRA.

Post-Mortem Digital Asset Planning In Overland Park, KS 
Have you noticed more and more articles popping up about your “digital assets”? When the background chatter in the media finally catches your attention about something, that usually is a sign to start paying attention whether you live in Overland Park or Anchorage.

 

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

 

  

Post-Mortem Digital Asset Planning In Overland Park, KS

Have you noticed more and more articles popping up about your “digital assets”? When the background chatter in the media finally catches your attention about something, that usually is a sign to start paying attention whether you live in Overland Park or Anchorage.

Proper planning means planning for all the "lives" you lead, whether your life lived in the "flesh" or your life lived in "paper" (i.e., your accounts and records, to include contracts). In the brave new world of the current millenium, however, you live much of your life on the internet.

Your online life requires that information about your digital assets and accounts (especially passwords) must be included as part of your comprehensive estate plan. In turn, this information must be kept up-to-date and made available to your executors (also known as personal representatives), financial agents and trustees.

Likely, the digital age will get only more complex. Forbes recently addressed this subject of digital assets in the context of postmortem planning in an article titled “Protect Digital Assets After Your Death.”

From simple email accounts to Twitter, Facebook, Pinterest and then all the way to investment and banking sites, each of these aspects of your online life contains information that can be of immeasurable value economically or sentimentally.

For example, what about your iTunes music collection or Kindle book collection? On the other hand, if your digital information is not secured postmortem, then it could become a liability in terms of identity theft.

Do not expect any help at common law either. These are largely uncharted legal waters. In fact, internet companies themselves are only just now starting to address this issue.

Bottom line: without a comprehensive list of accounts and passwords, executors, trustees and even heirs might have a hard time accessing, continuing and/or closing your accounts.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Kiplinger (May 2013) “Protect Digital Assets After Your Death”

Mind The Post-Mortem RMD On Inherited IRAs In Overland Park, KS

When an elderly loved one passes away their legal and financial affairs come to an end. However, there is an important exception – their final RMD on their IRA.

Many surviving designated beneficiaries of a decedent’s IRA do not realize that Required Minimum Distributions (RMDs) have to be taken annually and up to the end, even if the owner died earlier in that year. In fact, the year of death IRA distribution is a requirement that is easy to miss whether you live in Overland Park or elsewhere.

Recently, The Slott Report took up this matter in an article titled “Taking the Year of Death IRA Minimum Distribution.”.

Essentially, the RMD to be taken because there is an attending tax burden involved. Generally speaking, any individual over the age of 70 ½ must take RMD from their IRA. When it comes to the year of death for such an individual, their designated beneficiary of the IRA beneficiary must take the RMD even before inheriting the IRA itself.

OK, simple enough? Unfortunately, it is difficult to track whether the decedent had already taken their full RMD in the year of his or her death? For example, were they on a monthly installment plan? Were they waiting until the last moment? Did they miscalculate?

So, what is the penalty for failing to take the full RMD? Would you believe a whopping 50% of the shortfall?

If you are the IRA owner, then you can see how important keeping accurate and communicated recordkeeping can be to help your loved ones (i.e., your designated beneficiaries) avoid an unpleasant treasure hunt just to determine the post-mortem status of your RMD.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website. 

Reference: The Slott Report (April 30, 2013) “Taking the Year of Death IRA Minimum Distribution”

IRS Scrutinizing Pass-Through Entities In Overland Park, KS

Trusts can incredibly powerful tools. They can accomplish many goals and, depending on the type of trust, can secure some legitimate tax advantages. Little wonder ObamaCare may be changing all of that in the hunt for revenue to pay for the program.

It may not be a game changer, but it may be worth noting that some trusts might get a bit more dinged up this year with the new 3.8% surtax on investments created by ObamaCare.

Indeed, the accountants in Overland Park and across the nation are just starting to do the math, after the IRS staked out its position in a new “technical advice memorandum” (see TAM 201317010). Forbes has weighed in on the consequences of this new TAM in an article titled “Tough IRS Position Means More Trusts Will Get Hit With New ObamaCare 3.8% Tax.”

Cutting to the chase, the new 3.8% ObamaCare surtax hits investment income, and trusts that own interests in pass-through entities are construed as "passively active" (a bitter oxymoron in accounting-speak) and thereby produce investment income to tax.

To make matters worse, such trusts see the tax kick in at a much lower income rate than for individual taxpayers. And, to further complicate things, such trusts are not often designed to be “active” entities, and a complex plan might involve various trusts with various holding interests in companies, and might be targeted at various levels. As you can see, things can get complicated really fast.

Like most matters on the tax (and political) front, it remains to be seen how the year and the tax battle will be played out. Nevertheless, you should keep an eye on Washington, D.C., and a hand on your wallet.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

 

Reference: Forbes (April 29, 2013) “Tough IRS Position Means More Trusts Will Get Hit With New ObamaCare 3.8% Tax”

Time To "Spring Clean" Your Estate Plan In Overland Park, KS

We all are familiar with the annual family ritual known as “spring cleaning.” With the changes in the estate tax laws, this may be a good time for some “spring cleaning" when it comes to your estate plan, too.

Estate planning is an ongoing process, not a one-time event, whether you live in Overland Park or elsewhere. Not only are there changes in tax laws, but your life and the lives of your loved ones are in a constant state of flux as you move through life together. Accordingly, keeping your estate plan up with life changes requires action, not complacency.

This message was brought home in a recent article by The New York Times titled “Estate Planning Remains a Moving Target Under the New Tax Law.” The article notes that new tax law changes make the estate tax a far less likely threat to the life’s work of many Americans. In fact, the “permanent” nature of this most recent iteration of the tax law allows individuals to exempt $5.25 million from death taxes (doubled to $10.5 for married couples). Even better, the exemption is set to index for inflation.

All that noted, no changes to the estate tax or any other transfer tax will change the necessity for responsible adult Americans to make sure their own estate plans are current. For example, wills, trusts, beneficiary designations and even medical directives should be reviewed periodically.

As suggested in the original article, now is a great time to do some spring cleaning. It’s a chance to review what you have done, make any needed changes and perhaps tie up some loose ends.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: The New York Times (April 26, 2013) “Estate Planning Remains a Moving Target Under the New Tax Law”

Obama Budget Proposal Targets Estate Planning Tools In Overland Park, KS

Have you been tracking the budget battle storm clouds forming on the horizon? Estate planning attorneys certainly are keeping a wary sailor's eye cast in the direction of the President’s budget proposal. Why? It targets a number of important estate planning techniques in Overland Park and across the nation.

Forbes has been watching the various budget proposals with great interest and has provided a helpful summary in an article titled “Obama's Budget Proposal: The Impact On Estate Planning Tools.”

      Essentially, this is a crib sheet list of the techniques presently in the crosshairs:

            High value IRAs of over $3 million

            Generation Skipping Transfer Trusts

            Dynasty Trusts

            Grantor Retained Annuity Trusts

            Intentionally Defective Grantor Trusts

Click over to the original article for an overview of the techniques, along with examples of their estate planning applications.

If your current estate plan already includes one or more of these techniques, then any change could impact you, your loved ones and your assets in a significant way. This would be a good time to schedule a review consultation with your own estate planning attorney.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Forbes (April 26, 2013) “Obama's Budget Proposal: The Impact On Estate Planning Tools” 

Kansas and Missouri Estate Planning Weekly Digest - Overland Park, KS

In case you missed them, here are our five blog posts from this past week for your convenience. I welcome your feedback regarding any of these posts and your input regarding any areas of particular interest you would like for me to cover.

Blessings,

 

 

 ESOP Your Way To A Business Succession Win-Win In Overland Park, KS
In the alphabet soup of company forms (S-Corp, C-Corp, LLC, LLP, LP, LTD., and so on and so forth) there is a growing turn toward a slightly more obscure acronym: the ESOP.

Credit Shelter Trusts – The Tried And True Estate Planning Tool In Overland Park, KS

There are some estate planning tools that are just basic and vital, regardless of tax law changes. Unfortunately, some of these tools may be ignored by taxpayers (to their peril) in Overland Park and elsewhere, when they appear to be eclipsed by changes in the tax laws.

Avoid Estate Plan Executor Nightmares In Overland Park, KS
In many respects, understanding “personal finance” is easy when it is about annual year-ends and accounts balances. On the other hand, it is quite another matter when you look at personal finance over the life of an individual, and yet another still when you become the executor to that individual’s estate.

Have “The Talk” With Your Children Now In Overland Park, KS
There are a number of “talks” you have with your kids, whether you live in Overland Park or elsewhere. We all are familiar with “the talk,” but here's one you may have forgotten - "the inheritance talk."

529 Education Savings Plans Popular In Overland Park, KS
In today’s economy, I the rising costs of education are leading many of my client in Overland Park and elsewhere to choose the “gift of education” as a fundamental goal in their wealth transfer planning.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

 

529 Education Savings Plans Popular In Overland Park, KS

In today’s economy, I the rising costs of education are leading many of my client in Overland Park and elsewhere to choose the “gift of education” as a fundamental goal in their wealth transfer planning.

Planning for the next generation, and for what you will leave them, often varies depending on what you have and what your loved ones will need. As a result, it is no surprise that a recent by Morningstar Inc. found a sharp increase in contributions to Section 529 plans in 2012. Reuter’s reported on these findings in an article titled “Morningstar: 529 college savings plans up in 2012 despite some lags.”

The article describes a 529 plan as a tax-advantaged account that encourages savings now toward exorbitant college costs later. That said, not all plans are alike and the study found some were far better than others, and some were even of questionable worth. [Note: For a review of 529 plans and other options, read the page three article of my May 2012 newsletter titled "Leveraging Legacies."]

The final analysis: Although 529 education savings plans as a whole underperformed against some mutual funds, 2012 saw a 25% rise in 529 plan assets against a 13.4% gain in the S&P index.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Reuters (April 22, 2013) “Morningstar: 529 college savings plans up in 2012 despite some lags”

Have “The Talk” With Your Children Now In Overland Park, KS

There are a number of “talks” you have with your kids, whether you live in Overland Park or elsewhere. We all are familiar with “the talk,” but here's one you may have forgotten - "the inheritance talk."

 So, how do you prepare and execute this too-important-to-avoid chat in Overland Park and elsewhere?

To be blunt, there is no easy answer. Why? Because so much of the talk depends on what you have to leave, who is going to manage it, who is going to inherit it, and how soon are they going to get it?

The Wall Street Journal recently offered a pep-talk of sorts for estate planning parents in a recent article aptly titled, “The Inheritance Conversation. Ugh.”

One of the key reasons for this essential intergenerational communication is to prepare the inheriting generation for their attending responsibilities. One challenge, of course, is that any “inheritance” carries the risk of robbing a developing person of their work ethic.

In short, what makes you, your assets, and your heirs unique? That is what needs to be understood and communicated. The sooner you have the inheritance talk, the better it will be for all concerned.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: The Wall Street Journal (April 19, 2013) “The Inheritance Conversation. Ugh.”