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Estate Planning

North Carolina Estate Planning Blog

Consumer-oriented blog on estate planning, probate, tax law, with a focus on North Carolina.
By Gregory Herman-Giddens

Post Frequency: 3.5/day

Last Entry: April 01, 2011 at 09:52:45

NC adopts law for Notice to Creditors when no probate required

Posted on August 29, 2009
While I generally counsel my clients to avoid probate by the use of living trusts or other methods, one useful aspect of probate is the provision for publishing a Notice to Creditors. Publishing such a notice in the paper and otherwise following the law allows a decedent's creditors' claims to be extinguished after about three months...

The Time for Asset Protection Planning is Now

Posted on August 29, 2009
Many people come to see me for asset protection advice only after some type of actual or probable liability has arisen. At that time, it is normally too late to do any meaningful asset protection, as most contemplated transfers of property could be undone as a fraudulent conveyance...

"First-to-Die" Life Insurance Now Available

Posted on August 28, 2009
Second-to-die life insurance has long been used by married couples to provide liquidity to pay estate taxes at the death of the second spouse to die. Such insurance is less expensive and easier to obtain than two separate policies on the same individuals...

U.S. Tax Court - Single Member LLCs Not Disregarded for Gift Tax Purposes

Posted on August 26, 2009
Unlike in the income tax and asset protection arena, single member limited liability companies (LLCs) are not disregarded for gift tax purposes. Pierre v. Commissioner, 133 T.C. No. 2 (Aug. 24, 2009). See Paul Caron's recent TaxProf Blog entry for a brief summary.

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Don't Expect COLA Increases in Your Social Security Payments

Posted on August 26, 2009
According to the Social Security fund trustees, cost of living adjustments (COLAs) in Social Security payments are unlikely in 2010 and 2011. COLAs are linked in to inflation, which has been negative in 2009, primarily due to lower energy costs...

Put Your Parents in Your Will?

Posted on August 25, 2009
This article discusses when it might be appropriate to include your parents or grandparents in your will or living trust - generally when you are providing support for them. In most cases, funds should be held in trust for the elder relatives, to protect the assets and preserve Medicaid eligibility...

More on Living Wills from the Wall Street Journal

Posted on August 21, 2009
Make Time to Create an Advance Medical Directive - I recently had the opportunity to hear a presentation by Bill Colby, the attorney who represented Nancy Cruzan's family in the right-to-die case that went all the way to the U.S. Supreme Court. Mr...

North Carolina Caregiver Resources

Posted on August 21, 2009
Check out the Family Care Naivgator from the Family Caregiver Alliance. North Carolina's page is here.

Preparing for the End of Life

Posted on August 18, 2009
A recent WSJ.com article discusses Advance Directives (Living Wills and Health Care Powers of Attorney) and their important role in end of life situations. I learned that Google now has a free online service for registering such documents. North Carolina residents should be aware that NC has a statutory form for both an Advance Directive (Living Will) and Health Care Power of Attorney...

Estate Tax Repeal in 2010 Unlikely

Posted on August 13, 2009
More news on the possible future of the federal estate tax from WSJ.com.

Is Your Advisor IRA Savvy?

Posted on August 11, 2009
Last week I attended a presentation by Ed Slott, CPA, America's foremost IRA expert. A couple of years ago I participated in an extensive two-day training with Slott, and found him to be both informative and entertaining. One word of wisdom from Slott - check with your retirement plan custodian to review your beneficiary designations! Often these are outdated, incorrect, or even missing...

Perdue signs Budget - Here Come the Tax Increases!

Posted on August 10, 2009
North Carolina Governor Beverly Perdue signed the Budget bill (SB 202) into law. The bill includes increased income and sales tax rates. See this post from Enrolled Agent Brian Strahle.

Federal Estate Tax - Worst Case Scenario More Likely

Posted on August 05, 2009
Based on inside sources in the U.S. Senate, here's a prediction about what will happen with the estate tax. Since health care reform has consumed Congress and the Obama administration (except for drinking beer with professors and policemen), there will likely be no action on the estate tax until late December...

More from the IRS on How to Avoid Identity Theft

Posted on August 04, 2009
Video: Watch Out for Tax Scams: English | Spanish | ASL WASHINGTON — The Internal Revenue Service reminds consumers to avoid identity theft scams that use the IRS name, logo or Web site in an attempt to convince taxpayers that the scam is a genuine communication from the IRS...

Another Lesson on What Not To Do in FLLCs

Posted on August 02, 2009
This is from the latest edition of the GiftLaw eNewsletter: Note from Greg: Family Limited Partnerships (FLPs) were previously the preferred entity for obtaining discounts on transfers of wealth to younger family members. FLPs have largely been replaced by Family Limited Liability Companies (FLLCs)...

Children are the Most Important Thing

Posted on August 01, 2009
There's been a lot of coverage in the news lately about the care and custody of young children of deceased parents. First it was Anna Nicole Smith's baby. She didn't have a will naming a guardian for young Dannielynn. After a battle with Smith's attorney and companion Howard K...

Obama has a Living Will - Do you?

Posted on July 29, 2009
President Obama is visiting Broughton High School in Raleigh today, and conincidently he recently stated in a discussion of health care reform that he and Mrs. Obama have Living Wills and consider them important. Hopefully they also have Wills, Durable Powers of Attorney, Health Care Powers of Attorney and HIPAA Authorization forms...

Your IRA may be at Risk

Posted on July 28, 2009
In North Carolina standard IRAs are exempt from creditors' claims, under state law and federal bankruptcy law. Also, qualified retirement plans, such as 401(k)s and 403(b)s, are protected under the federal ERISA law. However, ERISA treats employer funded IRAs like SEP-IRAs and SIMPLE IRAs differently from qualified plans, and does not offer creditor protection for such IRAs...

NC Democrats Agree on Tax Increases

Posted on July 23, 2009
Democrats in the North Carolina House and Senate reached a compromise on tax increases yesterday. Briefly, the proposal would: Increase income taxes by 2% Increase sales tax by 1% (to 7.75% in most counties) Increase cigarette taxes by 10 cents per pack Increase beer, wine and liquor taxes The income and sales tax increases are supposedly temporary, for a two year period...

Joint tenancy interests can now be unequal in NC

Posted on July 21, 2009
As of July 10, 2009, there is no longer any doubt as to whether real property owners in North Carolina can create unequal joint tenancy with right of survivorship interests. Session Law 2009-268, amending N.C.G.S. Section 41-2. Example: A owns blackacre...

Changes to Effect of Will Caveat on Probate Proceeding

Posted on July 20, 2009
Beginning October 1, 2009, when a lawsuit is filed to contest a Will (Caveat), the probate administration will no longer be fully suspended until the caveat is resolved. Only certain actions, such as distributions to beneficiaries and payment of personal represenative's commissions, will be prohibited...

Bequests Under Will to Drafting Attorney to be Prohibited

Posted on July 20, 2009
Beginning January 1, 2010, it will be unlawful for North Carolina attorneys to prepare a Will or Codicil naming the attorney as a beneficiary unless the attorney is within five degrees of kinship of the testator, a present or former spouse of the testator, or a parent, sibling or child of a spouse or former spouse of the testator...

Spousal Year's Allowance to Increase to $20,000

Posted on July 18, 2009
The "Years Allowance" for spouses is intended to provide support for a surviving spouse during the year after the death of the deceased spouse, and has priority over creditors claims and other beneficiaries. The allowance has been $10,000 for many years, which, of course, is a pitifully small amount these days...

Small Estate Amount to Increase by $10,000

Posted on July 16, 2009
Effective October 1, 2009 the threshold for small estate proceedings (often called Affidavit for/of Collection) under North Carolina General Statutes Section 28A-25-1 will increase to $20,000 for estates where there is no surviving spouse or he or she is not the sole heir, and $30,000 where the surviving spouse is the sole heir...

Judicial Creation of Special Needs Trusts Clarified

Posted on July 15, 2009
Governor Bev Perdue recently signed into law Session Law 2009-267, which: modifies North Carolina General Statutes Section 36C-2-203(a)(9) to state the proceedings may be brought before the Clerk of Superior Court to create a trust. Adds a provision to NCGS Section 36C-4-401 providing that a court may create a trust, including a trust pursuant to 42 USC Section 1396p(d)(4) [Special Needs Trust]...

Medicare Tax on Investment Income?

Posted on July 14, 2009
The U.S. Senate Finance Committee is considering instituting a 1.45% Medicare tax on investment income, including interest, dividends, capital gain, and partnerships and rentals. Currently long term capital gains and qualified dividends are taxed at a maximum of 15%, while the other types of income are taxed at ordinary income rates...

Intra-Family Loans - Make Sure You Follow the Rules

Posted on July 11, 2009
Loans among family members, especially from parents to children, are very common. However, most people are not aware of the tax laws regarding such loans. With certain exceptions, if you make an interest free to loan to a family member (or friend, for that matter), the IRS will impute the interest income to you, meaning that you are required to pay tax on a certain amount of interest, even though you never received it...

Governor Perdue's Tax Proposal

Posted on July 08, 2009
Yesterday North Carolina Governor Beverly Perdue revealed her proposed tax plan, which is designed to raise $1.6 billion in taxes. Here are some of the highlights: Income Taxes Reduce individual income tax rates, except for a two-year "emergency surcharge" on single taxpayers with income over $500,000 and married taxpayers with income in excess of $1 million...

Independence

Posted on July 03, 2009
I'm down in Amelia Island Florida this weekend for a Florida Bar Tax Section meeting. Today is a day off for many, and will be an afternoon off for me, as I head to the pool and then a movie with the family. However, it's been a while since I blogged, and I wanted to write a brief note as we approach July 4th...

Text of N.C. Senate Bill 202 - Tax Increases!

Posted on June 24, 2009
Senate Bill 202, among other things, contains many tax increases for us in the Tar Heel state, to wit: Increase top income tax brackets to 8.25% and 8.5% (currently 7.75%) Raise the State sales tax from 6.75% to 7% Apply sales tax to repairs, warranties, installation, movies, athletic events, amusement events/activities, courier and delivery services, and internet sales...

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