Estate Planning

Seniors - Protect Your Financial Well-Being

Posted on June 22, 2009
North Carolina's elderly are particularly vulnerable to financial fraud and scams.  Check out the the North Carolina Department of Justice's website, which has helpful information for people of all ages to help protect themselves from identity theft, scams, and other crimes...

Diposition of Cremated Remains in NC

Posted on June 16, 2009
Cremation is an increasing common way of handling human remains.  While cremated remains are sometimes buried, there is often a desire on the part of family members (or a request from the deceased) to scatter the ashes somewhere. North Carolina General Statutes Section 90-210...

How Not to Structure a Family Limited Partnership

Posted on June 15, 2009
The U.S. Tax Court decision in Estate of Erma V. Jorgensen, T.C. Memo 2009-66, provides another example of the wrong way to create and administer a family limited partnership from an estate tax planning perspective.  See this article by attorney Kay Ford Bailey of Austin, Texas for a brief analysis.

Is it Worth the Money to Hire a Lawyer to do your Will?

Posted on June 12, 2009
See what the finance wizards at Kiplinger have to say with this fun quiz about saving money.

To access this complete feed in the blog feed reader login or register for free.

NC Changes Renunciation Laws

Posted on June 12, 2009
On June 1, 2009, Governor Perdue signed into law Session Law 2009-48, which, effective October 1, 2009, institutes substantial changes to to statutes dealing with renunciation of interests in property.  In general, the effect of a valid renunciation of property is that the person renouncing is treated as having predeceased the transferor...

NC House Finance Committee Proposes Tax Increases

Posted on June 10, 2009
Despite criticism from members of both parties, the North Carolina House of Representatives' Finance Committee approved a proposed tax package yesterday.  The proposal includes the following: Increase top income tax brackets to 8.25% and 8.5% (currently 7...

How Much Do You Charge for a Will?

Posted on June 08, 2009
That's a question we hear frequently from callers to the office.  While we like to be able to answer that question quickly and easily, that's not possible.  My favorite lawyer's answer applies: "well, it depends."  Depends on what, you ask?  Here are some of the factors that impact the fee for a Will: Are you married?  Will your spouse be doing planning as well? Are you in a second marriage with children from a prior marriage? Are you separated but not divorced?  Do you have a settlement agreement? Do you have a prenuptial agreement? What are your obligations, if any, upon your death? Do you have minor children? Do you have any elderly or disabled family member you wish to provide for? What's the total value of your estate?  What are the values of the individual assets? Do you own real estate? Where's it located? Do you own joint property? With whom? Do you have any life insurance? Who's the beneficiary? Do you have retirement accounts?  Who's the beneficiary? Do you own a business? Have you made large gifts in the past? Do you have any debts or other financial obligations that will survive your death? Then there are other questions to consider: Have you considered a living trust to provide privacy and avoid probate? What about Durable Powers of Attorney, Health Care Powers of Attorney, Living Wills and HIPAA Authorizations?  For some, these documents are more important than a Will...

What to do if you receive an IRS Notice

Posted on June 05, 2009
Here's the text of IRS Tax Tip 2009-72, but don't forget, you can always contact a tax lawyer, CPA or enrolled agent for assistance and representation before the IRS: It's a moment many taxpayers dread. A letter arrives from the IRS — and it's not a refund check...

Sensible Estate Tax Act of 2009 introduced in U.S House

Posted on June 01, 2009
On April 22, 2009 Representative Jim McDermott of Washington has introduced H.R. 2023, which has been submitted to the Ways and Means Committee for study. The Sensible Estate Tax Act of 2009 would (1) allow an estate tax exclusion of $2 million adjusted for inflation in calendar years after 2010; (2) revise the estate tax rates for larger estates (45% up to $5 million, 50% from $5-10 million, and 55%  above $10 million; inflation adjusted); (3) restore the estate tax credit for state estate, inheritance, legacy, or succession taxes; (4) restore the unified credit against the gift tax; and (5) allow a surviving spouse an increase in the unified estate tax credit by the amount of any unused credit of a deceased spouse...

FLP Gift Discounts Alive and Well - for Now

Posted on June 01, 2009
In the recent case of Estate of Valeria M. Miller v. Commissioner; T.C. Memo. 2009-119; No. 5207-07 (27 May 2009), the U.S. Tax Court allowed a 35% discount for gifts of family limited partnership interests.  No discount was permitted for the FLP interest owned by the decedent at her death...

Offshore Trust Cases - Trading Jail for Protection?

Posted on May 29, 2009
Offshore trusts continue to be an effective asset protection tool, including in bankruptcy, tax litigation, and divorce situations, even when the facts are not favorable to the trust grantor.  The catch, however, is that you might have to some time in jail for contempt of court before you and your money are reunited...

NC Needs to do More to Combat Fraud Against the Elderly

Posted on May 28, 2009
The North Carolina Center for Public Policy Research just issued a press release with the results of a study indicating that North Carolina needs to do more to protect its senior citizens against fraud.  The Center also provided recommendations on what could be done to improve the current situation, including implementing new laws to require bank employees to report financial abuse against elderly customers...

Review Those Life Insurance Policies!

Posted on May 27, 2009
A while back I blogged about the advisability of trustees of irrevocable life insurance trusts (ILITs) reviewing the policy owned by the trust to help ensure the policy is still a sound investment and won't lapse.  Here's an article from the Wall Street Journal website covering a related topic, Keep Tabs on Insurance that Covers Estate Taxes...

Possible Tax Increases to Pay for Health Care Reform

Posted on May 23, 2009
As reported in the Giftlaw eNewsletter, the potential tax increases to pay for healthcare reform may include the following: 1. Employer Health Care Exclusion -- The exclusion could be capped or phased-out for higher-income employees. For higher-income persons, part of their medical premium will be taxable, even though paid by the employer...

Is your IRA heir-tight? Probably not...

Posted on May 22, 2009
The recent Kiplinger.com article How to leave an IRA that's heir-tight contains lots of good information and advice about IRA distribution planning, but there's a glaring omission - no discussion of the use of trusts to protect IRAs for the benefit of one's heirs...

A Short Story on Asset Protection

Posted on May 21, 2009
I had a new client come in yesterday, and we were discussing including asset protection in one's estate plan.  He mentioned he had recently been sued for lead paint related issues by the tenant of an older rental home he owned in another state.  Now many of his personal assets may be at risk for any judgment rendered against him...

Is it Time to Rethink Your Estate Plan?

Posted on May 20, 2009
For many people, unless you have had your plan done or updated in the last few months, that answer would be YES! This article from CNN Money provides some important factors and ideas to consider.

U.S. Tax Court Rules on Exceptions to IRA Early Distribution Penalty

Posted on May 20, 2009
The United States Tax Court, in Benz v. Commissioner, 132 TC No 15, recently ruled that a taxpayer taking a series of equal periodic payments as an exception to the 10% early distribution penalty for IRA withdrawals could also take advantage the early distribution penalty exception for payment of higher education expenses without the education payment being considered a modification of the series of equal payments...

"Green Book" Proposals on Estate and Income Tax

Posted on May 19, 2009
President Obama's Green Book contains proposals for modifying the GRAT rules, eliminating valuation discounts for transfers of interest in many family limited partnerships and limited liability companies, and increasing income tax rates and limiting deductions for high income taxpayers...

NC 529 Plan Eliminates Two Investment Options

Posted on May 16, 2009
North Carolina's 529 College Savings Plan will be eliminating two investment options - the CollegeHorizonFunds and the Balanced Fund - due to their higher fees.  Click "Continue Reading" to view the text of the letter from the North Carolina National College Savings Program, which contains details about switching from those fund options...

IRS to Hire 4500 New Revenue Agents

Posted on May 12, 2009
Taxes are going up, and so is the number of revenue agents at the IRS!  This is from the latest GiftLaw eNewsletter: In the 2010 budget proposed by President Barack Obama, there is an increase of $400 million dollars for the IRS. The IRS plans to increase its enforcement budget to $5...

Explanation of Obama's Revenue Proposals

Posted on May 11, 2009

NC's Repeal of Rule Against Perpetuities Upheld

Posted on May 08, 2009
I previously blogged about NC's repeal of the Rule Against Perpetuities, which limited the amount of time a trust could stay in existence, and some questions that existed regarding the repeal's validity. In February 2009, an order was entered by Judge Albert Diaz in the Mecklenburg County Superior Court found that: Section 41-23 of the North Carolina General Statutes, denominated as Perpetuities and Suspension of Power of Alienation for Trusts (the "Act"), is a valid exercise of the General Assembly's legislative power to repeal both the common law Rule Against Perpetuities and the Uniform Statutory Rule Against Perpetuities, as they apply to trusts in North Carolina; The prohibition against "perpetuities and monopolies" found at Article I, Section 34 of the North Carolina Constitution applies only to unreasonable restraints on the alienation of property and not to the vesting of remote interests...

Why Use a Trust Protector?

Posted on May 01, 2009
The use of Trust Protectors is becoming increasingly common, particularly in irrevocable trusts that may last for decades, if not generations.  A Trust Protector is generally an individual, often an attorney, cpa or family member, who is given certain powers over a trust by the trust grantor...

Charitable Trusts - Save Taxes While Benefiting Charity

Posted on May 01, 2009
There are two primary types of charitable trusts - charitable remainder trusts (CRTs) and charitable lead trusts (CLTs).  CRTs are far more common, and are generally funded with a minimum of about $100,000 worth of assets.  With federal income and capital gains tax rates to increase the future, these trusts should see renewed popularity, particularly if the stock market begins to move from bear to bull...

Beware of "Pure" or "Constitutional" Trusts

Posted on April 30, 2009
Here's a great article from Santa Barbara attorney Mark Cornwall - Beware the Pros at Cons.  Occasionally clients ask me about such arrangements, and, of course, and I inform them that's it's a bunch of baloney.   Remember - if it sounds to good to be true, it most likely is!

Guardianship Personal Property Sale Limit Increased to $5,000

Posted on April 30, 2009
Here's a change to North Carolina Guardianship law which took place October 1, 2008 that I didn't report earlier.  North Carolina General Statute Section 35A-1251 was modified to allow a guardian of the estate to sell personal property up to $5,000 in value without a court order...

What Happens if the Federal Estate Tax Law Isn't Changed this Year?

Posted on April 29, 2009
There has been much recent discussion about "death" tax reform, and several bills have been introduced in Congress to that effect (as I have blogged about over the last few months), but so far the law as provided in the Economic Growth and Tax Relief Reconciliation Act of 2001(EGTRA) is still in effect...

Better Report that Offshore Income! The IRS is Coming...

Posted on April 28, 2009
From IRS Commissioner Doug Shulman:   March 26, 2009 My goal has always been clear — to get those taxpayers hiding assets offshore back into the system...

Safe Kids Week in North Carolina

Posted on April 27, 2009
This week is Safe Kids Week in North Carolina.  While Safe Kids Week is designed raise awareness about protecting children from unintentional injuries, parents also need to plan to keep their kids safe from a financial standpoint should something happen to the parents...

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.