Category Archives: Estate Planning

Proceed With Caution on Inherited IRA’s

Posted on December 14, 2011 by | Leave a comment

Parents and grandparents who saved and invested in retirement accounts should take special care to make sure their children and grandchildren receive the most benefit from their inheritance.  A recent Wall Street Journal article highlighted some of the complex rules surrounding the inheritance of IRAs.  http://goo.gl/tilfc. 

Client regularly ask whether they should liquidate an IRA.   Rather than taking a lump sum distribution, and paying the accompanying taxes, clients will often derive the most tax-efficient results by transferring the assets into an inherited IRA.  An inherited IRA allows a young beneficiary to spread distributions across his or her longer life expectancy.  Simply taking small, annual distributions can allow the IRA to grow while minimizing the tax burden borne by the recipient of the inherited account.

Individuals should be wary of receiving any funds in their name. Clients looking to move the account from one brokerage account to another should do a direct “trustee to trustee” exchange.  Otherwise, the IRS deems the transfer as a total distribution which is subject to tax.

As with most financial planning decisions, you should consult with tax and investment professionals before jeopardizing potential tax advantages.

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Posted in Asset Protection, Estate Planning, Tax

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“Et In Arcadia Ego…”

Posted on December 2, 2011 by | Leave a comment

Our celebration of Thanksgiving is past and now the time of year is upon us in which most people busy themselves with preparations for Christmas. The “holiday season” is a busy and stressful time of year, and this is perhaps a factor in the higher number of deaths that occur this time of year. I sometimes wonder what would happen if people put as much time into planning for their passing as they put into Christmas preparations each year.

We see many different situations in our office. Some folks call about estate planning literally from their deathbeds. Some die before the documents are prepared; others sign everything in the nick of time. Many people think there will be plenty of time in the future to take care of estate planning. Some people are afraid that if they form a trust or execute a will, it means they will die—so they put it off.

The reality is that we will all die, ready or not. It makes a lot more sense to have an estate plan in place so that the administration and distribution of your possessions will be orderly upon your death. It is especially critical if you wish to leave anything to charity, or in unequal shares to your children, or the like. Also, for those who do not have relatives in Nevada, it is important to designate who will act as executor or personal representative; non-residents are not qualified unless they are designated in a will, or associate with a resident.

If you have been procrastinating your estate planning, or updating your estate planning, I encourage you to make an appointment with a qualified estate-planning attorney.

By: Sharon M. Parker, Esq.

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Posted in Asset Protection, Estate Planning, Probate, Wills

Prime Time for Planning

Posted on November 1, 2011 by | 2 comments

As we have previously posted here and here, this is a golden age for transferring wealth.  The combination of depressed asset values, historically low interest rates, and hefty gift tax exemption make this the ideal time to distribute wealth to lower generations.

This recent Wall Street Journal article lists several strategies to take advantage of this opportune time to transfer wealth:  http://goo.gl/jGUqq.  As we noted in our post back in February, GRATs and valuation discounts are your allies in transferring wealth.  Both of these techniques have been examined by Congress as tax “loopholes ” that may be closed in the future.  As always, the message remains to act now while the tax laws and current economic climate are unusually favorable. We can only be sure that this offer lasts through 2012.

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Posted in Estate Planning, Gift, Tax, Trusts

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Steve Jobs’ Billions Will Pass Pursuant to Trusts

Posted on October 11, 2011 by | Leave a comment

Not long after Apple co-founder and innovator Steve Jobs passed away, folks speculated how his fortune would pass.  Admirably, and because he could, Jobs took a $1 salary in 2010 from Apple.  However, his wealth is estimated to be $7 billion.  Jobs held a large stake in the Walt Disney Co.  In 2006, it was estimated that he received $242 million in dividends before taxes from his Disney stock.  (Remember the part “because he could”) http://goo.gl/V7SuZ

Notably, land records in Silicon Valley reveal that Jobs and his wife transferred several real property parcels into trusts in 2009.  http://goo.gl/2HG0I  The virtue of revocable living trusts is that families are protected by privacy.  Using a will to pass real property means that the assets must go through probate court.  Properly funding a trust before death means the estate and assets remain out of the public eye. Also, jointly-owned property and assets with beneficiary designations (life insurance, 401K’s) pass outside of the probate process.

Proper planning and the strategic use of trusts is also vital for potentially difficult family dynamics.  Jobs had a child out of wedlock with his high school sweetheart.  A child is not automatically entitled to a share of a parent’s estate.  So whether Jobs chose to provide for his children, and how much, will likely remain out of the public eye assuming he had the proper planning in place.  Failing to state one’s intent with regard to planning will lead to inevitable family fighting.

While you might not be able to take a $1 salary, you can take action to ensure your planning wishes are carried out.  Contact a qualified estate planning attorney at 775-688-3000.

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Posted in Estate Planning, Probate, Tax, Trusts, Wills

Estate Planning Awareness Week

Posted on October 6, 2011 by | Leave a comment

October 17-23, 2011 has been designated by Congress as National Estate Planning Awareness Week.  Some estimate that as many as 120 million Americans do not have up-to-date estate plans and long term financial strategies to protect themselves or their families in the event of sickness, accidents, or untimely death.  The purpose of National Estate Planning Awareness Week is to encourage consumers to address these issues before they have a chance to negatively impact their daily lives.   Estate planning can include many different areas such as: retirement planning, asset protection planning, beneficiary designations, tax planning, planning for children, taking precautions to  address the risk of future disability, insurance planning, and more.

Locally, several charities are sponsoring a free workshop series titled, “It’s Your Estate.”  The workshops are designed to educate the public in the consumer financial arena and help them take charge of their own money and estate.  Jason C. Morris, Esq.will present on the Advanced Estate Planning topic the week of October 11th – 13th.  Mr. Morris will present at S. Valleys Library, 15650 Wedge Parkway, on October 11 at 2 p.m.  On October 12th, Mr. Morris will present at the North Valley Library, 1075 N. Hills Blvd #340 at 2 p.m.  Thursday, October 13th, Mr. Morris will present at the Sparks Library, 1125 12th Street, at 11:00 a.m. and offer another presentation at the Northwest Reno Library, 2325 Robb Drive, at 2:30 p.m.

For reservations or questions, call the Community Foundation of Western Nevada at 775.333.5499.

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Posted in Asset Protection, Estate Planning, Probate, Tax, Trusts, Wills

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