Estate Planning
North Carolina Estate Planning Blog 
Consumer-oriented blog on estate planning, probate, tax law, with a focus on North Carolina.
Post Frequency: 11.6/day Last Entry: November 21, 2009 at 07:28:41 Recent Entries: 337
By Gregory Herman-Giddens
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Is Your Will a "Turkey"? 6 Ways to Tell
Posted on November 21, 2009Thanksgiving is less than a week away, but many people currently have turkeys of a different kind - poorly drafted Wills. If your Will is missing one or more of these features, it's time for an update: Waiver of bond for the executor At least one successor executor (in case the first named executor can't serve) Trust provisions for minor beneficiaries Comprehensive powers for the executor and/or incorporation of statutory powers Contingent beneficiaries (in case the primary beneficiaries are deceased) Self-proving affidavit (witnessed and notarized) Having these provisions can save a lot of time, money and aggravation in the administration of your estate...
One Year Estate Plan "Patch" Likely
Posted on November 19, 2009Another article from CQ Politics about the Democrats' plan for the estate tax in 2010.
Year End Gift Checks - make sure you do it right
Posted on November 19, 2009Many people are aware that they can give any number of other people up to $13,000 per year under the federal gift tax annual exclusion (IRC Section 2503(b)). Staying under this number means that no gift tax return has to be filed and that there will be no reduction in the amount that can be passed free of estate taxes at the donor's death...
The IRS Loves Retirement Accounts
Posted on November 18, 2009Planning for tax-qualified plans, which includes IRAs, 401(k)s and qualified retirement plans, requires a careful examination of the potential taxes that impact these assets. Unlike most other assets that receive a 'basis step up' to current fair market value upon the owner's death, IRAs, 401(k)s and other qualified retirement plans do not step-up to the date-of-death value...
Tax Court: Gifts to your own Private Foundation are Deductible
Posted on November 17, 2009This courtesy of Professor Chris Hoyt of the University of Missouri (Kansas City) School of Law: The Tax Court rejected an argument made by the IRS that a donor should not be able to claim a charitable income tax deduction for a contribution to a private foundation because the donor effectively controlled the private foundation...
Further Delay on Estate Tax "Reform"
Posted on November 17, 2009Coming as no surprise to me, anyway, an article on the website CQ Polictics, House LIkely to Delay Estate Tax Consideration, states that the House will likely postpone any movement on estate tax legislation until after Thanksgiving. I'm still of the opinion that a one year "patch" continuing the current $3...
No Relief for the Wealthy - Tax Predictions for the Next Decade
Posted on November 16, 2009From the GiftLaw eNewsletter article New Decade Predictions: "The clear intention of Congress is to start addressing the deficit in 2011 by increasing taxes on upper-income taxpayers. The top brackets are proposed to be returned to 36% and 39.6% in 2011...
Online Wills - You Get What Your Pay For
Posted on November 16, 2009Last Thursday's Wall Street Journal's website featured an article on online estate planning programs: Before It's Too Late: A Test of Online Wills. As you might imagine, I'm not a big fan of do-it-yourself estate planning, particularly for those who have substantial assets...
NC Revises Spousal Elective Share Law
Posted on November 13, 2009The Elective Share is the value of property a surviving spouse is entitled to get from a deceased spouse. In the absence of a valid prenuptial or postnuptial agreement waiving such rights, when the deceased spouse leaves less than the elective share amount to the survivor, he or she can enforce the elective share...
NC Trust Law Allows Decanting
Posted on November 13, 2009Effective October 1, 2009, Trustees of North Carolina trusts can, subject to certain requirements, appoint the trust property to another trust for the same beneficiary. This "decanting" power can be useful in helping to protect trust funds...
How Does Your Living Trust Stack Up?
Posted on November 12, 2009Click "Continue Reading" for a Comprehensive Living Trust Checklist to determine whether or not your trust needs to be upgraded. Thanks to attorney Thomas J. Bouman for the checklist, which I have modified for North Carolina purposes. Living Trust Review Worksheet The purpose of this worksheet is to review living trust documents prepared by others...
Life Insurance - an Estate Tax Time Bomb
Posted on November 11, 2009One common oversight I see when reviewing new clients' financial status is failure to consider the estate tax impact of large life insurance policies. Most people know that life insurance proceeds are received free from income tax. What most don't know, however, is that the proceeds are part of the insured's estate for estate tax purposes if: The proceeds are payable to the insured estate, or The insured has any 'incidents of ownership' of the policy, such as the right to change the beneficiary or access the cash value...
Purchase Agreement Not Countable Resource for Medicaid
Posted on November 10, 2009This report on the NC case of Estate of Wilson is from the National Academy of Elder Law Attorneys (NAELA)'s eNewsletter: Kenneth Wilson was hospitalized from January 7, 2007 through the date of his death on February 22, 2007. While he was hospitalized, his community spouse, Doris, sold her 100% stock ownership in Brothers Deliver Service to her son pursuant to a purchase agreement...
New Website for High Net Worth Individuals and Advisors to Network
Posted on November 09, 2009Wealth Management Exchange is designed for networking and information exchange. One can sign up to receive email alerts on financial and estate planning topics.
NFA (Gun) Trusts Provide Many Advantages
Posted on November 05, 2009This posting is courtesy of my colleague David Goldman in Jacksonville, Florida, who has created a special trust for owning weapons regulated by the National Firearms Act (NFA). Our Copyrighted NFA Trust is significantly different than any other Revocable Trust on the market...
Most of us will be too poor to retire at 65
Posted on November 05, 2009According to the National Retirement Risk Index prepared by the Center for Retirement Research at Boston College, 51% of American will not be able to afford to retire at age 65. That means that many of us need to save more, spend less, and plan on working past age 65.
Wills - are You Aware or Blissfully Ignorant?
Posted on November 02, 2009Last week was National Estate Planning Awareness Week - I'm sure most of us didn't know that, but awareness about the necessity of estate planning is pitifully low, so anything that can be done to help folks realize that it's important to plan for the future is good...
Estate Tax: Back to the Future
Posted on October 31, 2009This article on Trusts & Estates journal's website discusses a very real possibility - a return in 2011 to the estate tax laws of 2001. Briefly, that would mean a $1 million exemption and a 55% rate.
The Dirty Dozen - 12 Estate Planning Mistakes
Posted on October 29, 2009As Halloween approaches, here's another reason to be scared - failure to do proper estate planning. Make sure you have not committed any of these common mistakes that I see all too often: No trust provisions for minor children as beneficiaries of a will...
IRS Publishes Retirement Plan Guide for Small Businesses
Posted on October 24, 2009To help small business owners steer their way through all of the retirement plan options available, the IRS has come up with the IRS Retirement Plans Navigator. The site contains a comparison of the various plans and other helpful information and links.
Reverse Mortgages can be Hazardous to your Equity
Posted on October 24, 2009The National Consumer Law Center has come out with a report detailing the risks of reverse mortgages for seniors homeowners. Because of high fees, interest rates and other issues, I generally do not recommend reverse mortgages, although for some they may be the only feasible way to access cash.
Uncertainty in Future of Estate Tax No Reason to Delay Planning
Posted on October 23, 2009Check out this aptly titled article on webcpa.com - The dangers of postponing estate planning until Congress clarifies the law. Don't let the expenditure of a few hours or a couple of thousand dollars keep you from putting a plan into place that could avoid unintended financial problems for your family and/or save them hundreds of thousands of dollars in taxes...
Another Estate Tax Bill Introduced
Posted on October 23, 2009On October 15, 2009, Rep. Schrader (D. Oregon) introduced "The Small Business and Family Farm Estate Tax Relief Act of 2009" ( H.R. 3841), which would "repeal carryover basis for decedents dying in 2009, and "increase the estate tax exemption to $5,000,000" and "reduce the maximum estate and gift tax rate to 45 percent" for decedents dying after December 31, 2009...
Regular Updates to Will Important
Posted on October 22, 2009This article from WSJ online on the effect on changing estate tax exemptions on what's left for the surviving spouse describes just one reason why.
Responsibilities of Guardians in North Carolina
Posted on October 08, 2009I'm leaving on vacation tomorrow, so it's a hectic day in the office, but I wanted to share the link to the pamphlet Responsibilities of Guardians in North Carolina, which is published by the NC Administrative Office of the Courts. It provides a good summary of requirements and prohibited acts for guardians of minors and incompetent persons...
When NOT to use a Living Trust
Posted on October 06, 2009Practically every day, I discuss with clients the pros and cons of revocable living trusts. In my opinion, the positives generally far outweigh the negatives, but living trusts don't make sense for everyone. There have been innumerable articles and blog postings about the advantages of using a living trust for estate planning, but I thought I'd approach the topic from a different angle - why might you not want to use a living trust: You want the court to dictate how your estate is handled - all those rules have to be there for a good reason, right? You favor supporting the government, so you like the idea of your estate paying thousands of dollars in court fees...
I Inherited Real Estate - Where's My Deed?
Posted on October 06, 2009I often have clients ask about "getting a deed" when they inherit real property. My response is usually "you don't need one." In North Carolina, in most cases, no deed is necessary to transfer and evidence ownership of inherited real estate...
Estate Tax Discussions Very Popular
Posted on October 03, 2009Here's a link to an article from Evan Cooper at Investment News about a recent webinar on the federal estate tax that the magazine hosted - geared for financial advisors but worthy reading for all those interested in what will happen with the estate tax...
FLP gets 47.5% Estate Tax Discount
Posted on September 30, 2009In addition to providing ease of management and significant asset protection, FLPs and (FLLCs) are still a excellent planning tool for obtaining gift and estate tax discounts (for minority interests and lack of marketability) - provided that the implementation and valuation are done correctly...
When to Review Your Estate Plan
Posted on September 29, 2009The following is a list of some of the events that should trigger a review of your estate plan: (1) Marriage, divorce, death of spouse. (2) Birth of a child. (3) Children become financially independent...
Estate Planning Lessons from the Waltons
Posted on September 28, 2009What Can We Learn from Sam and Helen Walton? by: Larry W. Gibbs Contemporary estate planning causes a division of an estate and results in an ultimate dissipation of the resource base over a period of years. Is it possible to keep the resource base together to serve the family for many family generations? The Sam and Helen Walton story tells us how we can do so...
IRS Provides Guidance on 2009 RMD Waivers
Posted on September 25, 2009From IR 2009-85: WASHINGTON ? The Internal Revenue Service today provided guidance for retirement plan administrators, plan participants and retirees regarding recent legislation affecting required minimum distributions. The Worker, Retiree, and Employer Recovery Act of 2008 waives required minimum distributions for 2009 from certain retirement plans...
A Picture is Worth a Thousand Words
Posted on September 24, 2009Here's the money your family could have saved had you done proper estate planning: (with thanks and apologies to Geico)
Disclaimers can Protect Assets in Bankruptcy
Posted on September 24, 2009In a case interpreting Arizona law, the Court of Appeals for the Ninth Circuit held in Gaughan v. Costas that a disclaimer filed prior to declaring bankruptcy was valid and effective since the disclaimer was permitted under state law. In re Costas, 555 F...
10 Foolish Estate Planning Myths
Posted on September 23, 2009I saw this post by a fellow estate planning attorney on linkedin and thought it would be good to share with my readers: Ten Dangerous Estate-Planning Fantasies By FREYA ALLEN SHOFFNER - an attorney in Boston who focuses on estate planning. Estate Planning is great...
Estate Tax in 2010 and Beyond - Who Knows?
Posted on September 22, 2009Jonathan Weisman of the Wall Street Journal reports that the Estate Tax Faces Its Own Life-and-Death Struggle. When and what will happen with regard to the federal estate tax is still very much up in the air. Here's what's happened this decade:
Inaction on the Federal Estate Tax to Continue in 2010?
Posted on September 21, 2009Fellow Blawger Gideon Alper, who writes the Gay Couples Law Blog, has an interesting take on what will, or will not, happen with the federal estate tax over the next year or so: Estate Tax Repeal in 2010 Not a Big Deal Because Congress Can Pass a Retroactive Tax Amendment...
IRS Extends Deadline on Foreign Account Reporting
Posted on September 21, 2009From IR-2009-84: WASHINGTON ? The Internal Revenue Service today announced a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. These taxpayers now have until Oct...
Duh! Prostitutes and Porn are Not Tax Deductible
Posted on September 18, 2009A New York tax lawyer, of all people, was denied medical expense deductions for $100,000 or so in expenses for his prostitute and pornography habit. See the TaxProf's posting on the U.S. Tax Court case of Halby v. Commissioner, T.C. Memo 209-204...
More on the Future of the Federal Estate Tax
Posted on September 16, 2009Hurry up and wait is basically the message of this article from TheHill.com TheHill.com is self-described as the publication 'for and about Congress, breaking stories from Capitol Hill, K Street and the White House. The Hill stands alone in delivering solid, nonpartisan reporting on the inner workings of Congress and the nexus of politics and business...
Prepare for Higher Income Taxes
Posted on September 14, 2009From the Wall Street Journal: Higher Taxes Are Coming: Are You Prepared? Here in North Carolina, we've already been hit with higher taxes. Can't wait for the federal increases. :-(
Need a Real Life Example of Why to do Asset Protection Planning?
Posted on September 11, 2009Rich Rodriguez, the football coach for the University of Michigan, has been sued for $3.9 million due to a loan default. Rodriguez and partners formed an limited liability company, The Legends of Blackburg LLC, to develop a condo community in Virginia...
NC Homestead Exemption to Increase
Posted on September 08, 2009House Bill 1058 - Effective December 1, 2009, an individual resident of North Carolina who is a debtor can retain, free from the enforcement of the claims of creditors, the debtor's aggregate interest, not to exceed $35,000 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor...
Inherited IRAs are Not Creditor Protected - #2
Posted on September 04, 2009I previously blogged about a Bankruptcy Court in Texas holding that an inherited IRA was not exempt from claims of the new owner's creditors. In re Jarboe, 2007 WL 987314 (Bkrtcy S.D. Tex. 2007). A new ruling out of Florida reaches the same conclusion, stating: "[t]he purpose of the ...
The BBB on Estate Planning - a solid C
Posted on September 03, 2009This morning I came across this article on estate planning advice by the Better Business Bureau. I certainly endorse the idea of urging people to do proper planning, but articles like this can sometimes do more harm than good. I give a grade of C (mediocre)...
Dont' Leave a Mess for your Loved Ones
Posted on September 01, 2009Most people fail to do any estate planning at all, and many more have outdated or inadequate plans. A recent article, A slacker's guide to death, discusses this issue. One word of caution - the article, while generally applicable to North Carolina, has one suggestion that is not always a good idea in North Carolina, and that's for married couples to own assets jointly...
NC Probate Fees Go Up Again
Posted on September 01, 2009Effective today, along with 1% increase the sales tax, the filing fee for probate cases has increased to $88 (from $61). The .40/100 fee applied to estate assets (maximum of $6,000) does not increase this year - but watch for future increases as the state continues to struggle to increase revenues...
US Budget Deficit Sure to Drive Tax Increases
Posted on August 31, 2009The White House Office of Management and Budget announced last week in its Mid-Sesion Review that the cumulative budget deficits for the upcoming 10 years are projected to be $9.1 trillion. The smallest single-year deficit during that time will be $739 billion (the largest actual shortfall was last year's $455 billion deficit)...
NC adopts law for Notice to Creditors when no probate required
Posted on August 29, 2009While 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, 2009Many 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, 2009Second-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, 2009Unlike 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.
Don't Expect COLA Increases in Your Social Security Payments
Posted on August 26, 2009According 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, 2009This 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, 2009Make 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, 2009Check 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, 2009A 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, 2009More news on the possible future of the federal estate tax from WSJ.com.
Is Your Advisor IRA Savvy?
Posted on August 11, 2009Last 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, 2009North 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, 2009Based 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, 2009Video: 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, 2009This 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, 2009There'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, 2009President 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, 2009In 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, 2009Democrats 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, 2009As 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, 2009Beginning 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, 2009Beginning 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, 2009The "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, 2009Effective 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, 2009Governor 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, 2009The 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, 2009Loans 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, 2009Yesterday 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, 2009I'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, 2009Senate 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...
Seniors - Protect Your Financial Well-Being
Posted on June 22, 2009North 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, 2009Cremation 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, 2009The 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, 2009See what the finance wizards at Kiplinger have to say with this fun quiz about saving money.
NC Changes Renunciation Laws
Posted on June 12, 2009On 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, 2009Despite 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, 2009That'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, 2009Here'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, 2009On 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, 2009In 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, 2009Offshore 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, 2009The 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, 2009A 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, 2009As 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, 2009The 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, 2009I 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, 2009For 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, 2009The 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, 2009President 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, 2009North 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, 2009Taxes 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...
NC's Repeal of Rule Against Perpetuities Upheld
Posted on May 08, 2009I 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, 2009The 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, 2009There 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, 2009Here'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, 2009Here'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, 2009There 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, 2009From 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, 2009This 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...
Public Good IRA Rollover Act of 2009
Posted on April 25, 2009This bill was recently introduced in the U.S. House of Representatives, and is for the expansion of IRA charitable rollovers, which are currently limited to those who have reached 70 1/2, may be no more than $100,000, and must go to a 501(c)(3) organization...
NC Income and Sales Tax Changes Considered
Posted on April 24, 2009The North Carolina Senate Finance Committee is reviewing a plan to cut income and sales taxes while instituting new sales taxes on certain services. For income taxes, the top rate would drop from 7.75% to 7.5%, while the lowest rate would decrease from 6% to 5...
Saying a Final Goodbye to a Friend
Posted on April 22, 2009This posting is not about estate planning per se, but rather death, which everyone must contemplate in the course of planning his or her estate. Yesterday afternoon I stayed at the bedside of a friend of 30 years as he peacefully died in the last stages of Lymphoma...
Death Tax Debate Alive and Well
Posted on April 16, 2009The debate over extending the $3.5 million estate tax exemption versus increasing the exemption to $5 million is discussed in this NY Times article. Don't our legislators have better things to do than argue over reducing taxes for such a minute percentage of the U...
Beware of these "Dirty Dozen" Tax Scams
Posted on April 14, 2009From the IRS Newswire 2009-041: WASHINGTON — The Internal Revenue Service today issued its 2009 'dirty dozen' list of tax scams, including schemes involving phishing, hiding income offshore and false claims for refunds. 'Taxpayers should be wary of scams to avoid paying taxes that seem too good to be true, especially during these challenging economic times,' IRS Commissioner Doug Shulman said...
Last Minute Tax Tips and Reminders from the IRS
Posted on April 13, 2009From the IRS Newswire issue IR-2009-040: WASHINGTON — The Internal Revenue Service offers last minute reminders to taxpayers who have not yet filed a tax return, paid what they owe or requested an extension of time to file as the April 15 tax filing and payment deadline approaches...
Obama's Budget Proposal - Automatic IRAs
Posted on April 10, 2009From my CPA colleagues at Virchow, Krause & Company - a summary of the proposals to help expand retirement savings.
Yesterday's Senate Action on the Estate Tax
Posted on April 03, 2009Reuters Blogs Front Row Washington Tracking U.S. politics « Previous Post Next Post » April 2nd, 2009 U.S. Senate goes two ways on estate taxes The U.S. Senate went two different ways on the estate tax, which has been a contentious issue for years — a tax congressional Republicans have villified as the 'death tax'...
The Octomom - I bet she hasn't done proper estate planning
Posted on April 02, 2009The other day I started thinking about Nadya Suleman (the Octomom), the California single mother of 14 who has been in the news so much lately. A professional hazard, I guess, but I wondered - has she done any estate planning? Does she have a Will? If so, has she named a guardian or guardians for her 14 children (who would want that job!)? Does she have a trust set up for the kids? Who's the trustee? Does she have a general and durable power of attorney in case she becomes incapacitated? Does she have any (or enough) life insurance to at least partially provide for her children in the event of her death? My guess is that she doesn't have any of these things...
25th Anniversary of Triangle Community Foundation
Posted on April 02, 2009The Triangle Community Foundation (TCF) is holding a celebration tonight of its 25th anniversary (I'm pleased to say that I will be attending). The TCF is a tremendous asset to the greater Triangle area, providing millions of dollars annually in funding to local non-profits...
Wagering on your NCAA Tournament Bracket? What are the Tax Implications?
Posted on April 01, 2009The Final Four is set for this weekend, and my beloved Tar Heels have a good shot at winning the title. In North Carolina and across the country, countless Americans have entered into NCAA office pools, and the winners will be determined Monday night...
Another Reason to Avoid Probate in NC
Posted on April 01, 2009The North Carolina Legislature is considering cuts of up to 24% in salaries of judicial system employees, which include Clerks of Court and their staff. Obviously, this may lead to staff shortages and/or staff turnover, both of which may cause delays in processing probate documents, particularly Annual and Final Account...
What You Need to Know to Choose a Nursing Home
Posted on April 01, 2009Listen to this Podcast on the ElderLawAnswers website.
Religion, Medicine and Death
Posted on April 01, 2009In this blog, mostly I write about taxes. Sometimes I write about death or politics. Often somber topics, but ones that will always be current. Here's an article from The Economist dealing with death, end-of-life decision making, and religion, so I now I'm adding that subject into the mix.
Baucus Comments on Income Tax Charitable Deduction and Estate Tax
Posted on March 31, 2009Click "Continue Reading" to view the statements of Senator Max Baucus (D-MT) (chairman of the Senate Finance Committee) made on the floor of the Senate last week. He opposed an amendment proposed by Senator John Thune (R-SD) to President Obama's budget...
10 Ways to Wreck Your Retirement
Posted on March 30, 2009Here's a great, to the point article on what NOT to do to ensure you have sufficient retirement savings - from the National Center for Policy Analysis.
Baucus Bill Keeps $3.5 Million Estate Tax Exemption
Posted on March 28, 2009From the GiftLaw eNewsletter: Senate Finance Committee Chair Max Baucus (D-MT) introduced the Taxpayer Certainty and Relief Act of 2009 on March 26, 2009. The tax bill includes a $2.3 trillion middle class tax cut package and also creates a freeze on estate tax rates and major estate planning modifications...
What do I do with my Health Care Power of Attorney and Living Will?
Posted on March 27, 2009So, you've been a responsible adult and have recently completed your estate plan. As part of your plan, you have a Health Care Power of Attorney, Living Will, and HIPAA Authorization. Now what? Here's what I recommend with regard to those documents: Keep the originals at home in a place that your Health Care Agent knows about...
Changes to NC's 529 College Savings Plan
Posted on March 21, 2009Here are some recent favorable changes to North Carolina's National Collge Savings Program (529 Plan): For 2009, a participant may reallocate the account assets twice during the year, rather than just once. Included as Qualified High Education Expenses for 2009 and 2010 are expenditures for computer technology, computer equipment and Internet access for the beneficiary or his or her family (provided the beneficiary is enrolled at an Eligible Institution)...
Summary of the American Recovery and Reinvestment Act
Posted on March 20, 2009Here's a nice, easy to read Summary of the American Recovery and Reinvestment Act of 2009, which includes comparisons to prior law.
Alphabet Soup - the ABCs of Estate Planning
Posted on March 18, 2009Here's another piece from my recent newsletter: Putting Together The Pieces It all boils down to the fear of mortality...
Tax Credit Options for First-Time Homebuyers
Posted on March 18, 2009First-Time Homebuyers Have Several Options to Maximize New Tax Credit WASHINGTON — As part of the Treasury Department's consumer outreach effort and with the April 15 individual tax filing deadline approaching, the Internal Revenue Service today began a concerted effort to educate taxpayers about additional options at their disposal to claim the new $8,000 first-time homebuyer credit for 2009 home purchases...
New Stimulus Tax Breaks
Posted on March 17, 2009The following is from my e-newsletter that went out this morning: The American Recovery and Reinvestment Act of 2009, which was signed into law on February 17th, includes a multitude of federal income tax changes. This article summarizes some of the personal tax changes: One-Year AMT Patch Has Two PartsIf Congress had not taken action, millions more individuals would have been forced to pay the alternative Want to Buy a New Vehicle? Uncle Sam is giving some help to eligible taxpayers who buy qualified vehicles between February 17 and December 31, 2009...
Don't Delay Reviewing Estate Plans
Posted on March 14, 2009Yes, these are times of financial uncertainty and difficulty for many of us, and federal estate law is likely to change sometime later this year, but not reviewing and possibly revising one's estate plan now can be a big mistake. Check out this NY Times article...
Reverse Mortgage Limit Increased to $625,000
Posted on March 12, 2009The American Recovery and Reinvestment Act of 2009 increased the allowable amount of federally insured reverse mortgages to $625,000, up from $417,000. The increase is effective for the remainder of the year.
New IRS Withholding Tables
Posted on February 25, 2009Available here on the IRS website. Hopefully most us will see a little more money in our paychecks soon. Click here for the text of the full announcement.
A Bit of Rare Living Will Humor
Posted on February 25, 2009MY LIVING WILL Last night, my friend and I were sitting in the living room and I said to her, 'I never want to live in a vegetative state, dependent on some machine and fluids from a bottle...
Expanded Tax Break Available for 2009 First Time Home Buyers
Posted on February 25, 2009From today's IRS Newswire: WASHINGTON — The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year...
Top 10 Facts About Taking Early Retirement Plan Distributions
Posted on February 24, 2009From the IRS: If you took an early distribution from your retirement plan, here are some things you need to know: 1. Payments you receive from your Individual Retirement Arrangement before you reach age 59 ½ are generally considered early or premature distributions...
Revised Medico-Legal Guidelines Published
Posted on February 24, 2009From the North Carolina Bar Association website: The North Carolina Bar Association and the North Carolina Medical Society are pleased to announce the publication of their revised Medico-Legal Guidelines. CLICK HERE TO ACCESS REVISED MEDICO- LEGAL GUIDELINES The guidelines represent decades of cooperation between physicians and lawyers aimed at improving their inter-professional interactions in medical litigation...
Brief Summary of Certain Stimulus Act Provisions
Posted on February 20, 2009On February 17, 2009, President Obama signed into law the $787 billion American Recovery and Reinvestment Act of 2009 (the 2009 "Stimulus Act"). The Act includes several provisions designed to offer a degree of financial assistance to individuals in the short and intermediate term, including a one-time $250 Economic Recovery Payment to individuals receiving Social Security benefits, Railroad Retirement benefits, Veteran's benefits, or Supplemental Security Income (SSI) benefits...
Federal Estate Tax Return Audit Rate Increasing
Posted on February 19, 2009While only about .05% of estates will be subject to federal estate tax with the current $3.5 million exemption, this article, which originally ran in Trusts and Estates magazine, says to expect an audit in virtually all taxable estates.
Title Insurance for Real Estate in Living Trusts
Posted on February 19, 2009My standard advice for clients who are transferring real property to their revocable living trusts is to check with their title insurance company to make sure they will still be covered. For those insured by Chapel Hill's own Investors Title Insurance Company, all that is required is to notify Investors, who will then issue a simple amendment, at no charge, to show the trust as the insured...
US Supreme Court Awards Retirement Plan to Ex-Spouse
Posted on February 17, 2009If you divorce, make sure that you change your retirement account beneficiaries! As obvious as that advice sounds, it is not uncommon, particularly when there is no remarriage, for one to forget to designate a new beneficiary. Even a waiver signed by your former spouse may not be effective to prevent him or her from getting the benefits upon your death...
Small Non-Profits Beware - File Your Forms 990-N!
Posted on February 16, 2009This report on msnbc.msn.com discusses GuideStar's statement that 500,000 non-profit organizations could lose their tax-exempt status in May 2010. Non-profits with annual receipts of no more than $25,000 need file only a short informational return with the IRS - Form 990...
SECU has Ridiculous Policy on Living Trusts
Posted on February 15, 2009I have long known that the North Carolina State Employees Credit Union (SECU) refuses to refinance any residence owned by a revocable living trust. Their explanation is that they do not have the legal expertise to determine whether the trust affects the borrower's legal title and powers to the property...
Summary of the American Recovery and Reinvestment Act of 2009
Posted on February 13, 2009A:link { } SPAN.MSOHYPERLINK { } A:visited { } SPAN.MSOHYPERLINKFOLLOWED { } P.MSONOSPACING { } LI.MSONOSPACING { } DIV.MSONOSPACING { } P.MSOLISTPARAGRAPH { } LI.MSOLISTPARAGRAPH { } DIV.MSOLISTPARAGRAPH { } font-face { MARGIN: 0in 0in 0pt; MARGIN: 0in 0in 0pt; MARGIN: 0in 0in 0pt; TEXT-DECORATION: underline } SPAN...
NC Had 7th Highest Unemployment in U.S. in December
Posted on February 12, 2009I had no idea North Carolina was so bad off until I saw the statistics put out by the Bureau of Labor Standards. Our unemployment rate in December 2008 was 8.7%, which puts us on top of all states but Michigan (the highest at 10.6%), Rhode Island, California, Nevada, Oregon, and Washington D...
The American Recovery and Reinvestment Act of 2009
Posted on February 11, 2009Click "Continue Reading" to view a chart that provides a side-by-side comparison of the tax provisions in the House and Senate versions of “The American Recovery and Reinvestment Act of 2009.” The House version is H.R. 1, as passed on January 28, 2009, with a 244 to 188 vote margin...
UNC Law School to Host Clinic for Same-Sex Couples
Posted on February 09, 2009On Thursday, February 12, 2009, the Lambda Law Students Organization of the UNC Law School will hold an event for same-sex couples to fill out and have notarized general and health care powers of attorney. As important as powers of attorney are, one should not forget that they do not form a complete estate plan...
Tax Discounts Alive and Well - For Now
Posted on February 05, 2009The U.S. Tax Court issued an opinion on January 29, 2009 in the Estate of Marjorie deGreeff Litchfield v. Commissioner (T.C. Memo. 2009-21). The case involved the determination of appropriate (estate tax) discounts for built-in capital gains tax liabilities, and lack of control and lack of marketability for minority interests in two closely held family corporations, including one that had recently converted to a subchapter S corporation...
Third Time is Not a Charm for Obama's Cabinet
Posted on February 03, 2009Facing negative publicity over unpaid taxes, Tom Daschle withdrew his name from consideration as Secretary of Health and Human Services. Nancy Killefer, Obama's pick for Chief Performance Officer, also withdrew her nomination, citing her unpaid payroll taxes for a household employee...
Estate Still Over $3.5 Million? Now is the Time to Plan
Posted on January 31, 2009The estate tax exemption is up (to $3.5 million) and portfolios are down. However, for those whose estates are still above $3,500,000, now is the perfect time to transfer wealth to younger generations. Interest rates are low, and the tax laws may never be more favorable...
Obama Picks Second Tax Cheat for Cabinet
Posted on January 31, 2009First it was Timothy Geithner for Secretary of the Treasury, and now it turns out Tom Daschle, nominated for Secretary of the Department of Health and Human, also failed to report income and pay taxes. Then there's Charles Rangel. What's up with these people? Mistake, error, omission - I call it tax fraud...
IRS Form 1099-B Deadline Now February 15
Posted on January 30, 2009Don't worry if you don't get your Forms 1099-B by tomorrow - the deadline this year is not until February 17. From the IRS: WASHINGTON ? Many investors will receive their year-end tax statements later than in past years, but these forms are likely to be more accurate, according to the Internal Revenue Service...
Attorney Sam Cooper Appointed as Chatham County Clerk
Posted on January 29, 2009Janice Oldham, who has served as Chatham County's Clerk of Superior Court for more than 30 years, is retiring at the end of this month. Senior Resident Superior Court Judge Carl Fox has appointed Chatham native Sam Cooper to serve the remainder of Oldham's term, which expires on December 31, 2010...
NC in Middle of Pack When it Comes to Foreclosures
Posted on January 27, 2009In 2008, 0.84% of housing units in North Carolina went into foreclosure, placing us at number 27 among the 50 states and Washington D.C.. The actual number of houses going into foreclosure was 33,819. The state with the largest number of foreclosures was Nevada, at 7...
MOST and DNR Forms - the other side of Advance Directives
Posted on January 25, 2009Lawyers routinely prepare advance directives for their clients - in North Carolina the statutory form was previously called a "Declaration of a Desire for a Natural Death, "and is now just known as an "Advance Directive (Living Will)." Also used, to a lesser extent, is the "Advance Instruction for Mental Health Treatment...
Forbes Says Don't Die in NC
Posted on January 23, 2009Where Not To Die 01.19.09, 06:00 PM EST Sixteen states and the District of Columbia (shaded in red) impose their own estate taxes. The dollar amount exempted from tax (in black) and the top tax rate (in yellow) vary by state. Eight states (shaded in orange) levy an inheritance tax, meaning the tax rate (in black) depends on who gets the money...
Looks Like Estate Tax Here to Stay - Don't Delay Planning
Posted on January 23, 2009There's a couple of good recent articles on forbes.com - Dems Dedicated to Death Tax and Why You Need a Will. For this year, anyway, the $3.5 million exemption means that many of us don't need planning for estate tax purposes, but we need planning nonetheless...
More on Insuring Homes in Living Trusts
Posted on January 21, 2009A colleague of mine, Dennis Toman of Greensboro, contacted the North Carolina Deparment of Insurance about the issue of insuring homes owned by living trusts. Bernard Cox, assistant to the Deputy Commissioner, stated that: We tend to agree with your insurance company that the manual eligibility rule for HO policies would allow this arrangement [keeping the homeowners policy in the name of the individual owner and naming the trust as an addtional insured]...
North Carolina Estate Procedure Pamphlet
Posted on January 21, 2009I recently had someone email me and ask if the North Carolina Estate Procedure Pamphlet, published by the North Carolina Administrative Office of the Courts, is accurate. It is generally correct, and provides a good, basic overview of estate administration requirements and procedures in North Carolina...
Have an Interesting Story Involving a Will and Want to Share it?
Posted on January 21, 2009I recently received the following email, and then had a phone conversation with its author. This is a legitimate documentary, with filming to take place in Montreal over the course of the year. All expenses for the trip to Montreal will be paid...
NC Estate Planning Blog to be Syndicated
Posted on January 21, 2009I am pleased to announce that the North Carolina Estate Planning Blog will be nationally syndicated by Newstex, a blog aggregation company. The Blog is also recognized by the American Bar Journal, Trusts and Estates magazine and USlaw.com, as well as by other nationally known bloggers.
Four Pending Federal Estate Tax Bills
Posted on January 16, 20091. H.R.96 : To amend the Internal Revenue Code of 1986 to increase the maximum reduction in estate tax value for farmland and other special use property, to restore and increase the estate tax deduction for family-owned business interests, and for other purposes...
Prepaid Funeral Plans can be a R.I.P. Off
Posted on January 15, 2009See this article from the AARP website. I have had clients who have lost money when their prepaid plans were not honored. The longer ago the plan was purchased, the more likely it is that there will be a problem Ownership changes, business termination, and theft or fraud can all affect plans...
Estate Tax Bill Submitted to House Ways and Means Committee
Posted on January 14, 2009A bill entitled the Certain Estate Tax Relief Act of 2009 was recently introduced in the U.S. House of Representatives. The bill retains the current $3.5 million federal estate tax exemption, freezes the estate tax rate at 45%, and repeals the carryover basis rules which would otherwise be in place next year...
IRS Offers Tax Daily Tips for 2009
Posted on January 13, 2009Here are some of the current entries: Choosing a tax preparer Where you can get free tax help How e-file can make filing easier and getting you your refund faster How to file for an extension or to amend your return What tax records to keep First-Time Homebuyer Credit An additional tip will be added each business day until April 15, 2009 In addition to the text tips, some audio files will also be available...
I Inherited a House - Do I have to Refinance the Mortgage?
Posted on January 13, 2009No - in most cases. Mortgages generally contain "Due on Sale" clauses, which say that the lender can call the mortgage due upon transfer of property. However, federal law (12 USC § 1701j-3(d)) provides a number of exceptions (emphasis added): (d) Exemption of specified transfers or dispositions With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon— (1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property; (2) the creation of a purchase money security interest for household appliances; (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; (4) the granting of a leasehold interest of three years or less not containing an option to purchase; (5) a transfer to a relative resulting from the death of a borrower; (6) a transfer where the spouse or children of the borrower become an owner of the property; (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; (8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board...
Teitel Urges More Favorable IRA Charitable Gift Rules
Posted on January 12, 2009Conrad Teitel, one of the nation's most foremost charitable gift planning attorneys, has, on behalf of the American Council on Gift Annuities and the National Council on Planned Giving, written Congress urging changes to IRA distribution laws: Removing the $100,000 cap on IRA charitable rollovers Allow similar transfers to charitable gift annuities and charitable remainder trusts Make the law permanent Click "Further Reading" for the full text of the letter and the proposed bill...
Obama Wants to Keep the $3.5 Million Estate Tax Exemption
Posted on January 12, 2009Today's Wall Street Journal has an article on the latest buzz on what the Democrats would like to do with the federal estate tax. This summary is courtesy of Stephen Bigge, CPA: -- President-Elect Obama and Democratic Congressional leadership are making a push to keep the estate tax in place before its repeal in 2010...
Teitell Urges More Favorable IRA Charitable Gift Rules
Posted on January 12, 2009Conrad Teitell, one of the nation's most foremost charitable gift planning attorneys, has, on behalf of the American Council on Gift Annuities and the National Council on Planned Giving, written Congress urging changes to IRA distribution laws: Removing the $100,000 cap on IRA charitable rollovers Allow similar transfers to charitable gift annuities and charitable remainder trusts Make the law permanent Click "Further Reading" for the full text of the letter and the proposed bill...
Homes and Cars in Living Trusts - Check With Your Insurer
Posted on January 08, 2009Revocable living trusts are a common estate planning tool for avoiding probate. It is not uncommon for a home to be transferred to the trust for that purpose, as well as occasionally motor vehicles. I normally advise my clients to check with their insurance company to make sure their coverage will not be affected...
Finance Charity-Owned Life Insurance with your IRA
Posted on January 05, 2009In a Private Letter Ruling issued late in 2007, the IRS approved a clever technique to leverage a gift to your favorite charity using your IRA and life insurance. Developed by Douglas Delaney, a CPA and attorney in South Carolina, the "CHIRA®" works something like this: The donor rolls over funds from a regular IRA to a self-directed IRA...
Expatriates Beware - New Taxes Apply
Posted on December 31, 2008Tired of all the taxes here in the good ole USA and thinking of moving to a tropical isle with little or no taxation? Besides the emotional and security issues, there tax penalties for leaving the U.S. In addition to providing tax relief to military personnel and veterans, the Heroes Earnings Assistance and Relief Act (HEART Act) of 2008 also contains a couple of provisions regarding expatriate taxation...
Happy New Tax Year - Changes in 2009
Posted on December 31, 2008Tonight at midnight, of course, will be the start of 2009. With the change in the calendar year comes several significant tax changes, most of which I have blogged about prior to today: Federal Estate Tax Exemption increases to $3.5 million Federal Gift Tax Annual Exclusion increases to $13,000 Federal Gift Tax Annual Exclusion for Non-Citizen Spouses increases to $133,000 North Carolina Gift Tax repealed Rollover availability from Employer Retirement Plans to Non-Spouse IRAs mandated Required Minimum Distributions from retirement accounts suspended While these changes all favor the taxpayer, keep in mind that unless the law is changed sometime in 2009 or 2010 (when there will be no estate tax), in 2011 the federal estate tax exemption will be only $1 million...
529 College Savings Plan Investments May Be Adjusted Twice Yearly in 2009
Posted on December 29, 2008The IRS recently announced in Notice 2009-1 that in 2009 the investments in 529 College Savings Plans may be adjusted twice, as opposed to once per year, which has been the rule to date. The investments may also be adjusted upon a change of the beneficiary...
Bush Signs Worker, Retiree and Employer Recover Act of 2008
Posted on December 24, 2008This morning President Bush signed H.R. 7327, the “Worker, Retiree and Employer Recovery Act of 2008” (WRERA). The law suspends Required Minimum Distribution (from IRAs and qualified plans) requirements for 2009 and requires employers to offer non-spousal rollovers from qualified plans to inherited IRAs beginning January 1, 2010...
The 12 Keys to Proper Estate Planning
Posted on December 23, 2008All of us know the Christmas song The 12 days of Christmas. Keeping with the holiday theme, I have come up with "The 12 Keys to Proper Estate Planning." This brief but very important listing applies to just about everyone, young or not-so-young, as well as the wealthy and the somewhat less-than-wealthy...
Planning with the Wyoming Close LLC
Posted on December 21, 2008p pbspan style="font-size: 14pt;"What is an LLC?/span/b/p pIn 1977 Wyoming was the first state to enact laws permitting the creation of a Limited Liability Company.nbsp;An LLC combines the best features of a corporation with the best features of a partnership...
IRS Offers Free Tax Guide for Individuals
Posted on December 17, 2008p pFrom a href="http://www.irs.gov/newsroom/article/0,,id=201359,00.html"IR 2008-142/a:/p pWASHINGTON mdash; The IRS has placed its comprehensive tax guide for individuals onnbsp; IRS.gov, updating it for tax year 2008. The updated on-line version of IRS Publication 17, ldquo;Your Federal Income Tax,rdquo; contains more than 900 interactive links...
Required Minimum Distributions to be Suspended?
Posted on December 12, 2008This update is courtesy of Barry C. Picker, CPA: It looks as if Congress has passed, and sent to Pres. Bush, H.R. 7237; Worker, Retiree, and Employer Recovery Act of 2008, which among other things, suspends the excise tax on the failure to take a minimum distribution...
It may not seem like it, but Now is the Time to Plan
Posted on December 10, 2008Difficult topics when planning for your estate is a recent article on the Chicago Tribune's website that discusses the advantages of wealth transfer planning during down market and low interest rate environments such as the one we are experiencing now...
IRS Offers Tips for Year-End Donations
Posted on December 09, 2008This is from IR-2008-138, issued today by the IRS: WASHINGTON — Individuals and businesses making contributions to charity should keep in mind several important tax law provisions that have taken effect in recent years. One provision offers older owners of individual retirement arrangements (IRAs) a different way to give to charity...
Own Rental Real Estate? You Need an LLC to Protect Yourself
Posted on December 09, 2008Anyone who owns rental real estate in his or her individual name is taking a tremendous risk. Suppose your tenant, or one of the tenant's guests, gets hurt on your property and sues the owner of the property. That's you! And any judgment against you can be satisfied from other property you own, such as bank accounts, investments, and other real estate, even your home...
Medicare Part D - An Overview
Posted on December 04, 2008From the most recent NAELA eNewsletter: By Terri Tersteeg Overview After the conclusion of World War II, employer provided health care benefits had become commonplace and employees had come to expect the benefit as part of their overall employment package...
Big Tax Losses in 2008? Consider a Roth Conversion
Posted on December 02, 2008Self-employed persons or small business owners such as home builders with big tax losses for the year should consider converting their traditional IRAs to Roth IRAs this year to "soak up" some or all of the loss. This planning could be even more beneficial given that the securities or mutual funds in the original IRA are likely to be depressed in value, which means less income will be realized...
North Carolina Has 4th Highest Beer Tax
Posted on December 01, 2008As a beer aficionado, I was surprised to learn today that NC has the fourth-highest tax on beer in the nation, at 53 cents a gallon. And, of course, we also have to pay sales tax when we as consumers buy the beer. The highest tax is Georgia, at $1...
Report Foreign Bank Accounts Totaling Over $10,000
Posted on November 26, 2008The IRS is increasing its efforts to track down American taxpayers who have undeclared foreign bank accounts (including US citizens living abroad). The Department of Justice indicted a UBS AG senior executive on November 12, alleging tax fraud...
IRS Announces 2009 Standard Mileage Rates
Posted on November 25, 2008The Internal Revenue Service has issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on Jan. 1, 2009, the standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be: 55 cents per mile for business miles driven 24 cents per mile driven for medical or moving purposes 14 cents per mile driven in service of charitable organizations Revenue Procedure 2008-72
"Aging in America" Recording Available on NAELA Webiste
Posted on November 21, 2008A recorded version of the National Academy of Elder Law Attorneys (NAELA)'s public webcast "Aging in America: How to Plan for it" is available for through November 30 on the NAELA website. During the one-hour program, AARP and NAELA officials discuss talking with one's parents about aging, family issues in elder care, healthcare decision making, long term care insurance, reverse mortgages and more...
Deductibility of Estate Planning Legal Fees
Posted on November 20, 2008Contrary to what many of my clients assume, legal fees for general estate planning are not deductible for income tax purposes. Estate planning fees are only deductible to the extent that they represent income, gift, or estate tax planning or advice...
Reverse Mortgage Limits Double
Posted on November 18, 2008The Housing and Economic Recovery Act of 2008 more than doubled the home value (now up to $417,000) to be used nationwide for establishing the size of loans available from the federal reverse mortgage program. Loan origination fees were also lowered...
NAELA Announces New Senior Housing Locator Website
Posted on November 11, 2008The National Academy of Elder Law Attorneys (NAELA) has unveiled its new Senior Housing Locator powered by SNAPforSeniors®, an online navigational tool designed to help easily find senior housing anywhere in the country. Users can search a database of more than 60,000 senior housing communities, including listings for all licensed senior housing in the U...
Obama and Taxes
Posted on November 07, 2008A recent article on Obama's tax plan: How Obama's Tax Plan Could Affect You
NC Has 11th Highest Income Tax Rate in U.S.
Posted on November 05, 2008Our top rate is now 7.75%, just slightly under Idaho's top rate of 7.8%. Even New York has a lower top rate. Before our top rate of 8.25% expired, we were tied for 9th place with Hawaii. The top 10 States (including Washington D.C.): CA - 10...
Tax Policy Center Report on Federal Estate Tax
Posted on November 03, 2008Here's a recent comprehensive report from the Urban-Brookings Tax Policy Center entitled Back from the Grave: Revenue and Distributional Effects of Reforming the Federal Estate Tax. An outline of the presidential candidates' and other recent proposals for reform is contained in Table 11 on page 20...
Something Smells Phishy - Fake IRS Refund Emails
Posted on October 29, 2008I just received an email with the following text (albiet in my spam filter). After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund under section 501(c) (3) of the Internal Revenue Code...
Update Your Beneficiary Designations
Posted on October 28, 2008Failure to update one's beneficiary designations for life insurance, annuities and retirement accounts is all too common. One of the more common problems stems from not changing beneficiary designations after a divorce. The law does not automatically cancel beneficiary designations in favor of a former spouse...
ILIT Trustees - Examine Your Policies
Posted on October 25, 2008Life insurance trusts (ILITs) are a popular estate planning technique used to shelter life insurance proceeds from estate taxes, creditors and mismanagement by beneficiaries. While the insured is alive, generally the only asset of an ILIT is the life insurance policy...
Warren Buffet - Now's the Time to Buy American Stocks
Posted on October 20, 2008Words of wisdom from a sage investor on the NY Times Website. It is also important not to use the poor economy as an excuse to neglect protecting what you have by doing sound estate planning. If you have less, aren't protections against creditors, mismanagement and taxes even more important than when you're flush?
Free Webcast on Aging October 30, 2008
Posted on October 18, 2008The National Academy of Elder Law Attorneys (NAELA) will be offering its first ever public Webcast on October 30, 2008. Aging in America: How to Plan for it is a one-hour roundtable discussion program video recorded and broadcast "live" via the Internet...
IRS Announces Pension Plan Limits for 2009
Posted on October 17, 2008IR-2008-118, Oct. 16, 2008 WASHINGTON — The Internal Revenue Service today announced cost?of?living adjustments applicable to dollar limitations for pension plans and other items for tax year 2009. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans...
Gift Tax Annual Exclusion to Increase in 2009
Posted on October 16, 2008.hmmessage P { margin:0px; padding:0px } body.hmmessage { FONT-SIZE: 10pt; FONT-FAMILY:Tahoma }The IRS has announced many annual inflation adjustments for 2009, including an increase in the annual gift exclusion. The annual gift tax exclusion for present interest gifts will be $13,000...
Using a Professional Care Manager
Posted on October 15, 2008Services from care managers should be something that every family takes advantage of, but in reality very few families use them. Care managers could go a long ways towards helping the family find better and more efficient ways of providing care for a loved one...
Should You Roll Your 401(k) Over into an IRA?
Posted on October 14, 2008Once you cease working for an employer, you have the option of rolling over to an Individual Retirement Account (IRA) any retirement plan (such as a 401(k)) established for you while employed. In most cases, it is beneficial to do such a rollover because of the advantages offered by an IRA...
FDIC Bank Account Insurance Coverage Calculator
Posted on October 10, 2008The recent Bailout law increased the FDIC insurance coverage for bank accounts to $250,000 per person, per bank. However, different types of accounts, such as joint, POD, etc. affect how the coverage is calculated. The FDIC provides this handy calculator to estimate the coverage available to you for your accounts at each bank.
More on Special Needs Trusts
Posted on October 09, 2008I recently posted a link to an article on Special Needs Trusts - here's another one from the Wall Street Journal, which quotes several well known lawyers, including Barry Nelson in Miami, who has a special needs child himself.
What Property is Exempt from Creditors' Claims in NC?
Posted on October 09, 2008If you were ever to be sued, what property would be protected in the event of a judgment against you? Homestead - only $18,500 of the value of your home. If you are over 65 and your deceased spouse (or significant other, etc.) was an owner of the home also, the amount protected is $37,500...
Estate and Income Tax Reduction Strategies in a Bear Market
Posted on October 08, 20081) If you are not selling options or using margin trading, you should revoke your margin agreements. This reduces your risk by ensuring that your securities are not lent. 2) Roth IRA conversions should be aggressively reviewed. 3) Loss Harvesting, while remaining in the market should be reviewed...
Bailout Includes IRA Charitable Rollover
Posted on October 04, 2008The Emergency Economic Stabilization Act of 2008 (H.R. 1424) passed the House yesterday, and was quickly signed by President Bush. The law includes an extension of the IRA Charitable Rollover, which allows individuals age 70 and older to transfer up to $100,000 per year to public charities, tax-free...
Capital Gain Limited for Former Vacation Homes
Posted on October 03, 2008Effective January 1, 2009, the $250,000 capital gain exclusion ($500,000 for married couples) for sales of former vacation homes that become one's personal residence will be limited. This posting by Charles Rubin provides a good explanation to the changes to IRC Section 121.
Top 10 Excuses for Failure to Plan One's Estate
Posted on October 01, 2008Most folks never get around to doing any estate planning, even so much as a simple will. Why? I'll do it later, when I'm "older." It costs too much. I don't like lawyers. I don't have time. It's too complicated. I don't have enough assets to worry about...
Older Estate Plans Should Be Reviewed
Posted on September 30, 2008While folks who put an estate plan into place years, or even decades, ago are to be commended for planning ahead, they should not assume that the job is completed. Estate plans should be reviewed and updated on a regular basis - I suggest every two years or so...
House and Senate Bills have same IRA Charitable Rollover Provision
Posted on September 29, 2008Both the Senate's Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (H.R. 6049), which was passed on September 23, 2008, and the House's Renewable Energy and Job Creation Tax Act of 2008 (H.R. 7060), which is expected to pass this week, contain identical IRA Charitable Rollover provisions...
FDIC Releases New Simplified Rules for Coverage for Living Trusts
Posted on September 26, 2008This is the Press Release issued by the FDIC (emphasis added): The FDIC's Board of Directors today adopted changes to simplify the rules for determining the coverage available on revocable trust accounts – commonly called payable-on-death accounts or living trust accounts...
Estate Planning Checklist
Posted on September 26, 2008Do you have an Estate Plan in place? If so, are you confident that it fully covers matters relating to health care, family, taxes, and asset protection? It is important to understand the impact of a comprehensive estate plan and how it will protect you and your family should an untimely death or disability occur, or in the event of a catastrophic lawsuit against you...
How to Choose an Executor
Posted on September 19, 2008This article is from one of our recent newsletters. Although it refers only to executors, most of the considerations also apply to trustees. North Carolina no longer requires that an executor be a resident of the state. For those interested in receiving TrustCounsel's newsletter, visit our website to sign up...
Plan Ahead for Special Needs Children
Posted on September 17, 2008A recent article in the Baltimore Sun discusses the special planning that should be done by parents of children with disabilities. I think the article is good, although it it states that one should contact a lawyer OR financial planner who is an expert in the area...
2008 North Carolina Tax Law Changes
Posted on September 16, 2008The North Carolina Department of Revenue has published a list of recent changes to NC tax laws. I previously reported on relatively minor change to the estate tax and the repeal of the gift tax. Another change that might be of interest to readers in the reduction in the top income tax rate from 8...
Real Property Transfer on Death Act
Posted on September 15, 2008By Chris Burti, Vice President, Senior Legal Counsel, Statewide Title, Inc. Elder Law is becoming a burgeoning practice area as the Baby Boomer Generation is rapidly beginning to gray out. This group has arguably accumulated more wealth as a group than any prior generation and has paid more taxes to support entitlement programs than any have previously...
Planning to Self-Insure the Risk of Long-Term Care Expenses?
Posted on September 13, 2008Planning for long-term care expenses should be a part of everyone's estate plan by the time they reach 50. Here's a piece by Alex Townsend, CLTC of Raleigh on why it may not be a good idea to try self-insure: Things To Consider: “How much does someone have to be worth to not need long-term care insurance?” What’s the magic number? How rich is too rich to not need LTC insurance protection? Even though I think that is the wrong question to ask (see next question), my answer is this: If you can write a check each month, indefinitely, for the kind of long-term care that you and your spouse will desire should you have the need, and it doesn’t bother you to write this check, then you may want to pass on LTC insurance...
Durham, NC Tops for Retirement
Posted on September 12, 2008Black Enterprise magazine has named Durham as the best place to retire. Factors considered were quality on life, health care, taxes, leisure, arts and culture, and climate. Asheville ranked 11th. Good news for me - my office is less than a mile from the Durham City limits.
Medicaid Patients May be Vulnerable to Eviction by Facilities
Posted on September 12, 2008Nursing homes are being accused by some patient advocates and state long-term care ombudsmen of increasingly evicting patients who are too inconvenient or too costly to care for. And the most vulnerable appear to be those patients with dementia or highly vocal families who are on Medicaid, according to a recent Wall Street Journal report...
Rep. Rangel Should Resign from Ways and Means Committee
Posted on September 11, 2008Rep. Charles Rangel, chair of the Ways and Means Committee in the U.S. House of Representatives, owes the IRS $5,000 in back taxes for failing to report years worth income from a rental property. Ironically, his position means that he is one of Washington's most powerful influences on changes to the tax code...
5 Legal Tips for Peace of Mind
Posted on September 10, 2008I sometimes say that I specialize in Peace of Mind. So, when I saw this post in the zenhabits blog I thought it would be a good addition to my blog. This piece was written by Andrew Flusche, a fellow lawyer and blogger. Legal issues don’t have to be stressful...
Often Overlooked in Estates - Cost Segregation Tax Savings
Posted on September 06, 2008This is a complicated but potentially very worthwhile strategies to pursue in estate in which the decedent owned valuable depreciable real estate (e.g. office buildings, shopping centers, or multiple rental homes). Thanks to Bob Keebler, CPA for the following memo: A unique opportunity many lawyers, CPAs and trustees miss during the estate administration process is to recommend cost segregation studies...
Presidential Candidates' Tax Proposals
Posted on September 03, 2008The following is from the latest GiftLaw eNewsletter's Washington Hotline: Presidential Candidate Barack Obama's Proposals Middle Class Tax Cuts - The general goal of the Obama plan is to cut taxes for the middle class and raise taxes for higher-income persons...
Just for Laughs - an Estate Planning Joke!
Posted on August 25, 2008I've seen this joke around a couple of times, and thought I would bring a little levity to the site by publishing it - don't know who came up with it. My apologies if anyone is offended.Dan was a single guy living at home with his father and working in the family business...
Chatham County Clerk Now Requires Approval of Attorneys Fees in Probate
Posted on August 20, 2008When I started practicing 20 years ago, Clerks of Court generally required approval of attorneys fees paid in probate proceedings. This required the attorney to spend extra time preparing a Petition and Order for Approval of Attorneys Fees, which of course resulted in an increase in the total fees...
IRS Publishes Report on 2005 Gifts
Posted on August 19, 2008The IRS recently published a report on lifetime wealth transfers in 2005 as disclosed to the IRS on federal gift tax returns. The statistics are interesting to review - for tax and estate planning nerds, anyway. The report also contains a history of the federal gift tax...
Burke County, NC One of America's Fastest-Aging Counties
Posted on August 17, 2008Burke County, in the foothills of the Blue Ridge Mountains, is one of the fastest-aging counties in the country, according a recent article in Forbes. Morganton, Burke County's largest city, is a pleasant enough place, but apparently young people are moving out, and few are moving in, as the general population grew only ...
Change to NC Estate Tax for Out--of-State Property
Posted on August 14, 2008I'm back from vacation, furiously trying to catch up on things (as if!), but thought I would quickly add this tidbit from the NC Department of Revenue. It only applies to returns of NC residents who owned real estate in one or more other states, and generally results in a reduced amount of tax...
For Tithing or Other Gifts to Church - Get Valid Receipt
Posted on August 01, 2008If you regularly give to your church, make sure you get an acknowledgment letter that complies with IRS regulations - otherwise you are not entitled to deduct the gifts. Furthermore, tax preparers should not include deductions for gifts unless the taxpayer can produce the proper receipts...
Phishing for Probate
Posted on July 28, 2008Today I received an email message that reads as follows: Good Day, My name is Sarah Brown. I work as an executive partner for the firm Mayer Brown Watford consulting,U.K. We are conducting an inquiry on behalf of Deutsche Bank, the German conglomerate...
Schiavo, Rivera, Who's Next?
Posted on July 28, 2008I read in the paper this morning about the case of Janet Rivera, a comatose 46 year old California woman. A heart attack two years ago caused the condition. The Fresno County Public Guardian's office, who is serving as her guardian, had life support withdrawn on July 11, but Rivera's family was able to get the court to order temporary support until a hearing a hearing schedule for tomorrow...
Two Federal Estate Tax Bills Introduced
Posted on July 25, 2008This news is courtesy of Roger Brooks and the Association for Advanced Life Underwriting. The introduction of two estate tax bills - one in the Senate (S. 3284) and the other in the House (H.R. 6499) - enhances the likelihood of ultimate (more probable in 2009 than 2008) estate tax reform...
Tired of Your CRT? Sell It!
Posted on July 24, 2008If you set up a Charitable Remainder Trust (CRT) in the past but now wish you could get a lump sum back from the trust, it may be possible to sell your interest in the trust. In a 2001 Private Letter Ruling (200127023), the IRS ruled that the sale of an income interest in a trust is a sale of a capital asset...
SSA Has New Retirement Calculator
Posted on July 24, 2008The Social Security Administration has a new calculator on its website called the Retirement Estimator. It allows one to estimate benefits based on different earnings estimates and expected retirement ages. I tried it out and it's quick and easy...
Parents - Don't Forget This Important Aspect of Parenting
Posted on July 19, 2008This afternoon I'm sitting in Koury Natatorium on the UNC Campus watching my son and hundreds of other kids compete in the Chapel Hill Summer Swim League Championship meet. This is my 15th year of doing this, so I have spent many, many hours watching my kids swim, volunteering, etc...
NC Gift Tax Repealed After All
Posted on July 17, 2008In what comes as a surprise to me, based on the last news as reported in my postings in the last week or so, yesterday Governor Easley signed HB2436, which includes (page 201) a complete repeal of the North Carolina Gift Tax (Article 6 of Chapter 105 of General Statutes), effective January 1, 2009...
FDIC Insurance Coverage for Trust Accounts
Posted on July 16, 2008With the recent failure of IndyMac Bank and even large banks like Wachovia reporting astounding losses, some folks are becoming increasingly concerned about the safety of their money. As most everyone knows, the Federal Deposit Insurance Corporation (FDIC) covers cash deposit accounts up to $100,000 per person...
Tax Extenders Bill Still in Limbo
Posted on July 14, 2008Democrat and Republican Senate leaders continue to clash over the tax extenders bill, which contains an extension of the $100,00 IRA charitable rollover and other income tax benefits. Stay tuned...
BB&T Wealth Management Ranked #1
Posted on July 14, 2008North Carolina's own BB&T Wealth Management was rated as the most prestigious regional bank wealth manager by high net-worth consumers, according to the 2008 Luxury Brand Status Index survey. The survey is conducted by the Luxury Institute in New York, but the results report must be purchased...
Separate Retirement Plan Trust is the Best Choice
Posted on July 11, 2008I generally recommend that persons with IRA or qualified plan assets of at least $200,000 should consider a Standalone IRA/Retirement Plan Trust. There are many reasons that justify creation of a separate trust just to receive retirement plan assets...
Assignment of IRA by Estate to Charity is Not a Transfer
Posted on July 08, 2008These are the facts from a recent Private Letter Ruling from the IRS: The Decedent had a "pour-over" will requiring that his probate estate be added to his living trust. The trust provided that upon Decedent's death distributions are to be made to certain beneficiaries with the remainder going to four charitable organizations...
Easley Wins - Gift Tax Here Until at least 2010
Posted on July 04, 2008Yesterday the North Carolina General Assembly reached an agreement on the budget, but it did not include a repeal of the gift tax in 2009. Instead, the repeal was put off until 2010. However, given the state of the economy and continuing budget woes, I for one won't count on repeal until it actually takes place...
Easley Wants the Gift Tax to Stay
Posted on July 03, 2008My last entry was about SB1756, which includes a complete repeal of the North Carolina gift tax. However, Governor Easley and others have been strongly urging the General Assembly to delete the repeal provisions. If you would like to see the gift tax repealed, please email or call the office of your legislators and ask them to support repeal of the gift tax, effective 1/1/09...
Extension Period Shortened for Forms 1065, 1041and 8804
Posted on July 02, 2008Today the IRS issued temporary and proposed regulations that reduce the extension of time to file tax returns for certain businesses that generate Schedules K-1 and other similar statements to five months. (The current period is six months.) This change will be effective for extension requests for tax returns due on or after January 1, 2009, and applies to entities that file the following returns and forms that have a tax year ending on or after September 30, 2008: • Form 1065, U...
NC Gift Tax to be Repealed?
Posted on June 27, 2008Budget negotiators for the North Carolina House and Senate agreed on tax breaks in the 2008-09 spending plan, which include, most notably for me and many of my clients, a repeal of the state gift tax. North Carolina is one of only four states with a gift tax...
Life Insurance Premium Financing
Posted on June 26, 2008Many of us could use more insurance for estate planning purposes, such as financial security for loved ones or payment of estate taxes. Most of us also have an unused asset, our insurance capacity. That is the amount of insurance for which we could qualify and is based on the projected value of our assets at life expectancy...
IRS Mileage Rates to Increase July 1, 2008
Posted on June 24, 2008As a result of the ever-rising gas prices, the IRS has increased the optional standard mileage rates for July 1 through December 31, 2008. For business, the rate is now 58.5 cents per mile, and 27 cents per mile for medical and moving. The charitable rate remains unchanged at 14 cents a mile...
Asset Protection Mistakes - A Baker's Dozen
Posted on June 23, 2008These days, just about everyone should take care to protect their assets from possible lawsuits or other problems. Here are 10 things to watch out for: Don't keep money in a joint account, even with a spouse. Don't own the car of an adult child, or keep him or her on your policy...
Renewable Energy and Job Creation Act of 2008 Fails
Posted on June 14, 2008The Renewable Energy and Job Creation Act of 2008, the latest version of legislation featuring several tax extenders, alternative minimum tax relief and energy provisions failed to pass the Senate. Championed by Senate Finance Committee Chair Max Baucus, the bill faced stiff opposition from Republicans who objected to the tax offsets, most notably taxing offshore deferred compensation of hedge fund managers and delaying a business tax interest deduction until 2019...
Summary Judgment Improper in Contract Case where Undue Influence and Lack of Consideration Alleged
Posted on June 12, 2008Bruce and Kathryn Barbee, an elderly North Carolina couple, owned a $450,000 vacation home. Since Bruce was legally blind, he relied on his wife to sign documents for him. After Kathryn went into a nursing home, their long time friends (the defendants) came to visit bearing a contract to rent the vacation property for $300 a month, with an option to purchase it for $150,000...
Attention Professors - Watch Out for Deferred Compensation Tax Law Change
Posted on June 10, 2008With all of the universities in this area, this recent change in the law dealing with deferred compensation (IRC Section 409A) may be of interest to many local readers. The new law may affect faculty who have a 10 month teaching contract but elect to be paid over a 12 month period...
Estate Planning for Parents
Posted on June 03, 2008Parents of minor children would be well-served to view this video, Estate Planning for Parents, which features my WealthCounsel colleague Alexis Martin Neely on the Today show. Neely is a California lawyer and author of a new book for parents about planning for the care of their kids...
How to Organize Your Financial and Legal Affairs
Posted on June 02, 2008I recently came across a publication entitled If Something Should Happen - How to Organize Your Financial and Legal Affairs. The booklet is authored by Marla Brill and is published by the American Institute for Economic Research. Copies can be ordered from the website...
Federal Estate Tax Return Statistics for 2004 Decedents Released
Posted on May 29, 2008For you true tax geeks out there, you can find all kinds of interesting statistics in this report published by the IRS. In 2006, North Carolina ranked 11th in the country in number of estate tax returns filed (1089), and 12th in terms of estate size...
House Passes Extension of Charitable IRA Rollover
Posted on May 24, 2008On May 21, the U.S. House passed the Renewable Energy and Jobs Creation Act of 2008 (H.R. 6049). The act includes a one year extension of the Charitable IRA rollover and similar tax provisions and updated tax incentives for renewable energy. The state and local sales tax deduction, and tuition deduction extensions are also included...
Organ Donation in North Carolina
Posted on May 22, 2008Most North Carolinians know that when they renew their driver's license, they can indicate their desire to be an organ donor by having a red heart placed on the license. This alone is now sufficient to establish ones' intent to donate organs (but not tissue)...
Top 10 Questions to Ask Your Financial Advisor
Posted on May 21, 2008How do you go about deciding which financial advisor to hire? The following, from the Paladin Registry , provides an important list of questions to ask when interviewing prospective advisors.All advisors claim to be financial experts. They make this statement to win your trust and your assets...
IRA Charitable Rollover and Other Tax Extensions Passed by House Committee
Posted on May 19, 2008The House Ways and Means Committee passed H.R. 6049, the Energy and Tax Extenders Act of 2008, on May 15, 2008. The bill includes a one-year extension of the $100,000 IRA Rollover for taxpayers age 70 and over, as well as many other tax extenders and renewable energy provisions...
Beyond the Basics - a Trio of Considerations for Succession Planning
Posted on May 16, 2008When doing estate planning, one needs to consider to whom to leave one's property, which is usually not much of a problem. Next, one must decide who will be in charge of the administration the Will - the executor . This choice is sometimes more difficult, but even without suitable family or friends, a professional or corporate fiduciary can be named...
Good News for Family LLCs
Posted on May 11, 2008As a proponent of Family Limited Liability Companies (LLCs) for asset management, creditor protection, and ease of gifting, I was please to read about the U.S. Tax Court's decision in Mirowski v. Commissioner, T.C. Memo 2008-74. March 26, 2008.Mrs...
North Carolina Probate Not Too Bad? Think Again...
Posted on April 27, 2008They other day a client came in and said that he had heard that probate in North Carolina was a "breeze." Wrong! While probate here is less expensive than in some states, I still counsel my clients to avoid it in most cases. Here are 10 Reasons to Avoid Probate in North Carolina: Court fees can exceed $6,000...
Where's My Refund?
Posted on April 23, 2008Excerpts from a recent IRS Memo:WASHINGTON — Taxpayers who have filed their federal income tax returns and are expecting their refunds can use the Internal Revenue Service’s online tool, “Where’s My Refund?,” to check on the status of their refunds...
Continuation of $100,000 IRA Charitable Rollover Proposed
Posted on April 22, 2008On April 17, Senators Max Baucus (D-MT) and Charles Grassley (R-IA) introduced a bill for 2008 and 2009 which would extend certain tax laws until December 31, 2009. The bill includes an increase in the AMT exemption for 2008 to $46,200 for individuals and $69,950 for couples, energy credits and tax extenders...
National Health Care Decisions Day
Posted on April 16, 2008Today is National Health Care Decisions Day. I personally encourage everyone who is at least 18 years of age to have a Health Care Power of Attorney and Living Will (also known as Advance Directives). These documents will help ensure that your wishes, and not someone else's, will be followed should you be in an end of life situation and unable to communicate.
Tax Day - I'm Exhausted!
Posted on April 15, 2008For better or worse, this has been my busiest tax season ever. That's the reason I haven't blogged in a while. I do a lot of returns for decedents, estates and trusts, as well as gift tax returns, most of which are due April 15. It's now after 7:00 p...
IRS Allows Roth Conversions for Inherited Retirement Plans
Posted on April 06, 2008In an unexpected announcement (Notice 2008-30), the IRS has stated that it will allow non-spouse beneficiaries of qualified plans (such as a 401(k), 403(b) or employer pension plan) to convert those funds directly to a Roth IRA. However, at least for the time being, beneficiaries of an IRA do not have this option...
Senate Finance Committee Discusses Gift and Estate Tax Reform
Posted on April 04, 2008Yesterday a public hearing on possible gift and estate tax reform was scheduled before the Senate Finance Committee. Click "Continue Reading" for the full text of the report by the staff of the Joint Committee on Taxation. I could not get the proper formatting to reproduce, so it's a bit difficult to read...
NC Gift Tax Reform Under Consideration
Posted on April 01, 2008The Revenue Laws Study Committee of the North Carolina General Assembly is taking a look at reforming the North Carolina Gift Tax. I previously blogged about House Bill 235, describing the proposed changes. In general the NC Gift Tax would be made similar to the federal gift tax, with a $1 million lifetime exemption...
3 Rules For Getting Your Economic Stimulus Payments on Time
Posted on March 27, 2008According to the IRS Commissioner: File Early. File Electronically. Use Direct Deposit.IR 2008-51
FDIC Insurance Coverage for Trusts
Posted on March 26, 2008Most folks know that cash accounts in banks are insured up to $100,000, per individual, per bank, by the Federal Deposit Insurance Corporation. Trusts, of course, can own bank accounts, but often have multiple beneficiaries. Recognizing this, the FDIC has issued guidelines so that one can calculate the amount of insurance coverage available for trust-owned accounts.
North Carolina Ranked 13th in Taxable Estates in 2006
Posted on March 20, 2008As reported in the TaxProf Blog, Citizens for Tax Justice has released a state-by-state ranking of the number of estates owing federal estate tax in 2006. North Carolina ranked 13th, with 523 estates paying estate tax that year. Not exactly a large number! The estate tax exemption in 2006 was $2 million, as it is this year, so only estates valued over that amount owed tax...
Retiring? This Study May Make You Think Twice!
Posted on March 19, 2008A Greek study reported this month in the American Journal of Epidemiology found that retired persons had a greater death rate than employed persons of the same age. That's good news for me, since with four kids to put through college, I'll be working a good, long time! It would be interesting to see if the same thing holds true for Americans...
Tax Rebate Payment Schedule
Posted on March 18, 2008Stimulus Payment Schedule for Tax Returns Received and Processed by April 15 Direct Deposit Payments If the last two digits of your Social Security number are: Your economic stimulus payment deposit should be sent to your bank account by: 00 – 20 May 2 21 – 75 May 9 76 – 99 May 16 Paper Check If the last two digits of your Social Security number are: Your check should be in the mail by: 00 – 09 May 16 10 – 18 May 23 19 – 25 May 30 26 – 38 June 6 39 – 51 June 13 52 – 63 June 20 64 – 75 June 27 76 – 87 July 4 88 – 99 July 11 An online calculator is also available to determine eligibility and calculate the amount of the payment for those who are not eligible for the entire $300 or $600 payments...
Estate Tax Changes Likely
Posted on March 14, 2008From this article in the New York Times yesterday: Beginning next year, the federal estate tax exemption will increase to $3.5 million. This means that the tax would apply to only about 0.3 percent of people who die each year. Not exactly the average American...
IRS Says Beware of These Tax Scams
Posted on March 12, 2008Tax scammers are creative - calling on telephone as well as sending emails. Heres a liink to a recent list of scammers' ploys from the IRS.The elderly are particularly vulnerable, so if you have an aging relative, make sure you alert them.
IRS Offers Free and Easy Online Filing for Tax Rebates
Posted on March 06, 2008For those folks who are not legally required to file federal income tax returns but want to get their tax rebates this Spring (who wouldn't?), the IRS offers free online filing.Information about eligibility requirements.
IRS Allows Favorable Gift Treatment for S Corp
Posted on March 05, 2008This from Professor Chistopher Hoyt at the UMKC Law School, with good news for S Corporation owners:The IRS released a revenue ruling that confirmed many of our hopes regarding charitable gifts of appreciated property by a Subchapter S corporation...
"Bundled" Fiduciary Fees Fully Deductible - For 2007
Posted on March 04, 2008The U.S. Supreme Court, in Michael J. Knight, Trustee of William L. Rudkin Testamentary Trust v. Commissioner, 552 U.S. ___, 128 S. Ct. 782 (2008), ruled that costs paid to an investment advisor by a nongrantor trust or estate generally are subject to the 2% floor for miscellaneous itemized deductions under Internal Revenue Code Section 67(a)...
IRS to Publish New Proposed Regulations for 529 Plans
Posted on March 01, 2008The IRS has announced that it will soon propose new regulations governing 529 College Savings Plans, which will (I) contain an anti-abuse rule (to prevent using 529 Plans to skirt gift tax rules); (II) determine the estate, gift and GST tax results of contributions, transfers and withdrawals; and (III) create rules for making the 5 year election, address certain income tax issues, and create new record keeping requirements...
Factors for Determining Undue Influence
Posted on February 20, 2008The North Carolina Court of Appeals' recent decision in In re Will of John A. Jones, Jr. deals with a Caveat against a Will in favor of the decedent's wife filed by the executor of the prior Will, which provided only a life estate for the wife...
Educational Trusts Provide Flexibility and Protection for 529 Plans
Posted on February 19, 2008Many parents are deeply concerned about the escalating costs of college and post-graduate education for their children, and how these costs may impact their overall financial and estate planning objectives. If you have college-bound younger family members, you should be aware of an important new technique that can pay for educational expenses, solve income tax issues, and provide an important piece of your estate plan...
Want Your Tax Rebate? Make Sure You File On Time
Posted on February 14, 2008If you are of of the many Americans eligible for a tax rebate this year, and are expecting a check in May, don't procrastinate. In order to receive a rebate, you must have already have filed your 2007 return. So forget the extensions and get your returns done by April 15!
Stimulus Bill - Here Come the Tax Rebates
Posted on February 11, 2008Click "Continue Reading" for a concise summary of, and some commentary on, the Stimulus Bill signed into law last week by President Bush, courtesy of the GiftLaw eNewsletter.On February 7, 2008 the House and Senate both passed H.R. 5140...
Family FLP/FLLC Checklist - Make Sure You do it Right
Posted on February 09, 2008Family Limited Partnerships, or more commonly now, Family Limited Liability Companies, are great vehicles for management and protection of family businesses, real estate, and investments. They also can be used to facilitate gifting, since interests in the entity given to junior family members typically qualify for minority interest and lack of marketability discounts...
The Problem with Joint Property
Posted on February 07, 2008Could joint tenancy, one of the most common forms of holding title to assets, lead to an estate planning disaster for your heirs? Joint tenancy, often called “joint tenants with right of survivorship,” is a form of holding equal interests in an asset by two or more persons...
Protect Your Ancestors' Legacy with an Inheritor's Trust
Posted on February 06, 2008If you’re like many of folks, you may be deeply concerned about how litigious our society has become and fear that your assets may one day be taken by creditors. If you share these concerns, I want you to be aware of an important new technique that can asset protect any inheritance you may receive and provide an important piece of your estate plan...
Questions for the Family Business Owner
Posted on February 01, 2008Owners of family businesses face unique estate planning challenges. Far too often, owners fail to plan properly, or at all, which can ultimately lead to higher estate taxes, conflicts among family members, and even failure of the business. If you own a business - take a look at this entry and seriously ponder these 32 questions...
IRS Warns of New Email and Phone Scams
Posted on January 30, 2008The IRS issued a warning today about new telephone and email scams. Click "Continue Reading" to view the official notice. In my inbox the phony IRS emails are almost as common as the emails from people in Nigeria or London or Hong Kong who want to share their found millions with me...
For Baby Boomers Only
Posted on January 24, 2008This is a big departure from my normally somewhat "dry" postings, but as a baby boomer myself, I found this animated short quite funny and wanted to share it. Enjoy!However, there is also a serious message there - despite our attempts to stay young, we are all growing older, and it is necessary to plan for incapacity and death in order to protect ourselves and our families...
IRA Beneficiary Rules - What You Don't Know Can Hurt Your Kids
Posted on January 23, 2008Click here for a good, concise article on one of the most important but frequently overlooked aspects of estate planning, particularly the interplay of IRAs and trusts. While the articles discusses the impact of estate taxes on IRAs, it does not mention that the current federal estate tax exemption is $2 million, so most IRA owners, even of relatively large accounts, need not worry about estate taxes...
IRS Lists 4 New Frivolous Positions to Avoid
Posted on January 17, 2008The IRS recently published a notice naming four new frivolous income tax claims: Misinterpretation of the 9th Amendment to the U.S. Constitution regarding objections to military spending. Erroneous claims that taxes are owed only by persons with a fiduciary relationship to the United States or the IRS...
Estate Planning Don'ts
Posted on January 16, 2008Take a look at this article 8 Ways to Leave a Mess for your Heirs for a somewhat tongue-in-cheek but oh so true discussion about how NOT to approach estate planning.
Thoughts on the Future of the Federal Estate Tax
Posted on January 15, 2008This week I'm in Orlando at the University of Miami School of Law's Heckerling Estate Planning Institute. Yesterday there was a discussion of what may be coming down the pike as to the federal estate tax (death tax):Date of New Legislation: It's unlikely there will be any action until after the November 2008 election...
North Carolina's Wealthiest ZIP Codes
Posted on January 13, 2008According to ESRI, most of North Carolina's wealthy live in the Charlotte area, but the Triangle boasts eight of the top 25 wealthiest ZIP codes in NC. Most of the eight are in Wake County (27518 Cary, 27614 Raleigh, 27519 Cary, 27615 Raleigh, 27617 Raleigh, and 27539 Apex)...
Congress Fails to Make Post-Death Non-Spousal IRA Rollovers Mandatory
Posted on January 08, 2008I previously blogged that employers would be required to allow post-death non-spousal rollovers of their retirement plans to IRAs starting in 2008. However, that did not come to pass:This information is courtesy of attorney Phil Kavesh in California:The IRS had previously announced that it would accept as part of the Technical Correction Bill to the Pension Protection Act of 2006 a provision that would require all corporate retirement plans to offer non-spouse beneficiaries a trustee to trustee lump sum rollover to an Inherited IRA, thereby allowing non-spouse beneficiaries to take advantage of RMD stretchout and avoid the one-year and five-year rules under most corporate retirement plans...
Federal Tax Law Changes for 2007 Returns
Posted on January 06, 2008This in information is courtesy of the NC State Giftlaw Newsletter. Of broadest interest in probably the increase in the AMT exemption and the delay it will cause for early filers who expect refunds.In letter FS-2008-1 on Jan. 2, 2008, the IRS explained a number of changes that affect 2007 tax returns...
Estate Plan Effectiveness and Maintenance Information
Posted on January 02, 2008Even the best estate planning documents will not be effective if they are lost or inaccessible. To help ensure that the documents are available when needed, we offer the following suggestions to our clients: Storage of Original Documents We recommend that original Wills be kept in your safe deposit box...
New North Carolina Trust Laws
Posted on December 27, 2007In addition to the repeal of the rule against perpetuities, which is effective January 1, 2008 (perpetual trusts will be allowed in North Carolina provided certain requirements are met), there are a few other changes to North Carolina trust law, which were effective October 1, 2007: Section 39-6...
Avoid Probate of Equity Refunds from Continuing Care Communities
Posted on December 16, 2007The Problem: Continuing care retirement communities have been growing in popularity with seniors for years. Such communities usually require a "buy-in" upon admittance and many provide for a refund of a portion of the fee upon death. The contracts (often called Residence and Care Agreements or the like) generally provide that the refund will be paid to the estate of the resident...
Worst Nursing Homes in U.S. - One is in NC
Posted on December 10, 2007The U.S. government's Center for Medicare and Medicaid Services has released a report listing the poorest quality nursing homes in the country. One is in North Carolina - Sunbridge Care and Rehab of the Triad in High Point, which has been poorly performing for 34 months!
History of the Estate Tax
Posted on December 02, 2007This article discusses in brief the history of the federal estate tax and its effect on the U.S. budget. Also examined are the ways in which the economic behavior of the population affected by the estate tax has changed over time due to market, technological, and political stimuli...
IRS Sets 2008 Mileage Rates
Posted on November 27, 2007Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be: 50.5 cents per mile for business miles driven; 19 cents per mile driven for medical or moving purposes; and 14 cents per mile driven in service of charitable organizations...
Titling a Car in Your Living Trust
Posted on November 26, 2007I often prepare Living Trusts for clients, who like the idea of avoiding the cost, time, and hassle of probate. However, probate can only be avoided completely if there are no probate assets. One type of asset that is often overlooked is vehicles...
NC Income Tax Deduction for Contribution to 529 Plan
Posted on November 20, 2007I previously blogged about the 2007 income tax deduction available to North Carolina residents to contribute to a North Carolina 529 College Savings Plan account. A deduction of up to $2,500 is available for single taxpayers and up to $5,000 for married couples filing jointly...
Top 10 Life Insurance Mistakes
Posted on November 15, 2007This posting is compliments of my colleague Karen Brady in Colorado. Important reading for anyone who has anything to do with life insurance, including owning it. With life insurance, knowing and following the rules can save hundred of thousands, if not millions, of dollars versus remaining ignorant! THE TOP TEN MISTAKES IN LIFE INSURANCE AND ILITS By Karen L...
President Bush Threatens to Veto AMT Patch and Charitable Rollover Extension
Posted on November 09, 2007A veto would also kill the extension of the $100,000 IRA Charitable Rollover, which is scheduled to expire at the end of this year. Tax expert Professor Christopher Hoyt of the University of Missouri (Kansas City) Law School is betting there will be no veto...
Increased Court Fees for Testamentary Trusts
Posted on November 03, 2007Another increase in North Carolina court fees: As of August 1, 2007, testamentary trusts (those contained in a Will) which account to the clerk are subject a fee of 40 cents per $100 of receipts. That fee is entirely separate from the probate fee paid by the estate...
IRS to Offer Workshop for 501(c)(3) Exempt Organizations
Posted on October 29, 2007The IRS will be offering a number of workshops for small to medium sized 501(c)(3) organizations on tax compliance issues. The cost is a bargan - only $45!The closest one to North Carolina will be in Columbia, South Carolina on December 4,5 and 6...
Repeal of Alternative Minimum Tax (AMT) Proposed
Posted on October 28, 2007The following is from the North Carolina State University GiftLaw newsletter: House Ways and Means Chairman Charles Rangel (D-NY) introduced this week the Tax Reduction and Reform Act of 2007 (TRRA 2007). The primary goal of TRRA 2007 is repeal of the AMT...
IRS to Require Retirement Plans to Offer Non-Spousal Rollovers to IRAs
Posted on October 27, 2007Beginning in 2008, retirement plans (such as 401(ks) must allow non-spouse beneficiaries to roll over to an IRA. The following is from Ed Slott, CPA:The Pension Protection Act of 2006 included a provision that would permit non-spouse plan beneficiaries to do direct transfers from the plan to a properly titled inherited IRA and take stretch distributions over their lifetimes instead of being subject to the harsh payout rules of most company plans...
2007 North Carolina Tax Law Changes
Posted on October 24, 2007Here's an update from the North Carolina Department of Revenue. There are no significant changes to the estate and gift tax rules, but clarification was made about penalties for those taxpayers who fail to report any changes in the federal estate and gift tax returns to the NC Department of Revenue.
New Medicaid Rules to Start November 1, 2007
Posted on October 23, 2007I previously blogged about the changes in the federal Medicaid laws that took place last year. The implementation in North Carolina has been delayed several times, but the rules are expected to be effective November 1, 2007.In brief, the lookback period for disqualifying gifts will increase from 3 years to 5 years, and the penalty period for gifts within the 5 years will start on the date the Medicaid applicant would otherwise become eligible for Medicaid, instead of the date of the gift...
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Is a child fathered out of wedlock by an American diplomat to a foreign women on foreign soil entitled to US Citizenship by jus sanguinis?
This is a very tough situation your friend is in. It is difficult to know the ex...
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Most leases are written as a one year agreement, if neither party elects to form...
Can I sue the executor of my fathers estate?
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My father and mother died with a will. The will states that the family house be sold and any money left be divided equally among the sibling. The house as a loan against it for $200.000. The executor of the estate (my si
Contest the will, this should lock things up in probate and prevent her from doi...
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