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Estate Planning

North Carolina Estate Planning Blog

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

Post Frequency: 3.5/day

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

Dividing Assets Among Adult Children

Posted on March 31, 2010
When children are young, the primary concern of parents is to provide for them. After they grow up, parents usually still want to provide for them in their estate plans. If you have more than one child, and you plan for them to inherit your estate, you may wonder how to divide your assets...

North Carolina vs. Florida: Creditor Protection & Taxes

Posted on March 29, 2010
Many North Carolinians have winter homes in Florida, and even more Floridians have summer homes in the North Carolina mountains. For those whot live part-time in each state, there may come a time when they want to think about changing domicile from one state to another...

Take Advantage of Recovery Act Tax Credits

Posted on March 24, 2010
The White House has launched an Tax Savings Tool on its website to assist middle-class taxpayers in getting the most out of the various Recovery Act tax credits. The tax wizard asks for input about one's filing status, salary range, recent home purchases, college expenses, and other questions relating to various tax credits provided by the Recovery Act...

Tax Consequences of Equitable Distribution

Posted on March 22, 2010
My article, Tax Consequences of Equitable Distribution, which discusses the income tax issues involved in the division of property due to divorce, was just published in Core Compass, an online newsletter for real estate investors and their advisors.

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NC Medical Society Website - A Resource for Advance Directives

Posted on March 22, 2010
In addition to attorney-prepared health care planning documents like Health Care Powers of Attorney, Living Wills and HIPAA Authorizations, I often talk to clients about Do Not Resuscitate (DNR) Orders and the newer Medical Order Scope of Treatment (MOST) Form...

Update on Health Care Surtax

Posted on March 22, 2010
The Reconciliation Bill (H.R. 4872), which passed the House and has gone to the Senate contains a 3.8% surtax on investment income for single taxpayers with modified adjusted gross income (MAGI) over $200,000, and married taxpayers with MAGI over $250,000...

Health Care Reform Will Bring Higher Taxes

Posted on March 19, 2010
The Health Care Reconciliation bill sent to the Senate today includes a new 4% medicare tax on investment income, which includes IRA distributions, interest income (including tax exempt), dividends, capital gains, rental income and oil royalties. There is also a 1% increase in the employee Medicare tax on all earnings...

10 Year Minimum GRAT Approved by Ways and Means Committee

Posted on March 18, 2010
The House Ways and Means Committee has approved H.R. 4849. The "Small Business and Infrastructure Jobs Tax Act of 2010," which contains a provision instituting a 10 year minimum for Grantor Retained Annuity Trusts (GRATs). GRATs are commonly used to transfer wealth to younger generations at no or little gift tax costs...

Airplane Kills Jogger Story offers Example of Necessity of Estate Planning

Posted on March 18, 2010
Most everyone in the country has heard about the Georgia husband and father, Robert Gary Jones, who was killed by an airplane while jogging on the beach on Hilton Head Island, South Carolina. This accidental death will no doubt spur a lawsuit against the pilot of the plane, Edward I...

The 2010 "Dirty Dozen" List of Tax Scams

Posted on March 16, 2010
From IR-2010-32: WASHINGTON — The Internal Revenue Service today issued its 2010 'dirty dozen' list of tax scams, including schemes involving return preparer fraud, hiding income offshore and phishing. 'Taxpayers should be wary of anyone peddling scams that seem too good to be true,' IRS Commissioner Doug Shulman said...

Caring for an Elderly Parent - Letting Go

Posted on March 15, 2010
For those who have been through a similar experience, this poignant article Letting Go of My Father, which details Jonathan Rauch's struggles in caring for his elderly father, will solicit empathy. For younger readers, it can provide a glimpse of things to come...

Special Needs Trusts: Allowable Expenses

Posted on March 12, 2010
Special Needs Trusts (SNTs), also sometimes referred to as Supplemental Needs Trusts, are used to provide supplemental benefits to disabled or elderly persons receiving governmental benefits (such as Medicaid and SSI) while not disqualifying them for the benefits...

Inherited IRAs - the continuing saga in bankruptcy

Posted on March 11, 2010
I previously blogged about inherited IRAs being subject to the claims of creditors, both in (In Re: Jarboe) and outside of (Robertson v. Deeb) bankruptcy, and one case (In Re: Nessa) where an inherited IRA was determined to be protected under federal law...

Battle to the Death (Tax)

Posted on March 08, 2010
Here's the latest on the fight over the future of the estate tax tax, from Bloomberg.com. In general, Republicans and business lobbyists are pushing for a $5 million exemption and a 35% rate, while the Obama administration is counting on a $3.5 million exemption and a 45% rate...

Does the IRS owe you money?

Posted on March 06, 2010
The IRS has announced that about 39,100 North Carolinians have unclaimed tax refunds, averaging $539 per person. The total due North Carolina residents is $32,919,000. However, to collect the money, a return for 2006 must be filed with the IRS no later than Thursday, April 15, 2010...

Asset Protection for the Rest of Us

Posted on March 05, 2010
Members of America's middle class should be a lot more concerned about protecting their assets from creditors than from the so called "death tax." While the very wealthy can use offshore trusts and other complex entities, such planning is cost prohibitive for most of us...

Washington State may double estate tax rate

Posted on February 27, 2010
Yes, I know this is the North Carolina Estate Planning Blog, but in these troubled economic times, with most states, including NC, desperate for cash, this could be a sign of things to come here and elsewhere. Washington currently has a $2 million estate tax exemption, with rates ranging from 10% to 19%...

State Estate Taxes - No Worries in NC (yet)

Posted on February 23, 2010
There is no estate tax in North Carolina this year, but residents (and owners of real estate) in 19 other states do have a state estate tax, even in the absence of the federal estate tax. Take a look at this article on Forbes.com, Where Not to Die In 2010...

High-income taxpayers to pay more in 2011

Posted on February 16, 2010
The Tax Policy Center of the Urban Institute and the Brookings Institution contains fascinating (to a tax geek) and detailed information about taxes. Particularly informative is the information on the Obama Administration's 2010 income tax increase proposal...

Inherited IRAs are protected in bankruptcy - sometimes

Posted on February 15, 2010
In a recent ruling, the U.S. Bankruptcy Court for Minnesota held that an inherited IRA was protected from the debtor's creditors under federal law. In re: Nessa, 105 AFTR 2d 2010-XXXX, 01/11/2010. The key difference between this decision and the earlier Texas and Florida decisions that held the inherited IRAs were not protected from creditors is that in Minnesota, bankruptcy debtors rely on federal property exemptions rather than state exemptions...

North Carolina's Repeal of the Rule Against Perpetuities Upheld

Posted on February 12, 2010
In a decision dated February 2, 2010, the North Carolina Court of Appeals upheld the Superior Court Judge's 2009 decision in Brown Brothers Harriman Trust v. Anne P. Benson, et al. Click here for my previous post about this case. The Court of Appeals ruled that North Carolina's constitution does not require application of the common law rule against perpetuities' restriction of the remote vesting of future interests in property...

Senate discussing possible agreement on Estate Tax

Posted on February 11, 2010
Nothing has been decided yet, but here's the scoop from TheHill.com as of February 9, 2010. At a minimum, the 2009 $3.5 million exemption and 45% rate would continue, effective January 1, 2010.

Stipulation Leads to Directed Verdict in Fraud Case

Posted on February 09, 2010
Here's a summary of Burton v. Williams, a recent North Carolina Court of Appeals case (adapted from today's NAELA eBulletin): Plaintiff sued defendant as attorney-in-fact for decedent, alleging that an addendum and payment agreement release entered into between decedent and defendant regarding the sale of decedent's property were void and unenforceable...

Tax Court Rules Gender Reassignment Expenses Deductible

Posted on February 03, 2010
On February 2, 2010, in Ododonnabhain v. Commissioner of Internal Revenue, the U.S. Tax Court held that a transgender woman's expenses for hormone therapy and sex reassignment surgery were medically necessary and therefore deductible for federal income tax purposes...

IRS Issues Guidance for 2010 Gifts to Trusts

Posted on February 03, 2010
Based on what appeared to be a giant "loophole" in the gift tax law applying to gifts made in 2010, taxpayers could arguably make gifts to a wholly-owned grantor trust free from gift tax. Last week at the Heckerling Estate Planning Institute, commentators said this was too good to be true, and opined that the IRS would soon close the loophole...

Income Taxation of Estates - a Brief Overview

Posted on January 30, 2010
In North Carolina it is not uncommon for persons to handle administration of a decedent's estate without hiring a lawyer or an accountant. Because of the complexity of the law and the likelihood that certain requirements or opportunities will be overlooked, I certainly don't recommend going it alone...

Haiti Donations Qualify for 2009 Tax Deduction

Posted on January 26, 2010
IR 2010-012: WASHINGTON — People who give to charities providing earthquake relief in Haiti can claim these donations on the tax return they are completing this season, according to the Internal Revenue Service. Taxpayers who itemize deductions on their 2009 return qualify for this special tax relief provision, enacted Jan...

GRATs and FLPs okay this year?

Posted on January 25, 2010
I'm at the University of Miami School of Law's Heckerling Institute on Estate Planning this week. Our first speaker, Lou Mezzullo, stated that he thinks Congress will not act this year on restricting planning with Grantor Retained Annuity Trusts (GRATs) and Family Limited Partnerships (FLPs) and Family Limited Liability Companies (FLLCs)...

State of the North Carolina Estate Tax

Posted on January 25, 2010
For years, there has only been North Carolina estate tax if federal estate tax was due. Now, however, that the federal estate tax is gone (for now, anyway), what's the status of the NC estate tax? N.C.G.S. Section 105-32.2 provides, in pertinent part, as follows: "The amount of the estate tax imposed by this section is the amount of the state death tax credit that, as of December 31, 2001, would have been allowed under section 2011 of the Code against the federal taxable estate...

Tax Free Planning Opportunity for Long Term Care Expenses

Posted on January 16, 2010
This posting is courtesy of attorney Mark Soss of Florida: The aging demographics of the United States coupled with the Pension and Recovery Act of 2006 (the "PPA') and Deficit Reduction Act of 2007 ('DRA') have provided an excellent planning opportunity to create tax efficient vehicles to solve a clients' long-term care planning needs...

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