Retirement Planning and Nonspousal Beneficiaries, 10/2008
Retirement distribution planning, if done well, can shield your heirs from large amounts of tax exposure. While wills control probate assets and trusts control trust assets, IRAs and qualified retirement plans are controlled either by the designation of a beneficiary or the default provisions of the contract. Planning for the distribution of an IRA or qualified retirement plan is of utmost importance as such funds often constitute the largest asset of an estate. The focus of this article is when the designated beneficiary of an IRA or qualified retirement plan is a nonspouse.
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Wealth Management, Tax Planning and Charitable Donations, 10/2008
This article will focus on how charitable donations, if properly structured, can minimize both income and estate tax exposure as part of a wealth management plan.
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Valuation of the Stock of a Closely-Held Business, 10/2008
Determining the worth of most of our valuables is generally not all that difficult. However, although a family-owned business is often one’s principal source of income and may represent the majority of one’s total worth, placing an accurate value on it is never easy. Since, by definition, the stock of a closely-held business is held by only a few individuals and is rarely traded in the marketplace, there is no established market price for it. This is what makes it so difficult to determine its worth.
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Payment of Estate Tax in Installments, 10/2008
Wouldn’t it be great if the IRS allowed you to pay your tax liability over 14 years? Even better, what if for the first five years you only had to pay interest on the amount due and that interest would be assessed at only a nominal 2% rate? While this is not possible for regular income taxes, it is a possibility for certain amounts of estate tax.
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Alternate Valuation Date: Final Regulations, 10/2008
On January 3, 2005, the IRS issued final regulations that give guidance on making an alternate valuation election when filing an estate tax return, Form 706. These final regulations change the earlier proposed regulations issued on December 24, 2003 and make changes to IRS Section 2032.
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Lifetime Gifts: What You Need to Consider, 10/2008
There are many reasons to give someone a gift but there are at least as many reasons why any sizeable gift should involve some tax planning for estate, income, and gift tax purposes. Tax planning and wealth management go hand in hand. With proper planning you can transfer a significant amount of wealth either tax free or with considerable tax savings.
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Stretch IRAs: Should You Set One Up?, 10/2008
Next to one’s primary residence, probably the largest single asset most taxpayers own is their IRA. While good estate tax planning is essential to all wealth management, this is especially true for taking full advantage of an IRA’s potential.
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Generation-Skipping Transfers: What You Need to Consider, 10/2008
A generation-skipping transfer (GST) is the transfer of an asset to a beneficiary who is at least two generations below the transferor’s generation (a.k.a., a “skip person,” such as a grandchild). The transfer may be an outright transfer or it may be a transfer to a trust for the skip person’s benefit. There is a GST tax imposed on certain of these transfers. It is a separate tax, apart from the estate or gift tax. The type of transfer determines who is liable for the GST tax.
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Penalties for Undervaluing an Estate, 10/2008
The federal estate tax is levied on the transfer of property at death. Since the amount of the estate tax liability depends on the value of the property transferred, it is important that the estate not be overvalued. However, as important as it is not to overvalue the estate, you also don’t want to risk penalties for undervaluing it. Generally, all property must be valued at its fair market value either at the time of death or on the alternate valuation date (usually six months afterwards).
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The Family Business as an S Corporation, 10/2008
This article will look at the reasons an S corporation is desirable and discuss how tax planning software can help.
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Wealth Management, Tax Planning, and Private Annuities,
No one will argue the fact that tax planning is an essential component of competent wealth management. But, for too many people, taxes are an afterthought and that can lead to disastrous results.
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