Trust Income Taxes and Deducting Expenses

Irrevocable Trusts, other than the special “grantor trusts” which we typically use for life insurance and other gifts, are taxed at the highest rate after just $12,150 of taxable income, so the effect of deductible expenses on the tax are significant. Unfortunately, many expenses that are not specific to the administration of the trust are not deductible unless and to the extent they exceed the threshold of 2% of (adjusted) gross income (AGI) for the Trust. Final regulations have been issued to clarify this fairly recent (and punitive) interpretation of the tax code. Specific Expenses Investment management fees. Investment management fees will be subject to the 2% floor, since individuals often incur such fees. If, however, a portion of the investment management fees are attributable […]

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Looking for the MONEY? Here is is!

From IFC, we were amazed by the following: “China has surged into second place for the country with the most millionaires propelling Asia towards becoming the wealthiest continent in the world, reports Yahoo News. North America (at US$50.3 trillion) and Western Europe (US$37.9 trillion) have maintained their stronghold as the wealthiest regions in the world but Asia-Pacific (excluding Japan) is closing in at US$37.0 trillion. A new report released by Boston Consulting Group (BCG) shows that private wealth in the Asia-Pacific region (excluding Japan) jumped 31 per cent to US$37 trillion in 2013, representing the fastest-growing region worldwide. Private wealth on a global scale has also peaked, reaching a staggering US$152 trillion. This amount jumped by US$19.3 trillion in 2013, nearly twice the increase of […]

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Survey Reports: Americans Remain Unwilling to Create Wills

A CBS News Poll, conducted by telephone from April 16-20, 2014 among 1,017 adults nationwide, concluded that 40 percent of Americans sampled had created a will. Not surprisingly, age plays a factor. Among those 18-49 years of age only 22 percent have a will, rising to 62 percent for those 50 and older. By comparison, a 2013 Harris Poll  doesn’t indicate much change, finding that 39% of Americans had a will. It appears that far less of a percentage of Americans have thought about disposing of their “virtual” assets and accounts. The Harris Poll confirms this, finding that “93 percent of Americans who have digital assets were unaware of or misinformed about what would happen to their digital assets should they die.”  We are hoping […]

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New York Modifies Taxes for Estates, Gifts, Trusts

Estate Tax Threshold Increases, effective immediately: Purportedly designed to stem taxpayer flight from the state, effective April 1, 2014, the estate tax exclusion will rise substantially — via a four-year phase-in — from the current $1 million to $5,250,000 by 2017. Increases will be indexed for inflation afterwards. However, there will be little benefit for those with larger estates. If the estate exceeds the exclusion by more than 5%, the entire taxable estate (i.e., there is no exclusion) is subjected to the NY estate tax. Further, while the rates are graduated, those with larger estates should also be aware that the maximum NYS estate tax rate remains unchanged at 16%. Gifts Within Three Years of Death are Taxed (Again) Gifts made by a NY resident […]

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Obama’s 2015 Budget Includes Serious Planning Loophole Closures

The Administration’s 2015 Budget, Dept. of Treas. “General Explanations of the Administration’s Fiscal Year 2015 Revenue Proposals,” (March, 2014), includes some drastic, previously submitted proposals of significance to estate planners, including: (a) Requiring a person who buys an interest in an existing life insurance contract with a death benefit of $500,000 or more to report the purchase and report any payment of the policy benefits;(b) Modifying the transfer-for-value rule by eliminating the exception for transfers to a partner of the insured, a partnership in which the insured is a partner, or a corporation in which the insured is a shareholder or officer, and adding an exception for a transfer to a partnership or corporation in which the insured is a 20% owner;(c) Restoring the estate, […]

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No Chance (yet) for Turning Back the Clock via New Estate Tax Bill

“The Sensible Estate Tax Act of 2014,” introduced by House Ways and Means Committee member Jim McDermott (D-Wash.), would reduce the estate tax exclusion amount to $1 million, raise the top estate and gift tax rate (and the sole GST tax rate) to 55% (on amounts over $10 million), and make numerous other changes in the estate, gift, and GST taxes. This has not chance of passage, but reflects the continued efforts of progressive democrats to keep the discussion alive, in view of emerging issue of financial inequality in coming elections.

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Video for new Book: Your Digital Afterlife

This is a short but very helpful piece about why this is important.  Its is worth sharing, and acting upon.  http://www.youtube.com/watch?feature=player_embedded&v=0_xV9UfCLXA We will continue to locate sites and resources that make it possible to deal with your online existence efficiently and privately, in case of your passing.  

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Estate Planning Now, for the Future You?

As you sit with your attorney and plan your estate, you are attempting to arrange a plan which will properly meet your objectives.  Helping you figure out what those objectives might be is one of the most important services the Will Doctor can provide to our clients.  New research into our identity by experimental philosophers and others points out that there really is a good reason to come back and see us regularly, because the person who comes back in a few months, or years later, is going to be very different.  It seems, more different than we suspect.   A great discussion and video fleshes this out, in the following link:  http://www.brainpickings.org/index.php/2014/02/26/josh-knobe-self/ Maria Popova ( see last Post) in the review of David DeSteno’s […]

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