Trust Your Gut, in Life and Estate Planning

Within reason, anyway!  It’s complicated, and a new area which embraces experimental philosophy and psychology, but: That’s precisely what psychologist David DeSteno, director of Northeastern University’s Social Emotions Lab, explores in The Truth About Trust: How It Determines Success in Life, Love, Learning, and More, which was recently and elegantly reviewed by Maria Popova at BrainPickings.org.  From his book: “Trust begets trust more often than not. Although common sense may seem to suggest that illusions are always to be avoided in favor of hard objectivity, sometimes a softer-focus lens, one capable of smoothing the rough edges, is to be preferred. If you’ve developed a strong sense of trust in a partner, it will function in just that way. When there’s ambiguity about how trustworthy he […]

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Cuomo Proposes Drastic Reduction in the New York Estate Tax!

Last week,  Andrew Cuomo proposed bringing New York into conformity with the liberalized Federal Estate Tax Regime, by 2019.  It’s not next year, but far better than a poke in the eye with a sharp stick. The proposal would reduce the NY maximum marginal rate to 10% from 16%, and tie the NY Exemption to the Federal-now $5.34 million, and indexed for inflation (it went up $90k last year).  This is great news, since a person with a $5 million estate under current law owes the IRS nothing (assuming no lifetime gifts), and owes NY $391,600. Of course, New Yorkers can take advantage of the fact that we don’t have a gift tax, and NY does not tax lifetime gifts.  So you can reduce the […]

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Remember: Federal Estate Taxes are Only for the TOP .2%

Due primarily to increases in the applicable exclusion amount, the number of estate tax returns filed decreased from more than 108,000 in 2001 to just over 15,000 in 2010. After accounting for marital and charitable bequests, as well expenses and debts of the estate, less than half of the estates filing in 2010 owed estate tax.  This was before the applicable exclusion amount jumped to $5 million and became indexed for inflation. It is estimated that in 2012 perhaps fewer than 4,000 estate tax returns were filed for taxable estates. With the increased applicable exclusion amount, less than 0.2% of Americans are expected to be subject to the federal estate tax. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% […]

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Direct Charitable IRA Distributions No Longer Allowed

For tax years 2006 through 2010, amounts up to $100,000 per year distributed directly to charitable organizations from an individual retirement plan, other than a Simplified Employee Pension (“SEP” IRA) or a Simple Retirement Account (“SIMPLE” IRA), on or after the date the participant attains the age of 70 1/2 are excluded from income.   The exclusion does not apply to distributions made to Section 509(a)(3) supporting organizations or donor-advised funds.  A donor is not allowed to claim an income tax charitable deduction for such distribution to charity, and doesn’t report the distribution as income, either. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the “2010 Tax Relief Act”) effectively extended this rule through 2011, and the American Taxpayer Relief Act […]

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Speaking of the Future: Dealing with our Digital Legacy

Alot of ink, real and virtual,  is being spilled about the need for managing our digital assets after our demise. Of course, there are many digital activities (social, political, and sexual) that we fully intend to take to the grave with us, and we demand complete confidentiality and proper handling by the administrators of those assets.  The Terms of Service, (“TOS”) Agreements which come with all our cyber accounts are evolving to give us more choices over the handling of these resources upon death or incapacity, but for the most part, take the cautious road and terminate all access to accounts by heirs, agents, and fiduciaries.   That was a good starting point, but as our physical and on-line lives become more enmeshed, more options […]

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The Notion of “Legacy” is Evolving. That is Really a Good Thing

In a new article in Aeon Magazine (http://aeon.co/magazine/being-human/what-will-happen-to-my-online-identity-when-i-die/) Patrick Stokes shines a light on the ways technology is shaping our understanding of death, and consciousness.  He writes, in part: “………As I was writing this piece, the sad news came through that the political theorist and prominent blogger Norman Geras had died. I didn’t know Geras, but I’d been following him on Twitter for about a year, after he tweeted to take me to task (rightly) about something I’d written for The Conversation website. I’m not sure why, but when I heard he’d died, I went straight to look at his Twitter account. His last tweets? Requests for friends and family to check if his phone was working and to please message him. No grand last words. No […]

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Should We Honor Your Wishes? Your Demands?

New York was the first of many states allowing the modification (decanting) of “irrevocable” trust agreements.  Of course, under the right circumstances, an irrevocable trust can be amended (in NY, and other states) with the consent of the creator.  But the decanting statute allows significant changes to the terms of a trust which the creator (whether by a trust deed or via his or her Last Will & Testament) understood to be irrevocable, and in which he or she has no say.   In modern usage, then, it may not be possible to revoke a permanent trust (other than by distributing it to the beneficiaries or losing all the money), but we can change it, and that seems a curious twist on the plain meaning […]

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Understanding Knowledge Acceleration

It seems pretty clear that we can’t intentionally slow down the “progress” which seems to have overtaken out ability to conceptualize how quickly it now grows, in volume and quality.  If you are in the summer or fall of your career, then perhaps you will find continuing rewards for doing what you are good at.  But for our children and grandchildren, these changes mean that the careers they choose may not exist a few years later, and they are likely learning about subjects and ideas that will be out of date before they graduate. The technological and related social and economic changes are not intentionally embraced-we do not adopt them.  We essentially become them.  Think about how the telephone changed how we live, and now, […]

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The Future is Bright: For Starters: The Knowledge Doubling Curve

The more we know, the faster we know more.  Knowledge volume undergoes exponential growth, doubling and redoubling over time. Buckminster Fuller created the “Knowledge Doubling Curve”. Up until 1900 it was said that the accumulation of knowledge doubled every century. At the end of World War 2 every 25 years.Today – well anywhere from 1 to 1.5 years to – Nanotechnology they say every 2 years – Clinical knowledge every 18 months. And IBM predicts that in the next couple of years, information will double every 11 hours! The Will Doctor is ENTHUSIASTIC about the future in store for our children and grandchildren-and even for us! More on this to come in future posts, to complement the (rather dry) dynamics of estate and tax planning!

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No More Taxes: Don’t Forget to Jump Through the Hoop

We recognize that far fewer individuals who pass away in 2013 will be required to file federal estate tax returns, with the AEA (Applicable Exclusion Amount) at $5.25 million, (before the increase of $90,000 next year to $5.34 million, per person).  Don’t  forget, however, that the AEA remaining to protect the inheritance will be reduced by taxable gifts made during life. Of course, married people can protect twice as much-either through careful planning with trusts (recommended, for many reasons), or through “portability”, the excellent (and long delayed) new tax break which allows the AEA of the spouse who dies first (the “predeceased spouse”, or PD) to “port” or pass over to the surviving spouse, to supplement their own AEA.  This tax benefit is called the […]

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