If you receive a direct inheritance through the terms of a will, you would not be required to report it as income on your state or federal tax returns. Distributions of portions of the principal in a living trust are not taxed, but distributions of the earnings would be subject to taxation. Though income taxes are not a source of concern, there are 12 states in the union that have state-level estate taxes. Fortunately for residents of California, there is no estate tax in the Golden … [Read more...] about Is There a State Estate Tax in California?
A living trust is the ideal estate planning tool for many people, and when you understand the benefits, you can see why they are so popular. We will provide a rundown here, and we will address the matter of assets that may have been left out of your living trust. Efficient Estate Administration If you use a simple will to serve as your asset transfer vehicle, you would name an executor in the document, and it would be admitted to probate after your death. This is a time-consuming legal process … [Read more...] about What Happens to Assets Left Out of My Living Trust?
When you plan your estate, you should cover all your bases, and this will require the execution of multiple documents. The optimal combination will depend on the circumstances, but there are four core components that should be part of every estate plan. Asset Transfer Vehicle Monetary asset transfers will come to mind first when you think about the estate planning process. Your estate plan will include a simple will or some type of trust to facilitate distributions to your heirs. A lot of … [Read more...] about You Need These Four Estate Planning Documents
Some people do not even consider the possibility of using a trust as an estate planning tool because they harbor a misconception. They think that you permanently surrender control of assets that you convey into a trust. On the one hand, this is false, and on the other hand, it’s true. We will provide some clarity in this post. Irrevocable Trusts There is a legal concept called “incidents of ownership.” In layman’s terms, when you relinquish incidents of ownership, the assets are no longer … [Read more...] about Can You Dissolve a Trust If Circumstances Change?
The tax situation that applies to inheritances is quite favorable for the vast majority of Americans. If you receive an inheritance through the terms of a will, you are not required to report the income when you file your tax returns. This would also apply to insurance policy proceeds. Inherited appreciated assets get a step-up in basis. To explain through the use of a simple example, let’s say that your grandfather bought 1000 shares of stock for $10 a share many years ago. When he dies, he … [Read more...] about Gift Tax Exclusion Will Remain Constant in 2021
Runoff Elections in Georgia resulted in a Senate controlled by Democrats. Could this impact your Estate Planning? It’s possible. Read on to learn more. … [Read more...] about Biden Administration Could Reduce Estate Tax Exclusion
Sometimes people use Joint Tenancy as an easy, simple way to do Estate Planning. However, this can have serious, unexpected drawbacks. Read on to learn more. … [Read more...] about Joint Tenancy Problems in Estate Planning
As we begin a new year, it’s a good time to start off right. If you don’t already have an estate plan, now’s a great time to make an appointment with an estate planning attorney to get one. Read on to learn more. … [Read more...] about Starting the New Year Right
There is no universal estate plan that is right for every situation, and this is the most important thing to understand when you are entering into the process. You don’t have to accept limitations or take risks, because your plan can be custom crafted to suit your needs. One situation that can be a bit complicated is inheritance planning for parents that are going to be part of blended families, and we will provide some tips in this post. A simple will is not a good choice. If you are … [Read more...] about Estate Planning Insight for Blended Families
The simple will is the document that comes to mind first when most people think about estate planning. In reality, this device is really not the right choice unless the situation is very simple and straightforward. We will provide a basic explanation of simple wills here, and we will also look at the drawbacks and limitations. Purpose of a Will Everyone is aware of the fact that a will can be used to state your final wishes with regard to asset transfers after you are gone. You can also use … [Read more...] about Simple Wills 101