Estate planning is brimming with acronyms. The QTIP Trust is yet another, though perhaps one of the easiest to remember. It stands for “Qualified Terminable Interest Property” Trust, and it is very helpful for couples who desire to leave property to one another, while saving as much on estate taxes as possible. The Irrevocable QTIP Trust A QTIP Trust is a type of irrevocable trust that is used most often to leave assets to a surviving spouse, who will in turn leave those same assets to their … [Read more...] about Should I Create a QTIP Trust?
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Understanding the Benefits of Pass-through Businesses
Pass-through businesses are the most common entity chosen for family-owned and closely-held businesses. Consequently, the number of pass-through business entities has increased substantially over the last 30 years. On the other hand, the number of traditional corporations has decreased. Now, pass-through businesses make up nearly 94% of all businesses, and they earn more than 64% of total business net income in the United States. Also, pass-through businesses employ more than half of the … [Read more...] about Understanding the Benefits of Pass-through Businesses
Can a Medi-Cal Trust be Revoked?
When clients ask can a Medi-Cal Trust be revoked, the answer is no, but there are other options. The reason that a Medi-Cal trust works is because it is irrevocable. An irrevocable trust cannot be altered or amended. Medi-Cal laws require that such a trust be irrevocable because, if you can receive from the trust any portion of the principal, then the entire value of the trust becomes a countable asset for Medi-Cal eligibility purposes. If a Medi-Cal trust is not irrevocable, then for the … [Read more...] about Can a Medi-Cal Trust be Revoked?
Why You Need a Retirement Plan
Clients often have the false impression that social security benefits and a basic 401K are sufficient for retirement. The truth is, it is important to create a real retirement plan so you won’t need to be dependent on government benefits, in order to have a comfortable retirement. Social security may not be a secure as you think. That’s why you need a retirement plan. What you need to know about Social Security benefits Most of us are concerned about the certainty or stability of the … [Read more...] about Why You Need a Retirement Plan
How to Transfer Appreciable Assets as Gifts
There are many different strategies available for minimizing exposure to transfer or gift taxes. One such strategy is very helpful if you possess highly appreciable assets. If you transfer appreciable assets, name a beneficiary to assume ownership of any remaining assets, once the term of the trust ends, you can save substantially on gift taxes. The history of estate and gift taxes Long ago, the government established the federal estate tax, which imposed a special tax on the estate of every … [Read more...] about How to Transfer Appreciable Assets as Gifts
What Makes a Trust Irrevocable?
The term “irrevocable” means not able to be changed. Therefore, by definition, an irrevocable trust is one that cannot be modified, changed or revoked. Once you create an irrevocable trust, the terms are considered written in stone and, regardless of the reason, its terms cannot be altered in the future. So, what makes a trust irrevocable is the inability to change its terms. Types of Irrevocable Trusts There are basically two types of irrevocable trusts: living trusts and testamentary … [Read more...] about What Makes a Trust Irrevocable?
What is a Grantor Retained Annuity Trust?
The basic purpose of a trust is to reduce estate taxes as much as possible. Another benefit is the chance to avoid the costly and lengthy probate court proceeding. With all of the available options, each trust having its own specific goals or requirements, it may be a little daunting trying to choose. One type of trust you may want to consider is the Grantor Retained Annuity Trust. What is the purpose of a GRAT? The purpose of a Grantor Retained Annuity Trust is to allow the donor to … [Read more...] about What is a Grantor Retained Annuity Trust?
It is Time to Update Your Will
The majority of adults have not written a Will. But for those that have, the Will is probably so outdated that it may as well not exist. The majority of Wills that exist need to be revised. There are several reasons for updating a Will, primarily when life circumstances have changed. Essentially, if your situation has changed in any way, it is time to update your Will. When is it time to make a change? When it comes time to consider modifying your Will, you need to look at the changes in … [Read more...] about It is Time to Update Your Will
What is a Letter of Instruction?
After the death of a loved one, most families are in a state of shock and grief. During that time, most people have difficulty making decisions with regard to that loved one's last wishes. The most important gift you can leave for your family may simply be the guidance they need to handle your estate. The most common way to provide that guidance is through a Last Will and Testament and a Letter of Instruction. The purpose of a Letter of Instruction A Letter of Instruction is a written … [Read more...] about What is a Letter of Instruction?
What is a Qualified Personal Residence Trust?
There are numerous kinds of trusts, each with its own specific functions. A Qualified Personal Residence Trust is one type of irrevocable trust designed to hold ownership of your primary or secondary residence. That way, upon your death, the value of the residence will not be included in your taxable estate. A Qualified Personal Residence Trust, if created properly can provide a huge benefit for you and your family. How the Qualified Personal Residence Trust works When correctly … [Read more...] about What is a Qualified Personal Residence Trust?
