A trust may be taxed as either a grantor trust or a nongrantor trust. Each type of trust has advantages and disadvantages. This article examines a nongrantor trust and situations in which it might be useful.Unlike a grantor trust, which is taxed to the grantor, a nongrantor trust is taxed as its own separate taxpaying entity. The trustee of the trust has the trust file its own tax return, Form 1041. On that return goes all the trust’s items of income and expense. The nongrantor trust has its … [Read more...]
Tax Tips after New Year
The New Year is here. Can you do anything to reduce your tax liability for 2018? This article provides a few tax tips now that we’ve begun another year.The ball has dropped in Times Square and we’ve bid farewell to 2018. But there are still a few things we can do to adjust our tax liability for 2018 before filing tax returns on April 15.First, you’ll need to organize all your tax records. That way, you’ll have some idea of what your tax liability might be. After you’ve organized your … [Read more...]
The Little Things Are Important: Your Tangible Personal Property
Often, the smallest things have the most sentimental value. Your grandmother’s silverware or your grandfather’s railroad watch could connect you to them in a special way. Your mother’s ring or your father’s Boy Scout bugle could hold a special place in your heart. Your sports memorabilia could connect you to one of your children in a unique way. You may want those items to go to particular beneficiaries who will cherish their sentimental value as you have. There’s an easy and flexible way to do … [Read more...]
Proposed Regulations Address “Clawback” Issue
The Tax Cuts and Jobs Act temporarily doubled the amount which can be given free of tax. However, that amount reverts to the permanent, undoubled amount in 2026. The estate tax ordinarily includes prior taxable gifts and then applies the exclusion to the total. However, in 2026 or later, this could result in a tax on amounts which weren’t taxable when gifted. This issue is the “clawback.” New Proposed Regulations resolve this issue. What's New Each person has a permanent exclusion amount of $5 … [Read more...]
How Are Trusts Taxed?
Trusts can be very useful vehicles to control assets during life and after death. During life, they can be especially helpful to control assets during periods of disability. After death, a trust can provide asset protection, remarriage protection, asset management, and many other benefits which might not be available otherwise. Grantor Trusts Generally, trusts are income taxed in two different ways, as “grantor” trusts or “nongrantor” trusts. A grantor trust is one that is taxed to the grantor … [Read more...]
Grantor Trusts Provide Flexibility and Ease
A trust may be taxed as either a grantor trust or a nongrantor trust. Each type of trust has advantages and disadvantages. This article examines a grantor trust and situations in which it might be useful.A prior blog discussed the taxation of trusts generally and that they could be taxed as grantor trusts or nongrantor trusts. This blog will focus on the advantages and disadvantages of taxation as a grantor trust.A grantor trust is one that is taxed to the grantor (or other substantial … [Read more...]
Selecting an Agent
Choosing the right Agent under a Power of Attorney is one of the most important choices. This article discusses the qualities of an ideal Agent and qualities to avoid in selecting an Agent. Read on to learn more.A Secret Agent may be very important to protecting the nation. Your Agent is just as important for your protection. An Agent is the person who makes financial decisions for you under a Financial Power of Attorney or makes medical decisions for you under a Health Care Power of … [Read more...]
Estate Planning is About More Than Taxes
Estate Planning addresses many concerns, not just taxes. It can protect beneficiaries from their own creditors, provide divorce and remarriage protection, and protect the benefits of children with special needs. Learn more about how Estate Planning can help protect your beneficiaries by providing privacy and other benefits.The new tax law doubled the amount that can be passed free of federal estate taxation, at least through 2025. In 2018, an individual can pass $11.18 million free from … [Read more...]
Aretha Franklin Died Intestate: What Does It Mean for Her Family?
Aretha Franklin died intestate. Intestacy has definite drawbacks. Read on to see what this means for her family, financially and in other ways. Aretha was the Queen of Soul, but her lack of planning caused consequences she did not consider.Aretha Franklin was known as the “Queen of Soul.” She was a singer, songwriter, civil rights activist, and so much more. Aretha was a great recording artist, with a career spanning many decades. She received honorary degrees from many prestigious … [Read more...]
Naming a Trust as Beneficiary of an IRA
Whom should you name as the beneficiary of your IRA or Qualified Plan? Sometimes, it can be best to name a trust for your intended beneficiary. Read on to see the protections a trust can offer that a direct designation of the individual would not.With IRAs and Qualified Plans, after the death of the “Participant” (the lifetime owner), there are required minimum distributions based on the life expectancy of the beneficiary. Often, people think that an individual must be named as the … [Read more...]
