18 Jun 2019
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Estate Planning for Single Parents

Roger Rossmeisl, CPA
Estate Planning Briefs
Estate Planning for Single Parents

Here’s a fast fact: The percentage of U.S. children who live with an unmarried parent has jumped from 13% in 1968 to 32% in 2017, according to Pew Research Center’s most recent poll. While estate planning for single parents is similar to estate planning for families with two parents, when only one parent is involved, certain aspects demand your special attention. Estate planning for single parents: 5 questions to ask Of course, parents want to provide for their children’s care and financial needs after they’re gone. If you’re a single parent, here are five questions you should ask: 1. Have I selected an appropriate guardian? If the other parent is unavailable to take custody of your children should you become incapacitated or unexpectedly die, your estate plan must designate...

10 Jun 2019
0

Types of Life Insurance Owners

Roger Rossmeisl, CPA
Estate Planning Briefs
4 Types of Life Insurance Owners

Life insurance has long provided a source of liquidity to pay estate taxes and other expenses. But, with the estate tax exemption currently set at an inflation-adjusted $10 million ($11.40 million for 2019), estate taxes are no longer a concern for many families. Nonetheless, life insurance offers many benefits for nontaxable estates. But who should own the policy?  There are 4 types of life insurance owners. If you own life insurance policies at your death, the proceeds will be included in your taxable estate. Ownership is usually determined by several factors, including who has the right to name the beneficiaries of the proceeds. If estate taxes are a concern, the way around this problem is to not own the policies when you die. However, don’t automatically...

31 May 2019
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College Financing in Your Estate Plan

Roger Rossmeisl, CPA
Estate Planning Briefs
College Plan as Part of Your Estate Plan

The staggering cost of college makes it critical for families to plan carefully for this major expense.  In many cases grandparents want to play a role. As you examine the many financing options for your grandchildren, be sure to consider college financing in your estate plan. Make direct payments A simple, but effective, technique is to make tuition payments on behalf of your grandchild. So long as you make the payments directly to the college, they avoid gift and generation-skipping transfer (GST) tax without using up any of your $11.4 million gift or GST tax exemptions or your $15,000 annual gift tax exclusion. Threr's a disadvantage of direct payments though. If your grandchild is young, you have to wait until the student has tuition bills to pay. So there’s...

15 May 2019
0

Spendthrift Language Safeguards Trust Assets

Roger Rossmeisl, CPA
Estate Planning Briefs
Spendthrift Language

Protecting assets from creditors is a critical aspect of estate planning.  However, you need to think about more than just your own creditors. You also need to consider your heirs’ creditors. Adding spendthrift language to a trust benefiting your heirs can help safeguard assets. Spendthrift language explained Despite its name, the purpose of a spendthrift trust isn’t just to protect profligate heirs from themselves. True, that’s one use for this trust type.  Even the most financially responsible heirs can be exposed to frivolous lawsuits, dishonest business partners or unscrupulous creditors. A properly designed spendthrift trust can protect assets against such attacks. It can also protect your loved ones in the event of relationship changes. If one of your children divorces, your child’s spouse generally can’t claim a share...

18 Apr 2019
0

(#538) Properly Funding your Revocable Trust is the Key to Unlocking its Benefits

Roger Rossmeisl, CPA
Estate Planning Briefs

If your estate plan includes a revocable trust — also known as a “living” trust — it’s critical to ensure that the trust is properly funded. Revocable trusts offer significant benefits, including asset management (in the event you become incapacitated) and probate avoidance. But these benefits aren’t available if you don’t fund the trust. Funding the trust Funding a living trust is a simple matter of transferring ownership of assets to the trust or, in some cases, designating the trust as beneficiary. Assets you should consider transferring include real estate, bank accounts, certificates of deposit, stocks and other investments, partnership and business interests, vehicles, and personal property (such as furniture and collectibles). Be aware that moving an IRA or qualified retirement plan to a revocable trust can trigger...

17 Apr 2019
0

(#533) Life Insurance Can Be a Powerful Estate Planning Tool for Non-Taxable Estates

Roger Rossmeisl, CPA
Estate Planning Briefs

For years, life insurance has played a critical role in estate planning, providing a source of liquidity to pay estate taxes and other expenses. Today, the gift and estate tax exemption has climbed to $11.4 million, so estate taxes are no longer a concern for the vast majority of families. But even for nontaxable estates, life insurance continues to offer estate planning benefits. Replacing income and wealth Life insurance can protect your family by replacing your lost income. It can also be used to replace wealth in a variety of contexts. For example, suppose you own highly appreciated real estate or other assets and wish to dispose of them without generating current capital gains tax liability. One option is to contribute the assets to a charitable remainder trust...

16 Apr 2019
0

(#527) Create a “Road Map” for your Estate Plan

Roger Rossmeisl, CPA
Estate Planning Briefs

No matter how much effort you’ve invested in designing your estate plan . . . your will, trusts and other official documents may not be enough. Consider creating a “road map” — an informal letter or other document that guides your family in understanding and executing your plan and ensuring that your wishes are carried out. Navigating your world Your road map should include, among other things: A list of important contacts, including your estate planning attorney, accountant, insurance agent and financial advisors, The location of your will, living and other trusts, tax returns and records, powers of attorney, insurance policies, deeds, stock certificates, automobile titles, and other important documents, A personal financial statement that lists stocks, bonds, real estate, bank accounts, retirement plans, vehicles and other...

02 Apr 2019
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(#523) Moving a Trust Over State Lines Can Offer Tax Savings and Other Benefits

Roger Rossmeisl, CPA
Estate Planning Briefs

People who live in states with high income taxes sometimes relocate to a state with a more favorable tax climate. A similar strategy can be available for trusts. If a trust is subject to high state income taxes, you may be able to change its residence — or “situs” — to a state with low or no income taxes. What can a “trust-friendly” state offer? In addition to offering low (or no) tax on trust income, some states: Authorize domestic asset protection trusts, which provide added protection against creditors’ claims, Permit silent trusts, under which beneficiaries need not be notified of their interests, Allow perpetual trusts, enabling grantors to establish “dynasty” trusts that benefit many generations to come, Have directed trust statutes, which make it possible to...

18 Mar 2019
0

(#515) Have You Properly Substantiated Your 2019 Charitable Gifts?

Roger Rossmeisl, CPA
Estate Planning Briefs

Donating to charity is a key estate planning strategy for many people. It reduces the size of your taxable estate and it can help you leave a lasting legacy with organizations you care about. The benefit of making such gifts during life rather than at death is that you may be eligible for an income tax deduction. Qualifying for a charitable deduction is, in some respects, a matter of form over substance. The IRS could disallow a deduction, even if it’s otherwise legitimate, if you fail to follow the substantiation requirements to the letter. If you’ve made charitable donations in 2018, it’s wise to review the substantiation rules as you file your 2018 tax return. Here’s a quick summary of the rules: Cash gifts under $250: Use a...

05 Mar 2019
0

(#508) What Your Need to Know About Filing Gift and Estate Tax Returns

Roger Rossmeisl, CPA
Estate Planning Briefs

Have you made substantial gifts of wealth to family members? Or are you the executor of the estate of a loved one who died recently? If so, you need to know whether you must file a gift or estate tax return. Filing a gift tax return Generally, a federal gift tax return (Form 709) is required if you make gifts to or for someone during the year (with certain exceptions, such as gifts to U.S. citizen spouses) that exceed the annual gift tax exclusion ($15,000 for 2018 and 2019); there’s a separate exclusion for gifts to a non-citizen spouse ($152,000 for 2018 and $155,000 for 2019). Also, if you make gifts of future interests, even if they’re less than the annual exclusion amount, a gift tax return is...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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