Friday, January 22, 2016

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We previously told you about the Uniform  Fiduciary Access to Digital Assets Act (“UFADAA”) in our post found here.  Now, Florida may become the 10th state to legislate fiduciary access to digital assets.

The Florida Senate Rules Committee unanimously consented to the bill (SB 494) on Wednesday, making it available to be heard on the Senate floor. (more…)

Thursday, January 21, 2016

The 7520 rate for February 2016 will stay at 2.2%.

The February 2016 Applicable Federal Interest Rates can be found here.

Tuesday, January 12, 2016

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With up to $1.4 Billion at stake in Wednesday’s Powerball, those who play the lottery are busy making plans for what to do with all the money they may win.  If you win it, you won’t ever have to worry about money again – right?

Wrong. (more…)

Thursday, December 31, 2015

The 7520 rate for January 2016 will increase to 2.2%.

The January 2016 Applicable Federal Interest Rates can be found here.

Friday, December 25, 2015

(This is an updated post from December 2014)

Need a New Year’s resolutions to kick start 2016? Here is an idea you probably hadn’t considered: review your estate planning documents.

If you are like most people, you are probably thinking that reading legal documents does not sound like an even remotely enjoyable way to start a new year. But, it doesn’t have to be as unpleasant as it sounds. Reviewing your documents does not mean you have to read them cover to cover. If you know what are the most important elements, it is easy to review your will, trust, and powers of attorney regularly to ensure they still comply with your wishes. These documents not only determine who will receive your property when you die, but also likely determine who has the right to make financial and major medical decisions during your lifetime. Needless to say, it is important that you are still comfortable with the designations you have made.

To get you started, below is a basic checklist of items we suggest you review annually (make it a New Year’s tradition!).

1. Assess the changes in your life since you last updated your estate planning documents.

Have you gotten married or divorced? Had a child or adopted a child? Moved to a different state? Had a death in the family? Had a major financial event? Any of these life changes may affect your estate planning, and your documents may need to be revised. (more…)

Thursday, December 17, 2015

With the end of the year approaching, we thought now would be a good time to re-post and update this blog from the end of 2014.

For 2016, the annual exclusion gift amount will remain the same at $14,000 but the lifetime gift tax exemption will increase to $5,450,000 (up from 2015’s $5,430,000).

With fourteen days left in the year, many people are still planning how to make 2015 gifts, whether by making “annual exclusion” gifts of $14,000 per beneficiary, or by taking advantage of the 2015 gift tax exemption amount of $5,430,000.  Whatever the reason for the last-minute gifting, as the end of the year approaches, people may be tempted to make a “quick and easy” gift to their beneficiaries by simply writing a check. As the year draws to a close, however, if your gift is dependent on utilizing 2015 tax law, beware of the potential trap of making a gift by check.

A gift is not complete for tax purposes until the gift is no longer revocable.  However, if you write someone a check, until that check clears, you could always “revoke” the check by alerting your bank to stop payment, or by emptying your account of sufficient funds to pay on the check.   Until the check clears the bank, your gift is still revocable.  Therefore, if your beneficiary doesn’t deposit the check in time for the banking system to clear the check, your gift may not be considered irrevocable until 2016, and you have therefore made a gift in 2016 instead of 2015.

If you are planning to make 2015 gifts over the next 14 days by means of a check, be wary and let your beneficiaries know that they need to deposit that check as soon as possible.  Better yet, make the gift by means of a cashier’s check, which is considered irrevocable as soon as you hand it over.  That way, you don’t have to rely on the promptness of your beneficiaries’ next trip to the bank, and the promptness of the banks in processing the checks.

Monday, December 7, 2015

Back in August, we wrote about how the IRS would no longer automatically issue closing letters for filed Form 706, United States Estate (and Generation-Skipping Transfer) Tax Returns.  Instead, the IRS will only issue closing letters upon request by the taxpayer.

However, on December 4, the IRS updated its Frequently Asked Questions on Estate Taxes website to provide estates with an alternative to requesting and obtaining an IRS closing letter:

“Account transcripts, which reflect transactions including the acceptance of Form 706 and the completion of an examination, may be an acceptable substitute for the estate tax closing letter.”

Further, transcripts are easily available:

“Account transcripts are available online to registered tax professionals using the Transcript Delivery System (TDS) or to authorized representatives making requests using Form 4506-T.”

Monday, November 23, 2015

The 7520 rate for December has remained the same at 2.0%.

The December 2015 Applicable Federal Interest Rates can be found here.

Wednesday, November 11, 2015

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Open up any newspaper or magazine across the county and likely you will read an article about the difficulties facing young adult looking for their first jobs.  More and more young adults are turning to their parents for financial assistance. How can parents help their children? And what are the gift tax implications of such assistance?

Each individual has the ability to gift $14,000 a year to each person without using up any of his or her lifetime exclusion. A married couple can then gift $28,000 to an adult child without any gift tax impact at all. However, you must keep in mind that this $14,000 amount is inclusive of all gifts. You cannot give $14,000 directly to your child and then give them additional withdrawal rights under a trust. (more…)

Thursday, November 5, 2015

 

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With some minor exceptions, the facts are the same in PLR 201525002& PLR 201525003. In these PLRs, the Grantor transferred funds to an irrevocable trust for the Grantor’s own benefit and the benefit of several charities. In each case, the trust was created in a state other than the state of residence of the Grantor. In addition to the Trustee, each trust had an Investment Advisor, a Distribution Advisor, a Charity Distribution Advisor and a Trust Protector, none of whom were trust beneficiaries, except that the Charity Distribution Advisor was the Grantor’s spouse who was a potential appointee.

The Distribution Advisor had the power to direct the Trustee as to whether to make Quarterly Distributions, Support Distributions and Special Contingent Distributions to the Grantor, and also had the power to direct the Trustee as to whether to make Quarterly Distributions to the charities.

The Grantor had a limited testamentary power to appoint the trust among her spouse and charities.

The Investment Advisor had the power to direct the Trustee as to trust investments. (more…)