What gifts can you make without informing the IRS? Why would you want to give large gifts during your lifetime?
Every person has a lifetime gift and estate tax exemption of $5.43MM (this number rises with inflation). Generally, most gifts made during a lifetime are counted towards this lifetime exemption. If lifetime gifs exceed $5.43MM, a gift tax is due. If the sum of lifetime gifts and the money remaining in the estate exceeds...
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Social Security “Spousal Benefits” – the money you never knew you had!
Spousal benefits are available to spouses, divorced spouses and widows / widowers. Married individuals can choose which Social Security benefit they will receive – their own or a percentage of their spouse’s, whichever is greater. The benefit of receiving the ‘spousal benefit’ is to delay the collecting spouse’s retirement age, and as a result,...
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Trusts will be the only solution if the “Step Up” in basis is eliminated
Earlier I wrote a post about what is the step up that President Obama wants to eliminate. Currently, the step up in basis is the favorable tax treatment that heirs get if the assets were held until death by the parent. If the mother buys stock at $20 a share, holds on to...
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Differences between Medicare and Medicaid
The cost of nursing home care or 24 hour home care averages over $140,000 per year in New York City. At this rate, only the very wealthy can pay indefinitely for this care, without depleting their lifetime savings. Since most people do not have private long term care insurance to pay for this cost, seniors...
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Top Ten Reasons Why You Might Want a Trust
The federal estate tax threshold for an individual is currently $5.43MM (and double that for most married couples). The New York State estate tax threshold is currently $2.06MM (and set to rise to the federal level by 2019). That all means that for the vast majority of New York residents, estate taxes are no...
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Asset Protection: Self-Settled Trusts vs. New York Based Trusts
The goal of asset protection planning is to insulate assets from claims of creditors without concealment or tax evasion. Many people get sued. Some are in professions that almost seem to invite litigation (doctors, lawyers, business owners, home owners). Others simply get unlucky (i.e. car accident). If one is already getting sued, then it’s...
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Planning for digital assets is just as important as planning for other assets.
What would happen to your Facebook account in case of your untimely death? Your email? Your online bank account? Your computer that is protected by a password? Your small business payroll system? Once you stop to think about the issue, you realize that without proper planning, finding and accessing your online accounts may be...
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What is the Step Up Basis that Obama Wants to Eliminate?
This is an extremely valuable tool in the long term tax planning that saves middle class thousands of dollars in taxes every year. It also enables families to pass on their most valuable possessions at death without the need for beneficiaries to immediately sell it. What is it? Under the federal tax code, if a tax...
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Supreme Court to Decide Whether States Can Prohibit Same-Sex Marriage
On Friday, the Supreme Court agreed to decide whether any of our 50 states can prohibit same-sex marriage. Currently, the number of states allowing same-sex marriage is 36 and the District of Columbia, and more than 70% of Americans now live in states where gay couples can marry. A 2012 case United States...
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What is a Health Care Proxy?
Multiple problems may arise when an adult lacks capacity. Do you remember Terri Schiavo and the 7 year court battle that her family had to endure to determine the proper course of her medical treatment? Much to the extreme surprise of relatives and close friends, unless certain documents were signed ahead of time, they...
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