2007 Posts

  • New North Carolina Trust Laws

    In addition to the repeal of the rule against perpetuities, which is effective January 1, 2008 (perpetual trusts will be allowed in North Carolina provided certain requirements are met), there are a few other changes to North Carolina trust law, which were effective October 1, 2007:...
  • Avoid Probate of Equity Refunds from Continuing Care Communities

    The Problem: Continuing care retirement communities have been growing in popularity with seniors for years....
  • Worst Nursing Homes in U.S. – One is in NC

    The U.S. government’s Center for Medicare and Medicaid Services has released a report listing the poorest quality nursing homes in the country. ...
  • Medicaid Penalty Changes in NC Effective January 1, 2007

    On February 8, 2006, the federal government implemented increased restrictions on gifts made before applying for Medicaid coverage. ...
  • History of the Estate Tax

    This article discusses in brief the history of the federal estate tax and its effect on the U.S. budget. ...
  • IRS Sets 2008 Mileage Rates

    Beginning Jan. 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:...
  • NC Income Tax Deduction for Contribution to 529 Plan

    I previously blogged about the 2007 income tax deduction available to North Carolina residents to contribute to a North Carolina 529 College Savings Plan account. ...
  • Top 10 Life Insurance Mistakes

    This posting is compliments of my colleague Karen Brady in Colorado. Important reading for anyone who has anything to do with life insurance, including owning it. ...
  • Increased Court Fees for Testamentary Trusts

    Another increase in North Carolina court fees: As of August 1, 2007, testamentary trusts (those contained in a Will) which account to the clerk are subject a fee of 40 cents per $100 of receipts. ...
  • IRS to Offer Workshop for 501(c)(3) Exempt Organizations

    The IRS will be offering a number of workshops for small to medium sized 501(c)(3) organizations on tax compliance issues....
  • IRS to Require Retirement Plans to Offer Non-Spousal Rollovers to IRAs

    Beginning in 2008, retirement plans (such as 401(ks) must allow non-spouse beneficiaries to roll over to an IRA. The following is from Ed Slott, CPA:...
  • North Carolina has Repealed the Rule Against Perpetuities

    Effective August 19, 2007, North Carolina repealed the Rule Against Perpetuities, which means that multi-generation dynasty trusts can be created in North Carolina. Previously trusts could not last longer than 90 years or a life in being plus 21 years. ...
  • Watch Out for Vanguard and its IRA Beneficiary Designation Policy

    Vanguard now requires its customers to have identical benefciary designations for all IRAs of the same type. Click "Continue Reading" for the full article....
  • 2008 Pension Limits Announced by IRS

    Maximum deferral limits for 401(k) and 457 plans remain at $15,500. The limit for defined contribution plan increases to $46,000, while the SIMPLE limit is $10,500. See IRS News Release IR-2007-171 for full details....
  • IRS Warns Against Certain Trusts Sold as Business Welfare Benefit Funds

    The IRS has issued a news release warning small businesses about certain trust arrangements being sold as welfare benefit plans. ...
  • Tax and Other Aspects of Vacation Homes

    Considering a second home? Read the Vacation Home Survival Guide on forbes.com. A couple things to keep in mind that aren’t mentioned are that second home in other states can trigger probate in that state,...
  • New Medicaid Rules to Start November 1, 2007

    I previously blogged about the changes in the federal Medicaid laws that took place last year. The implementation in North Carolina has been delayed several times,...
  • Anatomy of an Estate Plan

    Everyone can benefit from planning for the future, whether it involves the distribution of property, tax reduction, or the care of family members. ...
  • Questions and Answers about Life Settlements

    1. What is a Life Settlement? A life settlement is the sale of an in-force life insurance policy for an amount great than the cash surrender value of the policy and less than the face value of the policy....
  • Mediation in NC Estate and Guardianship Matters

    Clerks of Court, the ex officio judges of probate and guardianship matters in North Carolina Counties, can now order mediation in those cases....
  • A QTIP is Not Just for Your Ears

    Estate planners love acronyms, and one of the most common when referring to a particular type of trust is QTIP, which stands for Qualified Terminable Interest Property. ...
  • Florida Estate Planning Lawyer Blog

    http://www.floridaestateplanninglawyerblog.com/ ...
  • House Passes Ban on Tax Strategy Patents

    On September 7, the U.S. House of Representatives passed H.R. 1908, The Patent Reform Act of 2007. Section 10 of that bill prohibits patenting tax strategies. ...
  • IRS Reports on Estate Tax Return Numbers

    The IRS recently announced that the total number of estate tax returns filed fell by 58 percent to about 45,000 in 2005 from about 108,000 in 2001....
  • NC Reenacts Long-Term Care Insurance Tax Credit

    The North Carolina Long-Term Care Insurance Premium Tax Credit has been reenacted effective for the 2007 tax year through 2012. ...
  • Records and Documents Required by Survivors

    Earlier this week a couple of clients contacted me asking if I had a form called and "Essential Document Locator." ...
  • Retirement Accounts and Income Taxes vs. Estate Taxes

    This posting provides a brief explanation of the advantages and disadvantages of funding a Family Trust (aka Bypass or Credit-Shelter Trust, or Trust B) with an IRA or other retirement accounts. ...
  • Make Sure Your “Estate Planner” is Trustworthy

    I’m still in catch up mode from being out a week in early August, which is the reason for my paltry postings of late, but this article on the Chicago Tribunewebsite caught my eye....
  • NC’s 529 College Savings Plan Recommended

    Money magazine, in a August 2007 article on College Savings Plans, recommended North Carolina’s 529 Plan as a good choice for NC residents. NC’s plan features:...
  • Give Farmers a Break on the Estate Tax?

    Having just ridden a motorcycle through the endless farms of Iowa on my way to and from Sturgis, South Dakota, this news item caught my attention. ...
  • North Carolina Court Fees Increase August 1, 2007

    NC will increase some court fees, including certain estate fees, effective August 1, 2007. The filing fee for estates goes up to $60 (from $50). ...
  • Inherited IRA Not Creditor Protected

    The IRA you inherited from your parents, or that your kids might inherit from you, may not be safe from lawsuits. Jim Roberts, of Glast, Phillips & Murray, P.C. in Dallas, reports on a U.S. Bankruptcy case interpreting Texas law on this issue:...
  • Real Estate and Living Trusts – Things to Consider

    Living Trusts are a common estate planning technique for avoiding probate and facilitating management of assets in the event of incapacity. ...
  • Top 10 Estate Planning Mistakes

    This article on Morningstar.com lists common estate planning problems. Click on "Continue Reading" to see the full text of the article, with my commentary....
  • NC House Committee Approves New Advance Directives Bill

    ​A committee of the North Carolina House approved a bill changing the Declaration of a Desire for a Natural Death (Living Will) and Health Care Power of Attorney laws and the statutorily approved forms. ...
  • Gift and Estate Tax Planning for Non-Citizen Spouses

    While non-citizens who reside in the U.S. are subject to U.S. income tax on their worldwide income, and U.S. estate tax for worldwide assets, they do not receive the same treatment as citizens when it comes to U.S. gift and estate taxes. ...
  • Why Establish an IRA Trust?

    In 2005 a Private Letter ruling was issued by the IRA approving a specially designed "IRA Trust" that offers maximum protection and flexibility while allowing the beneficiaries to "stretch" their shares of the IRA over their life expectancies. ...
  • Warning – This email is not from the IRS

    Today I received the following email, which is clearly fraudulent. If you get such an email, DO NOT RESPOND unless you like having money stolen from your bank account:...
  • Play Dumb to Find a Good Lawyer?

    Today I came across a question and answer column on the Raleigh News and Observer website called "Ask Holly." ...
  • Local IRS Offices

    Do you have a dispute or other matter pending with the IRS and are tired of dealing with them over the phone? ...
  • “Kiddie Tax” To Apply to Grownup Kids Next Year

    ​Effective January 1, 2008, the "kiddie tax," which applies the parent’s tax rate to children’s unearned income over $1,700 (for 2007) will apply to dependent children under age 19 and dependent full-time college students under 24. ...
  • U.S. Supreme Court to Decide on Trust Investment Fees

    On June 25 the U.S. Supreme Court agreed to hear a case on whether the investment expenses of trusts are fully deductible or subject to a 2% floor. ...
  • Making a Gift? – Make Sure You Know the Rules

    Gifting property can be an effective way to spend down assets for future Medicaid eligibility and to reduce estate tax liability. Many people are not aware, however, that unless an exclusion or exemption applies, one must file federal and state tax returns on all gifts of property....
  • NC Senate Proposes Reduction in Top Income Tax Rate

    Last week the North Carolina Senate produced its version of the state budget, which included:...
  • Survey Finds Over Two-Thirds of Americans Lack a Will

    As reported in the Lincoln Journal Star, a recent survey by the website LegalZoom found that over 70% of Americans do not have a last will and testament. ...
  • Everything You Always Wanted to Know about IRAs

    I know it’s Memorial Day weekend, but being the compulsive tax lawyer that I am, I just finished reading two books by CPA and IRA expert Ed Slott – The Retirement Savings Time Bomb…and How to Defuse It and Parlay Your IRA Into a Family Fortune. ...
  • IRS Rules IRA Rollover Okay Even Though Taxpayer Was Deceased

    IRS regulations allow an owner of an IRA to withdraw it for purposes of transferring it to another institution provided that the funds are placed in the new institution within 60 days. ...
  • Nevada Offers Estate Planning Advantages

    North Carolina is not known for its attractive estate planning and asset protection laws, but NC residents can avail themselves of certain out-of-state planning strategies that can provide significant estate tax savings and creditor protection....
  • California Tax Attorney Blog

    http://www.californiataxattorneyblog.com/ ...
  • Many NC Nursing Homes Have No Liability Insurance

    A recent article in the Raleigh News and Observer describes how many assisted living and nursing homes in North Carolina lack liability insurance, as state law does not require it. ...
  • Seniors in Love – the Practical Considerations

    Are you a widowed retiree who has found love again and is considering marriage? Or maybe you’re a middle-aged child whose parent is about to tie the knot. ...
  • Using a Professional Care Manager

    This article is from the website of the National Care Planning Council. Services from care managers should be something that every family takes advantage of, but in reality very few families use them....
  • Estate Planning School

    CNNMoney.com contains a wealth of information about financial matters, including Money 101, a series of 43 lessons....
  • Dale Earnhardt, Jr. – a Victim of his Dad’s Failure to Plan?

    Yesterday Dale Earnhardt, Jr. announced that he is leaving what was his father’s company, Dale Earnhardt, Inc. (DEI), to hopefully drive for another, more competitive company. ...
  • Consumer Reports – Use a Lawyer for Estate Planning

    This afternoon a client brought to my attention an article on do-it-yourself finance-related matters, including estate planning, in the May 2007 Issue of Money Adviser by Consumer Reports....
  • How to Avoid Probate

    What is Probate? Probate is the court process for settling the estate of a deceased person. The executor named in a Will, ...
  • NC Medicaid Changes Delayed – Again

    I previously reported briefly on the Medicaid changes required by the Deficit Reduction Act of 2005....
  • Educate Yourself to Help Avoid Living Trust Scams

    This article on the website of the National Consumer Law Center provides a glossary of living trust related terms, description of common scams, educational resources, and more....
  • Massachusetts Estate Planning and Elder Law

    http://www.lhamillattorney.typepad.com/ ...
  • (New) Jersey Estate Planning Blog

    http://www.jerseyestateplanning.com/ ...
  • IRA Expert Ed Slott Recommends Standalone IRA Trusts

    I recently attended a two day seminar by nationally recognized IRA expert Ed Slott, CPA. If the protection of a trust for IRA beneficiaries is desired, Slott says that the best way is to have the IRA paid to a Standalone IRA Trust. ...
  • New PLR on See-Through Trust and Life Expectancy for IRA Distributions

    CPA Robert Keebler reports on PLR 200708084, pertaining to See-Through Trusts....
  • CCH Financial Toolkit

    http://www.finance.cch.com/ ...
  • Ohio Trust & Estate Blog

    http://www.bonasera.org...
  • NC Attorney Rick Graves Found Not Guilty of Tax Fraud

    In an October 2006 posting, I reported that North Carolina attorney Rick Graves was indicated for tax fraud. I am pleased to report that last week he was found "not guilty" by unanimous jury verdict, and acquitted of both charges of federal tax fraud....
  • 2007 NC Tax Deduction for 529 Plan Contributions

    In 2007, qualified North Carolina taxpayers may deduct contributions to North Carolina’s 529 College Savings Plan up to $2,500 for individuals and $5,000 for married couples filing jointly. Earnings used for qualified college expenses are income tax free....
  • 10 Questions Advisors Must Ask about IRA Custodial Documents

    More helpful information on IRAs from expert Ed Slott: Financial advisors should make sure they know the following about the IRAs they advise clients about:...
  • Findlaw’s Estate Planning Center

    http://estate.findlaw.com/...
  • New Medicaid Rules to Start in NC April 1, 2007

    ​I previously reported that the changes in the Medicaid rules from the Deficient Reduction Act were to become effective in North Carolina on March 1, 2007. Now it appears that the implementation date has been moved to April 1, 2007. ...
  • Top 10 Must-Dos for IRAs

    It’s vitally important to make sure that the proper beneficiaries are designated for your IRAs and other retirement accounts, since the beneficiary designation controls what happens to the account, regardless of what your will, trust, divorce settlement, or any other agreement says....
  • Estate Tax Legislation Update

    Yesterday the U.S. Senate approved an amendment to the Budget Resolution that would extend the 2009 estate tax rate (45%) and exemption ($3.5 million) through 2012. Under current law the estate tax would be "repealed" in 2010, but would return in 2011 with an exemption of only $1 million....
  • Young Boomers Prefer North Carolina for Retirement

    Of baby boomers born between 1956 and 1964 who plan to move to another state after retirement, the top intended destination is North Carolina, according to a Harris Interactive Study (Polte Homes – Baby Boomer 2005)....
  • IRS Identifies 40 Frivolous Income Tax Positions

    Earlier this week the IRS published Notice 2007-30, which contains a list of 40 frivolous positions taxpayers should avoid taking on their income tax returns....
  • 10 Things Your Estate Planner Won’t Tell You – My View

    I recently came across an article on SmartMoney.com entitled 10 Things Your Estate Planner Won’ t Tell You. Being an Estate Planner, I read the article with interest, and while it contains some useful tips, I found several things that I strongly disagreed with or were just plain wrong....
  • Trust Beneficiary Bill of Rights

    Capital Trust Company of Delaware’s website is full of articles and other information on trusts and estate planning One short piece that I found worth sharing is the Beneficiary Bill of Rights. ...
  • HIPAA Act Horror Story

    Why make sure you and your loved have signed authorizations allowing family members access to medical records? ...
  • Supreme Court Refuses to Hear Blackwater Suit

    On February 26, 2007, the United States Supreme Court declined to hear the wrongful death case against the North Carolina private security firm Blackwater Security Consulting, LLC filed by the estates of four of its employees killed in Iraq in 2004. ...
  • Postnuptial Agreements On The Rise

    My last post was about an article about 529 Plans in the February 24-25 2007 issue of The Wall Street Journal....
  • 529 College Savings Plans used for Estate Tax Planning

    An article in the February 24-25 issue of The Wall Street Journal describes how 529 College Savings plans can be used to reduce estate taxes. ...
  • Put Cremation and/or Burial Wishes in Will

    The recent highly publicized disputes over of the disposition of the bodies of James Brown and Anna Nicole Smith has lead me make an extra effort to ask clients about their wishes for cremation and/or burial. ...
  • More on Professor Pennell’s View of the Future of the Estate Tax

    Jeffrey Pennell, a professor at Emory Law School, was one of the featured speakers today at the Mid-South Forum ( meeting of estate planning attorneys) in Atlanta. ...
  • Living Trusts Article in USA Today quotes NC Attorney General

    The February 9, 2007 issue of USA Today contained an article on Living Trusts. I found the article to provide a good overview of living trusts and their advantages and disadvantages. However, a few things deserve comment:...
  • Everyone Needs a HIPAA Authorization

    In 2003 the U.S. Department of Health and Human Services finalized regulations under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Under HIPAA, medical providers can face sanctions and monetary fines for unauthorized release of “Protected Health Information”. ...
  • Hiring a Tax Preparer

    In North Carolina, anyone can call himself or herself an accountant (as opposed to a Certified Public Accountant). No special training or education is required. If your taxes are very simple, you may be okay going to an non-certified accountant or tax preparation firm such as H&R Block. ...
  • Estate Tax Revenues Drop

    An article by Robert Frank in yesterday’s Wall Street Journal describes the recent dramatic drop in taxable estate tax returns. ...
  • When Do You Need a Financial Advisor?

    Being in a college town, most of my clients are intelligent and well educated, and many handle their own taxes and investments. However, there are times when a professional’s advice can be invaluable....
  • Trust Protectors

    The use of a "Trust Protector" in trusts for maximum flexibility and protection is becoming increasingly common. ...
  • Filing Taxes Early Can be a Mistake

    An article in yesterday’s Wall Street Journal discusses the problem of financial services firms providing late or amended Forms 1099. ...
  • Incentive Trusts

    Professor Joshua Tate of Southern Methodist University has published an interesting and informative article on Incentive Trusts, which are generally used by parents to try to shape the behavior of their children. The abstract is as follows: ...
  • New Charitable IRA Rollover Guidance

    Professor Christopher Hoyt of the University of Missouri School of Law has proved a useful summary of IRS Notice 2007-7, 2007-5 IRB 1, which provides guidance about Charitable IRA Rollovers. ...
  • Professor Pennell’s view on Estate Tax Repeal

    This week I’m attending the 41st Annual Heckerling Institute on Estate Planning in Orlando. The Institute, sponsored by the University of Miami School of Law, is the nation’s leading conference on estate planning....
  • North Carolina Medicaid Changes to take effect March 1, 2007

    ​My entry of December 8 briefly discussed the changes to the Medicaid rules in North Carolina which were thought to take effect on January 1st. ...
  • Guardianships Gone Awry – Insurance Company Sues Clerk of Court

    Hartford Fire Insurance Company has sued the Wake County, North Carolina Clerk of Court, alleging that the Clerk’s office failed to properly oversee funds held in guardianships for three minor children. ...