2012 Posts

  • 9 Steps (Days) Away From the Fiscal Cliff – EIN Problems Too

    Congress has failed to avert the fiscal cliff. We have only nine days until the estate tax exemption drops to $1 million (and the rate goes up to 55%). Not to mention the income tax increases. ...
  • Tennessee Estate Planning: Tax Exemption Changes in 2012, 2013 and After

    Although this is the North Carolina Estate Planning Blog, much of what I blog about applies to folks all over the country. Since I am licensed in Tennessee and have clients there, I thought it was appropriate to report on these important changes in Tennessee transfer tax. ...
  • Tax Changes and Limitations on Dynasty Trusts

    Dynasty trusts, which help families legally avoid estate taxes and preserve assets for heirs of future generations, are the target of new legislation that could significantly limit their value. ...
  • Singles & Couples: Muni-Bond Tax Breaks Disappearing–Maybe

    What may become part of the “fiscal cliff” drop—and if not, it will be on the 2013 agenda—is the elimination of municipal-bond interest tax breaks. Muni-bond taxes help cover the costs of local utility services, community parks, and more....
  • It’s Not Too Late to Use Your $5 Million Exemption!

    Estate Planning attorneys all across the country are frantically working to help their clients utilize the $5.12 million gift and estate tax exemption before it disappears at year end. ...
  • The Fiscal Cliff Cometh – Things to Do By 12/31/12

    Ben Franklin said that the only two certainties in life were death and taxes. Tax exemptions and rates, however, are subject to change, and unless Congress acts soon, taxes are going up significantly next year. ...
  • IRS May Allow Late Filing Relief for 706 for Portability

    According to Robert Keebler, CPA, the IRS may allow a late filed Federal Estate Tax Return, Form 706, if the only reason for filing the return is for the surviving spouse to claim the deceased spouse’s unused estate tax exemption. The current exemption is $5 million, but it is scheduled to reduce to $1 million in 2013....
  • Last Minute 2012 Financial Move

    Last week the United States Treasury proposed new regulations for Charitable Remainder Trusts (CRTs), which affects the tax liability of distributions in 2013. ...
  • 3 Tips For Succession Planning

    Estate plans and trusts preserve assets accumulated over a lifetime and distribute them to beneficiaries, but what happens to a business when the owner or key executive departs to another company, becomes ill, or passes away? ...
  • Estate Can Sue to Enforce Waiver of 401(k) Benefits

    The recent U.S. Third Circuit Court of Appeals case Estate of Kensinger v. URL Pharma, Inc. involved an lawsuit by a decedent’s estate against an ERISA plan administrator and the decedent’s ex-wife, who was beneficiary as beneficiary of her ex-husband’s 401(k) plan, ...
  • The $5.12 Million Exemption – Use it or Lose it

    Now, weeks past the election with nothing positive coming out of Congress, people of means are finally starting to realize that it makes sense to use some or all of the $5.12 million federal gift and estate tax exemption before it falls to $1million next year. ...
  • Now is the Time to Consider Tax Issues as 2013 Draws Near

    A recent press briefing with Press Secretary Jay Carney touched on tax issues that will affect every American in 2013. Right now, Americans are ill-prepared for the approaching drop off the “fiscal cliff.” As tax cuts are about to expire in the New Year, how will individuals be affected?...
  • How to Determine Date of Death Values

    When administering an estate, determining the date of death values of the decedent’s assets is essential. Filing federal and state estate tax returns and paying any taxes due can only be done when the value of all the decedent’s property is known. ...
  • Springing Powers-of-Attorney in NC: New Court Case Makes Third Parties Responsible

    Powers of attorney, which should be part of every estate plan, allow an individual to appoint someone of their choosing to manage their assets and affairs, make medical decisions and handle other matters the individual would have controlled when they were competent. ...
  • The Financial Impact of ‘Gray Divorce’

    Divorce at any age involves the sensitive matter of splitting assets and debt. For couples who divorce in their senior years (coined a “gray divorce”), not only are a lifetime’s investments subject to division, but the costs of long-term care (LTC) also become an even more important consideration....
  • Trust Protectors in North Carolina Trusts

    North Carolina recently expanded its law regarding trust "power holders," persons named in a trust, other than trustee, who are given certain powers over the trust and/or trustee. ...
  • Don’t Fall Off the Fiscal Cliff Without an Estate Plan

    Estate Planning Awareness Week comes during the final quarter of the year, just before the New Year shift known as the “fiscal cliff.” What is the fiscal cliff?...
  • IRS Cracks Down on Gifts of Real Estate

    The IRS has begun checking land records in certain states, including North Carolina, to compare uncompensated, mainly intra-family gifts of real property to filed gift tax returns. ...
  • Estate Tax Exclusion Amount for 2012 to Increase to $5,120,000

    The IRS announced today that the amount exemption from estate taxes will increase next year. For an estate of any decedent dying during calendar year 2012, the basic exclusion from estate tax amount will be $5,120,000, up from $5,000,000 in 2011....
  • October is Special Needs Law Month

    Special Needs Law attorneys advise individuals with special needs, disabilities, and their loved ones, on laws concerning their financial comfort and well-being. ...
  • IRS Announces 2013 Tax Figures

    In Rev. Proc. 2012-41, the IRS has announced various inflation-adjusted tax figures for 2013. Among them: ...
  • 3 Tips for National Estate Planning Awareness Week

    October 15-21, 2012 is National Estate Planning Awareness Week. The country-wide campaign focuses on educating individuals about the importance of planning their estates, and the risks they face if they have not yet created an estate plan. ...
  • Dynasty Trusts Ranked – NC Doesn’t Make the Cut

    Nevada attorney Steve Oshins, who produces an annual ranking of Domestic Asset Protection Trusts, has now done the same for Dynasty Trusts. ...
  • Taxes – How Does North Carolina Stackup?

    Thinking about moving to North Carolina, or from NC to another state? Want to know how all of the various taxes compare from state to state? ...
  • Illinois Ruling Strikes a Blow at Asset Protection Trusts

    In Rush University v. Sessions, et al, the Illinois Supreme Court ruled that a transfer to a Cook Islands trust was per se fraudulent. ...
  • Transferring Vehicles to a Revocable Living Trust

    The use of revocable living trusts to avoid probate is common in North Carolina. However, one type of property that is rarely transferred to a living trust is automobiles, since doing so involves a trip to the local DMV office and paying to change the title. ...
  • Elder Law Resources – NC and Beyond

    Wake Forest University’s Law School is well known for its Elder Law Clinic, whose website contains a wealth of resources on elder law issues, including Basic North Carolina Information....
  • Online Legal Documents are Deficient

    A recent article in Consumers Reports featured a blind test of online legal documents by three law school professors. Their conclusion:...
  • Don’t Let Them Boss You Around!

    Dealing with financial institutions is not always easy; nor are the institutions always in the right. This is a big frustration in practicing estate planning and probate law....
  • Pay Gift and Estate Taxes Online

    The IRS charges hefty penalties for failure to timely pay taxes. Just like with the failure to file penalties, the failure to file penalty is 5% per month, with a maximum of 25%. ...
  • Top Income Tax Return Mistakes in 2012

    The IRS has compiled a list of the top five errors on on 2012 income tax returns, both taxpayer-prepared and those prepared by paid preparers (I intentionally don’t use the word professional, as many preparers have little training). ...
  • IRS Releases Draft 2012 Estate Tax Return

    The IRS has released a draft 2012 Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return dated August 16, 2012. ...
  • The Olympics and the Quest for Excellence

    The last couple of weeks I have been so busy I have neglected my blogging. However, I have taken some time to watch the Olympics at night, seeing athletes from all over the world compete to win a gold medal. ...
  • Long-Term Care Partnership Policies – Watch Out for Expanded Medicaid Estate Recovery

    The Raleigh News & Observer recently commented on the surging insurance rates for long-term care insurance (LTCI) policies in North Carolina, the article for which can be read here....
  • Higher Taxes are on the Horizon – 10 Planning Tips

    Despite all the wrangling in Congress, we are still facing income and estate tax increases in 2013, now only five months away. ...
  • U.S. House Republicans Introduce Bill to Continue Bush Tax Cuts

    The proposal provides for a continuation of the current income tax laws for one more year, preventing the scheduled expiration of the Bush tax cuts on December 31, 2012. ...
  • Self-Directed IRAs – Exercise Caution

    A self-directed IRA is an IRA held by a custodian that allows investments in a broader class of assets than allowed by most IRA custodians, such as real estate, promissory notes and private placement securities....
  • The New 3.8% Investment Surtax – Will it Apply to You?

    Now that the health care law has been declared constitutional, the remaining provisions will be going into effect. One little known provision is a new 3.8% investment income surtax, also called the health care surtax or the Medicare tax; ...
  • Intentionally Defective Grantor Trusts on the Chopping Block?

    Persons who have relied upon certain trusts as a means of limiting estate taxes upon their death might have cause for concern regarding an Obama administration budget proposal for 2013. ...
  • Supreme Court Clears Way for Affordable Care Act Taxes

    The Supreme Court’s recent decision to uphold the Affordable Care Act will have considerable tax consequences for both high-income as well as middle-class Americans. ...
  • New IRS Procedures Help U.S. Citizens Living Abroad

    The IRS has announced plans for new streamlined procedures that will allow U.S. citizens residing overseas, including dual citizens, to get current with their tax filing obligations without facing penalties or additional enforcement action. ...
  • Elder Fraud on the Rise – North Carolinians No Exception

    It’s an unfortunate reality that, as people get older, they find themselves at a heightened risk of becoming victims of elder abuse. Recent studies have shown that elder abuse is an increasingly prevalent phenomenon. ...
  • Keep Track of IRS Rules on IRAs and Other Retirement Accounts

    Owners of individual retirement accounts might face increased scrutiny by the IRS in the near future, posing the danger of hefty penalties for account mistakes that have previously gone unnoticed....
  • NC Dept. of Revenue issues Directive on $50k Business Income Deduction

    North Carolina has a new law, G.S. 105-134.6(b)(22), that grants business owners a deduction of up to $50,000 of their net business income from NC taxable income....
  • IRS Eases Up on Offer in Compromise Requirements

    The IRS has recently announced changes to its "Fresh Start" initiative that are aimed at helping struggling taxpayers. ...
  • Free Estate and Financial Planning Book

    Here’s a press release I received today from the American Institute for Economic Research (AIER): ...
  • New Hawaii Law to Help Protect Assets of Married Couples – NC Law is Not Quite as Helpful

    Hawaii is on the verge of a step forward in the field of asset protection, with pending legislation awaiting the Governor’s signature that, if signed, would extend the shield of creditor protection available to married couples. ...
  • The Conversation – How to Talk to Loved Ones About Elder Care Issues

    I recently met with a loving grandson, who needed some advice regarding his grandmother. His grandmother currently lives in another state. ...
  • North Carolina Scores Low for Long-Term Services and Supports

    AARP has come out with a Long Term Scorecard, which ranks each of the 50 states and the District of Columbia on "Long-Term Services and Supports for Older Adults, People with Physical Disabilities, and Family Caregivers."...
  • Get Your Social Security Statement Online

    Remember those statements you used to get every year from the Social Security Administration with your earning history and estimated benefits at retirement? Well, most of us will no longer receive them. ...
  • Most Americans Die Without a Will

    I came across a recent article in the Yahoo Finance Blog, Half of Americans With Kids Set to Die Without a Will. If you are a North Carolina resident, what happens to your estate if you don’t have a will (you die intestate, in legal terms)? ...
  • The John Edwards Case – What About Gift Taxes?

    Yesterday I blogged about North Carolina’s controversial Amendment One, which ended up passing by a large margin. ...
  • NC’s Amendment One and Estate Planning

    Today is election day in North Carolina, and I’m sure every North Carolinian, and many others across the country, know that the controversial Amendment One is on the ballot. Amendment One states that "Marriage between one man and one woman is the only domestic legal union that shall be valid or recognized in this State. ...
  • 7 Big Estate Planning Mistakes

    This recent Forbes article 7 Major Errors In Estate Planning is a must read for everyone, and most errors discussed apply to those with estates below $1 million....
  • How to Report Tax Scams

    Promoters of tax avoidance scams are not only acting illegally, but they can put unknowing participants at risk of penalties and even jail time. ...
  • NC POA Case Shows it’s Better to Plan in Advance

    A recent North Carolina Court of Appeals decision affirmed the Superior Court verdict that an agent under a power of attorney did not breach his fiduciary duty to his aunt, Doris King or unjustly enrich himself at her expense....
  • New Estate Planning Resource

    The national estate planning attorney group WealthCounsel, LLC has introduced the new EstatePlanning.Com, which, no pun intended, contains a wealth of estate planning information for the general public....
  • Estate Planning – Fast and Distant or Slow and Local?

    I’m a member of WealthCounsel, LLC, a national organization of estate planning attorneys. Lately there has been a lot of discussion on the list serve about how the internet is affecting estate planning and what the future holds for the profession and the public....
  • College Expense Tax Benefits

    The IRS has just issued a Last Minute Reminder to Parents and Student; Don’t Overlook College Tax Benefits. It provides a good overview and lots of links to other resources....
  • Why I Love LegalZoom

    First, my ideal estate planning clients do not use LegalZoom for their estate planning. The people who use LegalZoom would never go to a lawyer who is not dirt cheap. Unfortunately, experienced estate planners are not dirt cheap. Therefore, LegalZoom certainly is not costing me any business....
  • Haven’t Filed Your Taxes Yet? Here are Some Tips

    While no substitute for the advice and assistance of a tax professional, The American Institute of Certified Public Accountants (AICPA) offers 10 Tips for Last Minute Tax Filers....
  • NC Legislature Examines Elder Abuse

    The population of elderly persons is rising throughout the country, and North Carolina is no exception. The elderly are particularly vulnerable to abuse by relatives and others – increased awareness and prevention are crucial. ...
  • States Reconsider Death Taxes

    North Carolina repealed its intangible, inheritance and gift taxes within the last decade or so, but still maintains an estate tax with an exemption equal to the federal amount (currently $5.12 million). ...
  • Executors Held Personally Liable for Unpaid Taxes

    In a recent federal District Court case, the co-executors of a decedent’s estate were held to be personally liable for the decedents unpaid income taxes under the federal priority statute because they distributed assets of the estate,...
  • IRS Allows Rollover of IRA from Estate to Spouse

    As I tell my clients and audiences during presentations, one should never name one’s estate as beneficiary of an IRA or other retirement account. If the estate is the beneficiary, whether from a purposeful designation, failure to name a beneficiary...
  • Ranking Domestic Asset Protection Trust States

    Las Vegas asset protection guru Steve Oshins has updated his Domestic Asset Protection Trust (DAPT) State Ranking Chart. ...
  • The Importance of Planning for Young Families

    Many folks have the misconception that legacy planning is only for the wealthy, or for the elderly. Young families often overlook the importance of planning in the event of a parent’s incapacitation or death....
  • Long-Term Care Insurance Industry Shakeout

    Those considering long-term care insurance should be aware of recent several changes in the long-term care insurance industry. Guardian stopped offering the insurance as of December 31, 2011, ...
  • Another Flip-Flop on Inherited IRA Stretch

    Tax season is in full swing, and I was recently out of the office for a few days, so I’m a bit late in reporting this, but the provision to do away with the ability of most IRA beneficiary’s to stretch distributions over their life expectancies is now back on the table as part of the Senate Highway Bill. See Page 28 for details....
  • Stretch IRAs No Longer on the Chopping Block

    The the provision that would limit stretch IRAs (I blogged about it yesterday) has been removed from the proposed Highway Bill. Good news! See this article on AdvisorOne.com ...
  • No More IRA Stretching?

    Senator Baucus’ proposal to do away with stretching for most inherited IRA has not gone away as was anticipated earlier this month. A recently introduced Senate bill, S. 1813, the Highway Investment, Job Creation, and Economic Growth Act, ...
  • The Dirty Dozen – 12 Tax Scams to Beware of in 2012

    The IRS has released its annual list of tax scams for taxpayers to watch out for – review this list to help educate and protect yourself. Believe it or not, the IRS wants to help!...
  • Wealth Transfer Opportunities Targeted

    Wealthy folks looking to transfer assets to younger generations in tax-advantaged ways should act now, as the Obama administration is seeking to limit several favorite techniques of estate planning attorneys. ...
  • Obama’s 2013 Revenue Proposals

    The White House has issued its 2013 fiscal year revenue proposals, with estate and gift tax changes consistent with administration’s earlier stance on those rules....
  • IRS Procedure for Requesting Extension for Late 706

    Beginning in January 1, 2011, the Internal Revenue Code provides for portability of the estate tax exemption between spouses. According to issued guidance so far from the IRS (Notice 2011-82 and IR-2011-97), ...
  • Senator Baucus Proposes Big Changes to IRAs

    I’ve been a big proponent of planning to preserve the ability to "stretch" inherited IRAs over the life expectancy of the beneficiary, which allows for tremendous tax-deferred growth. In what came as a big surprise,...
  • Tax Related Duties of an Executor

    I just came across this article, Closing Down the Estate, on SmartMoney.com. It gives a good overview of what an executor is responsible for from a tax perspective, but is by no means exhaustive. Since Executors can be personally liable for certain tax penalties, they should make sure to engage an experienced tax attorney or CPA to ensure that everything is done timely and correctly. ...
  • S Corporation Service Firm Owners Beware

    S Corporation owners who are service providers often take a low salary so that they can receive most of the firm’s profits as a dividend, avoiding payroll taxes. When the salary is unreasonably low, or there are no other fee generating employees of the firm, doing so is particularly questionable....
  • Drafting an IRA Trust – What You Need to Know

    I have previously blogged about IRA Trusts, which are one of my favorite estate planning tools. This afternoon I presented a 90 minute national continuing legal education teleconference and webinar on the topic. I...
  • Why Lawyers vs. the Internet – a Baker’s Dozen

    It’s Friday the 13th, and I’ve been at the University of Miami School of Law’s Heckerling Institute on Estate Planning all week. This morning there was some discussion on the future for estate planning attorneys. ...
  • New NC Estates Court Costs in 2012

    Effective January 1, 2012, North Carolina has added a couple of new court costs in estate matters:...