One common estate planning technique the IRS has opposed or blocked for years is “charitable lid planning.” This technique relies on “defined value” and “value adjustment” clauses or similar provisions in wills, deeds or other transfer documents to cap the transfer taxes on estates, gifts or generation-skipping trusts at some
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TOPICS / PERSONAL FINANCIAL PLANNING
Estate planning
Valuing Art for Tax Purposes
Even people who don’t collect art probably own a painting or sculpture or two. At some point, one of two things is likely to happen: One, the artwork will be given away, perhaps as a noncash charitable contribution for which the owner will claim an itemized deduction, or as a
In the Twilight of the EGTRRA
When the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA, PL 107-16) was enacted in 2001, almost no one seriously thought that one of its most important provisions would ever be given its full effect—the repeal of the federal estate and generation-skipping transfer (GST) taxes in 2010. However,
Study of Financial Picture Reveals Struggles, Risky Habits
A study examining personal financial habits shows many Americans are struggling to cover their mortgage and other monthly bills, don’t have rainy day funds, and have yet to do the math on how much money they’ll need to retire. Roughly 49% of those surveyed reported having trouble paying their monthly
Charting a Course: Estate Planning 2009–2011
This special report is published as a supplement to the July 2009 issue of The Tax Adviser. It looks at the status of estate, gift, and generation-skipping transfer taxes over the next few years.1 Current State of the Law In 2001, Congress enacted the Economic Growth and Tax Relief Reconciliation
CPA Financial Planners Assess New Risk Environment
Eighty percent of CPA financial advisers are strongly recommending a mix of growth and income securities for their clients, according to an online survey of members of the AICPA’s Personal Financial Planning Section. The survey, conducted between April 22 and June 4, showed that CPAs are re-evaluating their clients’ risk
Estate Planning: Time for a Tuneup
A CPA is in an excellent position to help clients address the issues of estate planning. CPAs are usually aware of the scope of their clients’ assets and often know something about family relationships, recent marriages, children, grandchildren and other key facts. They see their clients annually in connection with
Quick Points on Prenups
Premarital agreements (also known as prenuptial agreements, or “prenups” for short) involve elements of estate planning and divorce law. And because such agreements can center on finances and taxes, accountants should be aware of how they operate. WHEN A PRENUP MAY BE NEEDEDPrenups aren’t just for rich people—they are for
Be Wary of Taxes Sapping Life Insurance Proceeds
Life insurance can provide an “instant” source of liquidity to the estate of an owner of a closely held business, preferably when the policy insuring the business owner’s life is held by an irrevocable life insurance trust (ILIT). Especially when business owners face succession issues, CPAs advising
Wealth Harvesting: More Than Just Retirement or Succession Planning
EXECUTIVE SUMMARY The first step in developing a wealth harvesting plan is to identify the client’s departure objectives, focusing on four categories: providing for the client and the people and causes they care about; ensuring a smooth and successful succession; protecting assets; and developing tax-smart strategies. It takes a variety
Advising Private Foundations
In the arsenal of estate planning, private foundations have traditionally ranked among the big guns. With their relative formality and extensive tax rules, they have been considered the province of the truly wealthy – people with $1 million or more to dispose of charitably. The belief that lesser largesse could
Trust-Owned Life Insurance: The CPA’s Role
Many CPAs recommend that their high-net-worth clients use trust-owned life insurance (TOLI) as the cornerstone of their estate plan. In addition, many CPAs choose to serve as trustees of such trusts. CPAs who are considering accepting a trustee designation should be well aware of the hazards inherent to the task
Life Is Short, Art Is Long: Maximizing Estate Planning Strategies for Collectors of Art, Antiques and Collectibles
by Michael Mendelsohn Wealth Management Press, 2006, 421 pp. Accountant, financial planner and outsider art collector Michael Mendelsohn has composed a pleasant read with a purpose. His premise: Most people collect something, and over time many of those collections come to represent important client wealth that should be included in
Tune Up for High-Performance Wealth
Each year, individuals and business owners should evaluate their wealth management initiatives to make sure they have the appropriate portfolio for their age and investment goals. Practitioners should emphasize the following key points to help clients maximize their saving potential. Maximize retirement plan contributions. The 401(k)/403(b) maximum
Smart Stops on the Web
TAX SITES Links for Professionals www.taxsites.com CPAs and tax preparers will want to bookmark this directory to accounting, payroll and tax Web sites. In the tax software category, users can find many links to electronic programs for income tax preparation, payroll and 1099s, estate, trust and retirement, and sales and
Small Business Insurance Checkup
or most people a preventive visit to the doctor for an annual checkup has become routine. Similarly, each year drivers have their cars inspected to ensure safe and reliable transportation. But too often, small business owners—including CPAs—don’t take similar measures to ensure the financial health of their organizations by conducting
Death and Taxes
EXECUTIVE SUMMARY CPAs WHO FILE FORM 706 ON BEHALF OF DECEASED clients should be familiar with some common pitfalls. The form shows the decedent’s assets, liabilities and allowable deductions that together are used to calculate the estate’s tax liability. FOR HELP IN DETERMINING WHICH ASSETS TO LIST on form 706,
Web Sites Worth a Visit
PERSONAL FINANCIAL PLANNING SITES www.ihatefinancialplanning.com Don’t let the URL fool you. Whether they love or hate financial planning, PFP professionals and clients can find useful information at this Web site. Visitors can register for free to access articles, checklists and interactive forms on topics such as annuities, asset allocation, budgeting,
Planning for Higher Education
ollege is expensive. IRC section 529 qualified tuition programs have become more popular due to Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) provisions that ended the taxing of distributions used to pay qualified higher education expenses. Prior to the EGTRRA, the earnings portion of such distributions was
Smart Stops on the Web
ESTATE PLANNING SITES Test Your Knowledge www.aaepa.com The American Academy of Estate Planning Attorneys Web site offers a top 10 estate planning techniques section which gives an overview of various approaches and how to use them to protect clients’ wealth. The FAQ area helps CPAs answer common questions such as
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