Investment advisors may be compensated in several ways. In some cases, they charge clients a fee for their advice. Sometimes they earn commissions from the investment products their clients buy based upon that advice. Life insurance is sold on commission, for example. Sometimes the advisor may earn both fees and commissions. Trust departments and trust […]
Read MoreCategory: Thursday Thoughts
Insurance and divorce
Beneficiary designations for life insurance or retirement plans are an often overlooked aspect of estate planning. A change in life circumstances may suggest a need to change those beneficiaries. Beneficiary designations can be the source of estate litigation, as a recent case demonstrates. Ronald and Heidi Lee had been married for ten years when Heidi […]
Read MoreFederal Estate Taxes
Dear Trust Officer: What is going to happen with federal estate taxes in 2018? —Interested Observer Dear Interested Observer: The IRS has announced that, under current law, the inflation-adjusted exemption from federal estate and gift tax will grow to $5.6 million in 2018. For a married couple, that means a total estate of $11.2 million […]
Read MoreThe Framework for Tax Reform
On September 27 President Trump released a nine-page “framework” for new tax legislation. The framework adds some detail to the one-page outlines that had been released earlier by the administration. The new target for the corporate tax is 20% instead of 15%. The “border-adjustable tax” is history. Pass-through entities (used by most small business owners) […]
Read MoreTax-conscious Bequests
The advent of a higher amount exempt from the federal estate tax ($5.49 million in 2017) has reduced the need for tax-aware estate planning, but it has not eliminated it altogether. Estates of any size will be subject to income taxes, as will their beneficiaries. Planning may permit this burden to be reduced. Take charitable […]
Read MoreEmotional Investing
We like to think that since the advent of modern portfolio management practices, investing in stocks and bonds has become a cerebral, analytical process with no room for emotion. The truth is that most investors, even institutional investors, are buffeted by emotional turbulence from time to time, and that truth is reflected in the volatility […]
Read MoreIRAs for charity
Charitable giving in the U.S. rose 2.7% last year, reaching an all-time record of $390.05 billion. That’s also a record in inflation-adjusted dollars, reports the Giving USA Foundation in its annual report on philanthropy. Individuals, foundations, and corporations contributed to the robust growth in philanthropy, while bequests were projected to have declined by 9.0%. Some […]
Read MoreYou can’t do that with an IRA
Terry Ellis decided that his next job would be selling used cars. To that end, he formed a limited liability company (LLC), which was to be 98% owned by his IRA. The other 2% would be owned by an unrelated third party working for the LLC. Ellis was designated as the general manager of the […]
Read MoreEstate planning for the married
DEAR TRUST OFFICER: Most married couples will never need to worry about filing a federal estate tax return, will they? I’ve heard that for couples the federal estate tax exemption is over $10 million. — AFFLUENT, NOT WEALTHY DEAR AFFLUENT: On the contrary, in the vast majority of cases of an estate with a surviving […]
Read MoreThree questions to ask yourself before you retire
As you near the end of the final lap of your working years, and begin scanning the retirement horizon, you are likely to be seeking the information that you need to ensure a secure financial future. Here, we touch on three of the most important questions that you should be asking yourself as you transition […]
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