Last night’s Powerball jackpot was over $325 million. If you won the jackpot or any other lottery jackpot, you might be thinking that you won’t ever have to worry about money again–right?
With good money management you–and your heirs–could live handsomely for many, many years. But from the moment that you claim that prize, you will be descended upon by vultures who want a hefty helping of those winnings. And if you didn’t have smart money habits up until now, you could easily turn out to be your own worst enemy by quickly squandering the fortune.
Forbes has written a wonderful article about the 10 things you should think about if you win! http://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things-to-do-when-you-win-the-powerball/
Some people sell in order to eliminate future legal expense to Probate their estates. For the Small Interest Owner, the cost associated with transferring ownership can exceed the perpetual value of the royalty interest.
It is very important to understand cost or percentage depletion of a well when computing taxes. Some interest owners do not want to incur extra costs or out-of-pocket expense for the tax preparation and administration.
Some people feel it is cumbersome to try to keep track of royalty interest income and the taxes associated with the interest. This seems to be especially true for owners of small interests. By selling your interests now, you will no longer be required to pay property taxes, which can simplify your taxing preparation or taxing problems.
With energy prices at an all time high, this is an excellent time to convert royalty interest into cash and liquidate. The Cardinal Rule is, “Buy Low, Sell High”, with the oil and gas commodity markets at an all time historic high, there has never been a better time to sell.
There are various companies that will buy your interest, just make sure you go with a reputable one so you are not taken advantage of when selling.
If you have a desire to pass on some of your wealth to the charity of your choosing, there are numerous ways to accomplish this goal. You could make a bequest in your will to your favorite cause, you could create a charitable trust, you could create a foundation, or you could give to a community foundation during your life or after death.
A Community Foundation can help you reach your charitable goals as follows:
- Build a personalized philanthropic plan with assistance from our expert staff, who will work with you to carefully understand your charitable goals and interests.
- Use the Community Foundation’s knowledge of your region and its nonprofits to enhance your giving.
- Choose to remain anonymous, if you want to protect your privacy and deflect much unwanted solicitation.
- Create a permanent legacy for future generations.
- Bring your family together around giving and pass along your philanthropic values to the next generation.
- Develop a family mission statement and define charitable interests and goals.
- Develop a list of organizations and programs that match your family’s interests.
- Facilitate annual family meetings to consider grants from your fund.
If your interested, you can contact the local community foundation in your area. Most states have an association of community foundations to assist you in picking the right one. In my area, The Community Foundation of North Texas at 817-877-0702.
The estate tax is a tax imposed on the transfer of a person’s assets at death, irregardless of whether such property is transferred by will, according to the state’s intestacy rules, through a trust, or by life insurance. A certain amount of each estate is exempted from taxation by the federal government. The exemption amount for 2012 is $$5,120,000 at a 35% tax rate for all amounts above that and in 2013 the exemption amount goes down to $1,000,000 at a 55% tax rate. There have been numerous laws passed which have made only temporary changes to the estate tax exemption amount and estate tax rate, however, Congress has failed to provide for any real permanency with regards to the estate tax.
In this election year, it is clear that both the President and Congress will drag their feet to wait until the last-minute to deal with the expiration of the 2010 Tax Relief Act. Nonetheless there are several directions that Congress could go in after this fall’s elections, which include doing nothing and allow the tax to remain at 55% on anything over $1,000,000, extend the current tax act, compromise, or repeal the estate tax all together. Most estate planning professionals will tell you that it is anyone’s guess what the boys and girls in Washington will do in the Fall Session, while the rest of the country just waits. Politics as usual!
A special needs trust or “supplemental needs trust” is a trust created for the benefit of a physically or mentally disabled individual. The purpose of such a trust is to provide an individual the ability to receive litigation settlement funds or inheritance funds without affecting their government benefits.
This type of estate planning, ensures that the recipient of a settlement award or inheritance has his or her benefit eligibility preserved and is not subject to unnecessary Medicaid payback provisions.
Example: Amber is a 39-year-old women involved in an automobile accident that left her paralyzed and with permanent brain damage. The lawsuit settlement provided that Amber was to receive $600,000.00 for damages. The settlement agreement was structured so that instead of being paid the money directly, it was put into a Special Needs Trust for Amber and allowed her to obtain Medicaid assistance.