estate planning

Estate Planning using Community Foundations

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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:

  1. Build a personalized philanthropic plan with assistance from our expert staff, who will work with you to carefully understand your charitable goals and interests.
  2. Use the Community Foundation’s knowledge of your region and its nonprofits to enhance your giving.
  3. Choose to remain anonymous, if you want to protect your privacy and deflect much unwanted solicitation.
  4. Create a permanent legacy for future generations.
  5. Bring your family together around giving and pass along your philanthropic values to the next generation.
  6. Develop a family mission statement and define charitable interests and goals.
  7. Develop a list of organizations and programs that match your family’s interests.
  8. 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.

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What is the future of the estate tax?

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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!

Hearing scheduled on Social Security’s Death Records

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Chairman Johnson Announces a Hearing on Social Security’s Death Records. The hearing will focus on the history, accuracy, use and impacts of the Death Master File along with options for change.  If you are interested in submitting comments to the Committee on Ways and Means then go to their website.  http://waysandmeans.house.gov/committeesubmissions/

Social Security: Will it be here when you need it?

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The Social Security  program has been providing benefits to over 47 millions workers for the past 65 years.  It was originally created to provide some assistance to workers after retirement, along with their employee retirement accounts and personal savings.  Social Security program is a sort of earned benefit insurance program, that provides benefits to workers and their family members for retirement, early retirement, disability and survivorship benefits.  It is only available to those who work and pay taxes and the benefits are supposed to be available to the workers and their family upon retirement, disability or death.

This program was never meant to be the sole funds to be relied on by retirees.  However, in these modern times Americans are saving less and receiving less company benefits, therefore reliance on the Social Security program has increased. In December of 2005, almost 48.5 million people received Social Security benefits on a monthly basis.  In the next twenty years, the baby boomers will start to retire in large numbers and could likely create a strain on the Social Security program.  Will the Social Security program still be around when we need it?   After this years election, we will have a new Congress which will have a major effect on the program, so only time will tell!

Do you need a special needs trust?

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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.