Gifting

A critical question to ask yourself when creating an estate plan is who will get your stuff when you pass on? While most people think about who they would like to receive the major items—homes, retirement accounts, savings—personal property such as jewelry, clothing, sports equipment, vehicles, and other possessions are often overlooked. The truth is that while some mementos and sentimental items may be very valuable to you, the people that you want to give them to at your death may not need or want them. Who, then, will get your remaining property and possessions if no one wants them?

How Gifts Pass Through Your Will

Your will contains instructions to be carried out by your personal representative for who should receive the money and property that has become part of your estate when you die. Your estate consists of real property (i.e.
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How your accounts are owned makes a big difference in estate planning. The main objective is usually to ensure that no accounts and property are in only your name when you die. Otherwise, they will be subject to probate, a costly, public, and time-consuming court process that many people prefer to avoid. Therefore, it is important that you review your accounts and beneficiary designations to be sure that the death of your loved one has not compromised your previously established plan.

Accounts with beneficiary designations, such as life insurance policies, retirement accounts, and annuities, will be distributed at your death, without probate court involvement, to the beneficiaries you have named.
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Setting money aside for your children’s or grandchildren’s education is a great way to provide for their future. However, it is possible that not all of the money you have set aside will be used for college expenses. For example, your child may receive a large scholarship and will not need to use all the money you have saved, or your grandchild may choose a trade school that is less costly than you expected. Alternatively, your child or grandchild may decide to join the workforce immediately upon graduation. When confronted with this scenario, you may wonder what you can do with the excess money.
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There are many reasons why you may want to give to a charity: You may give because you believe strongly in a cause or organization, but it can also reduce your yearly income tax bill and remove value from your overall estate. If you are considering making a donation, but are unsure of how to proceed, we are here to help. Working closely with other members of your financial team, we can craft a plan utilizing the charitable planning strategies that will best help you achieve your goals.

Genealogy has long fascinated many people, and it continues to be studied by those who are interested in discovering who they descended from and what those family members were like. Many of us have gazed at black and white or sepia-tone photos of ancestors whose names we don’t know and wondered about their lives, joys, trials, and accomplishments. Fortunately, today, there are many resources making it much easier to discover information about prior generations of our families.

You’re not a carbon copy of your neighbor. Likewise, your estate plan shouldn’t be a carbon copy of theirs.

A qualified estate planning team’s approach to counseling will be tailored to your specific needs. As your team works together to produce, tailor, or edit your estate plan, one key tool to consider is the niche trust.

Income tax basis may not be the most exciting topic to read about.  However, it is a critically important topic to anyone who owns significant assets.  Gaining an understanding of the basics of basis is a way to avoid costly mistakes.

The Real Meaning of Basis

According to IRS Tax Topic 703, your basis “is generally the amount of your capital investment in a property for tax purposes. Use your basis to figure depreciation, amortization, depletion, casualty losses, and any gain or loss on the sale, exchange or other disposition of the property.

While we all want to provide financial help to our loved ones—whether they are family or close friends—it is important to understand that how the money is classified will directly affect your estate planning. Accordingly, the intent behind the transfer of the money is key when determining if it will be considered a loan, gift, or advancement.

Understanding the Differences

Loan

If there is a mutual understanding that the money you gave to a loved one is to be paid back, this is considered a loan—whether the so-called loan was documented or not. If the money lent is not paid back before you pass away, the sum is still owed to your estate by the borrower. The loan becomes an asset of the estate.
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