699x100

Estate Planning Blog

It’s true—taxes are a reality of life—but their financial impact can be minimized with careful estate and tax planning. As a result, we are pleased to bring you Bob Lamm’s Estate Planning Blog, where he will provide valuable information and commentary about estate planning and tax law.

It might sound tedious, but we promise it won’t be. With blog postings like “Don’t Let the Tax Tail Wag the Dog,” Bob brings estate planning to life with humor and satire, offering great tips and ideas for you, your aging parents, or your clients. Bob’s blog also can be read through a RSS feed.  Please stay tuned for more…

___________________________________________________________________________________________

The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances.  No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.

If You Like Your Rifle, You Can Keep Your Rifle

By

January 9, 2017

The Problem There is an old saying, “you can’t take it with you.” You can’t really give it away to your heirs either (if you live in the Golden State Of California), at least when it comes to certain firearms. The Law What am I talking about, you ask?  The newly enacted California Assault Weapons Ban that […]

Read More

When Doves Cry

By

May 17, 2016

For those of you who have not heard, the artist formerly known as the “Artist Formerly Known as Prince” passed away recently.  Apparently, the talented musician had a lot of money.  Some estimates are as high as $300 million.  The one thing that he did not have is an estate plan.  People ask me all […]

Read More

A Domestic Tax Inversion

By

May 8, 2015

According to Bloomberg Business, more Americans who are living outside the U.S. gave up their citizenship in the first quarter of 2015 than ever before. (see article at http://bloom.bg/1zOKGM2). The reason is that last year asset disclosure rules under the Foreign Account Tax Compliance Act (“FACTA”) kicked in. FACTA requires U.S. financial institutions to impose […]

Read More

The Decision, Part II

By

July 10, 2014

On July 8, 2010, Cleveland Cavaliers fans anxiously awaited the “Decision” of star NBA player LeBron James. In what turned out to be a made for television 75 minute spectacle of supreme narcissism, King LeBron pronounced to the masses that he would be taking his talents to South Beach. Fast forward to the present and […]

Read More

Laughing all the way to the bank?

By

May 5, 2014

I stumbled across an interesting piece this morning by Nick Lum on how Donald Sterling may actually benefit from a forced sale of the Los Angeles Clippers. The article can be found here. The author’s point is that if Donald Sterling has to sell the team by decree of the other owners, it is possible […]

Read More

Freedom Isn’t Free

By

April 15, 2014

It’s getting more expensive these days to live in the land of the free and the home of the brave. Literally. This year, Tax Freedom Day will fall on April 21st. This is three days later than it was last year.  For those that don’t know, Tax Freedom Day is the first day of the […]

Read More

The Stealth Estate Tax

By

January 10, 2014

For most, the primary focus of their estate plan is the avoidance of probate and the prevention of family discord. The estate tax exemption increased this year to $5,340,000. That’s up from $5,250,000 last year. So, unless you have a large estate (those in excess of $5 million), estate taxes are becoming more of a […]

Read More

To Bypass or Not to Bypass

By

November 13, 2013

Within the last year, there has been a shift in the way some estate planning attorneys are drafting their trusts.  The American Taxpayer Relief Act of 2012 (ATRA), passed  in January 2013, enabled a husband and wife to benefit from each other’s unused estate tax exemption amount without having to draft complex estate planning documents.  […]

Read More

What is a Series LLC?

By

October 4, 2013

I recently met up with Sudden Wealth Radio to speak about the asset protection strategy of using a Delaware Series LLC or a Nevada Series LLC.  In the interview below, I will discuss how sudden wealth can be suddenly gone if your assets are not correctly protected.  I will also explain the many strategies you […]

Read More

Til Death Us Do Part

By

September 6, 2013

The IRS issued Revenue Ruling 2013-17, which describes how the IRS will handle same-sex marriages for federal tax purposes in light of the U.S. Supreme Court decision that found a part of the Defense of Marriage Act (DOMA) unconstitutional. The ruling says: •    The IRS will consider a person in a same-sex marriage as married […]

Read More

What’s Tax Got To Do With It?

By

July 29, 2013

It is official.  Tina Turner officially tied the knot recently with her longtime partner Erwin Bach.  She also became a Swiss Citizen earlier this year. See http://www.today.com/entertainment/tina-turner-celebrates-wedding-home-switzerland-6C10699401. While I am sure that she was not motivated by anything other than love, let’s face it, it’s hard being a U.S. Citizen living abroad these days.   Blame […]

Read More

Ouch! Gandolfini’s Untimely Death – Mortality Can’t be Predicted

By

July 12, 2013

The family of the late actor James Gandolfini is about to be whacked by the IRS.  Mr. Gandolfini had an estate of approximately $70 million, and it appears that the majority of it will be distributed via a simple will that lacks the necessary tax planning provisions that would have delayed the payment of estate […]

Read More

The Coast Is Clear

By

June 7, 2013

  When it comes to the estate tax, the coast is clear, at least for now.  Much of last year was spent talking about the coming tax apocalypse, or “taxmageddon” as some called it.  Turns out, it was much ado about nothing.  Thanks to passage of the American Taxpayer Relief Act (ATRA) in January 2013, […]

Read More

From My Cold Dead Hands

By

April 4, 2013

“So, as we set out this year to defeat the divisive forces that would take freedom away, I want to say those fighting words for everyone within the sound of my voice to hear and to heed, and especially for you, Mr. Gore: ‘From my cold, dead hands!”  – Charleston Heston. Moses made this pronouncement […]

Read More

Last Minute Tax Tips

By

March 22, 2013

April 15th is quickly approaching and people keep asking me if I know any “loopholes” that will help them get out of having to pay their fair share.  The answer I give usually goes something like this, “Well, um, no.”   Seriously,  I really don’t know anything about loopholes, but I did  find some creative deductions […]

Read More

Sad News This Week

By

February 22, 2013

My goal for the Estate Planning Blog is to educate and entertain. However, as much as I like to talk about Taxmageddon, Star Wars, athletes, and Facebook, estate planning is a very serious subject. We should not forget that. This week, three people were ruthlessly killed by a homicidal madman in Orange County. Click here […]

Read More

Only Little People Pay Taxes

By

February 18, 2013

“We don’t pay taxes. Only the little people pay taxes…” -Leona Helmsley Facebook is in the news once more. Apparently, they reported $1.1 billion in pre-tax profits from U.S. operations in 2012, but will pay little if any tax.  In fact, Facebook may even receive a federal tax refund of about $429 million! The reason–it was […]

Read More

Tis the season…

By

February 11, 2013

It is that most wonderful time of year again.  That’s right, time to prepare and file your 2012 Income Tax Return!  As if this wasn’t bad enough, it is also a time that some will discover that they are a victim of identity theft.  Here are the warning signs: -Receiving a W-2 or 1099 from […]

Read More

Turn Out The Lights…

By

January 28, 2013

Turn out the lightsThe party’s overThey say thatAll good things must end Call it a nightThe party’s overAnd tomorrow startsThe same old thing again —Willie Nelson from “The Party’s Over” No doubt, this was the tune bouncing around in Phil Michelson’s head when he recently announced that we was considering leaving California.  The reason:  between […]

Read More

‘Taxmageddon’ is Upon Us—Part III

By

December 11, 2012

Last month, we discussed potential devastating effects on business taxation when the Bush Era tax acts expire. We were concerned there would be no movement, and unfortunately, we were right.  It has been more than a month since the election, and with only 19 days to go until the “fiscal cliff” hits, neither side has […]

Read More

The Force Will Be With You….Always

By

November 9, 2012

As a child,  I was a big fan of Star Wars.  I loved all of the movies (Star Wars, The Empire Strikes Back, and Return of the Jedi) and insisted on having all of the toys and action figures.  I even managed to score a Death Star, which, back in the day, was quite unique.  […]

Read More

‘Taxmageddon’ is Upon Us–Part 2

By

Last month, we spoke about the possibly devastating effects of the expiration of the Bush Era tax acts as it relates to income taxation, not just estate and gift taxes.  This month we need to talk about business taxation. Because the President and current Congress were both re-elected, we are very concerned there will be […]

Read More

‘Taxmageddon’ is Upon Us–Part I

By

October 30, 2012

Without new federal legislation, the per person gift and estate tax exclusion will drop from $5.12 million to $1 million of net worth per person on January 1, 2013, making it very difficult to defer or reduce taxation on your estate.  Estate and gift tax rates also will increase dramatically from 35 percent to 55 […]

Read More

The more things change, the more they stay the same

By

October 3, 2012

For those thinking that a GOP victory in the race for White House is going to change the landscape for the estate and gift tax, think again.  According to a recent article in the Politico, the estate and gift tax is likely here to stay regardless of the outcome of the election.  Take this statement: […]

Read More

T-100

By

September 26, 2012

Just in case everyone forgot, there are only 100 more days before taxmageddon.  Today’s posting by Americans for Tax Reform goes into gory detail about the particulars.  These are the highlights for what awaits in 2013:  Personal income tax rates will rise on January 1, 2013. The marriage penalty returns. The expansion of the estate […]

Read More

Give Til’ it Hurts

By

September 12, 2012

Don’t look now, but 2012 is almost over, and it is now time to start thinking about year-end tax planning.  The old saying is true, you can’t take it with you, and if you give it away, Uncle Sam lets you deduct the gift from your income.   If you want to wait until after you […]

Read More

Read My Lips…

By

July 25, 2012

Many people that I’ve talked with lately are more optimistic than I am about the possibility of a last minute “deal” to delay Taxmageddon, at least as it pertains to the estate tax.  Simply put, they write off any likelihood that the exemption could fall from $5 million per person to $1 million per person.  They […]

Read More

And So It Begins…Taxmageddon

By

July 11, 2012

For some time I’ve been warning my clients about “Taxmageddon.”  Taxmageddon is the term describing the onslaught of tax increases set to begin on January 1, 2013, upon the expiration of the Bush Era tax cuts. Much has been said about this already, so I won’t belabor the point.  What many do not know, however, […]

Read More

A Chain Is Only As Strong As Its Weakest Link

By

June 27, 2012

A chain is only as strong as its weakest link.  The same is true in estate planning.  As estate planners, most practitioners  focus on probate avoidance and tax planning.   While these are important,  more and more, the primary threat to a client’s estate plan is that their elder care expenses during the final three years […]

Read More

Eduardo has Left the Building

By

May 16, 2012

On the eve of the Facebook IPO, the big news is that Eduardo Saverin moved to Singapore and renounced his United States Citizenship in order to reduce the capital gains tax on his shares of the popular social media company.  You can read the story at  http://e.businessinsider.com/4fad8ad790658cce4aae11b24fad8aa46763d9655400047b/T61FmnSIy4be-fvzAbc9f.  He will pay some tax on his unrealized […]

Read More

Taxmageddon

By

May 2, 2012

“Taxmageddon” is the word being used to describing the massive tax increases on the horizon. Of particular interest to estate planners are the changes to the estate and gift tax and the increase in the capital gains tax. A more detailed discussion can be found by clicking here. Unless Congress and the President act by […]

Read More

Sibling Rivalries & Trust Administration

By

April 6, 2012

This week I came upon an interesting article called “Sibling Scorned” in the March issue of Private Wealth.   Click “link” to read the article. Basically, it discusses the battles that may ensue between siblings during the trust distribution phase after  mom and dad pass away.   My thoughts on this are quite simple.  When constructing trusts, […]

Read More

Succession Planning in Turbulent Times—Operating Companies Need an Operator

By

April 4, 2012

Fred M. Whitaker, Senior Partner at Cummins & White, LLP.  If you have questions related to this article, please contact Fred Whitaker at (949) 852-1800 or fwhitaker@cwlawyers.com. Last month we discussed the traits that mark a successful operator like yourself and identifying them in your potential successor. Integrity is the number one trait that any […]

Read More

Why You Need an Estate Plan

By

March 28, 2012

The other day, someone asked me, “What happens to my home when I die?”  In other words, “Why do I need an Estate Plan?” This is why.  Assuming that the home is not in a trust, this will be the eventual outcome: 1. If you have a will, there will be a probate, and the […]

Read More

Irrevocable: Unable to Change, Reversed or Recovered

By

March 21, 2012

There is a good article posted about donor’s remorse on WSJ Online called “The Rush to Avoid Gift Taxes.”  The article can be found by clicking here and discusses the perils of making gifts to irrevocable trusts. As I’ve said before, the problem with an irrevocable trust is that it is irrevocable. So, once the […]

Read More

Succession Planning in Turbulent Times—Operating Companies Need an Operator

By

February 15, 2012

Last month we discussed that “Operating Businesses Need an Operator.”  Operating businesses—whether you want to sell your business to a third party, your employees, or give it to your heirs—need an operator to have longevity and value you can harvest.  If you are the only one who can run it, it won’t last very long […]

Read More

The Problem With Irrevocable Trusts

By

January 26, 2012

The problem with irrevocable trusts is that, well, they are irrevocable.  Once executed, an irrevocable trust may only be amended on rare occasion, and in most cases, only upon court order.   Life happens and sometimes the Trustee is faced with a situation that was not contemplated by the creators of the trust when they signed […]

Read More

Succession Planning in Turbulent Times—Operating Companies Need an Operator

By

January 19, 2012

If you have a lawyer, a CPA, or a financial planner, you have probably been inundated in the last few months with urgent calls, e-mails, newsletters and the like imploring that you take action. The five million dollar per person ($10mm husband & wife) lifetime exemption is set to expire at the end of this […]

Read More

You Can’t Take It With You

By

January 11, 2012

When you die, you can’t take it with you, but perhaps you can do some good with the assets that you leave behind.  This was the topic at the 46th Annual Heckerling Institute Conference presentation called “What Every Estate Planner Needs to Know about Tax-Exempt Organizations and Charitable Gift Planning.” Tax –Exempt Organizations and Charitable […]

Read More

A Modern Way to Fund a College Education

By

December 8, 2011

This week I had the pleasure of attending a meeting of the Estate Planning Council of South Orange County.  The keynote speaker, Barry P. Levine, a consultant with Northern Trust, gave an interesting presentation titled, “Understanding Social Security Retirement Benefits–What You Don’t Know May Be Hurting Your Clients.”  He posed the following question:   “A man […]

Read More

An Income Tax Trifecta — Last Minute Year-End Tax Planning

By

November 30, 2011

This blog focuses on estate planning, but many times estate planning intersects with income tax planning.   Take, for example this week’s post on The Wall Street Journal Online edition titled “There Is Still Time to Cut Your 2011 Income Taxes” found by clicking here. There are many good suggestions.  In particular, I like the idea […]

Read More

Refinancing Your Home May Cost You More Than You Think

By

November 17, 2011

With record low interest rates, homeowners are rushing to refinance their mortgages.  With 30-year fixed rates averaging around 4%, who can blame them?   Moreover, with many lenders also offering to waive closing costs, it seems like it is just too good to pass up. However, for homeowners that did the right thing by creating an […]

Read More

You Snooze, You Lose…

By

November 3, 2011

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the “Act”) added a  “portability feature” for estates of decedents dying after 2010 and before 2013.  This allows a surviving spouse to use the deceased spouse’s unused exclusion amount in addition to their own $5 million exclusion for taxable transfers made during life […]

Read More

Good News!

By

October 27, 2011

Every once in a while, the federal government gets it right.  Cost of Living Adjustments impacting tax rates for 2012 were recently released and most of the adjustments are favorable (see The Wall Street Journal, October 22, 2011 article A Tasty New Cola for 2012). In particular, the estate-tax exclusion per person is increased to […]

Read More

Decisions, Decisions

By

October 19, 2011

In 2010, the Federal Estate Tax was repealed.  Then, it was brought back on December 17th of the same year.  Confused?  Join the club. The executor of an estate for a person dying in 2010 will have to file an estate tax return after all, but fortunately, they can decide what  estate tax law to […]

Read More

Location, Location, Location

By

October 13, 2011

Location, I am told, is a huge factor in determining the value of real estate.  Turns out, location can play a big factor in your estate tax bill as well. Under IRC §  2103, a nonresident, not a citizen of the United States, is subject to estate tax in the United States for property situated […]

Read More

Your Estate Plan Is Not Worth The Paper It Is Printed On……..

By

October 5, 2011

…Unless someone other than you knows that it exists.  I constantly remind my clients to keep their estate planning documents in a safe place, but not too safe.  Specifically, your executor and trustee will need to know where the documents are kept and how to gain access to them. Also, they will need to know […]

Read More

Everyone Wants To Go to Heaven – They Just Don’t Want to Die First

By

September 28, 2011

Asset Protection Nearly all of my clients are interested in “asset protection” in some form or the other.  In particular, they are concerned about protecting their home from creditors.  Currently, the homestead exemption in California is $75,000 for single persons, $100,000 for married couples, and $175,000 for persons who are 65 years of age or older or that are physically or mentally disabled.  Given the […]

Read More

If it was not for the last second rush…..

By

September 21, 2011

Many years ago, my high school English instructor liked to remind the class of the old saying, “If it was not for the last second rush, nothing would ever get done.” It was her way of teasing the procrastinators out there that were likely burning the midnight oil in order to meet an approaching deadline. […]

Read More

Don’t Let the Tax Tail Wag the Dog

By

September 14, 2011

At the end of the day, a key goal of any estate plan is to make sure that the client’s estate is distributed to the persons that they intended. Most of the time, those persons are their children and their grandchildren. However, in the absence of an irrevocable credit shelter trust that is established at the death of one spouse, the survivor would be able to amend the entire trust and, at their death, leave it to anyone. This includes leaving the estate to a new and sometimes significantly younger spouse!

Read More

Advance Health Care Directive Registry

By

September 1, 2011

Ever since the Terri Schiavo case, the public has become increasingly aware of the need for advance health care directives. In fact, it’s one of the first topics that many of my clients raise during our first meeting about drafting their estate plan. Most do not want to be placed on life support when they are in a persistent vegetative state and the advance health care directive is typically designed to prevent just that scenario. However, what good is the document if nobody knows that it exists?

Read More