Estate Planning Blog
From My Cold Dead Hands
By Robert Lamm
“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 [...]
Last Minute Tax Tips
By Robert Lamm
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 [...]
Sad News This Week
By Robert Lamm
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 [...]
Only Little People Pay Taxes
By Robert Lamm
“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 [...]
Tis the season…
By Robert Lamm
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 [...]
Turn Out The Lights…
By Robert Lamm
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 [...]
‘Taxmageddon’ is Upon Us—Part III
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 [...]
The Force Will Be With You….Always
By Robert Lamm
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. [...]
‘Taxmageddon’ is Upon Us–Part 2
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 [...]
‘Taxmageddon’ is Upon Us–Part I
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 [...]
The more things change, the more they stay the same
By Robert Lamm
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: [...]
T-100
By Robert Lamm
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 [...]
Give Til’ it Hurts
By Robert Lamm
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 My Lips…
By Robert Lamm
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 [...]
And So It Begins…Taxmageddon
By Robert Lamm
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, [...]
A Chain Is Only As Strong As Its Weakest Link
By Robert Lamm
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 [...]
Eduardo has Left the Building
By Robert Lamm
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 [...]
Taxmageddon
By Robert Lamm
“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 [...]
Sibling Rivalries & Trust Administration
By Robert Lamm
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, [...]
Succession Planning in Turbulent Times—Operating Companies Need an Operator
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 [...]
Why You Need an Estate Plan
By Robert Lamm
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 [...]
Irrevocable: Unable to Change, Reversed or Recovered
By Robert Lamm
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 [...]
Succession Planning in Turbulent Times—Operating Companies Need an Operator
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 [...]
The Problem With Irrevocable Trusts
By Robert Lamm
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 [...]
Succession Planning in Turbulent Times—Operating Companies Need an Operator
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 [...]
You Can’t Take It With You
By Robert Lamm
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 [...]
A Modern Way to Fund a College Education
By Robert Lamm
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 [...]
An Income Tax Trifecta — Last Minute Year-End Tax Planning
By Robert Lamm
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 [...]
Refinancing Your Home May Cost You More Than You Think
By Robert Lamm
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 [...]
You Snooze, You Lose…
By Robert Lamm
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 [...]
Good News!
By Robert Lamm
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 [...]
Decisions, Decisions
By Robert Lamm
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 [...]
Location, Location, Location
By Robert Lamm
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 [...]
Your Estate Plan Is Not Worth The Paper It Is Printed On……..
By Robert Lamm
…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 [...]
Everyone Wants To Go to Heaven – They Just Don’t Want to Die First
By Robert Lamm
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 [...]
If it was not for the last second rush…..
By Robert Lamm
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. [...]
Don’t Let the Tax Tail Wag the Dog
By Robert Lamm
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!
Advance Health Care Directive Registry
By Robert Lamm
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?
