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Legal Resources

Do you need more than one trustee?

In the old days, trusts tended to be pretty simple.  Typically, a trustee was expected to invest the funds conservatively and pay interest to a beneficiary at regular intervals.  That was about it. Today, however, trustees are often expected to invest aggressively and successfully in a much more complex market.  They may be subject to far more tax, compliance and regulatory requirements.  And they may have to provide not for a single beneficiary but for a

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Some issues to consider when you create a trust

Here’s another story that shows the importance of picking a good trustee – someone who will adhere to your wishes and prevent disputes down the road. It’s also proof that just because someone has died, that doesn’t mean they cant be the source of a lawsuit – so carefully drafting your document can save a lot of headaches. Henry Hansen set up a trust to benefit his two daughters, Mildred and Ruth.  The trustee was to

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Avoiding the gift tax

Once a year, you’ll transfer to the ILIT enough money to pay the policy premiums.  This transfer to a trust would ordinarily be subject to the gift tax.  But there’s a way around that problem too. Under the gift tax laws, you can give $12,000 per person per year to any individuals you want before the gift tax applies.  So the idea is to “give” the money to your trust beneficiaries for tax purposes, while actually

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Why share your life insurance with Uncle Sam?

If you own life insurance, you probably bought it to protect your family if something happens to you.  But did you know that half of your life insurance proceeds could end up going to the U.S. Treasury, rather than to your heirs? The proceeds themselves will go to your beneficiaries.  But the amount of the proceeds will be added to your estate for estate tax purposes. If you have enough assets to be subject to the

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How to give your home to your children and reduce taxes

Parents can give their homes to their children at a substantial tax savings by way of a trust know as a “qualified personal resident trust” (QPRT).  In creating a QPRT, parents put their home or vacation home in a trust to give it as a delayed gift (usually to their children) while retaining the right to live in the home for a number of years.  QPRTs are seen as ideal for keeping a home in a

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Planned Charitable Giving can take a Bite Out of Taxes

Planned charitable giving can play an important role in estate, gift and income tax planning.  Below are some of the more common methods of providing assets to charities.  Outright gifts: This is the most common and popular form of charitable gift.  A will or revocable trust includes a provision leaving a fixed dollar amount or percentage of an overall estate to a particular charity.  You can modify the planned gift at any time. 

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Families Can Prepay Tuition as a Way to Avoid Gift Taxes

The Internal Revenue Service recently ruled that individuals can prepay tuition of family members at private schools and colleges for a number of years as a way to cut their tax bills. This wealth-transfer technique could be a wise move for people with large estates to deal with soaring education costs and trim their federal estate and gift taxes.  Prepaying tuition in large chunks reduces the value of an estate, which can save on future estate

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Keeping your vacation home in the family

If you own a vacation home and you want it to remain in your family for the continued enjoyment by your children and future generations, you might want to consider some special planning to avoid unnecessary conflict. For example, your estate plan could specifically cover how your vacation home is to be used and maintained following your death.  This could avoid tension among family members on how to upkeep the property and who should pay for

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Blended Families can Squabble over Inheritance

More and more families have stepchildren as the result of second and third marriages, which has sparked an increase in contested wills around the country. Tension can rise when a family member who holds a family together passes away, often a parent who has children with different spouses.  From an estate planning standpoint, perhaps the wisest course is to distribute assets separately.  That way, stepchildren are not financially intertwined with each other.

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New Medicaid Eligibility Rules Could Require Changes to Estate plans

The rules on getting help from the federal government to pay for nursing home expenses have been tightened, making it harder for senior citizens to qualify for long term care payments. With the average nursing home stay between two and three years at an average annual cost of $74,000, this could become a daunting financial burden for some seniors.  The federal government has toughened the rules designed to prevent individuals from transferring assets to family members,

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