You might think it’s easy to leave a vacation home to your children in your will.  But there are many issues that can arise.  For instance, over time children might squabble over who will pay for major repairs or renovations, especially if some children use the property more than others.  Children might disagree about whether to sell the property.  And there are tax, liability and asset protection issues and opportunities as well. If you haven’t thought

Many people like the idea of pre-paid funeral plans because they allow funeral services to be locked in at today’s prices, and save family members the trouble of selecting caskets and attending to other matters at a time of great sadness and stress.  But if you’re thinking of such a plan, be cautious.  After you’ve paid, there’s always a risk the funeral home will go out of business, or the owner (or a new owner) will

Can you put property into a trust, but keep the power to take it back again as long as you substitute other property of equal value?  Yes in some cases, according to an IRS ruling. This means you could put real estate, artwork, an insurance policy or other property into a trust, and keep the power to take it back for yourself, as long as you’re willing to pay the fair market value of it to

If you plan to leave a house, car, business, or other property to one of your heirs, and the property is subject to a mortgage or other debt, do you want o leave it with the debt? Or do you want the debt to be paid off from your other assets so the person receives the property debt free? Surprisingly, many people don’t think about this question when they write their will.  But it can have

A trust can’t deduct on its tax return the entire amount it spends for investment advice – at least in most cases, the U.S. Supreme Court has decided. The case involved a trustee who paid $22,000 for investment advice.  He tried to deduct this amount from the $625,000 in income the trust reported on its tax return. For an individual, investment advisory expenses are a “miscellaneous itemized deduction” and they can be deducted only to the

A family-owned limited liability company saved a family $14 million in taxes, in the latest ruling from the U.S Tax Court on this technique.  With a family LLC, parents create a company and fund it with valuable assets.  Then they give their children ownership interests in the LLC.  Giving these interests triggers less gift tax than giving the underlying assets, because they are “worth” less on the open market.  That’s because outside investors would be reluctant

An heir to the Johnson & Johnson fortune created a trust to benefit four children.  The trust was set up so that it would provide money to charity for a period of years, then be distributed to the four children and their spouses. By the time the distribution came around, one of the children (named Mary) had died.  Her third husband, Martin, who was married to her when she died, claimed that he was a “spouse”

From 1997 to 2003, a family could take an estate tax deduction of up to $675,000 if more than half of the estate property consisted of interest in a family business.  This law is scheduled to go back into effect in 2010, so it’s wise to be aware of it. In particular, you should be aware that certain business decisions you make now- such as making personal loans to your company as opposed to capital contributions

The IRS has given families a little more flexibility in handling a 401 (K) and pension plans.  According to an IRS announcement, children who inherit a 401 (k) or pension plan can now roll it over directly into a Roth IRA. Before, a spouse who inherited a 401 (k) or pension plan could roll it over into a Roth IRA, but this was not true for a beneficiary other than a spouse, such as a child. 

The recent dip in interest rates has created a golden opportunity to save taxes while giving income-producing assets to your heirs.  You can do this with a “grantor retained annuity trust,” or GRAT.  It allows you to continue receiving income from the property for a number of years, and you can then give it to your heirs while dramatically reducing your estate and gift tax. The amount of taxes you can save is determined by a