The Covid-19 pandemic has offered a great reminder to review the elements of your estate plan. Below are some key items to consider. Set up a call with your estate planning lawyer to consider any specific details related to your own plan. Review your health care proxy and power of attorney: Be sure you are comfortable with your choices of who will make medical and financial decisions on your behalf if you are unable to do
Get Your Affairs in Order For most of us, coronavirus and the threat it poses has made us contemplate the status of our estate plans. As thousands of people in the Commonwealth have died of COVID-19 and its complications, many thousands more are ill, and many, many thousands more face unemployment and financial hardship. There are also innumerable, lesser losses: newborn grandchildren who have yet to meet their grandparents; weddings canceled and postponed; funerals with only
The IRS recently offered settlements to a select number of taxpayers involved in what are known as “micro-captive” insurance schemes. Tax law generally allows businesses to create “captive” insurance companies to protect against certain risks. In abusive “micro-captive” structures, accountants or wealth planners convince owners of closely held entities to engage in schemes that actually lack the protections of real insurance. Under IRS Notice 2016-66, taxpayers are mandated to disclose such transactions due to their potential
The amount of time banks and other financial institutions have to notify people with retirement accounts about new rules for taking required minimum distributions (RMDs) has been extended. Under IRS Notice 2020-06, financial institutions have until April 15 to notify certain people with retirement accounts that no RMD is due for 2020. The new rule was recently enacted under the SECURE Act, increasing the age for RMDs from 70 1/2 to 72. Before passage of the
Taxpayers making large gifts no longer have to worry about big taxes coming back to bite them years from now. The IRS finalized regulations confirming that gifts made under the increased lifetime exemption under the Tax Cuts and Jobs Act of 2017 will not be subject to tax when the exemption returns to the rates that existed before the law went into effect (slated to occur on Jan. 1, 2026). The TCJA temporarily increased the gift
The Treasury Department recently issued final regulations regarding investments in so-called opportunity zones. The Qualified Opportunity Zone program, which offers tax incentives for investing in economically blighted communities, was created under the 2017 Tax Cuts and Jobs Act. Investment vehicles known as Opportunity Zone Funds allow investors to defer capital gains for up to 10 years, and possibly receive greater tax advantages, when they reinvest capital gains (from any investment, such as stocks, real estate or
When setting up a revocable trust, you need to be diligent about asset transfers, beneficiary designations and funding formulas. Failure to complete certain steps can prevent the trust from acting as you intended, creating additional cost and unintended consequences for your estate. Common issues include the following: Failure to transfer assets Setting up a trust is just the first step. You must accurately transfer assets into the trust in order for its proper function to take
You may already be familiar with the idea of setting an “in case of emergency” contact that displays on the lock screen of your phone to let emergency personnel know whom to call if you’re found alone unconscious or unable to speak. Smartphone providers now offer enhanced options that let you provide even more emergency information, such as medical conditions and allergies. Newer iPhones make it easy with their integrated Health app, but there are ways
Resist the urge to avoid naming a guardian as part of your estate plan simply because it’s not easy to imagine someone else raising your children. If you don’t, you leave the guardianship of your children up to the courts if you pass away. Think about who, starting with your family members, would be the best choice. Remember that the guardian you choose doesn’t also have to handle money for your children. Assuming you have life
An Irrevocable Life Insurance Trust (ILIT) has long been a fundamental tool for managing federal estate tax liabilities. But with a sizable increase in the federal estate tax exclusion, some families are wondering if their ILIT is even relevant anymore. An ILIT owns your life insurance policy for you, essentially removing it from your estate. ILITs were popular for their ability to shelter life insurance proceeds from estate taxes. They also give the grantor the ability
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