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Important IRS Update: Significant Interest Penalty Increase for Tax Underpayments

The Internal Revenue Service (IRS) has recently announced a critical change that could significantly impact taxpayers who underpay their taxes. This update is particularly relevant as we approach the next tax filing season. Previously, the IRS charged a 3% interest penalty on estimated tax underpayments. However, this rate has now been increased to a substantial

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Will Inflation Hurt Stock Returns? Not Necessarily

Investors may wonder whether stock returns will suffer if inflation keeps rising. Here’s some good news: Inflation isn’t necessarily bad news for stocks. A look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns. Since 1993, one-year returns on

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Maximize Your Charitable Impact with These Four Strategies

As the year draws to a close, it’s a perfect opportunity to rethink how you give to charity. This is important for managing how much tax you pay and how much help reaches those in need. Here are four effective strategies: Need Guidance? Reach Out to Us! These strategies are just a starting point. There

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Newlywed Estate Planning

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Category: Beneficiaries Blended Families Divorce Estate Planning

While there is a great deal to celebrate getting ready for your wedding, don’t neglect this excellent opportunity to delve into your estate planning as well. Unfortunately, as you may already know, accidents can happen at any time. Of course we all hope that nothing impacts your new family and celebrations, but it is critical that you discuss your plans with your new spouse and outline your plans early. Remember that it will be much easier to update them later on once you have decided on the proper documents, but that you should never neglect putting your plan together entirely.

Newlywed Estate Planning

Photo Credit: gogirlfinance.com

You can begin with small steps, like changing your account beneficiaries. This is one of the easiest things to do in your overall estate plan, but there are big ramifications if you’re adding on your new spouse. Do it early. Make sure you update your life insurance, IRA, and 401k accounts, including any others that may have beneficiaries listed in the event that something happens to you.

Your next step should be to look over any wills that both of you have and to ensure that each individual has a solid will reflecting his or her current wishes. Powers of attorney and medical directives are also crucial for new spouses who may be updating their information from the past to reflect their new marriage. For more ideas about transitioning your estate planning to married life, contact us through email at info@lawesq.net or contact us via phone at 732-521-9455 to get started.

Supreme Court Decision: Inherited IRA NOT Protected

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Category: Asset Protection Beneficiaries IRA Retirement Planning

A recent decision from the Supreme Court means there’s no better time than now to review your estate plans and ensure that you have identified the best possible solution for passing down assets to another generation. This new ruling states that inherited IRA funds DO NOT QUALIFY under the category of “retirement funds” under bankruptcy exemption guidelines. Previously, these kinds of funds might have been considered “bulletproof” from creditors, but this new ruling means it could be time to re-evaluate how you’re transferring your assets down to children and other beneficiaries. Is a Standalone Retirement Trust or IRA Trust right for me?

Supreme Court Decision Inherited IRA NOT Protected
(Photo Credit: baltimoretimes-online.com)

According to the Supreme Court, the members of which conducted reviews of the Bankruptcy Code to get more specifics on the situation, inherited IRAs should not count as retirement funds because the individual inheriting the assets cannot contribute to the funds or invest more money into them. Since the IRA also requires that the accountholder draw money from the account, the Supreme Court argued that this would “undermine the purpose of the Bankruptcy Code”.

Each client wishing to establish plans for the future transfer of assets to beneficiaries has their own concerns and situations, which is why it’s so critical that you work with a team of experienced planning attorneys to meet your goals and increase the chances that those assets will be protected and meaningful for the beneficiary. To review trusts and other options for asset transfer, email info@lawesq.net or contact us via phone at 732-521-9455

It’s not all about the cash: Passing on Wealth and Wisdom

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Category: Beneficiaries

It might feel overwhelming to put together your estate plan, but it’s a good tool for you as well as your children. Taking care of your needs early on can encourage children to plan for the long term and to consider their own estate plans. One of the biggest hurdles with regard to estate planning, in fact, is that there’s a general stigma when it comes to talking about money. Simply setting aside some time for the conversation is a valuable process.

Its not all about the cash Passing on Wealth and Wisdom
(Photo Credit: danielharkavy.com)

Many people that estate planning is simply for the management of their assets after they pass away, but that’s simply not true: it plays just as vital a role during your life, too. If you become incapacitated, a comprehensive estate plan will lay out your wishes clearly for your family members and other stakeholders. It’s also a tool that can be used to reduce risk and minimize taxes while protecting wealth- all of which are just as valuable while you are living.

One mistake to avoid in thinking about your estate planning is in seeing your wealth only for what it can do for the next generation in a positive light. Sometimes, there’s another impact that’s often forgotten- what your assets do to them when it comes to unintended consequences. Taxes can take a big hit on the assets if plans are put into place in advance, and gifts may even cause arguments between family members. Not every child, for example, will react the same way to learning that Mom or Dad has left a gift behind.

Estate planning is just as much about your mindset and passing on your wisdom as it is your wealth. To help create a living legacy that makes the most sense for your family, call us at 732-521-9455 or reach us through email at info@lawesq.net .

Special Planning for Second Marriages: Lessons Learned From Casey Kasem

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Category: Blended Families Family Limited Partnerships

The recent news hoopla over Casey Kasem illustrates an important lesson for planning your own estate: things may change when you throw a second marriage into the mix, calling for a re-evaluation of your plans. There are many things that should be addressed in estate planning where a second marriage has occurred. Doing so will help prevent problems and lay the groundwork for plans that actually carry out your wishes rather than spark legal battles among family members.

Special Planning for Second Marriages Lessons Learned From Casey Kasem
(Photo Credit: mediaconfidential.blogspot.com)

Medical directives, powers of attorney, and even decisions about burial planning should all be considered in your estate plan if you are involved in a second or third marriage. This avoids conflict between family members that can make the grieving process even more difficult.

When it comes to passing down assets, this is especially complex in a second marriage. Who should get the money? Should it be split between children? Does it go to the first wife in one lump sum and the remainder is split among the children? There’s a lot of tension that can arise if you don’t think about the answers to these questions well in advance. Conflicts tend to crop up especially when a non-parent spouse is receiving assets that children feel entitled to in one sense or another. The more clarity there is in your planning, the better. Once you’ve met with an estate planning professional, it’s important that you in some sense communicate what you have outlined to family member stakeholders. To learn more about estate planning techniques for second and third marriages, email us at info@lawesq.net or contact us via phone at 732-521-9455

Your IRA: Top Tips For Passing Down Your IRA To Children

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Category: IRA

Those who have spent a good amount of time contributing to their IRA might have questions when it’s time to decide beneficiaries. For example, is it best to stretch out the payouts over a lifetime to make the most of tax benefits or to withdraw the entire amount?

Your IRA Top Tips For Passing Down Your IRA To Children
(Photo Credit: beginnersinvest.about.com)

In many cases, an immediate emptying of the account is not in the best interest of the beneficiary, and it’s also something that parents may want to help their children avoid. Often, it’s difficult to suddenly manage a large sum of money, making Mom and Dad’s IRA benefits run out long before expected. Since many parents want to guard against this where possible, it’s important to note that two different strategies can help to stall an immediate withdrawal of all assets on the death of a parent.

One option is to name a trust as the IRA beneficiary, giving a trustee the power to distribute assets, but you must work with an experienced estate planner who knows how to craft a document that qualifies under IRS rules. Another option to consider is setting up the IRA as a trust account, giving trustee powers to the IRA provider, which is known as a “trusteed IRA”. This option, however, does have some downsides: higher fees and requirements for minimum balances are two of those disadvantages.

Options exist to help you plan for your future and to help beneficiaries receive assets in a somewhat-structured manner. To learn more about these planning tools, call us at 732-521-9455 to get started.