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Multiple Advantages of Charitable Giving

Lifetime gifts may carry considerable advantages over charitable bequests, according to Atlantic Trust, the U.S. private wealth management division of CIBC (NYSE: CM) (TSX: CM).

Lifetime gifting allows you to see your donation make a difference. In addition to this giving advantage, there’s also the goals of receiving an income tax deduction or estate tax savings, explains the PR Newswire article titled “Benefits of lifetime charitable gifts can outweigh bequests.”

For instance, individuals who give cash to public charity typically are entitled to an income tax deduction of up to 50% of their adjusted gross income (AGI) or up to 30% of their AGI for donations of other appreciated assets that are held for at least a year. What’s more, these deductions can be carried forward for up to five years if they can’t be taken in the year the gift was made.

There a few factors that come into play when creating a giving plan. Donors need to consider the pros and cons tax-wise of donating various types of property—and also the manner and timing of the gift.

There are other ways to give besides writing a check, accordingly to the original article, like structured giving vehicles. These types of strategies include a donor-advised fund, a private foundation, or a charitable remainder trust. These can give you additional benefits such as convenience, control, and anonymity. In addition, donors are able to leverage multiple giving vehicles to maximize the effect of their charitable giving.

Gifting real estate or tangible property, like a valuable piece of art or a classic car, are also terrific ways to make a sizable contribution to a charity. However, these types of donations may be a little more complicated. The timing of your gift or charitable donation can also be a critical element in your decision making process, as a donor's financial profile and tax outlook could influence when you make the gift and whether you do it in a single year or you start a multi-year gifting program.

Contact Robert A. Gordon of Redkey Gordon Law Corp, a qualified estate planning attorney who will know how to best structure your giving intentions to maximize your gift for both you and the recipient.

Reference: PR Newswire (March 12, 2015) “Benefits of lifetime charitable gifts can outweigh bequests”

Is It Necessary for a Trust to Last 360 Years? Several Mississippians Think So.

Legislation allowing Mississippians to place their assets in a trust for up to 360 years passed the state House and is now pending before Gov. Phil Bryant.

How long should a trust really last?

According to the Northeast Mississippi Daily Journal, Mississippi’s House Judiciary Chair Mark Barker said many states were passing laws allowing for the establishments of trusts for 360 years or longer. He also commented that this is actually the process already since there are loopholes in the existing state rules against perpetuities.

In general, though, current state law allows a person to set up a trust that would last to a point where a person’s grandchildren were young adults; however, at that point they would, in effect, own the property or assets and could do with them as they wanted. The grandchildren would have the authority to control the property and assets.

Under the state’s bill heading to the Mississippi governor, a trust for real estate could last for 110 years. But a trust for assets, such as money and investments, would be allowed to last 360 years. The reason for making these rules is that trusts usually are more protected from paying taxes on assets and property.

Talk to Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney, about the length of trusts and how they are taxed in your state. He will have the know-how to best set up a trust so that your needs and intentions are satisfied, and everything is legal and sound.

Reference: Northeast Mississippi Daily Journal (March 13, 2015) “Bill allowing trusts for 360 years heading to governor”

Will the Driverless Car Upend Insurance?

http://www.wsj.com/articles/will-the-driverless-car-upend-insurance-1425428891

There are special time limitations on public entity claims. Contact an attorney quickly in these type of cases...

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Planning for Minor Children

Although it is a difficult subject to face, you have options when it comes to protecting your estate and your family. The steps you take now can help prevent the wrong people from making decisions for your loved ones.

If you have minor children, who will take care of them in the event of your passing? Although no one likes to think about this, it is crucial that you make a plan.

A recent article from Military.com, titled “Protect Your Children's Future,”offers some ideas on how to protect your children. For starters, make sure to you have a will drafted by an experienced estate planning attorney. Be sure to name one or more people to be the legal guardian of any of your children you may have under age 18. [Note: In some states, like California, a will is not the only way to appoint such a guardian. Be sure to consult with an experienced estate planning attorney in your own state.]

A guardian is tasked with making decisions regarding the care and upbringing of your child. You should talk to this person prior to drafting your will to be sure they accept the responsibility. You should also have a back-up guardian in case the designated guardian is unable to serve. In addition, you can name someone other than the guardian to be in charge of overseeing your children's financial affairs. This serves as sort of a built in “checks and balances” to make sure the guardian is not tempted to use some of the inheritance for personal purposes.

Another way to help your children is to establish a trust to protect the property you intend to pass on to them.  This can be done regardless of your children’s ages. Just like the guardian, an important piece of this is designating the right person to serve as the trustee. This is the person who will manage the assets and make distributions based on your instructions in the trust document. Trustees can be individuals or institutions, as well as combinations of the two.

The original article recommends having a financial protection plan that includes Life and Disability Income Insurance. What would happen to your children if you were to die or become disabled and unable to work? Would there be enough assets to provide for their upbringing and education? An experienced insurance professional can help you determine how much money would be necessary to help protect your children in coordination with your will or a trust.

Living Documents. All parents need an up-to-date power of attorney, health care proxy and living will. A power of attorney allows a trusted agent to pay your bills for you and manage your finances according to the terms of the document. The other documents give you the opportunity to express your desires concerning the use of life support and other treatments to keep you alive, and permit medical decisions to be made for you if you are incapacitated.

Get these documents in order by contacting Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: Military.com (February 27, 2015) “Protect Your Children's Future”

Send Junior to College with a 529 College Savings Plan

Given the rising cost of most college tuitions, the complexity of college loan agreements and the difficulty for most middle-income families in simply maintaining their budget for ordinary daily household expenses, planning for your children’s college education is an important topic to consider at the earliest possible stages of a child's development. Fortunately, an established method of helping to accomplish this goal is the 529 college savings plan.

The 529 college savings plan is a way to save and set aside money specifically for the purpose of funding higher education. It’s a tax advantaged investment program that’s designed to help you fund future qualified education expenses. The benefits are that it offers flexibility, control, and tax advantages—plus it’s available to anyone who wants to make contributions for qualifying higher-education expenses without income limits (like Grandma or a favorite uncle!). The Legal Intelligencer’s recent article titled “529 College Savings Plans: How They Work” explains more, so let’s break it down.

The 529 owner keeps control of the assets and is allowed to choose how much and when money can be withdrawn. The owner can also change the beneficiary to a different family member related to the original beneficiary (see your estate planning attorney for the rules on this) whenever they like, and the investment allocation can be adjusted once a year.

You can also enjoy some federal income tax savings with a 529 plan because the account can grow tax free. But contributions are not deductible. Any withdrawals from the 529 made expressly for qualified higher-education expenses are also federal income tax free, but non-qualified withdrawals will be hit with regular federal income tax plus a 10% penalty.

One other feature of a 529 plan is that it can also be effective in estate planning. A 529 savings plan can decrease future estate taxes, as up to $14,000 of the annual gift tax exclusion per contributor can be taken when transferring assets to a child or grandchild (or up to $70,000 with a five-year election). When the assets are deposited in the 529 plan, the law says they are viewed as being removed from the account owner's estate, even though that owner still has control over the distribution of the plan itself.

Talk with an experienced estate planning attorney because there are many options available and your participation in a 529 plan doesn’t guarantee that the contributions and investment returns will be enough to cover higher education expenses. Contributors assume all investment risk, including the potential for loss of principal, and any penalties for non-educational withdrawals. Your state may offer state tax advantages to residents who participate in the in-state plan.

To find out more, speak to Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: The Legal Intelligencer (March 3, 2015) “529 College Savings Plans: How They Work”

Estate Planning in a Virtual World

Roos said it’s important that people plan ahead and put “someone in charge of these digital assets and giving the family the opportunity to take over accounts if something were to happen, so they can control the information so it doesn’t get into the wrong hands.”

Have you heard the buzz about digital estate planning? For those with online accounts—this includes online bank accounts, social media accounts, and photography accounts—these are part of your digital estate. And just like your physical assets, your digital assets need protection too.

A recent kcra.com report, titled Have you planned your digital afterlife?, reminds us that a digital estate can cause real headaches for grieving loved ones who may be attempting to access those accounts. The report recommends that people write down their passwords and make sure their trusted relatives will have access.

Google has the option of having trusted contacts access their accounts or to have the data deleted after a specific period of inactivity. Facebook recently started the “legacy contact” option, which lets their users select someone to manage their pages after death. If a user doesn’t do anything, and Facebook discovers that the individual has passed, his or her posts will remain active and “memorialized” according to that user’s settings.

The original article says that it’s important for you to plan ahead and put someone in charge of these digital assets so your family would have the opportunity to take over if something were to happen to you—allowing them to control the information. One more thing:  your digital estate planning should also incorporate your digital devices, like cellphones and laptops, along with the data they contain.

Pictures, music, videos, and documents make up our digital life. Make sure that you’re prepared to pass those on. Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney can help guide you through this process.

Reference: kcra.com (February 27, 2015) Have you planned your digital afterlife?

PBS Series “Downton Abbey” a Good Example of Estate Planning Lessons

The viewers of this high-end PBS costume drama, which takes place about a century ago, could very likely be your clients' demographic. Look at who's a top corporate sponsor: Viking River Cruises, which told The New York Times that “our demographic is affluent Baby Boomers 55+.” It's a big group: more than 10.1 million viewers watched the first episode of the fifth season in early January. Look closely and see if Downton can impart valuable financial lessons to you.

It can be difficult to explain to clients the ramifications of putting off their estate planning. Sometimes people have to “see it to believe it,” so to speak. Enter PBS hit series, Downton Abbey.

Downton Abbey follows the lives of the fictitious Crawley family who live in a grand English country house in the early 1900s. Downton’s characters can teach some valuable financial lessons, according to AccountingWEB’s recent post titled, “8 Lessons You and Your Clients Learn by Watching Downton Abbey.

The Crawley family on the award-winning PBS series are stewards of a large estate—over 1,000 acres of agricultural land with a village of tenant farmers and so on. They must keep the estate going and pass it on to the next generation. The big issue on the show lately is finding a suitable husband for Mary, so the estate remains in her family. Take a look at a few of the articles eight lessons:

Being Rich Doesn’t Make You Smart. Now the Granthams on the show may be friends with the Astors in New York and the aristocracy in England, but they’re extremely poor financial managers. Doing things the way we always have isn’t a business plan. Pay attention and make the necessary moves to be viable.

It's Never Too Early for Estate Planning. In season three of the popular series, Matthew Crawley revives the massive estate by injecting a large amount of cash he received as an inheritance from his deceased fiancé's family. The estate was afloat again, and Robert made Matthew a joint owner. However, he’s killed in a car crash. That’s another problem. Were this in 2015 America, any clients with more than $5.43 million in assets need to understand their estate tax liability.

One more lesson—Respect the Value of Advice. Lord Grantham got into a pickle financially by investing in a Canadian railway. But the founder died, and the railroad was on the verge of bankruptcy. LG either didn’t ask his broker’s advice or just ignored it. So if you’re paying an expert for advice, you should follow it.

Read some of the other lessons from this article and talk over a strategy for you and your loved ones with Robert A. Gordon, an experienced estate planning attorney from Redkey Gordon Law Corp.

Reference: AccountingWEB (March 10, 2015) “8 Lessons You and Your Clients Learn by Watching Downton Abbey”

New to Estate Planning? Follow This Guide for Help

Whether you want to provide for your family after your death or you just want to ensure that the process is as easy as possible for your family, estate planning is the easiest way to accomplish your goals.

What exactly is estate planning? Are you unsure of where to begin?

“Estate planning is simply the fancy legal term for deciding what to do with your stuff after you are gone,” according to The Cheat Sheet article titled “A Beginner’s Guide to Estate Planning.” Although no one really likes to talk about dying and what will happen when they die, it’s important to start planning. You really want to start your estate planning now while you are still living (of course!) and in sound mental and physical health. Planning allows you to choose what happens to your assets and prized possessions instead of a relative, friend—or worse—the probate court. With some basic estate planning, you can ease the burden on your loved ones of dealing with your estate.

If your estate is subject to taxes, The Cheat Sheet article stresses that a proper plan can help reduce or even eliminate these taxes.

After you pass away, your will is executed via the probate process. Probate includes the distribution of your assets to your heirs.

Estate planning can be a much easier task with the help of an experienced estate attorney. After you read the original article, set up an appointment to cover the basics and the finer points of your specific circumstances. Contact Robert A. Gordon of Redkey Gordon Law Corp to get started.

Reference: The Cheat Sheet (March 3, 2015) “A Beginner’s Guide to Estate Planning”

Its in the description of the food...

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