Search found 1781 matches

by bsteiner
Sun May 29, 2016 9:39 pm
Forum: Personal Finance (Not Investing)
Topic: Does anyone routinely analyze real estate comps?
Replies: 4
Views: 414

Re: Does anyone routinely analyze real estate comps?

We look at them when we review the appraiser's draft of an appraisal for estate or gift tax purposes. The appraiser has to make some judgments as to which comparables to select, and what adjustments to make to compare them to the subject property. In your case, you're hiring a broker to sell your pr...
by bsteiner
Sun May 29, 2016 8:04 pm
Forum: Personal Finance (Not Investing)
Topic: Funding a child's trust before death of grantor
Replies: 27
Views: 959

Re: Funding a child's trust before death of grantor

... Can't an IDGT be structured so that the Grantor and trustee can "swap" assets of equal value? I seem to recall a strategy where a Grantor can donate appreciated assets to an IDGT and later, perhaps when experiencing excessive cash flow from RMDs, "swap" cash for appreciated ...
by bsteiner
Sun May 29, 2016 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: Funding a child's trust before death of grantor
Replies: 27
Views: 959

Re: Funding a child's trust before death of grantor

... The downsides are expenses (both setup and most trusts have at least a .5% asset fee) and potentially the loss of stepped up cost basis (obviously paying 40% to avoid 15% isn't a win. But paying 0% is obviously better than 15% :)). .... The setup cost is significant if you're only making one $1...
by bsteiner
Sun May 29, 2016 6:20 pm
Forum: Personal Finance (Not Investing)
Topic: Can we inherit IRAs if not married?
Replies: 20
Views: 1311

Re: Can we inherit IRAs if not married?

There is an income tax deduction for the estate tax on income in respect of a decedent such as IRAs, at the marginal rate. However, it only covers the Federal estate tax, not the state estate or inheritance taxes. That makes the Roth conversion more attractive in states that have a state estate or i...
by bsteiner
Sun May 29, 2016 6:17 pm
Forum: Personal Finance (Not Investing)
Topic: Funding a child's trust before death of grantor
Replies: 27
Views: 959

Re: Funding a child's trust before death of grantor

... Would a trust that is funded using Crummey power provisions still enjoy robust asset protection? or is it considered a self-settled trust because of the withdrawal right and therefore reachable by a child's creditors? ... Many states now provide that if a beneficiary allows a withdrawal power t...
by bsteiner
Sun May 29, 2016 4:54 pm
Forum: Personal Finance (Not Investing)
Topic: Funding a child's trust before death of grantor
Replies: 27
Views: 959

Re: Funding a child's trust before death of grantor

Thanks Bruce & Gill & afan for your responses. I forgot about the stepped up basis. The increased taxes due to lack of stepped up basis, lawyer cost to set up irrevocable trust, and any income tax paperwork make this less attractive. I originally thought an irrevocable trust was almost too ...
by bsteiner
Sun May 29, 2016 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Funding a child's trust before death of grantor
Replies: 27
Views: 959

Re: Funding a child's trust before death of grantor

If you're concerned that you might have a taxable estate, then it might make sense to give your child $28,000 a year, either outright or in trust. A trust wouldn't make sense for one $28,000 gift, but if you think you might make similar gifts each year then it might make sense. The trust could be a ...
by bsteiner
Sun May 29, 2016 2:04 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security Disability???
Replies: 23
Views: 954

Re: Social Security Disability???

... People who qualify for Social Security disability benefits normally qualify for Medicare within two years of the date SSDI payments begin, so your sister-in-law should be eligible within two years (or possibly sooner, if there was an administrative delay in determining her qualification for SSD...
by bsteiner
Sun May 29, 2016 1:53 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security Disability???
Replies: 23
Views: 954

Re: Social Security Disability???

... People who qualify for Social Security disability benefits normally qualify for Medicare within two years of the date SSDI payments begin, so your sister-in-law should be eligible within two years (or possibly sooner, if there was an administrative delay in determining her qualification for SSD...
by bsteiner
Sun May 29, 2016 10:13 am
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

@bsteiner. The trust that owns the Arizona house is resident in Canada. If we still own the house when I die, there will be no triggering event for US estate taxes as I am not the settler, trustee, or beneficiary of this trust. My 32 year old daughter is the beneficiary, my wife the trustee. I have...
by bsteiner
Sun May 29, 2016 10:01 am
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

If you use a trust, do the beneficiaries lose the ability to stretch out distributions from Ira/401k accounts? Do funds have to be distributed within five years? Can the trust allow stretch distributions? .... If a trust (whether under your Will, under a revocable trust, or under a separate trust i...
by bsteiner
Sun May 29, 2016 9:58 am
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

... Spouse and I have RLT's with each named as cotrustee. I could get hit by a bus today and spouse could take over without missing a beat. We have DPOAs as well, but my experience leaves me doubting that they would be useful. I am curious whether bsteiner has confronted this problem? Have your cli...
by bsteiner
Sun May 29, 2016 9:45 am
Forum: Investing - Help with Personal Investments
Topic: Investing when you have an estranged spouse
Replies: 89
Views: 3869

Re: Investing when you have an estranged spouse

Should she be concerned about this point regarding her parents "They already signed over the deed of their house to me." Could her spouse actually come after 1/2 of the house as part of any divorce settlement? That depends on what state they're in. In most states, gifts and inheritances a...
by bsteiner
Sun May 29, 2016 7:35 am
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

1210sda wrote:... The reason I created the Trust was Estate Taxes. My estate was larger than the $600k exemption in the '80's. ...


Including a credit shelter trust in your Will or in a revocable trust may save estate taxes. However, creating a revocable trust won't save (or cost) any estate taxes.
by bsteiner
Sun May 29, 2016 7:34 am
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

... With regards to attorney fees for probate. My home state of Florida has a statute that defines "reasonable fees". For an estate of $1 million, Florida considers a fee of $30,000 reasonable, for 2 million a fee of $55,000 is reasonable, at 3 million it is $80,000. It goes up from there...
by bsteiner
Sat May 28, 2016 9:12 pm
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

Bsteiner knows his stuff For me, I probably will have my current ABC trust created in the lower exemption days restated to a simpler version that allows for the surviving spouse to decide on the split as opposed to mandating a 50/50 split. Living in California, I still want a trust to avoid costly ...
by bsteiner
Sat May 28, 2016 8:23 pm
Forum: Personal Finance (Not Investing)
Topic: Can we inherit IRAs if not married?
Replies: 20
Views: 1311

Re: Can we inherit IRAs if not married?

... My Girl Friend is 60 and I am 69. We live in Maryland. When we got together back in 2002, a local law firm told us that if, for example, she were to inherit my IRAs she would have to pay a 10% Maryland inheritance tax and then my children would have to pay another 10% inheritance tax when they ...
by bsteiner
Fri May 27, 2016 12:26 pm
Forum: Investing - Help with Personal Investments
Topic: Do You Consider Taxes When Evaluating Asset Allocation?
Replies: 14
Views: 565

Re: Do You Consider Taxes When Evaluating Asset Allocation?

While on the one hand the traditional 401(k) or IRA is pre-tax, on the other hand it has the benefit that the income and gains on your share (1 minus the tax rate) are tax-free, and it offers the potential for a Roth conversion. These benefits may offset, or perhaps even more than offset, the fact t...
by bsteiner
Fri May 27, 2016 12:03 pm
Forum: Personal Finance (Not Investing)
Topic: Inherited IRA with RMDs in peak earning years -- other options?
Replies: 26
Views: 1681

Re: Inherited IRA with RMDs in peak earning years -- other options?

If the beneficiary's children are the contingent beneficiaries, he/she could disclaim the IRA, and his/her children would be able to stretch it over a longer period of time. If his/her tax bracket is close to 50% and the IRA is modest, presumably he/she could afford to disclaim it.
by bsteiner
Fri May 27, 2016 11:04 am
Forum: Personal Finance (Not Investing)
Topic: Does the $5.45M exemption from estate taxes change your estate planning
Replies: 31
Views: 2451

Re: Does the $5.45M exemption from estate taxes change your estate planning

Ignoring state estate taxes, there's a tradeoff in smaller estates. Leaving your estate to a credit shelter trust will protect it from your spouse's creditors, predators, future spouses, and Medicaid. However, there's some additional cost to administering the credit shelter trust (the trust will hav...
by bsteiner
Fri May 27, 2016 8:18 am
Forum: Personal Finance (Not Investing)
Topic: Should a 72 yo renew term life insurance?
Replies: 31
Views: 2162

Re: Should a 72 yo renew term life insurance?

If your health has declined by enough, it might make sense to keep the insurance even if you don't need it. If you're in the latter part of an x-year level term it might also make sense to keep the insurance even if you don't need it, since in the later years you're getting a favorable price (that y...
by bsteiner
Wed May 25, 2016 6:07 pm
Forum: Personal Finance (Not Investing)
Topic: Cost for/how to understand(ing) trust documents
Replies: 26
Views: 1205

Re: Cost for/how to understand(ing) trust documents

... In the example stated, I believe that the contingent beneficiaries would have future rights until the primary beneficiary attained the age of 70 and gained the right to 100% of the trust assets. ... That's unusual. What was the IRA owner trying to accomplish by that? Can the trust be decanted t...
by bsteiner
Wed May 25, 2016 1:06 pm
Forum: Personal Finance (Not Investing)
Topic: Cost for/how to understand(ing) trust documents
Replies: 26
Views: 1205

Re: Cost for/how to understand(ing) trust documents

... What in the world was the person thinking when they set up this beast? I hate trusts. It's not the fault of trusts that this one (assuming it's as the original poster described) is the way it is. Trusts can be very useful both for asset protection and saving taxes. The trustee is primarily acco...
by bsteiner
Wed May 25, 2016 10:19 am
Forum: Personal Finance (Not Investing)
Topic: Cost for/how to understand(ing) trust documents
Replies: 26
Views: 1205

Re: Cost for/how to understand(ing) trust documents

If you're describing it correctly it may be a much larger project than you estimated to figure out what you have and to what extent you can fix it, and to fix it to the extent possible.
by bsteiner
Tue May 24, 2016 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: Cost for/how to understand(ing) trust documents
Replies: 26
Views: 1205

Re: Cost for/how to understand(ing) trust documents

What are the going rates (typically) for this kind of review? A couple of hours of some attorney's time? And can I get a written opinion for piece of mind? My attorney would probably ask you to drop off a copy at her office so she could read it for an hour. Perhaps paraphrase or outline and transla...
by bsteiner
Mon May 23, 2016 10:31 pm
Forum: Personal Finance (Not Investing)
Topic: Incomplete Account Beneficiary Information
Replies: 21
Views: 1022

Re: Incomplete Account Beneficiary Information

You have to name beneficiaries for your retirement benefits (so they can get the stretch) and for your life insurance (to protect it from your creditors). However, the easiest way to deal with your other assets is not to name beneficiaries for them. Your Will can say who gets what (dollar amounts f...
by bsteiner
Mon May 23, 2016 8:30 am
Forum: Personal Finance (Not Investing)
Topic: Buying Whole Life using your RMD
Replies: 28
Views: 2077

Re: Buying Whole Life using your RMD

It's not a fraud. The estate tax is due 9 months after death. If you've used up your other money, and all you have left is your IRA, then your estate will need to use some of the IRA benefits to pay the estate tax. To the extent your estate needs to use some of your IRA benefits to pay the estate ta...
by bsteiner
Mon May 23, 2016 8:06 am
Forum: Personal Finance (Not Investing)
Topic: Incomplete Account Beneficiary Information
Replies: 21
Views: 1022

Re: Incomplete Account Beneficiary Information

You have to name beneficiaries for your retirement benefits (so they can get the stretch) and for your life insurance (to protect it from your creditors). However, the easiest way to deal with your other assets is not to name beneficiaries for them. Your Will can say who gets what (dollar amounts fo...
by bsteiner
Sun May 22, 2016 8:18 pm
Forum: Personal Finance (Not Investing)
Topic: Buying Whole Life using your RMD
Replies: 28
Views: 2077

Re: Buying Whole Life using your RMD

The taxation of your remaining retirement benefits is the same regardless of whether you invest the required distributions that you receive in life insurance, stocks, bonds, real estate or baseball cards, or whether you spend them. Right, the question is, is buying insurance to avoid this tax a goo...
by bsteiner
Sun May 22, 2016 4:28 pm
Forum: Personal Finance (Not Investing)
Topic: Buying Whole Life using your RMD
Replies: 28
Views: 2077

Re: Buying Whole Life using your RMD

The taxation of your remaining retirement benefits is the same regardless of whether you invest the required distributions that you receive in life insurance, stocks, bonds, real estate or baseball cards, or whether you spend them.
by bsteiner
Sat May 21, 2016 8:38 pm
Forum: Investing - Help with Personal Investments
Topic: Cost basis problem with Vanguard re inherited assets
Replies: 16
Views: 1297

Re: Cost basis problem with Vanguard re inherited assets

Also you said that your parents both had credit shelter trusts, which is impossible. The credit shelter trust under your father's Will would only have been created if your mother survived your father, and the credit shelter trust under your mother's Will would only have been created if your father s...
by bsteiner
Wed May 18, 2016 10:09 pm
Forum: Investing - Help with Personal Investments
Topic: A very large sum and a unique situation
Replies: 24
Views: 2473

Re: A very large sum and a unique situation

... Estate planning has definitely been a priority since I first realized what the future would probably hold. A revokable trust and a will were set up in 2003 and has been revisited and refined over the years. All assets are held by this trust, and my mother (in her mid sixties) is the sole truste...
by bsteiner
Tue May 17, 2016 4:50 pm
Forum: Personal Finance (Not Investing)
Topic: Is it common for a step mother to inherit everything?
Replies: 105
Views: 7708

Re: Is it common for a step mother to inherit everything?

While we generally don't recommend joint ownership or naming beneficiaries for large accounts and in large estates What's the rationale behind this part? Do you mind expanding on some reasons? I would have expected it to be critical for larger accounts - to avoid probate.... or are you implying it ...
by bsteiner
Tue May 17, 2016 4:19 pm
Forum: Personal Finance (Not Investing)
Topic: Is it common for a step mother to inherit everything?
Replies: 105
Views: 7708

Re: Is it common for a step mother to inherit everything?

In second marriage situations where there are children from the first marriage, some clients leave everything to the second spouse, some clients leave everything to the children (except to the extent they're required to provide for the spouse either by law or a prenuptial agreement), and some client...
by bsteiner
Mon May 16, 2016 9:27 pm
Forum: Personal Finance (Not Investing)
Topic: Estate As Beneficiary Of A Deferred Annuity
Replies: 5
Views: 426

Re: Estate As Beneficiary Of A Deferred Annuity

If an estate inherits the death benefit of a deferred annuity, say $60k, where the original cost was $15k and the remaining $45k is tax deferred interest, I assume that the estate federal income tax return will show taxable income of $45k, taxed at an estate rate of about 39%. Can the tax rate on t...
by bsteiner
Mon May 16, 2016 9:21 pm
Forum: Personal Finance (Not Investing)
Topic: Unexpected issues: Cancer and Estate planning
Replies: 23
Views: 3349

Re: Unexpected issues: Cancer and Estate planning

He focuses on the two end points in leaving property to children, leaving assets outright and leaving assets in trusts that the child doesn't control, rather than the middle ground that makes the most sense in the majority of cases, leaving assets to the child in a trust that the child effectively ...
by bsteiner
Mon May 16, 2016 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: best moment to use step up in basis
Replies: 7
Views: 577

Re: best moment to use step up in basis

I once had a case where the wife, who was the surviving spouse, had recently died. The client was a trustee of what was supposed to be a credit shelter trust, but the spouse had a withdrawal power that wasn't clear whether it was limited to an ascertainable standard. He said that if he knew that the...
by bsteiner
Mon May 16, 2016 3:26 pm
Forum: Personal Finance (Not Investing)
Topic: best moment to use step up in basis
Replies: 7
Views: 577

Re: best moment to use step up in basis

If the trust is included in the beneficiary's estate (some are, most aren't), then you can sell immediately upon death. If the estate is subject to estate tax, there's a tradeoff. If you wait six months for the alternate valuation date, if the shares go up, you pay tax on the increase at capital gai...
by bsteiner
Mon May 16, 2016 2:52 pm
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

Yes, I am anxious to hear that as well. If the independence of the trustee does not matter much, as long as there is either an ascertainable standard (in some states) or a second trustee to make distributions to the beneficiary (in others), then the major reason for a corporate trustee disappears. ...
by bsteiner
Mon May 16, 2016 2:44 pm
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

If a beneficiary has the power to distribute to himself/herself for an ascertainable standard, it may be available for Medicaid, the income is more likely to be taken into account in determining alimony and child support, and in a state that doesn't have this UTC provision it may be available to cr...
by bsteiner
Mon May 16, 2016 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

Bruce - I'm struggling to reconcile the following two comments you've made: As to how to structure the trust, about half the states have enacted the Uniform Trust Code, though there are variations in it from state to state. Some states have enacted the provision that's been quoted, whereby the trus...
by bsteiner
Mon May 16, 2016 11:21 am
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

Bruce, Thanks for that. Would the Tanen case have avoided a long and I assume expensive court fight if the trust had not instructed the trustee to "support" the beneficiary? It ultimately turned out the way the grantors would have wanted, but only after spending ??how much?? in legal fees...
by bsteiner
Sun May 15, 2016 8:15 pm
Forum: Personal Finance (Not Investing)
Topic: Long Term Care Insurance or Not?
Replies: 41
Views: 2308

Re: Long Term Care Insurance or Not?

While you might not need the insurance, and if you had it to do all over again you might not have bought it, you might nevertheless consider keeping it. Long-term care insurance is like whole life in the sense that the premium doesn't increase with age, but it's like term insurance in the sense that...
by bsteiner
Sun May 15, 2016 7:34 pm
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

bsteiner, Thanks for joining in. It is always worrisome when those of us who are not attorneys are telling each other what we think we know about the law. My concern about the identity of the trustee arose from reports of cases, particularly divorces, where the courts essentially rejected the Indep...
by bsteiner
Sat May 14, 2016 9:37 pm
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

... A corporate trustee may take 1%. They may then hire a financial advisor to "manage" the funds. That's another 1%. Then, this financial advisor, obligated by prudent investor rules has to exercise his/her special skills at active management. This adds another 1% in excessive expenses (...
by bsteiner
Sat May 14, 2016 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: FERS FEHB and Medicare Part B
Replies: 25
Views: 1334

Re: FERS FEHB and Medicare Part B

... I think it is wasteful to pay for an expensive FEHB plan -- like BCBS Standard -- plus Medicare Part B, except under extraordinary circumstances. Something like GEHA Standard or Aetna Direct is the way to go if you want to hedge your bets and so pay two premiums. What if there's an extraordinar...
by bsteiner
Sat May 14, 2016 9:19 pm
Forum: Personal Finance (Not Investing)
Topic: Leave kids money by trust or outright/tax implications
Replies: 55
Views: 7120

Re: Leave kids money by trust or outright/tax implications

Providing for a child in trust rather than outright keeps the inheritance out of the child's estate for estate tax purposes, and better protects the inheritance against the child's creditors, predators and spouses, and Medicaid. When the estate tax exclusion amount was much lower, keeping the inheri...
by bsteiner
Sat May 14, 2016 8:10 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning Trusts and IRAs
Replies: 8
Views: 1430

Re: Estate Planning Trusts and IRAs

...bsteiner wrote: 1. Leave the IRA to the spouse, taking the rollover and the possible Roth conversion but giving up some of your state exclusion amount. 2. Leave a portion of your IRA to or in trust for your children, utilizing your state exclusion amount but giving up the rollover and the possib...
by bsteiner
Sat May 14, 2016 7:53 pm
Forum: Personal Finance (Not Investing)
Topic: Unexpected issues: Cancer and Estate planning
Replies: 23
Views: 3349

Re: Unexpected issues: Cancer and Estate planning

...I've read the Condon book "Beyond the Grave" and loved it. I encouraged my mother to read it despite dealing with a trust attorney already. ... That book provides some useful information but has some limitations. Without saying so, it's focused on community property, and California in ...
by bsteiner
Thu May 12, 2016 5:20 pm
Forum: Personal Finance (Not Investing)
Topic: Estate Planning Trusts and IRAs
Replies: 8
Views: 1430

Re: Estate Planning Trusts and IRAs

I've spoken at several webinars for Strafford, including one with Scott Tippett who did this one. They're continuing legal education programs for lawyers, mainly those not in major metropolitan areas where there are lots of live seminars with prominent speakers.

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