I just took a call from a trusted financial planner who was concerned about a client. It seems the client was “advised” to contact a VA Expert to help them qualify for VA Aid and Attendance benefits. The “Expert” is advising them to liquidate everything they’ve worked their whole lives to save and put it all in an annuity in their children’s names.
Unfortunately, this is happening everywhere – because we have failed to get the word out and share the truth about VA planning. So here it is:
1. Yes, the annuity plan described above will work – and the “expert” will make thousands of dollars selling the annuity – win, win, right? Wrong!
2. What if something happens to one of the children . . . divorce? . . . lawsuit? . . . any number of unforeseen events could cost this parent everything!
VA aid & attendance is a terrific benefit for our war-time veterans . . . they deserve everything we can give them . . . but they do not have to give up everything they’ve earned to get these benefits.
VETERANS . . . you can qualify for the benefit WITHOUT AN ANNUITY! And you can qualify without transferring your assets to your children.
You can maintain ownership, control and customized access to ALL of your assets and still qualify for these benefits . . . but you need a qualified attorney to assess your situation, not an annuity salesman!
The VA benefit should be a part of your total Estate Plan, not the whole thing – don’t fall victim to a salesman who is chasing a big commission!
Hunter Law Office, PC helps families protect their assets against loss from the unforeseen (and foreseen) events in life that inevitably take us off course. We are unique in that our practice is focused on each individual client . . . we design a plan around you and your family . . . because that’s what Estate Planning is supposed to be!
Wednesday, February 24, 2010
Debunking the Myths...Who is in Charge When Mom Dies?
What, exactly, is the difference between a Power of Attorney, an Executor or a Trustee? Aren’t they all basically the same thing? . . . NO, they are not.
What, exactly, is probate? Should we avoid it? . . . Maybe.
Do I need a Will or a Trust? . . . It depends
Confusion reigns when it comes to these terms, and the powers associated with each of them. Here’s a brief glossary of some of the basics:
Power of Attorney (attorney-in-fact): Grants authority to another person to act on your behalf (sign your name) during your life. Power terminates at death.
Durable Power of Attorney: Same as Power of Attorney but the power continues in the event you become mental incapacitated at any time. Power terminates at death.
Executor (Personal Representative): The person named in your Last Will & Testament who will be in charge of your “estate”.
Estate: All of the stuff (property, money, bank accounts, etc.) that you owned in your name alone at your death.
Probate: The process of administering your estate and appointing your executor or personal representative. The process requires a Court to grant authority to your executor, and may be “supervised” by the Court, or “unsupervised” depending on the circumstances.
Trust (Living Trust): A separate legal entity that you can create to own your estate. If you have a “living” trust (created during your lifetime), and have properly funded the trust, your estate will not go through the probate process.
Don’t be a victim of misinformation – the circumstances that happened to your neighbor’s-cousin’s-daughter’s-husband’s-mother might not be the same as yours. Talk to a qualified professional and get the real facts.
Hunter Law Office, PC helps families protect their assets against loss from the unforeseen (and foreseen) events in life that inevitably take us off course. We are unique in that our practice is focused on each individual client . . . we design a plan around you and your family . . . because that’s what Estate Planning is supposed to be!
What, exactly, is probate? Should we avoid it? . . . Maybe.
Do I need a Will or a Trust? . . . It depends
Confusion reigns when it comes to these terms, and the powers associated with each of them. Here’s a brief glossary of some of the basics:
Power of Attorney (attorney-in-fact): Grants authority to another person to act on your behalf (sign your name) during your life. Power terminates at death.
Durable Power of Attorney: Same as Power of Attorney but the power continues in the event you become mental incapacitated at any time. Power terminates at death.
Executor (Personal Representative): The person named in your Last Will & Testament who will be in charge of your “estate”.
Estate: All of the stuff (property, money, bank accounts, etc.) that you owned in your name alone at your death.
Probate: The process of administering your estate and appointing your executor or personal representative. The process requires a Court to grant authority to your executor, and may be “supervised” by the Court, or “unsupervised” depending on the circumstances.
Trust (Living Trust): A separate legal entity that you can create to own your estate. If you have a “living” trust (created during your lifetime), and have properly funded the trust, your estate will not go through the probate process.
Don’t be a victim of misinformation – the circumstances that happened to your neighbor’s-cousin’s-daughter’s-husband’s-mother might not be the same as yours. Talk to a qualified professional and get the real facts.
Hunter Law Office, PC helps families protect their assets against loss from the unforeseen (and foreseen) events in life that inevitably take us off course. We are unique in that our practice is focused on each individual client . . . we design a plan around you and your family . . . because that’s what Estate Planning is supposed to be!
Tuesday, February 2, 2010
2010 Estate Tax Repeal. Is it really as good as it sounds?
Once again, Congress has created a monster and waited too long to fix the mess! The year 2010 has been anticipated in Estate Planning circles ever since the 2001 tax act, signed into law by then-President George W. Bush (the “Act”). The Act called for a gradual reduction in the maximum rate of the federal estate tax from 55% to 45%. It also gradually increased the amount you could pass tax-free from$675,000 in 2001 to $3.5 million in 2009. That meant that a husband and wife could pass up to $7 million to their heirs completely free of estate tax if they both died in 2009.
However, in 2010 only, the Act completely repealed the estate tax-which sounds like good news at first…except there is a catch…. in order to pay for the lost tax revenue, the 2010 estate tax was replaced with an increased income tax on inherited property. Prior to 2010, heirs received inherited property with a “step-up” in basis. For instance, if you bought a stock for $1.00 per share (your basis), and it had increased to $10 per share prior to your death, your heirs could receive the stock at its current fair market value of $10 per share (their basis). When they sell the stock, they pay capital gain tax on the difference between their basis of $10 and the value they receive at sale. The net result was that the growth that occurred during your life was not taxed. This rule also applied to real property (i.e. your house).
In 2010, property that passes at death does not automatically receive this step-up in basis. Instead, each individual has a limited amount of property that can be “stepped-up” in value at the time of death. Property that does not receive this step-up value will be subject to income tax on all increase in value from the date you first acquired the property.
Interestingly, Congress tried to institute a similar law in the 1980s, but ended up repealing it because it was impossible to properly administer. Due to that past experience and the difficulty in calculating the tax, it was widely believed that Congress would change the law before January 1, 2010, but it didn’t. There is some speculation that Congress may yet act on this law and retroactively implement a “fix”, but we can never be sure.
That’s why you should consult with an expert whose job is to understand the rules and figure out the best planning strategies for you and your family.
Hunter Law Office, PC helps families protect their assets against loss from the unforeseen (and foreseen) events in life that inevitably take us off course. We are unique in that our practice is focused on each individual client… we design a plan around you and your family… because that’s what Estate Planning is supposed to be!
Subscribe to:
Posts (Atom)
