As we approach the end of 2017, it is a good time to take stock of the past year and plan for the future.  On the one hand, the economy is improving – the U.S. stock market is at an all-time high, unemployment is low, and consumers are spending money.  On the other hand, we are experiencing a political climate which has polarized our country.

In light of our country’s state of affairs, many Americans feel unsure about the future.  However, as Benjamin Franklin quoted- there are only two certainties in life- death and taxes!  My law firm is here to help you plan for both.  Here are some areas of interest that might have application to your estate planning.

Consider having an end-of-year family meeting.  Family meetings can help you coordinate financial and other estate planning matters and can be a valuable learning experience for children and grandchildren. Communicate the location and your intention or your estate planning documents.  Documents should be placed somewhere safe and easily accessible to the individuals you have named to handle your affairs.

Review your estate plan.  Take a look at your Will and/or Trust to ensure that you remain comfortable with bequests, personal representatives, trustees, and guardians.  Review your agents named under financial and medical powers of attorney to ensure they are still appropriate.  Review living wills to make sure you are comfortable with your end-of-life instructions.  If your documents are more than 5 years old, consult with an attorney about the advisability of executing new documents.  Recent legislation has changed some of the legal requirements for Durable Powers of Attorney, for example.

Review your insurance portfolio.  Consult with a qualified professional to determine whether or not your current life, long-term care and liability insurance continue to efficiently meet your coverage needs.

Review your beneficiary designations.  Make sure your life insurance and retirement plan assets will pass to according to your wishes.  Likewise, evaluate with your attorney the titling of your other assets to ensure they too, are distributed according to your objectives and are coordinated with your estate plan.

Charitable Planning.  In order to obtain an income tax charitable deduction for 2017, gifts must be made by December 31st.  In the case of a gift of tangible property in excess of $5,000, an appraisal will be required so you should start the process as soon as possible.  Make sure to obtain a receipt for any gifts in excess of $250 before filing your tax return.  A cancelled check may not meet the IRS requirements.

Planning for Disabled Beneficiaries.  Congress recently passed legislation to establish ABLE accounts for individuals diagnosed with significant disabilities before age 26.  You can invest cash contributions on a tax-free basis and the beneficiary will not have to forfeit certain public benefits.  You should also talk to an attorney to determine whether assets left to a disabled beneficiary must be placed in a Special Needs Trust.

Review your investment portfolio.  The end of the year is an excellent time to re-evaluate the goals of your portfolio, your risk tolerance, and the liquidity needs that will influence the next several years of your financial life.  Discuss your concerns with a Financial Advisor.  Ask your Financial Advisor and your attorney to make sure your investment goals and your estate planning goals work together, and consider having a conference with both advisors.

At the Law Office of Debra G. Simms, we are always available to help you evaluate your planning objectives and make sure your goals will be achieved.  Please contact us with any questions and concerns.

Wishing all a very Happy and Healthy Holiday season!

Charitable Remainder Trust Law

understanding-charitable-remainder-trustA charitable remainder trust has all the characteristics of any normal trust fund or deed. A trust is an agreement or contract wherein one party or a number of parties called the trustees agrees to take care of or protect a certain property or sum of money known as trust fund or property for the benefit and on behalf of a certain person or group of people called the beneficiaries. A trust deed is a written contract or agreement entered into by and between the trustees and the beneficiaries that outline all the rights, duties and obligations of the trust.

What is a charitable remainder trust?

A charitable remainder trust is similar to a trust for charitable purposes however it is an irrevocable trust that is exempt from tax. The money from the trust is first used to pay off any beneficiaries and the remaining money or ‘remainder’ is donated to a charitable organization. This trust has been designed to reduce the taxable income of an individual while filing his tax return and reduce his tax liability that he will be required to pay to the government every year. The individual’s income is first reduced by distributing the money from the trust to the beneficiaries of the trust over a particular period of time which is exempt from income tax and the remaining money is donated to a charity which is also automatically exempt from income tax liability.

How does a charitable remainder trust work?

The whole idea behind the concept of charitable remainder trust is to reduce the tax liability of the individual and prevent him from paying high taxes on his income. In most countries, a whopping 30-40% of a person’s earnings goes towards income tax payment to the government and the individual is not able to reap the benefits of his own earnings. Hence the charitable remainder trust helps to lower the taxable income of the individual. Once the assets are donated to a trust the primary beneficiaries are paid for a certain period of time and on the expiry of this time frame, the remainder of the trust money or property is donated to a charity who become the secondary beneficiaries. This is also a great way to save up your money for retirement.

Benefits of a charitable remainder trust

Once you transfer an asset into this irrevocable trust it is automatically reduced from the asset side of your balance sheet or is reduced from your total estate value. No estate taxes will have to be paid and deductions from income tax can be availed for the charities made.

A charitable remainder trust helps reduce your income tax liability and estate taxes too. It helps you convert high-value assets like real estate or stocks into a lifelong income that is tax-free. When the asset is sold you do not have to pay any capital gains tax on the sale of the property or asset.

Not only does a charitable remainder trust help you reduce your income tax liability and taxable income but also allows you to give back something to the less fortunate and help the poor. Doing charity invokes a positive feeling and gives someone else a chance at a better life.

Approach lawyer Debra G. Simms, a board certified law attorney who runs her practice at Simms Law Firm located at Prestige Executive Center, 823 Dunlawton Ave. Unit C, Port Orange, FL 32129 for all your law related queries.

To contact Florida attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667. Serving areas in and around Volusia County, Daytona, Port Orange, New Smyrna Beach and more.

Contact Us

Port Orange Office:
Prestige Executive Center
823 Dunlawton Ave. Unit C
Port Orange, FL 32129
Local: 386.256.4882
Toll Free: 877.447.4667
New Smyrna Beach Office:
629 N. Dixie HWY
New Smyrna Beach, FL 32168
Local: 386.256.4882
Toll Free: 877.447.4667

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