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Recent Blog Posts
Save Money With New Montgomery County Property Tax Credits
Over 65 and living in your Montgomery County, Maryland home for 40 years or more? New property tax credits for qualifying Montgomery County, MD homeowners could save you BUSHELS of MONEY!! Read on – *NEW* Property Tax Credit for Elderly Individuals and for Military Retirees (Bill 42-16)
The gift of your home: How a QPRT can reduce your taxes
Your home is a considerable asset. Yes. You have money in the bank, investments made and valuable possessions, but your home is also a rather significant asset to take into account when deciding how you want to leave your assets to your loved ones.
At the end of the day, the goal is to reduce the tax burden for you and your loved ones. Utilizing a qualified personal residence trust, commonly referred to as a QPRT, is one estate planning tool that allows you to live in your home, while also gifting the home to someone else, such as a child or grandchild. The benefit with a QPRT is that it reduces the size of your estate, which equates to a tax savings.
The basics of a QPRT
By no means are you expected to have an in-depth understanding and knowledge of how a QPRT works. After all, this is what your attorney is for. Rather, that you need to know is that you can give your home away, while still living in it for a certain period of time. After this time period is reached – a time period you pre-determine – the home is then either given to the named person or to a trust.
Prenuptials and estate plans for marriage after 50
Finding love in life is a great feeling, no matter your age. However, just like there are considerations for a 25-year-old to make prior to marriage, there are also important decisions someone 50 or older also needs to consider before walking down the aisle. In this blog post, we hope to provide some basic information on the importance of having a prenuptial agreement and finalizing estate plans before getting married.
Prenuptial agreement: Protect your children’s assets
Those who are 50 or older tend to be better established in life. Going into a marriage, there may be significant assets already, such as a home, retirement accounts and investments. The thing is, unless a prenuptial agreement specifically spells out the terms of how to divide assets in the event of a divorce, you run the risk of an ex-spouse getting the assets you intended for yourself, along with the ones you were hoping to one day leave to your children and grandchildren.
Strategies To Save Your Loved Ones Money After You Pass
You have worked hard for everything you have and you no doubt want to leave your children with your assets when you pass. While this sounds simple enough, the truth is that estate tax laws are downright confusing, and one small mistake or oversight can have serious financial implications for your heirs.
When it comes to estate planning, there is a number of different estate tax planning strategies you will want to explore with your attorney.
Tax benefits through trusts
Trusts can be beneficial for a number of reasons. These financial estate planning tools allow you to not only decide who will receive your assets, but you can also set stipulations for how and when these assets can be used — both while you are alive and after you pass. In addition to giving you more control over your assets, irrevocable trusts also provide tax benefits, as the assets are considered no longer owned by you and are therefore not subjected to estate taxes.
Spread The Word : Big Jumps In Estate Tax Exemption Amounts Effective In 2017
D.C.’s New Estate Tax Exemption Amount
The District of Columbia’s Office of Tax and Revenue recently announced that the D.C. estate tax exemption amount – – that is the portion of an estate NOT subject to tax – – will DOUBLE, from $1 million to $2 million, applicable to residents who pass away after December 31, 2016. This is big, welcome news! Those with their eyes on the ball had been disappointed the past couple of years, as this move had been announced in mid-2014, but was made dependent on the District’s budget meeting certain revenue goals, which had not been achieved until recently.
Maryland’s New Estate Tax Exemption Amount
As planned, Maryland’s estate tax exemption amount increased to $3 million for individuals who pass away in 2017 — an increase of a cool million dollars over the 2016 exemption amount. Assuming no bumps in the road, the Maryland exemption amount will be $4 million for individuals who pass away in 2018, and in 2019 and beyond, the Maryland’s estate tax exemption is scheduled to match the federal estate tax exemption then in effect for individuals who then pass away. Look how far we’ve come — in December 2014, the heirs of Maryland domiciled decedents had to bear a tax of approximately 16% on the taxable gross estates for the amount over and above a mere $1 million.
SPREAD THE WORD: BIG JUMPS IN ESTATE TAX EXEMPTION AMOUNTS EFFECTIVE IN 2017
D.C.’s New Estate Tax Exemption Amount
The District of Columbia’s Office of Tax and Revenue recently announced that the D.C. estate tax exemption amount – – that is the portion of an estate NOT subject to tax – – will DOUBLE, from $1 million to $2 million, applicable to residents who pass away after December 31, 2016. This is big, welcome news! Those with their eyes on the ball had been disappointed the past couple of years, as this move had been announced in mid-2014, but was made dependent on the District’s budget meeting certain revenue goals, which had not been achieved until recently.
Maryland’s New Estate Tax Exemption Amount
As planned, Maryland’s estate tax exemption amount increased to $3 million for individuals who pass away in 2017 — an increase of a cool million dollars over the 2016 exemption amount. Assuming no bumps in the road, the Maryland exemption amount will be $4 million for individuals who pass away in 2018, and in 2019 and beyond, the Maryland’s estate tax exemption is scheduled to match the federal estate tax exemption then in effect for individuals who then pass away. Look how far we’ve come — in December 2014, the heirs of Maryland domiciled decedents had to bear a tax of approximately 16% on the taxable gross estates for the amount over and above a mere $1 million.
Reasons You NEED A Power Of Attorney
In a perfect world, people are able to handle their own affairs and stay in control of their own lives. However, no matter how healthy you are, the future is uncertain. There is always a possibility you could fall ill, or be incapacitated for one reason or another. Sometimes the best way to truly maintain control over one’s life is to be ready to relinquish it – at least to some extent. This is done by designating a person or persons to fill the role of Power of Attorney.
What Is A Power Of Attorney?
A power of attorney (POA) is a legal document that grants one person permission to make certain decisions in place of another person. The person who created the POA is the principal. The person named in the POA is the agent or attorney-in-fact, and is normally a close relative, friend or business associate.
When it comes to the roles that POAs play, it is not one-size-fits-all. There are many different types of POAs that serve a multitude of purposes.
Estate Planning Lingo – What Is A Power Of Appointment?
Getting Comfortable With Powers Of Appointment.
Does your will contain power of appointment? Does it waive powers of appointment? Do you know? Can you check? A power of appointment can provide flexibility for transferring property to legatees and heirs, usually children and grandchildren. A will or trust may allow beneficiaries powers of appointment, enabling them to direct where their share of the estate or trust goes at their death
The Powers Of Powers Of Appointment.
A power of appointment grants the recipient with authority to designate the distribution of property held in an estate or trust. There are two types of powers of appointment: a general power of appointment and a limited power of appointment. .A general power of appointment is a broad power that enables the beneficiary to allocate all or part of his or her share of the estate or trust without limitation. A limited power of appointment permits the beneficiary to allocate his or her share of the estate or trust among only certain potential recipients or classes of potential recipients, such as the descendants or charitable organizations, but not to the beneficiary, the beneficiary’s estate, or creditors of the beneficiary or the estate.
Estate Planning For Your Pets As Well As Your Family
Entrusting Your Pet’s Care
Is your pet a part of your family? Pets are a great source of comfort, stress relief, and joy. Just as you want to provide for your friends and family if you are disabled or after you pass away, it is natural that you wish to do the same for your beloved pet. So, how do you go about doing it?
Unlike your human family members, your pet is considered a part of your personal property. Just like any other object you own, you can leave your pet to a friend or family member to take care of after you die, and you can gift or entrust the pet to someone during your lifetime. You can also leave a monetary bequest to your successor pet-owner, and state your intent that the funds be used to cover pet needs. However, if you are a Maryland resident who wishes to ensure that the person caring for your pet has the resources to pay for regular vet checkups, medical bills, and other related expenses, the Maryland legislature has provided a formal way to do just that. There are similar statutes in most other states, and you can check on the law in your own state.
IRS Issues Proposed Regulations Restricting The Use Of Valuation Discounts
For many family owned businesses the creation of a Family Limited Partnership (“FLP”) is a great way to achieve succession planning. When it works well, a founding member of the business can enjoy peace of mind knowing that his hard-earned business can stay within the family, with a long term plan in place to better insure its success.
However, FLPs have also been favored for their potential to provide significant estate tax savings. When used to insure that the business stayed within the family, restrictions can be placed on an individual’s ownership share within the company. Two popular methods of accomplishing this was to restrict an individual’s ability to transfer their shares (by only being able to sell their shares to other family members and/or the FLP itself) or to restrict an individual’s ability to control the business (often by restricting an individual’s ability to liquidate the company). Control and of transferability restrictions can result in an asset receiving a significant valuation discount.
