While this time of year can be extremely busy, carve out some time to make sure your affairs are in order. Review the following checklist and make note of the items you need to address.
Checklist:
____ Execute on your gifting strategy. The annual gift tax exclusion for gifts to individuals is $15,000 per person this year. This is a “use or lose it” exclusion. If you intend to use it, make the gifts prior to December 31, 2021. Take note that assets gifted in your lifetime retain their original basis. Assets inherited at death receive a step-up in basis. Consult with knowledgeable estate planning attorneys to determine which assets are best to gift during your lifetime.
____ Make your charitable donations. Required Minimum Distributions (RMDs) are back in 2021 for those over the age of 72. Each IRA owner may contribute up to $100,000 from his or her IRA directly to charity. This strategy reduces your taxable income. If you are under the age of 72 or do not have an IRA, you may want to consider “bunching” your charitable donations. With income rates likely increasing in 2022, have your advisory team evaluate whether bunching would be more beneficial for you in 2021 or 2022. Charities must receive your gift by December 31, 2021 for it to be counted on your 2021 tax return.
_____ Any gifts to a 529 plan must be deposited early enough to be recorded on a 2021 statement in order to capture the annual gift tax exclusion.
_____ You have a little more time to make IRA distributions, but make sure you have this on your list. Plan to make your 2021 IRA contributions prior to April 15, 2022. Contribution limits are currently $6000 per person (with a $1000 catch up contribution for those age 50+).
_____ Check your year-to-date contributions on your 401(k) and other retirement accounts to ensure you are on track to maximize your allowable deferral.
_____ Check your balance on any Flexible Spending Accounts (FSAs) to make sure you use any funds that you will otherwise lose if not spent in 2021.
_____ If you are on Medicare Part D, the open enrollment dates are October 15 – December 7, 2021 so hurry to make any needed changes.
_____ Review beneficiary designations on all life insurance policies, retirement accounts and annuities to make sure they do not require any changes.
_____ Read over your will and/or trust documents, power of attorney documents and advance directives to determine whether any updates are needed.
For assistance with your 2021 end-of-year estate planning and financial planning checklist, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
https://attendee.gotowebinar.com/register/483002683038496012
https://attendee.gotowebinar.com/register/2975170032206802443
https://attendee.gotowebinar.com/register/2024991874688696592
https://attendee.gotowebinar.com/register/4513474760412467725
LIVE Webinar – Click Here to Register for December 7th at 10am
How to Protect your "Stuff" in 3 Easy Steps (Estate Planning Workshop)
This webinar covers frequently asked questions and common misconceptions regarding: Wills & Trust, Asset Protection, Nursing Home Issues, Medicaid Qualification, and Estate Taxes.
Please click to register for our webinar:
LIVE Webinar – Click Here to Register for December 7th at 10am
Our webinars are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?
Please click to register for our webinar:
LIVE Webinar – Click Here to Register for December 7th at 10am
Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.
We can't wait to see you!
Today is the right day to take your first step. Click below to register for our next free workshop and learn what everyone is talking about. Attending our next free Workshops is the best way to Get Started on your New Estate Plan!
If you and your spouse die or become incapacitated in a tragic accident and you have minor children, law enforcement will have to find a place for your children to reside immediately. Having a guardian named in your Last Will & Testament is not sufficient to prevent your child(ren) from spending time in the care and control of Child Protective Services under these types of situations.
A Child Protection Plan will ensure that you child is not turned over to Child Protective Services because it lays out specifically who has the authority to care for your child in this situation.
A Child Protection Plan is a set of legal documents that include:
-Appointment of Temporary Guardian: a form designating who can take immediate custody of your child,
- Parental Consent for Medical Treatment: a form authorizing the temporary guardian to consent to medical treatment for your child,
-Medical Information Sheet: a form containing information on your child’s medical allergies and conditions, pediatrician information, health insurance information, immunization record, and medication list, and
-Wallet card: a small card registered with a national database that contains all of the above information on file for each child.
You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
https://attendee.gotowebinar.com/register/6502858531326280719
https://attendee.gotowebinar.com/register/5402288074449098253
https://attendee.gotowebinar.com/register/483002683038496012
https://attendee.gotowebinar.com/register/2975170032206802443
Webinar – Click Here to Register for November 28th at 6pm
How to Protect your "Stuff" in 3 Easy Steps (Estate Planning Workshop)
This webinar covers frequently asked questions and common misconceptions regarding: Wills & Trust, Asset Protection, Nursing Home Issues, Medicaid Qualification, and Estate Taxes.
Please click to register for our webinar:
Webinar – Click Here to Register for November 28th at 6pm
Our webinars are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?
Please click to register for our webinar:
Webinar – Click Here to Register for November 28th at 6pm
Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.
We can't wait to see you!
Today is the right day to take your first step. Click below to register for our next free workshop and learn what everyone is talking about. Attending our next free Workshops is the best way to Get Started on your New Estate Plan!
Webinar – Click Here to Register for November 27th at 10am
How to Protect your "Stuff" in 3 Easy Steps (Estate Planning Workshop)
This webinar covers frequently asked questions and common misconceptions regarding: Wills & Trust, Asset Protection, Nursing Home Issues, Medicaid Qualification, and Estate Taxes.
Please click to register for our webinar:
Webinar – Click Here to Register for November 27th at 10am
Our webinars are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?
Please click to register for our webinar:
Webinar – Click Here to Register for November 27th at 10am
Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.
We can't wait to see you!
Today is the right day to take your first step. Click below to register for our next free workshop and learn what everyone is talking about. Attending our next free Workshops is the best way to Get Started on your New Estate Plan!
This holiday season you may benefit from large gifts or an inheritance from relatives who are citizens of another country. First, the good news - the United States government does not impose a tax liability on the recipient of gifts or inheritances regardless of the donor’s immigration status.
While the donor, if a US citizen or legal resident may be required to pay estate and/or gift taxes, foreign nationals are not required. No gift tax applies to gifts from foreign nationals if those gifts are not situated in the U.S. There are two rules to note that apply to money or property coming from abroad:
1. If you receive more than $100,000 from a foreign estate or non-resident alien in one tax year, you must file a special tax form with the IRS. The amount refers to total gifts from all sources abroad, not per individual donor.
2. If you receive more than $16,649 from a foreign corporation or partnership, you must report the gift and the identity of the donor.
The required IRS form is Form 3520 and can be found on the IRS website. This form is filed separately from your income tax returns, but the filing date (April 15) is the same. If you fail to report this income and file this form by its due date, the IRS can enforce a 35% financial penalty.
Keep in mind that the taxes discussed above are estate and gift taxes. You may not find yourself as lucky when it comes to income taxes. Federal income taxes may be owed on foreign assets, even if it is not derived from U.S. situs property, since the IRS taxes worldwide income. This applies only to assets that produce monetary income, not the value of the asset itself.
The first step in determining whether you must report your foreign gift or bequest to the IRS is to determine whether the cash or property received is income or if it can be characterized as a gift.
Income would be reported as income on your personal income tax return. Income represented by a foreign currency should be translated into U.S. dollars at the applicable exchange rate. Foreign bequests and gifts will be reported on the Form 3520.
For more information on planned gifting or the consequences of receiving gifts and inheritances, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
https://attendee.gotowebinar.com/register/3615431045643044364
https://attendee.gotowebinar.com/register/5502063256534593804
https://attendee.gotowebinar.com/register/6502858531326280719
Many of the 50-year-old and older workers are raising children and helping aging parents, and it is putting a strain on budgets. There are over 3 million seniors or near-seniors looking for full-time employment and millions more looking for part-time work. Seniors are finding that to make ends meet and have a financially secure retirement they need additional income especially now that people are living longer than ever before. The good news is jobs are available, companies are hiring “seasoned” workers, and there are programs to help those aged 50 and older find the type of work that is right for them.
If you are age 50 or more, the American Association for Retired Persons (AARP) runs a program called BACK TO WORK 50+ that targets workers who previously worked at moderate income level jobs but who may lack the education level and computer skill sets that presents a barrier to employment in situations that lead to better economic security. There is also SCSEP, the Senior Community Service Employment Program, which is the only federal program targeted to help older workers. AARP works in conjunction with SCSEP and provides employers with qualified candidates who are pre-screened for placement. These programs support the employer in finding a skilled worker at a low cost and allow the senior to bypass the interview process. Both of these programs will train seniors to give them the skills and confidence they need to find a job so that they can provide for themselves financially. According to AARP, senior employment is becoming so prevalent that by the year 2022, workers aged 50 or more will comprise thirty-five percent of the workforce.
If you are a senior with a college degree and solid computer skills, AARP can also help place you in a meaningful work environment. More than 500 companies nationwide have signed the AARP Employer Pledge “We believe in equal opportunity for all workers, regardless of age, and that 50+ workers should have a level playing field in their ability to compete for and obtain jobs. Recognizing the value of experienced workers, we pledge to recruit across diverse age groups and to consider all applicants on an equal basis as we hire for positions within our organization.” This pledge affirms the value of an experienced senior worker and many companies are on board. The belief is that a workforce that leverages talent from all age groups is a stronger workforce. Jobs AARP and other employer resources connect 50+ job seekers with employers who recognize the value of experience that comes with a more senior and seasoned worker. These companies who have signed the pledge are on the AARP job boards, in the job search tools, and even participate in online recruiting fairs.
As more seniors are becoming computer savvy, remote work opportunities are becoming more popular and mainstream. Companies do not have to provide a physical workspace and employees have no commute and no need to spend money on proper work attire; overhead is lower for the employer and the employee. Seniors can use the AARP tools to find legitimate online job prospects. If a senior prefers to work with people for socialization purposes as well as earned income, the senior living industry has excellent opportunities and needs workers. Senior living facilities management acknowledges the expertise, dependability, and worth ethic that is common in the mature workforce. Currently, there are high rates of staff turnover in senior living environments, and a senior employee can make a positive difference in the rate of employee retention.
There is an undeniable benefit to remaining active as you age and work is a significant component of that activity. Old notions of ageism are changing at precisely the right moment to help you create a better retirement living situation for yourself through additionally earned income. If you are 50+ and looking for work, take advantage of these national programs to identify the right job for you. There is no better time than now to look forward to your own retirement needs and have the peace of mind that additional income brings.
It is essential to meet with an Elder Counsel attorney to ensure that you are increasing income without reducing benefits available to you. You don’t want to cross a threshold that would deny you a government benefit unless it would be financially beneficial. Many components need to be considered to plan a successful retirement. You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
https://attendee.gotowebinar.com/register/3615431045643044364
https://attendee.gotowebinar.com/register/5502063256534593804
https://attendee.gotowebinar.com/register/6502858531326280719
Writing a check and slipping it into your grandchildren’s stocking may have more consequences than you realize. Gifting assets is not simple and straightforward. These gifting mistakes can be very costly:
Failure to Have an Estate Plan
One of the biggest mistakes you can make when gifting money to loved ones is to do it with no estate plan in place. Planning for the future through a comprehensive estate plan helps to determine what gifting strategies are available to you in the present. Without this knowledge, you may give too much or too little and end up compromising your long-term goals.
Failing to Know About Gift and Kiddie Taxes
While the current exemption amounts are very high ($11 million), there are still requirements to report all gifts to each individual over the amount of $15,000 in any given tax year. Any property of value transferred figures into these amounts. The kiddie tax was created to prevent parents from sheltering assets in their minor children’s names to avoid taxes. Any amount over $2000 will taxed at the same rate as the parents.
Giving to a Special Needs Child
Outright gifts to a child with special needs can jeopardize the child’s government benefits such as Supplemental Security Income (SSI). A special needs trust can be created to hold assets for a special needs child that will not result in loss of benefits.
Failing to Understand Capital Gains Taxes
Certain assets like stock should not be gifted if they have substantially appreciated during your ownership of them. If you gift them, the recipient of the gift will owe capital gains on the profits. If you retain the stocks until your death and then transfer the assets, a step-up in basis will be applied and many of those capital gains taxes can be minimized or avoided altogether.
Giving Too Much
While being generous is certainly a virtue, each person must ensure that they save for a rainy day. Not only should you save enough for unforeseen medical expenses but also consider cost of living increases as well as lifestyle considerations. You may want to travel or move to a new location. Keeping enough stashed away for a solid future is more important than excessive gifting. Gifting should be a well thought out strategy.
For more assistance in gifting strategies as part of a comprehensive estate plan, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
https://attendee.gotowebinar.com/register/3615431045643044364
https://attendee.gotowebinar.com/register/5502063256534593804
https://attendee.gotowebinar.com/register/6502858531326280719
LIVE Webinar – Click Here to Register for November 30th at 10am
How to Protect your "Stuff" in 3 Easy Steps (Estate Planning Workshop)
This webinar covers frequently asked questions and common misconceptions regarding: Wills & Trust, Asset Protection, Nursing Home Issues, Medicaid Qualification, and Estate Taxes.
Please click to register for our webinar:
LIVE Webinar – Click Here to Register for November 30th at 10am
Our webinars are designed to be educational, interactive, informative and generate relevant discussion for attendees. Modern Estate Planning is more than just preparing a will and putting it in a safe. Find out how a comprehensive Estate Plan will protect your assets and your family. Our experienced attorney, Wilson McManus, will be sharing stories on how Estate Planning is beneficial and sometimes crucial. In an Estate Plan, you need to know the Rules: Who's "Rule-book" controls your Estate Plan? Yours? The Governments? Someone else? You need to know your Predators: Who's a Threat to Your Stuff? The Government? Long-term Care Costs? Your Family? You need to know your Options: What Plans are out there? Does a Will work? What about a Trust? Which kind of Trust?
Please click to register for our webinar:
LIVE Webinar – Click Here to Register for November 30th at 10am
Our workshops fill up fast, so please call (443) 470-3599 today to RSVP.
We can't wait to see you!
Today is the right day to take your first step. Click below to register for our next free workshop and learn what everyone is talking about. Attending our next free Workshops is the best way to Get Started on your New Estate Plan!
Start planning sooner rather than later when it comes to family business succession planning. It often takes years to complete the process as the transition may need to occur in phases.
Succession planning for the next owners involves legal matters like buy-sell agreements, employee compensation plans and complementary personal estate plans. Succession planning for future leaders (even though they may not become future owners) involves training and business continuity strategies.
One often overlooked aspect is that of psychological and emotional ramifications. Some older family members suffer from anxiety over losing control of the business. While new, younger ownership may feel anxious about taking on these new roles and stress over more leadership requirements. Having a family counselor involved in the process may help the family discuss the transition more effectively and openly.
Another obstacle to family business transitions may be the scenario where the older generation cannot afford to gift the business to the next generation and the younger generation simultaneously cannot afford to buy the business. There are several creative options available to ensure a smooth transition.
- Leveraged Buy-Out: The younger generation borrows funds to purchase the business and makes payments on the loan using profits from the business.
- Installment Sale: The new owners make installment payments to the current owner rather than a lump sum purchase price.
- Charitable Bailout: The ownership interest is sold to a charitable trust instead of to the next generation of family members. The younger generation then purchases the interest from the trust.
- Sale to an Intentionally Defective Trust: Instead of selling the business directly to the next generation, all or a portion of it is sold to a trust and the next generation is the named beneficiary of the trust.
Succession planning is an opportunity to design how your business continues in your absence (either due to death, disability or retirement). During the process it is vital to understand and respect the family hierarchy, maintain a strong cash position, remain flexible and keep the lines of communication open.
The knowledgeable estate planning attorneys at Stouffer Legal can lead your family through the creation of a business succession plan that aligns everyone’s goals. You can schedule an appointment by calling us at (443) 470-3599, emailing us at office@stoufferlegal.com, or register for an upcoming free webinar using the link below:
