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February 2013 - The New Tax Numbers for 2013: Things to Consider

There have been significant changes in tax law due to Obama Care and the tax compromise passed in January of 2013

January 2013 -Tax Planning for the Year : Things to Consider

Are you making financial plans for 2013?  Make sure that you get good advice with regard to

  • Traditional IRAs,
  • Roth IRAs,
  • Pensions,
  • Social Security,
  • Life insurance and
  • Annuities.

December 2012 -Transferring a One-Owner Business : Things to Consider

Financial professionals who work with closely held business owners will help those entrepreneurs make plans for the transfer of those businesses.  The plans typically deal with possible business sales in the event of retirement, disability and death.

November 2012 - Valuing a Closely Held Business: Things to Consider

Have your clients ever wondered how much a closely held business is worth? A closely held business owner can spend so much time running the business that the owner doesn’t know what the business is worth. 

July 2012 - The Alternative Minimum Tax: Things to Consider

The burden of income taxes and the difficulty of estimating tax liability are compounded by a separate, disguised tax system called the alternative minimum tax (AMT).  After individual taxpayers prepare their personal tax returns, must also prepare an AMT return.  If the AMT produces a higher tax than the regular return, the taxpayer must pay the AMT.

June 2012 - Buy-Sell Planning: Things to Consider

Your clients usually rely on their businesses for lots of things:

    • To provide income for the owner’s family

    • To support the families of employeesTo leave a family legacy         either

    • By allowing family members to take over one day or

    • By turning the business into money at death or retirement

May 2012 - The Ethical Financial Professional: Things To Consider
Nearly all mature professions have embraced an ethics code or  a set of rules governing conduct.  Those rules specify, at least in general terms, what the profession expects of its members.  The rules also provide some enforcement mechanism in case the professional violates the code.

April 2012 - The Ethical Financial Professional: Things to Consider
Nearly all mature professions have embraced an ethics code or a set of rules governing conduct. Those rules specify, at least in general terms, what the profession expects of its members. The rules also provide some enforcement mechanism in case the professional violates the code.

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March 2012 - Families Members with Special Needs: Things to Consider
There are more families dealing with special needs issues than most people suspect. An estimated 15 to 20 percent of Americans have an impairment that makes them permanently disabled, and the disability may put financial and logistical stress on their families.

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February 2012 - The New Tax Numbers For 2012: Things to Consider
A number of figures used in tax and retirement planning have been updated for 2012. Most limits for pension and IRA contributions have been increased slightly.

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January 2012 - The Past, Present, and Future of Estate Taxes: Things to Consider
The federal estate tax exemption—the amount that can be passed to kids without having to worry about estate taxes—for calendar years 2011 and 2012 is scheduled to be $5 million for a single person. For a married couple the exemption can be $10 million. The tax rate on the estate in excess of those amounts is a flat 35 percent.

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December 2011 - When To Use An UTMA Account: Things to Consider
Sometimes family members who are in line to receive gifts or money through inheritance are too young to handle it properly.
If I had my choice, my clients would always create trusts to manage and distribute money for the benefit of young beneficiaries. However, trusts cost money and substantial effort to create. They can also be costly and time-consuming to administer in some cases. For some, trusts are not an effective way to take care of young beneficiaries.

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November 2011 - The Most Common Life Insurance Mistakes: Things to Consider
Have you heard about pure trusts? There are some “experts” making the rounds, describing such trusts as a way that a taxpayer can avoid paying all income taxes. Of course, no trust can absolve a taxpayer from income tax. It’s a con.

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October 2011 - Planning For Transfers of Life Polices: Things to Consider
Those who own life insurance policies sometimes want to transfer those policies to others. Here are some examples. An affluent person may decide to give away a life policy to a younger family member for estate planning reasons. An employer may decide to transfer an existing company-owned insurance policy as a reward to its key employee. Still other insureds may consider selling their policies to unrelated investors.

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August 2011 - The Most Common Life Insurance Mistakes: Things to Consider
I recently saw a list of the top ten mistakes people make with regard to their life insurance policies, and thought it was worth sharing.

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July 2011 - Choosing A Business Entity: Things to Consider
When an entrepreneur begins a for-profit business, one of the key early questions he or she needs to answer is "What kind of business structure will serve me best?" How should the business owner decide on the correct entity?Making the final choice with regard to business entity usually involves weighing the answers to the following questions...

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June 2011 - The Lessons From the Dodgers: Things to Consider
Baseball Commissioner Bud Selig announced on April 11, 2011:
Pursuant to my authority as commissioner, I informed Los Angeles Dodgers owner Frank McCourt today that I will appoint a representative to oversee all aspects of the business and the day-to-day operations of the Club....

I have taken this action because of my deep concerns regarding the finances and operations of the Dodgers and to protect the best interests of the Club, its great fans and all of Major League Baseball. My office will continue its thorough investigation into the operations and finances of the Dodgers and related entities during the period of Mr. McCourt's ownership.

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May 2011 - Tax Time: Things to Consider
Financial professionals typically respond to more tax questions during the first quarter of the year than at any other time. We respond to questions about these topics, among others:

  • Traditional IRAs
  • Roth IRAs
  • Pension plans
  • Social security benefits
  • Life insurance and annuities
  • Education savings accounts

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April 2011 - Insurance Guarantees: Things to Consider
The tension between competing products’ guarantees can often make a difference when your client is trying to choose one product over the other. For example, a person who wants to be sure that a death benefit will be paid to the beneficiaries of a life policy may choose a guaranteed whole life product over a variable universal life design.

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March 2011 - Reviewing Your Client's Estate Plan: Things to Consider
For your clients who are married couples with substantial net worth, attorneys have traditional recommended A/B planning to help minimize federal estate taxes. A/B planning meant that at the first spouse’s death, the estate was divided into two parts:

  • The marital part, which was treated as going to the surviving spouse for federal estate tax purposes, and
  • The bypass part, which was treated as going to the kids for estate tax purposes.

With proper A/B planning, both the first spouse to die and the second spouse would have gotten credit for their estate tax exemptions—essentially doubling the amount that passed to the kids free from federal estate taxes.

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February 2011 - Maximizing Retirement Income: Things to Consider
For many, the transition into retirement is a time of unexpected stress. The change in lifestyle and the disappearance of the work social network can cause anxiety and depression. The pressures can make many susceptible to making bad financial choices at a critical time.

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June 2008 - Reviewing Buy-Sell Agreements: Things to Consider
VALUATION. The purpose of a buy-sell agreement is to establish an effective and efficient process for transfer of a business. The valuation of your client’s business interest is perhaps the most critical issue covered. There are several methods of setting the price for a buy-out of an owner’s interest. Many authorities agree the most flexible way is to create a formula to set a buyout price.

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May 2008 - Reviewing Your Buy-Sell Agreement: A Checklist
Even a business with only one owner should consider a buy-sell agreement. These so-called—one-way buy-sell agreements—are usually implemented in proprietorships or single-owner corporations, or LLCs between the owner and a key employee, or between the owner and a friendly competitor. They are called “one-way” agreements because they’re only triggered in one direction—if something happens to the current owner of the business. The buy-sell should be coupled with a stay-bonus plan for the key employees to be sure that there is something to sell in the event of the death of the sole owner.

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April 2008 - Beneficiary Designation
When your client approaches their estate planning professionals to implement a plan, they should expect the parts to work together to accomplish their goals and to address family issues, control issues, and taxes. One of the great things about life insurance is that the death benefit is usually income tax free. However, if their beneficiary designation is not done right, it can drastically change the tax result and that could create a significant liability exposure for the advisor who was involved in designating the beneficiary.

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March 2008 - Why a Buy-Sell?
Keep reading and you’ll have a better understanding of the problems inherent in closely held businesses, the inevitable conflicts that occur when no buy-sell is created, and the advantages in creating a binding arms' length bona fide agreement. Bluntly stated, the death or long term disability of a shareholder in a closely held business may signal the death or financial crippling of the enterprise. The business (or practice) and the business owner (practitioner) often both die (or become permanently disabled) on the same day!

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February 2008 - Will There Be Repeal of the Estate Tax - And If So - Will There No Longer Be A Need for Estate Planning?
Predictions in general are, of course, dangerous. Remember the prediction ofWilbur Wright who said, “I confess that in 1901, I said to my brother Orville that man would not fly for 50 years. Ever since then, I've distrusted myself and avoided all predictions.” Estate Planning Lives! No matter what happens with the estate tax, the need for estate planning is alive and well—since estate planning is not—and never was exclusively about saving or paying federal estate taxes. Even if there IS “permanent” repeal (it's already been repealed and reinstated several times before), according to the positions of the candidates, repeal will not occur unless the next President is a Republican, and even then, given the state of the economy, a full and immediate repeal is very unlikely.

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January 2008 - Reviewing Your And Your Client's Will and Trust
There really isn’t such thing as a “simple” will. What should appear to the client as a clear and concise “executor’s mission statement” is often quite difficult and time consuming to construct and may require considerable technical knowledge, skill, and experience. The technical and human aspects of the estate planning process must be brought together and placed into a larger context: the identification and achievement of the client’s objectives. Simply put, the estate planning process should help the client see and solve their financial problems. This is why “do-it-yourself” will drafting software sold directly to the public is both inadequate and dangerous; it may fail to consider and address many of the issues discussed below. In fact, the “fine print” on every will or trust in a box says this when it is actually deciphered.

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December 2007 - Family Limited Partnerships
The family limited partnership (FLP) is one of the best-known of all sophisticated wealth-transfer planning devices. Another very similar device is the family limited liability company (FLLC). Although it is certainly not appropriate in every situation, and it must be considered as part of an overall process in conjunction with many other tools and techniques, it is a very important concept that should be considered in most large or rapidly growing estates. Here is a brief explanation of what FLPs are and who will find them useful.

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November 2007 - Things You Need To Know About The Annual Gift Tax Exclusion
The annual gift tax exclusion is one of the most simple, yet powerful, of all the tools available to the financially successful individual. The privilege of totally excluding gifts from taxation is an extremely valuable one. Gift tax rates are equal to estate tax rates — and those rates are — once the gift becomes taxable — high! The right to totally exclude a gift from such rates can be very advantageous. An incredible amount of wealth can be shifted, gift tax free, through the use of the (currently) $12,000 exclusion.

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October 2007 - "The Only Difference Between An Old Woman and An Elderly Lady is...Adequate Income!" ~Author and retired Law Professor Stephan R. Leimberg
He is referring, of course, to the importance of knowing that your client and those they love will, in the event of death, disability, or at retirement, be assured of a steady, dependable, and adequate flow of cash for as long as it is needed. But Leimberg also stresses that proper planning isn’t only about having enough income and capital! Failure to properly plan for life contingencies such as disability and incompetency can result in disaster, no matter how successful your client has been in their investments.

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September 2007 - Estate and Financial Planning for Non-Traditional Relationships
2000, 2001, and 2003 Census reports conducted by the U.S. Census Bureau (America’s Families and Living Arrangements), indicate that roughly 11 million U.S. citizens (roughly 9% of “coupled households”) live with another person to whom he or she is not married. (Same-gender and different-gender couples are both included. That’s close to 10 million living with a different-gender person). These 11 million or more people consider themselves to be “partners” rather than merely room or housemates. They live in a “marriage-like” relationship but may have none of the benefits and legal protections available to spouses.

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August 2007 - Dynasty Trusts
Imagine a trust which could give your client’s beneficiaries the use and enjoyment of trust property without the transfer tax problems (i.e., your client could save federal transfer taxes), protect trust assets from the claims of a spouse who divorces a beneficiary, and insulate property from creditors’ claims (including a divorcing spouse). Advocates of the so-called Dynasty Trust believe it may do all those things! Additional reasons to create a dynasty trust include saving federal, state, and local income taxes, saving federal, state, and local intangibles taxes, providing long-term investment management (particularly for minor or physically, mentally, or emotionally disabled individuals), protecting beneficiaries from well (or not so well) meaning “advisors,” protecting beneficiaries from inexperience or imprudence, providing incentives for certain behavior (e.g., they get extra amounts upon the completion of college, grad or medical school, or upon marriage or the birth of children, and keeping the control of family owned assets (e.g., a family compound or the voting control of a family business entity).

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July 2007 - Sales to Grantor Trusts
Among the cutting edge tools and techniques of sophisticated estate planning, sales to grantor trusts rank high on the list. A “Grantor” Trust is an irrevocable trust deliberately designed to fall under rules that result in the grantor, the creator of the trust, being treated as the “owner” of trust assets, for income tax purposes only. The result is that items of income, deductions, and credits of the trust are attributable to the grantor, therefore, the grantor is taxed on trust income and is entitled to trust deductions and credits. This estate planning tool is also called by several names “Intentional Grantor Trust” and “Intentionally Defective Grantor Trust (IDGT)” are most common. This “defect” is an intentional provision, a power for the person who is the grantor of the trust inserted into an irrevocable trust.

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June 2007 - Selecting Financial Service Professionals
Selecting the financial services professionals your client’s work with is a difficult task. Aside from reputation and degrees or designations, how would they choose to work with one person over another? I believe that one of the most important factors that should be considered with respect to the professionals they choose to work with is ethics. At no time in history has ethical conduct been more important than it is today. I wanted to share with your clients some of my thoughts about the topic.

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May 2007 - Closely-Held Businesses
What is a Closely-Held Business? It is an entity in which or where:

  • there are a limited number of owners (shareholders or partners),
  • restrictions are imposed on an owner's ability to transfer his or her interest,
  • there is no listing of the stock or interest on an exchange or regular quotation in “over the counter” markets,
  • where the company has a no or an irregular, limited history of being sold or exchanged.

All or any one of these factors not only helps define a closely-held business, they significantly impact on its valuation. The mere fact that such a business has seldom, if ever, been traded and there is little, if any, market for it will be a major determinant of value.

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