The Wealth Counselor

Volume 9, Issue 7 - How to Protect Inherited IRAs After the Clark v. Rameker Decision

In a landmark, unanimous 9-0 decision handed down on June 12, 2014, the United States Supreme Court held that inherited IRAs are not “retirement funds” within the meaning of federal bankruptcy law. This means they are therefore available to satisfy creditors’ claims.

 

Volume 9, Issue 6 - How to Avoid a Basis Management Disaster

Many of us in the legal, financial and account worlds discover our new clients' well-intentioned, yet disastrous, plans after the fact.  The widow has already transferred her house into her children's names, or an inherited IRA is drained to pay for a Porsche.  Observing the lost planning opportunity and the financial fallout is universally gut wrenching.  

 

Volume 9, Issue 5 - Portability and Married Couples: No Downside

Portability laws and the opportunities they create have significantly increased advisors' roles in estate planning.  No longer is the standard credit shelter trust (with QTIP or outright distribution to spouse) the only way for married couples to plan.  Now, CPAs, insurance professionals, and financial advisors have a larger and more complex role in determining whether an estate plan should be credit shelter or portability based. 

 

Volume 9, Issue 4 - These Four Childfree Prospect Tips Will Grow Your Business - And They're Not What You Think

Along with buying a house and doing better than your parents, handing down your accumulated wealth to your children is a long-held tradition that many consider the cornerstone of the American dream.  But what about those individuals who do not have direct descendants?

 

Volume 8, Issue 12 - Be Your Clients' Hero: Decision Time for Income Tax Reduction as Trust Taxes Soar

Most clients and advisors have not yet caught up to the impact of soaring income tax rates on non-grantor trusts and on estates in administration.  Trustees and estate administrators must be informed immediately to implement strategies to mitigate the 2013 tax rate, eliminate the tax through distribution strategies in 2013, and deploy investment strategies and grantor trust solution in 2014 and future tax years.

 

Volume 8, Issue 11 - Trusts Solve Client Needs and Add Value to Wealth Plans

Some think that trusts are used only for end-of-life planning. Trusts, however, are like wrenches: they come in a wide variety of shapes and sizes, each particularly suited to a particular need. Some are for wealth accumulation while others are for wealth preservation, and still others are designed to protect future generations. In this edition of The Wealth Counselor, we look at some of the kinds of trusts that can be employed to deal with particular client concerns and needs and how they fit into a client’s overall wealth accumulation and preservation plan.

 

Volume 8, Issue 10 - Identifying Hidden Financial Risks Creates Sales Demand

The world changes; clients’ circumstances change; motivations and interests change. As these changes occur—often gradually—“hidden” risks emerge that can significantly deteriorate future wealth if left unattended. By “hidden” risks, we mean exposures of which the client or potential client is likely to be unaware. Identifying hidden risks in an education-based marketing program delivers an important service to your marketplace and, with this knowledge, provides you with a gateway to meaningful conversations about the added value you can deliver to prospective clients. Click here for the chart discussed in the newsletter!

 

Volume 8, Issue 9 - Planning for Blended Families: Part 2 - 3-Step Counseling Strategy for Blended Families

It is vital for each member of the advisory team to understand the roles of the other members in meeting their client’s needs. Therefore, in this issue of The Wealth Counselor, we will focus on how the estate planning attorney uses the initial interview in a blended-family situation.

 

Volume 8, Issue 8 - Planning for Blended Families: Part 1 - Intake Process

The “blended family” comprises a fast-growing segment of US households. Whether an attorney or investment advisor, fine-tune your intake or initial interview process to determine the desirability of representing a blended-family client, assess the accepted client to determine your counseling strategy, and hit the ground running with the information you need to begin strategy planning.

 Volume 8, Issue 7 - Including Life Expectancy and Health Care Costs in Retirement

The collision between economics and demographics is increasing client concerns about running out of money in retirement.

 

Volume 8, Issue 6-Income Tax Planning: Why Estate Planning is Still Important

With the federal gift and estate tax exemption currently at $5.25 million per person ($10.5 million for married couples), some clients and potential clients with “smaller” estates may wonder if they need any estate planning. But there are many reasons to do estate planning other than to avoid estate taxes. In fact, for most Americans, the recent tax legislation has brought incredible freedom. Instead of jumping through hoops to avoid estate taxes, planners can now concentrate solely on the real reasons clients need to do estate planning: to take care of themselves and their families the way they want.

 

Volume 8, Issue 5-Income Tax Planning: What Estate Planners Need to Know

The American Taxpayer Relief Act of 2012 (which became law on January 2, 2013) made permanent the temporary estate/gift/generation-skipping transfer tax exemptions established in December 2010, increased the rate on non-exempt estates/gifts/generation-skipping transfers to 40% and introduced substantial new income tax burdens on high income taxpayers and trusts. In addition, 2013 is the year in which both of the Medicare surtaxes of the Patient Protection and Affordable Care Act of 2010 (sometimes referred to as “Obamacare”) kick in. As a result, many wealth planning professionals will be doing more income tax planning, and estate tax planning will become less of a driving force.

 

Volume 8, Issue 4 -Income Tax Planning with Alaska Community Property Trusts

The Internal Revenue Code (“IRC”) provides substantial income and estate tax benefits to the married residents of the nine “community property” states. A tenth state – Alaska – allows married couples to opt in to the community property regime and reap these benefits. In addition, Alaska offers the married residents of the other 40 states a way to reap these benefits by using its community property law. 
 

Volume 8, Issue 3 -Using Trusts to Protect Inherited IRAs

Many clients have large IRAs and retirement plan accounts and need special estate planning for these assets. A 2009 study by the Investment Company Institute found that retirement plans account for 34% of all household financial assets, up from 14% in 1978; IRAs alone account for more than 10% of all household financial assets; and 47 million U.S. households have IRAs.

 
Volume 8, Issue 1 -The Continuing Need to Life Insurance

This issue of the Wealth Counselor examines some of these other common uses for life insurance, the only asset class that can ensure the completion of proper funding for a myriad of unique planning needs, regardless of the state of the federal estate tax!

 

Volume 7, Issue 12 -The State of the Federal Estate Tax

Since 2001, when President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) into law, we have known that the federal estate tax and generation-skipping transfer tax (GSTT) was scheduled for a one-year suspension beginning January 1, 2010, with the twist that basis adjustment at death would be limited for 2010 decedents. But even though that's what the law said, few, if any, of us thought Congress would actually allow it to happen. Nor did we think that the "sunset" would play out on December 31, 2010 and that those taxes would revert to their 2001-level exemptions rates.

 

Volume 7, Issue 11 -529 Plan Benefits Made Permanent by the Pension Protection Plan

Whether your client is a parent with future educational obligations for young ones, or perhaps a loving aunt, uncle, grandparent, or stepparent, now more than ever 529 plans are an attractive tool for the escalating costs of education, as well as for income and estate planning purposes. This is because one of the hidden gems of the new Pension Protection Act of 2006 (signed into law on August 17, 2006) is a provision that makes permanent the income-tax-free growth of Section 529 plans used for qualified higher education expenses. Prior to this new law, these provisions would have expired December 31, 2010.

 

Volume 7, Issue 9 -Trustee Selection for Irrevocable Trusts

Most professionals who work with trusts have plenty of "nightmare stories" about trustees chosen by clients for their irrevocable trusts. No doubt this is because trustees are often chosen without careful consideration of the qualifications required.

 

Volume 7, Issue 8 -Estate Planning for Disability

Planning for the possibility of disability is probably the most overlooked part of estate planning. While many people will give serious consideration to estate planning for their death, few will seriously consider planning for their disability. Yet disability planning should be the more important part of estate planning from the client’s perspective both because it benefits the client directly, and because, until a person is well past retirement age, the probability of becoming disabled in the next year exceeds the probability of dying in that period.

 

Volume 7, Issue 6 -Planning for Advanced Asset Protection

Asset protection is vitally important in our ever more litigious society, and more wealth planning teams are needed who understand the intricacies of this area and can collaboratively implement advanced strategies. Whether creating an entire plan for the client or creating additional asset protection measures added on to an existing plan, you want to know with a high degree of certainty that the plan will be effective if an attack ever comes.

 

Volume 7, Issue 5 - Understanding Practice/Business Transition Planning

A large part of many financial service professionals' practices is helping clients with business succession planning. Yet only 29% of these professionals have created a formal practice transition plan for their own businesses.

 

Volume 7, Issue 4 - Using Advanced Irrevocable Trusts for Income and Estate Tax Savings: Making 2012 Count
The next nine months are an exceptional window of opportunity for your clients to make family wealth transfers. The federal gift and estate tax exemption is $5,120,000, and both income tax rates and interest rates are at the lowest point in a generation. With federal deficit spending also at record levels, tax and interest rates seem sure to rise. Unless the President, the Senate, and the House of Representatives all agree otherwise, income and estate taxes will increase dramatically on January 1, 2013.

 

Volume 7, Issue 3 - An Overview of Estate Planning
Traditional estate planning often falls short of some of these goals. In this issue of The Wealth Counselor, we will examine the traditional estate planning process, some of its shortfalls, how modern estate planning overcomes them, and the pros and cons of modern versus traditional estate planning.

 

Volume 7, Issue 2 - Paying for College
In this issue of The Wealth Counselor, we will examine several of these educational savings tools as well as the impact they can have on financial aid.

 

Volume 7, Issue 1 - Continuum of Care: Client Update Meetings/Financial Control System
In this edition of The Wealth Counselor, you will learn some strategies for how to implement and/or improve a client update process/financial control system in your practice. You will also learn how to manage it so that it will produce a winning situation for the client and the various members of the advisory team.

 

Volume 6, Issue 12 - Retirement Planning: Coordinating with the Client's Overall Planning Objectives
In this edition of The Wealth Counselor, we will examine some of the critical rules in using IRAs and qualified retirement plans for wealth transfer planning, common misperceptions in this area, and why naming a trust as beneficiary may be the only way to accomplish some of the client’s planning objectives. Completely covering these subjects requires volumes, so we will cover only the basics.

 

Volume 6, Issue 11 - Asset Protection Planning: Teamwork Is Required for Success
In this issue of The Wealth Counselor, we will examine a variety of asset protection strategies - from rather simple to quite complex, how they work, the levels of protection they can provide, how these strategies can work together, and the advisor team approach to asset protection planning.

 

Volume 6, Issue 10 - Trustee Selection for Irrevocable Trusts
In this issue of The Wealth Counselor, we will examine who can, who should, and who should not serve as trustee; non-tax and tax factors that should be considered when selecting a trustee; who can, and should, be given the right to remove and replace a trustee; and using a team approach to segregate duties among lay and professional trustees.

 

Volume 6, Issue 9 - Niche Trusts
In this issue of The Wealth Counselor, we review some trust basics and then provide an introduction to a number of these lesser-known trusts and things called "trusts."

 

Volume 6, Issue 7 - Income Tax Planning Concepts in Estate Planning
In this issue of The Wealth Counselor, we will examine some of the basics of income tax planning and some of the techniques used in estate tax planning that have income tax impacts.

 

Volume 6, Issue 5 - TRUIRJCA 2010: Changes to Estate Planning
In this issue of The Wealth Counselor, we will look at how estate planning is changing after TRUIRJCA 2010, what clients want in estate planning, and how incorporating trust planning will benefit clients, their families and the professional advisors who serve them.

 

Volume 6, Issue 3 - Gift, Estate and GST Exemptions and Tax Rates
In this issue, we will look more closely at the powerful planning opportunities that exist for the next two years with the $5 million gift tax exemption. Let's begin with a quick review of the new law. 

 

Volume 6, Issue 1 -  An Introduction to Asset Protection Planning

Asset protection planning is not about hiding or concealing assets.  It is about using the existing laws appropriately to obtain the best possible level of protection for your assets - in other words, to make you a less desirable target for claimants.

 

Volume 5, Issue 12 - The State of the Federal Estate Tax
Since 2001, when President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) into law, we have known that the federal estate tax and generation-skipping transfer tax (GSTT) was scheduled for a one-year suspension beginning January 1, 2010, with the twist that basis adjustment at death would be limited for 2010 decedents. But even though that's what the law said, few, if any, of us thought Congress would actually allow it to happen. Nor did we think that the "sunset" would play out on December 31, 2010 and that those taxes would revert to their 2001-level exemptions rates

 

Volume 3, Issue 1 - Exciting New Developments in Buy-Sell Planning
This issue of The Wealth Counselor examines exciting new developments in business succession planning - specifically, the use of LLCs or partnerships to own life insurance for buy-sell planning  purposes. Such a structure obtains the advantages of cross-purchase and stock redemption buy-sell agreements without many of the disadvantages of either traditional structure. This development is  significant to all wealth planning professionals and their business-owner clients.

 

Volume 2, Issue 12 - Opportunities with Planning for Pets

This issue of The Wealth Counselor examines the issues surrounding caring for pets after the disability or death of the pet's owner. Given many clients' feelings towards their pets, and the costs of care  and longevity of some types of pets, this is an area where the planning team can differentiate itself and provide real client value while also generating additional revenue for multiple team members.

Volume 2, Issue 11 - New Planning Opportunities with Non-Spouse Rollovers

This issue of The Wealth Counselor looks at a very recent pronouncement from the IRS that finally makes this PPA 2006 provision useable and, therefore, is very beneficial to clients and all wealth  planning professionals who understand its implications.

 

Volume 2, Issue 7 - Life Settlements: Understanding the Opportunity for Your Clients

This month's issue of The Wealth Counselor addresses a topic that many professionals do not understand fully, life settlements. For the right clients, a life settlement offers a significant advantage over the alternatives - and one that the client and the planning team should at least consider.

 

Volume 2, Issue 6 - Understanding Medicaid Planning Opportunities For Your Clients and You
The last issue of The Wealth Counselor addressed the significant need for clients to plan for the possibility of disability, and how proper disability planning more often than not involves the coordination of financial and legal solutions. This issue addresses a related and often misunderstood topic, Medicaid planning.

 

Volume 2, Issue 4 - Planning for Tax-Qualified Plans
Planning for tax-qualified plans, which includes IRAs, 401(k)s and qualified retirement plans, requires a careful examination of the potential taxes that impact these assets. Unlike most other assets that receive a "basis step-up" to current fair market value upon the owner's death, IRAs, 401(k)s and other qualified retirement plans do not step-up to the date-of-death value.

 

Volume 2, Issue 3 - Policy Reviews of Trust Owned Life Insurance (TOLI): Why you should make it part of your standard estate planning process
This issue of The Wealth Counselor explores many of the common misperceptions about trust owned life insurance - plus a process for you to add significant value for your clients by incorporating policy reviews of trust owned life insurance.

 

Volume 2, Issue 2 - 10 Tips for Helping Families with Special Needs
This month's issue of The Wealth Counselor examines the unique planning requirements of families with children, grandchildren or other family members (such as parents) with special needs. There are many misconceptions in this area that result in costly mistakes in planning for special needs beneficiaries. It is, therefore, incumbent upon us - our clients' advisors - to ensure that clients understand all  of their options.

 

Volume 2, Issue 1 - The Continuing Need for Life Insurance
Last month's issue of The Wealth Counselor examined the various educational savings vehicles available to clients, including 529 plans, UGMA/UTMAs, Coverdell Education IRAs and life insurance. Using life insurance as an education savings vehicle prompted several questions about other uses for life insurance. Therefore, this issue of the Wealth Counselor examines some of these other common uses for life insurance, the only asset class that can ensure the completion of proper funding for a myriad of unique planning needs regardless of the state of the federal estate tax!

 

Volume 1, Issue 5 - Planning for Disability
No one likes to think about the possibility of their own disability or the disability of a loved one. However, as we'll see below, the statistics are clear that we should all plan for at least a temporary disability. This issue of The Wealth Counselor examines the eyeopening statistics surrounding disability and some of the common disability planning options. Disability planning is one area where we can give each and every one of our clients great comfort in knowing that, if the day comes for themselves or a loved one, they will be prepared.

 

Volume 1, Issue 3 - Understanding Educational Savings Vehicles
Last month's issue of The Wealth Counselor examined the many benefits of 529 Plans, including the income tax and gift and estate tax benefits of these popular educational savings vehicles. There are, however, several other educational savings vehicles that clients should consider; this issue examines some of these other vehicles and the advantages and disadvantages of each.

 

Volume 1, Issue 2 - 529 Plan Benefits Made Permanent by the Pension Protection Act
Whether your client is a parent with future educational obligations for young ones, or perhaps a loving aunt, uncle, grandparent, or stepparent, now more than ever 529 plans are an attractive tool for the escalating costs of education, as well as for income and estate planning purposes. This is because one of the hidden gems of the new Pension Protection Act of 2006 (signed into law on August 17, 2006) is a provision that makes permanent the income tax-free growth of Section 529 plans used for qualified higher education expenses. Prior to this new law, these provisions would have expired December 31, 2010.

 

Volume 1, Issue 1 - The Pension Protection Act: New Opportunities for Retirement Planning
The new Pension Protection Act of 2006 (signed into law on August 17, 2006) creates significant planning opportunities for advisors and their clients who understand it. This newsletter focuses on two key provisions: (1) non-spousal rollovers from a qualified plan to an inherited IRA and (2) charitable contributions of IRAs during lifetime.

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