Category Archives: Estate Planning

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DOMA – It’s defeat causes more tax headaches

Reuters article - DOMA and taxes 7-23-13

If you live in a state that recognizes gay marriage, you are entitled to federal tax breaks that other married couples get.  However, if you have business income from a state that doesn’t recognize same sex marriage, you’ve got a problem.

This week, Reuters published an article about a married California couple, Jeremy and Randy.   They don’t know how to report the business income Randy gets from Florida – a state that doesn’t recognize gay marriage.

The chief of the IRS, Danny Werfel, was quoted as saying that the IRS hopes to publish rules that will address issues like this one as soon as possible.  But there are more than 200 tax code references to marriage that have to be evaluated before this can happen.

Do you think the couple should get tax breaks based on income earned in a state that doesn’t recognize gay marriage?  Let us know what you think.

For information about other financial matters like estate planning, go to our website, diesmart.com.

6 estate planning lessons we can learn from James Gandolfini

James GandolfinoEverybody thinks celebrities have teams of lawyers that help them protect their assets and ensure that their affairs are in perfect order.  This is not always true.  In fact, many people don’t know the lessons that are included in this About.com blog by Julie Garber.  And they are lessons that, if not learned, can cost your family time, money and public exposure after you die.

James Gandolfini, who died in June, is used as an example of these 6 estate planning  lessons.  It’s important that you read about these lessons and be sure that you have protected your estate.  If you don’t, your loved ones may be caught up in a public probate process that will cost them a great deal of time and money.

For more about probate, what it is and how you can avoid it, go to www.diesmart.com.

 

5 things you should know before you agree to be an executor

When my father died ten years ago and I found out he had named me as his executor, I thought “Okay.  It’s no big deal.”  Was I ever wrong!  I didn’t realize how much time, effort and frustration would be necessary to get everything settled. And I didn’t know that I would also have to be a detective.

 AARP recently published an article that listed five questions you should ask yourself before you agree to become an executor.   You might feel flattered if asked but think carefully about the questions and be sure it’s something you’re comfortable taking on.

1.  Do you have the time to take on this project?  When I started the process, I didn’t realize that it would be more than a year before my dad’s estate would be settled and that, during that year, getting all of the paperwork done and answering all of the government’s questions would often feel like a full time job.

2.  Do you have the skills to handle the process?  You have to be very organized and good with numbers.  Keeping massive spread sheets and tracking all of the paperwork nearly drove me crazy.

3.  Do you have the temperament to deal with all of the details?  I am a fairly calm, easy going person but I found myself getting very frustrated when confronted by people who made ridiculous demands.  One example I can remember is when the state of New Jersey (where my father died) asked me to sign a bunch of papers in black ink, get them notarized and send them in.  I did that and was shocked when I received a letter from a government office saying that I needed to resign them in blue ink, get them notarized again and send them back.  I did it and got one more letter.  It told me that I had not completed the forms correctly.  Believe it or not, it the letter said that the forms needed to be signed in black ink! 

4.  Do you know the rules of the state in which the estate is being settled?  Estate rules are very complex and I ended up hiring an attorney to help me get everything processed correctly.  Many people take this step after realizing what is involved.  For example, if you incorrectly declare the value of the estate, there can be legal repercussions, not just for the estate but for you as well.

5.  Can you afford to be the executor of the estate?  I lived in California and my dad died in New Jersey.  Some things just couldn’t be handled by phone; this necessitated a few expensive trips back and forth across the country.  And it’s not just the money.  What’s your time worth?  Can you afford to handle this job for nothing?  In some states, executors are permitted to charge a fee that is a percentage of the value of the estate.  However, since this money comes out of the estate, taking a fee may cause conflict with family members.

If you agree to be an executor, be prepared to devote a great deal of time to the project.  Be patient and don’t let little things get to you.  Stay organized and check every detail.  You will get through settling the estate…eventually.

For more information about estate planning and settling an estate, go to www.diesmart.com.

 

What are your top five regrets?

An Australian nurse, Bronnie Ware, spent several years working in palliative care, taking care of people in the last 3 – 12 weeks of their life.  She interviewed these people, recorded their dying epiphanies and wrote about them in her blog “Inspiration and Chai.”      Her blog got so much attention that she eventually published her findings in a book called “The Top Five Regrets of Dying”.    

She asked the patients what they regretted and what they would do differently if they could do it over again.   In her blog, Ms. Ware outlined the five most common themes.  They were:

1.  I wish I had had the courage to live a life that was true to myself rather than the one that others expected of me.

How many of us put our dreams on a back burner and do what our family thinks we should do instead of what we really want to do?

2.  I wish I hadn’t worked so hard.

What have you given up in pursuit of your work goals?  Have you missed out on important events in your family’s life or not made time for things that you now wish you had done?

3.  I wish I’d had the courage to express my feelings.

Have you been resentful because you couldn’t tell someone how you really felt?  Were you afraid to speak up when you probably should have?

4.  I wish I had stayed in touch with my friends.

Is there someone who you lost touch with because you were just too busy or so caught up in your own life that you just didn’t make the effort?

5.  I wish I had let myself be happier.

Are you content but not really happy?  Is there something you could have done different that would have made your life a happier one?

What are your top regrets?  Take a minute and think about them.  Don’t come to the end of your life and then be filled with regret about things that you could have done differently.

We can’t help you with the way you have lived your life until now but we can help you think about estate planning and how you can get your affairs in order.  Don’t pass onto your loved ones a regret about the way you left your estate.  Go to www.diesmart.com for more information.

A major issue related to divorce of same sex couples – Defeat of DOMA doesn’t solve every problem

Although DOMA has been overturned by the U.S. Supreme Court, there is a major issue related to the divorce of same sex couples.

This issue is exemplified by the plight of Adam Cardinal, a gay man.  More than four years ago, Mr. Cardinal married his love, who happened to be of the same sex.  They were married in New Hampshire where same sex marriages are legal.

The couple subsequently moved to Florida, where their marriage is not considered legal and it is in Florida where the problem arose.

Several months ago, they separated and wanted a divorce.  However, since their marriage was not recognized in Florida, they could not obtain a divorce there.

The other option, returning to New Hampshire where they were married, was not feasible.  Although you just need a short visit to marry in New Hampshire, that state requires at least a one year residency before it will grant a divorce.  Since the former couple did not have the flexibility to pick up their lives and move back to New Hampshire, they are stuck.

They cannot divorce or remarry.  They are in limbo.  If one of them dies in a state where same sex marriage is legal, and he does not have a will, their still legal spouse may inherit everything.  Even though Mr. Cardinal and his spouse did not merge their funds, the lack of legal paperwork signifying the end of their marriage may cause financial issues in the future.

Six of the states that recognize same sex marriage, including Delaware and Vermont, allow nonresident couples who married in the state to divorce under some circumstances, but those circumstances are not clear cut.

DOMA was just recently overturned and a lot of details about the related wide ranging issues remain to be addressed.  States have a lot of work ahead of them as they figure out how to handle all of the specific issues related to same sex marriage and divorce.

To learn more about estate planning and other issues related to end of life issues, go to www.diesmart.com.