Tuesday, December 20, 2016

The 7520 rate for January 2017 has increased to 2.4%.

The January 2017 Applicable Federal Interest Rates can be found here.

Tuesday, December 20, 2016

(This is an updated post from December 2015)

With the end of the year approaching, we thought now would be a good time to re-post and update this blog from the end of 2015.

For 2017, the annual exclusion gift amount will remain the same at $14,000 but the lifetime gift and estate tax exemption will increase to $5,490,000 (up from 2016’s $5,450,000).

With fourteen days left in the year, many people are still planning how to make 2016 gifts, whether by making “annual exclusion” gifts of $14,000 per beneficiary, or by taking advantage of the 2016 gift tax exemption amount of $5,450,000.  Whatever the reason for the last-minute gifting, as the end of the year approaches, people may be tempted to make a “quick and easy” gift to their beneficiaries by simply writing a check. As the year draws to a close, however, if your gift is dependent on utilizing 2016 tax law, beware of the potential trap of making a gift by check.

A gift is not complete for tax purposes until the gift is no longer revocable.  However, if you write someone a check, until that check clears, you could always “revoke” the check by alerting your bank to stop payment, or by emptying your account of sufficient funds to pay on the check.   Until the check clears the bank, your gift is still revocable.  Therefore, if your beneficiary doesn’t deposit the check in time for the banking system to clear the check, your gift may not be considered irrevocable until 2017, and you have therefore made a gift in 2017 instead of 2016.

If you are planning to make 2016 gifts over the next 10 days by means of a check, be wary and let your beneficiaries know that they need to deposit that check as soon as possible.  Better yet, make the gift by means of a cashier’s check, which is considered irrevocable as soon as you hand it over.  That way, you don’t have to rely on the promptness of your beneficiaries’ next trip to the bank, and the promptness of the banks in processing the checks.

Tuesday, December 20, 2016

(This is an updated post from December 2015)

Need a New Year’s resolutions to kick start 2017? Here is an idea you probably hadn’t considered: review your estate planning documents.

If you are like most people, you are probably thinking that reading legal documents does not sound like an even remotely enjoyable way to start a new year. But, it doesn’t have to be as unpleasant as it sounds. Reviewing your documents does not mean you have to read them cover to cover. If you know what are the most important elements, it is easy to review your will, trust, and powers of attorney regularly to ensure they still comply with your wishes. These documents not only determine who will receive your property when you die, but also likely determine who has the right to make financial and major medical decisions during your lifetime. Needless to say, it is important that you are still comfortable with the designations you have made.

To get you started, below is a basic checklist of items we suggest you review annually (make it a New Year’s tradition!).

1. Assess the changes in your life since you last updated your estate planning documents.

Have you gotten married or divorced? Had a child or adopted a child? Moved to a different state? Had a death in the family? Had a major financial event? Any of these life changes may affect your estate planning, and your documents may need to be revised. (more…)

Tuesday, December 13, 2016

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While there is considerable uncertainty among wealth planners and tax professionals regarding how the incoming administration will impact the federal tax code, nearly everyone agrees that change is imminent. With that in mind, we have assembled this chart, which compares current tax rates with President-elect Donald Trump’s proposed tax plan, and the House Republicans’ Blueprint plan (released in June, 2016).  Click here.