The White House is proposing to limit the ability of families to use partnership structures to minimize the valuation of assets for estate tax purposes. A family might set up a partnership to introduce younger family members to investing while the parents maintain control over the assets, or a family…
The White House recently proposed changes to the rules governing Grantor Retained Annuity Trusts. These trusts pay an annuity to the grantor over the life of the trust that equals the initial value of the assets plus an interest rate established by the IRS (currently 2.4 %). The annuity is…
A Grantor Retained Annuity Trust (GRAT) is comparable to an annuity. You place funds in the annuity and receive an annual payout based on the IRS stated interest rate at the time you establish the trust. This rate is currently 2.4% When the annuity matures, any appreciation above the current…
An excellent way to donate to a charity is through a traditional IRA. Ordinarily, if you designate someone as the beneficiary of your IRA, he would owe income tax on the withdrawals and the value of the IRA would be included in your estate for tax purposes. But if you…
A Bypass Trust, also known as a Credit Shelter Trust, lets a married couple double the estate tax exemption. For example, if the husband dies first, his assets fund a trust for the children up to the estate tax exemption amount (currently $5 million Federal and $4 million for Illinois).…
Here’s another reason to convert your traditional IRA to a Roth IRA: When you convert to a Roth IRA, you can pay the conversion fee out of other assets. That is, you can pay the conversion fee from funds not in the traditional IRA. This will maximize the amount that…
Hoping to give investors a chance for their accounts to recover from the losses incurred in 2008, Congress recently suspended the law requiring owners of IRAs and 401(k)s who are over age 70 1/2, and those who have inherited such accounts, to make a minimum withdrawal in 2009. But this…
In his article in The Wall Street Journal titled Obama Plans to Keep Estate Tax, Jonathan Weisman points out that President-elect Barack Obama and congressional leaders plan to retain the estate tax instead of allowing it to expire as scheduled in 2010. Under the new plan, the estate tax would…
In a recent article in the Wall Street Journal titled, How to Fix Your Life in 2009, Eleanor Laise provides advice for individuals whose stock portfolios have been beaten down. She suggests taking advantage of the $13,000 exemption from gift taxes that one can use to give up to $13,000…
Daniel Henninger’s recent article in The Wall Street Journal titled “U.S. Says It Will Bail Out Christmas” is too entertaining not to be included in this Christmas blog: With the government on the brink of rescuing the U.S. auto industry, we have learned that the Treasury Department is drawing up…