Estate and Tax Planning e-Bulletin
April, 2015

Spring is in the air and, like many; you are cleaning out the old and replacing with new. It is also good time to review your estate planning documents. If you have either assets or a family and you haven't written an estate plan (or updated it in the past five years) you are doing yourself and your family a disservice. Estate planning laws are reasonably stable for the first time in over a decade so if you have an existing plan and you were working to avoid federal or state estate or inheritance taxes it may be advantageous to meet with us to discuss any possible changes that will benefit you and your heirs. 


John R. Crawford


                                         Florida Bar Certified in Tax Law          

A New Year and New Changes that may affect your Estate Planning

The New Year didn't bring a lot of changes to estate planning laws but there are some items to consider that may affect your estate planning for 2015. They include:


1. Non-taxable Gifts. Gifts to a spouse, payments for someone's medical or education expenses (made directly to the provider) and donations to a qualified charity are still tax exempt and have no limits. It is important to confirm with your estate planner that the gifts you are considering are truly tax exempt.


2. Exclusion Amounts. In 2015, Floridians will pay no estate taxes if at the time of their death if their estate is worth less than $5.34 million or 10.68 million for married couples.



3. Inherited IRAs. Traditionally, inherited IRAs have been safe from creditors and lawsuits but this changed last year when the U.S. Supreme Court ruled that inherited IRAs are not 'retirement funds' and can subsequently be used in the event of bankruptcy or a ruling against the holder. It may be wise to meet with your estate planner and discuss alternatives such as a 'Standalone Retirement Trust' to hold and protect your assets.


4. Healthcare Coverage. This year those without health coverage will be subject penalties. For 2014, the penalty is the greater of a flat $95 per adult and $47.50 per child under age 18, up to a maximum of $285 per family, or one percent of the portion of your family's modified adjusted gross income that is more than the threshold for filing a tax return.

The ABLE Act of 2014 Gives Additional Planning Options for Disabled Individuals              

The "Achieving a Better Life Experience Act of 2014" amends the Internal Revenue Code of 1986 to provide for the tax treatment of ABLE accounts established under State programs for the care of family members with disabilities, and for other purposes. The Act extends the 529 college savings account rules to allow for similar, tax-free "ABLE Accounts" to be created for qualified individuals. This law will allow people with disabilities a new way to save money. The funds, when properly managed, can grow tax-free, provide for qualified supplemental needs for disabled persons where they can save up to $100,000 without jeopardizing eligibility for Social Security and other government benefits. Click here to read a summary of H.R.  647.

Advantages of a Living Trust                  

Initially most people think a will can accomplish their estate planning goals. Then as their families, goals and assets evolve, a living trust seems a better option.  Living trusts are different than wills in that a will comes into effect after death and living trusts and are set up to manage assets both during life and after death. A living trust has a trustee assigned to manage the assets of the trusts in life and after death.  A living trust can be set up to avoid asset protection for your beneficiaries and be protected from things such as bankruptcies, creditors, and lawsuits.  Tax planning and legacy planning are additional items to consider with a living trust that are not part of a simple will.  It is best to discuss your goals with an estate planning attorney to discuss what type of planning is best for your goals.

Generation X Retirement Planning

Employees in their 40s and 50s need more savings to retire than ever before. We are living longer and our retirement dreams are bigger than the generation before. According to standards published by JP Morgan Asset Management, a 50-year-old making $100,000 should have $390,000 in investment funds. If this makes your feel good or ready to reel in your spending there are few things to consider in saving more and getting on the right path. First, take a good look at your contributions. Many IRAs and 401(k) plans kick in at age 50, allowing savers to add $1,000 more to IRAs and up to $6,000 more in 401(k) plans. Make sure your income is diversified in taxable and non-taxable accounts as you plan your retirement account withdrawals on a multi-year basis. Finally, consider risk tolerance if you plan on working at least 15 more years. The best advice for Generation X's is to take a deep breath and meet with a qualified advisor to help you predict and plan your goals most effectively.

Obama set to Tighten Regulations on Financial Advisors and Brokers         

Brokers and financial advisors who deal with retirement accounts may soon see new rules aimed to make advisors act in their clients' best interest, according to a 'fiduciary standard'. It is unclear whether the measures will be approved or how effective they will be if they are passed. The regulations proposed are based on the dispute that current legislation allows room for advisers to take advantage of their clients. For more information on the proposed rules, click here.

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