Asset Protection

Why You May Need a Gun Trust if You Own Guns

Published on: February 11, 2019 | By McCulloch & Miller, PLLC

Gun owners, you may own guns to protect your family or because you admire the workmanship or history of firearms. However, without a gun trust, your heirs may face a surprising consequence.

Mistakes with inherited IRA accounts can become expensive, but the penalty is financial. Inherit a gun collection without the necessary permits, and you could unwittingly commit a felony. Gun collectors need to prepare their heirs, if they intend to pass on their firearms, and they may also need a gun trust.

Kiplinger’s recent article, “Own a Gun? Careful: You Might Need a Gun Trust,” explains that a gun trust is the common name for a revocable or irrevocable management trust that’s created to take title to firearms.

Here’s How to Donate to Loved Ones and Avoid a Tax Bite

Published on: February 8, 2019 | By McCulloch & Miller, PLLC

While there’s a time limit on this great opportunity for tax-free giving—2025, unless Congress makes some changes—this is a good time to take advantage of minimizing your tax liability through generosity. There’s a new big break for top-dollar wealth transfers, thanks to the new tax law.

Basic rule: the more you give away, the smaller your estate and, therefore, the smaller your tax liability. If you’ve got a lot of wealth, this is a good time for you and those you want to make gifts to. The sooner you exploit this, the more you can give. It means that there’s less of a chance your estate will have to write a check to the IRS.

The Street’s recent article, “This Is the Golden Age of Tax-Free Gift Giving,” says the federal government has taxed estates since 1924, and as recently as 2001, the threshold when taxes kicked in was $675,000. This exemption level from taxation has been increased ever since. However, a large increase came from the Tax Cuts and Jobs Act, which took effect in 2018. The Act doubled the exemption level and indexed it to inflation. Anything above the new limits is taxed at 40%. It is $11.4 million for singles and $22.8 million for married couples in 2019.

The Biggest Retirement Risks? The Ones You Don’t Know About

Published on: January 28, 2019 | By McCulloch & Miller, PLLC

You know that health care, taxes and not saving enough for retirement can derail retirement. However, what about the risks you never saw coming?

Consider these three risks to retirement says Wealth Advisor in the article, “The Three Risks To Prepare For In Retirement.” They are a little less obvious than the ones you usually worry about, but no less dangerous for your later years.

Complacency. Don't let yourself fall victim to complacency risk. This involves feeling smug or uncritical satisfaction with your own achievements. In this case, it’s thinking that you have your retirement plan all set and forgetting about it.

The Sooner You Complete Your Estate Plan, The Better

Published on: January 24, 2019 | By McCulloch & Miller, PLLC

Among the top three reasons for an estate plan are to make sure that your assets are distributed according to your wishes, helping your loved ones from having to pay more taxes than necessary and if possible, avoiding having your estate go through probate.

When there are minor children or family members with special needs, it’s critical to have an estate plan, advises the Capital Press in the article, “Ag Finance: Why you need to do estate planning.”

While it’s likely that most adult children can work things out, even if it’s costly and time-consuming in probate, minor young children need protection. Wills are frequently written, so the estate goes to the child when he or she reaches age 18. However, few teens can manage big property at that age. A trust can help, by directing that the property will be held for the child by a trustee or executor until a set age, like 25 or 30.

Is Your Estate Plan Working for You?

Published on: December 20, 2018 | By McCulloch & Miller, PLLC

Remember that estate planning is not just for the wealthy, and now that the federal exemption is so high, not just for the billionaires either. Estate planning is also much more than a will.

Your estate plan has a lot of work to do for you, both while you are alive and for your family when you have passed. A good article that explains it all comes from Investopedia, “How to Get Your Estate Plan on Track.” There are three key objectives that your estate plan needs to do:

End-of-life health care decisions are documented in a legally binding document;

How Does Life Insurance Work in Farm Estate Planning?

Published on: November 2, 2018 | By McCulloch & Miller, PLLC

Life insurance can be useful in paying off debt, covering funeral costs and serving as a useful resource so that estate proceeds or any one person’s savings don’t have to be tapped.

Life insurance may be the least sexy part of the transition from one farming generation to another, but this financial tool can be very valuable. If parents or grandparents have planned properly, the proceeds from the life insurance may provide the funds that permit the farm to stay in the family. The proceeds, which are not subject to estate taxes, can be used to buy out the non-farming siblings so that the family ownership of the land can continue to another generation.

Successful Farming’s recent article, “Using Life Insurance in Estate Planning,” quotes David Bau, a University of Minnesota Extension educator based in Worthington, Minnesota. He says, “Life insurance is expensive, but it’s still a very good tool in the process. The farming heirs can have insurance on their parents, and they can use that money to buy out the estate.”

Brad Pitt is Savvy About His Children’s Future

Published on: October 30, 2018 | By McCulloch & Miller, PLLC

Here’s one celebrity savvy about estate planning. Actor and producer Brad Pitt has an estate plan that will keep his money away from his ex and benefit his children through a $250 million trust.

After reading about so many celebrities who fail to plan for the future, it’s refreshing to learn that one bold-face Hollywood star has taken steps to create a will and care for his children. In the recent article from Wealth Advisor, “Even Brad Pitt Has Prepared A Will (And A Post-Divorce Trust),” the 54-year-old Pitt has achieved the dual purpose of keeping his millions from his ex-wife and had a trust created to divide his money between his six children.

A source, who’s a family friend commented, “Brad’s intent is that any money he doesn’t have to give Angie in a divorce settlement and for child support is well-protected. He’s setting up a firewall that is specifically intended to keep her hands off his cash.”

Leaving a Legacy? Expand What That Means

Published on: October 29, 2018 | By McCulloch & Miller, PLLC

Your legacy is far richer than your assets and possessions. Planning to pass on a legacy to your family becomes more rewarding, when it includes non-tangibles, like values and treasured family stories.

Who wants to think about death, dying and bank accounts? Not too many people do. That’s why so many of us tend to put off creating or updating our wills. However, taking a different approach, breaking up the task into four key components, and including more than the assets you’ve accumulated over a lifetime can make planning your personal legacy rewarding. The Street’s recent article, “Planning Your Legacy: More Than Just Finances,” explains how this works.

Pillar 1: Values and Life Lessons. People can forget to provide for some of the most valuable gifts that can be passed on to the next generation of family members, which are experiences and memories. Your years of life encounters have given you a wealth of life lessons and knowledge you can pass on to your heirs. Document your memories, relationships, and any important lessons you want to preserve.

Making Smart Decisions About Your Pension

Published on: August 20, 2018 | By McCulloch & Miller, PLLC

The burden of saving for retirement shifted from employers to employees. It is now unusual for companies to offer pensions. If you’re lucky enough to have one, make your decisions wisely.

It’s hard to imagine today, but years ago, it wasn’t unusual to stay with one company for a lifetime, then retire and collect a generous company-provided pension that lasted as long as you lived.

Investopedia’s recent article, “Choosing How and When to Receive Pension Benefits,” reminds us that times have changed. Pensions have been replaced in large part by 401(k)s or other employer-sponsored savings plans. Those fortunate enough to still have a pension, will make it a large part of their retirement plan. If you have a pension, you’ll have to make some decisions, when you are ready to retire.

Blended Families Need to Blend Estate Planning Too

Published on: July 5, 2018 | By McCulloch & Miller, PLLC

Estate plans are as individual as the families that they are created for. Blended families need estate plans that address their own dynamics, including the resources and children that each spouse brings to the new family.

Blended families who marry, when children are young, are different from those who marry after their children are grown and have established their own families. Without years of living together as step-siblings, the dynamics may be considerably different.

Hometown Life’s recent article, “Blended marriages take careful estate planning,” discusses what happens when second marrieds combine their finances and must determine how to divide their estate. Their big question centers on how to address the kids, upon both of their deaths.