Estate Tax

Will the Senate Estate Tax Bill Impact My Estate Plan?

Published on: April 8, 2021 | By McCulloch & Miller, PLLC

With the recent election and inauguration of the 117th United States Congress, new bills are being introduced that impact all aspects of a person’s life. According to a recent news source, one such bill is Senator Bernie Sanders’ proposed estate and gift tax reform legislation. For individuals with an estate plan in place, the introduction of new legislation gives cause for concern that it may impact their estate plan. The bill will reduce the estate tax exemption to $3,500,000 and increase the estate tax rate from a flat rate to a progressive one. Because the nuances of such a law can be confusing, below are some common questions and answers about the new estate tax bill.

What Does the Bill Propose?

The bill seeks to reduce the estate tax exemption from $11,700,00 to $3,500,000. This means if an estate is valued at over $11,700,000 currently, the heirs of the estate will need to pay a tax. If the proposal is enacted, the heirs of an estate valued at over $3,500,00 will have to pay the tax. Additionally, if the bill passes, anyone who received more than $1,000,000 in gifts from a loved one as a part of their estate plan will have to pay a tax too. The proposed exemption limits are per person; therefore, for married couples, the total exemption limit would be $7,000,000. After 2022, the exemption will continue to rise with inflation.

Why Children Should Be Included in Charitable Giving Plans

Published on: December 9, 2019 | By McCulloch & Miller, PLLC

A fear that children will not be motivated to have careers because of their family’s wealth is a concern. However, in the long run, it can hamper how wealth is handled by the next generation.

In a perfect world, discussing a family’s legacy should be a process that begins when children are old enough to understand concepts as simple as giving and the notion that wealth comes with social responsibilities. In reality, few discuss their philanthropic or legacy goals with their children.

CNBC’s recent article, “Don’t expect Mom and Dad to clue you in on your inheritance,” says that 8 out of 10 financial advisors said that “some” or “hardly any” of their clients involve the next generation in family philanthropy, according to a recent survey from Key Private Bank.

What is a Probate Lawyer? Do I Need One?

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

While it’s possible for people to manage some parts of their loved one’s estate, very often the tasks feel overwhelming. When getting assets out of probate becomes too much of a challenge, it’s time for help.

There are instances when an executor knows they need to hire an attorney who focuses their practice on settling an estate immediately. That’s usually when there’s a lot of money at stake, or if the family has a history of fighting. Other times, the job of settling an estate starts out okay, then hits a roadblock, or becomes too emotionally draining.

KAKE.com’s recent article, “Do I Need to Hire a Probate Lawyer?: The Top Signs You Should Lawyer Up” says that trying to do this on your own can often be time-consuming and expensive. That’s why it’s smart to have a probate lawyer working with you.

Estate Planning Basics You Need to Know

Published on: August 12, 2019 | By McCulloch & Miller, PLLC

Estate planning is not as much fun as vacation planning, but it is something you do for your loved ones to save them a lot of stress. It can also provide a surprising sense of relief to have this task completed.

It’s hard for anyone to consider their own mortality. However, that doesn’t mean you don’t need to protect your family by making sure you have a well-designed estate plan for distributing your assets, communicating your intentions and getting organized. Think of it as tidying up your life.

Forbes’s article, “Estate Planning: What You Need To Know,” says that this preparation means asking yourself questions that can make you uncomfortable, like the following:

Why Do I Need an Attorney’s Help with Estate Planning?

Published on: July 30, 2019 | By McCulloch & Miller, PLLC

When you die, the assets you’ve accumulated during your lifetime have to be distributed. If you don’t make a plan, your family may be left to clean up a legal mess, quarrel amongst themselves, or watch as a long-lost family member is given everything by a court decision.

An estate planning attorney helps clients, by making sure that the distribution of property after the person dies is done the way they wanted it done. While a plan may be simple or complicated, says the New Hampshire Union Leader in a recent article, “Estate planning is important and may require help from a professional,” working with an experienced estate planning attorney will save your family time, unnecessary costs and stress.

You definitely need to work with an attorney if your life falls into any of these categories:

Is a Trust Right for Your Estate Plan?

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

A trust is a complex document, but taking the time to read it a few times will prove enlightening. If you have questions, call your estate planning attorney, so they can help clarify anything you don’t understand.

Attorneys do try to simplify documents when they can, so that clients will have a better understanding of what goes into their estate plans. However, according to a recent article from Forbes, “A Beginner's Guide To Reading A Trust,” there’s still enough legal language in trusts that they can sometimes be confusing. Here are some basics about trusts.

First, familiarize yourself with the terms. There are basic terms of the trust that you’ll need to know. Most of this can be found on its first page, such as the person who created the trust. He or she is frequently referred to as the donor, grantor or settlor. It is also necessary to identify the trustee, who will hold the trust assets and administer them for the benefit of the beneficiaries, and any successor trustees.

How Trusts Solve Problems in Estate Planning

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

Think of trusts like the Swiss army knives of estate planning. There are many different trusts that are used to accomplish many different tasks.

At its essence, a trust is a legal document that permits a third party, called the trustee, to hold assets on behalf of a beneficiary. The trustee has a fiduciary duty to the beneficiary, that is, the trust must put the beneficiary’s needs first. The trust document is drafted to address issues like how and when assets pass to the beneficiaries, what conditions must be met for the beneficiaries to receive assets, etc.

Because trusts usually avoid probate, the beneficiaries can get access to these assets more quickly than they might if the assets were transferred using a will. If it’s an irrevocable trust, it may not be considered part of the taxable estate, which means there will be fewer taxes due at your death.

Is a Death Tax the Same as an Inheritance Tax?

Published on: June 14, 2019 | By McCulloch & Miller, PLLC

Estate tax, death tax, income tax and inheritance tax: what do they mean for your estate and your heirs? You’ll want to be sure to know the difference between them, as you create your estate plan.

Most people don’t have to worry about the federal estate tax, which is often referred to as the death tax. Unless your estate is valued at more than $11.4 million ($22.8 for couples), you won’t be paying this tax. However, says Forbes in a recent article, “Eight Things You Need To Know About The Death Tax Before You Die,” that doesn’t mean your estate and your heirs won’t have to pay income taxes or inheritance taxes.

Assets in your name only and everything else you had control over will be added into your gross estate. For example, all stocks, bonds, bank accounts and life insurance death benefits are included, as well as any real estate, business interests, jewelry, household furnishings and artwork.

Should You Make Lifetime Gifts While Living?

Published on: May 22, 2019 | By McCulloch & Miller, PLLC

Some people give generously all year long, supporting local nonprofits and taking care of their family members. If that’s you, perhaps it’s time to consider taking a more strategic approach to lifetime giving.

Not everyone gives because they are looking to minimize their taxes. If you’ve reached the age and stage where you have accumulated more than enough wealth to retire on, you may enjoy being generous and seeing the impact your gifts can have on the lives of those you love, or those who are less fortunate.

WMUR’s recent article, “Money Matters: Lifetime non-charitable giving,” explains that lifetime giving means you dictate who gets your property. Remember, if you die without a will, the intestacy laws of the state will dictate who gets what. With a will, you can decide how you want your property distributed after your death. However, it’s true that even with a will, you won’t really know how the property is distributed, because a beneficiary could disclaim an inheritance. With lifetime giving, you have more control over how your assets are distributed.

Prince’s Unresolved Estate Battle Likely To Continue for Years

Published on: May 20, 2019 | By McCulloch & Miller, PLLC

It’s been three years since music icon Prince died at his famous Paisley Park mansion, joining the ranks of many celebrities who died without an estate plan.

Prince’s estate, which includes master tapes of his recordings and a 10,000-square-foot Caribbean villa, has been estimated at $200 million. However, what it will be worth after years of battles between heirs, people claiming to be heirs, consultants and a court-appointed administrator, is anyone’s guess.

Page Six reported in its article, “Fight over Prince’s $200M estate could go on for years,” that Prince’s heirs are entrenched in a fight to rein in the estate’s administrator. They’ve spent more than $45 million in administrative expenses, according to a probate-court petition filed by Prince’s designated heirs.