For traditional 401(k) plans and IRAs, you generally get a tax break when you make contributions and then pay taxes on the withdrawals in retirement. In contrast, Roth versions of those accounts come with no upfront tax break, but qualified withdrawals are excluded from federal income taxes.
Conversations about family succession plans are difficult.
First, before making a gift or bequest outright to your youngest son, consider whether now or in the future he will possibly be eligible for governmental assistance based on his disability and his own assets.
If you do not learn from your mistakes, you are doomed to repeat them. In Estate Planning, if you do not learn from other’s mistakes, you are likely to repeat them.
I know of someone who was joint account holder with his dad for many years, then later his dad then appointed him as power of attorney. How does that work? Is the son still a joint account holder?
Do I need a trust in case something happens to me?
To be tax efficient, which types of assets should you live off of in retirement, and which should you plan on passing down? There’s a bit of art to the equation, and how you plan can make a big difference to your beneficiaries.
Right now, gifts to trusts can take advantage of high tax exemptions and remove future appreciation of assets from taxable estates. One example available to spouses is making a gift to a trust that allows for a qualified terminable interest property (QTIP) election.
Over the years I get all kinds of questions from people. And boy, have I heard some doozies. But one common one I get is called the ‘lazy (or poor) man’s (or woman’s’) estate planning.’ This type of estate planning has some very negative tax consequences.
The wave of people prompted by the COVID-19 pandemic to write their wills is creating yet another wave in estate planning: all the people being asked to one day put those wills into effect.
