The Gift Rule

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Making Gifts: The $16,000 Rule One simple way you can reduce estate taxes or shelter assets in order to achieve Medicaid eligibility is to give some or all of your estate to your children (or anyone else) during their lives in the form of gifts. Certain rules apply, however. There is no actual limit on how much you may give during your lifetime. But if you give any individual more than$16,000 in 2022, you must file a gift tax return reporting the gift to the IRS. Also, the amount above $16,000 will be counted against a lifetime tax exclusion for…

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Estate Planning For Estate (Death) Tax

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Congress sets the amount that an individual can transfer tax-free either during life or at death. The current estate tax exemption is so high that very few estates will have to pay an estate tax.  In 2017, Republicans in Congress and President Trump doubled the federal estate tax exemption and indexed it for inflation. In 2022, the exemption is $12.06 million ($24.12 million for couples). That means that as long as your estate is valued at under the exemption amount, it will not pay any federal estate taxes. The lifetime gift tax exclusion – the amount you can give away without incurring…

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Reasons For Setting Up A Trust For Grandchildren

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Transferring funds into such a trust offers the following benefits: (1) You can reduce the size of your estate by transferring up to $16,000 (in 2022) into each trust you create for each grandchild. No gift taxes will be due in connection with the transfers; (2) Although the trust owns the assets, you control them as trustee and can decide what type of investments to make; (3) Income earned by the trust from amounts that you’ve deposited will not be taxed to you; the trust pays the taxes; (4) Amounts deposited in trust, and the income earned from those funds,…

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Gifts To Grandchildren

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There are some serious drawbacks to many options for giving gifts to grandchildren. Either there are no tax or estate planning advantages, or you have no control of the funds (or lose control after a certain point), or the money could affect a grandchild’s eligibility for financial aid. An option that overcomes many of these problems involves transferring money into a trust established to benefit a grandchild. With the help of an attorney, you can draft a trust that reflects your express wishes about when the income and principal will be available to the grandchild, and even how the funds…

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Reason To Create A Will (Part 2)

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A will is a legally-binding statement directing who will receive your property at your death. It also appoints a personal representative to carry out your wishes. However, the will covers only probate property. (Probate is the court process by which a deceased person’s property is passed to his or her heirs and people named in the will.) Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate Why should you have a will?…

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Reasons To Create A Will (Part 1)

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A will is a legally-binding statement directing who will receive your property at your death. It also appoints a personal representative to carry out your wishes. However, the will covers only probate property. (Probate is the court process by which a deceased person’s property is passed to his or her heirs and people named in the will.) Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate Why should you have a will?…

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Planning for Your Golden Years: 5 Things You MUST Know!

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Planning for Your Golden Years: 5 Things You MUST Know!   Webinar on: Wednesday, October 28th, 2020 10:30 am To register call us at 301-663-9230 or Kristin@davidwingate.com   For a complete list of upcoming seminars, visit our website at www.davidwingate.com. Peace of mind is only a call or click away! For an Initial Consultation call Estate and Elder Planning by David Wingate at (301) 663-9230 or visit www.davidwingate.com David Wingate is an estate planning and elder law attorney at Estate and Elder Planning by David Wingate. The Estate and Elder Planning office services clients with powers of attorneys, living wills,…

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Five Reasons to Have a Will

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Your will is a legally-binding statement directing who will receive your property at your death. It also appoints a legal representative to carry out your wishes. However, the will covers only probate property. (Probate is the court process by which a deceased person’s property is passed to his or her heirs and people named in the will.) Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate. Why should you have a will?…

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Understanding the Common Types of Trusts

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A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” Trusts fall into two basic categories: testamentary and inter vivos. A testamentary trust is one created by your will, and it does not come into existence until you die. In contrast, an inter vivos trust, starts during your lifetime. You create it now and it exists during your life. There are two kinds of inter vivos trusts: revocable and irrevocable. Revocable Trusts Revocable trusts are often…

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Your Medical Directive

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Any complete estate plan should include a medical directive. This term may encompass a number of different documents, including a health care proxy, a durable power of attorney for health care, a living will, and medical instructions. The exact document or documents will depend on your state’s laws and the choices you make. Both a health care proxy and a durable power of attorney for health care designate someone you choose to make health care decisions for you if you are unable to do so yourself. A living will instructs your health care provider to withdraw life support if you…

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