In a recent article published by Kiplinger, the article stresses the importance of wealthy individuals acting quickly to prepare their estates after details of Bernie Sanders’s Estate Tax Proposal.
After Sanders’s Estate Tax Proposal, a bill known as the “For the 99.5% Act,” among other proposed changes to estate and gift tax policies, anyone with an estate of $3.5 million or more should consider contacting an experienced estate planning professional, like the estate lawyers at Rhodes Law Firm in Augusta.
Sanders’s “For the 99.5% Act” would cut the federal gift and estate tax exemption amount from the current $11.7 million to $3.5 million. The reduction would not occur until Jan. 1, 2022. The same timing applies for the bill’s proposed reduction of the gift tax allowance to only $1 million, which means that people will not be able to gift more than $1 million after 2021 without paying a gift tax.
The current maximum federal estate tax rate is 40%. The 99.5% Act proposes to increase the estate tax rate to 45%, once a deceased person’s taxable estate exceeds $3.5 million and 50% and higher when the amount subject to tax exceeds $10 million, maxing out at 65% for estates over $1 billion, but that increase would not apply until 2022. In addition to the above exemption and tax changes, gifting of up to $15,000 per year per person would be limited to $30,000 per donor per year for gifts to irrevocable trusts or of interests in certain “flow through entities” beginning in 2022.
Essentially, estate plans and strategies could change drastically and some of the things we’ve grown accustom to knowing may not be the same if President Biden signs the 99.5% Act bill into law. Learn more about the proposed estate tax law and how it can affect your estate plan by contacting the estate planning lawyers at Rhodes Law Firm in Augusta.
In a recent article written by nwitimes.com, this question was asked in regard to estate planning. “My father passed away recently, how do we remove his name from the title to the home? Can we record a death certificate or have mom sign a new deed?”
This is a normal estate planning question, and the answer is simple. The first thing you need to determine however is how the homeowners held title to the home. There are two options here, did your parents own the home as husband and wife, legally known as tenants by entirety? Or did they own the home as Joint tenancy with rights of survivorship?
If they owned the home as husband and wife through tenants by entirety, it creates ownership interest in which the spouses own the property jointly as a couple and not as individuals. This creates the rights of survivorship so that the survivor owns the property as a matter of law at the death of the first spouse.
If they owned the home through joint tenancy with rights of survivorship, then some of the legalities will differ as long as both the spouses are still alive, but it doesn’t affect the end result of this question.
Assuming that the parents owned the home as tenants by entireties or as joint tenants with rights of survivorship, the surviving spouse owns the house as a matter of law at the time of death. We would notify the recorder’s office of the death by preparing a surviving spouse affidavit or surviving joint tenant affidavit. That puts the recorder and the public on notice that one of the homeowners has died and the survivor of them now owns the home.
Since we submit the affidavit, there’s no reason to record a death certificate because the affidavit makes important recitals that can prove the change of title. There also won’t be a deed since the surviving spouse owns the property at the moment of death. The affidavit will demonstrate proof of transfer of title in place of a deed.
If you’re unsure what kind of title you hold on your home as a married couple, or you have additional questions regarding ownership of your home, contact the estate planning lawyers at Rhodes Law Firm. At Rhodes Law Firm, we assist you and give the peace of mind you deserve.
With Democrats taking control of both houses of Congress and President Biden’s new administration in the White House, many folks may be concerned about their estate plans and changes that may come with a new tax reform. This Forbes article suggests that while there is a possibility that tax reform could pass later on in 2021 and be retroactive to January 1, tax advisors feel that this is unlikely to happen. Most advisors believe that tax reform would come into effect in 2022, after most of the population has been vaccinated against the Coronavirus. The article lists five possible ways that tax reform could affect your estate plan and how you can prepare now.
- Estate tax exemption – This could be lowered to $3.5M as estimated by the Tax Policy Center
- Estate tax rate change – Currently at 40 percent, it could increase.
- Lowering the gift tax – It is possible that the gift tax exemption could be lowered to $1M.
- Elimination of the step-up in basis at death – This would mean heirs would be required to pay capital gains tax on inherited property
- Potential increase in capital gains rate – For those making more than $1M annually, Biden’s proposed tax plan suggests increasing the long-term capital gains tax rate
It’s never too early or too late to start making adjustments and considerations for your estate plan. If you would like to review your plan with our team and have peace of mind, contact Rhodes Law Firm today!
2020 was a very unusual year, and if it taught us anything it is that we should always be prepared for the worst. The best way to start the new year off right is by resolving to create an estate plan! It may sound grim, but it truly is a great way to gain peace of mind by knowing your loved ones will need not worry about resolving your estate after you pass or if you suffer an injury that leaves you unable to make decisions on your own behalf. This article encourages
everyone to consider this not-so-traditional New Year’s resolution.
By doing this now, while you are alive and well, you are able to plan and consider the total picture and have full control of how your assets are distributed. Begin by first itemizing your assets and listing any liabilities. Gather any important documents, such as tax returns, real estate records, and insurance policies, and place them in a secure location.
There are some more difficult things you may need to consider while planning your estate, such as who will provide for your children and/or spouse, who would take care of your business, and more. While these may be uncomfortable topics of discussion, it’s important to address these issues now while you may still make your wishes known rather than leaving it to the state.
If you are ready to start the new year on the right foot, let Rhodes Law Firm help you today.
With the election coming up, it may be a good time to review and work to implement any changes necessary to your estate plan. This article by The National Law Review suggests that while no major changes would take place if Republicans are in control of the White House, Senate, or House of Representative. However, if Democrats take control of all three, there would likely be a reduction in the current federal gift and estate tax exemption of $11.58M.
These possible changes do not mean that everyone needs to do something now to prepare. Everyone’s own situation is different and you may not be affected at all. If you would like to find out more and review your estate plan with experienced advisors, contact Rhodes Law Firm today. You can expect a tailored plan for your unique situation.
Planning your estate is essential in normal circumstances. Add in the uncertainty and risk that come along with a pandemic, and it really is a wise move to have your affairs in order. This article highlights that the suggestion of planning your estate now isn’t just based on the issues of morbidity, as many survive COVID-19, but if you require hospitalization or if you fall ill, it may bring you peace of mind to know everything is settled.
While estate planning can be complicated, it doesn’t have to be. Some helpful documents to get started, as listed by the Emporia Gazette, are:
- Financial power of attorney – This would give someone of your choosing the authority to conduct your financial affairs if you are unable to do so
- Last will and testament – choose how your assets are distributed and appoint an executor to oversee the distribution
- Living trust – allows you to leave assets to heirs without probate, also provides more flexibility in regards to how you disperse your assets
- Health care surrogate – should you become incapacitated, this person can act for you regarding your medical care
- Living will – allows you to specify end-of-life treatments that you do or do not want
The process of estate planning or updating requires time, with notarization and witnesses necessary. During a time of quarantines and social distancing, those things may be more difficult to accommodate than usual. It is best to act sooner rather than later, and you can be content knowing that if the worst does happen, everything is already settled and in place.
Call Rhodes Law Firm today to get started!
Losing a parent is often one of the most difficult times a family can face. Many times, it can result in friction between siblings. There are simple ways to help avoid this, however, such as deciding early how property should be sold or maintained. This article elaborates on specific steps you can take now to help keep the peace during a difficult time for your loved ones. Below are some ideas and suggestions to consider when making your estate plan.
- Find a Real Estate Attorney with Experience and Referrals – It’s important to work with someone who understand the needs and wishes of retirees. Find someone with plenty of experience in the field as well as satisfied clients.
- Produce an Overview of Your Financials – One easy way of helping your beneficiaries simplify the process is to create a simple overview of what you own and where. This minimizes any possibility of skepticism. This overview should include a list of all assets, liabilities, and insurance policies, as well as contact information for all insurance and legal professionals you have. It would be a good idea to include usernames and passwords for any accounts or websites.
- Communicate with Your Family Now – Once you have the above steps in place and completed, it is vital you communicate with your family to prevent any miscommunication in the future. Discuss your estate intentions and legacy items that are important to you. Explain who your executor will be as well as let them know where the important documents are kept.
If you are ready to meet with an experienced and reputable estate attorney to begin your estate planning process, call Rhodes Law Firm today!
If you think you are safe from data breaches and identity theft because you froze your Equifax credit account, you may be sorely mistaken. Due to a security flaw, identity thieves may be able to easily hijack your phone and utility accounts. According to this article, the National Consumer Telecom and Utilities Exchange, an association that houses consumer payment data for utility bills, is a separate organization and, thus, not affected by your credit freeze with the credit bureaus.
The director of the Identity Fraud Institute at Hodges University, Carrie Kerskie, reported that they have had many people come to them because crooks have opened utility accounts in their names. She suggests that anyone whose personal information was exposed in a data breach request a copy of their NCTUE in addition to the three big credit reporting agencies. Then you can place a freeze on all accounts.
While it’s always possible that your information will still be stolen in the future, it’s important to take extra steps and precautions to try to protect your data and personal information as best as possible. If you need the assistance of an attorney, contact Rhodes Law Firm today. While the COVID-19 pandemic has limited our in-office interactions, we are happy to provide legal assistance by email or phone.
It is important to review your estate plans regularly to adjust for any changes that occur, whether they are legal or personal. This year, that is especially true. The Setting Every Community Up for Retirement Act, or SECURE Act, has made substantial alterations to how certain retirement benefits and IRAs should be treated after death. This means that you should take the time to review and update your estate plan. This article on Forbes.com highlights some key points regarding these changes and why you should take the time to consider making changes to your plan.
The SECURE Act changes could possibly result in revision of beneficiary designation forms, revision of wills and trusts, possible modifications of existing conduit trusts, and complete restructuring of the planning for the IRA account. One major change that the SECURE Act brings with it is the death of the “Stretch IRA.” With this death, the ramifications will shake things up for many. The stretch technique permitted heirs to defer IRA over a long period of time, which essentially would permit the IRA balance to compound income tax free. Now, however, most heirs of an IRA dating after 2019 will be required to completely withdraw all assets within 10 years of the date of death.
There are a few exceptions to the 10-year rule. For heirs who qualify as “eligible designated beneficiaries” do not need to adhere to the 10-year payout. Those who are considered eligible designated beneficiaries are surviving spouses, chronically ill, or disabled heirs.
The SECURE Act significantly affects many estate and retirement plans, so it is critical to review your plans today. The team of legal experts at Rhodes Law Firm is ready to help ensure that your plan is structurally sound and your wishes will be upheld. Don’t wait until it’s too late – come see us today to review or create your estate and retirement plans!
Social Security is a truly wonderful program that distributes nearly 64 million benefit checks to more than 15 million retired workers. These monthly payments also benefit the survivors of deceased workers and those on long-term disability. This is a lifeline many cannot afford to lose. However, many might not realize that your Social Security benefit might be taxable.
This article by The Motley Fool has a great article that delves into the history behind the taxation of social security benefits as well as offers more information on whether or not you may be taxed. Social Security taxation, a controversial addition to the Amendments of 1983, was originally aimed to only impact upper-income households in order to avoid cutting benefits for retired workers.
The odds of future retirees’ benefits being taxed is currently at about a 50/50 chance. When the taxation of benefits was put into place, people or couples whose modified adjusted gross income exceeded $25,000 and $32,000 were subject to the tax. In 1993, the second tier of taxation was created, aimed at those whose MAGI were more than $34,000 and $44,000. However, these thresholds have never been adjusted for inflation, and therefore more and more seniors are being subjected to the taxes of Social Security benefits.
This taxation, while unpopular, is a large chunk of what is helping keep Social Security benefits afloat. Social Security is facing an imminent funds shortfall, and the Board of Trustees has anticipated the program’s $2.9 trillion in asset reserves will be depleted completely by 2035.
Read more about the taxation of Social Security benefits here. With Social Security’s wellbeing in flux, it is more important than ever to have a plan for your retirement and later years. Contact us at Rhodes Law Firm today to get started on your future.