For a limited time only (June 15 to July 15, 2017), you can receive a standard estate plan (which consists of six “must-have” estate planning documents) for only $500 (five hundred dollars). You will be billed only at the conclusion of this process, when you are executing the documents. So, obviously, you won’t pay anything until you are completely satisfied with both the plan and your understanding of the plan.
What if you need or want, something more than the standard estate plan? Like, say, a revocable living trust? A standard estate plan, including a revocable living trust, will only cost you $1,000 (one thousand dollars). A revocable living trust accrues several benefits, including avoiding probate; saving costs, taxes, and fees; getting bequests to beneficiaries more quickly; and privacy.
I should note that either package comes with as many consultations (meetings, emails, and phone calls) with me as you reasonably feel we need to finish your estate plan. Again, you’re not sitting down to execute the documents, and so you’re not being billed (let alone paying anything!), until you are completely satisfied with both the process and the results of the process.
WHY?
Why have an estate plan sale? Several reasons, actually.
To begin, the mission of my law firm is to promote and maximize charitable giving in Iowa. Straight up, the more estate planning Iowans do, the more charitable giving will occur.
Sure, not everyone who constructs an estate plan uses it to give to charities, but many do. Again – it’s simply a numbers game; the more estate planning, the more money flowing to worthwhile causes.
Finally, everyone deserve access to a secure future and a legacy. For these reasons, I’m offering very special rates.
HOW?
How much money are you saving? Quite a bit actually!
Speaking very generally, an estate plan from my Firm usually costs a single person about $700, and a family about $850. So, under this Estate Plan Sale, that’s a saving of about $200 for singletons to $350 for your family!
Also, speaking very generally, an estate plan including a revocable living trust, from my Firm, usually costs a single person about $1,300, and a family about $2,200. So, under this Estate Plan Sale, that’s a saving of about $300 for singletons and a whopping savings of $1,200 for your family!
WHERE?
Any Iowan is eligible. I am licensed to practice law in Iowa, and I have clients all over the state. In our modern age of emails, scanning, and cell phones, mere physical distance is not an issue.
I have clients from Burlington and Carroll to Sioux City and Urbandale. If you want to work with me, I want to work with you, and we can easily find ways to do so.
HOW?
I write about my process at length, but it’s just five steps! Seriously, it’s not that painful, it truly isn’t. My clients report back to me that they have such relief and peace of mind when it’s completed.
WHEN?
NOW! RIGHT NOW!
Again, the special deal of $500 for a standard estate plan, and $1,000 for a standard estate plan plus a revocable living trust, will last only a limited time, June 15 to July 15, 2017. I’m already backlogged, so ACT NOW. Do not wait!
We all know, of all the seasons, summer goes by the fastest. Time can run out on you; don’t let that happen.
You can reach me most easily by email at gordon@gordonfischerlawfirm.com or call my cell, 515-371-6077. Don’t delay—write or call today.
The Estate Plan Sale merely relates to pricing and in no way creates an attorney-client relationship, nor any other kind of professional relationship. The Estate Plan Sale merely relates to pricing and does not create a contract or agreement of any kind.
GFLF, P.C. retains full and total discretion as to who it chooses to serve as clients and why. GFLF, P.C. retains the right to refuse service to anyone it chooses.
The Estate Plan Sale may not apply to individuals or families with a net worth of more than $1 million dollars. (You still need an estate plan, very much so, but it necessarily needs to be much more “complex.”).
With regard to charitable giving, not all assets are equal. For tax reasons, some assets may be better to pass on to heirs, while others may be better to give to your favorite causes. Consider the potential tax treatment of retirement benefit plans such as IRAs, 401(k)s, etc. A simple story illustrates why, for example, an IRA may make a better charitable gift, while other assets may be better for heirs, based on tax provisions.
Old Man Lear and his Four Beneficiaries
Consider the simple story of old man Lear and his four beloved daughters: Cordelia, Goneril, Regan, and Ashlee. (Feel free to take a break and go brush up on your King Lear!)Lear, no fool, engages in estate planning with the intention of helping each of his daughters in the future. He has four major assets: his house, stock, a painting, and his IRA. Each asset is worth roughly the same (plus/minus just a few dollars).
Lear’s house is worth $100,003. He purchased it for only $20,000.
Lear owns shares of stock in Acme Company, valued at $100,002. He bought the stock for just $50,000.
Lear has a famous painting of a castle. It’s valued at $100,009; he purchased it for $35,000.
Lear has dutifully paid into an IRA that’s now up to $100,020.
Nothing if not fair, Lear divvies up the four assets to each daughter. Do all four daughters get more or less the same deal?
Three Tax Concepts
Before answering, we need to consider three important tax concepts:
(1) Inheritance as income
(2) Income in respect of a decedent
(3) Step-up in basis (also called, stepped up basis)
The interplay of these concepts may make charitable gifts of retirement plan assets more attractive to your clients than charitable gifts of other kind of assets.
Inheritance as Income
Under our federal income tax rules, receipt of almost every type of asset counts as income. One of the rare exceptions in inheritance of property. Generally speaking, inheritance is not income, for federal tax purposes. Most inherited property passes tax-free. (It’s true there is an Iowa inheritance tax. To keep this article simple(r), I’ll focus on federal tax).
Income in Respect of a Decedent (IRD)
Of course, with every rule in federal tax law, there’s an exception. Most inherited property passes tax-free, but not all. IRD is income that the deceased was entitled to, but had not yet received, at time of death. IRD can come from various sources, including:
(3) Accrued but unpaid interest, dividends, and rent; and
(4) Distributions from retirement benefit plans
That’s right – retirement benefit plans are IRD.
Federal tax law provides for IRD to be taxed when it’s distributed to the deceased’s beneficiaries. IRD retains the character it would have had in the deceased’s hands.
Step-up in basis
Step-up in basis is a critically important concept. It refers to the readjustment of value of an appreciated asset for tax purposes upon inheritance. With a step-up in basis, the value of the asset is determined to be the market value of the asset at the time of inheritance, and not the value at which the original party purchased the asset.
Four Beneficiaries and Four Assets
Cordelia’s inherits the house. As we discussed, there’s no federal tax on inheritance. Cordelia sells the house for $100,003. Still, no federal tax. Although Lear purchased the house for only $20,000, recall that Cordelia receives a step up in basis. Cordelia’s basis is $100,003, the fair market value (FMV) of the house. Since she sells it for $100,003, there’s nothing to tax.
When Goneril inherits the stock, there’s no tax—as there’s no taxable event. Soon, Goneril sells the stock. Although Lear purchased the stock for just $50,000, Goneril receives a step up in basis. Goneril’s basis is $100,002, the stock’s FMV. Since she sells the stock for its new stepped-up basis, there’s nothing to tax.
Regan inherits the painting, with the same result. There’s no federal tax on inheritance of the painting. When Regan immediately sells the art for FMV, there’s nothing to tax, as the FMV, and step-up in basis, are the same.
How about Ashlee and the IRA? If Ashlee withdraws money from the IRA, it’s a different story. Ashlee will have to pay federal income tax of up to 39.6 percent. (It is true that Ashlee could defer withdrawals from the IRA for a long time, and of course such deferral reduces the impact of taxes.)
To sum up, in this hypothetical, the house, stock, and art passed to the beneficiaries without any taxable event, and the daughter were able to sell without tax consequences. The IRA passed to the fourth daughter, but she will have to pay taxes when she withdraws funds.
When considering charitable gifts, also consider the tax code. And, considering talking to your kids about these issues. After all, not all assets are equally beneficial to heirs. In this case, retirement benefits plans may make an ideal gift to your favorite cause.
https://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/104494896.jpg455680Gordon Fischerhttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngGordon Fischer2017-05-25 14:57:082020-05-18 11:28:58Retirement Benefit Plans: A Case Study of Four Beneficiaries
Estate Sale? No. It’s an Estate Plan Sale!
Estates & Estate Planning, From Gordon's Desk..., Wills, Trusts & EstatesWHAT IS AN ESTATE PLAN SALE?
For a limited time only (June 15 to July 15, 2017), you can receive a standard estate plan (which consists of six “must-have” estate planning documents) for only $500 (five hundred dollars). You will be billed only at the conclusion of this process, when you are executing the documents. So, obviously, you won’t pay anything until you are completely satisfied with both the plan and your understanding of the plan.
What if you need or want, something more than the standard estate plan? Like, say, a revocable living trust? A standard estate plan, including a revocable living trust, will only cost you $1,000 (one thousand dollars). A revocable living trust accrues several benefits, including avoiding probate; saving costs, taxes, and fees; getting bequests to beneficiaries more quickly; and privacy.
I should note that either package comes with as many consultations (meetings, emails, and phone calls) with me as you reasonably feel we need to finish your estate plan. Again, you’re not sitting down to execute the documents, and so you’re not being billed (let alone paying anything!), until you are completely satisfied with both the process and the results of the process.
WHY?
Why have an estate plan sale? Several reasons, actually.
To begin, the mission of my law firm is to promote and maximize charitable giving in Iowa. Straight up, the more estate planning Iowans do, the more charitable giving will occur.
Sure, not everyone who constructs an estate plan uses it to give to charities, but many do. Again – it’s simply a numbers game; the more estate planning, the more money flowing to worthwhile causes.
Also, 60% of Americans don’t have a will/estate planning. I want to help combat that statistic in Iowa. We can do better. Working together, we will do better.
Finally, everyone deserve access to a secure future and a legacy. For these reasons, I’m offering very special rates.
HOW?
How much money are you saving? Quite a bit actually!
Speaking very generally, an estate plan from my Firm usually costs a single person about $700, and a family about $850. So, under this Estate Plan Sale, that’s a saving of about $200 for singletons to $350 for your family!
Also, speaking very generally, an estate plan including a revocable living trust, from my Firm, usually costs a single person about $1,300, and a family about $2,200. So, under this Estate Plan Sale, that’s a saving of about $300 for singletons and a whopping savings of $1,200 for your family!
WHERE?
Any Iowan is eligible. I am licensed to practice law in Iowa, and I have clients all over the state. In our modern age of emails, scanning, and cell phones, mere physical distance is not an issue.
I have clients from Burlington and Carroll to Sioux City and Urbandale. If you want to work with me, I want to work with you, and we can easily find ways to do so.
HOW?
I write about my process at length, but it’s just five steps! Seriously, it’s not that painful, it truly isn’t. My clients report back to me that they have such relief and peace of mind when it’s completed.
WHEN?
NOW! RIGHT NOW!
Again, the special deal of $500 for a standard estate plan, and $1,000 for a standard estate plan plus a revocable living trust, will last only a limited time, June 15 to July 15, 2017. I’m already backlogged, so ACT NOW. Do not wait!
We all know, of all the seasons, summer goes by the fastest. Time can run out on you; don’t let that happen.
You can reach me most easily by email at gordon@gordonfischerlawfirm.com or call my cell, 515-371-6077. Don’t delay—write or call today.
A great place to start in on the process is with my Estate Planning Questionnaire.
DISCLAIMERS
Retirement Benefit Plans: A Case Study of Four Beneficiaries
Estates & Estate Planning, Wills, Trusts & EstatesWith regard to charitable giving, not all assets are equal. For tax reasons, some assets may be better to pass on to heirs, while others may be better to give to your favorite causes. Consider the potential tax treatment of retirement benefit plans such as IRAs, 401(k)s, etc. A simple story illustrates why, for example, an IRA may make a better charitable gift, while other assets may be better for heirs, based on tax provisions.
Old Man Lear and his Four Beneficiaries
Consider the simple story of old man Lear and his four beloved daughters: Cordelia, Goneril, Regan, and Ashlee. (Feel free to take a break and go brush up on your King Lear!)Lear, no fool, engages in estate planning with the intention of helping each of his daughters in the future. He has four major assets: his house, stock, a painting, and his IRA. Each asset is worth roughly the same (plus/minus just a few dollars).
Nothing if not fair, Lear divvies up the four assets to each daughter. Do all four daughters get more or less the same deal?
Three Tax Concepts
Before answering, we need to consider three important tax concepts:
(1) Inheritance as income
(2) Income in respect of a decedent
(3) Step-up in basis (also called, stepped up basis)
The interplay of these concepts may make charitable gifts of retirement plan assets more attractive to your clients than charitable gifts of other kind of assets.
Inheritance as Income
Under our federal income tax rules, receipt of almost every type of asset counts as income. One of the rare exceptions in inheritance of property. Generally speaking, inheritance is not income, for federal tax purposes. Most inherited property passes tax-free. (It’s true there is an Iowa inheritance tax. To keep this article simple(r), I’ll focus on federal tax).
Income in Respect of a Decedent (IRD)
Of course, with every rule in federal tax law, there’s an exception. Most inherited property passes tax-free, but not all. IRD is income that the deceased was entitled to, but had not yet received, at time of death. IRD can come from various sources, including:
(1) Unpaid salary, fees, commissions, and/or bonuses;
(2) Deferred compensation benefits;
(3) Accrued but unpaid interest, dividends, and rent; and
(4) Distributions from retirement benefit plans
That’s right – retirement benefit plans are IRD.
Federal tax law provides for IRD to be taxed when it’s distributed to the deceased’s beneficiaries. IRD retains the character it would have had in the deceased’s hands.
Step-up in basis
Step-up in basis is a critically important concept. It refers to the readjustment of value of an appreciated asset for tax purposes upon inheritance. With a step-up in basis, the value of the asset is determined to be the market value of the asset at the time of inheritance, and not the value at which the original party purchased the asset.
Four Beneficiaries and Four Assets
Cordelia’s inherits the house. As we discussed, there’s no federal tax on inheritance. Cordelia sells the house for $100,003. Still, no federal tax. Although Lear purchased the house for only $20,000, recall that Cordelia receives a step up in basis. Cordelia’s basis is $100,003, the fair market value (FMV) of the house. Since she sells it for $100,003, there’s nothing to tax.
When Goneril inherits the stock, there’s no tax—as there’s no taxable event. Soon, Goneril sells the stock. Although Lear purchased the stock for just $50,000, Goneril receives a step up in basis. Goneril’s basis is $100,002, the stock’s FMV. Since she sells the stock for its new stepped-up basis, there’s nothing to tax.
Regan inherits the painting, with the same result. There’s no federal tax on inheritance of the painting. When Regan immediately sells the art for FMV, there’s nothing to tax, as the FMV, and step-up in basis, are the same.
How about Ashlee and the IRA? If Ashlee withdraws money from the IRA, it’s a different story. Ashlee will have to pay federal income tax of up to 39.6 percent. (It is true that Ashlee could defer withdrawals from the IRA for a long time, and of course such deferral reduces the impact of taxes.)
To sum up, in this hypothetical, the house, stock, and art passed to the beneficiaries without any taxable event, and the daughter were able to sell without tax consequences. The IRA passed to the fourth daughter, but she will have to pay taxes when she withdraws funds.
When considering charitable gifts, also consider the tax code. And, considering talking to your kids about these issues. After all, not all assets are equally beneficial to heirs. In this case, retirement benefits plans may make an ideal gift to your favorite cause.
GoFisch: May Edition
From Gordon's Desk..., NewsletterThis month’s issue of GoFisch is out! Give it a read, subscribe, and pass it along to someone you know who could benefit from the information.
Missed past issues? Here are the April and March editions.