Here's a brief glance at what you'll find in the January/February issue... or check out the PDF of the publication below.
A fresh look at charitable remainder trusts
Those who are charitably inclined but concerned about having sufficient income to meet their needs may find that a charitable remainder trust (CRT) is the answer. A CRT allows donors to support a favorite charity while potentially boosting their cash flow, shrinking the size of their taxable estate, and reducing or deferring income taxes. This article explains the basics of a CRT and the investment advantages. A sidebar shows how a CRT provides the ability to control the income flow to suit the donor's needs, which can be helpful in retirement planning.
Making a difficult decision: When is it appropriate to have your elderly parent declared incapacitated?
When an elderly parent gradually loses control of their faculties, it can be difficult for children to determine whether having their parent declared incapacitated is the right thing to do. This article explains the legal criteria for incapacitation, and shows what's involved when that decision is made. It discusses the role of a court-appointed guardian/conservator, along with other possible options.
Prenups and estate plans: Make sure they work together
If a prospective couple plan to sign a prenuptial agreement, it's a good idea to design the agreement with their estate plan in mind. A well-planned prenup can provide several estate planning benefits; a poorly planned one can trigger unintended tax consequences or hinder achievement of estate planning goals. As this article discusses, benefits include protection from liability for one spouse's separate debts and implementation of estate planning strategies. But there are traps, as well, involving premarital transfers, the estate tax exemption, and the disposition of the family home.
Estate Planning Red Flag: You and your spouse have similar trusts
If a couple have similar irrevocable trusts for each other's benefit, they could be subject to the "reciprocal trust" doctrine. It prohibits tax avoidance through trusts that 1) are interrelated, and 2) place both grantors in the same economic position as if they'd each created trusts naming themselves as life beneficiaries. This article explains that reciprocal trusts can be undone by the IRS; to avoid this, it's important to vary factors related to each trust, such as the trust assets or terms, trustees, beneficiaries, or creation dates.