The Estate Planner – November / December 2015

Nov 4, 2015

Here is a brief look at what you will read in the November / December 2015 edition of The Estate Planner.
Double whammy: IRD triggers both estate and income taxes
IRD refers to income earned or accrued during life, but not received until after death. It often results in double taxation because it’s included in the deceased’s taxable estate and it represents taxable income to the recipient — usually, the deceased’s estate, spouse or other beneficiaries. Unlike other types of assets, IRD assets don’t receive a stepped-up basis, which otherwise would eliminate income taxes. This article provides strategies to minimize the impact of IRD, while a sidebar illustrates how to calculate it.
When to begin collecting Social Security depends on personal circumstances
Determining when to begin collecting Social Security benefits depends on many individual factors — including the amount of a person’s nest egg, how much he or she will need to continue his or her desired lifestyle during retirement, and a person’s overall estate planning goals. This article examines several factors to consider when determining the optimal time to begin receiving Social Security.
Estate planning for disabled children: ABLE accounts vs. special needs trusts
For families with a disabled child, financial planning can be a challenge, because loved ones don’t want to jeopardize the child’s eligibility for means-tested government benefits, especially after family members are no longer around to provide for the child. This article examines the benefits and drawbacks to two solutions to this problem: ABLE accounts and special needs trusts.
Estate Planning Red Flag: You’re lending money to a family member
When a family member is in financial need, a natural response may be to make a loan by writing a check. But while an informal approach may feel comfortable, it pays to take steps to formalize the transaction. Why? For one thing, the IRS tends to view undocumented loans as disguised gifts. This brief article explains steps to take to ensure the IRS views the loan as bona fide.