Imagine your elderly friend or family member receiving a heartfelt call. The voice on the other end claims to be their loved one, urging them to act quickly to avoid financial disaster. This is the all-too-familiar scenario where criminals use Elder Financial Exploitation (EFE) to prey on vulnerable individuals, often in their later years when …
According to a 2024 research report from the Investment Company Institute, 62% of U.S. households have Individual Retirement Accounts (IRAs) that have been funded with rollovers from employer plans. An estimated $595 billion worth of such rollovers occurred in 2020. Care needs to be taken that these transactions are handled properly to avoid unexpected tax …
Parents who are building a college fund for their child or children have two tax-advantaged alternatives, the 529 plan and the Coverdell Education Savings Account (CESA). Contributions to 529 plans and CESAs are not tax deductible, but there is no tax as the income builds up in the account. Distributions from the plans are tax …
When people decide to relocate, how do they choose a destination? Key factors will include job opportunities, family situations, and lifestyle changes, such as retirement. According to a recent study from the Tax Foundation, income tax rates are also a factor, especially for upper income folks who have more resources to draw upon in making …
Sometimes a sound estate plan may need to be modified after it is put into effect. One such situation was recently outline in Private Letter Ruling 202504006 from the IRS. A decedent’s estate plan called for the creation of two trusts, a marital trust for the surviving spouse and a decedent’s trust. Although the ruling doesn’t mention …
Most clients we work with need to supplement their Social Security and/or pension income by taking distributions from their portfolio to cover ongoing expenses. Insert the “Bucket Strategy” to solve this need. The strategy separates investment assets into “buckets” according to the time horizon of when those dollars will be needed. A diagram of how …
Jeffrey and Margaret were in their 20s when they met in a park and began dating. They moved to Sullivan County, Pennsylvania, living together while Margaret waitressed and Jeffrey got a job at Proctor and Gamble. In 1987, Jeffrey signed up for P&G’s profit sharing and savings program. He listed Margaret as his beneficiary, stating …
Once upon a time, distributions from an inherited IRA could be spread over the beneficiary’s lifetime. For young beneficiaries, the RMDs might be small enough that the inherited IRA would continue to grow handsomely. This changed with passage of the SECURE Act. In general, subject to important exceptions, the assets of an inherited IRA must …
The Brady Bunch Breaks Down: Estate Fights Tear Stepfamilies Apart—Wall Street Journal headline, June 1, 2024 According to that Journal article, the U.S. Census Bureau has determined that one in five opposite-sex couples who lived together in 2021 had a least one partner who had a child with a prior partner. That’s a lot of …
When the tax system was reformed in 2017 in the Tax Cuts and Jobs Act, there was much concern about the effect the changes would have on charitable giving. First, the rough doubling of the standard deduction meant that far fewer taxpayers would be itemizing, and without itemizing there is no tax benefit at all …