Category Archives: Gift Tax

Inheriting in Trust

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Generation Skipping Tax, Gift Tax, Gifts to Minors, Kansas, LLCs, Missouri, Small Business, Trusts, Wills

Yahoo Finance and CNBC have this interesting story about Whitney Houston’s daughter. The famed pop star’s daughter is set to inherit a large fortune from her late mother’s estate, but some of the daughter’s advisers are concerned that the inheritance will make her a target for creditors. Inheriting in trust is better than inheriting money outright, as it protects your inheritance from creditors and divorcing spouses, among other unpleasant surprises in life. Inheriting in trust using a discretionary trust gets into an estate planning buzz word, asset protection. Asset protection is using an entity, usually a trust or LLC, to hold an asset and protect it from your creditors, divorcing spouses, spendthrift kids, or others who might squander your money. Asset protection and discretionary trusts are not allowed under Kansas law, but Kansas and Missouri residents can use a Missouri trust to protect assets for generations. Missouri (unlike Kansas) welcomes dynasty trusts – irrevocable trusts designed to pass wealth across families for generations – and allows them to last indefinitely. For clients who anticipate receiving more than $400,000 in inheritance, we recommend a beneficiary defective inheritor’s trust (BDIT or inheritor’s trust). An inheritor’s trust allows you to protect the assets and keep them off your balance sheet for tax purposes (so you don’t have to worry about estate, gift, or generation-skipping taxes) while having the assets available for your use and enjoyment.

Our firm, Johnson Law KC LLC, is experienced counseling clients on all aspects of estate planning, asset protection, and inheritor’s trusts. If we can serve you or your family with these sensitive matters, please call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule a convenient appointment.

(c) 2012, Stephen M. Johnson, Esq.

Time to Sell?

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Generation Skipping Tax, Gift Tax, IRA, Kansas, LLCs, Missouri, Retirement, Roth IRA, Small Business, Trusts, Wills

Thinking of selling your business, transitioning it to the next generation, retiring, or moving onto the next great entrepreneurial idea? Bloomberg has this interesting article noting that many financial advisors are recommending that their wealthy clients sell their businesses by the end of 2012 to avoid tax hits in 2013. As we approach the expiration of the Bush tax cuts (on the estate, gift, generation-skipping, and capital gains taxes), the Obama tax cuts (on payroll taxes), and massive planned spending cuts to the federal budget on the one hand, and a potentially historically close election on the other hand, we’re entering a perfect storm. While no one can predict what will happen with taxes, the economy, or the election, if you’ve got a business and you’re looking to sell, now’s a good time to get out and enjoy the fruits of your labor. The article also recommends some good ideas on stock options, capital gains, and Roth IRAs.

Our firm, Johnson Law KC LLC, has the depth and breadth of legal and business expertise to advise you and your family on arranging a sale or other exit from your small business, as well as serving you and your family’s estate planning needs. If we can serve you, please call me (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient appointment.

(c) 2012, Stephen M. Johnson, Esq.

Final Boarding Call: Estate Planning in 2012

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Illiquid Assets, Kansas, Living Wills, LLCs, Medical Powers of Attorney, Missouri, QPRTs, Small Business, Special Needs Trusts, Trusts, Wills

The WSJ has this helpful article reminding folks to get their estate plans in order, especially for families with $1 to 5 million+ in assets. As we ring in the new year in a few short months, if Congress hasn’t done anything on the tax front, you’ll see several changes hitting your pocketbook. The Bush tax cuts will expire – so you’ll owe tax if you (1) die with more than a $1 million estate, if you (2) give more than $1 million to family or friends, or (3) if you do more than $1 million generation skipping transfers (e.g. grandparents to grandchildren). Portability is also set to expire, so you won’t be able to use your predeceased spouse’s estate tax exemption. The Obama payroll tax cut will also expire – so you’ll have less take home pay from each paycheck. Like the historically low interest rates now in play, we may not see estate and gift tax laws that allow you to pass on your hard-earned wealth and leave a legacy for your family again in our lifetimes.

Echoing the anecdotes offered in the WSJ article, our firm has been very busy lately, and our appointment calendars are filling up with work, as are the other professionals we work with to best serve clients with a holistic approach. If you need to do any estate planning, business, or real estate work before 2013, it’s time to act. If you have a small business, real estate interests, or other potentially hard-to-value assets, you may need to have an appraisal done before structuring your business succession plan, or setting up a family limited partnership (FLP) or family LLC. Appraisers’ schedules are filling up, so if you’re thinking of passing on your business or real estate holdings, it’s time to bite the bullet and get it done. Your family will thank you and you’ll be able to enjoy the holidays with the peace of mind that everything’s taken care of according to your desires.

We offer a free 1/2 hour consultation, convenient and affordable flat fee billing, and we’re a simple phone call or email away at (913) 7o7-9220 or steve@johnsonlawkc.com. At Johnson Law KC LLC, we look forward to serving your legal needs.

(c) 2012, Stephen M. Johnson, Esq.

Estate Planning: Beyond Taxes

Posted on by under Digital Estate Planning, Estate Planning, Estate Tax, Family Business, Financial Powers of Attorney, Generation Skipping Tax, Gift Tax, Gifts to Minors, Kansas, Living Wills, Medical Powers of Attorney, Missouri, Probate, Small Business, Trusts, Wills

Conrad Teitell, a noted tax and non-profit lawyer, has these helpful tips to remind people that while a good estate plan will minimize or completely avoid taxes for your and your family, estate planning is about more much than taxes. I would add that consulting with an estate planning attorney is crucial. Any adult with any complexity in their life (married, divorced, kids, grandkids, house, more than $50,000 in assets, business interests, life insurance, IRAs, favorite charities or college, anticipated inheritance, etc) needs to talk with a lawyer about their estate plan.

Every adult needs a will and/or trust, a living will, and durable financial and medical powers of attorney. Our law firm’s estate planning documents include digital estate planning provisions (for email, social media, digital photos, online banking, and more) standard. While digital estate planning is a cutting edge field and certainly not included in most online legal services or other one-size-fits-all forms, at Johnson Law KC LLC, we listen to your needs and provide custom tailored solutions that will protect you and your family for generations to come. Give us a call (913-707-9220) or email us (steve@johnsonlawkc.com) for a free 1/2 hour consultation on your estate plan.

(c) 2012, Stephen M. Johnson, Esq.

Gift Giving in 2012

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Family Business, Financial Powers of Attorney, Gift Tax, Gifts to Minors, Kansas, Missouri, Small Business, Trusts, Wills

The NYT has this interesting blog post encouraging wealthy individuals and families to take advantage of the $5.12 million gift tax exemption for 2012. Remember, on New Year’s Day 2013, the gift tax exemption goes back to $1 million per person, meaning you’ll lose the opportunity to give $4.12 million tax free. And the gift tax rates are scheduled to rise from the current 35% (for amounts over the $5.12 million exemption).

Does your financial power of attorney document include gifting provisions if you’re incapacitated? If not, you may need a new power of attorney.

If you’re considering giving gifts this year to family members, remember the old adage that there’s no time like the present. Call (913-707-9220) or email our office (steve@johnsonlawkc.com) for convenient appointment to discuss your gift giving strategy for 2012 and a complimentary 30 minute consultation.

(c) 2012, Stephen M. Johnson, Esq.

Gifts and FLPs in 2012

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Family Business, Family Limited Partnerships, Gift Tax, Illiquid Assets, Kansas, Missouri, Small Business, Trusts

CNBC has this interesting article regarding the increasing popular estate planning tactics of gifts and setting up family limited partnerships or family limited liability companies (FLPs) in 2012 to take advantage of the $5.12 million per person gift tax exemption. Our firm is advising numerous clients on leveraging the gift tax exemption this year (before it falls back to $1 million on January 1, 2013 when the Bush tax cuts sunset absent Congressional action) and drafting FLPs or family LLCs to meet client’s estate planning needs.

If you had over $1 million, real estate, business interests, or want to extend your family’s legacy to your children and grandchildren and beyond, now is the time to look at gifts and see whether a FLP, family LLC, or dynasty trust may be right for you. Call (913-707-9220) or email us (steve@johnsonlawkc.com) for a convenient appointment to discuss your estate planning strategy. We offer a complimentary 30 minute consultation. Our firm has experience counseling high net worth individuals and families on their estate planning needs and we frequently design FLPs or trusts for clients. A well-designed and carefully crafted FLP or trust is like a finely polished diamond: We understand the legal, tax, and business facets of protecting your assets, providing for your family, and ensuring the legacy of your values continues for generations.

(c) 2012, Stephen M. Johnson, Esq.

Interesting investing trend

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Family Business, Generation Skipping Tax, Gift Tax, Illiquid Assets, Kansas, Missouri, Probate, Small Business, Trusts, Wills

According to this CNBC article, many very affluent investors are shifting their investment portfolios around as they search for (1) safety and (2) yield. Safety or asset preservation and yield or accumulation are two often conflicting goals for investors. The article does point out that following the investing habits of very affluent investors (those with over $30 million to invest) is not necessarily a good idea for ordinary investors. But as Robert Frank notes, wealthy investors “set the tone for the broader market,” so if they are dumping publicly traded U.S. stocks in favor of private companies, real estate, and commodities (as the study suggests many are), it may send signals rippling through the broader stock markets for some time.

For both asset protection (from creditors, taxes, divorcing spouses, and spendthrift children) and tax benefits, we’re recommending Inheritor’s Trusts or Beneficiary Defective Inheritor’s Trusts (BDITs) to many of our affluent clients, clients who anticipate  receiving an inheritance from their relatives of  over $400,000, and entrepreneurial clients who like to start, grow, and sell small businesses. An Inheritor’s Trust works well in any of these situations and is an exciting new tool to help facilitate your estate and financial planning needs. Call (913-707-9220) or email (steve@johnsonlawkc.com) our law firm, Johnson Law KC LLC, to learn more about how you can benefit from an Inheritor’s Trust and for a convenient and free half-hour consultation.

(c) 2012, Stephen M. Johnson, Esq.

A One Year Extension to the Estate Tax Law?

Posted on by under Estate Planning, Estate Tax, Family Business, Gift Tax, Gifts to Minors, Kansas, Missouri, Small Business, Trusts, Wills

House Speaker John Boehner (R-OH) said in an interview yesterday that he wants the current estate tax law extended for one year. President Obama is opposed to extending the so-called Bush tax cuts. If Congress and the President do not take action, the estate tax will come back at its pre-2011 tax cut level in 2013 – up to 50% tax on any estate over $1 million. Such a move would not only cause confusion and uncertainty for estate planning professionals and their clients, it would also have economic consequences, including plunging America back into a recession, according to the Congressional Budget Office. As we get closer to 2013 and this fall’s election, expect lots of discussion from Washington, D.C. regarding taxes.

In the meantime, married couples can give up to $10.24 million in gifts to family members and friends this year and leave a combined $10.24 million estate without paying federal estate or gift taxes. If our firm, Johnson Law KC LLC, can help you with your estate planning needs, please email (steve@johnsonlawkc.com) or call (913-707-9220) us for a convenient appointment and free half hour consultation.

(c) 2012, Stephen M. Johnson, Esq.

Heckerling Insights: Part 3

Posted on by under BDITs, Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Generation Skipping Tax, Gift Tax, Income Tax, Kansas, Missouri, Probate, QPRTs, Small Business, Trust protector, Trusts, Wills

Here are some interesting insights from our colleagues at the Heckerling Institute from this year’s conference. Among other topics, beneficiary defective inheritor’s trusts (BDITs), generation skipping tax planning (GST), trust protectors, qualified personal residence trusts (QPRTs), grantor trusts, and various probate planning issues are discussed. If we can help you and your family with any of these issues or address other estate planning or small business issues you have, please call (913-707-9220) or email us (steve@johnsonlawkc.com) for a convenient appointment.

Our firm, Johnson Law KC LLC, is developing a practice in Missouri inheritor’s trust and other beneficiary defective inheritor’s trusts (BDITs) and excited about sharing this new tool with clients to help meet their estate planning needs now and for generations to come.

(c) 2012, Stephen M. Johnson, Esq.

Heckerling Insights on Family Businesses and Gift Planning

Posted on by under Business Succession Planning, Business Transitions, Dynasty Trusts, Estate Planning, Estate Tax, Family Business, Family Limited Partnerships, Gift Tax, Gifts to Minors, Illiquid Assets, Kansas, LLCs, Missouri, Small Business

Here’s the first part of the Trusts and Estates annual roundup from the Heckerling Institute in Florida. The Heckerling Institute is America’s premier estate planning seminar for attorneys and other professionals. If we can help you with your family business, gift planning, or other estate planning, call or email us.

(c) 2012, Stephen M. Johnson, Esq.