From CNBC and Bank Rate comes this news that the Treasury Department is now allowing annuities in 401(k)s, at least in some circumstances. This may be a useful retirement, financial and/or estate planning tool for various Americans.
If my law firm, Johnson Law KC LLC, can help you or your family with your personal estate planning or small business needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a free consultation.
(c) 2014, Stephen M. Johnson, Esq.
CNBC has this interesting column laying out some rules of thumb to consider if you’re contemplating converting a regular IRA into a Roth IRA. The columnist’s 6 rules of thumb are:
What do you think? How does a traditional IRA compare to a Roth IRA? When does a Roth IRA conversion make sense? How have you handled your retirement portfolio?
My firm has experience working with individuals and families at all stages of the retirement spectrum. If my law firm can help you or your family with your estate planning, elder law, asset protection, business law needs, or digital estate planning, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a free, convenient appointment.
IRS CIRCULAR 230 Disclosure: Unless expressly stated otherwise, any U.S. federal tax advice contained in this blog post or links is not intended or written by Johnson Law KC LLC to be used to avoid IRS or other tax penalties, and any tax advice cannot be used to avoid penalties that may be imposed by the IRS.
(c) 2013, Stephen M. Johnson, Esq.
About a month ago, I had the pleasure of attending a wedding of two dear friends. A month or so before the wedding, I shared some advice with the groom (I’ve shared the same advice with other friends over the years). Every bride and groom encounter various financial, tax, and legal questions in the busy and chaotic wedding planning time and after the honeymoon’s over and the new couple adjusts to life together. Good planning is crucial. Nobel Laureate T.S. Eliot memorably wrote, “What we call the beginning is often the end/And to make an end is to make a beginning./The end is where we start from.” (The Four Quartets, Little Gidding, V). True with estate planning as with many endeavors in life. So what’s the end game? Start from there to figure out how to get there.
Pre-wedding tips:
After the wedding:
A few other ideas for newlyweds:
My firm has experience working with young professionals, young families, and newlyweds to make the estate planning simple, easy, and inexpensive. My firm also has experience working with high net worth individuals and families with tens of millions in assets, closely held businesses, real estate, and other issues. We provide reliable, easy to understand documents so you can rest easy and enjoy your life. Give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient, free consultation.
IRS CIRCULAR 230 Disclosure: Unless expressly stated otherwise, any U.S. federal tax advice contained in this blog post or links is not intended or written by Johnson Law KC LLC to be used to avoid IRS or other tax penalties, and any tax advice cannot be used to avoid penalties that may be imposed by the IRS.
(c) 2013, Stephen M. Johnson, Esq.
With apologies to the Duke Ellington Orchestra’s 1934 rendition of the great jazz standard “It Don’t Mean a Thing” (if it ain’t got that swing), here’s an interesting LA Times piece about a family where a child was promised for years (decades even) that he would inherit a house, but the parent’s Will was never signed. Kansas and Missouri both require Wills to be signed by witnesses to be valid. A Kansas Will must be signed by 2 disinterested witnesses (people who won’t inherit anything) and notarized, then filed with the county probate court within 6 months of your death to validly pass property (see K.S.A. 59-601 et seq.). A Missouri Will must be signed by 2 or more disinterested witnesses and notarized, then filed with the country probate court within 1 year of your death to validly pass property (see V.A.M.S. 474.310 et seq.). While an adult can write their own Will, consulting an experienced estate planning attorney, such as my law firm, Johnson Law KC LLC, is highly recommended to ensure your wishes are carried out according to your desires and that no federal tax or state probate issues arise after your death. Don’t be like the family in the LA Times that didn’t execute documents or did homemade documents that didn’t hold water legally and found out when it was too late – call or email my firm today for an affordable, professional solution to your estate planning needs and make an investment in your financial well being and your family’s future. My firm is experienced handling the full estate planning spectrum, from a simple will, living will, and power of attorney, to complex business and tax planning with dynasty trusts for multiple generations. My firm is also experienced handling probate and trust administration – ensuring your Will goes through the Probate Court smoothly, or that your Trust works as intended for your family, business, and favorite charities.
If my law firm, Johnson Law KC LLC, can serve you or your family’s Wills or trusts, living wills, powers of attorney, estate planning, asset protection, elder law, or business needs, call me (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, complimentary consultation. My firm looks forward to serving you and your family with reliable, friendly experience and counsel at an affordable cost. Don’t leave your family’s inheritance up in the air this autumn season.
(c) 2013, Stephen M. Johnson, Esq.
Costco’s member magazine has this interesting discussion about offshore bank accounts in its July 2013 issue. (I also recommend this interview with noted author Tom Wolfe, which explores his life and writing.) They ask various members whether offshore bank accounts are ethical, should be legal, or should be taxed differently than American bank accounts. We know that many celebrities and politicians have offshore bank accounts – see this blog post for more details.
Ethical questions about offshore banking center on whether the account owner is paying a “fair” level of tax on the account. Complicating matters is that the IRS Code treats Americans’ investments abroad differently from other countries – the IRS collects tax on an American’s accounts or investments anywhere in the world, while many other countries only collect tax on accounts their citizens hold domestically (e.g. a Briton who holds an account in London and an account in New York would only pay British taxes on the London account).
Offshore banking may be unavoidable, even inevitable, for many professionals and business owners. If you have a factory or business colleagues or partners overseas or offices around the globe, you may have to use offshore banking accounts. And many companies, mutual funds, IRAs, and other investment vehicles have extensive overseas holdings, which can be a good thing to diversify accounts, invest in emerging markets, and collaborate with business partners around the world.
What do you think? Should offshore accounts and banking and tax havens be allowed or outlawed? Are they ethical? If so, when? Should they be taxed differently than American accounts or investments?
If my law firm, Johnson Law KC LLC, can help you or your family with your estate planning or asset protection needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient, free consultation.
(c) 2013, Stephen M. Johnson, Esq.
CNBC has this helpful article about how to plan for a tax-free retirement with lots of good tips and portfolio ideas. Many retirees can expect lower income tax bills than those of us still working (and earning more income), but the article wisely points out the wild card – the Congress/tax wild card.
Thoughts? What are your ideas for planning a tax-free retirement?
If my law firm, Johnson Law KC LLC, can help you or your family on your estate planning or other legal needs, give me a call (913-707-9220) or email me (steve@johnsonlawkc.com) to schedule a convenient and free consultation.
(c) 2013, Stephen M. Johnson, Esq.
CNBC has this article about a recent US Trust study about when parents should talk to their children (and grandchildren) about inheritances. As the article points out, many children of wealthy families realize they’re wealthy based on the lifestyle they enjoy. But there’s a big difference between knowing “My family’s wealthy and takes exotic vacations” and knowing “Mom & Dad have XYZ income each year, a house held in ABC trust, a controlling interest in Family Co LLC, a vacation home also held in trust, and a net worth of $_______.” When to tell family members specifics is an important question to consider in careful consultation with your family’s accountant, attorney, and other professional advisors. As the article suggests, maturity levels, financial acumen, and other factors come into play. But as the article rightly concludes, “even if parents don’t give their kids “the number” for their wealth, they should at least give them the skills and the values to manage it well.”
Beyond the tax and legal details of structuring entities that attorneys and other wealth advisors do, imparting skills and values to manage a legacy is vital. Without the skills and values, a child or grandchild may not know how a family member became wealthy, why a family member managed their lifestyle as they did, or what legacy the wealth should have. I encourage clients to be open and honest with their families when the time comes to discuss inheritance and legacy. But don’t just give your family the numbers, give them the context and share your values and passion and legacy with them.
If my law firm, Johnson Law KC LLC, can help you or your family with estate planning or asset protection needs, or give you ideas for spurring these important conversations with your family, please call (913-707-9220) or email me (steve@johnsonlawkc.com) for a convenient free consultation.
(c) 2013, Stephen M. Johnson, Esq.
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.
Smart Money has this article recommending that parents set up a Roth IRA for their teenage children. Good idea: it’s never too soon to help your family, loved ones, or friends get a jump on saving for their future. And once your child reaches retirement age, they’ll be able to take IRA distributions tax free, a major Roth advantage. If our firm, Johnson Law KC LLC, can help you with your estate planning needs or provide you with more information about retirement savings strategies, or any of your legal needs, give us a call (913-707-9220) or email us (steve@johnsonlawkc.com) to schedule for a convenient appointment.
(c) 2012, Stephen M. Johnson, Esq.
The WSJ has this interesting article about retirement planning. What’s your number? The Wall Street 2: Money Never Sleeps clip features a Wall Street mogul replying with a smile to the young trader’s proverbial “how much is enough” question “more.”
In the WSJ article, Fidelity Investments suggests that folks should save “at least 8 times their final annual pay” for basic retirement living expenses. So if your final salary before retirement is $100,000 per year, you need $800,000 in your IRA or Roth IRA to retire. For younger workers, like myself, Fidelity says that by 35, aim for “an amount equal to your annual pay.” So if you earn $50,000 a year by 35, have $50,000 in your IRA. Fidelity says by 45, you want “three times your salary,” and “five times your salary by 55.” If you’re like me, those numbers are daunting, but it’s not too late to start saving and investing to enjoy your future with your family. After all, compound interest is the 8th wonder of the world. Harnessing the power of compound interest in your IRA or Roth IRA will explode your retirement savings as you go through life.
The WSJ article rightfully recommends “The more you make, the more you need to save, not just in dollars but as a multiple of your final salary.” Lifestyle and standards of living also matter – one person’s comfortable life is another’s posh lifestyle or “slumming it” for yet another person. You don’t have to only use an IRA or Roth IRA for your retirement – stocks, downsizing your house, and other options work fine too – but IRAs and Roth IRAs are among the most tax efficient investments for funding retirement, so you’ll be working less and making more, paying fewer taxes, getting more bang for your buck.
If you don’t have an IRA or Roth IRA, you’re letting a golden opportunity to save and invest money tax free for retirement slip away. If your employer matches your IRA contribution, contribute at least as much as your employer’s match amount. We work with a number of top retirement, insurance, and investment professionals around KC to provide holistic estate planning services for you and your family’s unique needs. If Johnson Law KC LLC can help you review or implement your estate plan, give us a call (913-707-9220) or email (steve@johnsonlawkc.com) at your convenience. We’d love to work with you no matter where you’re at in the process – young professional just getting started in life, mature worker plugging away at work and home, or retired couple trying to leave a legacy for the grandkids. You want our firm’s legal and business expertise on your team and you can rely on our 50 years of combined experience for all your legal needs.
(c) 2012, Stephen M. Johnson, Esq.
Estate Planning, Entrepreneurial, and Entertainment Law
Estate Planning, Entrepreneurial, and Entertainment Law
The KC Estate Planner 