Wealth Preservation, Trusts and Estates

Do End Of Year Gifts To Children and Grandchildren Still Make Sense?
By: David M. Frees III

In the last few days of 2010 Congress passed, and the president signed, a new bill governing federal estate and gift taxes.

Since we are so close to the end of a calendar year, many people are calling and asking whether or not to make their traditional end of year gifts.

General Thoughts On Gifting and Gifting Before The End of 2010

In general, you should not make gifts that will negatively impair your personal lifestyle. This is especially true when you are retired and on a fixed income.

However, many clients find that they are fortunate enough to be building estate value even though they are comfortable in their retirement. In these cases, or even in cases of smaller estates, where you want to preserve assets and protect them from the nursing home spending, gifts may be a valuable end of year planning strategy.

This article deals predominantly with gifts where you have sufficient funds to avoid medicaid and nursing home issue. If you desire to protect
your assets from nursing home costs, click here.

For those who want to continue making gifts to family members, there is some very good news in the new estate tax law.

Here is a quick review of the new federal estate tax law and rates.

Strategies For End of Year Gifting and Gifts in 2011:

Since the federal estate tax rate will be the same for the next 2 years, and since five million dollars will be covered and tax free at death (or even during lifetime) for those same two years (before we fall back again to only $1 million dollars) large gifts do not need to be made before the end of 2010 unless very large gifts are being made to grandchildren.

Annual gift tax exclusion gifts (currently $13,000.00) per person can be made before December 31st and again after January first (for 2011) without using any of your lifetime or death exemption. Note that this amount might adjust again in the future.

These annual gifts can be made to children and grandchildren and can be made to the spouses of your children and grandchildren as well. If you are married, both you and your spouse can make these gifts and effectively double the amount that can be given without filing a gift tax return or paying any tax.

In addition, greater amounts can be paid directly to a school or for medical purposes in certain circumstances as well.

In short, make gifts of up to the $13,000.00 per person annual gift tax exclusion amount before the end of the year. In 2011 gifts in excess of this amount will either be taxed (at the historically low rate of 35% for the next two years)

Since the effectiveness of gifts can vary widely from person to person, and because there are better and worse ways to make gifts depending on your personal circumstances ask your lawyer and/or tax adviser to consider your personal facts and circumstances when advising you on the use of gifts, paying up insurance policies, or the use of trusts, annuities, and other gifting strategies.

David M Frees III
Unruh, Turner, Burke and Frees
Offices serving Malvern, Phoenixville, Devon, Wayne, West Chester,
Chester Springs and many surrounding communities.

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Do End Of Year Gifts To Children and Grandchildren Still Make Sense?
By: David M. Frees III

In the last few days of 2010 Congress passed, and the president signed, a
new bill governing federal estate and gift taxes.

Since we are so close to the end of a calendar year, many people are
calling and asking whether or not to make their traditional end of year
gifts.

General Thoughts On Gifting and Gifting Before The End of 2010

In general, you should not make gifts that will negatively impair your
personal lifestyle. This is especially true when you are retired and on a
fixed income.

However, many clients find that they are fortunate enough to be building
estate value even though they are comfortable in their retirement. In these
cases, or even in cases of smaller estates, where you want to preserve assets
and protect them from the nursing home spending, gifts may be a valuable
end of year planning strategy.

This article deals predominantly with gifts where you have sufficient funds
to avoid medicaid and nursing home issue. If you desire to protect
your assets from nursing home costs, click here.

For those who want to continue making gifts to family members, there is
some very good news in the new estate tax law.

Here is a quick review of the new federal estate tax law and rates.

Strategies For End of Year Gifting and Gifts in 2011:

Since the federal estate tax rate will be the same for the next 2 years, and
since five million dollars will be covered and tax free at death (or even during
lifetime) for those same two years (before we fall back again to only $1 million
dollars) large gifts do not need to be made before the end of 2010 unless very
large gifts are being made to grandchildren.

Annual gift tax exclusion gifts (currently $13,000.00) per person can be made
before December 31st and again after January first (for 2011) without using
any of your lifetime or death exemption. Note that this amount might adjust
again in the future.

These annual gifts can be made to children and grandchildren and can be made
to the spouses of your children and grandchildren as well. If you are married,
both you and your spouse can make these gifts and effectively double the amount
that can be given without filing a gift tax return or paying any tax.

In addition, greater amounts can be paid directly to a school or for medical
purposes in certain circumstances as well.

In short, make gifts of up to the $13,000.00 per person annual gift tax
exclusion amount before the end of the year. In 2011 gifts in excess of this
amount will either be taxed (at the historically low rate of 35% for the next
two years)

Since the effectiveness of gifts can vary widely from person to person, and
because there are better and worse ways to make gifts depending on your
personal circumstances ask your lawyer and/or tax adviser to consider your
personal facts and circumstances when advising you on the use of gifts,
paying up insurance policies, or the use of trusts, annuities, and other gifting
strategies.

David M Frees III
Unruh, Turner, Burke and Frees
Offices serving Malvern, Phoenixville, Devon, Wayne, West Chester,
Chester Springs and many surrounding communities.

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End Of Year Gift Tax Planning Just Got Harder
By:  David M. Frees III

David Frees on Gifting, Estate Planning, Wills and Trusts At The End of The Year

Were you planning to make gifts at the end of this year knowing, that since Congress has failed to act, the federal estate tax returns with a vengeance at 12:01 on January 1, 2011?  Are you one of the families who are tired of waiting for clarification and are willing to pay a thirty five percent tax for gifts before the end of the year?

Well, while tax payers and planners alike have been complaining about the unjustness of uncertainty in the law and financial writers and taxpayers have been begging for clarification, Congress has been failing to provide any real guidance.

And now, to make matters worse, the Baccus bill, while suffering a temporary  defeat just a few days ago, has raised the specter that Congress has suddenly awakened to the idea that many wealthy families are planning gifts at the end of the year and are willing to pay gift taxes at a rate of 35% to avoid higher tax rates in the future.

While the bill was defeated on  a procedural basis, many are now worried that Congress is even considering a bill that would be effective retroactively to December 2, 2010 and would foil the end of year planning that has resulted from Congresses repeated failures to act.

If you’d like to know more about the status of this bill here is a great blog on the Baccus Bill and the federal estate tax by Forbes.

David M. Frees III chairs the Trust, Estate, and Wealth Preservation Section of Unruh, Turner, Burke and Frees

610-933-8069

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David Frees on Gifting, Estate Planning, Wills and Trusts At The End of The Year

Click here to read more about estate planning, wills, trusts, gifting and the changes to the federal estate tax in 2011.

David M. Frees III – Pennsylvania SuperLawyer and AVVO Top Rated Lawyer
Chairman: Unruh, Turner, Burke and Frees
Trusts, Estates and Wealth Preservation Section

Contact Information:
610-933-8069
dfrees@utbf.com

David Frees’ practice focuses on wills, trusts, powers of attorney and living wills as well as family business succession planning,
and related issues such as asset protection planning.

His law offices are located in Phoenixville, West Chester, and Malvern Pennsylvania.

These offices serve many communities such as Ardmore, Berwyn, Malvern, Exton, Devon, Chester Springs,
and surrounding areas

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Inherit in 2010 - There may be some taxes you don't know about

Capital Gains Taxes For Trusts, Estates, and Beneficiaries of Estates in 2010 Are The Subject of IRS Attention. By: Attorney David M. Frees III

If you inherited assets from a trust or an estate where the decedent died during 2010 you probably thought that you were spared the worries and expenses of the federal estate tax. And strictly speaking, it appears that you’d be right. But, you may not have completely dodged the tax bullet and even the IRS hasn’t weighed in yet on exactly what you need to do.

Congress unexpectedly allowed the federal estate tax to lapse at the end of 2009 and despite regular threats to impose a retroactive estate tax, it appears that there will be no federal estate tax for this year.

However, since most lawyers, accountants and financial advisers expected Congress to address the situation and even the IRS held off, there are now many unanswered questions about the tax returns for these estates and their beneficiaries.

In particular, there are numerous unanswered questions about the new carry over basis rules and what they really mean for estates and beneficiaries who inherit assets and later sell them.

For more information on the IRS and the tax issues facing trusts, estates, and their beneficiaries from the Wall Street Journal click this highlighted link.

David Frees and Unruh, Turner, Burke and Frees’ Trust, Estate, and Wealth Preservation Section assist families and individuals with their trust, will and estate planning needs ranging from the simple to the highly complex.

David can be reached for consultation at 610-933-8069 or by e-mail at dfees@utbf.com.

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The Will, Trust, Estate and Probate Section of Unruh, Turner, Burke & Frees Invites You To Our Upcoming Client Appreciation and Educational Events

Our clients and friends enjoying Napa Valley wines, cheese and fruit

Doug, Jennifer, and I enjoyed hosting and getting together with you to say thank you for being our clients, and in 2011 we will also be hosting a series of social and educational but fun events for clients and friends of the firm.

If you’re interested in attending one or more of the events that are being considered please let us know by sending me an email at dfrees@utbf.com or by calling Donna, Beth, or Denise at 610-933-8069.

Also, if you have an idea or suggestion for another event or an educational event please let us know by email or by leaving a comment below.

Getting ready for our guests

The Napa Wine Tasting Event

Just recently, we hosted a very nice wine tasting event at the Frees house where we shared some wines that Robin and I discovered during our anniversary in Napa and then served a light supper (fillet, salad, and home made deserts by Robin).

The weather was perfect and everyone had a great time. If you are interested in any future wine tasting events, please let us know that you wish to be added to the list. E-mail dfrees@utbf.com, dkaune@utbf.com, or call 610-933-8069 and mention that you want to be added to the wine events list.

So what else do we have in store for our friends and clients?

Winter/Spring Auction Event & Cocktail Party

Many clients have expressed interest in attending one of the famous
Freeman’s Auction House Auctions in Philadelphia.

This local and family run business has been in operation since colonial times, is America’s oldest auction house,  and they have invited us to host a cocktail reception for our clients before an auction.

Freeman's Auction House Event

So if you’re interested in bidding at an auction, selling at an auction, or just learning more about the world of art, jewelry, and antique auctions, let us know that you would like to join us when this event is scheduled.

To sign up for this event, just email dfrees@utbf.com or call us at 610-933-8069.

Fall/Winter Educational Events

Why January 1st Matters and What To Do About Your Estate Planning To Be Ready for The New Law

October 3, 2010 Dave Frees will be appearing as part of a panel including an accountant and financial adviser to help you to deal with the radical changes coming in the areas of federal estate tax and estate planning in 2011. This event is being hosted by Phoenixville Federal Bank and Trust. To register call 610-933-8069 and we will add you to the list.

Nursing Home Protection and Obamacare Update

Want to know how to lock your assets up to keep them safe from a nursing home?

Worried about Obamacare changes to medicare, taxes and insurance law and how it affects you?

Date To Be Determined: At this event, Douglas Kaune and David Frees will help you to understand what Obamacare changes in insurance, medicare, and taxation mean to you.  This program will also review how you can lock your home and assets up in a Family Wealth Protection Trust(TM) for your heirs, rather than seeing them dissipated for nursing home care.

Spring/Summer Picnic Event

Enjoy A Summer Picnic With Us

In 2011 we have a picnic planned for the late spring or early summer. The date and location are yet to be determined, but we are already working on the menu, the music, and all of the things that make a great picnic.

If you enjoy a great cook out, then let us know that you’d like to be on the invitation list for this event.  To let us know, email dfrees@utbf.com or dkaune@utbf.com or call Donna, Denise, or Beth at 610-933-8069 and tell them that you’d like to be on the client picnic list.

For more information on any event or to suggest a new event or educational topic, just email us: Attorney David Frees dfrees@utbf.com or Doug Kaune dkaune@utbf.com or call 610-933-8069.

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Avoiding The Federal Estate Tax – In 2010 and Beyond
What You Need To Know and Do In Your Estate Plan To Be Ready For 2011

The federal estate tax is currently not in effect.  However, it will return at rates and in amounts
that have not been seen for some time.  As of January 1, 2011 the IRS will be taxing all estates
of over 1 million dollars at rates of 42% to 55% depending on the size of the estate.

However, five billionaires have died since the federal estate tax was eliminated at 12:01 on January 1st 2010.
and as a result, their families will likely owe no tax as opposed to more than half of the estate value.
Since the federal estate tax ranges (when it is in effect) from a rate of 42% to 55% the federal government
has failed to collect billions in tax that it might otherwise have charged the billionaires’ estates.

The the deceased billionaires include, among others,  Mr Bell, the founder of Taco Bell, George Steinbrener, who
needs no introduction, and philanthropist and media billionaire Mr John Kluge.

The Federal Estate Tax and Billionaires

Kluge, who was well known in media circles, was the oldest member of the Forbes 400 Richest List
and had a net worth estimated to be in excess of $7 million dollars.

For more information on the federal estate tax click here.  For more information on Mr. Kluge, see the
The New York Times which carried an article on Mr. Kluge as well as USA Today, The New York Daily News, and
CBS news.

So short of dying in 2010 what do you need to know and to do before the tax is imposed on your family?

First, stay informed.  When you register for any one of our reports, you’ll be added to a list of smart consumers and you’ll
receive updates through our articles on what Congress is doing about the federal estate taxes. You can also peruse our articles, blogs, videos and checklists
that we provide at www.utbf.com/trust-estate and www.PaEstatePlanners.com.

Next, understand that even if your wills are designed to save on Federal estate taxes, they may no longer work properly and you might need to do more planning
to be prepared for 2011.  Just get advice that applies to your situation.

Finally, be an informed consumer about the options and planning techniques often used by those with larger estates but which might also work for
families with more modest affluence who will be taxed after January 1, 2011. Click here for a selection of our reports for executors, trustees, and those doing estate planning.

David M. Frees III has been awarded the AVVO lawyer rating services highest rating of 10.0 – Superb.

David M. Frees III on Wills, Trusts, Estates and Estate Tax

dfrees@utbf.com

610-933-8069

Law Offices In Malvern, Phoenixville and West Chester

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Will and Trust Reviews - For Free?

If you’re interested in using a charitable trust and want to know what happens as the money grows, or what happens when the charitable purpose of your trust no longer exists, the read this quick article about Charitable trusts.

And, for more information about trusts, living trusts, charitable trusts, insurance trusts, and family trusts, call the law offices of Unruh, Turner, Burke and Frees for attorney David M Frees III or email David Frees at 610-933-8069 or dfrees@utbf.com.

The firm has law offices in Malvern, Phoenixville, and West Chester and serves many communities on the Main Line.

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The Grantor Retained Annuity Trust (GRAT) has

Douglas L. Kaune

been an excellent and widely used federal estate tax savings tool.  However, President Obama took aim at the GRAT in his 2011 budget proposals.  Additionally, the House has included provisions targeting short-term and rolling GRAT planning tools in legislation that has passed at that level.  Although that particular House legislation has not made it through Senate, there is a significant amount of discussion and proposed legislation in the Senate that would require a GRAT to be for a term no less than 10 years.  This would not eliminate the GRAT as a planning tool, but would curb its use.   Read this recent Forbes article that outlines how the GRAT is used, how it is being attacked and how it will be used into the future.

Keep in mind that it is likely that the Federal Estate Tax will return in 2011 and we will need every resource available to help limit what could be a tax in excess of 45% for every dollar over $1,000,000 in an estate.  We encourage all clients and friends to keep their out for the final legislation of the federal estate tax system and to be ready to update estate plans accordingly.

Doug is a Partner with Unruh, Turner, Burke & Frees, P.C. which is a full service law firm with offices located in Malvern, Phoenixville and West Chester, PA. Doug can be reached at 610 933 8069 or at dkaune@utbf.com. The Law Practice serves Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).

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No Will? That’s Called Intestacy.
But Don’t Worry.
The State Of Pennsylvania Has Done One For You.
How Do You Think That Will Work?

If you have a will and it’s more than a few years old, you may have to have it reviewed because of the volatile situation with the estate tax. However, if you have never done a will it may be time. Most people don’t realize, that when they fail to create and to properly execute a will, that the state of Pennsylvania will do one for you.

Old Will May Be Better Than No Will - But if your will looks like this it may be time for an update

The failure to have a properly executed and legal will at the time of death makes you INTESTATE under Pennsylvania law. And, if you die intestate, the state automatically answers the following questions:

1) Who gets your estate – it may not be who you think.

5) Who gets to be the administrator (the executor under a will) – and there are classes of people who may not be qualified and who might fight about who gets to do it (again, think legal fees and administrator fees).

If you’d rather be in control of these and many other issues, thn completing and executing a valid will and/or will and trust is essential.

That process can be easy and inexpensive when compared to the high costs that often result from intestacy.

For a limited time, Unruh, Turner, Burke and Frees are offering a free will review or, if you have never had a valid will or trust, a free will consultation. And while there would be fees for completing an estate plan (including a will, power -of – attorney and medical power as well as a living will) there is no charge for the review or consult and there is no obligation on your part while this offer lasts.

To claim a free will review or a free will consult call 610-933-8069 and mention offer code: DaveFreesWillReview. Donna, Beth, or Denise will be happy to schedule you. (more…)

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