Wealth Preservation, Trusts and Estates

You Must File The Gift Tax Return or Extension for Gifts In 2010
By April 15th 2011

If you made a gift to a child or
grandchild in 2010 you must file
the return or an extension by April 15th.

Once the extension is filed, you have until
October to file the return.  However,
extensions do not automatically extend
the time to pay the tax.

So, if your gift created a tax (it was
more than the annual exclusion amount
and/or you previously used your lifetime
exemption, you may have a tax laibility.

You should also consult your tax preparer or estate tax adviser if you
made gifts to grandchildren or great grandchildren (or to a trust)

which might require a return to allocate the generation skipping
transfer tax exemption.

For questions about gifting in trust or outright to your
family members, please call David M. Frees III
610-933-8069

Are You Married?
Does Your Wife Want You To Get A New or
Revised Will for Her Birthday or Mothers’ Day?

Don’t take our word for it.   ASK HER.

You might be surprised by how easy it will be
to make her happy this year.

Book your appointment now to get your
planning done before mother’s day and
she’ll also get some flowers from you – on
us.  Call 610-933-8069 and ask for our
Birthday or Mothers’ Day Planning Offer.

You can also call David Frees at 610-933-8069
or email dfrees@utbf.com to get an
appointment and to qualify for this
special arrangement.

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Are you thinking about having your return done for you?
A Brief Income Tax Checklist for those hiring or changing their tax preparer

For many clients, the thought of doing your
own income tax return is tantamount to
doing your own tooth extraction.

You probably could, but who wants to.
And, the likelihood of making a mistake
is high.

And, since the tax laws change so
frequently, most of us find the task too
complicated and the cost of making an
innocent mistake is simply too high.

So, if you are thinking about changing tax
preparers, getting a tax preparer for the first
time, or just need some reminders about getting ready for the tax return,
we found a great but brief article in the Baltimore Sun to help you to get
yourselfin gear for this year’s tax return.

Click here for more information about getting ready for your 2010
income tax return (the infamous 1040)

David Frees
610-933-8069

David Frees Chairs the Trust, Estate and Wealth Preservation Section
of the law firm Unruh, Turner, Burke and Frees
Are You Married?
Does Your Wife Want You To Get A New or
Revised Will for Her Birthday or Mothers’ Day?

Don’t take our word for it.   ASK HER.

You might be surprised by how easy it will be
to make her happy this year.

Book your appointment now to get your
planning done before mother’s day and
she’ll also get some flowers from you – on
us.  Call 610-933-8069 and ask for our
Birthday or Mothers’ Day Planning Offer.

You can also call David Frees at 610-933-8069
or email dfrees@utbf.com to get an
appointment and to qualify for this
special arrangement.

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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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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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What You Need To Know About The End of The Year and Estate Planning In 2011 Part One of Ten

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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Do you have a son or daughter in college or entering college?

If you’d like more information or resources about paying for college, or the tax and gift tax consequences surrounding college educational expenses then read on.

We know that paying for one or more children’s college educations can be a real hardship for many of our clients and for families in Pennsylvania generally.

So, we periodically try to find articles, resources and information for our clients and our blog readers as a way of adding value, and helping out.

For more information from the IRS and Dave Frees about tax issues surrounding college educations, gifting and loans, you should review IRS FORM 970 at www.PaEstatePlanners.com
There are also numerous considerations in your will, trust, and/or estate planning as children get to college and toward the college years.

Do you have enough life insurance for the next few years of high college expenses?
Should the college money go into trust or into a trust under your will?
Should your spouse be the trustee? What if that caused higher taxes?
Is your power of attorney updated in case of accident or illness rather than death?

If you or a loved one need a review of your will, trust, power of attorney or of any estate planning documents, you can s also receive a complimentary telephone or personal consultation.

To receive your review just call 610-933-8069 and mention FREE WILL REVIEW.

David M. Frees III, Esquire.

IMPORTANT BONUS: For the first twenty readers who call, comment below, or email Dave Frees at dfrees@utbf.com for a free consultation, you will also receive a copy of Paying For College an interview with a college funding expert.

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Gift Tax Returns Are Due Now!

Gift tax returns are due by April 15th of the year following the gift. You must file a return if you have made a gift of a hard to value asset such as real estate or an interest in a closely held business. You may also need to file a gift tax return if your total gifts to any one person of more than $13,000.00. However, you might not owe any taxes if you’re married and your spouse will “split” the gift but you still have to file a return.

So, if you’re just reading this, in April, you may only have a few days or hours left.

That’s the bad news. However, the good news is that like the individual income tax return, you can file an extension to file the gift tax return and can file up until April.

Click here to link to the IRS for all forms and instructions.

Click here to download the gift tax return form 709 from my website www.PaEstatePlanners.com.

Click here to download the extension form 8892 from my website www.PaEstatePlanners.com

Note: An extension to file does not mean that payment is not due.

I hope that this is helpful. If you need help filing a return for a trust, or for a gift tax return, please call Donna, Denise, or Beth at 610-933-8069 and mention code: David Frees or 2010TAXES for a appointment with one of our tax lawyers.

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Are You Remarried or Contemplating Remarriage With Children From A Prior Marriage? The Prenuptial and Postnuptial agreements can be the solution to a tricky problem.
By: David M. Frees III
Tiger Woods situation has put the prenuptial agreement back in the news. Following Tiger’s admission of his “transgressions,” many news sources have reported that Tiger and the current Mrs. Woods are renegotiating their prenuptial agreement.

So what does Tiger Wood’s dilemma have to do with prenuptial agreements in Pennsylvania and the use of such agreements in estate planning?

Well, first and foremost, the story reminds me that such premarital agreements are valid and enforceable under Pennsylvania law. And, while the current renegotiation of the pre-nup by Tiger Woods and his wife revolves around divorce, it is important to remember, that prenuptial agreements are a powerful tool for avoiding disputes when you are in or considering are second or third marriage and/or have children from multiple marriages. In short, prenuptial agreements need not focus just on divorce, but can also set forth the parties’ agreements on estate planning so that expensive and destructive family disputes can be avoided.

Many married people want to leave their assets outright to one another but also want to ensure that the children of a prior marriage get some benefit from the estate when the surviving spouse passes. However, if you own all of your assets jointly with your husband or wife, they will transfer automatically to him or her. Likewise, if you have a simple will, and your spouse receives everything, he or she is free to dispose of those assets in any way they desire. And, they can refuse to give any of those assets to your children at death.

So, what are you going to do? If you are remarried or planning to remarry and have children or heirs that you want to protect in addition to your current spouse, then careful planning using a prenuptual agreement or post nup for estate planning purposes and not just to cover the divorce is a major benefit.

The parties agree on a plan in advance. Then, by using the rules of the pre-nip or post-nup and some insurance and/or other trust arrangements you can protect your new spouse and the heirs you want to benefit after the spouse passes.

Prenuptial agreements are not just for divorce. They are also a valuable state planning tool.

Stay tuned for more on prenuptial and postnuptial agreements in estate planning.

David M. Frees III, Esquire is an estate planning, probate, and trust lawyer in Pennsylvania.
The firm’s offices are located in Malvern, Phoenixville, and West Chester

Are you remarried or contemplating remarriage with children or others heirs that you would like too protect? If you need a consultation about a prenuptial or post-nup agreemnt please call Donna Brownback or Denise Fox at 610-933-8069 for an appointment with David M. Frees III. Mention this article to receive additional articles and information on estate planning strategies and tactics for remarriage.

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By: David M. Frees III, Esquire Will, Trust and Estate Planning for the End of The Year.

Want to make sure that you avoid the most common estate planning mistakes at the end of the year and that you are reviewing and doing what you need to complete to make sure that your new year starts off just right?

Want to know how much you can gift without filing a gift tax return?

Need to know when those gift checks have to be cashed before you’ve got a problem?

Then click here for a short video and a checklist that you can print out and follow.

It could save you and your heirs thousands to tens of thousands of dollars.

END OF YEAR GIFTING, Estate Planning and Asset Protection CHECKLIST, and VIDEO by David Frees

David M. Frees III
Asset Protection and Estate Planning

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By: David M. Frees III Review David Frees’ AVVO Lawyer Rating.
Wills * Trusts * Estates * Estate Planning * Asset Protection Planning
Malvern, Phoenixville, and West Chester Law Offices

It is that time of year when we start to get questions about gift taxes, the gift tax exemption, and about how much you can give to your children and grandchildren.

This year we are getting a new question for the first time, “I thought that the amount goes up every year so how much can I give this year?”

Well, the reason many people believe the amount of the gift tax exemption (the amount that you can give without paying gift tax or filing a gift tax return) goes up every year is that it is indexed for inflation and has gone from the original amount of $10,000.00 to $11,000.00 and recently, to $13,000.00.

However, the amount does not go up every year. And, because the rate of inflation is so low (or perhaps non existent), the amount will remain the same for 2009 and 2010 unless Congress acts to change it as part of the review of the estate and gift tax that is still pending in Congress.

Quick Facts and Reminders about Gift Taxes:

Each person can give up to $13,000.00 for 2009.

A married couple can give $26,000.00 to each recipient even when one spouse has the assets and the other does not. (This is called a split gift and may require your spouse to sig the gift tax return)

If your child or grand child is married, you can also make a gift to the spouse. However, that gift is not protected in the event of a divorce.

You can make gifts of property, real estate, Limited partnership interests, stock or cash. However, the recipient acquires your basis in the asset and may have to pay capital gains taxes on the gift if the specific property is later sold for more than your basis.

Learn more about avoiding end of year gifting mistakes.

We also have a related article on our Estate Planning Blog on Three Gift Tax Questions
Thank you.

Please leave your questions and comments below.

David M Frees III
Will, trust, and estate planning lawyer
Chairman: Trust, Estate, and Wealth Preservation Section

You can find out more about David Frees and the trust, estate, and asset protection lawyers in the firm at Unruh, Turner, Burke and Frees.

* Note: In Pennsylvania, there are no legal specialties. Lawyers may not refer to themselves as “experts” or “specialists” in trusts, estates, wills, or other practice areas. Therefore, when we make reference to ourselves as will or trust lawyers, we mean only that we focus our practice to the areas of wills, estates and related matters.

To see a list of Unruh, Turner, Burke and Frees lawyers and Unruh, Turner, Burke and Frees practice sections click here.

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