David M. Frees III on Legislation and GRATs

So, if this bill, or a similar bill passes the Senate, a very powerful technique for moving assets from one generation to another without estate or gift taxes will be lost to the American tax payer and to all Pennsylvania residents doing federal estate tax planning.

If you’re interested in GRATs, just search our site for the many articles and information that we have published on this topic. But, as a brief review, GRATs allow you to move a higly appreciating asset out of your estate without paying gift taxes. However, if you die during the GRAT term (which currently can be as little as two years) the assets come back into your estate and get taxed at their current value.

Congress believes that this technique is so effective for tax payers, that if they eliminate short term GRATs, that it could result in significant revenue generation through higher estate taxes.

According to a group called Citizens for Tax Justice, this provision of the bill would raise an estimated $4.5 billion in 10 years…” This group is a lobbying organization that describes its mission as “requiring the wealthy to pay their fair share.”

So, be aware that 2010 may be the last year for the short term GRAT.

If you need assistance in setting up a GRAT, or want to know more about the many advantages of a short term GRAT before they are eliminated by Congress, please feel free to visit this site or to call David M. Frees III at 610-933-8069 or by email at dfrees@utbf.com.

For a free book on GRAT techniques, from Bernstein’s research group, click here.
For a free telephone consultation or appointment for estate planning including GRATs call Donna, Denise or Beth to set up the appointment and mention offer code: GRAT

David Frees and Unruh, Turner, Burke and Frees maintain law offices in Malvern, Phoenixville, and West Chester Pennsylvania and serve many surrounding communities including Wayne, Devon, Berwyn, Radnor, Exton, Chester Springs, and others.

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David M. Frees III on Required Minimum Distributions and 2009 Deductions You Can Still Get

Tax Deductions and Required Minimum Distributions for 2009 and 2010 – Estate Planning Means Good Tax Planning

If you took advantage of the one year exception last year, you may not have taken a required minimum distribution from your IRA or 401(k). However, as our friend Doug MacGray reminds us in his news letter MacGray Matters, that the RMD is back.

Doug also notes that Haiti earthquake donations made this month can still be taken on your 2009 tax return.

First, the issue of required minimum distributions.

THE RMD is back: If you hold money in a traditional IRA, and you are older than 70 ½, then beginning this year (2010), you must once again withdraw your annual Required Minimum Distribution. Of course, when you make these withdraws, you are subject to tax (on traditional and not Roth IRAs).

The I.R.S. suspended the RMD rule in 2009 due to the large loses many taxpayers experienced. That was great for last year, but the RMD is back.

As your tax preparer will remind you, the RMD is determined by your age and the market value of your IRA. So if you’re 70 1/2 or above, contact your investment advisers soon to plan for this withdraw and the tax issue that will result in on your 2010 return.

Tax deductions still available for 2009:

Just as a reminder, President Obama recently signed into law an act which allows taxpayers to claim a charitable deduction for tax year 2009 for cash donations made for the relief of victims in areas affected by the January 12, 2010 earthquake in Haiti. These contributions must be made before March 1. Ask your adviser for more specifics about the eligible recipients.

Thanks to our friend Doug MacGray
Principal, Senior Vice President Financial Planning
300 Conshohocken State Road, Suite 670 | W. Conshohocken, PA 19428 | (610) 783-4265 (direct)

Hope that you had a great snow weekend and here’s to a safe return to work.
Be well.

David M. Frees III, Esquire
For an estate planning consultation or for advice concerning an estate or trust, call 610-933-8069. Mention OFFER DMFREES2010 for your free consultation.

Unruh, Turner, Burke and Frees maintains offices in Malvern, Phoenixville, and West Chester serving Devon, Berwyn, Exton, and the Western Main Line

dfrees@utbf.com

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We know that in this area of the state of Pennsylvania, you have many choices for your trust, estate planning, and probate lawyers as well as for your elder law needs.

For that reason, we both thank you and want to let you know that we have once again, in preparation for the new year, spent time, resources, and money in making changes that we think will enhance your experience as a client of the firm.

First, in addition to our two Estate Section partners, David M. Frees III and Douglas L. Kaune.

Jennifer adds more depth of tax practice (especially tax issues facing trusts and estates) and will also be helping us to focus on the unique issues facing women in their estate planning.

We have added two blogs designed to bring you more and timely news and information on estate planning, asset protection planning, and information and news for executors and trustees. In addition, we are currently working on a new web site and blog oriented just for families in need of elder law and nursing home advice and information. Be sure to read and watch www.UTBF.com/trust-estate and www.PaEstatePlanners.com for the latest news and information affecting you, your business, investments, and your family.

We have also invested in new software that we believe will take us to the next level in preparing and updating your tax returns, estate and trust accountings, and the family settlement agreements that we often use to avoid much of the probate process.

Several other associates and partners of the firm, including Denise Werkley, Theo Claypoole, William Burke, Don Turner, John Fiorillo, and Stephen LaGoy will be working on matters with the Estate Section – especially when planning involves family limited partnerships, closely held businesses, and real estate or when there are matters involving litigation.

We would also like to welcome Beth MacNulty as our new client relations manager. Beth’s jobs will include helping you to get appointments that fit your schedule, confirm appointments, making sure that your estate planning documents have been received by you and are stored safely, and in assisting you in emergency appointments, and with your other needs as they arise.

Beth can be reached by calling 610-933-8069.

In addition, David Frees was recently honored by receiving AVVO’s highest lawyer rating of 10.0 or Suberb and presented again to the prestigious Pennsylvania Bar Institute Estate Institute on the topic of Estate Planning for Families with Young Children. David has also just finished, with his brother Robb Frees, a soon to be published book and report on What Consumers Need To Know about insurance law.

Douglas Kaune was admitted as a member of NAELA (National Association of Elder Law Attorneys) and Doug in addition to his work in the are of sophisticated estate planning is working on three new reports for consumers on the changing laws in the area of Elder Law and Nursing Home issues.

In conclusion, we thank you for your continue support ans we look for new ways to help you through this difficult time with the many changes and the uncertainty now that Congress has allowed the state tax to lapse but at the same time is threatening to restore it retroactively.

For estate planning questionnaires, estate planning appointments, appointments to update older estate plans, or for any of our free reports for executors please call 610-933-8069.

David M. Frees III, Esquire – Chairman: Trust, Estate and Wealth Preservation Section
Douglas L. Kaune, Esquire – Trust Estate and Wealth Preservation and Chairman: Elder Law Section

Donna Brownback – Paralgel
Denise Fox – Paralegal
Beth MacNulty – Client Relations Manager

The firm maintains offices in Malvern, West Chester, and Phoenixville

610-933-8069

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