Designating a contingent beneficiary can be an important part of your overall wealth distribution plan. Learn more here.
estate tax
IRAs Do Not Pass Through Your Will
Here’s a little fact that you may not realize: when you assign a beneficiary for your IRA account, you are effectively bypassing any outside action against that account, including your will – assuming that the beneficiary assigned is appropriate. For most assets that you own, when you pass away, your last will and testament determines who will receive the assets. You may want to make sure that your daughter gets the heirloom china set, and your son receives the antique car, among other things – so you direct these wishes through your will. If you don’t have a will, your state of residence, through the probate process, determines how your assets are distributed. Generally this will direct your estate to your living heirs in order, from your surviving spouse to your children and then grandchildren. It’s different in each state, so it really makes a lot of sense to get […]
Share, tweet, print, email, like or pin this post:
Why Young People Need Estate Planning
Many young individuals and couples think that the time to start thinking about estate planning is when they’re older, or perhaps if they ever have “estates”. On other occasions, the impetus to plan may be due to a recent death of a friend or family member without an estate plan or as my friend Tom, an estate planning attorney says, “Right before they take a trip over water.” However, many young individuals should start thinking and “doing” some estate planning right away. Before we get to specific recommendation, let us first understand what estate planning is – and, what your “estate” is. Essentially, your estate is everything you own. This includes your home, personal property, life insurance policies, invested assets, etc. Deciding how these assets are controlled and divided in the event of your death is called estate planning. Additionally, estate planning includes who will care for your children if […]
Share, tweet, print, email, like or pin this post:
Do You Have The Will?
Statistics show us that approximately 70% of all Americans don’t have a valid will. Are you one of them? With that statistic, chances are that you don’t. This means that in a circle of four people, three probably don’t have a will. This situation begs an obvious question: Do I need a will? One simple way to determine if you need a will is if you can’t truthfully answer “No” to both of the following questions: Do you care who gets your money and property when you die? Do you care who is appointed guardian of your minor children if you die? If you answered “Yes” to either or both of those questions, you need a will! Otherwise, state laws will determine the outcome of those situations – and it’s not likely that you would have made the same decisions that the state would. Why should you have a will? A will […]
Share, tweet, print, email, like or pin this post:
Important Tax Numbers for 2015
For 2015 the IRS has given the new limits regarding retirement contributions as well as estate and gift tax exemptions. Regarding retirement contributions employees may now defer $18,000 annually to their employer sponsored plan including a 401k, 403b, and 457 plans. This is an increase from last year’s $17,500 amount. Additionally, employees age 50 or older can now make an age based catch-up contribution of $6,000 which is a $500 increase from last year’s $5,500 amount.
Share, tweet, print, email, like or pin this post:
Annual Gift Tax Exclusion Amount Remains the Same for 2014
All individuals have the opportunity to give gifts annually to any person, and as many persons as they wish, without having to file a gift tax return. For 2013, the amount of the annual exclusion is $14,000; it remains the same for 2014. This means that anyone can give a gift of up to $14,000 to any person for any reason without worrying about possible gift tax implications. A married couple can double this amount to $28,000. In 2014, this annual exclusion amount will remain the same at $14,000 ($28,000 for couples). For amounts given in excess of the annual exclusion amount, every individual has a lifetime exclusion amount, against which the excess gifts are credited. For 2013, the lifetime exclusion amount is $5,250,000. For 2014, the lifetime exclusion amount for giving is increased to $5,340,000. These are the same exclusion amounts as for estates in 2014.
Share, tweet, print, email, like or pin this post:
A Stable Pyramid
One of the basic fundamentals regarding financial planning and saving money revolves around what is known as the financial planning pyramid. You may hear other names such as the wealth management pyramid, the financial house, etc. You may also see different stages or “building blocks” added here or there, but I’ve broken it down for the purpose of this book to three basic levels for easier understanding. The first level is where we see risk management. This is the foundation of your plan. It’s important to have a strong base to build off of, otherwise the slightest of breezes or tremors can send it toppling. Risk management can be simply seen as your insurance – and this can range from your auto, home, renters, life, health, disability, and umbrella insurance, to your will, emergency fund, and debt management. The reason why insurance is the base is due to the fact […]
Share, tweet, print, email, like or pin this post:
The Qualified Terminable Interest Property (QTIP) Trust
Often we come up against situations in planning finances for folks where some special tools are necessary. One of those situations, quite common these days, is when one or both members of a couple has children by a prior marriage. The situation brings about some interesting questions when considering how the marital assets will be divided when one member of the couple has passed on. Daryl has three children by a prior marriage, and his wife Toni also has three children by a prior marriage. Both Daryl and Toni have considerable assets from before their marriage – each has a investments and retirement accounts in their own name: Toni’s accounts are worth $350,000, and Daryl’s accounts are worth $300,000. Given their lifestyle, they will not be needing much of their accounts early in retirement – but it’s quite likely that later in life they may need the accounts for medical […]
Share, tweet, print, email, like or pin this post:
Per Stirpes / Per Capita–What Does it Mean?
When working with your estate planning (even if you don’t realize you are) you may run across the terms per stirpes and per capita. Choose one type over the other and you could have a significant impact on who eventually receives your estate. So what do these two terms mean? Dictionary.com defines the two terms as follows: per stirpes – noun; pertaining to or noting a method of dividing an estate in which the descendants of a deceased person share as a group in the portion of the estate to which the deceased would have been entitled. per capita – noun; noting or pertaining to a method of dividing an estate by which all those equally related to the decedent take equal shares individually without regard to the number of lines of descent. This probably seems like just so much gunk to you, so let’s look at an example. Joe […]
Share, tweet, print, email, like or pin this post:
Pre-Death Planning: Roth Conversion
Image via Wikipedia Financial planning often requires us to face our own certain demise – something that we often don’t want to do, but still a certainty that we all must face. Among the things that we want to do when planning for the inevitable would be to make certain that our surviving loved ones have access to adequate monetary resources to support themselves, in the most cost-effective manner. Another thing that we hope to accomplish is to make the transition as easy as possible for our loved ones. One way to do this is to convert a good portion of your IRA or other tax-deferred funds to a Roth IRA account. Here’s why: By converting to a Roth account, you will make the funds in that account available to your heirs totally tax free. Granted, your estate will also be smaller by the amount of tax that you paid […]
Share, tweet, print, email, like or pin this post:
A Beneficiary Designation Dilemma
Image by Ben Saren via Flickr Since families today are different and more complicated from the traditional situation, with ex-spouses, children from first and subsequent marriages, and children from unions where a marriage didn’t take place, designating beneficiaries for IRA accounts can be very complex. For example, it’s not out of the question for an individual to have re-married later in life and have children from an earlier marriage. In addition, the new spouse could have children from his or her previous marriage. And then possibly children resulting from the current marriage. So, this individual might wish to leave the proceeds of his IRA to his or her current spouse first and foremost at his or her passing – but then to split the remainder of the account among his or her children from the first marriage and the children from the second marriage equally. If you know anything about […]
Share, tweet, print, email, like or pin this post:
Understanding the 2010 Estate Tax Repeal
The start of a new year often signals a time for change–especially when it comes to taxes, and 2010 has brought some major changes. As of January 1, the federal estate and generation-skipping transfer (GST) taxes are repealed, and the step-up in basis rule is modified for 2010. While it’s possible (and some believe very likely) that Congress will reinstate these taxes, until that time, it’s important to understand these significant federal tax law changes and how they might affect you. Federal estate tax repeal In 2009, the top estate tax rate was 45%, and estates received an exclusion of $3.5 million, (meaning that up to $3.5 million of assets were exempt from estate tax). However, as part of the tax cuts initiated in 2001, the estate tax is repealed for 2010 but is scheduled to return in 2011, albeit with a reduced $1 million exclusion and an increased top […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.