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Wealth Advisor Archive

7/10/2018: Have You Taken Advantage of the Tax Cuts and Jobs Act Planning Window?

Have You Taken Advantage of the Tax Cuts and Jobs Act Planning Window?
From

Condie & Adams, PLLC

611 4th Avenue, Suite A

Kirkland WA 98033
425-450-1040

Condie & Adams, PLLC is a values-driven law firm committed to providing individuals, families and small businesses with personalized, client-centered legal services in estate planning, probate and trust administration, tax planning, and related legal matters.

Important Estate Planning Tips You Should Act on Now

Like all things, tax laws are constantly changing. Together, we need to respond quickly and strategically to the new developments in the tax law landscape. While you shouldn’t wait to review your estate plan in light of the passing of the Tax Cuts and Jobs Act (TCJA), making a knee-jerk reaction is rarely the best course of action, either.

The best decisions are made when we carefully analyze all angles of your estate to come up with the best strategy for you and your family. The law’s benefits will accrue most for those who take a proactive approach rather than those who wait until the last minute. Here are several reasons the tax changes need to be top-of-mind:

  • The increase in the standard deduction and reduction in individual tax rates means that you may now be taking home more of your weekly/month pay. Taking some of this money and investing it into your future may be a great action to take.
  • The elimination of the personal exemption means that depending upon your marital status and number of dependants, you may not be able to lower your taxable income as much as you had in the past. For some people, this might mean a higher tax bill, in spite of the decreased individual rates.
  • The limitations on deductions for state and local income taxes (SALT) means that for those in states or communities with high income taxes, your taxable income may not be reduced as much as it had been in past because you won’t be able to get credit for all of the other forms of income tax you have paid.  However, if this is a concern for you, we may have some strategies (such as an Incomplete Non-Grantor Trusts) to help alleviate the new tax burden.
  • With the increase in the unified credit to $10,000,000, indexed for inflation, there has been a reduction in the overall number of estates affected by the estate tax. If you had previous planning centered around saving estate tax, we need to re-evaluate to make sure that the plan still works for your long term objectives now that estate tax may not be a concern. You may also want to take advantage of the increase by making lifetime gifts, especially if you had previously used up your exemption in previous years.
  • With the effective repeal of the individual mandate of the Affordable Care Act effective in 2019, you will now have the choice of whether or not to carry health insurance coverage without suffering the penalty of a fine. However, with no requirement for coverage, it is speculated that the cost of insurance in the marketplace could increase without the additional participants. As open enrollment occurs this fall, consider how you would cover medical expenses as you make coverage decisions.

The new tax developments are especially pertinent to you if you’re a business owner. With the possible 20% income tax deduction for pass-through entities, you’ll want to review entity selection for your business operations as soon as possible. Now is also the time to consider gifting of interests to reduce the limitations inherent in the qualifying business income calculation and to utilize the increased gift tax exemption.

If you have a “specified service business” as an attorney, doctor, dentist, or consultant, it may make sense to separate any “non-service” businesses out of your service business, such as real estate or clerical activity. Utilizing multiple trusts may also help you achieve a larger QBI (qualifying business income) deduction.

Don’t Just Think About Taxes!

The implications of the TCJA go much further than taxes alone. You will always need an estate plan that takes a thoughtful approach to asset protection, privacy, retaining control, avoiding issues like guardianship and probate, and ensuring that your loved ones are cared for in years to come. These aspects of estate and financial planning are constant regardless of fluctuations of tax reform.

Collaboration will us, as your estate planners, is critical for long-term success. We’re ready to help you plan for whatever comes next. Give us a call to set up a chat today about how we can fully protect you and your family.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.

 

You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any questions about this or any matters relating to estate planning.

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Condie & Adams, PLLC 611 4th Avenue, Suite A   Kirkland WA 98033 

6/12/2018: Keeping the Peace After You Are Gone

Keeping the Peace After You Are Gone

Planning With an Aim Towards Building

Unity

A will or trust contest can wreak havoc on

families. The conflict can result in possibly

irreparable resentment and loss of familial

communication. Old rivalries and disputes

can resurface during the trying time that

occurs after the death of a loved one,

especially a parent. But careful estate

planning can help you substantially reduce

the risk, or even avoid this problem

entirely.

Let’s take a look at a few of the ways you

can build your estate plan to minimize

family conflicts after you’re gone.

· Keep your plan up-to-date: An up-to-date estate plan can help you preserve family

unity after death or in the event of incapacity. Even if you have put an estate plan in

place in recent years, estate planning is an ongoing process and needs attention at

regular intervals. An out-of-date plan can become misaligned with your goals, new laws,

and policies, rendering it less effective and more likely to generate conflict (the last

thing you want).

· Select key individuals in your plan: You can give certainty to your family and make your

wishes easier to carry out by selecting the right people as your key players in carrying

out your estate plan. Make sure that you’ve thoughtfully selected the right people to

carry out your estate plan. A few of the key individuals you’ll have to select:

o Successor trustee – This person will manage your trust’s assets when you are

unable to do so.

o Executor – This person is appointed in your will to manage your probate estate if

one is needed. In many cases, you may select the same person as your successor

From

Condie & Adams, PLLC

611 4th Avenue, Suite A

Kirkland WA 98033

425-450-1040

Condie & Adams, PLLC is a

values-driven law firm

committed to providing

individuals, families and small businesses

with personalized, client-centered legal

services in estate planning, probate and

trust administration, tax planning, and

related legal matters.

trustee. However, if you don’t, remember that your executor must work closely

with your successor trustee to ensure that everything is handled smoothly and

in a timely fashion.

o Health care proxy – This person is authorized to communicate with your medical

providers and make medical decisions if you are unable to do so.

o Financial agent – This person is authorized to make financial decisions on your

behalf. They will likely need to work closely with your successor trustee, or you

may designate the same person to serve in both roles.

· Share your wisdom: By sharing your stories and wisdom (through ethical wills, intent

letters, personal stories, videos, etc.) you can help your family understand the legacy

you want to leave so that the wealth you’re leaving doesn’t become a distraction or

point of contention.

· Don’t try to DIY: While it might be tempting to cut corners and take your estate plan

into your own hands, taking a do-it-yourself approach is never wise. This sets the stage

for potentially inadequate planning, which increases the likelihood of will or trust

contests and will likely mean your estate isn’t distributed how you’d like it to be in the

end. Let your estate planning attorney do the heavy lifting — we’re always here to help.

· Be clear about your intentions: Are you planning on giving more of your total assets to

one child than the others? Or are there other ways in which your estate planning goals

may upset some of your beneficiaries (or those who aren’t beneficiaries)? It can be a

very tricky subject to broach, but if you foresee hurt feelings, consider being as clear as

possible about your wealth distribution plans with those individuals. This will limit the

potential for confusion and disagreement down the road. It may – or may not – make

sense to explain this to your family. But, it’s always incredibly important to let us know

the reasons so we can develop a rock-solid legal strategy for your goals.

· Consider discretionary trusts: If you have a child or other potential beneficiary who

struggles with addiction, mental health problems, or other conditions that could hinder

their ability to use their inheritance in a healthy way, you might want to consider a

discretionary trust. With this type of trust, you can control the disbursements based on

your beneficiary meeting certain requirements — such as attending a treatment

program or enrolling in higher education. This can help you treat each child fairly by

taking into consideration what is best for each child’s unique situation.

Will or trust contests can tear a family apart, and can also be time-consuming, costly, and

embarrassing for the family that remains. If someone who feels slighted by your estate plan can

convince the court that your will or trust is invalid, chaos can break loose and your intended

beneficiaries can lose their inheritances. Typical reasons a family member might use to say your

estate plan is invalid are that it wasn’t signed, you didn’t have the capacity to make the estate

planning decisions you made, the documents were fraudulent, or that you were pressured or

influenced to sign documents.

Let us help you make sure that none of these events unfold. We’re here to guide you every step

of the way through creating and maintaining a timely, robust, and strategic estate plan. Give us

a call today to make sure your plan is current and includes all the necessary provisions to keep a

contest from occurring in the future.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a

Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax,

accounting, financial, or legal planning strategies.

You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any

questions about this or any matters relating to estate planning.

Unsubscribe from this newsletter

Condie & Adams, PLLC 611 4th Avenue, Suite A Kirkland WA 98033

5/8/2018: Planning for the Financial Future of a Troubled Adult Child

Planning for the Financial Future of a Troubled Adult Child

Your 3-Step Guide to Creating an Informed

Estate Plan

Are you concerned about any of your adult

children? Estate planning can pose extra

challenges for families with adult children

struggling with addiction, marital issues, or

irresponsibility with money. The last thing

you want is for your wealth to end up

having a negative impact on your child, or

to see them squander their inheritance.

Many parents are concerned about what

they can do to shield an adult child who

struggles with problems like these from bad

decisions and bad people that could worsen

their child’s situation.

This is often a hidden issue within estate

planning conversations, as it’s a sensitive topic that can bring up painful memories or emotions.

Some parents are apprehensive to discuss their troubled adult children with friends or

colleagues because of its private nature and potential for judgment from those outside the

family.

However, estate planning offices like ours are safe spaces where we work diligently to craft the

best possible plan for your family while taking your unique challenges into account. While these

conversations may be difficult to have, they are crucial to ensuring that your wishes are carried

out the way you want. It is important to put your trust in your estate planning attorney knowing

that they have both you and your troubled adult child’s best interests in mind.

Step #1: Figure out what works for your family

First, understand that what works for your family doesn’t necessarily mean an identical plan for

each of your children — it’s okay to customize your plan to work differently for each beneficiary

From

Condie & Adams, PLLC

611 4th Avenue, Suite A

Kirkland WA 98033

425-450-1040

Condie & Adams, PLLC is a

values-driven law firm

committed to providing

individuals, families and small businesses

with personalized, client-centered legal

services in estate planning, probate and

trust administration, tax planning, and

related legal matters.

depending on their unique path through life. Feel welcome to initiate a frank discussion with us

about any issues you may be concerned about regarding your adult children. The worst course

of action is to pretend the issue isn’t there or that it will somehow resolve itself. Bringing these

factors to light can only improve the situation and help you create the best possible plan for

your family.

Step #2: Create a tailor-made plan to mitigate risk

A lifetime trust can be a great solution to prevent an inheritance from making a troubled child’s

situation worse. Lifetime trusts spread distributions over the course of your beneficiary’s entire

life, significantly reducing the risk that they waste their entire inheritance on harmful

substances, irresponsible spending, or contentious divorce proceedings. Lifetime trusts keep

your wealth out of the hands of the probate and divorce courts and ensure that the assets

contained in the trust stay in the family even after a divorce. If you don’t already have the

benefits of lifetime trusts written into your estate plan (or simply aren’t sure), we can review

your current plan to make sure that it is customized to optimize your child’s long-term security

and well-being.

Step #3: Follow up with us continually

Once we have a plan in place to protect all members of your family, make sure you follow up

with us, your financial advisor, and your family to make sure the plan continues to work as

intended. You can rely on your financial advising and estate planning professional team to

answer any questions that arise and make any necessary changes as time goes by. Staying in

touch frequently means that your plans stay up to date and will continue to further your goals

for your family.

Give us a call today so we can make sure all your children get the most out of life and enjoy

ongoing financial security for years to come.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a

Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax,

accounting, financial, or legal planning strategies.

You have received this newsletter because I believe you will find its content valuable. Please feel free to Contact Me if you have any

questions about this or any matters relating to estate planning.

Unsubscribe from this newsletter

Condie & Adams, PLLC 611 4th Avenue, Suite A Kirkland WA 98033

4/11/2018: Does Your Family Know About Your Estate Plan?

A Guide for How Much to Share and With Whom

It’s the thick of tax season and you’ve probably been working on (or finished) your tax returns. Most of us don’t feel comfortable sharing the details of our tax returns, unless we have to, say for a mortgage. But, your estate plan, an important part of having your affairs in order, is a bit different. You might be wondering whether or not your family should be acquainted with the details of your estate plan.

When it comes to their estate plan, many people are often confused about when and what to share with their family, so you’re not alone if you’re trying to decide what to do. There are several reasons for concern, ranging from worry over stirring up family tension to a concern that broaching the subject of powers of attorney and healthcare directives isn’t the sunniest of dinner table topics.

However, there are a number of benefits to letting your family know some of the key points covered in your plan, especially regarding your incapacity planning. If your family knows what your wishes are and understands how they’re expressed in your health care proxy and powers of attorney, they will be much more prepared to carry out those wishes if the need arises. Telling your family about your preferences in the event of incapacity will save them from encountering an extra level of stress and confusion.

While it’s by no means necessary that you share the entirety of your estate plan with your family, it doesn’t have to be an all-or-nothing decision. Here are a few different ways you might choose to get your family acquainted with your plan.

Option #1: Share everything with everyone
Total transparency is certainly an option, but it might not be the ideal choice depending on your family dynamics. This level of openness is usually only appropriate for you if you anticipate needing help soon or are already receiving help from your successor trustee and/or other agents. Consider what you would want to know if you were in your family members’ shoes. Too much information can be overwhelming, and could also lead to disputes between family members. However, too little information can cause misunderstandings, stress, and time delays when the time to act comes.

Option #2: Share the basics with everyone
Sometimes, sharing a summary rather than all the details is a simpler and more effective choice. If you’re going the summary route, talk about how your estate plan works or “flows” without including any information about the specific assets. For example, tell your family about the types of documents in your plan and the function each document serves so that your loved ones understand who will be in charge and the general manner of distribution and management of your assets. This might mean explaining the basics of how health care directives, powers of attorneys, and trusts work. We are always here to help you figure out how to best describe your plan in simple terms and may even be able to help you with a family meeting.

Option #3: Share your list of point people
Another route to take if you don’t want to divulge every detail of your plan is to simply share who you’ve “cast” in different roles in your plan. Let your family know who your trustees, executors, and health care agents are so there are no surprises later on and so they know who to look to, when the time comes. If you sign a waiver with us, we can even be authorized to provide a copy of your documents upon your incapacity or death. This option will help prepare your family for the future without overwhelming them with the specifics. It can also help maintain a greater level of privacy for you.

Does your list need a checkup?
As you ponder how much to share with your family, seize this opportunity to review your “cast.” If you were re-doing your plan today, would you still select that person as successor trustee? Health care agent? Guardian for your children? Caretaker for your pets? Changes like these are fairly straightforward, but incredibly important to get done so your plan works as intended. If you have any questions or need to make changes, give us a call. We’re here to help.

The Practical Aspect of Sharing
If you intend to share the actual documents with your family, give us a call. We can work with you to provide paper or electronic copies to those family members that need them.

It’s possible that none of these options suit your family’s unique needs, and that’s perfectly fine. We can work with you to create a custom strategy. Let us know if we can help you develop your own family meeting agenda.

This newsletter is for informational purposes only and is not intended to be construed as written advice about a Federal tax matter. Readers should consult with their own professional advisors to evaluate or pursue tax, accounting, financial, or legal planning strategies.