Give Yourself a Christmas Gift

You can give yourself a big Christmas present this holiday season if you take the time to design and implement a tax plan.

Don’t delay, if you don’t implement your plan prior to January 1, 2017 it will be too late.  Here are ten (10) year-end tax planning strategies for you to consider:

1. Accelerate your income tax deductions;
2.Postpone receipt of income;
3.Don’t buy any capital assets this year;
4.Make gifts to charities and family foundations with appreciated assets;
5.Harvest losses to offset capital gains;
6.Establish and fund qualified retirement plans;
7.Identify assets and amounts to make grantor retained annuity trust payments before April 17, 2017;
8.Make annual exclusion gifts to friends and family of up to $28,000 per married couple;
9.Make distributions of income from trust/estate accounts to lower the income tax liability; and
10.Host annual meetings for your family office, business entities and foundations.

If you would like a free consultation to discuss the design and implementation of a tax plan for you and your business please contact us today.


Estate Plan – Do You Need One?

Often I get the question, “Do I really need an estate plan?”  This question comes from young people, people with modest asset levels and people with a “who cares, I will be dead attitude”.  The answer to the question is WE ALL NEED AN ESTATE PLAN.  The latest surveys show that only 55% of Americans have any type of estate plan.  If you do not make the investment to implement your plan, the state of Oklahoma has a plan for you.  The dispositions under Oklahoma’s laws of intestate succession are undoubtedly not how you would choose to leave your assets.


Here are just a few reasons to get your plan in place today:

  1. Without a plan you can’t control the taxes, legal fees, administrative costs and time it takes to settle your estate.
  2. It is a great gift for your family.  Who really wants to meet with and pay attorneys when they lose a loved one?
  3. It prevents the “morbid scavenger hunt” where people have to try to find all of your assets.
  4. It allows the people of your choosing to access your assets in the event of a disability or death without court involvement.
  5. You can ensure the assets are protected from your children’s spouses and creditors.
  6. You can protect the assets from your surviving spouse’s new partner.
  7. It allows you to give what you have, to who you want, in the way you want while minimizing the costs and taxes.
  8. You can ensure you don’t disqualify persons who are receiving government funding by passing your assets to them in the proper way.
  9. You can elect not to be kept alive if you are not coming back (like the Terry Shiavo case).
  10. If you weren’t able to instill the values you want in your children while you were alive you can incentivize them through your estate plan (or at least not disincentivize them).

If you would like a complimentary consultation to discuss your estate plan, please contact us.


Don’t Go Broke in The Nursing Home

Did you know the cost of nursing home care in Oklahoma is $5,000 to $6,000 per month, per person?  The prescription medications per person for persons in a nursing home is $500 to $1,000 per month.  The total cost of long-term care can easily cost from $60,000 to $80,000 per person.


There are legal ways to qualify for Medicaid benefits for you or your parents without being broke.  In order to qualify you have to design and implement a Medicaid plan.


A properly designed Medicaid plan can:

  1. Protect the spouse who will remain at home from financial hardships and provide additional assets for the spouse in the nursing home;
  2. Protect business assets from being lost to nursing home costs;
  3. Protect parents and children from financial hardships; and
  4. Allow you to pass some of the assets you have worked so hard for to your children and grandchildren.


Please contact us if you would like a free consultation on how you can design and implement a Medicaid plan.


Can You Make Decisions for Your Children?

You may be aware that when your children turn 18 they are no longer minors but did you know you no longer legally have the authority to make their medical or financial decisions.  Often when children are in college they still need and want their parents assistance with medical and financial decisions.

We recommend you get with our attorneys to set up a durable power of attorney (financial decisions), healthcare power of attorney, simple will and advanced directive (living will) for your children when after they turn 18.

Please contact us if you would like to discuss our Coming of Age Program.


Want to Give the Kids an Early Inheritance? 4 Things to Consider

If you’re thinking about giving your children their inheritance early, you’re not alone. A recent Merrill Lynch study suggests that these days, nearly two-thirds of people over the age of 50 would rather pass their assets to the children early than make them wait until the will is read. It can be especially satisfying to fund our children’s dreams while we’re alive to enjoy them, and there’s no real financial penalty for doing so, provided that you structure the arrangement correctly. Here are four important factors to take into account when planning to give an early inheritance.

1. Keep the tax codes in mind.

The IRS doesn’t really care whether you give away your money now or later—the lifetime estate tax exemption as of 2016 is $5.45 million per individual, regardless of when the funds are transferred. So, whether you give up to $5.45 million away now or wait until you die with that amount, your estate will not owe any federal estate tax (although, remember, the law is always subject to change). You can even give up to $14,000 per person (child, grandchild, or anyone else) per year without any gift tax issues at all. You might hear these $14,000 gifts referred to as “annual exclusion” gifts. There are also ways to make tax-free gifts for educational expenses or medical care, but special rules apply to these gifts. Your estate planner can help you successfully navigate the maze of tax issues to ensure you and your children receive the greatest benefit from your giving.

2. Gifts that keep on giving.

One way to make your children’s inheritance go even farther is to give it as an appreciable asset. For example, helping one of your children buy a home could increase the value of your gift considerably as the home appreciates in value. Likewise, if you have stock in a company that is likely to prosper, gifting some of the stock to your children could result in greater wealth for them in the future.

3. One size does not fit all.

Don’t feel pressured to follow the exact same path for all your children in the name of equal treatment. One of your children might actually prefer to wait to receive her inheritance, for example, while another might need the money now to start a business. Give yourself the latitude to do what is best for each child individually; just be willing to communicate your reasoning to the family to reduce the possibility of misunderstanding or resentment.

4. Don’t touch your own retirement.

If the immediate need is great for one or more of your children, resist the urge to tap into your retirement accounts to help them out. Make sure your own future is secure before investing in theirs. It may sound selfish in the short term, but it’s better than possibly having to lean on your kids for financial help later when your retirement is depleted.

Giving your kids an early inheritance is not only feasible, but it also can be highly fulfilling and rewarding for all involved. That said, it’s best to involve a trusted financial advisor and an experienced estate planning attorney to help you navigate tax issues and come up with the best strategy for transferring your assets. Give us a call today to discuss your options.


Act Now! There’s Still Time to Avoid the New IRS Regulations That Might Raise Taxes on Your Family’s Inheritance

The IRS recently released proposed regulations which effectively end valuation discounts that have been relied upon for over 20 years. If the IRS’s current timetable holds, these regulations may become final as early as January 1, 2017. Although that date isn’t set in stone, I expect that the regulations will be final around that time or shortly thereafter.

With New Regulations Looming, What Should You Do Now?

As I mentioned before, the timetable isn’t set in stone. Luckily, there’s still a narrow window of time to implement “freezing” techniques under current, more favorable law, to save taxes and protect your family’s inheritance.

Depending on your circumstances, some options are going to be a better fit than others, and I want to make sure you get the best outcome possible. Some of these “freezing” techniques involve the use of a family business entity to own and operate your family fortune, in combination with one or more special tax-saving trusts. These plans provide numerous benefits including asset protection, divorce protection, centralized management of assets, and more – in addition to the tax savings.

Unfortunately, these types of plans can take 2-3 months to fully implement and time is running short.

So, here’s your action plan.

First, schedule an appointment with me as soon as possible. I’d like to get a time on the calendar so that I can take a look at the options that are available to you under current law between now and the end of this year.

Second, find your estate planning portfolio and take a look at it. If I prepared your plan, you’ll have a graphic that represents your current plan, making it easy to review. (If you can’t find it, let me know and I will send you another one.) If someone else prepared your plan, you might have a graphic summary or some other type of summary. Regardless of who prepared your plan, now’s a great time to review your plan. When we meet, I want to make sure that anything we do to help you protect your family’s inheritance from the IRS still achieves your overall planning goals – and not just the tax-saving goals.

Our firm is available to assist you with the immediate implementation of your wealth transfer plan using valuation discounts that are still available under current law. Please call our office now.


What To Do When a Disability Throws Your Estate Plan Into Chaos

As poet Robert Burns mused centuries ago, “The best-laid plans of mice and men often go awry.” Despite thoughtful effort and a concerted strategy, you cannot prepare for every emergency. A car accident, sudden illness, workplace injury or chronic medical condition can force you to re-evaluate the core assumptions you used to plan your future and set up your legacy.

A 2015 report published by the Centers for Disease Control and Prevention (CDC) offered this sobering assessment: “In 2013, approximately one in five U.S. adults reported any disability, with state-level prevalence of any disability ranging from 16.4% in Minnesota to 31.5% in Alabama.” The CDC also reported that “annual disability-associated health care expenditures were estimated at nearly $400 billion in 2006, with over half attributable to costs related to non-independent living (e.g., institutional care, personal care services).”

Frustratingly, you can’t turn back the clock. However, you can take meaningful actions to protect your legacy and estate in the wake of your newfound limitations. Here are some insights to that end:

Work with a qualified estate planning attorney to ensure that:

There’s an authorized person to make financial and healthcare decisions for you if you become mentally or physically unable to do so yourself.

There’s also an authorized person to manage your property, pay your bills, file your taxes and handle similar business if you’re unable to do these tasks.

Your wishes about health care decisions, such as end of life care and do-not-resuscitate instructions, have been communicated in a legally valid and binding manner.

Get a recommendation from your estate planning attorney or your financial advisor, who can help you take additional actions, such as:

Ensuring that you have appropriate insurance.

Reassessing your investment options and portfolio in light of your new limitations and constraints on your ability to generate income.

Making sure that you have a budget that works and that your bills will all get paid on time.

Mind this important distinction:

Be advised that “disability” for legal purposes is different than “disability” for financial planning purposes.

For example, disability for financial purposes might mean you can’t work gainfully anymore because of cancer or a workplace injury. On the other hand, “incapacity” in an estate planning context typically means that a person is no longer capable of making sound decisions, often due to systemic illness or injury.

In other words, you can be “disabled” for financial/insurance purposes and be non-disabled for legal purposes. However, almost anyone who is disabled for legal purposes would also be considered disabled for financial purposes.

Either way, it’s important for us to work together with your financial advisor to make sure you and your family are fully protected.

Take these actions on your own:

Pay attention to where your money is going as well as to your long term planning strategy. Your estate planning attorney can help you assess whether your current plans are still realistic and, if not, what alternative options you have.

Maintain a healthy lifestyle. For instance, cut down on added sugars and refined vegetable oils and be sure to eat enough vegetables, protein, and healthy fats.

Get the help you need from trusted professionals. Now is the time to tap your friends and family and network for assistance with the heavy lifting. No single advisor will have all the answers. But your team can work in concert to reduce the anxiety and uncertainty and keep you focused on what really matters.

Please reach out to us to assess your long term plans and documents and make sure you are as secure as possible in light of your new challenges.


Prince’s Sad and Incredibly Expensive Mistake! (Are You Making It, Too?)

The news of the unexpected death of music legend Prince, age 57, shocked the world and touched off stirring tributes from the likes of Bruce Springsteen, Elton John, the Harlem Gospel Choir and the cast of Saturday Night Live. Prince left a profound, indelible mark as an artist – when asked what it was like to be the greatest guitar player alive, for instance, Eric Clapton famously responded: “I don’t know. Ask Prince.” Tragically, though, for all his talent, Prince made a simple error that is creating huge complications for his family.


Don’t Leave Your Trust Unguarded: 6 Key Ways a Trust Protector Can Help You

Trust protectors are a fairly new and commonly used protection in the United States. In short, a trust protector is someone who serves as an appointed authority over a trust that will be in effect for a long period of time. Trust protectors ensure that trustees: maintain the integrity of the trust, make solid distribution and investment decisions, and adapt the trust to changes in law and circumstance. (more…)


10 Types of Trusts: A Quick Look

Considering the myriad of trusts available, creating an estate plan that works can seem daunting. However, that’s what we, as estate planning attorneys, do every day. We know the laws and will design a plan which addresses your specific situation.

Here’s a look at the basics of ten common trusts to provide a general understanding. (more…)