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2015 Estate and Gift Tax Exemptions

The 2015 estate and gift tax exemption will be $5,430,000 per person, or $10,860,000 for a married couple. (In 2014, it was $5,340,000 per person.) You won't have to worry about an estate tax unless your estate value is greater than $5,430,000 if you are single or $10,860,000 if you are married. The 2015 estate tax rate will stay at 40% for estates in excess of the exemption. The 2015 annual gift…

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A Very Good Christmas Gift – For Yourself

I spend a lot of time teaching my estate planning clients how to avoid probate and how to protect their children's inheritance from divorce and creditor claims. In a nutshell, this is what I tell them: If you establish a living trust and transfer your assets to the trust, your family will not have to experience the hassles and costs of probate when you and your spouse pass away. In addition, we…

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Why You Do Estate Planning

Why do you do estate planning? Simple - because you love your kids and spouse. It's not for you, because you will be dead. Although a properly crafted estate plan will include documents to allow someone you trust to take care of you if you become incapacitated. You do an estate plan to make life manageable for your spouse and children when you pass away. It's part of being a good steward…

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Do You Really Need to Be an Owner?

Many of my microbusiness clients are successful freelancers or independent contractors. Every now and then, one of them will be asked by a business they contract with to become an owner in the business. Sometimes it may be a good idea, but in many cases it's not. As a freelancer or independent contractor, you control your expenses and your work experience. As an owner of a bigger business, you will take on…

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Don’t Sell Your Parent’s House – Yet

If you have an elderly parent who is moving to a nursing home or who needs to downsize, think carefully before you advise her to sell her home. If she has owned her house for a long time, she most likely purchased it for a very low price. If she sells it now, she will have to pay a capital gains tax on the sale price minus the purchase price. That could…

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Friday’s Random Thoughts #7

Hard is overrated It bugs me when I see an unkempt guy in shorts and a T shirt sorting the mail in my office building. But he is my mailman. If he had a uniform, no problem. Why can't US postal delivery persons wear a uniform? Why did casual Friday extend to casual everyday for the USPS? The FedEx and UPS guys have uniforms. Certain jobs should have uniforms - police, firemen,…

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Clark v Rameker – Protecting IRAs

In June, the US Supreme Court ruled in Clark v. Rameker that inherited IRAs will not be protected in bankruptcy. Here is a brief summary of the case: Mom established IRA in 2000 and named her daughter as beneficiary. Mom died in 2001. In 2010, daughter and her husband filed for bankruptcy and tried to exempt daughter's inherited IRA, worth $300,000, from the bankruptcy estate. The US Supreme Court, in a rare…

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Starting a Business

If you are ready to start a business, congratulations, you are on the road to one of the purest forms of American freedom. But you must know it will not be easy. It is fraught with challenges. But it will give you freedom, the freedom to determine how to structure your life. One of the basic issues you must sort out is how to organize your business. The main options are 1)…

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Friday’s Random Thoughts #6

Happy people have one thing non-happy people don't have: faith. It makes life simple and makes life hopeful. Families with good relationships make estate planning easy. Easy is underrated. The Giants are undefeated since the All-Star game and are outscoring their opponent 9 to 1. Best Headline of the Year - Hey, Miss Idaho, Is That an Insulin Pump on Your Bikini? Sierra Sandison, age 20, was diagnosed with Type 1 diabetes…

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