Disaster checklist for seniors

via wavy.com

The elderly are among the most vulnerable victims when hurricanes strike. Home Instead Senior Care has offered up some tips to help seniors prepare.

Posted via email from The Modern Planner

How to talk to your parents about the estate tax

via money.usnews.com

Talking about estate taxes is very important right now, since the federal estate tax doesn't exist this year because of a legal quirk. Next year it's back, with an exemption of only $1 million (down from $3.5 million in 2009), unless Congress acts.

Bringing up the topic with your aging parents isn't easy. Adult children often fear appearing like money-grubbing kids, while older adults sometimes prefer to avoid the topic altogether. This article features helpful tips on how get this important conversation started.

Posted via email from The Modern Planner

Move to permanently repeal estate tax defeated by Senate

via blogs.wsj.com

The estate tax came a step closer to being revived late Wednesday when the Senate defeated a move to permanently repeal it.

Wednesday’s amendment to repeal the estate tax was offered by Sen. Jim DeMint (R., S.C.), in the midst of debate on a bill to extend jobless benefits. The amendment failed by a wide margin of 39-59. The vote was almost entirely on party lines, although two Democrats – Sens. Blanche Lincoln of Arkansas and Ben Nelson of Nebraska – joined Republicans in voting “yes.”

Posted via email from The Modern Planner

Sens. Lincoln and Kyl introduce estate tax fix

via thehill.com

Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) introduced legislation late Tuesday creating a permanent fix for the estate tax.

Their proposal would require Democratic leaders to amend the small-business jobs bill with a provision that sets the estate tax at 35 percent with a $5 million exemption. These amounts will be phased in over a 10-year period and also be indexed for inflation. In addition, inherited assets would be taxed at their worth upon transfer, not when the deceased purchased them.

The senators have tried for two years to permanently fix the estate tax. But with the tax being repealed in January, efforts to do something have become more urgent, as lawmakers on both sides of the aisle do not want the estate tax to return to pre-2001 levels, which is scheduled to occur in 2011 when estates worth more than $1 million will be taxed at 55 percent.

Still, it is not clear if Senate Majority Leader Harry Reid (D-Nev.) will allow a vote on the amendment. He has limited the number of amendments that can be added to the bill, though Republicans will be allowed to offer some.

Reid has already signaled that the small-business bill will be one of three proposals that will pass his chamber before the August recess. It will likely be the last legislative train to leave Capitol Hill, as lawmakers will be focused on November's elections in the fall.

Posted via email from The Modern Planner

George Steinbrenner’s final win: The estate tax?

via goingconcern.com

By now most of you have heard that George Steinbrenner passed away this morning at age 80. The silver lining in Steinbrenner’s death is that the estate tax remains in limbo, and his $1.1 billion fortune (Forbes’ latest ranking) could possibly pass to his heirs tax free.

Steinbrenner is the third billionaire to pass away this year – Walter Shorenstein and Dan Duncan are the others – and if the family is as shrewd about their money as they are about their baseball team, they will likely fight any potential retroactive provisions in the new estate tax.

Posted via email from The Modern Planner

Ranchers demand a fix for the estate tax

via thehill.com

With less than 30 legislative days left on the congressional calendar, the National Cattlemen's Beef Association on Tuesday warned lawmakers that time was running out to fix the estate tax. Steve Foglesong, the association's president, warns inaction will force some ranchers and farmers to close their operations.

"They're in essence handing down a death sentence to family-owned farming and ranching operations," he said in prepared remarks. "Taxing family farmers and ranchers out of business will have serious impacts on all Americans, not just in our rural communities."

Because farm and ranch assets consist mainly of land, buildings and specialized equipment, these estates may look wealthy on paper. But they include few assets that can be liquidated to pay the tax without closing the business. These estates are five to 20 times more likely to incur estate taxes than other estates.

"This is not a tax on the 'wealthy elite,'" Foglesong said. "The wealthy can afford accountants and estate planners to help them evade the tax... Farmers and ranchers are often forced to sell land, equipment, or even the entire ranch just to pay off tax liabilities."

Posted via email from The Modern Planner

Tax writers have full agenda in run-up to summer break

via thehill.com

Senate Finance Chairman Max Baucus (D-Mont.) wants to move a small business tax package before the August recess. The legislation exempts capital gains taxes on certain C corporation stock, extends “bonus depreciation” allowing companies to expense 50 percent of the cost of equipment, and allows self-employed workers to deduct health insurance costs from their self-employment tax.

The bill also enables small businesses to get a refund on past tax payments and count general business credits against the alternative minimum tax. The proposal includes measures that passed the House as well, such as penalty relief for businesses that invested in certain tax shelters.

Once debate begins again on the bill, Senate Minority Whip Jon Kyl (R-Ariz.) has indicated that he would like to amend the measure with a fix for the estate tax.

The tax on estates is repealed, but barring congressional action it returns next year to pre-2001 levels by socking estates worth more than $1 million with a tax that tops out at 55 percent. Republicans and more than a few Democrats oppose this level and prefer rates set in 2009, when estates worth over $3.5 million were taxed at a top rate of 45 percent.

In December, the House passed legislation (H.R. 4154) making permanent 2009 estate tax rules, which costs a whopping $233.6 billion over 10 years. The Senate has yet to take up the measure.

Tax lobbyists expect a lot of tax activity in the coming weeks, but aren’t sure how much of it will produce legislation aimed for the White House. They expect the lame duck session will be when most bills pass Congress, but aren’t sure if the Bush middle-class tax cuts will be a part of the group.

Posted via email from The Modern Planner

Former Treasury head to urge Congress to move on estate tax

via thehill.com

Former Treasury Secretary Robert Rubin will join several others in calling on Congress to reinstate the estate tax before the August recess. The July 21 event will be hosted by United for a Fair Economy, which has been fighting to preserve the estate tax since 1999. Rubin is expected to discuss his reasons for supporting a permanent estate tax fix.

Currently, the tax is repealed, but will return in 2011 to levels not seen since 2001.

Sen. Jon Kyl (R-Ariz.) could introduce legislation that would reinstate the tax before 2011. He has recently said he will seek to amend the small-business jobs bill with an estate tax fix, assuming amendments are allowed on the bill. The Senate is expected to take up the jobs bill when it returns from the July 4 recess.

Posted via email from The Modern Planner

Rep. Delahunt introduces bill to streamline payment of taxes for online purchases

via thehill.com

Rep. William Delahunt (D-Mass.) has proposed a measure that would provide for a simplified sales-tax collection system setting up a way for online retailers to collect sales taxes on purchases.

The change could raise as much as $23 billion in new taxes, according to the National Conference of State Legislatures, which supports the legislation.

Current tax rules don't require Internet retailers from collecting state taxes if they don't have a "physical presence" in a state.

Critics of the change argue closing the loophole on purchases made over the Internet would mean a tax increase for Americans.

Proponents say that because sales tax is due on all purchases, it's just a matter of determining who collects the tax, the seller or purchaser. They also say uncollected taxes have pushed state budgets into the red, forcing states to raise other taxes to compensate.

Posted via email from The Modern Planner

Sanders estate tax proposal would hit wealthy harder

via online.wsj.com

Under the estate tax plan proposed by Sens. Bernie Sanders (I-R.I.), Tom Harkin (D-Iowa), Sheldon Whitehouse (D-R.I.) and Sherrod Brown (D-Ohio), the federal estate tax exemption would be $3.5 million for an individual, or as much as $7 million for a couple, with a tax rate of 45%. But estates with taxable assets between $10 million and $50 million would pay a 50% rate, and estates valued above $50 million would pay 55%. A further 10% surtax would apply to assets above $500 million.

In a nod to farmers, the bill would allow them to reduce the value of farmland by $3 million for estate-tax purposes, an increase over the current reduction of $1 million. It would also allow farmers and other landowners more generous estate-tax treatment of conservation easements by increasing the maximum exclusion to $2 million.

The changes would be retroactive to Jan. 1 of this year.

Sen. Chuck Grassley (R-Iowa), the highest-ranking Republican on the Senate Finance Committee, said "I welcome the other side's finally putting a proposal on the table."

Posted via email from The Modern Planner

Three senators call for billionaire estate surtax

via forbes.com

In a new twist on the political stalemate over the future of the now lapsed estate tax, three of the Senate's most liberal members are calling for a 10% estate "billionaire's surtax" which would raise the levy on their estates to 65%. The tax would apply to estates above $500 million, which Sens. Bernard Sanders (I-Vt.), Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.) say would allow each couple to pass $1 billion on to heirs without facing the surtax.

Sanders, Harkin and Whitehouse say that under their new counterproposal, 99.7% of families would pay no estate tax. They would exempt $3.5 million per estate ($7 million per couple) from any estate tax and levy a rate of 45% above that, the same as in 2009. Moreover, family farms would be allowed to exclude an additional $3 million in value per estate. But the liberals would also add higher rates that didn't exist last year. The value of estates between $10 million and $50 million would be taxed at 50%, while assets up to $500 million would face a 55% tax. Then the billionaire's surtax would kick in.

Posted via email from The Modern Planner

Sen. Chuck Grassley: Tax limbo affects family businesses

via iowapolitics.com

Sen. Chuck Grassley (R-Iowa) continues to urge estate tax reform. Though some of his recent floor speech seems to be political posturing, it is hard to overlook Grassley's underlying theme - "We’re almost half a year away from a tax policy that a super majority of Senators say they don’t support. Yet, we’re stuck. This time-sensitive issue has taken a back seat to everything else."

Posted via web from The Modern Planner

Confusion over estate tax keeps advisers busy

via nytimes.com

The disappearance of the federal estate tax this year has created confusion and frustration among the wealthy, even among those who stand to benefit from it. And this has sent them in droves to amend documents that they may have to change again next year.

While there were rumblings at the beginning of the year that Congress might reinstate the estate tax and make it retroactive to Jan. 1, it has made no progress on the issue. The death of Dan Duncan (with an estimated net worth of $9 billion, makes a retroactive tax unlikely. As one commentator has stated “Now we’re way beyond that consideration. This single family could outspend the I.R.S. in litigating this.”

Posted via web from The Modern Planner

Tips to help prepare for the return of the federal estate tax

via forbes.com

The prospect of a $1,000,000 exemption means many more families need to plan for the federal estate tax. There are several simple steps you can take to help preserve your assets and your family upon the return of the federal estate tax. Among these steps: reviewing the ownership of life insurance policies, properly titling assets, maximizing annual gifts, funding college savings plans and paying tuition and medical expenses.

Posted via web from The Modern Planner

Charities and other non-profits feeling a pinch from estate tax repeal?

via consumerismcommentary.com

This is a very interesting suggestion. The commentator has opined that some charities and other non-profit organizations may feel a side-effect from this year’s estate tax repeal.

"Charitable giving is often a part of estate planning, and one goal of estate planning is to reduce tax liability. Charity has the benefit of being a good deed and sheltering wealth from taxes. If there are no estate taxes to avoid this year, there will certainly be estate planners who decide to pass all income to heirs rather than distributing wealth to needy organizations."

Posted via web from The Modern Planner

Legacy for one billionaire: death, but no taxes

via dealbook.blogs.nytimes.com

A Texas pipeline tycoon who died two months ago may become the first American billionaire allowed to pass his fortune to his children and grandchildren tax-free.

Dan L. Duncan, a soft-spoken farm boy who started with $10,000 and two propane trucks, and built a network of natural gas processing plants and pipelines that made him the richest person in Houston, died in late March of a brain hemorrhage at 77.

Had his life ended three months earlier, Mr. Duncan’s riches — Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world — would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher — 55 percent.

Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.

Posted via web from The Modern Planner

Grassley urges Reid to act on the estate tax

via thehill.com

Sen. Chuck Grassley (R-Iowa) on Wednesday urged Senate Majority Leader Harry Reid (D-Nev.) to act on making changes to estate tax law before it reverts back to pre-2001 levels in 2011. Sens. Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.) have hatched a bipartisan plan that would create a permanent 35 percent tax on estates worth more than $5 million. But without Reid backing the proposal, Grassley said the Senate Finance Committee is unlikely to bring the bill forward.

Lawmakers were supposed to be close to a deal on the tax a few weeks ago, but that agreement apparently fell apart. During those negotiations, Kyl said there was some disagreement on how to pay for the bill. However, today, Grassley said offsets were no longer an issue, but did not say what offsets were being used to pay for the bill.

Posted via web from The Modern Planner

Estate tax update: Congress looks for a compromise

via thefiscaltimes.com

At the recent Baker Hostetler conference, Rep. Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee and the heavy favorite to become chairman of the committee if Republicans capture control of the House in November, mentioned the possibility of allowing estates to choose this year’s law or the 2009 version. This idea stems largely from fears of a court challenge if Congress brings back the 2009 law and makes it retroactive to Jan. 1, 2010. Such a court challenge could take many years to resolve.

Posted via web from The Modern Planner

Proposed estate tax: pay now, die later

via blogs.wsj.com

Would a prepayment option work? Probably not for everyone. It would be great for people with liquid assets who can easily pay the taxes on the assets they put into the prepayment trust. However, for small-business owners and family farm owners with illiquid assets, the benefits would not be as apparent. We will have to wait and see if this proposal gets off of the ground.

Posted via web from The Modern Planner

Estate tax deal falls apart

via examiner.com

One commentator's thoughts..."My personal opinion remains that we’re not likely to see any estate tax legislation before the November elections, and that retroactive legislation is less likely with each passing day."

Posted via web from The Modern Planner

Estate Tax Could Come Back in 2011 With Sharp Bite

via forbes.com

The reinstatement of the estate tax at 2001 exemption levels plus greater restrictions on GRATs or family partnerships--or both--could spell problems for wealthy taxpayers in 2011.

Posted via web from The Modern Planner

US Senate effort to reduce estate tax hits turbulence

via nasdaq.com

Further commentary regarding the fallout between Senate Democrats and Republicans over the stalled plan to address the estate tax. It seems the parties are further apart than originally thought. "There's no agreement on estate tax, neither on substance nor on process. None whatsoever," said Senate Finance Committee Chairman Max Baucus (D., Mont.).

Posted via web from The Modern Planner

How to protect your family from estate tax uncertainty

via forbes.com

The 2010 repeal of the Federal estate tax and the tax's potential retroactive reinstatement have caused several families to fall into estate limbo. This article provides an excellent summary of steps you can take today to help protect your heirs and assets during this time of uncertainty.

Posted via web from The Modern Planner

Senate Minority Whip Jon Kyl: Senate deal off on estate tax

via thehill.com

It seems the estate tax proposal forged last week between Senate Democrats and Republicans has fallen apart. Though the proposals details were not disclosed, sources say that lawmakers were looking to give taxpayers the option of prepaying their estate tax. The levy would be set at 35 percent for those worth more than $3.5 million. However, the exemption would ultimately increase over time to $5 million and wouldn't be indexed for inflation. Prepayment trusts would pay a lower rate. Stay tuned as this matter continues to churn in Washington.

Posted via web from The Modern Planner

Senators seek venture capitalist waiver from fund tax

via businessweek.com

A group of five Senators has urged Senate Finance Committee Chairman Max Baucus to back off a proposed higher tax rate on carried interest. Carried interest is the profit share paid to managing partners of VC firms as part of their pay. That share, which lawmakers say is payment for services, currently can qualify for long-term capital gains rates of 15 percent. In a May 11 letter to Baucus and Iowa Senator Chuck Grassley, the lawmakers wrote, "We encourage you to include language in any carried interest provision that maintains a capital gains incentive for those who contribute to the viability of our start-up community - venture capitalists."

Posted via web from The Modern Planner

Sen. Lincoln pushes estate tax fix for small businesses

via thehill.com

Sources close to the matter have recently said that the levy would be set at 35 percent for those worth more than $3.5 million; however, the exemption would ultimately increase over time to $5 million and would be indexed for inflation. Prepayment trusts would pay a lower rate.

Posted via web from The Modern Planner

Senate Minority Whip Jon Kyl: Deal on the estate tax in the offing

via thehill.com

According to Senate Minority Whip Jon Kyl (R-Ariz.), his estate tax proposal is near completion. It is speculated that the plan will include an estate tax prepayment option. Kyl said the fate of his estate tax bill would likely be tied to legislation aiding small businesses that is being created by Senate Finance Chairman Max Baucus (D-Mont.).

Posted via web from The Modern Planner

Talks advance on estate tax

via thehill.com

As talks among lawmakers advance, one interesting proposal has surfaced - an estate tax prepayment option. If taxpayers choose to this option, payments would be at a lower tax rate than if made after death.

Posted via web from The Modern Planner

Billionaire’s Heirs First to Win 2010 Estate Tax Jackpot

via thetrustadvisor.com

The death of Dan Duncan, the world's 74th richest person, at a time when the Federal estate tax has been repealed may end up costing the U.S. Treasury nearly $4 billion in lost estate tax revenue.

Posted via web from The Modern Planner

Some quirky tax breaks that aren't going away

via online.wsj.com

The House of Representatives recently passed a tax exemption for employer-provided cellphones and smartphones. Assuming the bill becomes law, it will join several other quirky tax breaks that have survived the chopping block. Among those is the so-called "Masters exemption" which allows homeowners who rent out their property for 14 or fewer days a year to pocket the income tax-free. As you can imagine, this has provided a hefty windfall for those homeowners near the Augusta National Golf Club.

Posted via web from The Modern Planner

How to protect your family from estate tax uncertainty

via forbes.com

The 2010 repeal of the Federal estate tax and the tax's potential retroactive reinstatement have caused several families to fall into estate limbo. This article provides an excellent summary of steps you can take today to help protect your heirs and assets during this time of uncertainty.

Posted via web from The Modern Planner

Do I need a Will? (part 1)

One of the most frequently asked questions that I receive from clients is whether they need a Will or estate plan. Typically, they will ask the question, then recite three or four reasons why they don't think they need a Will in an attempt to push me away from an affirmative response: "I'm only [insert relatively low number] years old," "I'm not married," "We don't have any kids yet," "I don't have that many assets anyway." The simplest lawyerly answer to their question, of course, is: "it depends."

The state of Nebraska has already drafted an estate plan for you. It is referred to as "intestacy." When an individual dies without an Will in place, their property passes pursuant to the intestacy statutes.

In Nebraska, if the decedent is unmarried, the intestacy statues provide that his or her property will pass first to his or her issue (children, grandchildren, great-grandchildren, etc.). If the decedent leaves no issue, the property will pass to his or her parents. If they are not living, the property will pass to his or her siblings. If none, the property will pass to his or her nieces/nephews. If none, the property will pass to his or her grandparents. If none, the property will pass to his or her aunts and uncles. And so on and so forth. You may notice a pattern - look up one generation (e.g. parents), then follow that family tree down (e.g. siblings, nieces/nephews), then look up an additional generation (e.g. grandparents), then follow that family tree down (e.g. aunts/uncles, first cousins, first cousins once removed), etc.

However, if the decedent is married, the Nebraska intestacy statutes get a bit complicated. If the decedent leaves no issue or parents, the surviving spouse gets the entire intestate estate. If the decedent leaves no issue, but at least one parent is surviving, the surviving spouse gets the first $100,000 and one-half of the balance of the intestate estate. If the decedent leaves issue, who are also the issue of the surviving spouse, the surviving spouse gets the first $100,000 and one-half of the balance of the intestate estate. If the decedent leaves issue, at least one of which is not the issue of the surviving spouse, the surviving spouse receives one-half of the intestate estate.

Whew....

A review of the intestate succession discussed above is the first step to determining whether it is time to take the estate planning plunge. If this is not how you would like your property being distributed upon your death, the answer to the original question is "yes." Setting forth the exact manner in which you would like you property distributed upon your death is the most obvious advantage of preparing an estate plan.

Welcome

Welcome to the Nebraska Estate Planner. This will be a spot where you can read about interesting topics regarding estate, tax and business succession planning in Nebraska. Check back often for new topics.