I've created a new web-site and written a new article about Debt Settlement Negotiations. Here's the first in what I believe will be many articles on various aspects of this topic, examining the pros and cons of various techniques to settle your unsecured and secured consumer debts!
Debt Relief Basics
Debt Relief Law Firm of John Stege
Thursday, May 14, 2015
Monday, May 11, 2009
"Ding-Dong! The Estate Tax Is Dead!" (At Least For You!)
Middle Class Americans Will No Longer Need a Tax-Planned Will: Unless They Have More Than $5 Million (Net Assets) for a Single Person and $10 Million For A Couple!The Senate votes to make permanent the repeal of the Estate Tax for individuals with estates worth less than $5 million and couples with estates worth less than $10 million in 2010.
Parents with Minor Children Still Need A Will With Contingent Trusts For Their Children! But NO Tax Planning!
History: Ever since 2001, the Estate Tax has been in a kind of limbo and tax and estate planners have had to live with the uncertainty. Back then Congress wanted to pass a huge estate tax roll-back for the richest 1% of Americans. Instead of taxing estates over $1 million, they raised the exemption from tax in stages from $1 million in 2001 to $3.5 million in 2009.
That meant that a person who died in 2009 with an assets (including life-insurance benefits) worth less than $3.5 million would pay no tax.
But, because they couldn't pay for a permanent repeal of the tax (which would cost over $100 billion over a ten year period), they left it to expire in 2011! If that happened, the exemption amount would go right back to what it was in 2001. $1 million.
This tax never should impact average middle class Americans. It was designed simply to prevent the very top 1% from passing vast fortunes on from one generation to another and creating a permanent American aristocracy of wealth and privilege like Medieval Europe.
The Problem: But, people with a house that had gone up in value (or someone living in a high priced area like New York or San Francisco) or people who had a life insurance policy for their families could easily find their estate being taxed if they had more than $1 million in assets.
The Uncertainty: That has meant that people wanting a simple will have had to put extensive and expensive "tax planned will" language in their wills, simply because the law was uncertain!
What IS a Tax-Planned Will?: A normal tax-planned will has about 10 pages of contingent trust information and the heir might wind up having to administer a trust rather than just using the assets they inherited from their spouse. They probably would not want that. For one thing, it means paying an accountant to file a trust tax return every year. For another it means more book-keeping requirements. The trust administrator also has a "fiduciary relationship" to the heirs, which in this case has some absurd and unintended consequences.
The Latest News: Then in March 2009, the Senate passed the Lincoln-Kyl amendment, which would raise the exemption from $3.5 million to $5 million and make this tax-exemption permanent. It will cost $100 billion over ten years time, but at least it would prevent middle-class people from having their estates taxed!
Frankly, I don't know anybody with ten million dollars in NET assets (after deducting what they paid for those assets). So a husband and wife who have a large house, perhaps a vacation home, plus a large $1 million insurance policy no longer have to worry about this tax. Each can shelter $5 million tax free.
Of course, people who might have an estate worth more than $5 million would have to hire a lawyer to draft a tax-planned will. But, they can afford it!
The rest of us now can get by with a simple will!
What's Left? At this point many people can get by with a will they get from a form. If they just want to leave all their assets to their spouse and don't have any minor children this will work just fine (of course there are other issues like powers of attorney so they might wish to consult a lawyer). I write about those issues in another article on this site.
What If You Have Minor Children Or Elderly Parents?: But, if they have children or elderly parents who might need special care then a form will off of the internet probably won't work very well. In this case you probably need a lawyer to draft your will.
Those situations are called "contingent planning." You might die before your child reaches 25 years of age for instance. Here in Denver, Colorado alone there are tens of thousands of families with minor children! Every single one of them ought to have at least SOME form of life-insurance to protect their families in case of death.
Many if not most of them have other assets like a 401k plan, a home, or other assets they might not want their children to inherit at age 18! But, kids reach the "age of majority" at 18! That's when the law says that all assets MUST be distributed to them (in many states)!
Result: "Hello, Tahiti!" And "How do you like my new Porche?" Not many 18 year olds have the ability to properly handle a sudden lump sum payment of several hundred thousand (or more) dollars!
Solution: A simple will with contingent trusts for your children until they reach the age of 25 or 30 might be desirable. But, this kind of will needs careful drafting so that it works in your state. Someone has to know what they are doing in creating it for it to work right.
Worse, if you have "a will" that really doesn't do what you THINK it is supposed to do, you'll never find out! Your heirs will find out when they inherit a big mess years from now!
Friday, May 8, 2009
Simple Will? If I Have Children, What Do I Do As A Responsible Parent?
A Continuing Series of Articles by a Denver, Colorado Estate Planning Lawyer.
Since the most recent changes to the Estate Tax it is now certain that a couple with less than $6 million or an individual with less than $3 million in assets will NEVER be subject to the Estate Tax!
What Does This Mean for Middle-Class Families?
Simply put, a single person with no dependents and an estate worth less than $3 million can have a "simple will." This is just a document to leave their estate to whomever they wish. Depending on your state laws, the entire document might fit on one legal sized page.
This doesn't take into account the need for someone to make medical or financial decisions if you are incapacitated. For that you would still need a power of attorney and a advanced medical directive or "living will."
But, as far as the Will itself goes, there's no longer the need for sophisticated tax planning for middle class families.
But, What If I Have Children? What Do I Do As A Responsible Parent?
This is a different matter. If you have children then you will still need a will with proper trust language written into it.
This is because in many states your child would inherit all your property at the age of majority (mostly 18)! So, if anything were to happen to you, your children would inherit outright any life insurance proceeds, real property, retirement accounts or other assets you might have.
Suppose both you and your spouse were killed in a car accident?
If your child were orphaned whoever was appointed guardian could keep all your assets held in trust for the benefit of your child, saving the money for necessities like clothing, medical care or education. But, unless you establish a trust in your will that provides for a longer term (until the child reaches the age of 25, say) then all your assets would by operation of state law, pass to your child at the age of majority.
Since as a responsible parent you should probably have a life insurance policy sufficient to at least send your children to college, this could be at least several hundred thousand dollars in assets.
Will your child at age 18 or 21 have the maturity to handle such a sudden windfall?
If you think, "maybe not" then you are like most parents! It might well be better sense to make sure that the money would be used wisely -- for education, to make a downpayment on a home or apartment, to start a business or to simply invest to provide long-term for the child's future for instance.
Establishing a will with a trust arrangement to handle such assets and naming a trusted business adviser or family member to act as trustee of the trust can solve this problem.
If you are a parent with a minor child, you should consider contacting an experienced Estate Planning Lawyer in your state to consider what trust arrangements you should make to safeguard your children's future.
Since the most recent changes to the Estate Tax it is now certain that a couple with less than $6 million or an individual with less than $3 million in assets will NEVER be subject to the Estate Tax!
What Does This Mean for Middle-Class Families?
Simply put, a single person with no dependents and an estate worth less than $3 million can have a "simple will." This is just a document to leave their estate to whomever they wish. Depending on your state laws, the entire document might fit on one legal sized page.
This doesn't take into account the need for someone to make medical or financial decisions if you are incapacitated. For that you would still need a power of attorney and a advanced medical directive or "living will."
But, as far as the Will itself goes, there's no longer the need for sophisticated tax planning for middle class families.
But, What If I Have Children? What Do I Do As A Responsible Parent?
This is a different matter. If you have children then you will still need a will with proper trust language written into it.
This is because in many states your child would inherit all your property at the age of majority (mostly 18)! So, if anything were to happen to you, your children would inherit outright any life insurance proceeds, real property, retirement accounts or other assets you might have.
Suppose both you and your spouse were killed in a car accident?
If your child were orphaned whoever was appointed guardian could keep all your assets held in trust for the benefit of your child, saving the money for necessities like clothing, medical care or education. But, unless you establish a trust in your will that provides for a longer term (until the child reaches the age of 25, say) then all your assets would by operation of state law, pass to your child at the age of majority.
Since as a responsible parent you should probably have a life insurance policy sufficient to at least send your children to college, this could be at least several hundred thousand dollars in assets.
Will your child at age 18 or 21 have the maturity to handle such a sudden windfall?
If you think, "maybe not" then you are like most parents! It might well be better sense to make sure that the money would be used wisely -- for education, to make a downpayment on a home or apartment, to start a business or to simply invest to provide long-term for the child's future for instance.
Establishing a will with a trust arrangement to handle such assets and naming a trusted business adviser or family member to act as trustee of the trust can solve this problem.
If you are a parent with a minor child, you should consider contacting an experienced Estate Planning Lawyer in your state to consider what trust arrangements you should make to safeguard your children's future.
Monday, December 1, 2008
Denver Colorado Estate Planning Attorney
Denver Colorado Estate Planning Attorney
If you have considered recently whether you need a will and estate plan you might want to remember the following:
Even small estates can often benefit from proper estate planning. Of course, if you have a taxable estate (in 2008 this may mean assets of more than $1,000,000) you should have an estate plan drafted by an experienced legal professional who knows the laws of your state (unless you just enjoy giving extra money to the government in taxes).* However, even for smaller estates, there are many situations you might not have considered where you and your business might benefit from proper estate planning.
Although there are many will documents out there on the web and do-it-yourself will kits, books and manuals, this is an area where there are many pitfalls for the unwary. Every state has different laws and they change periodically. A generic will or other documents may not work properly in your state or may not have the effect that you want them to, and no-one would ever know until the will is admitted to probate. Don’t leave your children or heirs with a big mess!
In Colorado you should consider the following:
* If you or your spouse have children by a previous marriage, you need a properly drafted will to make sure your assets are properly distributed at your death, so that such children are not inadvertently disinherited.
* If you are not married to your partner, you definitely need a will. Under the intestacy laws (for people who die without a valid will) the State of Colorado will inherit all your assets before your partner, who might have lived with you for years. This may not be at all what you intended! This especially applies to gay relationships which are not recognized under Colorado law.
* Generally speaking, while state probate laws are better than they once were they are still not tailored to unusual situations:
For instance, have you considered what happens if you or your spouse are disabled and not able to make critical medical and financial decisions? Who would you want to handle such matters? Normally, your spouse or family member must petition the court for an emergency temporary conservatorship or guardianship. This proceeding is expensive and can be time consuming. Worse, suppose you want your unmarried partner to make financial or medical arrangements rather than your parents or adult children? The law doesn’t recognize your partner’s rights. Who will have access to your bank accounts? Who will make important medical decisions? A durable medical and durable financial power of attorney, plus a Colorado living will can easily be drafted to handle such situations, but only before, not after an emergency! If you are unconscious for instance, you cannot sign legal documents! Then it will be too late and you or your family may be stuck with needless delay and thousands of dollars in unnecessary legal fees!
The important point to consider here is that proper planning empowers you! You make the decisions in advance instead of leaving critical decisions about your life to others, even family members!
Business and Succession Planning: Another area that can routinely benefit from proper estate planning is planning for your business. What happens if you or your business partner were to die or become seriously disabled, who would inherit there share of the business? Have you got key person insurance to handle the distribution of assets to your partner’s spouse or heirs?
These matters may seem unduly remote, but suddenly finding yourself in business with your former partner’s spouse or heirs or having to sell off the business to satisfy the claims of your partner’s estate or creditors can be devastating. What if it’s a bad time to sell? What if you want to continue in business, but lack the capital assets to continue after division and sale of the business?
There are many other similar contingencies. This is where proper succession and business planning go together to protect your assets. Do you want your children to have a share of your business while you are alive, but you want to maintain control?
If you are in business you got an estate plan to cover these and other contingencies?
There are solutions to these and other problems that can easily arise. Proper business planning is essential to avoid difficulties in the future. Consulting experienced legal counsel can be essential in dealing with these and a host of other issues surrounding your small business. A free initial consultation may help you decide whether these or other business planning techniques are right for you or your business.
Contact John V. Stege, Attorney at Law
My Website:My Word-Press Web-site:
A Site that has articles on Estate Planning:
*As of December 2008 it appears that President Obama will allow the Bush tax cuts to expire. If so, this would mean that the tax threshold for estate tax would revert to the situation in 2001, which would be a $1,000,000 exemption. Anyone with more than this amount could potentially be subject to tax. This area of law is most uncertain, so maximum flexibility in creating an estate plan is necessary.
Thursday, November 27, 2008
"No Jury In The World Would Convict Me!": Surviving Your Family Holidays!
If your family is at all like mine you probably remember the time when your father got drunk at your uncle's house on Christmas eve and insisted on wrestling with you and the relatives had to step in and break it up to stop him from breaking the furniture.
Or perhaps you recall the time your father's friend, whom he invited to stay the weekend over Thanksgiving when you where 16 tried to put the moves on you and your dad just laughed. Or the time your parents forgot you were with them and accidentally left you at the mall one Christmas.
But, the real recurring family trauma tends to be not those never-to-be-forgotten debacles you can tell your grand-children, but those every-single-year events where you KNOW what your relative is going to say. And you're all tense because you KNOW they're just waiting to say it. It happens every year. It's going to come up. And of course, it does.
Examples:
"So have you found a boyfriend/girlfriend yet?"
"Can you really afford that?"
"Didn't you just give up smoking recently?"
"When are you going to stop fooling around and get a real job?"
My family used to have a yearly Christmas sport of the "family argument." Everybody had a role in the fight and the results were pre-ordained.
No matter how many years pass. All you have to do is enter your family home and by magic you are now 9 years old again. It never fails. No matter how many times you tell yourself "I'm not going to react to Stella when she tells me I'm overweight" the minute she opens her mouth all our good resolve goes out the window. Family get under your skin.
But everything doesn't have to end up like this! There are options:
1. Realize that it could always be worse, and actually IS in other people's families: Like this poor woman whose mother-in-law threw her out of the house when they came to visit over Christmas holiday and she had have her parents wire money so she could fly home alone - her idiot husband didn't want to leave!
If that doesn't help:
2. This guy's advice seems some of the best: "I always respond 'Thank you for your input!'" when relatives say something insensitive that they KNOW is going to get under your skin that might be the best way to react.
3. Gretchin Rubin has: "7 Ways To Get Along With Your Relatives Over Thanksgiving" the best of which is probably the simple but underrated "don't stuff yourself and don't drink too much" concluding that "I basically had to give up drinking because alcohol makes me so belligerent."
Unfortunately, we can't always moderate the behavior of our relatives!
So perhaps the best advice is to surrender the idea of control. Many people have a mental image in their minds of "how the holiday should go." Perhaps it's a Halmark Family Christmas, perhaps it's just that "I pray uncle Charlie won't get drunk and try and feel up my date this year."
But, nothing ever goes the way it "should." And it's this "should" that causes so much stress. I was a self-expression coach a year ago and one woman in my group actually bought two Christmas trees every year -- one for her 8 year old daughter to decorate, and one to decorate "the right way" because having the decorations not evenly distributed over the tree in the "proper" fashion bothered her.
Needless to say that Christmas was such a stressful time of year for her that she emerged from the holidays totally exhausted and in need of a "vacation."
Imagine the "lesson" this taught to her poor daughter that nothing she ever did was "good enough." And of course, this woman was only carrying on the "lessons" of her own childhood that SHE wasn't good enough.
For some reason the holidays bring out the worst in some relatives.
But, you can accept that although you're NOT going to be able to prevent Aunt Muriel and your mom from fighting if they insist on fighting again this year, YOU don't have to become emotionally involved in it. The key is to give up the idea that things "shouldn't be like this."
You may be able to help by making a public declaration of your commitment to family peace this year, but be prepared to back it up if push comes to shove.
Overall having a sense of humor helps best and not taking yourself too seriously is a big advantage. So, instead of yelling at my father when he tells me "looks like you're getting a little lardy there!" I can always tell him "I'd prefer you didn't comment on my weight because it bothers me." Or, you can say "maybe you have some exercise tips for me!"
It couldn't hurt. And remember that whatever happens over the holidays, January 1st is only around the corner.
Or perhaps you recall the time your father's friend, whom he invited to stay the weekend over Thanksgiving when you where 16 tried to put the moves on you and your dad just laughed. Or the time your parents forgot you were with them and accidentally left you at the mall one Christmas.
But, the real recurring family trauma tends to be not those never-to-be-forgotten debacles you can tell your grand-children, but those every-single-year events where you KNOW what your relative is going to say. And you're all tense because you KNOW they're just waiting to say it. It happens every year. It's going to come up. And of course, it does.
Examples:
"So have you found a boyfriend/girlfriend yet?"
"You'll just have to lower your sights a bit. One can't be too choosy at your age!"
"When are you two going to get married/start a family?""Can you really afford that?"
"Didn't you just give up smoking recently?"
"When are you going to stop fooling around and get a real job?"
"That's ok dear. You'll find a man. You poor thing! We'll just all keep praying for you."
To be followed shortly by:
"Well, you're hitting the bottle a bit early today aren't you?"
My personal favorite is my dad's annual taunt: "You're getting a bit LARDY there! Getting a bit of a gut on you! Now I can still fit into my size 29 pants just like when I was in the Navy! Blah, blah, blah."
My family used to have a yearly Christmas sport of the "family argument." Everybody had a role in the fight and the results were pre-ordained.
No matter how many years pass. All you have to do is enter your family home and by magic you are now 9 years old again. It never fails. No matter how many times you tell yourself "I'm not going to react to Stella when she tells me I'm overweight" the minute she opens her mouth all our good resolve goes out the window. Family get under your skin.
But everything doesn't have to end up like this! There are options:
1. Realize that it could always be worse, and actually IS in other people's families: Like this poor woman whose mother-in-law threw her out of the house when they came to visit over Christmas holiday and she had have her parents wire money so she could fly home alone - her idiot husband didn't want to leave!
If that doesn't help:
2. This guy's advice seems some of the best: "I always respond 'Thank you for your input!'" when relatives say something insensitive that they KNOW is going to get under your skin that might be the best way to react.
3. Gretchin Rubin has: "7 Ways To Get Along With Your Relatives Over Thanksgiving" the best of which is probably the simple but underrated "don't stuff yourself and don't drink too much" concluding that "I basically had to give up drinking because alcohol makes me so belligerent."
Unfortunately, we can't always moderate the behavior of our relatives!
So perhaps the best advice is to surrender the idea of control. Many people have a mental image in their minds of "how the holiday should go." Perhaps it's a Halmark Family Christmas, perhaps it's just that "I pray uncle Charlie won't get drunk and try and feel up my date this year."
But, nothing ever goes the way it "should." And it's this "should" that causes so much stress. I was a self-expression coach a year ago and one woman in my group actually bought two Christmas trees every year -- one for her 8 year old daughter to decorate, and one to decorate "the right way" because having the decorations not evenly distributed over the tree in the "proper" fashion bothered her.
Needless to say that Christmas was such a stressful time of year for her that she emerged from the holidays totally exhausted and in need of a "vacation."
Imagine the "lesson" this taught to her poor daughter that nothing she ever did was "good enough." And of course, this woman was only carrying on the "lessons" of her own childhood that SHE wasn't good enough.
For some reason the holidays bring out the worst in some relatives.
But, you can accept that although you're NOT going to be able to prevent Aunt Muriel and your mom from fighting if they insist on fighting again this year, YOU don't have to become emotionally involved in it. The key is to give up the idea that things "shouldn't be like this."
You may be able to help by making a public declaration of your commitment to family peace this year, but be prepared to back it up if push comes to shove.
Overall having a sense of humor helps best and not taking yourself too seriously is a big advantage. So, instead of yelling at my father when he tells me "looks like you're getting a little lardy there!" I can always tell him "I'd prefer you didn't comment on my weight because it bothers me." Or, you can say "maybe you have some exercise tips for me!"
It couldn't hurt. And remember that whatever happens over the holidays, January 1st is only around the corner.
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