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SLATs

Spousal Lifetime Access Trusts (SLATs): FAQs – 2022 Update

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What is a Spousal Lifetime Access Trust (SLAT)? It is a trust that you (the grantor) set up for the benefit of your spouse and your descendants. You would make a gift to the SLAT, using some of your federal lifetime gift exemption (currently $12.06M in 2022) to shield that gift from gift tax. While you give up all your rights and control over the gifted assets, your spouse will have access to the gifted assets as beneficiary of the SLAT. When does it make sense to have a SLAT? You should consider creating a SLAT if you have a…
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new york estate tax cliff

Understanding New York’s Estate Tax “Cliff” – 2022 Update

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In 2014, dramatic changes were made to New York’s gift and estate tax law. For many clients, the subject of the New York estate tax “cliff” continues to remain a source of confusion. This is for good reason. The New York cliff is not easy to understand, nor is it easy to know how it may impact your particular situation. The answers below are intended to guide those who remain baffled by the New York estate tax cliff. Does New York have an estate tax? Yes. New York, like several other states, has a state estate tax. This means that…
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account beneficiaries

Pay Attention to How Your Accounts are Titled

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Do you have sizeable jointly-held accounts with your spouse? Is your estate large enough that it could be subject to federal or state estate taxes? If you answered yes to both of these questions, then pay attention, because your Will may not do what you think it does. What’s the problem here? Your Will is not the end of the story. Your Will might only “work” if your accounts are titled properly. It’s not uncommon for us to see well-drafted Wills with solid tax planning incorporated into the estate plan. In the case of a high net worth client, this…
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inherited IRA

What to Do If You Inherit an IRA Post SECURE-Act

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Introduction If you inherited all or part of an individual retirement account (IRA) or a qualified retirement plan, you may be wondering what you should do with the assets or the account. But the first question might be, what can you do. The rules governing inherited IRAs are complex – all the more so since the passage of the SECURE Act of 2019. The options available to you will depend on several factors, including the type of account you inherited, when you inherited it, your relationship to the deceased, and at what age the death occurred. In the following paper,…
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A couple reviewing their revocable trust with their Wealthspire Financial Planner.

Revocable Trusts vs. Irrevocable Trusts: What Is the Difference?

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A trust is an ideal way for individuals to transfer assets either during life or after their passing. At a basic level, a trust is a separate legal entity created to hold certain assets. Once these assets are placed in the trust, they are managed by the trustee. The trust document instructs the trustee on how to manage the trust assets and distribute them to beneficiaries. Individuals and families often use trusts for estate planning purposes, such as to avoid probate, minimize estate taxes, and seamlessly transfer intergenerational wealth.  Let’s take a look at revocable and irrevocable trusts and the…
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dow 36000

Dow 36,000 Revisited

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On October 1, 1999, in the midst of the tech stock mania of that era, James K. Glassman and Kevin Hassett published their notorious book, Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market. When the tech bubble burst the next March, Glassman and Hassett became the butt of many jokes for the audacity and timing of the book. In full disclosure, I know and like Jim Glassman and he has been very kind to me in my career; but Jim and Kevin forgot a seminal piece of old Wall Street wisdom – it’s…
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The Case for Exit Planning & Why I Earned My Certified Exit Planning Advisor (CEPA) Credential

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In my wealth management practice, I focus on helping business owners and corporate executives achieve quality of life and financial freedom. For some time now, I have been interested in exit planning for business owners. This interest led me to engage with other advisors and business owners as a Tri-State member of the Exit Planning Exchange and to obtain my CEPA (Certified Exit Planning Advisor) credential from the Exit Planning Institute. As CEPA professionals, we think of exit planning as a roadmap for fulfillment in our clients’ business and personal lives. We want to help our client entrepreneurs create transferable…
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tax law changes

Tax Proposals: Big Changes to Come

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On November 3, the House Rules Committee updated the October 28 revised reconciliation bill for the Build Back Better Act – H.R. 5376, which differed from the original draft released on September 13. Below is a summary of the changes: Income and Investments The top individual tax bracket remains 37% (versus an increase to 39.6%). Enacts a 5% surtax on modified adjusted gross income over $10,000,000, and an additional 3% surtax on modified adjusted gross income over $25,000,000 (versus a 3% surtax on incomes above $5,000,000). Trusts and estates will be subject to lower thresholds at $200,000 and $500,000 of MAGI (newly added). The top capital…
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investors just starting out

3 Financial Skills for Investors Who Are Just Starting Out

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When starting out, knowing how to manage your money can feel daunting. In this post, we will offer simple steps to help you begin taking control of your financial life. #1: Set Priorities and Goals When you get your first paycheck, it is easy to want to spend it all right away, but what are all the things you should be putting your money toward with these limited resources? Strategies to help you save regularly and effectively: Automatically direct a portion of your paycheck to your separate savings account. Studies show that if you don’t see the money, it makes…
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lifestyle creep

3 Tips to Help Junior Partners Avoid Lifestyle Creep

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Lifestyle creep, or lifestyle inflation – when expenses rapidly rise to match newfound income – ensnares countless newly minted partners. Often there are underlying social pressures from peers or colleagues to keep up with new levels of conspicuous consumption. New indulgences and one-time splurges quickly become everyday necessities. It may begin innocently enough with a new car, a small remodel to an existing home, or a generous contribution to one’s alma mater, but it can quickly snowball into completely spending bonus checks before they’ve even been deposited. So, who cares? After all, you’ve sacrificed a lot to get where you…
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