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Time to check the list for financial and estate planning goals by Corliss Law Group Estate Planning Law Corporation

Time to check the list for financial and estate planning goals by Corliss Law Group Estate Planning Law Corporation | Corliss Law Groups |

It’s time to make a list and check it twice — not by Santa, but for financial and estate planning goals.

“There’s nothing magic about reviewing goals at year end, but it is a good time to refocus people on their financial goals,” said Michael Joyce, co-founder and president of JoycePayne Partners, a Richmond-based financial planning firm.

“People have been working hard all year, and they are more focused on the day to day, not the big picture, long-term goals,” he said.

Joyce recommends that consumers make sure they have made beneficiary designations on their retirement accounts and 401(k) plans, that they double-check the accuracy of their wills and that they don’t overlook long-term disability coverage.

It’s also important to consider tax consequences. “In addition to looking at goals, we try at year end to look at strategies for reducing taxes.”

L. Michael Gracik Jr., managing partner at Keiter, a Henrico County-based accounting firm, said year’s end is a good time to review estate planning documents in light of changes to the estate tax laws.

He noted two changes resulting from the American Tax Payer Relief Act of 2012:

• The lifetime estate and gift tax exemption of $5 million per person — money that would be free of estate and gift taxes — was made permanent. The exemption was indexed for inflation, resulting in an exemption of $5.25 million for 2013 and $5.34 million for 2014.

The $5 million exemption was set to expire and revert to $1 million this year.

“Many folks had their estate planning documents drafted when exemption amounts were much lower, say, for example, $2 million,” Gracik said. “Their documents may refer to the old exemption amounts and may need to be changed to accomplish the intended purpose in light of the new amounts.”

• The portability of the exemption amount between spouses was made permanent.

Consider, for example, a couple where one spouse has $2 million in assets and the other has $7 million. If the spouse with assets of $2 million died first, under the prior law, $2 million would have been the extent of the exemption, not $5 million, and the extra $3 million of unused exemptions would have been lost.

With portability, the executor could pass $3 million in unused exemptions to the surviving spouse. The surviving spouse’s exemption then becomes $8 million, instead of $5 million. As a result, all $7 million in assets could pass to the next generation without any estate tax.

“With proper planning, a married couple can pass on assets of $10.5 million to their heirs free and clear of estate tax,” Gracik said.

“Everyone needs to revisit estate planning documents to make sure they still make sense.”

It’s also time to review annual exclusion gifts, Gracik said.

The maximum annual amount that a donor can give tax free to any one person is $14,000. There is no carry-over of this annual exclusion from one year to the next.

“People need to decide before the end of the year whether they need to make additional gifts to use up the exclusion,” he said.

Gracik added that a 529 college education savings program is one of the best ways to save for a child’s education. It can be the avenue for the annual tax-free gift up to $14,000.

A married couple effectively gets double the annual exclusion. A married couple can gift $28,000 to an individual before having to touch the lifetime exemption for either of them.

Another new law that took effect this year is the net investment income tax, a 3.8 percent surtax on investment income of individuals, estates and trust.

The tax is part of the Affordable Care Act, enacted to help pay for health care changes.

It affects single people with gross incomes of more than $200,000 and married couples filing jointly with gross incomes of more than $250,000. It also affects some small businesses, people who invest in real estate and people who rely on income from trusts.

Trusts have lower thresholds than individuals for the 3.8 percent tax to kick in.

A trust will pay a 3.8 percent tax on any income greater than $11,650 a year in addition to a 20 percent capital-gains tax if income is generated from the sale of an asset such as stock.

“It’s important to take a look at where you stand with capital gains and losses,” Gracik said. “Some people may want to take losses before the end of the year to reduce their exposure to the net investment income tax.”

The end of the year also is time to get a handle on investment expenses, such as investment interest and state income taxes on investment income, because these expenses can reduce exposure to the tax, Gracik said.

Finally, this is the time of year to review investment portfolios.

“We’ve seen a big run-up in the stock market in 2013,” Gracik said. “It’s a good idea not to get complacent.”

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Protect Your Asset by Corliss Law Group Estate Planning Law Corporation

Protect Your Asset by Corliss Law Group Estate Planning Law Corporation | Corliss Law Groups |



The world we live in is growing in complexity and risk.  There were around 16 Million lawsuits in the United States in the year 2002 alone. Divorce is a fact of life, especially in California.  Even some of the people you love the most may need protection from themselves, such as those who suffer from drug or alcohol dependency, or who lack the maturity to handle a large inheritance on their own. Jury damage awards seem to be steadily rising.  Business failures are common in normal times but growing and quite unexpected in times of recession.  Taxes, regulation and compliance are becoming an increasing cost of doing business.  Asset protection and the minimization of risk should be one of the cornerstones in every business plan and in every life plan. Asset protection is not only about shielding your assets from outside attack, it is or should be about reducing your exposure to the type of events from which liabilities often arise.


It is planning our way around the landmines that constantly appear in our paths, choosing the better path and learning to identify and see pitfalls before they become a problem –i.e. when we are in the air on the way to the bottom. We have developed a detailed Risk Audit Assessment process which can be applied at any stage to identify areas of concern and heightened risk and we then work with you to develop a strategy to minimize or avoid the risk you are likely to face.


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Corliss Law Group Estate Planning Law Corporation: Giving to Charity? Watch Out for These Tax Traps

Corliss Law Group Estate Planning Law Corporation: Giving to Charity? Watch Out for These Tax Traps | Corliss Law Groups |

To give is divine. To err while giving is human.

For many donors eager to nail down tax deductions, contributing to charity can be as simple as writing a check. But tax laws often can be surprisingly tricky. While there are many tax-smart ways to donate, it can also be easy to make costly mistakes.

The mistakes run the gamut. Many thorny problems, for instance, stem from uncertainty over how to value gifts. Other donors stumble because they don't pay attention to the fine print on such long-cherished techniques as giving stock to charity. And still others trip over paperwork issues, such as getting proper acknowledgment for gifts on a timely basis.

Many generous donors "have learned their lessons the hard and expensive way," says Victoria Bjorklund, a charitable-giving consultant and a retired partner at the law firm Simpson Thacher & Bartlett LLP.

How can donors avoid these traps? It may help to keep in mind the following (seemingly) simple ideas—as well as a few common errors to avoid:

Give Away Your Winners
This is an especially good year to consider giving securities that are worth far more than you paid for them. Stock prices this year have surged, and 2013 brought higher taxes for many investors.

This "could be a great strategy," says Justin T. Miller, national wealth strategist at BNY Mellon Wealth Management's office in San Francisco.

In a typical case, you give a qualified charity shares of publicly traded stock that have risen sharply in value and that you have owned for more than one year. You deduct the fair market value of the stock—and you don't owe a capital-gains tax.

If you donate appreciated stock you've held for a year or less (considered "short term" gains), you generally can deduct only your cost "basis"—that is, your cost for tax purposes—not market value.

Don't make the mistake of donating securities that are worth less than your tax cost. Instead, sell those losers, donate the proceeds to your favorite charity and use your capital losses to trim your taxes. Capital losses can offset capital gains on a dollar-for-dollar basis.

If losses exceed gains, deduct net capital losses of as much as $3,000 a year—$1,500 if married and filing separately from your spouse—from wages and other ordinary income. Carry over additional losses into future years.

Get It In Writing
One common error is making a gift of $250 or more and neglecting to get an acknowledgment from the charity saying whether or not you received something in return, such as free tickets. Even if you didn't get anything, make sure the charity says so—and gives you a description of any property you gave.

If you did get something in return, the acknowledgment typically must include a good-faith estimate of the value. Rules can vary depending on several factors, such as the size and type of your gift. See IRS Publication 526.

Don't wait to get the receipt until you're audited years later. You need "contemporaneous" receipts, Ms. Bjorklund says. Be sure to get a proper receipt by the date you file your return for the year you make the contribution—or the due date, including extensions, for filing the return—whichever is earlier.

"The IRS pays a lot of attention to substantiation requirements," says Eileen Donahue, director of planned giving and senior philanthropic adviser at Yale University.

If you get something in return for a gift, you typically can deduct only the amount of your gift that exceeds the value of that benefit.

Nail Down Value
Problems can crop up with valuing donations of a wide variety of noncash items such as shares in a family business, real estate, conservation easements, paintings, antiques and many other items. "It is very easy to make major mistakes," says Carolyn M. Osteen, a consultant to the Ropes & Gray LLP law firm and co-author with Martin Hall, a Ropes & Gray partner, of a book on tax aspects of charitable giving.

For instance, she says, "many donors make mistakes being overly aggressive on valuations." That can lead to painful and expensive battles with the IRS.

Other donors stumble because they didn't follow the rules on getting an expert appraisal from a qualified appraiser, Ms. Osteen says. There are strict rules on when you need an appraisal, what must be in it and the qualifications to be an appraiser. (See IRS Publication 561 at

The rules can be tricky even with donations of some household items. For example, you must include with your return "a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500," the IRS says in Publication 561.

The bottom line: If you are making a significant gift requiring an appraisal, consider hiring a reliable tax pro to walk you through the fine print.

Tap Your IRA
If you're 70½ or older, you can transfer as much as $100,000 from an Individual Retirement Account this year directly to qualified charities without having to include any of that in your income. The transfer will count toward your required minimum distribution.

You can't deduct direct transfers from IRAs as charitable gifts, but this technique still can be very smart for many taxpayers. That's because transfers aren't considered income that would inflate your adjusted gross income and could lead to loss of key deductions and exemption amounts, as well as possibly subjecting you to higher taxes for other reasons.

"That's a tremendous opportunity, especially for higher-income taxpayers," says Mr. Miller of BNY Mellon Wealth Management. "A lot of our clients are taking advantage of that."

But don't procrastinate. The law allowing you to make these transfers is scheduled to expire at year end. Nobody knows whether Congress will extend this and dozens of other laws.

A few points to bear in mind: This is for IRAs, not 401(k) plans. It doesn't apply if you are younger than 70½. Make sure you choose "qualified" charities. (For example, donor-advised funds don't qualify under this technique.) And make sure the transfer goes directly to the charity.

"Many donors have found this opportunity a very attractive way to make gifts," says Ms. Donahue of Yale University. "It's unclear at this point whether this opportunity will still exist in 2014."

Watch Out For Car Trouble
Many charities would be delighted to take your unwanted cars, trucks and other types of vehicles.

But if you donate, say, a car worth more than $500 and the charity (or middleman) turns around and sells it, you typically can deduct only the sale proceeds—even if you think it was worth much more.

Here's an example from the IRS: Suppose you donate a car you bought three years ago for $9,000. A used-car guide says the car is worth $6,000, but the charity sells it for only $2,900. Typically, you could donate only $2,900.

Even so, there are a few key exceptions that might enable you to deduct market value. Thus, consider shopping around before choosing a charity. For example, one exception would be if the charity makes "a significant intervening use" of your vehicle, such as using it to deliver meals to the poor.

If you use your car to help a charity, you typically can deduct your actual expenses (such as oil and gas costs directly related to getting to and from the place you volunteer) or use the standard rate of 14 cents a mile. But you can't deduct the value of your time or services.

Look Into Donor-Advised Funds
Donor-advised funds are a convenient, simple and tax-efficient way to donate. You make your gift to the fund, and then you can suggest how the money should be distributed to your favorite causes either now or in future years.

But there are some key nuances that you should remember. You claim your deduction for the year in which you fund the account—even if you wait until future years to ask the fund to make grants. Don't make the mistake of assuming that if you make a donation now, you must ask the fund to give away all that money this year in order to nail down your deduction for this year.

Naturally, donations must go only to qualified charities. For example, you can't ask the funds to buy tickets for you or give money to your child.

There can be significant differences among funds. Before you sign up, make sure you check into such things as grant-making policies, the minimum size of grants and the minimum initial account size.

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Blogs Posted in Corliss Law Group Estate Planning Law Corporation

Blogs Posted in Corliss Law Group Estate Planning Law Corporation | Corliss Law Groups |

Business Exit Planning Using Charitable Strategies


Business owners usually have four goals when they leave their businesses: retire from the business; sell to a new owner (family members, employees, or third parties); minimize taxes and maximize profits. For those who are already charitably inclined, business exit planning using charitable tools allows them to add a fifth goal: doing good things for their favorite charity or their community.


In this issue, we continue our series on business exit planning by examining some frequently used charitable planning tools and some common pitfalls.


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