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The 6 Questions You Must Ask Before You Spend a Dollar on Your Will, Trust or LLC. Click here
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Allison Consulting came highly recommended to me by my professional advisor to handle my estate planning needs as well as the set up for any new business entities which...
Isabella Rogers
Davis, CA
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As you may know, the current estate tax law is a mess. A person dying this year can exempt $2,000,000 of assets from the estate tax (the exemption amount). In 2009, the exemption amount increases to $3,500,000. In 2010, there is no estate tax. That means even Bill Gates could die that year and his family would not pay an estate tax. However, in 2011, the exemption amount drops to $1,000,000. This would put many estate's in the bull's eye of a big tax (45%).
For years, the House has passed legislation to eliminate the estate tax, while the Senate has stalled. Now, in the midst of a dead heat presidential election season, the Senate has just passed a budget resolution. A budget resolution is not law, but it indicates the Senate's future intentions.
Finance Committee Chairman Baucus's amendment 4160 to the Senate Budget resolution was the only estate tax amendment to pass. It would make the 2009 law permanent — a $3.5 million exemption ($7 million per couple) with a 45% rate. It was approved 99-1. Read more |
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Posted on: 04/21/2008 by Clark Allison
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Many of my new clients ask me to review their existing living trusts. Some are good, some are bad. Almost all of them do not protect the inheritance from lawsuits and divorce. Most estate planners - assuming they are skilled and experienced - can help you avoid probate and estate taxes. That's where the work usually ends. We believe that is incomplete planning.
Why not draft the living trust to protect your children's inheritance from lawsuits and divorces?
If you go through the time and expense to design and implement your living trust plan, why not do it right and protect the inheritance? Most trusts I review are written to distribute the inheritance to the children at a certain age or in a staggered distribution - such as at age 25, 28 and 30.
We like to ask our clients why would you design your living trust so your children are given an inheritance that at a certain age is unprotected from lawsuits and divorce claims? The better approach is to design the living trust so each child's inheritance remains in a separate protected trust that at a certain age or benchmark event (a certain income level, graduation from college or grad school, age or ?) the child can take over as his own trustee. The assets, however, will remain protected in that child's trust. Read more |
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Posted on: 04/21/2008 by Clark Allison
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One of the most important contract a business owner can make is a Buy-Sell Agreement. Unfortunately, it’s a contract few business owners take the time to make. In its basic form, a buy-sell agreement controls who gets the owner’s share of the business when he dies or becomes disabled.
An example: You and your partner started and operate your business. Your partner dies, and his wife and kids end up owning his share of the business. Do you want to be partners with his wife and kids? They may be nice people, but they can’t replace your partner. They don’t know the business and don’t have the skills to take on his responsibilities. You would like to buy out your deceased partner’s share from his family, and they would like the cash, but you have no cash. As a result, your partner’s wife and kids become your new partners with a one-half ownership and one-half controlling share of the business. They contribute nothing to the ongoing success of the business, but they have a say in all your business decisions. Read more |
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Posted on: 04/21/2008 by Clark Allison
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Recently, one of my friends emailed me the following:
Clark, can you help me. As you know my dad died several years ago. My mom is 80 and doing well but she is afraid to discuss estate planning. I know she has a simple will which leaves all to my brother and sister and me. Her house is worth about $800,000 (though she and my dad bought it for $16,000 way back when - not even a down payment today!) and she has some investment and savings accounts. I know she needs a revocable living trust so we won't have to go through probate, but I don't know how to broach the subject with her. Could you send me some basic information I can give her and my brother and sister to help them see the need for planning?
This is not the first time I've received this request. Below is a draft of a letter I sent my friend to give to his mom. I think it lays out the issues in a gentle and informative way.
Dear Mom:
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Posted on: 04/21/2008 by Clark Allison
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