As we get closer to the repeal of the New Jersey Estate Tax on January 1, 2018, it is important to remember that New Jersey has NOT gotten rid of its inheritance tax. Accordingly, if you wish to leave money to brothers, sisters, nieces, nephews, friends or a significant other (besides a spouse) and if […]
A colleague of mine, David Saltzman, has written a nice article on the Basics of Irrevocable Life Insurance Trusts. As he points out, setting up a life insurance trust is a great way to minimize your estate tax liability and it can be especially important in New Jersey. Dave is a great resource and knows […]
In New Jersey, tax planning and estate planning can be very important. I’d like to show you a good representation of what a plan can do for a married couple with $2,000,000 in assets. Let’s assume that the couple has $800,000 of life insurance, a house worth $400,000, retirement accounts of $200,000, brokerage assets of $350,000, and […]
One of the biggest misconceptions people have about life insurance is how it should be taxed. Most people think that they can receive the proceeds completely tax free. Upon the death of the insured, the beneficiary of a policy can almost always receive the proceeds without paying an income tax. However, estate taxes and inheritance […]
I was speaking with a colleague of mine the other day and the subject of college loans came up. It occurred to us that with the new stricter lending regime, it is probably more important than ever for a parent to consider getting life insurance on a child of theirs if they are co-signing a […]
Prior to discussing estate planning for non-traditional couples, it is important to understand that we agree on a common definition for a traditional couple. The notion of a “traditional couple” has advanced over recent years. Until as recently as 2015, same-sex couples could not legally marry, which from an estate planning perspective, meant that a […]
The Importance of Proper Trust Maintenance The trustee of an irrevocable life insurance trust (ILIT) must follow numerous rules and regulations laid out by the IRS in order to exclude the ILIT’s policy proceeds from federal and state estate tax. The insured and the trustee should check to see that these rules and regulations are […]
I. General Benefits Tax savings Control of assets after death Second to die policies typically provide guaranteed money for your heirs which is cheaper to obtain than single life premium policies. II. Reasons to establish a Second to Die Life Insurance Trust Pay taxes upon death for assets outside of trust Provide guaranteed funding for […]
Irrevocable Life Insurance Trusts (ILIT) Many people create irrevocable life insurance trusts (ILIT) for the benefit of minor children. The common scenario is that the grantor will create an ILIT and his or her spouse will act as trustee of such trust. Because ILITs are established as Crummey trusts, a contribution notice should be sent […]