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Posted in Estate Planning

Inchworm walking on a branchAround this time every year, the IRS looks at whether there has been a year-over-year increase in the Consumer Price Index and announces inflation adjustments to the federal gift and estate tax exclusion amounts for the following calendar year. In general, these exclusion amounts tell a U.S. citizen or resident how much he or she can give away without incurring gift and/or estate tax on the transfer. Individuals and couples make use of these amounts, both during lifetime and at death, to transfer wealth to family and friends on a tax-free basis. When the amounts go up, it presents an opportunity to increase the tax-free giving. Given that inflation has been relatively sluggish, will any of these exclusion amounts be higher in 2017 than they are currently? According to the announcement just released by the IRS, the answer is “yes” for some but not all.

Identity Theft Abstract

Identity theft happens when your personal information is stolen. Perhaps the thief steals your bank card or credit card, or the thief obtains your social security number and date of birth to open credit card accounts, credit lines or file for an income tax refund. Even the most prudent person can fall victim to identity theft. Sometimes we will never know how or where the thief obtained the victim’s information. If you are a victim of identity theft you should take these three actions.

1. File a police report with your local police department. This is a critical step, as it will allow you to place a seven year security freeze on your credit report. This will also serve to protect you in the future, because it establishes a record of the identity theft.

Traditionally, families have relied on valuation discounts when transferring interests in closely-held family businesses to the next generations. Transfers of minority interests in a closely-held family entity were generally allowed a minority discount when valuing interests for estate and gift and tax purposes, primarily due to the inability of a minority shareholder to compel a liquidation of the entity. These discounts often proved to be a helpful way for the family to avoid the need to sell the family business to pay estate taxes, by reducing the gift and estate tax burden on such transfers. The proposed regulations effectively eliminate any minority discounts and largely any marketability discounts on the valuations for estate and gift tax purposes. If these regulations are finalized, they would impact transfers between family members of interests in family-controlled corporations, partnerships, LLCs and other business entities, regardless of whether the business is active or passive.

Posted in Philanthropy

US Capitol Building- Washington D.C.

Senators John Thune (R-SD) and Ron Wyden (D-Ore) introduced the Charities Helping Americans Regularly Throughout the Year (CHARiTY) Act (S. 2750, summarized here) to “encourage charitable giving and make it easier for foundations and other tax-exempt organizations to conduct their charitable mission.” This legislation, among other things, streamlines operations by changing the private foundation excise tax to a flat one-percent tax, creates a limited exception to the private foundations’ excess business holdings rule, allows the Treasury Department to update the standard mileage rate applicable to personal vehicle use by volunteers (see here for current rate) and, most significantly, expands the IRA charitable rollover to include donations to donor-advised funds. This last measure is viewed as a logical next step that builds upon the Protecting Americans from Tax Hikes Act of 2015 (PATH), which President Obama signed into law last December and was regarded by many as only a partial victory for the charitable sector. While PATH provided certainty for philanthropic planning by making the IRA charitable rollover permanent, as explained here, it did not go as far as extending the reach of the rollover benefit to donor-advised funds.

Posted in Estate Planning

Now that sunshine and blue skies are upon us, people are opening their summer homes for the season. Happy memories of family vacations and gatherings often motivate parents to seek out ways to preserve their second home for their children, grandchildren, and great-grandchildren. Whether you’ve got a compound on the Cape or a cabin on Winnipesaukee, it’s an appropriate time to think about how these properties currently fit into your estate plan. It’s also crucial to consider how such decisions will affect those who love and use these properties now and might want to continue doing so after you’ve passed away.

Posted in Estate Planning

During the Perkins School for the Blind annual fundraising gala, Perkins Possibilities 2016, we witnessed the launch of the powerful social change campaign called BlindNewWorld. The campaign aims to help the sighted population break down barriers to blind inclusion like discomfort and fear and create a more blind-friendly world. This got us thinking: how can we do a better job of taking the needs of clients who are blind or visually impaired into account when designing our estate planning services? We came up with three ideas we want to share.

From left to right: Maria Teresa Kumar, Shiza Shahid and Robert Ross (President and CEO, The California Endowment) at the Council on Foundations 2016 Annual Conference.

From April 9 to April 12, I had the good fortune to be part of the Council on Foundations 2016 Annual Conference. The Council welcomed nearly 1,400 leaders in the philanthropic sector to Washington, D.C., for plenary programs and concurrent sessions focused on "the Future of Community through the lenses of identity, purpose, and place." Here are four of my biggest takeaways from the Conference:

1. When you want to fill a room to capacity, talk about the Chan Zuckerberg Initiative. One concurrent session was so popular that attendees filled the seats, stood along the walls and sat on the floor. The topic that drew this crowd was "Philanthropy Outside the Tax-Exempt Model." The discussion covered the alternative vehicles for individual and corporate giving, such as public benefit corporations, L3Cs and B-Corp certified companies, which have been embraced by a new generation of philanthropists, most notably Mark Zuckerberg and his wife Dr. Priscilla Chan.

Posted in Philanthropy

Close up of finger touching calculator3 Things to Remember About Documenting Charitable Gifts of Property, Securities and Art.

Last month in this blog, we described five ways to be diligent about documenting charitable gifts of cash or out-of-pocket expenses to preserve your tax deduction. But what about gifts of property – does giving something other than cash change the taxpayer’s responsibilities? According to the tax regulations, the answer is no and yes.

Posted in Philanthropy

Tax Form- Charitable Deductions

How can you determine if you’re allowed to claim a charitable deduction for amounts you paid to support your favorite charities? And what paperwork do you need in hand before you can claim that charitable deduction? Here are five ways to observe the requirements for charitable gifts of cash.

Every Massachusetts homeowner should be aware of the opportunities that are available for protecting the equity in the family home. A recent bankruptcy case, In re: Nealon, reminds us of one such opportunity – the Massachusetts homestead exemption -- and its power to stave off creditors, especially when the homeowner takes the simple steps necessary to maximize the amount entitled to protection.

No two families are exactly alike, but all family members share common opportunities and challenges as they seek to take care of each other and leave a lasting legacy the next generation can build on. In this blog, the experienced attorneys in Nutter's Trusts and Estates and Nonprofit and Social Impact Advisors groups offer news and insights for individuals, couples and multi-generational families who are looking to convey wealth (and its responsibilities) to children and grandchildren, make a philanthropic impact in the community and prepare for the life events we all can face.

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