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  • keifong

    Corliss Law Group Estate Planning Law Corporation: Time to check the list for financial goals

    4 years agoReply
    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.”
  • keifong

    Corliss Law Group Estate Planning Law Corporation: Exclusive: Pa. pension officer retires

    4 years agoReply
    The chief investment officer of the Pennsylvania State Employees' Retirement System speeded up his retirement after a whistle-blower said he had engaged in personal investment trades at work and withheld news about a $3 million loss in a pension-fund investment, documents obtained by The Inquirer show.

    The material shows that the whistle-blower first raised the complaints in April about Anthony Clark - one of the state's highest-paid employees, at $270,000 a year - to her superiors in the legal staff about the $26 billion pension system and to at least one of the system's board members.

    Six months later, after those complaints triggered no action - Clark's lawyer calls them unfounded - she met with top lawyers on Gov. Corbett's staff and again leveled her accusations.

    After taking almost a month to hire the Philadelphia law firm Stradley, Ronon, Stevens & Young to assess issues, the Corbett lawyers briefed the pension fund's acting counsel. The council then informed the board's longtime chairman, Nicholas J. Maiale, on the allegations and recommended he not say anything yet to Clark.

    Disregarding that advice, Maiale told Clark about the complaint and urged him to take a leave of absence after the Thanksgiving holiday, the documents say.

    In an interview with The Inquirer, Maiale said he went to Clark to avoid having him remain in charge of state investments with a cloud over his head, a situation Maiale said "would have been surreal."

    Maiale also said he had "locked down" Clark's access to state computers.

    But after learning that Maiale had told Clark about the allegations, Corbett's lawyers rushed to preserve Clark's e-mail and computer records "to protect the agency from the potential consequences of your un-counseled notification to Mr. Clark," a top state lawyer told Maiale in a letter Wednesday.

    That letter, obtained by The Inquirer, was given to the SERS board Wednesday in a closed-door executive session in Harrisburg.

    The board was also given Stradley Ronon's report reviewing the allegations and assessing whether they should be reported to federal securities regulators or the state ethics board. In its 14-page assessment, obtained by The Inquirer, the law firm said there was no requirement to report the situation to authorities at that time and urged further investigation.

    On Thursday, state Treasurer Rob McCord, a member of the SERS board, called upon Corbett to remove Maiale as chair. McCord cited Maiale's failure to act more quickly on allegations of "possible criminal or unethical conduct" by Clark.

    McCord, an announced candidate for governor in next year's Democratic primary, also lambasted Corbett's lawyers for not acting sooner.

    In a sign of a widening partisan fight, Corbett's Office of General Counsel issued a statement Friday suggesting that it was McCord and other board members who had dropped the ball.

    "The real question now is what the fiduciaries to SERS, including the treasurer, knew and when they knew it," the statement read.

    State Attorney General Kathleen Kane, a Democrat, has also requested documents related to the complaints against Clark. Her office declined all comment Friday.

    Clark, 60, chose to retire early from the job after his talk with Maiale. He was hired in 2011.

    In the interview, Maiale praised Clark and called him an assertive boss who pushed workers to perform and who may have made enemies on the staff.

    "I think he did a fine job," Maiale said. "The investment program is a lot better. It's been repositioned. The returns are good."

    The SERS whistle-blower alleged that Clark removed information from a report to the board, which would have showed the Tiger Keystone Partners hedge fund had lost $3 million and cost SERS $1 million in additional administrative fees.

    Clark had advised the board that the $250 million Tiger investment was expected to yield $20 million to $30 million a year in profit for SERS, providing stocklike high returns with bondlike low volatility.

    For Tiger to lose money, instead of meeting its projection, would be an extra embarrassment for Clark, who had strongly recommended the investment.

    The whistle-blower told lawyers that staff members believed concealing the loss would make it hard to trust Clark on other investments he recommended.

    Clark's attorney, Virginia Gibson, of the Hogan Lovells law firm in Philadelphia, said in a statement: "Mr. Clark was planning to retire in the near future, and when this arose, he chose the earlier date of Dec. 31," instead of waiting until next year.

    She added: "He is looking forward to an early resolution of these unfounded allegations."

    Maiale, a Philadelphia Democrat and onetime state representative, has chaired the politically appointed SERS board under Republican Gov. Corbett and four previous governors, both Republicans and Democrats.

    On his watch, SERS has pursued a complex diversification strategy aimed at boosting pension assets while guarding against losses in declining markets.
  • keifong

    Disclaimer of Corliss Law Group Estate Planning Law Corporation

    4 years agoReply
    Source: corliss-law.com/index.html

    Legal Information Is Not Legal Advice

    Corliss, A Law Corporation is a California Corporation licensed to practice law in the State of California. Our web site provides information about the law designed to help users safely cope with their own legal needs. However, legal information is not the same as legal advice. Legal Advice is defined as the application of law to an individual's specific circumstances. Although we have gone to great lengths to ensure our information is accurate and useful, we recommend you consult with a lawyer. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before selection of counsel, Internet subscribers and online readers should ask a prospective attorney or law firm to send free written information about their qualifications and experience.

    Transmission of the information in Corliss, A Law Corporation’s web site is not intended to create, and receipt does not constitute, an attorney-client relationship. Internet subscribers and online readers should not rely upon the transmission of an e-mail message to Corliss, A Law Corporation through this web site to create an attorney-client relationship. Internet subscribers and online readers should not act upon any information in this web site without first consulting legal counsel of their own directly.

    IRS Circular 230 Disclosure: Pursuant to recently-enacted U.S. Treasury Department (Circular 230), we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed in this communication or attachments.

    You can visit our website: corliss-law.com
  • keifong

    Blog Post in Corliss Law Group Estate Planning Law Corporation

    4 years agoReply
    Source: corliss-law.com/blog/

    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.

    Tools for Business Exit Planning Involving Charitable Giving

    Three tools involving charities are typically used in business exit planning: charitable remainder trusts, gift annuities and charitable lead trusts.

    A charitable remainder trust (CRT) is a tax-exempt trust. It is primarily an income tax planning tool with some estate and gift tax benefits. With a CRT, the appreciation in assets can be realized without immediate gain recognition tax-free, a stream of payments created for the donor and a deferred benefit provided to a charity. An income tax deduction, gift tax deduction or estate tax deduction is based on the remainder value that passes or is projected to pass to charity at the end of the trust term. Certain private foundation rules apply, which can be problematic.

    A gift annuity is essentially a bargain sale in which the consideration paid by the charity is in the form of annuity payments. Code Section 72 specifies how the income is categorized; i.e., how much is return of principal and how much is ordinary income. Code Section 1011 specifies how gains are recognized, for example if the gift annuity is funded by contribution of appreciated assets. Code Section 415 limits payments to one or two persons. Private foundation rules do not apply to gift annuities.

    A charitable lead trust (CLT) is the opposite of a charitable remainder trust in that the income stream is paid to charity with the remainder going to private individuals. A CLT is primarily an estate or gift tax tool. If it is set up as a grantor trust, it can also provide some income tax benefits. Unlike a CRT, a CLT is not a tax-exempt trust. Some private foundation rules apply to CLTs.

    More blogs at: corliss-law.com
  • keifong

    Business Review and Audit in Corliss Law Group Estate Planning Law Corporation

    4 years agoReply
    Source: corliss-law.com/BusinessAudit.html

    What If You Already Have a Business Entity?

    When we are involved in the original business planning and choice of entity, our engagement often involves an initial Risk Assessment of the areas of risk that your business will most likely be subject to. These risks can involve business processes, record keeping, reporting, compliance procedures, economic and capital structure, labor structure, procedures and compensation, insurance coverage, and a number of other issues. The purpose of this Risk Assessment is to attempt to anticipate risk exposure and assist in providing structure, processes and safeguards to eliminate, minimize, or prepare for such risks.

    If we have not participated in the original planning, were not asked to initially conduct that review, or after any business has been operating for a while, we offer a Business Review and Audit Package which includes a Risk Assessment. This process allows us “audit” and assess the choice of entity, whether conditions have changed, and the common risk areas and exposure brought about by the way the business is operating. We offer several Review Packages priced to accommodate the needs of any business.

    The Business Review Process parallels the steps of the Entity Choice and Formation Process. In general the necessary information is gathered, reviewed and evaluated and a report presenting our findings, along with recommendations for changes, a timeline and the price of our services to design and implement the recommended changes.

    Gathering the Information about the Business and Your Goals

    In order for us to review and assess your situation, it will be necessary for us to get a very clear picture of how your business is operating. We will do that through interviews, gathering documents and observation as well as discussions with you and your other advisors after we have been engaged. We actually begin that process during our initial contact before you have engaged us where we gain a basic understanding of your business and concerns. We will explain our business planning process and schedule a time for you to meet with our attorneys and often your other key advisors.

    We will send you our Confidential Business Information packet which includes:

    • the date and time of our meeting
    • directions to our firm's offices
    • an explanation of the process ahead
    • basic information about business planning and our firm
    • a Confidential Information Booklet for you to fill out and a list of requested documents.

    You can visit our site: corliss-law.com/
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