L&H Insights

Keeping a Trust a Secret Could Violate State Law

Posted by L&H CPAs on Apr 16, 2018 9:02:16 PM

If your estate plan includes one or more trusts, you may have a good reason for wanting to keep them a secret.

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Tags: Estate Planning

Size of Charitable Deductions Depends on Many Factors

Posted by L&H CPAs on Apr 10, 2018 5:23:39 PM

Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on more than just the actual amount you donate.

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Tags: Estate Planning

5 Estate Planning Tips for the Sandwich Generation

Posted by L&H CPAs on Apr 9, 2018 9:06:20 PM

The “sandwich generation” accounts for a large segment of the population. These are people who find themselves caring for both their children and their parents at the same time. In some cases, this includes providing parents with financial support. As a result, estate planning — which traditionally focuses on providing for one’s children — has expanded in many cases to include aging parents as well.

Including your parents as beneficiaries of your estate plan raises a number of complex issues. Here are five tips to consider:

1. Plan for long-term care (LTC). The annual cost of LTC can reach well into six figures. These expenses aren’t covered by traditional health insurance policies or Medicare. To prevent LTC expenses from devouring your parents’ resources, work with them to develop a plan for funding their health care needs through LTC insurance or other investments.

2. Make gifts. One of the simplest ways to help your parents financially is to make cash gifts to them. If gift and estate taxes are a concern, you can take advantage of the annual gift tax exclusion, which allows you to give each parent up to $15,000 per year without triggering taxes.

3. Pay medical expenses. You can pay an unlimited amount of medical expenses on your parents’ behalf, without tax consequences, so long as you make the payments directly to medical providers. 

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Tags: Estate Planning

Leverage the TJCA to Ease Estate Tax Liability

Posted by L&H CPAs on Mar 7, 2018 11:00:27 AM


Many of us have dreamed of buying a home that we one day wish to pass on to our adult children. Consider a joint purchase to reduce estate tax liability, provided the children have sufficient funds to finance their portion of the purchase. With the gift and estate tax exemption now set at an inflation-adjusted $10 million thanks to the Tax Cuts and Jobs Act, federal estate taxes are less of a concern for most families. However, the high exemption amount is only temporary, and there’s state estate tax risk to consider.

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Tags: Estate Planning

How to Ensure You Receive Your Charitable Tax Deductions

Posted by L&H CPAs on Feb 22, 2018 6:00:00 AM

If reducing your taxable estate is an important estate planning goal, making lifetime charitable donations can help achieve that goal and benefit your favorite organizations. In addition, by making donations during your lifetime, rather than at death, you can claim income tax deductions. But some of your charitable deductions could be denied if you don’t follow IRS rules.

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Tags: Estate Planning

Only Certain Trusts Can Own S Corporation Stock

Posted by L&H CPAs on Feb 15, 2018 6:01:00 AM

S corporations must comply with several strict requirements or risk losing their tax-advantaged status. Among other things, they can have no more than 100 shareholders, can have no more than one class of stock and are permitted to have only certain types of shareholders.

In an estate planning context, it’s critical that any trusts that will receive S corporation stock through operation of your estate plan be eligible shareholders. 

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Tags: Estate Planning

Gifted Assets to Loved Ones? File a Gift Tax Return? Only if You Have To

Posted by L&H CPAs on Feb 7, 2018 11:00:00 AM
Gifting assets to loved ones is one of the most satifying, generous, and simplest ways of reducing your taxable estate while taking care of the people you've worked so hard to provide for. However, what may not be as simple is determining whether you need to file a gift tax return (Form 709). With the April 17 filing deadline approaching, now is the time to find out an answer.

Return required

A federal gift tax return (Form 709)  is  required if you:
  • Made gifts of present interests — such as an outright gift of cash, marketable securities, real estate or payment of expenses other than qualifying educational or medical expenses (see below) — if the total of all gifts to any one person exceeded the $14,000 annual exclusion amount (for 2017),
  • Made split gifts with your spouse,
  • Made gifts of present interests to a noncitizen spouse who otherwise would qualify for the marital deduction, if the total exceeded the $149,000 noncitizen spouse annual exclusion amount (for 2017),
  • Made gifts of future interests — such as certain gifts in trust and certain unmarketable securities — in any amount, or
  • Contributed to a 529 plan and elected to accelerate future annual exclusion amounts (up to five years’ worth) into the current year.
Return not required


No  gift tax return is required if you:
  • Paid qualifying educational or medical expenses on behalf of someone else directly to an educational institution or health care provider,
  • Made gifts of present interests that fell within the annual exclusion amount,
  • Made outright gifts to a spouse who’s a U.S. citizen, in any amount, including gifts to marital trusts that meet certain requirements, or
  • Made charitable gifts and aren’t otherwise required to file Form 709 — if a return is otherwise required, charitable gifts should also be reported.
If you transferred hard-to-value property, such as artwork or interests in a family-owned business, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file. 

In some cases it’s even advisable to file Form 709 to report  nongifts . For example, suppose you sold assets to a family member or a trust. Again, filing a return triggers the statute of limitations and prevents the IRS from claiming, more than three years after you file the return, that the assets were undervalued and, therefore, partially taxable. 

Contact us if you made gifts last year and are unsure if you should file a gift tax return.
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Tags: Estate Planning

Looking for a Powerful Estate Planning Tool for Nontaxable Estates?

Posted by L&H CPAs on Feb 1, 2018 6:30:00 AM

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Tags: Estate Planning

Have You Taken State Estate Taxes into Account?

Posted by L&H CPAs on Jan 22, 2018 10:42:21 AM

The Tax Cuts and Jobs Act has doubled the federal gift and estate tax exemption, with inflation-adjustments projected to raise it to $11.18 million for 2018. This means federal estate taxes are a concern for fewer families, at least in the short term. (The doubled exemption expires December 31, 2025.) But it’s important to consider how state estate or inheritance taxes may affect your estate plan.

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Tags: Estate Planning

Who Should Be the Guardian of Your Minor Children?

Posted by L&H CPAs on Dec 12, 2017 7:28:36 PM

If you have minor children, arguably the most important estate planning decision you have to make is choosing a guardian for them should the unthinkable occur. It’s critical to put much thought into this decision to ensure your children would be cared for as you wish in such a situation.

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Tags: Estate Planning

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