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Recent Blog Posts
Highlights of ATRA Benefits
The online publication Financial Planning recently reported on the benefits of the new American Taxpayer Relief Act of 2012 (ATRA), which have now gone into effect.
The first benefit highlighted by the report is the provisions for estate and gift tax. Unlike the prior law, which relied on sunset provisions with constant uncertainty surrounding federal tax policy, the new law's provisions are permanent.
Permanence of portability of the federal estate tax exemption for married couples is also offered under ATRA. This means that if the first spouse dies and the value of his or her estate does not require the use all of his or her federal exemption from estate taxes, then the amount of the exemption that was not used for the deceased spouse's estate may be transferred to the surviving spouse's exemption so that he or she can use the deceased spouse's unused exemption plus his or her own exemption when the surviving spouse later dies.
Divorce Taboo Slowly Dissipating Despite Death Threats
According to a report by the New York Daily News, despite strict Muslim rules, more and more Pakistani women are turning to divorce as an option to escape marriages that are riddled with abuse and with little love. These brave women are willing to face the possibility of being killed to me free of their nuptial captors.
It is thought that the women are gaining a better feeling of empowerment because they do not have to continue to be dependent on their husbands. They are learning about the rights that they have and they are learning skills so that they can seek their own employment. There were over 1,500 honor killings reported last year and many women are killed while pursuing their divorces. Some of them have even been shot and killed on their way home from the court and many are murdered right in front of their lawyers.
Pakistani women are learning that they no longer have to depend on their husbands financially, which historically has been the reason that they would remain in these loveless marriages. Many of the marriages are still arranged but now the women feel that if the financial support is not there then the marriage is based on love and affection. Many women in arranged marriages complain that their husbands are cheating on them.
Defining Your Basic Estate Planning Documents
As a recent Chicago Tribune article points out, there is no time like the present to update your basic estate plan. Now that Congress has spoken, albeit at the last minute, on the issue of estate and gift taxes in passing the American Taxpayer Relief Act, it is essential that you execute basic estate planning documents or update your old documents to suit your current situation.
There are a number of very basic documents that can clearly express your wishes in terms of your property and your children following your death. If you fail to complete these documents and you should pass away, then your state's law will determine the disposition of your property and the care and custody of your minor children. As a result, it is essential to complete the following documents if you wish to have any say in the resolution of these important issues.
- Will - Perhaps the most basic estate planning document, a will is a legal document that directs how your assets are divided amongst your chosen beneficiaries. You can go into great detail as to how to divide your possessions, or you can simply divide up your estate as a whole in predetermined percentages between various people. Additionally, a will often expresses your wishes for a guardian for your minor children.
Who's Fault Is It? Fault Versus No Fault Divorce
Wedding day bliss, you never dreamed that one day you would have to state fault or no fault in a divorce petition. "Of course there is a fault!" you simply conclude - that's why divorce is imminent. However, in the state of Illinois, there are specific things that make a divorce a fault or no fault divorce.
No fault divorce is when a couple has tried everything, and it still will not work. Couples who have lived separately for two years and who have tried to reconcile still might just see it fit to end the marriage. At times, it is in the best interest of both parties to divorce.
In a fault marriage, there are specific accounts that will be taken into consideration and grounds for a dismissal in a marriage:
- Naturally impotent during marriage
Enjoy Giving Now!
Birthdays. Christmas. Showers. What do all three have in common? The ability for the giver of a gift to enjoy seeing the receiver's reaction and joy to the gift given to them and knowing what they just gave made someone else happy. What a feeling. It is true that it is better to give than to receive in that regard.
If your love language is gift-giving, look into giving your financial contributions and gifts NOW instead of after your death. Wills are great and so is making sure people and organizations get what you worked a lifetime for, but, there are opportunities for you to see your hard earned money bless others today.
There are two veryeasy ways to go about this. First, is to pay either medical or educational bills - unlimited expenses! Just make sure you give directly to the institution on behalf of the person you wish to help. That means college, doctors, hospitals, medication - expenses anyone would appreciate the help with! Second, is to give $13,000 per person per year. Yes! That means you can select as many people you would like to give each $13,000 a year to! Just remember that you do have a lifetime to give $1 million without paying taxes.
Changes to Estate Planning in 2013
At the end of 2012, people were worried that the fiscal cliff would bring a lot of tax increases to investments, income, and will see the end to unemployment benefits extensions for people who have been hit the hardest by the economic downturn. The reason that the issues have not been rectified is because the US states government has been running a deficit. A little talked about aspect of the fiscal cliff is the changes to estate tax and how that will affect estate planning in years to come.
Current estate taxes until the end of 2012 take 35 percent of the assets which are passed onto successors. That is after a limit of $5 million for individuals or $10 million for couples is met as the current exemption. If Republicans and Democrats are unable to agree to new measures, then that rate will increase up to 55 percent after the first million. Obama has proposed a tax of 45 percent and a middle ground of a $3.5 million exemption.
Divorce During the Happiest Time of the Year
The stress of the holidays is enough to make anyone crazy, but if you're undergoing or considering a divorce, the holidays can be enough to make a person crash. Not only are there the complicated proceedings, paperwork, and navigation of the court system, emotions are running higher than at other times of the year. Divorce or pending separation during the holidays can leave both spouses feeling increased anxiety about the unsettled future. According to the San Francisco Chronicle, there are several things people undergoing a divorce can do to help overcome the increased stress of divorce during the holidays—the least of which is taking a deep breath and forgiving yourself the expectations of familial perfection.
One piece of advice, according to the Chronicle, is to create new family traditions. "Finding new and creative ways to celebrate and reminding yourself that you are making a fresh start for your family can remind you of the real reason you cherish these family moments in the first place." In the same vein, taking new family photos can be a visual reminder of the hopeful future in your divorce—and help to create new traditions as well. Pose for a holiday card without your soon-to-be ex, and display it proudly in place of an old photo that may bring forward negative emotions.
Estate Planning Needed at All Ages
Many people think that estate planning is just for old people, but that is not necessarily true. An article is Forbes magazine stated that there are way too many people of all ages and situations that not only do not have an estate plan, but they have not even drawn up the very basics for the documents.
A 2011 survey found that 64 percent of baby boomers do not have living wills. That is a document that anyone over the age of 18 should have. These documents allow a person in advance to decide on what type of care they will get if he or she will become ill and incapable of making his or her own decisions.
Even young and broke people should have a will.
In most states, parents do not have the authority to make health care decisions or manage the money of their children over the age of 18. If these young people were to get in a serious accident, his or her parents might have to go to court to get approval to make life or death or financial decisions on their child's behalf.
Legal Separation rather than Divorce
Most states require a couple seeking a divorce to be separated for a minimum time before they can be legally divorced. Illinois is no different as they require a trial separation period of 6 months. People can still file for divorce while living with their spouses; they just cannot become divorced without being split. Though, there is an affidavit that can be signed by both parties attesting to 6 months of separation.
Occasionally, people decide to remain separated without seeking a divorce. This can be for a multitude of reasons:
- Religious concerns keep either you or your spouse from divorce
- You or your spouse will soon become eligible for government benefits (such as Social Security)
- If you or your spouse are unable to secure separate insurance or health care
Estate Planning Checklist
Most Americans do not have a will, and especially not a revocable living trust. And yet, anyone that has had to deal with the estate of a deceased family member who did not have solid plans in place will tell you how frustrating, time consuming, and expensive it is to sort everything out.
If a person dies with no will or trust in place, the courts will follow state law to disperse the assets, regardless of verbal promises. If someone dies with only a will in place, the courts will have to give the document a stamp of approval before dividing up the estate. This is known as probate, and the cost of this necessary judicial step can cost more than 5 percent of the estate's value and can trap the heirs for a year or more in a legal twist to get the estate sorted out.
An easy way to avoid all that hassle that your family will have to go through by setting up the essential documents. That way, all of your assets will go exactly where you want quickly and with the least amount of expense.
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