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Drew's News

Friday, December 17, 2010

Estate Tax...the final answer...or is it?

Well, it's finally done.  The estate tax ticking timebomb has been diffused...for a while at least. 

Both houses of Congress have passed the Bill and all that is needed is the President's signature to make it law.  Certainly we should all be relieved that our taxes are not going to increse in a few weeks.  Congress also addressed the Estate Tax.  We will have an Estate Tax on January 1 but the exemption amount will be set a fairly comfortable $5 million or $10 million for a married couple.

This clearly takes the vast majority of estates out of the taxable realm.  The really good news however is that the new structure also provides exciting and unique planning opportunities for clients.  With the reunification of the gift and estate tax systems, the lifetime gift tax exemption is now a whopping $5 million.  A carefully crafted gifting strategy could provide spectacular results.  I strongly recommend each of my clients to take the time to set an appointment and come on in for a review.  New clients are also encouraged come in for a no-charge consultations to explore how this new tax structure could benefit them.

As always though, there is a downside.  Congress did not permanently fix the problem; they only extended this law for two more years, so don't wait.  Procrastination is not recommended.  Who knows where Congress will take us next time!


Monday, December 6, 2010

Estate Tax..Here's the latest

A compromise Bill has been introduced in the U.S. Senate. that would extend the "Bush" tax cuts past 2010.  Included in the "Middle Class Tax Cut of 2010" (S.A.4727) is a "permanent" change to the Estate Tax.

In effect, the Bill would make permanent the law that we had in place in 2009.  That is a $3.5 million exemption per person indexed for inflation.  That's a lot better than the $1 million exemption that was due to take effect on January 1 but not as good as the total repeal we have in 2010.

Interestingly, the Senate followed through on its intention to make the changes retroactive to January 2010 but gave estates of peop[le that died in 2010 the option of using either current law OR the new law, so the retroactivity of the law should have no adverse consequences.

The proposed law makes the exemption amount "transportable" between spouses, but that has always been available using very basic estate planning techniques anyway.

The Bill also makes permanent the income tax cuts that are part of the current law.

We should see in the next week or so if this Bill gets passed and signed into law, but it looks promising at the moment


Tuesday, November 9, 2010

Estate Tax...what happens next

Well here we are at the end of 2010.  Those of you that have been following the developments of the Federal Estate Tax over the last few years know the "repeal" of the Estate tax is slated to end on January 1, 2011.  The Estate Tax will then revert to where it would have been had the law never been changed.  This means that every estate in excess of $1,000,000 is at risk.  The tax rate will go as high as 55%..

The elections of a few weeks ago will have an impact; it just remains to be seen what that impact will be.  Some believe that the lame duck Congress controlled by the Democrats will push through some form of "compromise" extension of the "Bush Tax Cuts" and that compromise will involve allowing the Estate Tax to return.  Others are of the belief that the new Congress with  the Republican-controlled House of Representatives will act and that the Estate Tax may stay repealed.

Either way, we should have an answer soon.  Stay tuned.


Tuesday, November 9, 2010

Veterans' Benefits

Many of you folks know that I am the President of Old Glory Honor Flight, Inc. of Northeast Wisconsin.  We are the charitable group that raises funds to fly our World War II veterans to Washington DC so they can have an opportunity to visit the newly completed National WWII Memorial.

I am passionate about helping our veterans in any way I can.  This includes helping them pursue VA benefits that might be available to them.  I am certified by the Veterans Administration to assist with Veterans Benefits.  If you are a Vet and have questions about what benefits are available to you, call or set an appointment to come in and see me so we can talk about your options.


Friday, December 4, 2009

Congress Moves on Estate Tax Reform

 

As many of you know, the Estate Tax law that exists today was established in 2001 and exempts estates with a value less than $3.5 from paying any Federal Estate taxes.  The Estate Tax was to be completely repealed in 2010 meaning no estate would be taxed regardless of size.  Then in 2011 the tax exemption would have fallen back to $1,000,000.  This structure obviously added a great deal of confusion and uncertainty to the world of estate planning.

My long-standing opinion had been that Congress would never allow the one-year repeal to take place because of the patently unfair nature of such a structure.  As more and more time passed without Congressional action however, doubt began to creep into my mind.

Well, yesterday (December 3, 2009) the House passed bill HR 4154 which extends the 2009 exemption amount through 2010.  The Senate is working on a bill that permanently extends the 2009 exemption amount, so we may actually see action this year afterall.   The House and Senate both have to pass a bill and any differences will need to be ironed out in committee before the Bill can be presented to the President to be signed.  Stay tuned.

 

UPDATE 12/21/2009:  Well I guess with the time spent on the health care bill, Congress could not get to the Estate Tax legislation, so it looks like we're in for a repeal on January 1st.  But the Wall Street Journal is reporting that: "Lawmakers already were promising Wednesday to revisit the issue early next year. One option is to pass a new tax retroactive to the beginning of 2010."

Stay tuned.

 


Thursday, August 27, 2009

Old Glory Honor Flight, Inc. formed in Northeast Wisconsin

Drew has helped form and is the President of Old Glory Honor Flight, Inc.   Old Glory Honor Flight is a charitable organization dedicated to transporting World War II veterans to Washington DC so that they may visit their memorial.

"It took us 60 years to build this memorial and it is important that we get our heroes there to see it before it's too late." Drew says.

Old Glory Honor Flight, Inc. serves the northeast corner of Wisconsin from Fond du Lac, Manitowoc, Green Lake and Marquette Counties on the South to Lake Superior to the North, and from Lake Michigan on the East to the Wisconsin River on the West.

Veterans may download applications from the Old Glory website.  The organization is also actively seeking "guardians" to accompany the veterans on their trip, and obviously the organization is actively engaged in raising funds to support the mission.

Please feel free to contact Drew directly with any questions that you may have about this worthy cause.

Drew has made numerous appearance on local television to promote the new charity.


Thursday, August 27, 2009

Drew Receives Accreditation from Veterans Administration

Drew MacDonald has been formally acredited by the Department of Veterans Affairs to prepare and present claims for veterans benefits before the VA.

Drew is honored to receive this accreditation and is eager to continue to serve the brave veterans who call Wisconsin home.


Thursday, April 23, 2009

Spots on the X-Ray: or who needs an estate plan?

I often get asked: "how do I know when I need an estate plan?"  It is a simple question but an important one.  There are certain issues or circumstances that will demand attention.  I call these spots on the x-rays.  If your doctor takes an x-ray and sees something out of the ordinary, he or she will investigate the cause of those spots and offer the appropriate cure.  Lawyers do the same thing; they're just looking for different spots.

Here is a list of important issues that, if present in your situation, need to be addressed in your estate plan.  If you have any issue on this list, please feel free to call our office to discuss your options.

  • Minor children - having minor children is a huge responsibility, and parents must have a plan in place as to how their children are to be cared for and by whom.
  • Blended Families - When a couple each with children from prior marriages decide to get married, unique issues are created and special care needs to be taken to ensure that each spouse's plans are realized
  • Special Needs Children - A child, or other beneficiary, with special health, physical, or educational needs equally special attention in the planning process.  Special features must be incorporated into the estate plan to ensure that the inheritance doesn't disqualify the beneficiary from any government benefits that they would otherwise be entitled to.
  • Business Owners - One of the biggest shortcomings I see in an estate plan is the failure of many business owners to have a comprehensive exit strategy.  Careful planning is required to ensure the value of the business is maximized and that is transferred to the correct people upon disability or death.
  • The Family Cabin - Many people have a desire to preserve the family fishing cabin or hunting land in the family for generations to come.  It is a very difficult task to accomplish without careful planning.  Many times, family property left to the kids is quickly lost to unrelated parties via, divorce, death, or bankruptcy.  A Family Cabin LLC or trust can help you accomplish your goal.
  • Nursing Homes - Many people are worried that the assets they have built over the last 40 - 60 years can disappear in just a few years if the family is forced to spend $6,000 - $7,000 per month in a nursing home.  This is a valid concern and the earlier you address the issue, the better outcome you will achieve.
  • Estate dominated by one asset - This occurs frequently in farm families and small business owners.  One asset comprises 80% of the estate; one child would like to run the business/farm, but the Will says everything is split evenly among the 4 kids.  How do you accomplish this without saddling the one child with a debt load that will make it impossible to run the business profitably?
  • Large Estate - Most people have heard of the Estate Tax, but what is it and how can we avoid it?  The Estate Tax is a constantly evolving topic in the estate planning world and deserves special attention as it has often been referred to as a voluntary tax.  With careful planning for those families affected by the tax, many thousands of dollars can be saved for the family.
  • Children at financial risk - Whether it's bankruptcy, divorce, incarceration, drug or alcohol abuse, gambling problems, health concerns, high-risk occupations, spending issues, or just plain irresponsibility, a carefully drafted estate plan can protect your children from their creditors and predators; it can even protect them from themselves!

Please feel free to contact our office to discuss any of these issues.


Monday, March 23, 2009

Welcome

Welcome,

I am planning on using this area to touch on various estate planning-related topics that are being affected by recent events whether it be political developments, social trends or technological advancements.  Please check back periodically and feel free to contact our office if you wish to get more details about the various topics. 

Thank you and I hope this will become a valuable educational resource for my clients, colleagues, and the public at large.




MacDonald Law Office, LLC assists clients with Estate Planning, Elder Law/Medicaid, Probate & Estate Administration, Special Needs Planning, and Business Succession in Northeast Wisconsin including Appleton, Menasha, Greenville, Kimberly, Neenah, Combined Locks, Little Chute, Kaukauna, Freedom, Hortonville, New London, Clintonville, Oshkosh, Fond du Lac, Green Bay, Ashwaubenon, De Pere, and Waupaca as well as most of Central, Southeastern and Northern Wisconsin.



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