Michigan Elder Law Blog

This is the year to give gifts to loved ones, if you are in a position to do so. The government's $5 million gift tax exemption is due to expire this year and revert to $1 million at the end of the year. The estate tax is also set to return to a top rate of 55%.

The upshot to making gifts is that by doing so now, you will avoid future estate taxes. The downside is that if you make gifts, the property is no longer yours.

This article discusses some tips to assist you with your planning.

Regardless of your situation, it is imperative prior to engaging in any planning, you consult with an experienced Michigan Estate Planning attorney, such as the attorneys at Barsch & Joswick, PLLC. Call today for a free consultation.

Last month, I blogged on the importance of long term care insurance. I recently came across another article on the topic that I thought would be of interest to our readers. The article provides a good point/counter point by two separate writers as to why you should or shouldn't purchase long term care insurance.

Whether or not long term care insurance is right for you, it should be considered as part of a comprehensive estate plan.

Continue reading "Long Term Care Insurance" »

One can imagine what it would be like to be Mark Zuckerberg, the 28 year old founder and CEO of Facebook. He is young, rich, and about to become even richer with Facebook's IPO looming. However, being rich does not come without complications, specifically when it comes to the dreaded Estate Tax.

This article discusses the techniques Facebook insiders, which include Mark Zuckerberg, have set up to avoid paying at least $200 million of estate and gift taxes on their Facebook shares. Specifically, it appears based on Facebook's prospectus that eight separate annuity trusts, referred to as a grantor retained annuity trust (GRAT), have been set up Facebook insiders. The annuity trust effectively transfers asset appreciation from one taxpayer to another, tax free, thereby avoiding gift and estate taxes in the future.

There is also another option for Facebook insiders looking to avoid estate taxes - renounce their US citizenship. This was the strategy recently employed by Facebook co-founder Eduardo Saverin. The purpose of renouncing his citizenship will serve two purposes: 1) to avoid capital gain taxes on his shares; and 2) minimize any estate tax upon his death; though some nonresidents with US assets must file estate tax returns.

Continue reading "Avoiding Estate Taxes & Facebook" »

This is a great article that I think will be of interest to our readers. The article outlines the 7 major errors in estate planning. Out of those seven, there are two that I find to be the most common:

1. Not having a plan; and

2. Online or do-it-yourself (DIY) instead of seeking professional guidance.

Not having a plan is really a misnomer as everyone has a plan - it's just a matter if the plan is yours or not. If you don't have an estate plan, your estate is distributed according to the laws of intestate succession in the state you reside. Also, by not having your own plan, it ensures that your estate will most likely go through Probate Court.

Online/DIY is a relative recent phenomenon, especially in today's economic climate, but just as problematic as not having a plan. A properly drafted estate plan should be the culmination of a well thought out plan prepared by an experienced estate planning attorney, not an amalgam of stand alone documents, as online/DIY estate plans often are. Additionally, any mistakes in estate planning documents do not come to light until it's too late.

Continue reading "7 Major Errors in Estate Planning" »