Tax Cuts and Jobs Act Update

The full text of the Tax Cuts and Jobs Act was released on November 2nd . Although the changes have not been finalized, the following are some of the highlights that might affect you if it passes as currently written:

The Act would reduce the number of tax brackets from 7 to 4:

For married filing jointly 12% (0-$90,000), 25% ($90,000-$260,000), 35% ($260,000-$1,000,000), 39.6% (greater than $1,000,000).
Elimination of the personal exemption.

Estate and Gift Tax

The Internal Revenue Service has announced updated numbers for 2018 relating to estate and gift taxes (as well as numbers on income tax and retirement plan rules). For 2018 the annual gift tax exclusion will be $15,000, an increase from the prior limit of $14,000. The estate and gift tax exemption amount is raised to $5,600,000, or $11,200,000 for a married couple, which is an increase from the prior limits of $5,490,000 and $10,980,000. This latest update may also be viewed on the IRS website, under the heading “Form 706 Changes.

I AM A BENEFICIARY AND I WANT TO REMOVE THE TRUSTEE: PART II

A “breach of trust” arises when a trustee violates any duty that the trustee owes the beneficiary. This is a broad definition, and can be either negligent, willful, and/or fraudulent depending upon the circumstances. What defines a “breach” may be circumscribed by the trust itself, but generally can, again depending on the circumstances, include actions such as failure to account, misappropriation of funds, failure to invest, threats to beneficiaries, failing to pursue legal action, commingling trust and personal assets, withholding copies of the trust or certain other information, failing to treat the beneficiaries fairly and impartially, mistakenly selling land held by the trust, selling shares owned specifically by a beneficiary, having private interests conflict with those of the trust, etc.

ESTATE PLANNING – NOT JUST WILLS AND TRUSTS : PART VI

E. Guardianship and Care of Your Minor Children

Another benefit of estate planning is the ability to choose WHO will care for your minor children, should you pass away before they become adults. In California, the name for a person or people designated to care for your children is “guardian” (which is sometimes confused with “conservator,” which deals with the care of adults).

A guardian’s duties are expansive.

ESTATE PLANNING – NOT JUST WILLS AND TRUSTS : PART II

A. Mental Incapacity and Your Finances (cont’d)
Incapacity planning can also include preparation of a durable power of attorney. Powers of attorney are discussed at length in our blog, here. Basically, a durable power of attorney allows another person, your “agent,” to make decisions for you, the “principal;” the scope of power that your agent has is set forth in the document that you sign granting them the power of attorney.