MKA Executive Planners Blog

Avoiding the Long Term Risks of Charitable Annuities: Can Your Organization Sustain Losses?

Posted by John Yagjian on Thu, Sep, 17, 2015

Basics of a Charitable Gift Annuity

Charitable Gift Annuities (CGA) are a very popular fundraising technique.  A CGA is a contractual agreement between a donor and a charity where the donor transfers assets to the charity, and in return, the charity is obligated to pay a fixed amount to the donor or donors, for a specified term, usually for life.

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Tags: Annuities, Estate Planning

Which Will You Pay — Estate Taxes, Income Taxes, Or No Taxes At All?

Posted by John Yagjian on Tue, Aug, 18, 2015

Current Estate Planning – Tax Considerations

The interplay between basis, estate tax, and income tax requires that the estate planner take into consideration a number of factors (i.e., basis, growth potential, appreciation, federal and state estate taxes, and income and capital gain taxes) in order to determine if lifetime transfers are appropriate, and, if so, the proper asset and transfer strategy.  This is true regardless of the size of the estate.

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Tags: Taxes, Estate Tax, Estate Planning

Life Insurance Trends and Choices

Posted by John Yagjian on Wed, Jul, 08, 2015

Life insurance products may be designed to maximize death benefits or cash accumulation.  From an estate tax perspective, the need for the death benefit design has become less important.  The reason is that other than the state estate tax exposure, most people are no longer concerned with the federal estate tax, since the federal estate tax exemption is currently $5,340,000 per person.  The new wave of life insurance policies are trending toward a “cash accumulation design” for retirement income, with a number of enhancements that improve cash accumulation.

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Tags: Life Insurance, Estate Planning

How Safe is Your Retirement Plan? – Part II

Posted by John Yagjian on Thu, Jul, 02, 2015

I have seen many financial plans.  A common plan will take into consideration a savings target during the income years, investment diversification, an assumed investment return commensurate with age and risk/reward profile, income need projected during the retirement years, and the impact of taxes and inflation.

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Tags: Retirement Planning, Estate Planning

Non Resident Aliens, U.S. Real Estate Investments, and Life Insurance

Posted by John Yagjian on Tue, Jun, 23, 2015

Non-Resident-AliensImportant Considerations

There are a great many reasons why foreign investors choose to invest in U.S. real estate.  The U.S. has a secure, stable economy and political environment, with attractive investment opportunities compared to other countries.  In a world of political turmoil, it is a safe and secure place to live or dwell.

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Tags: Life Insurance, Estate Planning, Trusts

Why Do High Net Worth Families Purchase Life Insurance?

Posted by John Yagjian on Fri, Jun, 19, 2015

High-Net-Worth-FamiliesThe definition of “wealth” is quite broad.  In the context of this article, I will define a High Net Worth Individual (“HNWI”) as a person who has net worth of at least $15,000,000 and liquid assets in excess of $5,000,000.  At this level of wealth, a HNWI is primarily concerned with preserving wealth from estate and income tax drag, and would only purchase life insurance if it is considered a good investment compared to other investment alternatives.

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Tags: Life Insurance, Estate Planning

Presidential Tax Proposals – A Big Wow!

Posted by Barry Koslow on Tue, Feb, 24, 2015

The Obama Administration recently released its federal budget for fiscal year 2016 proposing several tax law changes, which, if enacted, could significantly increase your federal income, capital gains and/or estate tax exposure. Although Congress may not take action on these proposals, they may provide some insight into potential areas of consideration for future tax reform legislation. Some of the more notable proposals include:

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Tags: Taxes, Estate Tax, Estate Planning

Investment Concerns With Taxable Trusts - Part 2

Posted by John Yagjian on Thu, May, 02, 2013

My prior article Investment Concerns With Taxable Trusts, addressed the new tax landscape for taxable trusts.  Subsequent to that article, on January 28, 2013 the IRS published Rev. Proc. 2013-15, the updated income tax rates for 2013.  The change resulted in a small increase in the tax brackets and an increase in the top marginal tax rate for trusts from 35% to 39.6%.  The following is an updated comparison of individual and trust tax rates.

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Tags: Estate Planning, Trusts

Investment Concerns With Taxable Trusts

Posted by John Yagjian on Fri, Dec, 28, 2012

Generally speaking, if a trust earns income (dividends, interest, rent, capital gain, etc.) either the trust or some other person is required to pay income tax.  The taxpayer will be either the trust or the grantor, during his or her lifetime.  Although the capital gain rate is the same for individuals and trusts, the income tax brackets for trusts are quite compressed; with the top tax bracket kicking in after taxable income reaches $11,500.  The focus of this article is trust income, exclusive of capital gains (Ordinary Trust Income).

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Tags: Estate Planning, Trusts

Federal Estate and Gifting Strategies to Consider Before 2013

Posted by John Yagjian on Tue, Oct, 30, 2012

For 2012, the federal exemption from all three transfer taxes is $5,120,000 ($10,240,000 for married couples).  The gift and estate tax exemptions are each scheduled to revert to $1,000,000, and the generation skipping transfer tax exemption (GST) is scheduled to revert to $1,390,000 on January 1, 2013.  No one really expects a complete reversion, but it is highly unlikely that that all three types of transfer taxes will be sustained at the current, historically high, levels.  Here are a few reasons why a great deal of wealth will be transferred between January 1 and December 31, 2012, in variety of ways. 

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Tags: Estate Tax, Gift Tax, Estate Planning