The trustee of a third-party created and funded SNT is given complete discretion in making distributions to or for the benefit of the special needs child. Thus, who should serve as the trustee of a third-party created and funded SNT is important. The selection of the trustee involves many considerations,…
There are five estate planning options available to parents concerning their special needs child: (1) Distributing assets outright to the special needs child (not recommended since the assets may disqualify the child from receiving means-tested government benefits); (2) Disinheriting the special needs child (generally not recommended since the child will…
Tax planning should not be ignored when preparing an estate plan that involves a special needs child. There is a general (and incorrect) assumption among some estate planners that taxes are of little or no concern to families of special needs children. Income taxes, estate taxes, gift taxes, and the…
Five Essential Estate Planning Documents For A Special Needs Family. At the minimum, a special needs child deserves a parent’s continued stewardship and guidance, even though the parent may be incapacitated or deceased. Therefore, the parents of a special needs child should typically have the following five estate planning documents…
In addition to the usual hurdles that parents face when preparing an estate plan (e.g., who should be the guardian, trustee, executor, etc.), the parents of a special needs child are faced with five unique estate planning challenges: (1) How to provide for all of their loved ones without jeopardizing…
There are at least seven options for family philanthropy, each of which has its own strengths and weaknesses from tax, regulatory, and personal perspectives. Some are extremely complex while others are simple. 1. Private Foundation According to the IRS in 2006 65% of the 80,000 private foundations had assets of…
Given that many GRATS are now underwater and will not likely recover. Grantor can purchase assets, acknowledge that the GRAT will fail and create a new GRAT with the assets. If the GRAT contains an annuity payment and the grantor believes that that the underlining asset will still preform over…
Seven states have enacted statutes that permit a trustee with discretion to distribute principal of a trust to exercise the discretion by transferring principal to a new trust, which may have terms different than the original trust. They are Alaska, Delaware, Florida, New Hampshire, New York, South Dakota and Tennessee.…
The following states will have an inheritance tax in 2009 Estates in excess of $3,500,000: NC, VT $3,000,000: OK (tax expires after 2009) $2,000,000: CT, IL (tax expires after 2009), WA $1,000,000: DC, KS (tax expires after 2009), ME, MD, MA, MN, NY, OR, TN $ 675,000: NJ, RI $…
A retirement plan distribution is not taxed in the year received if it is “rolled over” to the same or a different retirement plan or IRA, if various requirements are met. § 402(c)(1). A rollover means either: A. 60-day rollover. A distribution from one plan or IRA to the participant…