IRS Clarifies Estate Rules
By: Laura Saunders

The Internal Revenue Service last week clarified a provision of the estate tax affecting people who die in 2011 and 2012.

The good news: The paperwork process is now clearer for surviving spouses. But the new rules could pose problems for some.

Last December, Congress reinstated the estate tax after allowing it to lapse in 2010, and raised the amount of money exempt from the tax to $5 million per individual or $10 million per married couple.
Included was a provision on “portability,” which allows a surviving spouse in effect to roll over the unused portion of a deceased spouse’s exemption. The IRS said last week that to preserve the spouse’s exemption, executors must file an estate-tax return listing assets and their values, even if the total is very small.

Say Harry’s wife, Jane, died this year. Jane’s assets totaled $1.5 million, so $3.5 million of her exemption went unused. Harry’s assets total about $6 million and include a large individual retirement account and an interest in a business owned by his extended family.

Under the new rules, Jane’s executor can file an estate-tax return listing her assets and their values as of the date of death. That automatically preserves her remaining $3.5 million for use at Harry’s death, putting him below the estate-tax threshold.

Estate-tax returns are due nine months after death. With that date looming for people who died in January, estate planners welcomed the IRS’s guidance. A six-month filing extension is available, with interest due on any tax owed.

The portability provision, long advocated by many estate-law experts, allows new post-death planning. From 1981 until Congress changed the law last year, married couples faced a dilemma: If they left everything to each other outright, then the first to die would, in effect, lose the use of his or her estate-tax exemption. In 2009, when the exemption was $3.5 million, this meant that instead of shielding $7 million from estate tax, the surviving spouse could shield only $3.5 million.

The way around this problem involved setting up special trusts, but taxpayers needed to be willing both to plan and to pay higher legal fees—insurmountable hurdles, in some cases. In others, planning was complicated by a large, indivisible asset such as an IRA or a business.

Some planners say the new requirement poses a problem, in that advisers usually don’t file a federal return if the estate is worth less than the exemption amount. “But under these rules, even small estates have to file a return if they want to preserve any unused exemption,” says Beth Kaufman, a tax attorney with Caplin & Drysdale in Washington.” Not only could advisers miss the IRS’s guidance and fail to file, but those estates that do file will owe professional fees for any needed appraisals (say, of a house).
The provision also provides spiteful executors with an opportunity. “If the executor is a child who dislikes his step-mother or step-siblings, he or she might opt out of the portability that would save tax when the step-mother dies,” says Ron Aucutt, an estate attorney with McGuireWoods in Washington.
For example, say John dies and leaves an estate of $4 million. His executor, Jack, the son from his first marriage, dislikes John’s second wife, Sonia, and her two children by him. If Jack opts out of portability on John’s remaining $1 million exemption and Sonia dies with an estate of $6 million, then her estate might well owe tax it wouldn’t otherwise have.

More guidance also is needed on how the surviving spouse would use the remaining exemption to make a tax-free gift of assets to heirs while alive, as well as what happens to it if the surviving spouse remarries.

The biggest drawback, however, is that portable exemptions expire when the current estate- and gift-tax exemptions do, at the end of 2012. Some believe portability is likely to be renewed if the current exemptions are renewed, but there isn’t any guarantee.

Experts say it is too early to predict what will happen to the estate tax in 2013. Michael Graetz, a former Treasury official who is now a professor at Columbia University Law School, offers this possibility: “The $5 million exemption will not go down, but the estate tax might be repealed entirely. In that case, there would be great pressure to replace it with a tax on the heirs who receive assets.”

Congratulations to Kristin Davis! If you are interested in adopting, join us for THE ADOPTION EXPERIENCE. One day. One Stop. Everything You Need TO Know. November 5, 2011 at the Handlery Hotel in Mission Valley.

For more information and to register, visit THE ADOPTION EXPERIENCE

SOLUTIONS TO CAPACITY AND CARE ISSUES IN THE ELDERLY CLIENT
Thursday, October 27, 2011
12:00 P.M.
Registration Begins 11:45 A.M.
at Roppongi Restuarant, 875 Prospect, La Jolla, CA
By invite only.

Speakers are
TERESA SHANAHAN, PH.D., Lifeline CEO/Clinical Director
and
LORI BOLANDER, Bolander Law Group Attorney/Owner

R.S.V.P. Requested Call 858.581.6400 or
Email: karol@lifelinecares.com with your appetizer and entrée order
875 Prospect, La Jolla, CA

Join us for this one of a kind, one day, educational event for prospective
adopting parents to hear directly from local adoption professionals.

Event speakers will include:
• An Adoption Facilitator
• San Diego County Adoptions
• Adoption Agencies
• An Adoption Service Provider
• An International Adoption Agency
• Adoption Support Organizations
• A Therapist that specializes in adoptive families (and is an adoptive parent)

We are also pleased to provide the opportunity to obtain a further
understanding of adoption and its joys with an interactive roundtable
discussion by adoptees, adoptive parents and first/birth parents.

EVENT DETAILS:

Date: Saturday, November 5, 2011

Location:
Handlery Hotel in Mission Valley
950 Hotel Circle N. San Diego, CA 92108

Time: 10:00am to 5:00pm
(doors open at 9:30 with a 1 hour break for lunch)

Cost : $40.00

Click Here To Register: www.TheAdoptionExperience.eventbrite.com

Download the PDF flyer here.

This is event is co-sponsored by:

Michele Balke
Marriage, Family and Child Therapist
www.FamilyCrisisSolutions.com

and

San Diego Youth Services
www.sdyouthservices.org

Thursday, October 27, 2011
11:30 a.m. to 1:30 p.m.
1231 Upas Street, San Diego, California 92103

RSVP to Annie at (619)610-0807 or arevel@sdgirlscouts.org by October 21, 2011

GIRL SCOUTING BUILDS GIRLS OF COURAGE, CONFIDENCE, AND CHARACTER WHO MAKE THE WORLD A BETTER PLACE. www.sdgirlscouts.org

You can also support the Girl Scouts by remembering them in your estate planning documents. Bolander Law Group is happy to provide you with for more information about estate planning, planned gifts or gift annuities. You can also contact the Girl Scouts Gift Planning Officer, Merle Brodie, for information on their Legacy Circle at (619)610-0804 or mbrodie@sdgirlscouts.org.

Free Estate Planning Education Workshop Series

Sponsored by:
American Heart Association
Casa Foundation • USS Midway Museum • Air and Space Museum • KPBS
Sharp HealthCare Foundation • Foundation for Senior Care • Fallbrook Library • Fallbrook Music Society

To register go to: http://www.ItsYourEstate.org or Call 619-752-6991
(You must pre-register to attend, due to limited seating. Parking instructions will only be provided to registrants)

The 2011 Workshop series will consist of two classes per day for four weeks. The first class begins at 9:00am, and is finished by 10:15am. We offer a fifteen minute break, and then begin again at 10:30am. The second class will finish by 12:00pm. Please plan to attend all of the sessions.

2011 Dates and Topics:
Week 1 Class 1. “It’s Your Estate” Opening Session – “What do you know about your own Estate Plan? How does your plan protect you and serve you? When does it start? Do you need an Estate Plan?” Introduction and Overview of the next 3 weeks of classes – This session is important to everyone taking these workshops. All Sessions hosted by Marguerite Lorenz, CTFA, CLPF
Class 2. Estate Planning Basics – Learn more about working with attorneys and other professionals to create the plan that is best for you. How can you help your attorney create an effective estate plan? What does your attorney need to know?

Week 2 Class 3. Advanced Health Care Directive, Conservatorship & Power of Attorney over Assets – How much power do the agents you select have over your health and finances? What is a Conservatorship and will you need one?
Class 4. Advanced Estate Planning – This session will highlight concepts and possibilities beyond the four basic documents. Taking this class will help you understand the next two.
Week 3 Class 5. Charitable Income & Tax Planning Issues – How can working with a charity benefit your estate plan? What gifts qualify for tax deductions? We discuss many ways to maximize your benefit.
Class 6. IRA; 401k; 403b and 457 plans, Savings and Retirement funds, beneficiary designations – How are your retirement accounts titled? How do distributions to beneficiaries really work? How do you make sure that your retirement accounts don’t end up in probate?

Week 4 Class 7. Being a Trustee & Executor – Are you the Trustee of a trust? What are your duties & responsibilities? What is your Successor Trustee’s job? How are Private Trustees and Bank Trust Officers the same or different? Hear it straight from a Bank Trust Officer and a Private Fiduciary.
Class 8. Case Study/Review – Have fun reviewing all you have learned throughout this workshop series and get your questions answered by an Estate Planning Attorney.

There is no charge for attendance; however, registration is important, as seats are limited. Our program is unique, as this is an educational workshop series and there are no sales. The professional presenters are available to you, at your choice and you are welcome to contact them, if you want to. This program is made possible by the sponsorship of Charities only and that’s why we can offer this great series of classes without selling anything.

“It’s Your Estate” 2011 Dates and Locations:

September 7, 14, 21, 28 ? Fallbrook Library

October 4, 11, 18, 25? Air and Space Museum

SAN DIEGO WOMAN
Aug/ Sept 2011
http://sandiegowoman.com/uploads/Final_Template_Pat_Brown.pdf

Researched & Written by Judith a. Habert

Many women have found themselves on the horns of this dilemma. Increases in divorce, death of a spouse, inheritance, and sudden success of a business, are but a few of the events that cause women to seek help making sound financial decisions and appropriate planning. The question is a long standing one however; today there are so many choices and everyone has an answer or a suggestion.

The options are dizzying. So we did our own research.

We reviewed many reports and chose the June 11, 2011, report from the Nielsen consumer information company. The report has some interesting statistics. Not too surprising the answer to our question garnered some standard responses. For example, how a woman hires a financial advisor depends on age, social background and of course circumstances. But there were some surprises too.

Nielsen found that the number one driver in making this decision was – brand quality. In other words the reputation of the firm had to evoke trust and security. That does not mean to say bigger is better. It does mean the firm’s reputation is stellar.

What about costs? In 95% of the respondents cost was not even in the top three criteria. How about the sex of a financial advisor? That doesn’t show up as even being in the top 10 reasons for choosing an advisor. Remember the Mel Gibson movie “What Women Want?” Well, the answer is loyalty, trustworthiness and of course personal attention. What will the level of communication be because we need to stay informed? As we know, women are information gatherers. We get our information from TV, radio, books, magazines and the Internet. Yet we rely often on the oldest form of communication, and that is word of mouth.

A decision was made to research San Diego Financial Advisors and since we were somewhat surprised that the sex of advisors didn’t matter, we chose to look at some men who advise women. Now keep in mind that this is neither an endorsement nor a testimonial from San Diego Woman Magazine. It is just our research report.

Addressing the issue of brand loyalty we found several good companies.
Morgan Stanley Smith Barney seemed to come up frequently. We were impressed on how they have survived the financial crisis we have seen throughout the past 5 years. It appears their global research capabilities were a factor. Low risk investments have been the mainstay of their recommendations. But what was interesting to us was how they have developed the team approach by pairing Financial Advisors so they may work together and complement each other.

In San Diego we found such a team: Dax Fletcher and Ardo Peltekian, otherwise known as The Fletcher Peltekian Group* at Morgan Stanley Smith Barney. They have been Financial Advisors (FA’s is the industry term) for many years. They worked together as a team at a bank that no longer exists. That aside, they decided to team up to provide their clients what they wanted. The problem at the bank was that they had no time to develop a personal relationship with people. They covered 7 branches of the bank where they got customers, but not clients.

We asked how they decided to go to Morgan Stanley Smith Barney and Ardo said they wanted a solution based career and not a product based one, and the opportunity to build relationships. Morgan Stanley Smith Barney was their first choice. Dax emphasized that he and Ardo are married family men. Though they work long hours they take time regularly for their families. Ardo also said that they have a family-like relationship with their clients, often going to weddings, baptisms, and family events of various kinds. In short, they are involved with their clients of which 48% are women.

They also did some research and found out what we keep preaching and that is women are involved in 91% of all financial decisions (courtesy of Women’s Regional Publications of America). So they have been growing their women base clientele naturally. They do not target women directly. They receive referrals from women, through trusted professionals and educational events. For many women, hiring a financial advisor is a daunting task. This is especially so when there is a divorce or death of a spouse and, of course, financial calamities. Many do not want someone to tell them what to do. They want choices in a collaborative environment. Women business owners want the same thing.

So we asked Dax and Ardo how they give women what they want in the financial areas of their lives. They answered that their first step is to help their clients to establish their needs, both short term and long term. They then create a profile that establishes resources and time tables as well as risk aversion. The women clients of course participate in the process and approve their profile. The client is then offered various compensation arrangements and they choose the one that they are the most comfortable following. How do you maintain a productive relationship with your women clients, we asked? They said they prefer to talk on the phone regularly and in person as often as possible. Ardo said that he wants to see their facial expression and look them in the eye to see how they feel about a problem or a recommendation. Dax added that they organize small events with their clients, a high tea or a wine pairing are some examples. Additionally, they provide, through Morgan Stanley Smith Barney, quality information on various financial matters. Topics include how to assess risk or how to manage your wealth, just to name a few.

(Contact them at (619) 236-1331 for a complete list of their reports.)

To us it seems that Dax and Ardo have combined old school ethics with contemporary financial know how.

If you were gone or became incapacitated, could your loved ones find your will, social security number, the passwords to your computer, or your insurance accounts? The inventory of information you compile in a Family Love Letter could make all the difference to a traumatized and confused family trying to fulfill your final wishes.

The Family Love Letter ––
Estate Planning Workshop
At this workshop we will cover:
• Estate planning documents
• The importance of Powers of Attorney — medical and general
• Details on the contents and use of the Family Love Letter

Please join us for this seminar on:
August 24, 2011
6:30 pm – 8:00 pm
Southwestern Yacht Club
2702 Qualtrough St
San Diego, CA 92106

Complimentary glass of wine & light hor-doeurves will be served

RSVP to 619-557-8245
by August 22, 2011

Space is limited,
So please reserve today.

Presented by
Linda Hukill, Financial Consultant
AXA Advisors, LLC
701 B Street, Ste 1500
San Diego, CA 92101
619-557-8245
Cell 619-550-6233
Linda.hukill@axa-advisors.com
www.lindahukill.com

Securities offered through AXA Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC. Annuity and insurance products offered through AXA Network, LLC and its insurance agency subsidiaries. AXA Network, LLC does business in California as AXA Network Insurance Agency of California, LLC and, in Utah, as AXA Network Insurance Agency of Utah, LLC. AXA Advisors and AXA Network do not provide tax or legal advice. [[DBA Name] is not owned or operated by AXA Advisors or AXA Network.]
GE 59221A (11/10)

Toni Lynn Mathias
TLM Paralegal

“I was researching fees for estate planning purposes for some of my clients and came across your website.

Shayne Aldridge, Attorney At Law in Illinois