The Wealth & Wisdom Blog

Information on Estate Planning, Estate and Trust Administration and Unique Asset Planning

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The Tax Efficiency vs. Legal Control Tradeoff with IRA Assets

“Nothing is for Free, Cory,” a physician once explained to me.  “If we take steps to address this particular health problem, it will have adverse consequences on other organs.”  Just as there is often a “cost” for a particular medical treatment option, there are certain tax and control tradeoffs in estate planning decisions.  Tax-deferred retirement […]

The Benefits of Professional Advisory Insights

“Hey honey, you can’t use the microwave now– I have to start a zoom call.” Throughout much of the stay-at-home period in 2020 and into early 2021, my wife and I “suffered” (in a very first-world sense of the word, of course) from a few technology-related issues in our home.  Until about six months ago, […]

Don’t Let the Tax Tail Wag the Dog

The phrase, “not letting the tax tail wag the investment dog” emerged in the 1960s to discourage business owners from making business based solely upon tax implications. The term “wag the dog” has historically been used whenever a minor detail controls a significant decision. More recently, the term “wagging the dog” has been used to […]

American Family Plan and Gifts to Children and Charity

A few weeks ago, President Biden introduced proposed legislation under the name of the “American Families Plan” (“AFP.”)  In this month’s update, I wish to summarize the appropriateness, or perhaps the double-meaning, of the name of the American Family Plan legislation.  If the AFP is enacted, certain taxpayers should consider gifts to other members of […]

Charitable Remainder Trusts

A charitable remainder trust (“CRT”) is a type of irrevocable trust that creates a “split interest” in contributed property between the taxpayer and one or more tax-exempt charities.  This type of irrevocable trust structure provides three separate tax benefits: (a) an immediate charitable deduction to the taxpayer equal to a certain percentage of the value […]

Minnesota Tax Law Update

“Dad, it’s so cold outside. Why can’t we live in a warmer state like Grandma and Grandpa?” This past week, a few of my clients called me from their winter residences in Florida and Arizona.  In addition to their own estate planning matters, we discussed the significant temperature differential between our respective locations.  On a […]

2020 Year-End Tax Update and Planning in a Time of Uncertainty

“Our new constitution is now established and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”  Benjamin Franklin’s letter to Jean-Baptiste Leroy, 1789. For many of us, the end of the calendar year could not come soon enough.  Between the social unrest, political […]

Annual Exclusion Gifts

Do your givin’ while your livin’ so your know’n where its goin’.  Unknown Poet and Estate Planner Many of my clients share with me their pleasure in seeing their family use and enjoy gifts made by them. Whether it is paying for a nice dinner out with the family (remember those days?), a vacation adventure […]

Lowered Hurdle Height for Asset Transfers to Children

In last month’s update, I shared how our family has documented our memories of the 2020 pandemic.  One of my lasting memories will be of the virtual learning assignments for our children. As the self-appointed physical education teacher, I took it upon myself a few weeks ago to create an obstacle course in our front […]

Grantor Retained Annuity Trust (“GRAT”)

A “Grantor Retained Annuity Trust” (“GRAT”) is a planning strategy used to transfer wealth without necessarily using any federal gift tax exemption.  Under this strategy, a donor irrevocably transfers assets to an irrevocable trust, but purposely retains a fixed annuity amount for a fixed period of years (called the “annuity period.”) While the donor will […]