2013 Estate Tax Changes Lincolnshire IL

by: Alan Orlowsky

The New Year brought with it some very Significant changes to the estate tax law. Without these changes, families with estate of $1 Million or more would have been subjected to estate and gift taxes.

The Good news is that for most families the primary goal for estate planning will be to make sure that your plan is comprehensive and remains up to date and relevant for you and your family. We suggest that you add this to your annual list of New Years Resolutions.

Some areas Orlowsky & Wilson often see opportunities:

1. Asset Preservation

This type of estate planning helps to protect your assets you leave for your children and grandchildren, thus preserving the assets for many years into the future and making sure they are used for good purposes. Failure to take advantage of available protections could mean that your hard earned assets end up being lost or wasted. Asset Preservation is a key part of estate planning that should not be ignored.

     2. Disability Planning

This type of planning makes sure that you and your loved ones are taken care of in the event that you become disabled. An Annual review can ensure that your disability planning documents are up to date.

     3. Planning to make a difference

Our colleagues report that many clients are asking about ways they can use their wealth to make a difference in their community or in the world. Often, this type of planning can be tied to helping children (and grandchildren  learn how to be responsible with significant sums of money. They opportunities for philanthropic giving are limitless and can be personally rewarding in addition to helping to reduce income tax.

Of course, these are just three ideas out of many that could provide benefits to you and your family.

Summary of 2013 estate tax changes:

The biggest impact for the new tax law is that the estate and gift tax exemption will not fall back to $1 Million as many experts had predicted.

The new estate and gift exemption is set at $5.12 Million per person ($10.24 Million for most married couples.) The exemption amount is indexed for inflation and is will rise automatically over time. The tax rate for taxable gifts and estates is set at 40%.

If you have questions, click here to contact us and set up a time to discuss your situation and how we can help.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559.

Who Do You Trust? Lincolnshire Power of Attorney

Who do You Trust? Let's Talk about it.

An Article by Alan Orlowsky. For more information please visit our website.

What is Power of Attorney? A power of attorney is the grant of authority to act for another person in legal financial matters.

A Colleague recently related the following story, illustrating how powers of attorney can be abused. Her Client, Gloria had started thinking about going into an Adult Living Community because taking care of the house was getting to be more and more of a chore. Several of her clients Friends had already made the move and loved it.

Gloria called a Realtor who did research on the value of the home and came back with some disturbing news. The Realtor told Gloria the house was not worth as much as the mortgage.

This really caught Gloria by surprise. To her knowledge, the house mortgage had been paid off whether husband dies eight years earlier. She called the attorney who had been involved and asked for help. He told her that indeed the old mortgage had been paid off, but a new one had been put on the property by Gloria's son less than a year later for $300,000. All without her knowledge and permission.

Gloria had no idea how this had happened. The attorney told her that her son Mike had used the power of attorney she had given him to take out the mortgage.

When confronted, Mike admitted that he had borrowed money against the house. It turned out that he had a gambling problem and needed the money to pay outstanding debts. He had been paying the mortgage on the property from his cash flow but was just about out of money and it looked like the house might go into foreclosure.

Her lawyer contacted the police. The police said that it was a money matter between family members and that they were not going to get involved. Even if they had been willing to get involved, it is unlikely that Gloria would have pressed charges or that it would have solved Gloria's real financial issue, which was how to save her house from foreclosure.

With an aging population, this type of incident is starting to happen with more frequency. Enough so that lawmakers throughout the US are starting to pass laws to increase oversight, limit powers and make this behavior criminal.

While this is good, it may not be enough. What Gloria needed in her case was a greater level of oversight.

Orlowsky & Wilson have different methods for helping our clients work through these types of issues. But each family situation is different. If this is something you need to discuss, contact us today.

If you have questions about this post or about a particular legal situation, please contact Alan Orlowsky by calling 847-325-5559.