There’s been quite a bit of speculation about what Congress plans to do with the estate tax. Under President George Bush’s 10-year tax-cut program, the estate tax has slowly dwindled over the last nine years. And this year, there’s no estate tax at all. But if Congress doesn’t do something between now and January 1st, the estate tax will return with the same $1 million exemption it had prior to 2001. In a recent attempt to remedy this problem, Senator Jim DeMint proposed a permanent repeal, … [Read more...] about Update on Estate Taxes
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What is a Life Insurance Trust?
Proceeds from life insurance policies are distributed directly to the named beneficiaries upon your death. They are not governed by your Will and do not have to be probated before being distributed. But that doesn’t mean your heirs won’t pay tax on those proceeds. Quite the contrary, the value of the policies will be added into your estate specifically for estate tax purposes. Fortunately, there’s a way to avoid paying those extra taxes. An Irrevocable Life Insurance Trust can act as a … [Read more...] about What is a Life Insurance Trust?
IRAs: Traditional vs. Roth
Are you considering opening an Individual Retirement Account? There are several types to choose from, but the two most common are Traditional and Roth IRAs. Both are excellent savings opportunities, but they vary in several ways. Tax Deferred versus Tax Free Earnings A traditional IRA allows you to save non-taxed income for your retirement. When you contribute to this type of account, the amount is deducted from your yearly taxable earnings. This allows you to defer taxes on this money and to … [Read more...] about IRAs: Traditional vs. Roth
How A Revocable Living Trust Works
If you have traveled in estate planning circles, the term Revocable Living Trust may be familiar to you. Revocable means that the Trust can be changed by you – the “trustor” – at any time. You can also cancel or revoke the Trust if you choose. This type of Trust is created while you’re alive and benefits both you and your heirs. There are three basic stages to a Revocable Living Trust: While you’re living and are of sound mind, you can continue to manage the assets within your trust. You’ll … [Read more...] about How A Revocable Living Trust Works
How A Health Savings Account Works
A Health Savings Account (HSA) is a great way to plan for high medical costs. If you have a high deductible health coverage plan and are considering opening an HSA to supplement the deductible cost, here is what you need to know. How to Get Started Before you open an account with a bank or insurance agency, check to see if your employer provides an HSA. This may be the case if their offered health coverage is high deductible. When you open your account make sure it pays interest. You may have … [Read more...] about How A Health Savings Account Works
