Take 3 Steps To Cut Taxes or Avoid Tax Surprises Before Dec. 31

If you aren’t making New Year plans, I have news for you–the time is NOW! Here’s a quick list of important tax cutting or planning actions to take before Dec. 31. Read on for more details:
Donate gifts of cash or stocks to your favorite charities now
• Update your will to find tax breaks or fix tax consequences before year-end
• Assess business changes to cut taxes now or push taxable decisions to 2018

Do I have to give a charitable gift before Dec. 31?
Yes, you do. Here’s the IRS break down:

How charitable giving tax deductions work
You can deduct contributions in the year you make them. If you charge your gift to a credit card before the end of the year it will count for 2017. This is true even if you don’t pay the credit card bill until 2018. Also, a check will count for 2017 as long as you mail it in 2017.

Wait! There’s more! Gifts of money include those made in cash or by check, electronic funds transfer, credit card and payroll deduction. You must have a bank record or a written statement from the charity to deduct any gift of money on your tax return. This is true regardless of the amount of the gift.

Gifts of stock require more detailed planning. Let us know if you want to give away stock as you need to understand the most beneficial way to handle this transaction—for your own tax consequences and to best benefit the charity.

Why update your will before Dec. 31?
Reveal tax breaks or deal with tax problems before year-end deadline

New baby or grandbabies? You now have another potential tax deduction. But, remember– anyone under the age of 18 cannot inherit property in Texas. We recommend you place any inheritance for minors in a testamentary trust in your will. This helps you avoid guardianship issues and allows you to specify the age of inheritance (age 25, age 30, or older).

Happily married again? Congratulations! Divorce? It happens. Your tax status can change with with either of these life events. As far as your will–make sure the new spouse is the beneficiary on all your documents. Or, name someone else as beneficiary if you’re now free of a spouse. Too often we see estate plans where an ex-spouse is still a primary beneficiary. Staying friends is one thing . . .but inheritance?

Move to Texas recently or move away? Different states mean different tax and probate rules. State income tax factors into your tax return. You may need to file separate returns for different states. Your will should reflect your new place of residence to avoid costly probate. For example, California probate is difficult and expensive. Texas probate is straightforward and cost-effective by comparison. While Texas allows valid wills from other states to be presented in a probate case, we always recommend new Texas wills for clarity and to cover any issues which may have arisen in the last few years.

Inherit property or purchase a home in another state? This change almost always affects your tax situation and likely has probate consequences for your will. No one ever said, ““I want to probate a will in two states.” If you have valid Texas estate planning, these documents cover any and all property you own in Texas. If you own property outside of Texas, especially real estate, we recommend placing this property in a simple revocable trust. This avoids multi-state probates and allows you to transfer the property seamlessly without further court involvement.

Buy or sell a big item? Maybe you finally bought that boat you’ve always wanted. Don’t forget to invite us on your next trip! Just kidding–kinda. If this is for personal use, it probably won’t qualify as a tax deduction. But, maybe the boat can be used in part to entertain clients? Let’s talk. This asset definitely should be added to your will along with designating what happens to it if you’re not around.

Is your will’s executor still a good choice? This decision may affect your taxes and far more–your entire family’s inheritance or anyone else designated to benefit from your will.

Let me give a good example. Let’s say you are an elderly gentleman and you have a nice new friend named Anna Nicole Pith. This friend is quite a bit younger than you and is kind enough to offer to serve as your executor. Now let’s say this friend starts borrowing money from you and maybe even steals a car or boat from you. We recommend finding a new executor. If you don’t trust the people named in your documents, find new people. Don’t have ideas? Ask us to brainstorm for you.

Why Do Business Changes Matter?
Assess Before Dec. 31 & Avoid Unexpected Tax Outcomes

Ask yourself the questions below to do a quick assessment of your business changes over the past 12 months. If “YES!” is the answer to any of them, you may need to talk with us or your CPA about tax consequences. And, you likely need to update your will:
• Buy or sell a business?
• Get a new partner or dissolve a partnership?
• Buy or sell business assets including property, buildings, equipment, cars, etc.?
• Declare bankruptcy?
• Make tons of money with your new business idea?
• Added new staff—possibly some relatives?

Make sure your estate plan matches the current state of your business. We want your wills, trusts, power of attorneys, and more to match your business plan in a seamless transition plan.

Need help? Call our office at 817-638-9016 to schedule an appointment.

Wishing you peaceful and relaxing holidays,

Travis Weaver, Attorney
tweaver@WeaverLegal.net

Rick Weaver to Speak at Fort Worth Business and Estates Council

Do you have plans for November 16, around noon? No? Well you do now! Rick Weaver (of the Weaver Firm) and Earl Davidson are speaking on Discovering Government Benefits for the Elderly at the Fort Worth Business and Estates Council at the City Club in Fort Worth. Mr. Weaver and Mr. Davidson will touch on issues such as Medicaid for long term care and nursing homes, Veterans Aid and Attendance benefits for those who served our Country, and long term care insurance for those who might need it. The average cost of a nursing home is over $7,000.00 per month in 2017! Come hear these two speakers tell you everything you need to know about long term care planning. If you aren’t a member of the Tarrant County Bar Association and would like more information about long term care planning, schedule an appointment with the Weaver Firm today.

Sign up below

https://members.tarrantbar.org/calendar/signup/NTQwOQ==

 

$100,000.00 Hotel Room? Only in Aggieland

Texas A&M recently auctioned off the rights to premier rooms located in their on-campus hotel. If this sentence is confusing, you aren’t alone. As tax deductions for things like football and basketball suites become increasingly scarce, the Aggies decided to get ahead of the curve with hotel room licensing.

Basically, Texas A&M will allow you to pay $100,000.00 (if you win an auction) for the right to reserve hotel rooms in the new Texas A&M hotel currently being constructed on campus. Your name will appear on the door of the hotel room and you get first dibs on these premium rooms directly adjacent to the football stadium. This $100,000.00 fee is complete tax deductible, although the website does recommend you speak to a tax professional before shelling out the 100k. A couple of things to watch:

  • prices depend on the game being played (much like other hotels in the area)
  • donors must reserve the room 45 days in advance of any football game
  • hotel has a pool, 24 hour room service, sports bar, and conference center
  • the hotel is using a private/public development partner, so watch out for IRS red flags if making the deduction
  • the hotel is being paid for by private funds and NOT student funds
  • this donation does NOT count towards 12th Man priority points for sporting events

This is an interesting idea and should provide Aggies the ability to stay in luxury while they watch their team lost at home.

If you have an interest in Aggie Football and happen to have $100,000.00 burning a hole in your pocket, do I have an idea for you!

If you need help designing an Estate Plan that may or may not leave money to an Aggie hotel, please give us a call today.

Gig Em

The Weaver Firm 817.638.2022

 

Highlights of the New Republican Tax Plan

If you’re like me, you probably spent your Thursday night pouring over the new Republican tax plan . . . right? At 429 pages, you’d be crazy not to take the chance to read some good ol’ fashioned tax law. I for one really enjoyed the pictures they included around page 275.

Ok Ok . . . you got me. I watched my Spurs get beat up by the Warriors on TV until switching over to the delightful new crime drama, “S.W.A.T.” on CBS. I sometimes like to think of myself like the Shemar Moore of Estate Planning Attorneys, but I digress.

Here are the things you need to know about the GOP tax plan thanks to a wonderful summary from Caitlin Owens on AXIOS:

  • the 39.6% tax rate for couples with over 1 million in income remains the same
  • the tax plan caps the mortgage interest deduction for newly purchased homes at $500,000 (down from $1 million)
  • the plan also allows only $10,000 of property tax to be deducted
  • the plan increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.

Worried about individual tax brackets? Here they are:

  • Individual tax rate brackets:
    • 25 percent rate starting at $90,000 for married couples, $45,000 for individuals (everyone below that pays a 12 percent rate).
    • 35 percent rate starting at $260,000 for married couples, $200,000 for individuals.
    • 39.6 percent rate starting at $1 million for married couples, $500,000 for individuals.

Of not for those expecting or soon to be expecting:

  • The plan expands the Child Tax Credit from $1,000 to $1,600 and provides a credit of $300 for each parent and non-child dependent.
  • Makes no changes to deductions for charitable contributions.

Have student debt? Might want to read up on this next part:

  • The plan eliminates student loan and medical expense deductions and the adoption tax credit.

Haven’t contributed to your 401(k)? Shame! It’s ok, almost two-thirds (2/3) of Americans haven’t either. Start NOW!

  • The plan doesn’t change contribution rules for 401(k)s.

Now to the juicy part for Estate Planners:

  • The new plan doubles the estate tax exemption immediately (11 million per person) and repeals the tax in six years. Goodbye credit shelter trusts.

Feeling bold? Read the whole text of the Bill here.

As a caveat, none of this is set in stone, so expect major changes to these provisions in the next few months.

If you have questions about the plan and how the proposed changes might affect you and your family, give us a call at the Weaver Firm. 817.638.9016

 

Estate Planning for Entrepreneurs

Forbes published a great article showing 9 out of 10 entrepreneurs have out of date Estate Plans. What exactly is an “out of date estate plan”? Basically a plan (i.e. Wills, Power of Attorney, Living Will) that hasn’t been looked at in more than five years.

Here are five reasons to update your Estate Planning documents regularly:

  • changes in the law: tax laws change yearly
  • changes in your family: births, deaths, divorces
  • changes in where you live: did you move to Texas recently?
  • changes in your Estate: did you win the lottery or purchase a home in another state?
  • changes in your life: were you diagnosed with an illness?

Check out the article and understand that it is never too late for Estate Planning…until it is too late

h/t to Professor Beyer and his blog at http://lawprofessors.typepad.com/trusts_estates_prof/ for the article

817.638.2022 or TWeaver@weaverlegal.net

How To Protect Yourself & Reduce Online Risk – Equifax Hack Tips & More

How To Protect Yourself – Respond To Equifax Info Leak & Reduce Online Risks

Recently the national credit monitoring company, Equifax, had a data leak resulting in the personal information of hundreds of millions of individuals being made public on the internet.

If you aren’t aware of this breach, Equifax has set up a website at https://www.equifax.com/personal/?/  allowing you to check to see if your personal information including social security number, address, birth date, employment history, credit history, and more was leaked. 

Protect Yourself – Your Personal Info May Be Vulnerable

Most people don’t realize how much of their personal information is being used by websites around the world. Plus, most people don’t have a plan to protect themselves and their digital selves, both while they are living, and after they pass away.  This article will provide several different types of digital asset protection including:

  • Protecting your credit score – risk greatly increased due to the Equifax leak
  • Protecting your passwords—a serious matter with email passwords recently brought up in the Presidential campaign and subsequently in the early days of the Trump administration
  • Protecting your social media accounts including ways of protecting this information if you pass away or become incapacitated
  • Protecting your website and blog ownership as these assets become more profitable
  • Protecting your digital estate with new Texas legislation in this area

Protect Yourself – Your Credit Score May Be at Risk Due To Equifax Leak

Your credit score may be affected by the Equifax leak. Here’s how this could happen: As a credit monitoring company, Equifax plays a big part in determining if you are approved or denied credit. They store and use your personal information and credit payment history to provide credit scores to banks and other companies. These companies use your credit score to determine if you qualify for a home mortgage, buying cars, or even getting a credit card.  If you have experience with one of those three things, you probably have a credit record stored by Equifax. 

To help protect yourself if your personal information was leaked by Equifax, you can sign up for a lifetime Equifax credit monitoring service. This means Equifax will let you know if someone is applying for credit in your name—meaning they could run up bills and not pay them—and potentially affecting your credit score. They are also offering other benefits with this free service.

Based on the information I reviewed, the monitoring service appears to be a very good deal and is part of Equifax’s efforts to patch up their relationship with customers. 

Protect Yourself – Tips for Strengthening Passwords

Changing passwords for your online accounts may seem like a nuisance, but having funds stolen from your bank account or clearing up your credit score ruined by thieves running up bills in your name are much more time-consuming problems. Consider these tips to create stronger password protection:

  • Change your passwords about every six months or use a password manager. There are many password managers out there, Apple has its own, but Microsoft also has several good password managers that are secured.
  • Here is a definition from Consumer Reports for password managers: A password manager will generate, retrieve, and keep track of super-long, crazy-random passwords across countless accounts for you, while also protecting all your vital online info—not only passwords but PINs, credit-card numbers and their three-digit CVV codes, answers to security questions, and more—with encryption so strong that it might take a hacker between decades and forever to crack. And to get all that security, you’ll only need to remember a single password, the one you use to unlock your so-called vault. Your login data will be locked down and, at the same time, remain right at your fingertips.
  • Make sure you are not using one of the top five most used passwords used in the United States. Those passwords include “password”, “12345”, “password12345”, and various other fairly ridiculous passwords.  Try not to use your personal information in your password if possible or if so, combine it with a series of numbers and special characters i.e. periods, exclamation points, etc. that are unique to you. 
  • In keeping up with your password protection, I would also include a list of your current passwords either digitally or hard copy with your Will or Powers of Attorney in a safe or safe-deposit box. If something were to happen to you, your Executor or family members could get access to email, your bank accounts and important documents.  Be sure the person you give access to these accounts is someone your trust.  If you are going to name someone as your Power of Attorney, I would always recommend that person be someone you trust anyway. 

Protect Yourself – Tips for Protecting Your Social Media Accounts

First of all, do you know who owns your Facebook?  The answer would be Facebook itself.  Even though you created your Facebook and maybe spent hours and hours adding pictures, posts, and information to it, Facebook, the company, actually owns your Facebook account. 

            If something happened to you or you violate their terms of service, Facebook may completely delete your Facebook and all the posts and pictures you ever posted online. 

            If you pass away, there are three options to continue or discontinue your Facebook account. 

  • First, you can memorialize your Facebook account. This can be done either by yourself through a designation on the Facebook website before you pass away, through your Executor or Administrator with a Court Order, or by a close family member who can prove that that person is a close family member.  By memorializing your Facebook, you leave your Facebook up and no further changes can be made to this account other than allowing your friends and family members to post thoughts and remembrances of you on your Facebook for as long as you would like to keep this alive.  Some people think this helps the grieving process.  I would recommend considering this option if you are very attached to your Facebook. 
  • The next option is to have your Facebook downloaded off-line so that your family members and friends can have your pictures and posts, etc. and then have your Facebook closed. This way you won’t pop up as someone’s friend suggestion down the road.  As someone who has dealt with this personally, I would recommend trying to remove a deceased family member from Facebook to create any further damage in terms of emotional grief. 
  • The last option for Facebook is to simply have Facebook close your account and delete all of the content. If you don’t have anything of note on your Facebook and you really don’t have any interest in keeping your Facebook open once you pass away this is something you can preselect on your Facebook account or your Executor or Administrator can do this after you pass away. 

Protect Yourself – Use New Texas Laws to Allow Access To Your Online Accounts

Recently, Texas passed the “Texas Revised Uniform Fiduciary Access to Digital Assets Act” or TRUFADAA.  This Act allows a person (fiduciary) named by you, much like a Power of Attorney, to obtain access to your digital assets.  These digital assets can include two things. 

  • The first type of digital asset includes social media, email accounts, and various things that require password protection because of personal information. These digital assets don’t necessarily make money. This would include things like Facebook, My Space, Instagram or Twitter, etc. 
  • The other type of digital asset is a website or blog that is profitable or at least is created for profit.

This new Act would allow you to use a form provided by an attorney or created by you, obtained online, or an estate planning service. The form names one, two or even three or more people to act on your behalf in case something happens to you in regard to your digital assets.  If you have further questions about this type of planning, please be sure to visit an estate planning attorney like us!

Protect Yourself – AND Your Profitable Website or Blog

Unlike Facebook, Twitter or Instagram, there are website and blog platforms online that individual people and companies do own or can own.  For example, this website that you are visiting right now is owned by the Weaver Firm – Attorneys. The most famous of these is “Huffington Post” which started as a blog and is now a multi-million dollar company. 

If you created a blog or website that is profitable or if you believe your website may be profitable one day, you need to have a succession plan just like any other business. 

As these types of websites become more and more common, I believe that litigation will increase as family members and friends fight over the profits and the rights to these websites.  If you own a business, either an internet company or a company in the real world, you must have a succession plan either in the governing documents of the company or in your Will or Trust.  If you need help setting up a plan for your business, please contact our office. 

Protect Yourself & Your Heirs – Create a Digital Estate Plan

So, how does all of this I have discussed relate to estate planning?  Well, I mentioned a few things including the new laws and planning in your Wills for your online business or your social media, but to wrap everything up in a nice little package, I would recommend creating an actual digital estate plan that goes along side your regular estate plan.  This would include:

  • List of passwords and other access to online accounts, emails, etc.
  • Name at least one person (a fiduciary), preferably from a different generation, to handle your digital assets including access to emails, text messages, etc., access to businesses you run online including eBay accounts and Amazon accounts. This would also include designating websites like Facebook and Twitter to either terminate upon your death or to be memorialized depending on your personal situation. 
  • Add language in your Will allowing your Executor to deal with digital assets specifically as the legislature has not quite caught up with current technology and the law is very new on most of these topics.

Should you need help in planning–for distribution of your digital or tangible assets–please give us a call to schedule an appointment at 817-638-9016.  We would be happy to meet with you about your estate plan as technology continues to change our lives.

I believe that estate planning, both digitally and non-digitally, will be crucial to avoiding costly litigation. We’re glad to help protect you, your family, and your online presence in the future.

 

By Travis Weaver, Attorney

Office: 817-638-9016

Email:  TWeaver@WeaverLegal.net

 

 

 

 

 

 

Z:\Marketing – TW\October 2017 e-letter.docx

Make 401(k) Plans Great Again

If you don’t already have a 401(k), do I have some great news for you! The new limits for 2018 contributions just came out and as of January 1, 2018, you can contribute $18,500.00 to your 401(k). 

For a quick reminder, a 401(k) account is a retirement savings account through your employer (SEP IRAs are for self employed individuals and those have slightly different rules) which allows you to contribute money to your retirement before taxes are taken out. Yes, taxes are taken out once you retire, but 401(k) plans allow you to lower your taxable income right now.

Over 1.1 million dollars saved for retirement

With modest returns, a forty year old could max out his or her 401(k) account for the next twenty-seven years and have over 1.1 million dollars saved for retirement above and beyond social security. That’s a lot of vacations.

Weaver Firm PC 817.638.9016 or TWeaver@weaverlegal.net

The Importance of Elderly Legal Advocates to Stop Elder Abuse

Last week, the New Yorker published a sobering look into the world of abusive guardianships around the country. Stories about elderly individuals being over-medicated and shuffled around to different nursing homes show the dark side of Guardianship law and how the Elderly are abused in our communities. As the baby boomer generation ages, elder abuse will continue to plague our society. After reading this story, I am left with two takeaways:

  1. Attorneys appointed to represent the interest of potential Wards need to do their due diligence EVERY TIME. Visit the person and speak to the caregivers. Talk to the family members and gather all relevant facts before submitting any report to the Court. In 99 out of 100 cases like those discussed in the article, a good advocate for the Ward would prevent the situation from getting out of hand.
  2. Family members and friends need to look out for the elderly in their communities. In a society where we close ourselves off more and more each year, those struggling in their homes or daily lives go unnoticed. If you know of an elderly person or couple in your neighborhood, take time to stop and check on them once a week or so. If you are family, go visit your elderly family members! Look for signs of elder abuse (new credit cards, HSN packages by the dozens, etc.). Those with memory issues can greatly benefit from seeing familiar faces on a daily or weekly basis.

Although we practice Guardianship law at the Weaver Firm, we always recommend a Guardianship as a last resort. The State of Texas has many statutory alternatives including Power of Attorneys, Caregiver Agreements, etc. Often, a strong support system can prevent Guardianships for years if not indefinitely.

For more information about these alternatives or if you think you need Guardianship advice, call our office at 817.638.9016.

To report elder abuse, go here: https://www.dfps.state.tx.us/Contact_Us/report_abuse.asp.    

Who is Entitled to Death or Survivor Benefits from an ERISA Plan or from a Federal Employee Benefit Plan?

Are you or someone you know a part of the federal employee plan? Postal employee? Social Security worker? Senator? If so, you are covered by the Federal Employee Benefit Plan. We often deal with clients who are entitled to benefits from this type of plan. Check out this great article about what to do if you are entitled to benefits under this type of plan.

Some highlights:

  • make sure you designate your beneficiary and keep it updated!
    • married? change the beneficiary
    • divorced? change the beneficiary
    • children? change the beneficiary
  • FYI, just because you get a divorce, your surviving spouse can still receive retirement benefits
  • ambiguous designations on forms can still be effective depending on the intent of the employee

article link: https://poseidon01.ssrn.com/delivery.php?ID=695120099066114013027099112073077092097036019031031092110087122090070084089113065093056035048125008059096096007071031065126120038022089021065116026080115123096064024046007086080070084082070083125112002114094008068080065015005113092010007021119102024&EXT=pdf

What Trump’s Tax Plan Means for Texas Estate Planning

Attached, please find a timely article on the changes to the tax laws and how they might affect your Estate Planning.

Here are some highlights:

  • repeal of Estate Tax (death tax)
    • yes, the death tax is once again being threatened to within an inch of its life. While I doubt, the 5.5 million dollar exemption goes away, be on the lookout for changes in the future.
    • no mention of gift tax staying or going . . . limit is $14,000 a year per person still
  • cost basis at death is also strangely unmentioned. Perhaps you will keep a step-up in basis and perhaps not

Our advice:

  • update Power of Attorneys to allow for gifting powers
  • update Estate Planning documents for 2017 changes in language and law
  • keep investing wisely and saving so you can eventually take advantage of no Estate tax in the future!

Link to article: https://www.fa-mag.com/news/what-your-hnw-clients-should-do-in-response-to-trump-s-tax-plan-34964.html