IRA Charitable Rollover is Now Permanent

IRA Charitable Rollover is Now Permanent

The Pension Protection Act of 2006 permitted individuals to draw money directly from their IRA accounts and donate it to qualifying charities without having to declare it as income. This rollover was capped at $100,000 and counted towards the minimum IRA distribution required of those aged 70 ½ and older. The Act was renewed annually for the next several years, leaving taxpayers to wonder each year if the rules would change. On December 18, 2015, President Obama made the IRA Charitable Rollover permanent when he signed the PATH Act into law. This is a relatively seamless option for seniors who wish to donate to charity. Without the Charitable Rollover, an individual would have to take the minimum IRA distribution for the year and count the total amount as taxable income. Depending on his or her total other sources of income from Social Security, pensions, etc., the minimum distribution could push the taxpayer into a higher tax bracket. He or she could then donate to the charity and take a tax deduction to protect a portion of income from taxes. Under the PATH Act, the individual specifies the amount, up to $100,000, to be donated and it is distributed by the Trustee of the IRA directly to the eligible charity or charities. This is counted toward the annual minimum IRA distribution. The individual then takes the remaining balance of the minimum distribution (if any) and claims that amount as income. Since the monies were pre-tax and were sent directly to the charity, the individual cannot claim the donation as a deduction. It is important to confirm that the charities you...
Estate Planning for 2016

Estate Planning for 2016

We’ve updated our Estate Planning Guide for 2016. If you haven’t reviewed your estate plans recently or you’ve experienced a major life event (birth, marriage, divorce, death of a spouse), you’ll want to review this...
What is a Living Probate?

What is a Living Probate?

By E. Drew Nelson, Attorney You have a last will and testament in place, but do you worry that one of your relatives or heirs might challenge your will after your death? Recent changes in the estate laws of North Carolina have provided an option never before available to North Carolinians – the chance to have a Living Probate. If you are a resident of North Carolina, you can now seek a judicial determination that your last will and testament is declared valid during your lifetime. Until recently, you would execute a will and after your death the will would be probated. Anyone challenging your will would come forward at that time and file the challenge with the courts. The option now exists to address any potential challenges while you are still alive. If the will is declared valid by the court during your lifetime, this would serve to bar future challenges or caveats after your death. This tool can provide a family peace of mind that their well thought out estate planning will not be challenged by a disgruntled heir or unhappy family member after their death. In order to petition the court for a determination as to the validity of your will, an application must be filed showing the court that you possessed testamentary capacity (were of “sound mind”) at the time you executed the will. You must also show the court that you were not subject to any undue influence. All interested parties will have a chance to come forward and bring any disputes as to the validity of the will to the attention of the...
Contested Wills: When is a Last Will Not “The” Last Will?

Contested Wills: When is a Last Will Not “The” Last Will?

By David Inabinett, Attorney at Law There is something that feels “final” about making one’s last will and testament. Even though that document may be changed or amended any time by the person making a will, everyone has a sense that this is now “done” when a will is signed. However, with extended life expectancies, the prevalence of dementia and Alzheimer’s disease, and more frequent changes in domicile, second marriages, stepfamilies and stepparents, chances that a will may leave certain heirs or “would-be heirs” disgruntled and disappointed are pretty good; the law allows these unhappy parties to take action and contest the will. Enter the “will caveat” lawsuit or devistat vel non, derived from the Latin phrase meaning “he devises or not.” In order for a will to be validly executed in North Carolina, the person must sign the document and it must be witnessed or “attested” by two (2) competent witnesses. The person must intend to sign the document as his/her will and do so by signing it or by having someone else in the person’s presence and at his/her direction sign the person’s name to it. The person must signify to the attesting witnesses that the document is his/her will by signing it in their presence or by acknowledging to them his/her signature previously signed on it. The attesting witnesses must then sign the will in the presence of the person making the will, but need not sign in the presence of each other. To be capable of signing a will, a person themselves must satisfy four (4) essential elements: The person comprehends the natural objects of...
5 Things You Should Include in Your Will

5 Things You Should Include in Your Will

We often send out reminders about making sure you have a current will, so today we’re providing a quick list of five things you should consider when you make that will. Remember, your will is basically a list of your final wishes related to your financial assets and personal belongings. Name an Executor you trust. Many people feel obligated to name a close family member as Executor, but that may not be the right choice for you. If you don’t believe you have any relatives able (or willing) to take on this task per your instructions, you may choose an independent third party as Executor. Think carefully about appointing two or more to serve jointly – we’ve all been on a “committee” before, and some work well and some, not so much! Also select an alternate if your first choice is unable to serve. Choose a guardian for your minor children/trustee for adult dependents. Again, a relative may not be the best choice to care for your dependents. Consider the age and health of the person you name (for example, raising grandchildren might be a strain for your elderly mother), as well as their value system and current living situation. Also remember to make provisions to name a trustee if you are caring for an elderly parent who will need ongoing assistance in the event of your death and for whom you wish to leave assets to assist with that care. Be specific in how you want your assets distributed. While it’s easy to distribute cash, family heirlooms can cause some major fights among beneficiaries. List specific items of...
And a Jazz Band at the Funeral

And a Jazz Band at the Funeral

We seldom know exactly how much time we will spend on this earth. We were reminded of that recently when our colleague, R.B. Smith, died unexpectedly. It was another reminder of how important estate planning can be to family members and survivors. R.B. knew this, and had plans in place, including details of how he wanted his funeral handled (yes, this included a jazz band after the service playing the standard, When the Saints Go Marching In). Why do I need estate planning? Consider any minor children you might have or adults dependent on you for their care. What happens if you don’t have plans in place? If you die unexpectedly, you leave behind not only family and friends, but things like personal property (your car, clothes, furniture, jewelry), real property (houses or land), investment accounts (IRAs, 401ks, stocks), cash and bank accounts. While the courts can get involved in settling your estate, this can be time consuming and costly. Most people would much rather choose a trusted relative or friend to do this. This person becomes the Executor. You may also leave behind debts that will need to be paid from your assets. And what about your digital assets, automatic payments or online profiles that need to be handled? If you have a preference for funeral arrangements, you may specify this as part of your plans. You may even choose to pre-pay for arrangements so your loved ones are not left with the added stress of this financial obligation when the time comes. Age is not always a factor. Accidents like car crashes and work-related injuries happen every...