Archive for the ‘Life Changes Preparations’ Category

Five Tax Tips for Recently Married Taxpayers

by P. Lewis Robinson
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Aug
19

Are you getting married this summer?  If you recently got married or are planning a wedding, the last thing on your mind is taxes.  However, there are some important steps you need to take to avoid stress at tax time. Here are five tips from the IRS for newlyweds to keep in mind.

  1. Notify the Social Security Administration Report any name change to the Social Security Administration, so your name and Social Security Number will match when you file your next tax return. Informing the SSA of a name change is quite simple. File a Form SS-5, Application for a Social Security Card, at your local SSA office. The form is available on SSA’s website at www.socialsecurity.gov, by calling 800-772-1213 or at local offices. (more…)
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8/17/09 -Reviewing Your Will

by P. Lewis Robinson
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Aug
17

If you are married and the combined value of you and your spouses’ estate is LESS than $4,000,000.00, I recommend you review your will. You should determine how your assets will be distributed at the death of the first spouse.  With all of the constant changes in tax laws, you may even need to review your estate plans on a yearly basis (to find out if you need to review this year, please contact us).
 
Most of the wills prepared in the last several years for our clients were structured using a Credit Shelter Trust.  You may not realize that your will was prepared with this trust so it is important to check your will.  With the current Federal Estate Tax Exemption of $3,500,000.00 for each taxpayer, the surviving spouse may not like the results of their current wills.
 
Some disadvantages to Credit Shelter Trusts are as follows:

1.  Surviving spouse’s access to the Credit Shelter Trust Assets must be restricted.

2.  The deceased spouse can give the surviving spouse access to all, a portion, or none of the income from the Credit Shelter Trust.

3.  If access to principal is allowed, it must be limited to health, education, maintenance, or support only.  Health, education, maintenance, and support, or “HEMS”, are four magic words used by the IRS, and there’s some guidance about what they mean, but the surviving spouse will have to be careful when withdrawing principal to make sure the money’s use will fall within these parameters. 
 
4.  It adds complexity to the surviving spouse’s life.  If the surviving spouse is trustee, he or she will have to maintain separate records for the trust, and ensure that he or she does not overstep the trustee’s powers. 
 
5.  If a neutral trustee is used, the surviving spouse will have to cooperate with the trustee. Further, a neutral trustte will likely charge a commission.  

6.  A tax return will have to be filed. 

Your CPA can help you review how your assets will be distributed at the death of the first spouse.  Call for an appointment to have your will reviewed or with any questions about how to determine the value of your estate.

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