The Wealth & Wisdom Blog

Information on Estate Planning, Estate and Trust Administration and Unique Asset Planning

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2020 Year-End Tax Update and Planning in a Time of Uncertainty

“Our new constitution is now established and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”  Benjamin Franklin’s letter to Jean-Baptiste Leroy, 1789. For many of us, the end of the calendar year could not come soon enough.  Between the social unrest, political […]

Annual Exclusion Gifts

Do your givin’ while your livin’ so your know’n where its goin’.  Unknown Poet and Estate Planner Many of my clients share with me their pleasure in seeing their family use and enjoy gifts made by them. Whether it is paying for a nice dinner out with the family (remember those days?), a vacation adventure […]

Lowered Hurdle Height for Asset Transfers to Children

In last month’s update, I shared how our family has documented our memories of the 2020 pandemic.  One of my lasting memories will be of the virtual learning assignments for our children. As the self-appointed physical education teacher, I took it upon myself a few weeks ago to create an obstacle course in our front […]

Grantor Retained Annuity Trust (“GRAT”)

A “Grantor Retained Annuity Trust” (“GRAT”) is a planning strategy used to transfer wealth without necessarily using any federal gift tax exemption.  Under this strategy, a donor irrevocably transfers assets to an irrevocable trust, but purposely retains a fixed annuity amount for a fixed period of years (called the “annuity period.”) While the donor will […]

Unintended Consequences: The Use of Conduit Trusts for Retirement Accounts

If you have read any of Malcom Gladwell’s books, or listen to his podcasts, you are acquainted with various examples of the law of unintended consequences. Gladwell demonstrates how well-intentioned efforts to solve societal problem might actually prove to be an impediment to success.  In the 1990’s, Australian lawmakers enacted legislation requiring Australian children to […]

Use it or Lose It: The Use of Spousal Lifetime Access Trusts

“I am suddenly feeling ill.”  I overhear a friend feign a cough as he calls his boss, reporting his absence from work by reason of sickness. As we tee off together from the first hole at our favorite golf course, my friend reports to us, his golfing buddies, that while he has no vacation days […]

Full Utilization of a Donor Advised Fund

The implementation of a Donor Advised Funds is at an all time high. Vanguard reported a 45% increase in new DAF accounts in the fourth quarter of 2017, with more than 80% of the gifts comprising non-cash assets, such as appreciated securities.  Likewise, Schwab has reported a 59% increase in the number of new DAF […]

Minnesota Estate Taxes

Back in 2017, Governor Mark Dayton signed a Minnesota tax bill into law that, among other items, specifies the Minnesota estate tax rate and estate tax exemption amounts.  Minnesota residents with significant assets should be aware of these exemption amounts and why so-called “Credit Shelter Trust” planning (also known as A/B Planning or “Credit Shelter […]

Minnesota Estate Tax Rules

  Minnesota imposes an estate tax at death on the assets of anyone who, at the time of his or her death, either (i) was a Minnesota resident or (ii) owned real estate or business assets physically located in the State of Minnesota. The key points about Minnesota estate taxes are as follows:

Utilizing a Tax Savings Trust for Married Clients

In order to minimize the incidence of Minnesota estate taxes following the death of the surviving spouse, a married couple residing in Minnesota who own assets in excess of $3.0M should include specific provisions in their estate plan during their joint lifetimes. Through the creation of a “Tax Savings Trust” following the first death between […]