Idaho Estate Planning

Charitable Gifts Might Be Viewed as Elder Abuse

Charitable giving in the last years of the über wealthy tend to come under fire from family members and the public, oftentimes questioning the donor’s aging mind and capacity to make sound decisions regarding their finances. Such is the case of the late Huguette Clark, her immense inheritance, and the hospital that may (or may not) have influenced her generous donations. Ms. Clark was extremely wealthy, and during the last twenty years of her life the reclusive copper heiress spent an absolutely excessive amount of time in the hospital. She had few afflictions other than, well, loneliness.

After her passing, it did not take long for questions to arise regarding how the hospital pushed to care for a not-so-infirm woman for so long and just so happened to be receiving sizable donations from her all the while. What may be worse is that the allegations may be true and there are some interesting, perhaps damning, tidbits.

This scenario and the questions it raises were reported recently in The New York Times in an article titled “Hospital Caring for an Heiress Pressed Her to Give Lavishly.” The article chronicles the last lonely years on Ms. Clark’s life.

Remember, she was only all-too-human. If manipulation was afoot, what should be done about it and, closer to home, how can such manipulation be prevented in our own estates or those of our already senior loved ones?

But then there is the reverse side of the coin: what if it was not manipulation at all? Then Ms. Clark’s wishes and last charitable actions are being drawn through the mud for not having been fully articulated.

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

Cost Basis & Your Inherited Stock

If you ask any accountant or business owner, calculating the cost of something is tricky and ever-changing. And when figuring out the “cost basis” for stock, one is often left scratching their head. Needless to say, “cost basis” is incredibly important when it comes tax time, especially if it was a bequest or gift.

So what if you inherited stock? It’s fairly common, but how do you determine the value for that? That’s the complicated calculus of the “cost basis.”

If you think about it, stock represents a value that is forever changing on the basis of the market itself. Those ups and downs of the market can make it a bit difficult to calculate actual gain over the life of one individual. The wrinkle of how to count for those changing values when stock passes from the hands of that one individual to another makes the wrinkle more challenging.

For a basic introduction to “cost basis” and the value of inherited stock, consider reading a recent Kiplinger article titled “Cost Basis for Inherited Stock.”

Planning for your estate means understanding what your assets are and what their value is to your heirs. Accordingly, the understanding of cost basis is imperative to you and your heirs. At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

The Value of Art Gifts May Be Questioned by IRS

Giving someone art rather than dollars can be complicated, especially when it comes to taxes and the IRS. So the need for a qualified appraisal is critical in this gifting situation.

When it comes to art valuations, however, you should know that the IRS certainly will not take your word for it, or even the word of a decent appraiser, until they get their own expert opinion from their own experts: the Art Advisory Panel. A fair question to ask, then, is how fair is the Art Advisory Panel?

The question of the Panel and fairness was addressed in a recent Forbes article titled “Is Art Advisory Panel Giving Taxpayers A Fair Shake?” Here’s how the competing interests play out. First, if you are a taxpayer giving art to a loved one or bequeathing it as a part of your estate, then you likely want a lower valuation. Why? Because you want a lower tax bill. On the other hand, if you are selling that very same piece of art, then you will want to command the absolute top dollar. Likewise, a body in charge of taxation is pretty much always going to be interested in a high valuation because it triggers a higher tax bill.

So, statistically, how much of taxpayer appraisals does the government Panel accept? Would you believe only 51%? In addition, the Panel “adjusts” the other 49%, and of that adjusted percentage generates a net 47% increase on items in estate and gift appraisals.

Of whom are you more cynical, the IRS or the taxpayer?

When considering the gift of art, be sure to have your valuation set and ready to go. Remember: there’s nothing an expert likes better than disagreeing with another expert - and the IRS keeps them on staff.

Gift Valuations in Idaho Can Be Complex

You may think that being eligible for the charitable tax deduction is as simple as making your gift and then claiming the deduction.  Not so. In order to qualify, there are important steps to take regarding documentation and valuation of your gift.

Fundamentally, you need to prove the value of what you have given, but that can get complicated when you are giving in the form of things. You need an appraisal of any thing you give (e.g., art, a house, an easement, or a service), and you need that appraisal to answer all the tax man’s questions even before he asks them. In short, appraisals can get tricky.

For example, if you give art you need an art appraiser, and if you give real estate you need a real estate professional. However, what if you give interest or stock in a company? Then the appraisal becomes even trickier.

When you are giving less than obviously valued interest, then you might want to consider the advice given in a recent Forbes article titled “It's Hard To Satisfy The Qualified Appraisal Requirement For A Charitable Contribution If You Appraise The Wrong Property.” The problem with interest or stock in a company is that the interest or stock is different than the things the company owns. So, 10% of the stock in a company with $5 million in assets is not (necessarily) equivalent to 10% of $5 million. Such is the case, even when the sole purpose of the company is to hold well-documented and appraised assets worth $5 million.

In a “simple case,” the IRS likely will provide leniency and determine that such and such an appraisal was “substantially compliant” if not fully so. Nevertheless, the greater the business complexity, the greater the risk of misstep and attending (and costly) determination of insubstantial compliance.

To avoid any questions being raised about your gift, obtaining an appraisal is an essential step when recognizing the tax implications of any transfer of property that is more than simply money itself. At Idaho Estate Planning we have a large network of resources to help you accomplish your goals. Call us today for a consultation and let's get to work for you and your loved ones. Remember, good planning is no accident.

Keeping the Family Home In the Family

You’re probably well aware that for many families, the family home is the single most important estate asset. Can you imagine your kids having to part with the home they grew up in? The thought evokes many emotions when making end-of-life plans, and passing along the family home to the next generation is certainly an option. Family homes may also be the most valuable estate assets, and estate taxes may complicate plans for passing them along. If this is your goal, however, don't give up. There are tax-savvy strategies to make it happen, but they require you to plan ahead.

For a good overview of this topic, turn to a recent article in SmartMoney, “Passing Your Home to Heirs.” The article is pretty easy reading on a fairly complex subject, and includes a run-down on some effective strategies: from the simple bequest in your will, to variously structured sales, to more sophisticated trust-based strategies.

Which planning strategy will work best for you depends upon your unique circumstances. This definitely is not a do-it-yourself undertaking. There are many factors to be considered and legal land mines to avoid.

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

Some Gifts End Up Costing The Charity & Cannot Be Returned

Ever been in possession of a gift you cannot return? No, I’m not talking about a post-Christmas conundrum where you don’t have the receipt or the tags are missing. What happens if you can no longer keep a gift given to you through someone’s will? This is a problem so many museums face each year in regards to gifts they receive through the wills of deceased art collectors.

One museum currently on the hook is the Brooklyn Museum in New York. The New York Times recently reported on its plight regarding a gifted collection in an article titled “Brooklyn Museum Finds Some Problematic Gifts Can’t Be Returned.”

It seems that in 1932, Colonel Michael Friedsam gave a massive collection to the then fledgling museum. Nevertheless, since then the museum has grown and has too much to put on its walls, no longer displays items like historic battle axes, and half the Colonel’s collection turned out to be fakes or “not of museum quality.” Bottom line: the museum wants to give or sell the artworks and stop paying the exorbitant storage and restoration fees.

Now, it’s not that the museum is unappreciative. No, it’s more complicated even than that. Unfortunately, the Colonel’s will legally excludes any option the Colonel’s estate executor hasn’t signed off on. Even more unfortunately, the last executor died in 1962.

The lesson for those with artworks worth preserving for future generations is to include alternatives permitting like-minded individuals (executors) to further your objectives for your gifts in the future.

Frankly, the Colonel and his estate planners couldn’t have foreseen the next 90 years. But let that be a lesson when it comes to your planning. Predicting the future can be a very tricky thing. So, how are your gifts structured?

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

Mixed Numbers For Charitable Giving in 2012

A new year of giving has begun, but many are curious about the sum from wealthy donors for 2012. The numbers are starting to come in -- how did last year compare to 2011? Unfortunately, and according to a summary post by the Chronicle of Philanthropy entitled “America’s Wealthiest Donors Slow Their Giving,” 2012 was not a good year for charities or a big year for donors.

In fairness, 2012 will first and foremost go down as a year of great indecisiveness, whether it was the presidential election or the deal that brought us over the fiscal cliff. But political indecisiveness gives rise to a tricky environment for charitable intentions. That said, the largest gifts by American philanthropists totaled a whopping $5.1 billion, except when you account for the fact that Warren Buffet gave away $3 billion of that total. By comparison, the largest gifts by American philanthropists totaled $2.6 billion in 2011. Without Buffet’s gifts, the 2012 total would have been $2 billion, falling under 2011’s totals.

Now, this kind of assessment isn’t an entirely fair estimate of the direction of the charitable energies of all donors. In fact, the list only accounts for the top ten public donors, thereby ignoring the many small donors who you may recognize as those not being featured on the cover of Forbes. Nevertheless, it seems to be indicative of an overall mood.

So, if 2012 was all indecision and waiting, what can we expect in terms of philanthropy for 2013 now that we’ve got some answers and direction on the tax front? No matter what 2013 brings as far as taxes go, or any financial concerns for that matter, you can make the new year a better year by planning now. Call us and we'll help you accomplish your goals. Remember, good planning is no accident.

11th Hour Tax Planning in Boise Idaho

Trick-or-treaters have come and gone, the elections are over, the turkey is on its way, and before you know it the holidays and the year itself will be over. What then? For many Americans the new year will find us in the grip of a potentially disastrous tax predicament, either the fiscal cliff itself or something else entirely.

When it comes to estate and gift taxes there are some actions you may want to take while it is still 2012. This matter was taken up in a recent Forbes article appropriately titled “Year-End Estate Tax Considerations -- TIME IS RUNNING OUT.”

Yes, time is running out on your ability to take advantage of more than a few powerful tax tips and tricks. In fact, this countdown clock has been ticking toward this very precipice since the final days of 2010. If you haven’t been carefully planning all along, then now’s the time to jump to it! What can be done is another question and, while it depends on your unique goals, the original article offers a few examples of your options before the buzzer sounds.

Another Forbes article titled “Major Estate Tax Change Looming - Don't Be A Last Minute Louie” points out rather directly how 2012 has been a year of waiting; waiting for Congressional action, waiting for an election to come and go, and waiting for a settled law to base your planning around.

Instead of waiting, however, the best advice would seem to be to take action as best we can.

Idaho Estate Planning is your best resource for in the Treasure Valley. Call us today and reserve one of our quickly dissapearing consultation appointments. Call now and avoid the year-end rush. Remember, good planning is no accident.

Estate Tax Frenzy Hits Idaho

We have discussed the coming changes to the Estate Tax especially as it pertains to gifting in many blogs. On Saturday the Idaho Statesman shared another article worthy of your review. You can find it here.

If you are considering using some of the estate tax planning issues covered in the article you are quickly running out of time. Call us today at 208-939-7658. At Idaho Estate Planning we have ther resources you need to put together an effective and thorough plan for you and your family. Remember, good planning is no accident.

Gun Trusts in Boise Idaho

Do you have any firearms that are collectible and likely expensive? Do you have any firearms that are subject to federal regulations on ownership and use? If yes, then careful planning may be required to avoid running afoul of tax and regulatory laws upon your incapacity or death.

Planning to give away your estate property is often about understanding your loved ones and family members, but proper planning is also about understanding the assets you are giving and the snares to avoid. You own different assets in accordance with different laws, so you must take these elements into consideration when giving them away.

Many firearm owners take great pride in their collection and also hope to pass them along to their loved ones. Failing to plan for the legal ownership transfer, however, can result in accidentally triggering illegal transfers. Accordingly, if you own a firearm or even a firearm collection you plan to leave to family or loved ones, then a “gun trust” may be in order. A recent article in AmmoLand, titled A New Breed of Gun Trusts – Protecting Firearms Collectors & Their Collections, makes this point very clearly.

A properly written gun trust can skirt tax and regulatory pitfalls. When drafted correctly, trusts are very powerful and specially-tailored legal tools for giving all sorts of unique assets. In Boise as well as the rest of Idaho you can count on Idaho Estate Planning to be your source for facets of planning for the future. Call us today at (208)-939-7658.