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Monday, June 23, 2014

Titling Assets for Routine Estate Planning

June marked 15 years in the financial business for me. I continue to see significant mistakes in planning by folks daily. Let’s discuss the titling of assets in an effort to expedite the transfer process.

Checking/Savings account:  Do these have a joint holder or have you added a TOD (transfer upon death) person to the account?

Safety Deposit box:  Is this in your name only or is it in the trust’s name? If it is in your name only, your heirs will need a legal document (not your trust) to open it.

IRAs:  Are adult children the primary beneficiaries? This is typically the best practice. Trusts are named for minor children and adult children that you do not want to inherit the money right away.

Life insurance:  Who is the owner and the beneficiary? Is only one child the beneficiary but you have multiple children? Naming them all is a better practice than paying it to one and having them dole the money out (too much room here for squabbling).

Other Investment Accounts:  Are these accounts jointly held, in a trust, or have a TOD?

If you have questions please contact your financial professional at Argus Financial Consultants for a beneficiary and titling discussion.


This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.

Monday, June 16, 2014

Are Home Prices Really Going Up in Grand Rapids?

If your neighborhood is like mine, you have seen a couple of houses go on the market recently only to have a “pending” sign a week or so later. I stumbled upon the following link on the Grand Rapids Association of Realtors (www.grar.com) website last week and found it very interesting. Each month stats are posted about prior months sales. Despite the abnormally cold and long winter I noticed that the number of listing were up for April and the average sale price was up significantly from a year ago. I also noticed the average months of inventory is way down, which may help to explain the quick sale of houses. I’m anxious to see what next months numbers look like!

Monday, June 9, 2014

To Be or Not To Be Generous

There seems to be a lot of confusion about making gifts to family and friends. Not surprisingly, since the law has changed a lot over the years. Here is a basic rundown:

· In 2014, an individual can give $14,000 to another individual without gift taxes.
· Married couples can combine their annual gift exclusion amount and gift $28,000 to another person.
· An individual can pay tuition for the education of another individual without incurring a gift tax. The payment must be directly to the qualifying school/college.
· An individual can pay for medical expenses or medical insurance for another individual without incurring a gift tax. The payment must be directly to the provider or insurance company.
· Gifts made to a spouse who is a US citizen are not subject to gift taxes.
· The gift tax is the responsibility of the person making the gift. The person making the gift files with the IRS and pays the tax.
· Gifts to charity or a political organization are generally not subject to gift tax.

Even if you make a gift of a value greater than $14,000 this year, it is very unlikely that you will actually owe a gift tax. The excess gift will reduce your lifetime gift tax exemption. In 2014, the lifetime gift tax exemption is $5.34 million and it is indexed for inflation. So, you can see, most will not use up their lifetime exemption.

Another completely separate issue in gifting is the Michigan Medicaid rules. Gifts made in the five years prior to needing nursing home care could cause the state to deny Medicaid benefits for a period of time. It is important to consult a financial, tax, and estate professional before making high value gifts.

Tuesday, June 3, 2014

Reviewing Your Tax Return

Now that tax season has ended it is time to review your tax return. As always I am not an accountant, so please check with your tax professional for any tax advice.

There are two deductions I have seen that are done incorrectly on tax returns. The first is the 529 state tax deduction for contributing to your states 529 plan. One of the reasons this one does not find it on the tax return is because it is self-reported. You must add up your contributions and provide them to your accountant. The other reason why this is not reported is that not all accountants know the rules for each state. I had a situation recently when the client’s accountant was in a different state than where the client lived. The client is now amending prior year returns as they missed tax deductions for a number of years.

The second one I see done incorrectly is the HSA deduction. If you are contributing to an HSA through your employer it will most likely be on your W2 in box 12. This number is your contribution plus your employer’s contribution. If you have made a direct contribution outside of your employer’s plan you need to communicate this to your accountant.

Good planning involves tracking and making sure your financial transactions are reported. If you have questions about any of the above items please let your financial professional at Argus Financial Consultants assist.


This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.