By James A. List
The Law Offices of James A. List, LLC
There was much speculation about what the current presidential administration was going to do about estate tax law changes in late 2008 into 2009. Some of this has quieted down as the stimulus package, unemployment, the auto industry and AIG, and health care reform now dominate the headlines. However, 2010 is upon us and the debate will soon again heat up, so it’s best to stay on top of the issues.
By Matthew Jones, CFA
Investment Manager for Harvest Investment Consultants
In the first quarter of 2009, Harvest Investment Consultants, LLC provided information about the structure of corporate bonds and detailed the compelling investment opportunity that we had identified in that sector. The corporate bankruptcies and onset of global recessionary conditions in late 2008 and early 2009 lead to a credit market freeze and high-quality companies were unable to issue new debt. Over the last six months, the capital markets have been gradually improving and we believe the corporate bond market has moved closer to “fair value” levels. High quality corporate bonds that are relatively short in maturity can still provide attractive income opportunities and lower levels of volatility compared to riskier asset classes due to their priority level on a company’s balance sheet.
By Mary E. Ryan
Taylor & Ryan, LLC
Employers are well-advised to review their hiring practices with respect to verifying employment eligibility on Form I-9 as well as conduct an audit of existing Form I-9s. After all, Janet Napolitano, Secretary of the U.S. Department of Homeland Security, has made worksite enforcement a priority. Further, Immigration and Customs Enforcement has conducted high-profile investigations that have resulted in substantial fines based on I-9 violations and criminal charges for employers who knowingly employ undocumented workers.
By Lawrence N. Leitch, ChFC CLU
Partner with Synergy Financial Group
We are starting to see some parts of our economy begin to heal from the big bank meltdown that started last fall. And after severe declines in U.S. GDP in the fourth quarter of last year and the first quarter of this year, the second quarter report shows a modest one percent drop in real GDP. However, many areas remain weak – consumer spending, business investment, residential construction and inventory investment all declined, while net exports, due to huge declines in imports, and government spending improved.
James A. List, Esquire
The Law Offices of James A. List, LLC
What is a trustee? What do they do? What are their qualifications? Who should we use?
These questions and many similar ones often fill up estate planning appointments. The need for qualified trustees continues to grow for many reasons. Families with disabled members need to provide special needs supports without impacting disability benefits. Family structures have changed, and trustees are necessary to protect second spouses and to protect children from previous marriages. Some trusts are critical for estate tax planning.
Anne Meltzer, CPA/ABV
Mark W. Norris, CPA/ABV, CVA, CFFA, ASA
Tucker & Meltzer Valuation Advisors
In order to transfer an interest in a privately held business for estate and gift tax planning, a business valuation is required. The first step in this process is to determine the value of the business. The second step is to determine the value of the minority interest in the business by applying discounts for minority interest and lack of marketability.
J. Michael Martin, JD, CFP®
Chief Investment Officer for Financial Advantage Inc.
For an entire generation, investors were swept up in an intoxicating environment of unbridled opportunity: the dismantling of the Soviet empire, the resurgence of capitalism in Asia and Eastern Europe, the Internet revolution, a global credit boom, the trade boom, the housing boom and the energy boom. That was our investment context, and while it lasted every market correction was an investment opportunity. As everyone now knows, the cheap and plentiful credit that supported this giddy expansion has imploded. And that changes everything, though not everyone realizes it yet.
Many of us were first jostled from our American reverie when it was brought to our attention this year that equities have lost money for an entire decade! Whatever happened to that fabled “10.4 percent average annual return over the long term”? Whatever happened to “over long periods of time, stocks earn more than bonds”? As advisors, we have been examining the basic big-picture assumptions investors have long accepted about the world in which we live. Some of our discoveries are a bit unsettling.
From Mark Pallack, New York Life
Suspension of the 2009 Required Minimum Distribution (RMD) requirement
President George W. Bush recently signed H.R 7327, the “Worker, Retiree and Employer Recovery Act of 2008.” One of the provisions of the bill suspends the Required Minimum Distribution (RMD) requirements applicable to qualified retirement accounts, such as IRAs and TSAs, for 2009.
Due to this legislation, IRA and TSA owners who are age 70 ½ or older and inherited IRA owners are not required to take an RMD for 2009. This also includes any clients who first become RMD eligible in 2009. However, please be aware that this provision does not apply to any 2008 RMD that is permitted to be made in 2009 because the individual’s required beginning date is April 1, 2009. These individuals will still need to take their 2008 RMD by April 1, 2009.
If you or your clients have a previously established RMD Periodic Partial Withdrawal disbursement arrangement, the companies will continue to honor these payment requests. Any individuals or clients who wish to suspend their RMD PPW arrangement for 2009 will need to contact their respective financial advisor.
Domestic Partner Update
Effective 7/1/08, Maryland’s Health Care statutes were revised to recognize Domestic Partnerships. These revisions legislate the rights of domestic partners to visit their partner in a health care facility and elevates domestic partners to the rights of a spouse to act as one’ health care agent.
This change not only impacts same-sex couples, but unmarried opposite-sex couples who qualify as domestic partners. Legally, a domestic partnership is a relationship between two people who are not related to each other, are not married or in a civil union or in a domestic partnership with someone else, and who agree to be in a relationship of mutual interdependence in which each contributes to the maintenance and support of the other, although they are not required to contribute equally.
2009 Gift Tax Exclusion
Effective January 1, 2009, each individual can gift up to $13,000 tax free to any other individual, an increase from the previous $12,000 Gift Tax Exclusion.
This increase means that more wealth (including LLC interests and closely held stock) can be transferred for estate tax planning purposes. For example, a married couple with two married children will be able to give away up to $104,000 in 2009 with no gift tax implications. (2 x 4 x $13,000).
To discuss other ways of moving funds to your family or friends in order to reduce the effects of estate taxes, Contact a Maryland Estate Planning Lawyer.
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