Archive for February, 2010

« Older Entries

Job Search Tax Deductions

Thursday, February 25th, 2010

In the Bay area, our unemployment rate is somewhere near 12%.  If you added underemployment to that number, that is, folks who may have been only able to locate a part-time job, the rate probably climbs to 20%.  If you were unemployed and looking for a job, your job search expenses may be tax-deductible.  That’s probably a small consolation, but in these tough times, getting something might be better then nothing!

IRS Tax Tip 2009-01 lists some of the important factors to consider about deducting costs related to a job search:

  • Expenses must be spent on searches for a job in your current occupation.
  • Employment and outplacement agency fees paid while looking for a job are deductible.  However, if those fees are later reimbursed to you, you will have to add that amount into your gross income.
  • Preparation and mailing expenses related to resume submissions are deductible.
  • Job search expenses may not be deductible if there is a significant break between the end of your job and the start of your job search.

These types of deductions are reported on Schedule A, Itemized Deductions, as miscellaneous deductions.  This means that they are only deductible if (i) you itemize your deductions and (ii) the deduction exceeds 2% of your adjusted gross income.

Tags: , , , , , , , , ,
Posted in Business Planning, Estate Planning | Comments Off

Where are your Documents?

Saturday, February 20th, 2010

About 2 years ago, we updated our practice to retain electronic copies of our clients’ estate planning documents.  We also provide our clients copies of their documents on disk for future reference.  This allows us to access those documents from just about anywhere, assuming we have security clearance to access our server remotely. 

In the past, we simply had our clients sign multiple originals and placed one set of those documents in our safe in the event those originals were ever needed.  But that turned out to be costly – paper expense, additional storage fees, etc.  Plus, very few people ever called us to get copies.  So we decided to enter into the digital age with electronic copies.

Fortunately, electronic copies of documents work well in many instances - as long as you can find them when they are needed!  For this reason, we suggest that our clients consider forwarding electronic copies of their documents to people they name in those documents for safekeeping.  Just think about it: if you name your best friend as your successor Trustee of your Florida Living Trust, it would be awfully sad if he did not act on your behalf when you needed him solely because he did not have knowledge of your documents’ existence. 

If sharing your documents gives you heartburn, then we urge you to have a conversation with your family (or one or two select members at the very least) about the existence and location of your estate planning documents. Although they do not have to know the details of your Last Will or Revocable Trust, knowing where to locate them can ensure that the time and money you spent creating them is not wasted.

Tags: , , , , , , , , , ,
Posted in Estate Planning | Comments Off

How Special Needs Trusts Can Benefit Your Loved Ones

Wednesday, February 17th, 2010

A special needs trust or supplemental needs trust (“SNT”) is a trust established to benefit a disabled person that allows that person to qualify for government benefits. Some government programs aimed at assisting the disabled, such as Medicaid and Supplemental Social Security Income (SSI), are needs based. That means that if a disabled individual has access to more than a specified level of resources, he or she will not be eligible to receive such benefits.

In 1993, Congress approved the use of SNTs to maximize the use of private and government resources to provide more fully for the needs of the disabled.

If a loved one has limited resources, government assistance may constitute the primary source of funding for their current and future needs. However, government programs are also available to families who have resources available to meet a disabled person’s needs. These families may be fortunate enough to be able to use their personal resources to provide for non-basic needs as well. With an SNT, the disabled person is able to first access government benefits to which he or she is entitled and then can spend personal resources as a secondary source for additional support and comfort.

Common Types of SNTs

Self-settled Trust

A self-settled is created for the sole benefit of a disabled person who is under age 65. The trust must be established by the disabled person’s parent, grandparent, guardian, or by the court, but it cannot be created by the disabled person. The disabled person can, however, fund the trust.

Generally, Medicaid and SSI will look back 36 or 60 months to determine if assets have been transferred to someone else in order to qualify for benefits. If there has been a transfer, the person who is enrolling will not be eligible to receive benefits for a certain time period. Transferring assets to an SNT, though, does not trigger these provisions.

Unfortunately, upon the disabled individual’s death, any money or assets remaining in the SNT must be used to reimburse the government for Medicaid benefits extended to the individual during lifetime.

Third-party Trust

A third-party SNT is a trust created by a disabled person’s parent or other third party, but this type of SNT has no payback requirement. The person establishing the trust must not have a duty to support the disabled child. There is no requirement that the disabled person be under the age of 65.

If a loved one has special needs, please contact our office to discuss how a Special Needs Trust can provide and protect your family.

Tags: , , , , , , , ,
Posted in Estate Planning | Comments Off

« Older Entries