Planning Potpourri

Copy
Your Wallet:

Simple but effective. Every say 6 months dump the contents of your
wallet on a copy machine and copy front and back of everything. File it
someplace secure. If you loose your wallet you have a checklist of everything,
account numbers, and on the back the phone numbers to call.

Non-Deductible
IRA:

The general financial literature says don’t contribute to a non-deductible
IRA as it doesn’t make financial sense. That’s a one-dimensional planning
perspective and not always correct. IRA assets are protected up to $1 million
in bankruptcy. IRAs are simple, no cost ways to invest in a format that has
tremendous creditor protection. Use them. Rollovers of pension plans into your
IRA are protected without limitations, so don’t combine them (even if the same
financial press says to simplify by consolidating them). Use newly released IRS
Form 8606 to report non-deductible IRAs to the IRS with your annual tax return.

QPRTs:

Qualified Personal Residence Trusts are special house trusts designed to
transfer principal residences to your kids while minimizing gift tax. When they
end you must act. The trustees must deed the house to the kids (or trusts for
them, depending on the language QPRT). The kids need to insure the house and
lease it back to you and you need to pay fair rent. Sign a written lease. The
kids should sign a document governing their ownership of the house to avoid
issues later.

529 Plans:

College savings plans are touted, often
appropriately, for their tax deferral and other benefits of saving for college
costs. But are they really right for you? If you are concerned about asset
protection, estate taxes, control and other issues, you might have better options
than a 529 plan. Look at your overall estate plan. If setting up a family
limited partnership or limited liability company to hold family assets is
appropriate to your plan, then making gifts to a trust for your child rather
than a 529 plan,  might be a much
better result. The child’s trust can then invest in and become a partner or
member in the family entity, thus helping achieve broader and more important
family