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Vermont Estate Planning Blog

Thursday, January 23, 2020

The SECURE Act: Glass Half Full?


There is no doubt that the SECURE Act of 2019, signed into law on December 20, 2019, as part of the spending package, revolutionizes  the treatment of many retirement benefits, particularly in the area of required withdrawals for the plan-owner’s beneficiary.  But, should you panic?  Well, that may depend upon whether you are a glass-half full or glass half-empty personality type.

Here’s what you need to know in basic terms:

Þ No changes to required minimum distributions (RMDs) for plan participant/IRA owner if you were over age 70 1/2 on 12/31/19

Þ Those younger than 70 1/2 can now wait until age 72 to begin RMDs

Þ No changes to retirement accounts naming charities as beneficiaries

Þ No changes for RMDs for a beneficiary if they qualify for “eligible designated beneficiary” status, which may include: surviving spouse, minor child (until age of majority), disabled individual, and individual not more than 10 years younger than plan participant

Þ Major changes for all other “designated beneficiaries” —full withdrawal of all retirement funds by  10th anniversary of plan owner’s death, but no RMDs for years 1-9

 

Confused?  Bottom line is that Congress has removed the “lifetime stretch” for most beneficiaries of retirement benefits.  Accounts must be withdrawn—and applicable income taxes paid— within 10 years of the account owner’s death.

If you’re a glass half-full type: tax benefits still exist for the plan owner, even increased ones for those who can delay RMDs until age 72.
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Friday, November 8, 2019

Lawyer Joke

Q: What do you get when you cross a librarian with a lawyer?

A: All the information you need, but you can’t understand a word of it.

 


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Wednesday, November 6, 2019

Tip / News: Estate Tax

Vermont remains one of about a dozen states that imposes a state estate tax.  However, during the summer, Governor Scott signed Act No. 71, raising Vermont’s exclusion amount to $4,250,000 in 2020 and $5,000,000 in 2021.

 


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Sunday, November 3, 2019

Dissecting Legalese


Whereas the party of the first part shall prescribe, provide, formulate, and otherwise execute the means, method, and product for the tertiary daily repast for the mutual benefit of the parties; whereas the party of the second part shall evaluate, conduct, and otherwise execute in a timely manner the subsequent restoration of the premises used by the mutual parties in the enjoyment of said repast; now therefor, both parties stipulate to the following: dinner shall promptly commence at 7:00pm.

What if legalese was the common language of all communications?  Would we understand each other better?  Although legalese, in its best light, is intended to provide a uniform interpretation of certain terms or phrases, it often complicates dialog and documents. 

For example, the Latin phrase per stirpes is often used in wills, trusts, and  beneficiary designation forms to describe what happens if the named beneficiary has died.  Its widely accepted meaning directs that the beneficiary’s share passes in equal shares to his/her descendants by right of representation.   A descendant (child, grandchild, great-grandchild and so-on) takes the “representative” share of his/her parent.


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Tuesday, August 6, 2019

Would You Rather Embark on an Unmarked Treasure Hunt or Navigate a Map?


Imagine you are playing the popular “Would You Rather” game on a family road trip this summer.  Would you rather embark on an unmarked treasure hunt or navigate that route to the treasure using a clearly marked map?  While some adventurers may prefer to search without clues, others will certainly accept the map in hopes of reaching that destination faster and with less frustration.

Now imagine that same question, but there is no game.  You have recently lost a loved one and have the responsibility of settling their affairs.

Would you rather figure things out as you go or have some guidance from that lost loved one?  Undoubtedly, most would prefer the latter, but let’s consider some real examples from real estates.
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Thursday, June 6, 2019

New England Qualifying Track Meet Sponsorship

We were so proud to be able to support our local school at the Essex Invitational.  We received the following note from Heidi Stewart of Essex.

 

Thank you so much for being a sponsor for the New England qualifying track meet! Hundreds of Vermont's best track and field athletes competed in the Essex Invitational in hopes to go on to compete at New Englands this Saturday. Nothing could have been possible without the contributions of our amazing sponsors! Thank you again for sponsoring and attached I sent along pictures of the front and back of the t-shirt and the program, that was bought by hundreds of families, that contains the business' name. 

Thanks again!

Heidi Stewart



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Friday, May 17, 2019

4th Annual Golfing4Life

Hi Everyone!  This is Bogey.  I would love to have you register and/or be a sponsor at Golfing4Life this year.  The plan is to have a wonderful, fun filled event for our 4th year!  Please register by RSVPing to this email or call/text 802-922-5951! 

 

 


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Monday, May 13, 2019

Lawyer Joke

Q: What do you need when you have 3 lawyers up to their necks in cement?

A: More cement.

 



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Monday, May 13, 2019

4th Annual Golfing4Life Tourney

Jarrett & Luitjens is proud to co-host its 4th Annual Golfing4Life Tournament on July 24th at the Links at Lang Farm.  Last year we raised over $10,000, funds which directly benefit the Cancer Patient Support Foundation of Williston’s Emergency Relief Fund.   To join the fun and support this worthy cause, contact Holly Keough for more information.

 



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Monday, May 13, 2019

No Magic Carpet Ride for “Medicaid” Trusts


The road to eligibility for long-term care Medicaid benefits can be long and winding, so it can be tempting to board a magic carpet ride and try a so-called “Medicaid” trust, more descriptively referred to as an irrevocable income-only trust.  The theory behind such a trust is that assets owned by the trust are protected from creditors, primarily in consideration of long-term care costs and the desire to become eligible for government benefits.  However, there is no free ride, and transferring assets into an irrevocable trust comes with risks and costs.

IRREVOCABLE: As its name suggests, you cannot change the terms of the trust.  If circumstances change requiring a modification, you would need Court approval and/or consents of all interested parties.
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