Will you pay the Estate Tax?


Will you have to pay estate taxes?


Chances are that you won’t have to pay the Federal level estate tax. Most Americans will not have to pay it. This law changes a lot though. It is one of Congress’s favorite things to tinker with so you must stay up to date. State level estate tax is different.


Minnesota changes its tax often as well, but, as of right now, you will pay tax if your estate is worth over $3 million. Many folks will hit that. You add your house, your IRA/401k, and life insurance proceeds together and many have that amount.


If you have questions leave a comment or schedule a session by clicking here.


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Incapacity Planning Is Important

Incapacity Planning is very important. It can be even more important than Estate Planning. How will your family take care of you if you are just injured and don’t die?  Do you have long term care insurance?

Do you have disability insurance?  What if you just get too old and your mind begins to go?  That can have a much more devastating affect than your death.  The emotional toll of having to take care of you after an accident while also dealing with financial pressure is often worse.

What happens if you don’t have a plan? Living Probate.  The video below explains that as well.

If you want to plan with me or talk further, click here to schedule an appointment.

Planning is not a Projection

Just predicting the future and letting it run its course is not planning. Planning is when you take identify steps that you can take now to shape the future and change it for the better. You do not tax plan just by predicting how much money you will have to pay at the end of the year. You plan by deciding what you can do now to lower that future bill. Then seeing it through.

The same is true for business planning and estate planning. You are going to die. Your stuff will be passed to someone else. Planning just to transfer the assets is not a plan. A plan will help you do things with those assets to make sure they take care of your family when you are gone.

Planning Is About People

Planning is about people. Too often we focus on the things. We focus on taxes or we focus on the business and the heirlooms.  Don’t forget that the purpose of planning is people.

Planning is about our loved ones, our employees, our customers, and the other people in our lives. It is about a result or a goal that enhances our lives and theirs.  The plan itself is about taking steps and actions to achieve those outcomes to enhance people’s lives.

The things and the money are the fuel for that process. We use them along with our other talents to achieve the goals. We just got out of tax season. Many people are focused on planning right now. It is just that they are focused on the dollars and cents.  We should look to the people first.

If you have more questions or would like to schedule a planning session, click here.

Does your trust have to pay Minnesota state income tax?

The Minnesota Supreme Court handed down its decision in Fielding v. MacDonaald et al.  The decision rendered the statute that determines when a trust is taxed as a resident to the state unconstitutional as it applies to many different trusts.  Previously, Minnesota would tax a trust as a resident perpetually if the Grantor was a Minnesota resident at the time it became irrevocable (among other times).  This raised the question of whether this tie to the grantor was constitutional for due process reasons.


Getting the Most Out of The New Pass-thru Business Tax Deduction

  • Trusts can also get a 20% Qualified Business Income Deduction
  • Trusts will likely also get their own SALT deduction
  • This can cause more deduction to be had overall
  • Planning for asset protection and business succession including trusts, now also benefits client’s income tax planning
  • Clients should consider using trusts to get the most out of these deductions and to create the best value plans


Estate Planning When Not All of Your Kids are in the Family Business

Owning your own business can be a great endeavor that takes a lot of passion and drive. Many small business owners focus on the day-to-day management and growth of the business, rather than thinking about a time when he or she may not be in the business. This is a far too common mistake.  Future plans for your enterprise are even more important when one child works in the business but the others do not. Keeping the peace among your children after you are no longer able to participate in the business requires careful balancing of your estate plan.