For married couples with estates valued at more than the federal estate-tax exemption, a bypass trust can sharply reduce the potential burden. Bypass trusts also offer a few other important benefits. (Source: The Houston Chronicle)
Wednesday, November 10, 2004
Thursday, November 04, 2004
Donor Advised Fund Reforms Welcomed
Based on hearings that took place last June, and its own research, the US Senate Finance Committee’s staff has proposed a number of recommendations to more closely regulate donor advised funds. The Non-Profit Times reports that these reforms are being welcomed by a number of leaders in the field.
The National Philanthropic Trust, along with other leading providers of donor advised funds, has always supported strict compliance with existing tax law, and has been a leading advocate for establishing model standards of practive. In fact, NPT, and a number of peers, are already doing what these proposals recommend.
While a couple of the proposals should be modified, to ensure the costs of providing this valuable charitable giving vehicle remain as low as possible, and the details of others still need to defined, overall it should help the market as a whole.
The National Philanthropic Trust, along with other leading providers of donor advised funds, has always supported strict compliance with existing tax law, and has been a leading advocate for establishing model standards of practive. In fact, NPT, and a number of peers, are already doing what these proposals recommend.
While a couple of the proposals should be modified, to ensure the costs of providing this valuable charitable giving vehicle remain as low as possible, and the details of others still need to defined, overall it should help the market as a whole.
Bigger Estates - Fewer Estate Taxes
According to a new report from the IRS, the number of Americans who left large fortunes increased, but the overall amount of estate taxes declined.
A major factor was the decline in the estate tax rate, and increases to the exclusion rate that were passed as part of President Bush's tax overhaul in 2001. Estate taxes only apply to estates greater than $1 million, up from $675,000, and double for married couples.
The number of estates reporting income over $20 million increased nearly 8-percent, form 469 to 505, and the average value these estates was $62 million. Overall the estate tax generated 20.7 billion in 2003, a decline of more than 12% from estates of $1 million or more than in 2001, despite a 1.4 percent increase in total value of such states.
While the maximum estate tax rate is 49% (for 2003), and will decline, 1% each year following (48% in 2004, 47% in 2005, 46% in 2006, and 45% 2007-2009), the average estate tax paid by estates of $1 million-$2.5 million feel to 11.2% from 15.2. For the ultra wealthy, their average estate tax rate was dropped to 16.5% from 18.4%.
A major factor was the decline in the estate tax rate, and increases to the exclusion rate that were passed as part of President Bush's tax overhaul in 2001. Estate taxes only apply to estates greater than $1 million, up from $675,000, and double for married couples.
The number of estates reporting income over $20 million increased nearly 8-percent, form 469 to 505, and the average value these estates was $62 million. Overall the estate tax generated 20.7 billion in 2003, a decline of more than 12% from estates of $1 million or more than in 2001, despite a 1.4 percent increase in total value of such states.
While the maximum estate tax rate is 49% (for 2003), and will decline, 1% each year following (48% in 2004, 47% in 2005, 46% in 2006, and 45% 2007-2009), the average estate tax paid by estates of $1 million-$2.5 million feel to 11.2% from 15.2. For the ultra wealthy, their average estate tax rate was dropped to 16.5% from 18.4%.
Wednesday, October 27, 2004
Wealth Managers - Is Yours Certifiable?
The Wall Street Journal reports today that the growth, and increased competition in the high-net-worth marketplace has spawned a number of programs to train and certify advisors in the field of wealth managment.
According to the article the programs seem to fall into two camps: "certificate courses that run for a matter of hours or days, and graduate programs that last a semester or two." The article opines that "While many of the courses offer rigorous training, others are little more than marketing ploys, making the task of finding qualified advisers even more confusing," or as one industry expert said "It's a little bit of a Wild West out there."
Among the new programs being established include New York University, The Wharton School of the University of Pennsylvania, joining programs started by The College for Financial Planning, Investment Management Consultants Association, and the American Academy of Financial Management.
According to the article the programs seem to fall into two camps: "certificate courses that run for a matter of hours or days, and graduate programs that last a semester or two." The article opines that "While many of the courses offer rigorous training, others are little more than marketing ploys, making the task of finding qualified advisers even more confusing," or as one industry expert said "It's a little bit of a Wild West out there."
Among the new programs being established include New York University, The Wharton School of the University of Pennsylvania, joining programs started by The College for Financial Planning, Investment Management Consultants Association, and the American Academy of Financial Management.
Wednesday, October 20, 2004
Stupid Tax Tricks
Forbes.com has a posted an insightful article on donor managed investment accounts (requires registration). This new charitable giving vehicle has received some press lately -- recently profiled in the Wall Street Journal -- but it has a number of shortcomings, and its long-term viability is uncertain. We have also provided a side-by-side comparison between donor managed investment accounts, donor advised funds, and private foundations. E-mail me to request your copy.
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