Categories Estate Planning, Trusts

Estate Planning With Spousal Lifetime Access Trusts (“SLATs”)

Author fraserandallen Categories Estate Planning, Trusts Posted on

Spousal lifetime access trusts, also known as “SLATs”, have become increasingly popular in estate planning in recent years. A spousal lifetime access trust is an irrevocable trust established between a couple, where one spouse places assets into trust for the benefit of the other spouse. The couple designates a trustee to manage the trust assets and usually the second spouse is a primary beneficiary. This can help couples establish a secure financial legacy while avoiding the hefty estate taxes that often come with passing assets between spouses after death.

While it might seem odd to create a trust with assets to benefit a spouse, SLATs can be a great way to ensure that both spouses get the most out of their estate. The funds placed in the trust can be used to provide the surviving spouse with income, pay for long-term care and other expenses, or used as an emergency fund. Additionally, SLATs can be used to fund charitable goals, such as setting up a charitable foundation or endowment.

However, as with all estate planning, it is important to consider the tax implications of establishing a spousal lifetime access trust. Generally, assets placed in a SLAT are subject to gift tax and, if the primary beneficiary is not the spouse, estate taxes could apply when the surviving spouse passes away. The trust beneficiaries are also limited to the trusts’ settlor (person who created the trust) and spouse, meaning individuals other than the couple would not be eligible for distributions from the trust.

Another important factor to consider is that SLATs require careful maintenance and monitoring to ensure that the trust remains valid. The couple must make sure that none of the trust assets are used as marital resources and that all distributions are kept separate from the couple’s joint possessions and assets.

Spousal lifetime access trusts can be an effective estate planning option for couples intending to pass their assets on to each other. However, couples should seek professional advice to make sure that their SLAT is properly established and structured in order to maximize its intended benefits. With careful planning and attentive maintenance, a SLAT can be a great tool to help couples manage their estate and provide financial security to both spouses.

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.

Categories Estate Planning

Estate Planning for the Elderly

Author fraserandallen Categories Estate Planning Posted on

Estate planning is an important step for everyone to take at all stages of life, but for the elderly it can be especially important. With new laws constantly being enacted, it’s important for seniors to stay informed about the changing estate planning landscape.

For starters, the federal gift tax exclusion from 2022 has increased to $17,000. This means that you can give up to $17,000 to anyone without having to pay taxes on the gift. However, gifts greater than this amount must be reported to the Internal Revenue Service (IRS) and will be subject to taxation. This amount is adjusted annually, so it’s important to stay up to date with the current maximum exclusion amount.

Another change to consider is the updated rules surrounding different types of trusts. The two most popular types of trusts are Revocable Living Trusts and Irrevocable Trusts. Revocable Living Trusts allow the grantor to make changes to the trust while still alive, while Irrevocable Trusts are not able to be modified once they have been created. It is important to understand the differences between the two types of trusts and to choose the one that best suits your needs.

The exemption for estate taxes has also been updated for 2023. The federal estate tax exemption has increased to $12.92 million for individuals, while the amount for married couples is up to $25.84 million. This means that if your estate is worth less than this amount, it will not be subject to estate tax. If your estate is worth more than this amount, steps should be taken to reduce its value through methods such as gifting and charitable giving. In addition, a deceased spouse’s unused exemption (commonly referred to as “DSUE”) is portable to and may be used by the surviving spouse.

With the changing landscape of estate planning, it is more important than ever for seniors to review their estate plans and make any necessary updates to ensure that their overall financial goals are met. It is a good idea to seek advice from an experienced financial professional to help navigate these changes and ensure that your current and future needs are met.

Estate planning can be a daunting task, but it is an important step for everyone to take. Seniors, in particular, need to stay informed of the changing laws and regulations surrounding estate planning to ensure that their final wishes are respected.

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.

Categories Estate Planning

Estate Planning for Blended Families

Author fraserandallen Categories Estate Planning Posted on

As modern families become more diverse and complex, estate planning becomes more important than ever. Blended families—where parents are married and bring children from former marriages into a new family unit—presents unique challenges as it relates to inheritance and other financial matters. An estate plan can ensure that everyone is taken care of in the event of death or incapacitation, while protecting the assets and future of both sides of the family.

When couples in a blended family create an estate plan, they should consider the needs of each family involved. This includes not only the children of their marriage, but any children or heirs from previous marriages. It is important that each side of the family is taken care of, and that inheritance goes to the designated heirs. It also helps to create a plan that does not cause any legal issues for the separation of assets among heirs.

Another issue to consider is the ability of the surviving spouse to manage the assets. Depending on the size of the estate, a surviving spouse may not be able to handle the complexity of managing it. An estate plan should include a trust that is designed to provide security and an orderly way to distribute assets. This will help ensure that all interests are taken into consideration and that the goals of the estate plan are met.

Taxes are also an important factor in estate planning for blended families. These tax issues can be complex, and should be addressed as part of the estate planning process. An estate planner or attorney can advise couples on the best way to approach taxes and inheritance when taking into account the needs of each family.

For blended families, estate planning is absolutely essential. It ensures that everyone’s interests are taken into consideration, and that assets are distributed in a way that is fair to everyone. By taking the time to create an estate plan, blended families can be confident that their wishes will be respected, no matter what the future holds.

Disclaimer

The information on this website is made available for education purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this website, you understand that there is no attorney-client relationship between you and Fraser & Allen, LLC and that the information provided on this website does not constitute legal advice.

Categories Property Tax

BEAUFORT COUNTY PROPERTY TAX BILLS

Author fraserandallen Categories Property Tax Posted on

Beaufort County real property taxes are payable in arrears annually at the end of the calendar year. The tax bills are normally mailed by the Beaufort County Treasurer’s Office in November and are due and payable upon receipt of the tax bill. The real property taxes are past due on January 16 of the following year (2022 real property taxes are past due on January 16, 2023) and will begin incurring late penalties if not timely paid. If the closing occurs in the late fall, the Beaufort County Treasurer may send the current year’s tax bill to the seller and not to you. NOTE: If you have not received a Beaufort County property tax bill by early December, you can obtain a copy of the property tax bill online (see below).

If your closing takes place prior to November 1, the current year’s property taxes will be prorated using an estimate (if the actual tax information is not available) for the current year’s taxes. You will be given a credit at closing for the seller’s portion of the current year’s real property taxes from January 1 to the closing date. You are responsible for paying the tax bill for year of closing. If the property was rental property in the year of the closing, there will also be rental property taxes. The rental property taxes are due and payable the same time as the real property taxes. Once the current year’s property tax bills are available (normally mid-November), the current year’s property taxes will be prorated and collected and paid at closing.

If you do not receive a tax bill by December 1, you can go online to request a duplicate property tax bill. You will need the PIN number or the Alternate number or AIN. The PIN is usually shown on the first page of the Deed (for example: R550 011 000 0025 0000). The website is www.beaufortcountytreasurer.com and use Tax Bill Look Up. You are advised to place the AIN or the PIN number on the payment check.

Special Instructions for those purchasing property from permanent residents of Beaufort County: If the seller is a Primary Resident of Beaufort County, the property will most likely be taxed at the 4% Primary Residence rate instead of the normal 6% assessment residence. The property taxes on these closings are prorated using 4% assessment since the status of the property will not change the year of closing. If the property you purchased is not to be your primary residence, the real property taxes beginning the year after closing will be taxed based on a 6% assessment.

Please note that if you intend to occupy the property as your primary residence as of the year of closing, you should apply for the 4% assessment at your earliest convenience after closing by picking up and completing the Legal Residence Exemption Application (4%) at the one of the Beaufort County Tax Assessor Offices on Hilton Head Island, Bluffton or Beaufort or going online (www.beaufortcountysc.gov/assessor – under Forms or apply online at the top) or calling 843-255-2400.

Also, if you are over the age of 65 and a permanent resident, you can apply for the Homestead Exemption which will further reduce your property taxes. You must apply for this exemption at one of the Auditor Offices located on Hilton Head Island, Bluffton or Beaufort.

Assessable Transfer of Interest: Under current South Carolina law, upon the purchase of a property (an Assessable Transfer of Interest), the tax Assessor will re-assess the property to reflect the current value of the property. This means that a property purchased in 2022 for substantially more than the current assessed value of the Property (Market Value for tax purposes) may be revalued for property tax purposes resulting in higher property taxes for the subsequent year.

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