Just for Laughs - an Estate Planning Joke!
I've seen this joke around a couple of times, and thought I would bring a little levity to the site by publishing it - don't know who came up with it. My apologies if anyone is offended.
Continue Reading...Chatham County Clerk Now Requires Approval of Attorneys Fees in Probate
When I started practicing 20 years ago, Clerks of Court generally required approval of attorneys fees paid in probate proceedings. This required the attorney to spend extra time preparing a Petition and Order for Approval of Attorneys Fees, which of course resulted in an increase in the total fees.
Several years ago the counties in which I primarily practice ended this requirement, which made probate somewhat easier and less expensive. After all, shouldn't the executor of an estate be in the best position to judge what is reasonable to pay an attorney for his or her services?
We were recently informed that Chatham County now requires approval of attorneys fees once again. This effectively increases the cost of probate in Chatham County by the several hundred dollars attorneys will bill for the preparation of the documents necessary to obtain the approval. In addition, it creates the potential for problems if fees are paid prior to approval and the Clerk then refuses to approve them.
Personally, I am going to charge larger initial retainer fees and amend my client agreement to state that the executor is responsible for payment of my fees even if not approved by the court.
Bottom line - this is yet another reason to avoid probate by using a living trust.
IRS Publishes Report on 2005 Gifts
The IRS recently published a report on lifetime wealth transfers in 2005 as disclosed to the IRS on federal gift tax returns. The statistics are interesting to review - for tax and estate planning nerds, anyway. The report also contains a history of the federal gift tax. In 1924 the annual exclusion was only $500!
Burke County, NC One of America's Fastest-Aging Counties
Burke County, in the foothills of the Blue Ridge Mountains, is one of the fastest-aging counties in the country, according a recent article in Forbes. Morganton, Burke County's largest city, is a pleasant enough place, but apparently young people are moving out, and few are moving in, as the general population grew only .03% in the last five years. The 65 and over population grew by nearly 7% during the same time period, so the old folks are staying put. Query if Burke County has become a senior destination, like Chatham County.
Change to NC Estate Tax for Out--of-State Property
I'm back from vacation, furiously trying to catch up on things (as if!), but thought I would quickly add this tidbit from the NC Department of Revenue. It only applies to returns of NC residents who owned real estate in one or more other states, and generally results in a reduced amount of tax.
The change became effective July 16, 2008, but amended returns can be filed for any returns for which the time to claim a refund had not expired as of December 31, 2007.
Continue Reading...For Tithing or Other Gifts to Church - Get Valid Receipt
If you regularly give to your church, make sure you get an acknowledgment letter that complies with IRS regulations - otherwise you are not entitled to deduct the gifts. Furthermore, tax preparers should not include deductions for gifts unless the taxpayer can produce the proper receipts.
Here's Professor Christopher Hoyt's report a recent decision from the Tax Court on this issue:
By way of background, a gift over $250 is not deductible unless the
charity delivers a letter to the donor that states (a) the amount of the
donation plus (b) a statement that there were no goods or services
provided to the donor. (If there were any goods or services, then the
statement must describe the goods or services and set forth a good faith
estimate of the value of those goods or services.) Sec. 170(f)(8)(C);
Reg. Sec. 1.170A-13(f)(3)
Here the donors made tithes to their church but the church failed to
give the statement with the magic language. Despite the cancelled
checks and the Tax Court's acknowledgment that the tithes were
charitable gifts, the charitable tax deduction was disallowed. The
church finally sent a letter with the magic statement that there were no
goods or services after the donors were audited, but since the letter
was received after the return was filed so it was not "contemporaneous"
The court case stresses the need for all charities to competently send
to their donors a contemporaneous written acknowledgment for all gifts
of $250 or more.
Continue Reading...
Here's Professor Christopher Hoyt's report a recent decision from the Tax Court on this issue:
By way of background, a gift over $250 is not deductible unless the
charity delivers a letter to the donor that states (a) the amount of the
donation plus (b) a statement that there were no goods or services
provided to the donor. (If there were any goods or services, then the
statement must describe the goods or services and set forth a good faith
estimate of the value of those goods or services.) Sec. 170(f)(8)(C);
Reg. Sec. 1.170A-13(f)(3)
Here the donors made tithes to their church but the church failed to
give the statement with the magic language. Despite the cancelled
checks and the Tax Court's acknowledgment that the tithes were
charitable gifts, the charitable tax deduction was disallowed. The
church finally sent a letter with the magic statement that there were no
goods or services after the donors were audited, but since the letter
was received after the return was filed so it was not "contemporaneous"
The court case stresses the need for all charities to competently send
to their donors a contemporaneous written acknowledgment for all gifts
of $250 or more.
Continue Reading...
