Maple Knoll Village


Sycamore Senior Center joins forces with Mowry, Marty and Bain, Inc. for monthly financial seminar

The Sycamore Senior Center, located in Blue Ash, strives to provide stimulating community experiences by creating sustainable, outstanding opportunities for social, intellectual and volunteer experiences for the older adults they serve. One way Sycamore is able to accomplish this goal is through a monthly financial seminar sponsored by Mowry, Marty and Bain, Inc.

Each month Money Matters is held at Sycamore and is open to members and friends of Sycamore Senior Center. The courses provide insight into the many aspects of the world of finance. Class participants are given regular updates on market activity, economic indicators and may from time to time be presented with examples or ideas about financial solutions. These open discussions allow for attendees to ask a variety of questions and suggestions for upcoming classes are always encouraged. Recent topics include: Insurance 101, Retiree Financial Pitfalls, Will and Estate Planning Refresher, Charitable Giving- How you get the most out of your gifts, Everything you need to know about healthcare changes that can affect your finances, New Tax Law Changes and more!

The topic for this month is Annuities: Are they right for you? It will be held on May 28th, 2015 at10:30 am at The Sycamore Senior Center. For questions please call 513.782.2428.

The Sycamore Senior Center is owned and operated by Maple Knoll Communities, Inc. a non-profit, continuum of services provider is dedicated to supporting older adults so they can live happy, healthy and active lives in order to live life the way they want to in retirement. The membership for Sycamore Senior Center is $30.00 annually. Other opportunities available through the Center are: Nutrition, Transportation, Social Service, Education, Recreation and Fitness, Maple Knoll Home Health Services and Volunteer Opportunities

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Estate and Income Tax Planning – Gift Tax Exclusions

If you’re like most people, you don’t like to think about planning your estate. But it’s an important part of ensuring the financial security of your loved ones. One of the most common tools used in estate planning – and one that everyone should at least give careful consideration to – is a program of giving gifts. A carefully planned gift-giving program can reduce the amount of your estate that is subject to tax while still passing on wealth. Our friends over at Mowry, Marty and Bain have shared this article with us to help all of us prepare.

Congress has not made estate planning easy over the past several years. There has been a general indecisiveness among legislators over the minimum amounts that should be excluded from gift and estate taxes and the tax rates that should apply to amounts not excluded. As a result, taxpayers have only temporary amounts with which to plan, making long-range strategies more difficult.

The American Taxpayer Relief Act of 2012 (ATRA), passed by Congress on January 1, 2013 and signed into law by President Obama the next day, brings some much-needed certainty. ATRA sets the unified gift and estate tax exclusion at $5 million (indexed for inflation) for 2013 and subsequent years. The inflation adjusted exclusion for 2014 is $5,340,000. The maximum estate and gift tax rate is 40 percent for 2013 and subsequent years.

Absent the immediate financial needs of a gift recipient, the main motivation for making large gifts during your lifetime rather than waiting to pass on your wealth at death is to remove the future appreciation from your eventual taxable estate. There is a certain degree of risk in this strategy since your donee receives a tax basis equal to what you paid for the asset while your heirs will receive a stepped-up tax basis equal to the assets value at death, As a result, the loss of stepped up basis and higher future tax rates on capital gains may diminish the benefits of current gift giving. Nevertheless, the consensus planning purposes is that getting future appreciation out of a taxable estate still trumps worries about any more remote tax issues for your donees if and when they eventually were to sell the gifted assets.

While large gifts can be subject to rules with a multitude of variable, you can give away up to an “annual exclusion amount” per recipient per year free of gift tax and free of any future offset against any exemption amount used to lower future gift or estate taxes. For 2014, that annual exclusion amount is $14,000 (unchanged from 2013).

There is a great deal of flexibility in the types of property that can be transferred. Gifts that qualify for the $14,000 annual exclusion can be made in money, property such as stocks or bonds, or even a life insurance policy, as long as the recipient gets the present right to possess or use the property. The gift may be in trust if the terms of the trust give the recipient the immediate right to the property or income from the property.

You can give up to $28,000 in 2014 per recipient per year if you are married and your spouse consents to “split” your gifts. This is useful for spouses who do not own an equal amount of property. The spouse with less property can consent to gifts made by the wealthier spouse, thereby effectively doubling the amount that the wealthier spouse can give away tax-free. To take advantage of “gift splitting,” both spouses must be U.S. citizens or residents. The consent must be given on a gift tax return, so a return must be filed even if no gift tax is due. However, a short form gift tax return is available. Don’t underestimate how an annual gift-giving plan using the $28,000 split gift exclusion per donee alone can facilitate the tax-efficient transfer of family wealth.

As emphasized in discussing large gifts, above, but equally applicable to smaller gifts, it is important to remember when you make a gift that the recipient must take your basis in the property. This means that if the recipient sells the property, any gain on the sale will be measured using what you paid for the property, not what the property was worth when he or she received it. In contrast, if property is transferred to another through your estate and whether or not estate tax is owed, the recipient can use the value of the property at that time in measuring any gain on the sale of the property. Consequently, choosing the right property to achieve your goals is an important aspect of any gift-giving program.

Another way to further the financial security of others without incurring gift tax is by payment of medical and educational expenses. You can pay an unlimited amount for these expenses tax-free as long as the payments are made directly to the medical services provider or educational institution. The person you benefit does not need to qualify as a dependent for tax purposes. Any medical expenses, however, must not be reimbursed by insurance, to either you or to the beneficiary.

If used properly, a program of gift-giving can benefit everyone involved. Passage of ATRA makes it all the more important for you to consider how a gift giving plan can be advantageous now. If you have any questions about the best way of using gifts as part of your overall financial plan, please call us.