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Gift Giving from your IRA

CHARITABLE CONTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS

CHANGE IN THE LAW. Congress has just made permanent a great technique for making charitable gifts. You ae now permitted to make charitable contributions directly from your Individual Retirement Account. This is a technique that was approved on a temporary basis in the past, but now you can work this into your charitable gift planning with the assurance that it will be available in the future. In the statute, this is called a QUALIFIED CHARITABLE DISTRIBUTION (QCD, for short).

 

HOW DO YOU DO IT?  It is vital that the transfer to the charity occur directly from your IRA account. If the IRA administrator writes the check to you, you lose the benefit of the QCD. The IRA administrator must write the check directly to the charity.

 

WHY IS THE QCD BETTER THAN A DIRECT CONTRIBUTION FROM YOU?If you receive the distribution from your IRA in your name, the increase in Adjusted Gross Income on your federal income tax return may expose more of your Social Security benefits to taxation, can lessen the available amount of current deductions and can limit the amount of the contribution you can claim as an itemized deduction. And, once the Social Security Administration reviews your adjusted gross income numbers, you might experience an increase in Medicare premiums.

 

REQUIREMENTS FOR A QUALIFIED CHARITABLE DISTRIBUTION.  There are a few hurdles to jump. First, you must be over 70 ½ years old when the QCD occurs. The charity must qualify for charitable income tax deductions, and the charity must provide written acknowledgment of the gift.

 

IMPORTANT RESTRICTIONS.  Simplified Employee pension plans, simple retirement accounts and inherited IRA accounts are not eligible for Qualified Charitable Distribution treatment. The distributions can be made from any other Individual Retirement Account.

 

Contact us at Luskus & Fuelleborn, P.C. to discuss your charitable gift planning. Call us at 215-886-9030 or email at This email address is being protected from spambots. You need JavaScript enabled to view it." class="Hyperlink SCX141244555" style="color: inherit; text-decoration: none;">This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it." class="Hyperlink SCX141244555" style="color: inherit; text-decoration: none;">This email address is being protected from spambots. You need JavaScript enabled to view it.

Digital Assets & Accounts

 

 IF YOU ARE ONLINE, you have digital assets and accounts. These can consist of email accounts, online bank accounts, store accounts and many others. In 2014, 87% of U.S. households had internet access. Most people use the internet. We have files stored on various devices like desktops, tablets and smartphones. What does that mean for our estate plans?

 

A LITTLE BACKGROUND. The Electronic Communications Privacy Act, a federal statute, generally prohibits a service provider from disclosing the content of an electronic communication to a third party except with the lawful consent of the customer. Further, Pennsylvania internet privacy law makes it a felony to access a computer or computer network without authorization. What happens if you are unable to access your accounts because of incapacity or death?

 

ACCESS BY EXECUTORS, TRUSTEES AND AGENTS is beginning to be addressed by some states, but coverage right now is spotty. Without access to electronic accounts, what is an Executor, Trustee or Agent to do in the meantime?

 

AUTHORIZATION LANGUAGE can be inserted into our Powers of Attorney, Trusts and Wills. With the appropriate consent, the Fiduciaries can freely access your accounts, locate assets, ensure that automatic payments can be terminated, protect the privacy of the incapacitated or deceased person and, overall, thoroughly administer an estate.

 

WHAT DO WE NEED TO DO? First, update your documents to insert the appropriate directions about digital assets and accounts. Second, make sure you have an up-to-date list of account information, account log-in data, and passwords available for your Agents and Executors.

 

If you have questions about digital assets and accounts, contact us at 215-886-9030, This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..

Keep on Surfing!!! But securely.

How do you choose an Executor?

Every Will names an Executor, the person responsible to administer the Estate. The choice of an Executor is important and cannot be made without a clear understanding of the Executor’s role and responsibilities. In a nutshell, the Executor will identify and gather bank and investment accounts, real estate and any other property owned by the decedent. The Executor will pay all debts owed by the Estate, file applicable Inheritance, Income, and Estate Tax Returns, and will, once everything is done and all bills are paid, distribute the balance of the assets to the beneficiaries named in the Will.

Generally, people select family members to serve as Executor. But there are no hard and fast rules. A spouse is often a good choice, especially if he or she is the primary or only beneficiary of the estate. However, if you do choose a spouse, make sure you have chosen an Alternate Executor as well, in case your first choice is unavailable. Children are also frequently chosen as Executors, but be aware that multiple Executors must agree.

Here are four important things to consider as you select your Executor:

1. Choose someone who is competent to handle an Estate and is also willing to take on the personal responsibility for proper administration. This is not just an honorary position. The executor usually works closely with an Estates Attorney, but the Executor still has to be sure that everything is being done correctly.

2. When you ask someone to serve as an Executor, clarify with that person whether the Executor will be compensated. Sometimes, in close family situations, the Executor may devote significant time to the administration of the Estate but feels sheepish about asking for compensation. Executors are always entitled to compensation, so you want to ask your Estate Planning Attorney how that is calculated.

3. It almost goes without saying, but choose someone who is financially and personally stable. In some cases the Register of Wills may require an Executor to purchase a bond. This will generally be avoided with proper drafting of the Will. If a bond is required, however, Executors with bad financial records may not be able to obtain a bond.

4. Choose someone with the highest standards of integrity. The Executor will take control of the Estate assets, will sign all the checks and make the ultimate distributions. Honesty and trustworthiness are the hallmarks of great Executors. If you are ready to create your Estate Plan, or if you have been named as an Executor in someone’s Estate, we are happy to help you.

Please call us at 215-886-9030 or email This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it..

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