Planning Potpourri


Copy Your Wallet:

Simple but effective. Every say 6 months dump the contents of your wallet on a copy machine and copy front and back of everything. File it someplace secure. If you loose your wallet you have a checklist of everything, account numbers, and on the back the phone numbers to call.


Non-Deductible IRA:

The general financial literature says don't contribute to a non-deductible IRA as it doesn't make financial sense. That's a one-dimensional planning perspective and not always correct. IRA assets are protected up to $1 million in bankruptcy. IRAs are simple, no cost ways to invest in a format that has tremendous creditor protection. Use them. Rollovers of pension plans into your IRA are protected without limitations, so don't combine them (even if the same financial press says to simplify by consolidating them). Use newly released IRS Form 8606 to report non-deductible IRAs to the IRS with your annual tax return.



Qualified Personal Residence Trusts are special house trusts designed to transfer principal residences to your kids while minimizing gift tax. When they end you must act. The trustees must deed the house to the kids (or trusts for them, depending on the language QPRT). The kids need to insure the house and lease it back to you and you need to pay fair rent. Sign a written lease. The kids should sign a document governing their ownership of the house to avoid issues later.


529 Plans:

College savings plans are touted, often appropriately, for their tax deferral and other benefits of saving for college costs. But are they really right for you? If you are concerned about asset protection, estate taxes, control and other issues, you might have better options than a 529 plan. Look at your overall estate plan. If setting up a family limited partnership or limited liability company to hold family assets is appropriate to your plan, then making gifts to a trust for your child rather than a 529 plan,  might be a much better result. The child's trust can then invest in and become a partner or member in the family entity, thus helping achieve broader and more important family

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