Wednesday, April 25, 2012
You wouldn't know it to look at me, but I have really long hair. Its not quite Repunzel like, but its long enough. The reason why you wouldn't know this is because I always keep it tied up or covered. I grow out my hair and, after a couple of years, I lop it off to start anew. I donate my hair to locks of love, a non profit that provides hairpieces to financially disadvantaged children suffering from long term medical hair loss. This hair cut always has be feeling better about myself (because how often can you do something good and get a free haircut?). But there is a way that this donation can be tax deductible. Donations of the body ie blood, organs and even hair are not able to be deducted. However, if you sell your hair to a wig shop and donate that money to locks of love or other such organizations, your donation can qualify as a tax deductible gift. It may take a little longer to prepare this donation, but the charity of your choice could be the beneficiary of a couple hundred dollars.
Tuesday, April 24, 2012
Sunday, April 22, 2012
I had a wonderful meeting with Daniel Israel who works for New York Life. This meeting started me thinking how little people know about how life insurance can help you plan your estate and insure your beneficiaries get more money. Normally life insurance proceeds are included in your estate for tax purposes. However, one way to avoid the taxing of life insurance proceeds at death is to establish an Irrevocable Life Insurance Trust or an ILIT for short. This makes ILITs a powerful and often underutilized estate planning tool. A properly drafted ILIT can remove the life insurance proceeds from the insured-grantor’s estate and the surviving spouse’s estate, while allowing the proceeds to be available to meet the needs of the surviving spouse and children. Beyond the ability of being able to remove life insurance proceeds from a grantor's estate is that it provides liquidity to the grantor's estate. This means that beneficiaries will be able to pay estate taxes and other obligations without aggravating the estate tax liability. The insurance proceeds can be available to support a surviving spouse and minor children. The proceeds can also be used to purchase assets from the insured-grantor’s estate to provide the estate with liquidity without forcing it to sell assets to outside parties. This is especially helpful in cases involving appreciating assets such as real estate. ILITs have other benefits that this blog does not address. If you have any question about ILITs or any other estate planning documents please contact me.