JK Lasser's New Rules for Estate, Retirement, and Tax Planning

The popular handbook to estate planning, now updated for 2018

Since its first publication in 2002, New Rules for Estate, Retirement, and Tax Planning has sold more than 40,000 copies, providing a solid, accessible introduction to estate planning for any age or income bracket. Now in its sixth edition, Estate, Retirement, and Tax Planning continues this tradition, covering such topics as trusts, donations, life insurance, and wills in easy-to-understand language that offers valuable insights and solid strategies to help you preserve your wealth and plan your estate so that your assets go where you want with a minimum of taxes and government interference. This comprehensive guide answers such common questions as: How much do I need to retire comfortably? How do I protect my children’s inheritance? How do I ensure planned donations are made after I’m gone? And many more.

The Sixth Edition is also fully updated to reflect changes following the 2018 Tax Cuts and Jobs Act, so that you can learn how new regulations could impact your inheritance and trusts. Other notable features include advice on working with elderly parents and introducing financial planning to children and teenagers, in addition to a list of professional advisers and a glossary of estate planning terms.

• Understand estate planning and obtain solid strategies for growing your wealth
• Explore asset protection and succession planning strategies
• Discover how recent updates to the tax code could affect you and your heirs
• Stay informed of any relevant law changes with an author-managed web site

Estate, Retirement, and Tax Planning contains a wealth of valuable information for any adult who needs help planning their financial future, from the established professional heading toward retirement, to the young adult looking to understand the basics. Wherever you are in your journey, use Estate, Retirement, and Tax Planning to ensure your legacy is protected.

STEWART H. WELCH, III, AEP^®, CFP^®, is a nationally recognized, fee-only financial advisor. The author of six books, he is founder of The Welch Group, which manages in excess of $1 billion for a nationwide clientele.

J. WINSTON BUSBY, ESQ, LLM, counsels clients on tax and estate planning. He is co-author of the New Rules for Estate, Retirement, and Tax Planning, Fifth Edition, and writes regularly on income and transfer tax planning.

Acknowledgments xi

Introduction xv

1 Tax Cuts and Jobs Act of 2017 1

Ordinary Income Tax Rates 2

Capital Gains Tax Rates and Qualified Dividends 2

Educational Provisions 2

Business and Corporate Tax Relief 5

Estate, Gift, and Generation-Skipping Transfers 6

Dangers of Relying on Portability 9

Limitations on Deductions 11

2 Estate Planning 15

What Is Estate Planning? 15

The Benefits of Estate Planning 16

The Nightmares of Poor Planning 18

The Myths of Estate Planning 19

Guidelines for Successful Estate Planning 20

3 The Estate Tax System 23

Determining Your Estate Net Worth 23

Your Estate Tax Picture 29

Your Future Estate 33

Overview of Estate-Planning Strategies 35

4 Investment Strategies for Maximizing Estate Growth 37

Growth Strategy with a Safety Net® 38

Prioritizing Your Investment Dollars 43

Retirement Planning: Choosing the Best Investment

Environments 43

Roth Conversions 46

Some Final Thoughts on Investing 53

5 Retirement Planning: Living Your Dream 55

Your Retirement Requirements 56

Best Retirement Strategies 61

Reverse Mortgages 67

Social Security Strategies 70

Customizing Your Health Care Plan 75

6 You Don’t Have a Will? Big Trouble! 79

Property Transfers at Death 80

Transfers via Probate 81

Direct Transfers by Title 84

Other Methods of Property Ownership 88

Choosing the Best Methods of Ownership 90

Setting Estate-Planning Goals 91

7 Where There’s a Will, There’s Your Way! 93

What Is a Will? 93

Types of Wills 93

Advantages and Disadvantages of Wills 95

Intelligent Decisions Concerning Your Will’s Basic Provisions 97

Executing Your Will 110

Where to Store Your Will 111

Other Important Documents 111

Working with Your Attorney 115

When to Review Your Estate Plan 121

8 Using Trusts in Your Estate Plan 125

The Credit Shelter Trust Will 126

Disclaimers 131

Marital Trusts 132

Spendthrift Trust 136

Standby Trust 137

Other Trusts 137

9 Understanding the Living Trust 139

Advantages of Living Trusts 139

Disadvantages of Living Trusts 141

How a Living Trust Operates 142

Transferring Property into Your Living Trust 145

Types of Property Likely to Be Transferred 148

Living Trust Myths 150

Transacting Business with Your Trust 152

10 Using Insurance in Your Estate Plan 153

Life Insurance 153

Using Life Insurance to Replace Income 156

How Much Life Insurance Do You Need? 157

What Type of Life Insurance Is Best for You? 160

Insurance on a Homemaker 161

Insurance on Adult Children 161

How to Get the Best Deal on Term Life Insurance 161

What Type of Life Insurance Is Best for Estate Liquidity? 164

The Irrevocable Life Insurance Trust 166

Getting Your Life Insurance into Your Trust 167

Using Life Insurance to Leverage Your Estate 170

About Your Cash Values 173

11 Smart Strategies for Gifting Assets to Family Members 179

The Annual Gift Tax Exclusion 179

Unintended Gifts 181

Filing a Gift Tax Return 182

The Lifetime Applicable Exclusion Amount 182

Outright Gifts 183

When the Donee Is a Minor 185

Other Tax-Free Gifts 194

Family Gifts Utilizing Trusts 195

Grantor Retained Annuity Trust 195

Grantor Retained Unitrust 197

Qualified Personal Residence Trust 197

Taking Advantage of Generation-Skipping Transfers 201

Sales to Family Members 204

Loans to Family Members 207

Sales to Intentionally Defective Grantor Trusts 208

The Legacy Trust 208

12 Strategic Planning with Charities 219

Outright Gifts to Charities 220

Testamentary Gifts to Charities 223

Gifts Using Charitable Trusts 223

Using Your Charitable Trust for Retirement Planning 227

The Private Foundation 230

13 Family Limited Partnerships 235

General Structure of the Family Limited Partnership 235

Family Limited Partnership Rules 240

14 Succession Planning for the Family Business or Farm 249

Special Estate Tax Benefits for Farmers and Closely Held Business

Owners 251

Valuing Your Business or Farm 253

Succession or Sale? 253

Succession Planning: Keeping the Family Business in the Family 254

Maximizing Your Business’s Value through a Sale 255

Structuring Your Buy-Sell Agreement 256

Types of Buy-Sell Agreements 257

Funding the Buy-Sell Agreement 258

One Final Strategy—The Employee Stock Ownership Plan 260

15 Asset Protection Strategies 263

The Concept of Fraudulent Transfers 263

A Word about Jointly Held Property 267

Retirement Plans 267

Life Insurance 269

Using Trusts to Protect Assets 270

Using Limited Liability Entities to Protect Assets 271

Use of Multiple Limited Liability Entities 274

Foreign Asset Protection Trusts 275

Domestic Asset Protection Trusts 277

16 Personal Business Planning Issues 281

Choosing the Right Entity for Your Business 281

Closing Thoughts 293

Importance of a Business Plan 295

Epilogue—Dealing with Parents and Their Money 297

Appendix A—Professional Advisers 299

Appendix B—Estate Planning Terms 303

Appendix C—IRS Life Expectancy Table 309

About the Authors 313

Index 315

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.