Author: WB Admin

What is Spousal Lifetime Assess Trust

Posted on by WB Admin

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Tuesday October 18, 2022.

The Spousal Lifetime Assess Trust (SLAT) is a common strategy for tax savings that is used by married couples. The spousal lifetime access trust is an irreversible trust that is created by one spouse to benefit another spouse. The donor spouse makes a gift to the SLAT by using their gift tax exemption and then the spouse who will benefit is named as the beneficiary.

The SLAT offers married couples a way to take advantage of the federal lifetime gift and estate tax exclusion whilst keeping restricted access. It is possible for either one spouse to fund the SLAT for another spouse or each spouse may opt to fund the SLAT.

SLAT 101

It is vital to remember that the trust is irrevocable and this means that when contributing spouse transfers assets to the SLAT, they are forever parting with the use of those assets and any income from it.

However, the contributing spouse can only gain benefits from the funds and property given to the trust if the benefactor of the trust is still legally wedded to the donor. This is subject to the terms of the SLAT, the spouse who is to benefit from the SLAT could receive distributions of income from the SLAT, which allows the benefactor spouse together with the donor spouse indirectly, to access the assets if they needed to.

Advantages and disadvantages of SLAT

An advantage of SLAT is that it enables the contributing spouse to donate up to their available exemption amount without gift tax. If the contributing spouse dies, the value of the assets in SLAT will not be subjected to federal estate tax since it is excluded from the contributing spouse’s gross estate because the SLAT is funded with a gift made during the contributing spouse’s lifetime.

The downside to a SLAT is that if the benefactor of the trust dies, then that would mean that the donor of the trust will no longer have indirect access to the SLAT. The donor of the trust will have no choice but to terminate the trust. They can either choose to distribute it or continue it for the donor’s children or perhaps other family members.

Tax Strategies for Charitable Giving

Posted on by WB Admin

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Tuesday September 13, 2022.

It takes much thought and planning to decide where to contribute your hard-earned money. A wise charitable giving plan takes into account your giving style, timing, and content. 

Your giving strategy and the timing of your donations can optimize their impact on your favorite charity while lowering your tax burden. The following two strategies can help reduce your tax burden. 

It’s Not Just Cash

Direct charitable giving may be more advantageous than selling non-cash assets like a mutual fund or stock shares and donating the after-tax proceeds. If you’ve had the assets for more than a year, you’ll receive two important advantages. In most cases, you’ll be able to deduct the full fair market value from your taxes — neither you nor the charity will owe any taxes on the gain. As a result, you will be able to donate up to 20% more to the charity than you would have given if you had sold the asset and donated the after-tax revenues.

You can also acquire more of the same stock after donating any that has dramatically increased in value, thereby “resetting” the cost basis to a more significant sum.

While stock awards can generate a sizable income, they can also have unanticipated tax repercussions after they are exercised or vested. As a clever strategy to lower your tax exposure, think about using vested shares from prior years or other long-term appreciated assets for charitable giving.

Consider a QCD

A qualified charitable distribution, or QCD, is another tactic that can lower your taxable income. These are contributions paid to your preferred charity straight from your IRA. The gift amount isn’t considered as a charitable deduction, but it doesn’t count as taxable income either. It essentially reduces your taxable income by the amount donated to charity, even if you weren’t otherwise itemizing deductions.

If your required minimum distribution (RMD) for the year has not yet been satisfied, QCDs can count toward it. Reducing your taxable income can also be beneficial when figuring out how much Medicare premiums will cost you. Make sure to speak with your accountant first because there are a few rigorous criteria you must follow in order to take advantage of this method.

Invalidating a Prenup

Posted on by WB Admin

On behalf of The Law Office of Wickersham and Bowers posted in Family Law on Tuesday September 13th, 2022.

Prenuptial agreements are typically created with participation from both spouses and can be very advantageous for all parties. Prenuptial agreements can occasionally be made in bad faith, with one spouse solely considering their own interests. 

What is a Prenup?

An engaged couple may enter into a prenuptial agreement or prenup before they get married. The agreement specifies each party’s assets and property. When deciding who receives what assets in the event of a divorce, the couple will consult the prenuptial agreement. 

What Makes a Prenup Invalid?

A court may invalidate the terms of an agreement if it finds that something illegal occurred during the filing or creation of the document.

Here are four reasons a judge may invalidate your prenup:

Failure to disclose assets:  One spouse’s failure to reveal the full extent of their assets prior to signing the prenuptial agreement is a frequent reason why prenuptial agreements are declared illegal. If neither spouse waives their right to review, the other must be informed of all assets and obligations for the disclosure to be deemed valid. The financial details cannot be purposely hidden, such as a prospective spouse transferring assets or giving them as gifts.

Signing without representation: Some states demand that both parties’ legal representatives be present when the agreement is signed. Without a lawyer present at the signing, the agreement can be wholly void unless one party explicitly relinquishes their right to legal counsel.

Coercion: A prenuptial agreement that was signed under duress or under the influence of a future spouse may be void. Threats or physical force used to compel someone to sign a document are referred to as duress and coercion. Duress and coercion include demanding someone sign a prenuptial agreement before they walk down the aisle and denying them the chance to evaluate the terms or obtain independent legal counsel. 

Improperly filed paperwork: A prenup should always be handled by an attorney that is well-versed in the process. A poorly drafted agreement or improperly filed paperwork can be all it takes for a judge to invalidate the document.

Please contact our office today for a consultation if you need help drafting a prenuptial agreement. 

Can I Date Other People Before My Divorce Is Final?

Posted on by WB Admin

On behalf of The Law Office of Wickersham and Bowers posted in Family Law on Wednesday August 10th, 2022.

After a divorce, dating can be challenging. If you recently separated and are now returning to the dating world, you may be wondering “can I date someone new before my divorce is final?”

The Short Answer

Yes. 

There is no legal prohibition against beginning a romantic relationship before a divorce is final. In any jurisdiction, it is not necessary to prove one party’s fault for a couple to obtain a divorce. The new person you are dating doesn’t have to be concerned about being accused of adultery in the divorce proceeding.

Will It Complicate Your Proceedings?

It might. 

Dating is defined by law as one-on-one social interaction with another person. There is technically no difference between platonic and romantic or sexual contact. However, romantic or sexual relationships are the ones that garner attention and could complicate your divorce case, practically speaking.

Even if you are formally separated, divorce attorneys advise against dating during the divorce process. There is a possibility that it might raise the cost and stress of the divorce trial. If you’re still married, you shouldn’t date anyone else. However, once a person has physically and legally separated their spouse, judges rarely penalize them for starting a new relationship—sexual or otherwise.

Remember, it can be quite challenging to date while a divorce is still pending. It’s possible that dating someone new won’t impact the divorce process, but consider if it’s truly worth the risk. Before starting a new relationship, speak with your lawyer if you genuinely want to end your marriage. You can get legal advice regarding the repercussions of dating while your divorce is still pending. You may be advised to keep your connection private and try not to be seen together in public if you are dating someone. Definitely do not introduce your children to a new partner before the final divorce decree.

Get All of Your Divorce Questions Answered

The staff at Wickersham and Bowers is accessible right now to respond to your inquiries if you’re considering sacking your marriage. Our attorneys are skilled, competent, and sympathetic with years of combined legal expertise. We’ll work hard to get you the best result while assisting you in understanding your legal rights. 

What Can and Cannot Be Included in a Living Will

Posted on by WB Admin

On behalf of The Law Office of Wickersham and Bowers posted in Estate Planning on Wednesday August 10th, 2022.

Living wills and other advance directives are legally binding documents that outline your preferences for medical treatment if you become incapacitated. 

Advanced directives are not only for those in their advanced years. All people should create these documents since unexpected end-of-life circumstances might occur at any age.

By making arrangements in advance, you can receive the medical treatment you desire and prevent needless suffering. The document also frees up caregivers from the pressure of making decisions during trying or grievous times. 

What Can Go In a Living Will

Be specific about your wishes for medical procedures while drafting your living will. Take into account your options for each of the following:

Cardiopulmonary Resuscitation (CPR): using a defibrillator or someone performing chest compressions to restart your heart.

Life Support: maintaining your life through artificial nutrition, hydration, medicine administration, and ventilator support.

Mechanical Ventilation: a device that takes over breathing by supplying the lungs with air.

Artificial Nutritional Feeding: a tube that extends into the stomach and delivers nutrients.

Dialysis: a process where blood is cleansed by passing through a machine.

Intravenous: injections of medication, antibiotics, or antivirals using a tube or needle into the veins.

End-of-Life/Palliative Care: Healthcare professionals can manage your pain to make you comfortable while respecting your preferences for medical treatment, such as avoiding intrusive procedures.

Organ Donation: You must be briefly put on life support if you choose to donate your organs. You will need to obtain an exemption for the organ transplant operation if you decide not to be put on life support.

What You Can’t Include in Your Living Will

You need a few things in conjunction with your living will, but they are not included as part of it. 

Do Not Resuscitate (DNR): Although you might have said in your living will whether you wish to be revived, a DNR is a particular directive that a doctor must write and sign. 

Orders for Life-Sustaining Treatment (OLST):  An OLST is primarily used for those who have been told they have a severe or fatal illness, are elderly, or both.

Health Care Proxy: A Health Care Proxy or other Medical Power of Attorney document must be used to designate the person you want to act as your Health Care Proxy (also known as a Power of Attorney for Health Care and a Health Care Representative) to make decisions on your behalf if you become incapacitated. 

Myths about Collaborative Divorce

Posted on by WB Admin

On behalf of The Law Office of Wickersham and Bowers posted in Family Law on Tuesday July 12th, 2022.

The benefits of collaborative divorce are numerous. It enables you and your spouse to control the process and make all crucial choices. You can decide where and with whom your children will reside as well as how the marital estate will be divided. The outcome is a customized divorce agreement made by you and your spouse — not a judge.

However, because collaborative divorce is relatively new, a few myths are circulating about the process. This article will bust some of the three biggest ones:

Myth: I need a “bulldog” lawyer

Most people think of divorce as a nasty process and think they need an attorney that is ready to get dirty.

The truth is, you don’t need to pit yourself against your former spouse during the divorce process. While defending you, your collaborative lawyer won’t disparage your spouse. Instead, you, your spouse, and both your lawyers collaborate to find solutions to the problems brought on by your separation.

Myth: We need to be in complete agreement

Like any other divorcing people, couples that go through the collaborative process have arguments and problems in their marriage. Throughout the process, a group of experts will collaborate with you and your spouse to identify practical answers to those issues. The only requirements are your honesty, trustworthiness, and willingness to bargain in good faith to discover solutions that benefit your family.

Myth: Collaborative divorce is expensive

Although a collaborative divorce will cost you money, a contested divorce will cost more. Each spouse typically hires a lawyer and a divorce coach in a collaborative divorce. A financial expert and a child evaluator are two examples of impartial experts that the parties jointly hire. If necessary, mediation sessions can be planned and are also beneficial. While that may sound like a large and expensive team, a collaborative divorce avoids the costs of going to trial.

Is collaborative divorce right for you?

Collaborative divorce can assist you and your spouse with respectfully resolving any differences. You will collectively divide the family’s assets in a way that both parties find acceptable and establish a custody schedule that will pave the way for a successful co-parenting relationship. 

Contact us for a consultation if you would like to discuss the collaborative divorce process further.

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