Saturday, March 4, 2017

The change

Effective March 15, I am ending my affiliation with the law firm of Garan Lucow Miller, P.C. and will be thereafter associated with the Kitch law firm in its Marquette office. I will continue to be available to clients in Marquette and surrounding communities to assist with personal and family succession planning, probate and estate issues, wills, health care directives, real estate matters, trusts and trust administration, IRA and retirement account planning, Social Security planning, contested probate matters, and similar issues. I appreciate the confidence that Marquette County residents have had in my services, and I look forward to being able to assist with your needs in the future. 

All client files in this area of practice will continue to be maintained by me with my new law firm. 

Contact information after March 15: 

M. Sean Fosmire 
Kitch Drutchas Wagner Valitutti & Sherbrook, P.C.
1440 West Ridge Street, Suite C
Marquette, Michigan 49855
(906) 228-0001

Note that I will be working in the same office (behind Shopko) that I have been in for the last 15 years. 

Monday, January 30, 2017

Planning for digital assets

Joe Kissell, who has written numerous books in this series, has written Take Control of Your Digital Legacy, a guide to planning for digital and online assets. From the introduction:
"This book walks you through the process of digital estate planning. It helps you identify the important information you may want to pass on to future generations, document your wishes in detail, and make practical decisions about preserving your data."
The book is available as an electronic books, in PDF, EPUB, or Mobi format, for $15 from Take Control Books

Saturday, January 7, 2017

Expected changes to inherited IRAs

Included in the Retirement Enhancement and Savings Act introduced last year is a proposal to modify the ability of a non-spouse designated beneficiary of an IRA or other retirement account to take mandatory distributions, after the death of the participant (the worker whose earnings originally funded the account), over a "stretch" period based on the life expectancy of that beneficiary.

This idea has been raised, in one form or another, several times in the past few years, by Federal officials eager to accelerate the release of these funds as distributions of ordinary income that will generate tax revenue. Most of the proposals made by the outgoing Obama administration had called for the outright elimination of the "stretch" distribution for all funds payable to a non-spouse beneficiary.

This more recent proposal offers more of a compromise. It would provide:

  • The current right of the spouse of the participant to treat the account as his or her own after the participant's death to remain unchanged.   
  • The current ability of a non-spouse beneficiary to take distributions from the account based on his or her own life expectancy to remain in effect for the first $450,000 in all accounts owned by him. 
  • For amounts over $450,000, they are to be subject to a much faster distribution schedule. All such funds must be distributed, as ordinary income, within five years after the participant has died. 

On request, we can provide a model payout schedule that will demonstrate, for a given set of retirement accounts, how this proposal would affect distributions.

Knowledgeable observers expect that this proposal or something close to it has a good chance of passing in 2017. At this point, the bill has been approved by the Senate Finance Committee. There are still several steps needed before it is passed and enacted.

How much additional revenue this proposal would generate is uncertain. Commentators familiar with the issue have pointed out that most non-spouse beneficiaries do not leave the funds in place to continue to grow over the "stretch" period. Most, they say, take the money out, pay the tax on it, and spend it.