In The News
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Gary Altman Comments on the Importance of Having a 'Digital Executor'
(January 2010)
In a recent interview with The Washington Post, local estate planning attorney, Gary Altman, weighs in on the recent development of web sites offering virtual storage vaults that store important information such as passwords and log-in information so that when the worst happens, the information will be accessible to whomever the deceased had designated as a “digital executor” of sorts.
Altman, who has always encouraged clients to leave access to passwords to a trusted family member, is quoted as saying, "It's really important for someone to know all of this information we have out there. Everything is hidden in the clouds. If no one knows it's there or where to get it, how are you going to find it?"
The full article is available here.
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Gary Altman Set to Share His Expertise with Two Howard County Publications in Early 2010
(December 2009)
Award-winning estate planning attorney, Gary Altman, will once again lend his expertise to the Howard County, Maryland publications, Generations, and also Business Monthly. Altman’s article contributions will offer a succinct look at two different estate planning topics. With an office in Columbia, Maryland, Altman feels these publications are close to home for many of his client base. “I’m very much looking forward to contributing to Generations and Business Monthly again,” says Altman. “Howard County residents are very plugged in to these publications and I hope sharing my knowledge will help them become more informed about the critical importance of estate planning.”
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Gary Altman Sheds Light on "Debt After Death" - Who's Responsible?
(November 2009)
In response to an inquiry from La Opinion – the leading Spanish-language daily in the U.S. – estate planning attorney, Gary Altman, offers insight as to who is responsible for debts after someone dies.
“After someone passes, family members typically have no obligation to pay the debts of the decedent from their sole and individual funds. Debts of the decedent must be paid by the decedent’s probate estate or otherwise by assets passing from the decedent, as provided under state law,” says Altman.
He adds, “Every state has a different law and these laws can change at any time, either by legislative action or a court case. For instance, in Maryland, a creditor or debtor must file a claim within 6 months of death or the debt can be denied and not paid. Another legal possibility is that a claim can be filed only against the probate estate, so assets that pass outside of probate, like a joint bank account, etc, could be free from attachment by a debtor or creditor.
Altman adds some words of caution, however, saying that there can be situations in which a family member has accepted responsibility, before death, by being a co-applicant on a credit card or by saying so when the decedent went into a hospital or nursing home. In those cases, that family member will very likely be liable for the debt.
Finally, Altman adds, “If a family member inherits a house or car that has a secured debt, the family member will have to pay the secured debt, or else that creditor can foreclose or repossess the house or car.”
To read this article, click here.
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“Estate Affairs” – Gary Altman Offers Expert Advice to Making Sure Family Heirlooms End Up in the Right Hands
(November 2009)
Emotions run high when it comes to dividing up family heirlooms. In an interview with Family Tree magazine, estate planning attorney, Gary Altman, offers sound advice on how to best ensure that your possessions end up where you want them.
Not surprisingly, Altman’s first recommendation is to have a will. He says, “[Absent a will] someone’s going to come into your home and sell everything or throw it away.”
To avoid that from happening, Altman suggests that people incorporate specific wishes into your will – or - create a “side letter” (also known as an “ethical will”). In order for either to be effective, Altman cautions, “You have to be very clear about who is going to get [what] property.”
For more information on passing on personal belongings, Altman recommends visiting www.yellowpieplate.umn.edu.
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“Advanced Health Care Directives” – End-of-Life Planning Can Put You and Your Family at Ease
(October 2009)
In a contribution to Boomer-Living.com, Gary Altman, highlights examples such as recent celebrity deaths as a way of underscoring the importance of having an Advanced Health Care Directive.
Altman explains, “Simply put, Advanced Health Care Directives are instructions given by individuals specifying what actions should be taken for their health in the event that they are no longer able to make decisions due to illness or incapacity.”
Altman goes further, explaining the various components of an Advanced Health Care Directive, including a “Living Will” and “Health Care Proxy” – both of which he recommends for his clients to have in place.
For more information on Advanced Health Care Directives, download a PDF of this article here.
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“Estate Planning: DIY or Pro?” – Gary Altman Stresses the Danger in “DIY” Estate Planning
(October 2009)
It’s easy to surmise that an estate planning attorney wouldn’t thinking too much of someone drafting their own will, trust, or other estate-related document, such as a health directive. In an interview with Bankrate.com, Altman underscores his weariness against “DIY” estate planning, such as online services.
Altman says, "Online estate planning documents probably work very well if you want to leave your assets outright to one or two people, and those people have virtually no legal or financial problems.” He strongly recommends anyone considering it, however, to answer the following:
- How big is my estate?
- Who am I leaving it to, and are they minors, or do they have issues like angry creditors I need to plan around?
- How am I leaving it to them, such as through a will or a trust?
Sighting the criticality of keeping your estate documents current, Altman says, "Sometimes people think that when they've done estate planning, they never have to look at those documents again. This is not true. I had clients who did estate planning with me in 1997. Since then, the estate tax laws changed, and an obscure regulation that affected a small fraction of the public -- including them -- changed."
Altman has final words of caution. "There are a number of people who don't consult estate planning experts because they don't want to spend the money," he says. "But estate planning is something that if you make a mistake, there's no way to correct it because you're no longer around. If you don't pay to have estate planning documents done properly now, your heirs will probably pay more than you'll have ever paid a professional to do them. In many ways, the most selfless thing you'll ever do is to make sure your children or heirs will receive your assets in the best and least costly way possible."
To read this article, click here.
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“Divorce, Remarriage and Blended Families” – An Estate Planning Wake Up Call
(September 2009)
In a country where 75% of divorcees will remarry, 65% of remarriages involve children from a prior marriage, and 60% of all remarriages will end in divorce, award-winning estate planning attorney, Gary Altman, is on a mission to raise awareness on the importance of having a thorough and professionally prepared estate plan.
Says Altman, “…little attention has been paid to the critical Life & Estate Planning challenges of blended families. These challenges include disinheriting your ex-spouse, protecting your own children, providing for your new spouse and minimizing your estate taxes.”
To learn more about the estate planning issues facing blended families, download a PDF of this article here.
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“All the Right Moves” – Gary Altman Weighs in on Lessons Learned from the Drama Surrounding Michael Jackson’s Estate
(July 2009)
In an interview with The Baltimore Sun, local estate planning attorney, Gary Altman, chimes in on the legal “lessons learned” following the untimely death of musical legend, Michael Jackson. Knowing that Jackson’s will named two executors that were not family, but business partners, Altman says, “Most estates require only one executor, which makes the job easier. But, if you have a huge estate [as did Jackson], you might want more than one to act as a check.”
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“Don’t Leave Home Without It!” – Gary Altman Urges Vacation-bound Boomers to Have Their Estate Plans Reviewed and Updated Before Leaving for Vacation
(July 2009)
“Despite economic concerns, many people will still hit the road in search of a little R&R and/or adventure this summer. In preparation for your trip, maybe you’ll leave care instructions for your prized tomato plants with your neighbor. Perhaps the kennel will get a list of your dog’s toys of choice. You might ask the mailman to hold off delivering mail. And while each of these “vacation checklist” items are important in their own right, there’s one critical item that you may be forgetting: Having your estate planning documents (i.e. wills, medical directives, power of attorneys, guardianship papers, etc.) updated and filed properly…”
Download a PDF of this article here.
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“Estate Planning for a Boomer’s Best Friend” – Gary Altman Explains How a Pet Trust Can Protect Your Feathered, Finned or Furred Friends
(June 2009)
In a contribution to Boomer-Living.com, dog-lover and estate planner, Gary Altman, describes the peace of mind that a pet trust can bring to pet owners.
“Do any of your closest friends have feathers, fins or fur? Are you also responsible for their room, board and ongoing veterinary care? Consider this: If something untoward were to happen to you today, what would happen to your feathered, finned or furred friends tomorrow…?”
Download a full text, PDF version of this article available here.
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Gary Altman Warns of the Dangers in DIY (“Do-It-Yourself”) Estate Planning
(May 2009)
Gary Altman has a bone to pick with Susie Orman, Legal Zoom, and other people/programs pushing “Do-It-Yourself-style legal programs. As a veteran estate planning attorney, Gary knows that attempting to draft one’s own estate planning documents (wills, trusts, power of attorneys, etc.) is a recipe for disaster and can result in paying significantly higher estate taxes.
“There will be many projects this spring where you (or even a not-so-crafty attorney like myself) may be compelled to try and DIY (Do-It-Yourself) - replacing a light fixture, trying a new faux finish painting technique, maybe even putting up a new fence if you’re feeling bold. But there is one project that you should never, ever take on alone and that is drafting your own will or trust…”
Download a full text, PDF version of this article available here.
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“Triple Witching Hour” – What You Should Know About This Estate Planning Phenomenon
(May 2009)
In an article for Fenton Report, Gary Altman Sheds Light on Estate Planning’s “Triple Witching Hour” – the convergence of three different events – favorable interest rates, depressed asset values, and a potentially limited timeframe to continue receiving higher valuation discounts – resulting in an exceptional opportunity to realize greater lifetime gifting/wealth transfer potential.
Download a full text, PDF version of this article here.
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“Word of Caution When it Comes to Gifting 529 Plans” – Gary Altman Cautions 529 Gifters to Have a Thorough and Current Estate Plan
(April 2009)
In a contribution to Boomer-Living.com, Gary Altman leverages his financial planning credentials alongside his estate planning expertise to caution people of how improper estate planning can potentially wipe out investment funds such as 529 College Savings Plans.
“It's spring and the promising sounds of "Pomp and Circumstance" will soon fill graduation halls across the country - a reminder for some with younger children in their families that college days are just around the corner. That said, the 529 College Savings Plan may seem like the perfect gift for the little academic in your life. Regardless of whether you've invested or are just now considering a 529, a story of caution, below…”
Download a full text, PDF version of this article available here.
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"Death and Taxes – The Estate Tax is Certainly Here to Stay" – Gary Altman Explains the Most Recent Changes to the Federal Estate Tax
(April 2009)
In a recent contribution to Boomer-Living.com, estate planning attorney and columnist, Gary Altman, updates readers on changes to the Federal Estate Tax.
Altman explains, “The exclusion amount (the amount you can pass to your children and others without any federal estate tax) will be permanently set at $3.5 million. Estates in excess of $3.5 million will be taxed at a rate of 45%. Estates in excess of $10,000,000 will be taxed at a rate of 50%. While these rates are still lower than the maximum rate in effect prior to 2001, they are still so high that advanced estate planning should still be a priority.”
To read this article, click here.
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“Heir to the Abode” – Gary Altman on What to Expect When You’re Due to Inherit Real Estate
(April 2009)
In an interview with nationally syndicated real estate columnist, Charles Scutt, estate planning guru, Gary Altman, is quoted extensively on the good, the bad, and the ugly when it comes to inheriting real estate.
Altman explains that once ownership of the home is transferred to you, Uncle Sam may deduct federal, state and/or local taxes from the estate if its net taxable worth is more than a certain amount.
“Inheritance tax is imposed on the transfer of assets, including real estate, at death,” Altman says. “The rate is dependent on the relationship between the descendent and the inheritor. Estate taxes, meanwhile, are imposed on the value of the property at death. The Federal government currently has an estate tax for estates in excess of $2 million dollars. Some states have an estate tax, some have an inheritance tax, and some, like Maryland, have both.”
To read the full text of this article, click here.
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Altman & Associates Profiled in Bethesda Magazine’s Lawyer Spread
(April 2009)
In a special section of Bethesda Magazine, Altman & Associates reaches out to Bethesda-area residents.
"As founder of the nationally acclaimed estate planning law firm, Altman & Associates, Gary Altman
has been helping clients throughout the Washington, D.C., area for over 20 years. His 'outstanding
expertise, trustworthiness and commitment to his clients’ needs' has consistently earned him recognition
by Washingtonian magazine as among the region’s 'Best Estate Planners.'
And while Gary appreciates the honors (he is also listed in Worth Magazine’s 'Top 100 personal family lawyers in the country'), he takes the most pride in listening to his clients and learning their individual needs.
Whether it’s creating wills and trusts, assisting with probate and estate administration or navigating through complex estate tax issues, Gary is committed to crafting estate solutions for his clients in accordance with their wishes. His advice: 'Life is uncertain, so estate planning is not something that should be put off until another day.'"
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Gary Altman Puts His CFP Hat on for an Interview with the Washington Post on Cutting Back in a Tough Economy
(March 2009)
Gary Altman works hand in hand with financial advisors to ensure that his estate planning solutions consider every aspect of an individual’s financial framework. In an effort to best serve his clients, Altman (also a Certified Financial Planner), joined the National Capital Area chapter of the Financial Planning Association, for which he has served as Chairman and President. Because of his unique blend financial and estate planning expertise, The Washington Post recently asked Gary for his suggestions of things that we can and can’t afford to cut back on during a tough economy. Knowing that people (desperate to find cash) may turn to their assets for relief, Gary strongly advised against breaking into any retirement accounts or estate assets until you have nothing left in savings.
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“Mom and Dad, You’re Broke” – Gary Altman Walks the Wall Street Journal Through Tough, But Critical Questions to Ask Mom and Dad During a Down Economy
(March 2009)
In an interview for the Wall Street Journal’s “Family Finances” section, estate planning expert, Gary Altman, Esq., sheds light on some tough, but important questions we should ask our aging parents – particularly during an economic downturn when asset values are plummeting. He says, "We've all planned for greater money in the future. No one has planned for less money.”
Gary's list of questions to ask aging parents:
- Have you named someone to make medical decisions for you (and to obtain medical information)?
- Have you named someone to make financial decisions for you?
- Do you have a list of your assets, passwords, login, other important information; if so, where is it?
- Where do you want to be buried? Who do you want to invite to your funeral? What type of funeral do you want?
- Do you hide cash or jewelry in your house? Can you tell me where it is hidden?
- Do you want any of your grandchildren to get anything when you die?
- Have you clearly determined who is going to receive your personal effects?
- And the most difficult: When was the last time you have revised your Will/estate planning and should you revisit it at this time?
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"Before You Remarry" - Things for Boomers to Consider with Respect to Estate Planning
(February 2009)
In the spirit of Valentines Day, estate planning expert, Gary Altman, used his column for Boomer-Living.com to highlight estate planning considerations to take into account before getting remarried. He writes, “As a boomer and a romantic, I believe that marriage (even the second time around) is a wonderful thing. That said, the attorney and the realist in me knows that sometimes financial and estate issues can get in the way. Therefore, there are several things for boomers to consider before remarrying.”
To read this article, click here.
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Increasing popularity of Spendthrift Trusts
(February 2009)
InvestmentNews called on the expertise of Gary Altman for a recent piece on the increasing popularity of spendthrift trusts.
In an economic climate where wealthy investors are becoming more risk averse, interest in establishing spendthrift trusts for beneficiaries is becoming an enticing option. As Altman explains, spendthrift trusts are essentially irrevocable third-party trusts created for another individual's benefit (i.e. when the estate holder isn't certain that the beneficiary will manage the money properly).
Altman & Associates has long specialized in the establishment of a variety of trusts. Unlike wills, trusts afford the benefit of avoiding probate, a lengthy and costly legal process that oversees the transfer of assets. Trusts can also be beneficial while the donor is alive to minimize taxes.
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Couples Should Consider Debt When Estate Planning
(February 2009)
In an interview with CreditCards.com, Gary Altman, advises against joint credit card accounts and even against spouses taking authorized user cards on each others' accounts. "From an estate perspective, joint credit implies a 100 percent obligation of the surviving spouse for any debt remaining on a joint card. And if a spouse has access to a deceased spouse's account through an 'additional card' offer, the credit card issuer may try harder -- particularly in these times -- to see if that person can be made liable for any outstanding debt on the deceased's card."
Altman goes on explain that in most states, the responsibility for paying off outstanding debt on a deceased's individual debt falls to the deceased's estate. Altman says. "Depending on the state, there are guidelines on how creditors get paid. In Maryland, credit card companies need to file a claim against the estate within six months. While the executor is supposed to notify them, there's no legal requirement to do it."
Altman says the current economic climate also plays a role as credit card issuers have gotten much better about combing death records and making those estate claims. "I've seen a claim happen for as low as $132," he said.
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"Estate Planning in 2009" - What Changes the New Administration May Bring
(January 2009)
In his New Year contribution to Boomer-Living.com, Gary Altman focuses on the possible changes to estate law that the new administration could have in store. First and foremost on the list – the Federal Estate Tax. To read this article, click here.
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Interview with Financial Advisor Magazine
(January 2009)
In an interview with Financial Advisor magazine, estate planning expert, Gary Altman, was asked about how tough economic times can impact people’s decisions about estate planning.
Gary admitted that he’s seen some people – whether out of fear or out of necessity - try to access money that had been set aside in an estate plan (i.e. borrowing money from a trust).
However, Gary believes that probably the biggest impact of an economic downtown is that people, reluctant to spend money, avoid planning altogether. They may understand the risks of doing so, (i.e. estate taxes), but they are reluctant to spend any money because unsure of what will happen next.
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Gary Altman Interviewed by Associated Press
(January 2009)
Estate planning authority, Gary Altman, recently spoke with the Associated Press about a high profile case in which a general partner in three hedge funds approached a well-known ballet company and foundation about making a large endowment. In this case, the general partner asked that the charities put the endowment in hedge funds in which he was a general partner. Gary commented on the frequency and legality of such investments.
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Estate Planning Authority, Gary Altman, Recognized as a "Top 100 Attorney" by Worth Magazine
(December 2008)
Gary Altman, Esq., founder of the DC-Metro area estate planning law firm Altman & Associates, has once again been named a "Top 100 Attorney" by the prestigious financial publication, Worth Magazine.
The top attorneys list, to be featured in the December 2008/January 2009 issue, recognizes the nation's 100 best lawyers for their outstanding expertise, insight, trustworthiness and commitment to their clients' needs. Mr. Altman has made this list two years in a row.
The announcement comes on the heels of yet another distinct honor, Mr. Altman's recognition by Washingtonian magazine as "Best Estate Planner" for the 4th year running.
A nationally recognized estate planning authority, Mr. Altman is also a Certified Financial Planner and the current Chairman of the National Capital Area Financial Planning Association. He has served as an expert analyst for media outlets such as The Washington Post, The NY Times, The Journal of Financial Advisors, and FOX News. Mr. Altman authors columns for media publications such as Growing Wealth, Boomer-Living.com and recently launched a new blog on estate and legacy planning, Altman Speaks, available here.
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"The Perfect Holiday Gift: Passing On Wealth to Grandchildren"
(December 2008)
In his regular column for Boomer-Living.com, founder of the estate planning law firm, Altman Associates, Gary Altman, Esq., explains two great options for grandparents wishing to leave a significant bequest to their grandchildren - IRA stretch planning and perpetual trusts.
To read the article, click here.
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“Estate Planning in Uncertain Times” – by Gary Altman
September 2008
In his debut contribution to Agent’s Sales Journal, estate planning expert, Gary Altman, Esq., discusses the challenges of estate planning today.For full text, click here.
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Gary Altman Serves as Estate Planning Expert for Readers of More Magazine
September 2008
Gary Altman recently lent his estate planning expertise to the more than one million MORE magazine readers in their "Ask the Expert" column on "Family Inheritance-Feuds". Altman weighed in on the touchy matters such as challenging a will and parents opting to make charitable donations over leaving money to children. For a full text version of the article, click here.
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Journal of Financial Planning
August 2008
In a piece for the Journal of Financial Planning, Altman & Associates attorneys, Gary Altman and Brenda Bosch, discuss the drafting of estate planning documents to encourage certain behavior in the beneficiaries of an estate plan according to the client's wishes and planning goals. Click here for a PDF of the article.
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Gary Altman Acknowledged by The Examiner for Receipt of the Norma Stevens Leadership Award
July 2008
In the new “Kudos” section of The Washington Examiner, Altman Associates founder, Gary Altman is recognized for being honored with the Norma Stevens Leadership Award by the National Capital Area Financial Planning Association. “Kudos” highlights local D.C. individuals' accomplishments.The Gazette soon followed suit, including Altman in their “Names & Faces” section.
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Gary Altman’s Advice on Financing a Funeral
July 2008
In an article for CreditCards.com, Gary Altman was asked about the most common options and problems when it comes to financing a funeral.While there are a number of financing options in advance of a death. Afterward, there are fewer. "Most funeral homes won't let you defer payment because they don't want to have to try to collect later," says Altman.
The article cites other options for paying for a funeral in advance, including:
- A prepaid funeral plan, known as an irrevocable funeral trust, which you generally buy from a particular funeral home.
- A Totten trust, which is payable to a beneficiary without going through probate.
- A joint bank account, in which you deposit a sum of money in a bank, savings and loan or credit union with one of your beneficiaries with the intention that he or she will use the money to pay for your funeral.
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Gary Altman Lends Expertise to Washington Post’s “Ask an Expert” Column
June 2008
Estate planning authority, Gary Altman, was recently asked to participate in the Washington Post’s “Ask an Expert” Column. He was asked to share the essential parts of a will:- Designating who is in charge of your property and of your minor children.
- Who is going to receive your assets.
- How they will receive your assets, outright or in a trust. A trust may be necessary if your beneficiary is a minor, has special needs, creditor or marriage problems, or any other issue that requires special attention. If you create a trust, you have to name a trustee who will be in charge of it, and you have to describe how you want the trustee to distribute assets to the beneficiary.
Altman notes, “Once you do a will, it is essential to make sure that your assets are owned properly and your beneficiaries are correct. Your will does not control property that is jointly owned with someone else or assets that are paid directly to a beneficiary upon your death, such as life insurance or retirement accounts.”
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What to Expect When You Inherit a Real Estate Property: Answers by Gary Altman, Esq.
June 2008
In a recent interview with Charles Scutt, a reporter for a nationally syndicated real estate column published weekly, Altman Associates founder, Gary Altman, shared the following information on inheriting a real estate property:-
What are the different possible ways of inheriting a real estate property (i.e., surviving ownership, tenancy in common, etc.), and what's important to understand about each of these possible ways?
The most common ways of inheriting real estate are:
- Through a Will as a specific devise, (i.e., I give my house to "A"
- Through a revocable living trust as a specific devise (i.e., Upon the Grantor's death, my house shall be distributed to "A") and
- As joint tenants with rights of survivorship (i.e. "A" and "B", as joint tenants with rights of survivorship)
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What should you expect regarding inheritance tax? At what rate will you be taxed? (Please provide a few hypothetical scenarios.)
There are two types of taxes at death: Inheritance taxes and Estate taxes.
Inheritance tax is imposed on the transfer of assets, including real estate, at death. The rate is dependent on the relationship between the decedent and the inheritor. Estate taxes are imposed on the value of property at death. The Federal government has an estate tax for estates in excess of 2 million dollars. Some states have an estate tax, some states have an inheritance tax, and some states, like Maryland, have both.
Moreover, who pays the tax may be dependent on what someone's Will says. For example, a Will can devise house to "A", residuary of estate to "B", and require that "B" pay all estate and inheritance taxes. While this may not seem fair, it can be the result if someone is not careful.
If someone had a 3 million dollar estate, the federal estate tax is $450,000. If the tax was shared proportionately, then if real estate going to "A" was worth 1 million, the federal estate tax would be 150k.
In Maryland, inheritance tax is paid of property is going to distance relatives or friends. So if "A" was a cousin or a friend, the inheritance tax rate is 10%, so the inheritance tax would be $100,000. Now, the inheritance tax reduces the estate subject to estate taxes, so the Federal tax could be different.
If the only asset was real estate, and it was worth 10 million, the federal estate tax would be 3.6 million.
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Are there any tips for helping to avoid paying large taxes on the inheritance?
Planning has to be done prior to death. The owner of the property can give gifts prior to death, or can form a family limited partnerships, or can created a variety of complex trusts, such as grantor retained annuity trusts, qualified personal residence trusts and charitable remainder trusts to minimize large estate or inheritance taxes. While tool or technique should be used is highly dependent on the type of real estate, the other assets, the ages and health of the individuals, and other factors.
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What is involved if you decide to sell the inherited real estate property? How much will you have to pay in capital gains tax, etc.?
Upon inheriting real estate property, you pay capital gains tax on the difference between what you net from the sale and your basis (purchase price plus improvements minus depreciation). Currently the federal capital gains tax is 15%. If it is a personal residence, and you meet the rules, you can exempt the first 250k from capital gains tax, if single, 500k if married.
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What are some important considerations for people to think about before, during or after the inheritance of a property?
The most significant consideration is deciding what your own financial goals are. Once these are determined, then you need to determine if the property is part of your overall plan. If it is not, then it should be sold, if it is, then maybe it should be retained.
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What typically happens when a spouse inherits a real estate property?
When a spouse inherits real estate, they can get a new basis and pay no estate tax, so, in most cases, they should probably keep it.
How about when an adult child or an adult relative inherits a real estate property? What are the tax ramifications for each scenario?
It is easier to sell after death because you get a new basis, value on the date of death, and therefore less capital gains tax. However, some end up having to sell to pay estate taxes. If it is one parcel of land, worth 10 million dollars, and there are no other assets, then must sell the land to get the cash to pay the 3.6 million Federal estate, due within 9 months of death.
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Gary Altman Responds to a Host of Estate Planning Questions
June 2008
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What happens if you die without a will?
If you die without a Will, the state you live in has one for you. It determines who gets your assets and who controls. Usually this means that your spouse and/or children will receive your assets, but each state has a different law. Why would you want some law written many years ago to determine who receives your assets when you die.
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Ethical wills/legacy plans?
A typical Will only governs your financial assets. Your goals, dreams, aspirations for your children, your family history can all be passed on by creating what is called an ethical will. While this is not a legal document, and you do not need a lawyer to draft one, you should consider creating a document that passes on your hopes and dreams to your children and grandchildren.
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How to save on gift, estate and income taxes business
Probably the most effective tools to save on estate taxes today are grantor retained annuity trusts and sales to intentional defective grantor trusts. With the low interest rates that are used when calculating the tax savings, these techniques can shift significant assets to someone’s heirs without any gift or estate tax.
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Family limited partnerships
A family limited partnership may be a great estate planning tool, but it should only be used when there is a legitimate business and when it will be followed completely. Most family limited partnerships fail because either there is no business (i.e., just investment assets) or the creator uses it as a checkbook and totally ignores the other members of the family limited partnership.
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Do do-it-yourself forms suffice?
No, these documents cannot easily be changed when they are needed. So, if a mistake is made, whether because someone checked the wrong box or misspelled a name, it is more costly to correct than doing it right in the first place. Just like you would not perform heart surgery on yourself, it is probably equally unwise to draft an estate planning document yourself.
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Pet trusts
Many people care deeply about their pets and want to insure that their pets are taken care of after they die. A pet trust can be used to allow a trusted friend or advisor to use your money after your death to provide the funds to care for your pets. Not all states allow for a trust to be solely for a pet and there are tax issues to consider, but a careful drafted pet trust will insure that there are sufficient funds to care for someone’s beloved pets.
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Insurance trusts
There are two issues here. The first is estate taxes. If someone’s estate will be subject to estate taxes after he or she dies, then removing the life insurance death benefit from the taxable estate is usually a very good idea. This is because life insurance on your life which you own is included in your estate, for tax purposes, when you die. However, a life insurance trust is not a good idea when someone is using a life insurance policy as an investment tool for their own retirement. But, if the life insurance is solely for the use of your loved ones after your death, then placing the life insurance in an irrevocable life insurance trust could save your loved ones significant estate taxes. A second issue is how your loved ones will receive the death benefits. Sometimes the beneficiary is a minor or a child with special needs and if the beneficiary receives the proceeds outright, that could be a major mistake. Using a life insurance trust as the beneficiary of a life insurance policy will allow the insured to control how the death benefit will be used after death.
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Gary Altman on Things Gay Couples Need to Know About Estate Planning
June 2008
In an interview for Consumers Digest, estate planning authority, Gary Altman spells out what gay couples need to understand about estate planning:“It remains critically important for gay and lesbian couples to complete their estate plan,” says Altman. “That a state has made gay marriage legal has nothing to do with Federal estate taxes and may not have any impact on state estate and inheritance taxes. Moreover, the biggest concern for gay and lesbian couples may not be estate taxes, but may be making sure their partner is able to make medical and financial decisions for him/her and making sure that their partner (or other desired individuals or charities) receive their assets at death, and not a disgruntled family member.”
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Gary Altman Comments on the Pros and Cons of Online Estate Planning
June 2008
In an interview for Consumers Digest, award-winning estate planning attorney, Gary Altman, is frank when talking about the shortcomings of online estate services. He says, “I strongly disapprove of online estate services. I liken drafting a Will online to trying to tackle your own electrical or plumbing problems. Why chance your family's future to an online estate service instead of hiring an experience professional to assist you? That said, if you or the electrician did a bad job, it can be fixed. If you draft a Will by yourself, and it has a problem, by the time it is discovered, you could be dead. Then it is too late. The stakes are too high.” -
“A $41 Trillion Market – Why Legacy Planning Matters, and What it Takes” – Gary Altman Tackles
June 2008
Agent’s Sales Journal asked estate planning expert, Gary Altman, Esq., for his thoughts on charitable lead trusts (CLTs) which distribute payments to a charity during the trustees' lifetime, then provide an income stream to any beneficiaries after the owner's death. Altman believes this can be an excellent way for clients to illustrate to their beneficiaries what is most important to them. "One thing I always suggest is, when there is a large liquidity event, why not take $30 million or $40 million of it and put it into charitable lead trust so the income can fund a private foundation which, at their death, the children control so they can learn there are other people in the world who are less fortunate than them?" said Altman. "Then, the money goes to grandchildren after a number of years, so you've created a legacy in terms of the foundation and a legacy in terms of your grandchildren."
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Gary Altman Awarded the 2008 Norma Severns Leadership Award
June 2008
Altman & Associates founder, Gary Altman, was awarded the 2008 Norma Severns Leadership Award by the Financial Planning Association of the National Capital Area (FPANCA). The award, presented to Mr. Altman at the FPANCA's 8th Annual Charity Gala this June, was in recognition of his contribution to the growth and improvement of the financial planning profession.Altman, the current Chairman and former President of the FPANCA, is a strong advocate for the relationship between financial and estate planning. Recognizing the potential to promote this principle, Mr. Altman became the first estate planning attorney to join the association back in 1988. He more recently joined the FPANCA's Chapter Leadership Resource Council, where he assists FPA chapters throughout the country and has spearheaded a new Task Force to plan the President's track at the 2008 Leadership Conference.
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Reasons Financial Professionals Should Concern Themselves with Estate Planning
May 2008
- Set yourself apart - Distinguish yourself from competitors by providing greater expertise and resources.
- Get a broader perspective - Estate planning requires clients to pull together complete asset information, allowing for better advice and consolidation.
- Superior service - Highly informed advisors can identify more unmet client needs and offer the ideal products and services to meet them.
- Legacy creation - Estate plans help clients create a legacy for loved ones or charitable causes.
- Better wealth preservation - Estate plans can integrate asset protection, tax avoidance, insurance for liquidity or wealth replacement, and help clients cope with nursing home costs, death taxes and other significant monetary drains.
- Improved wealth management - Estate plans can manage assets for the benefit or protection of the next generation – i.e., by stretching out retirement plans.
- Establish lasting relationships – If you're part of an estate planning team, you can build relationships with you clients' families and provide services for generations to come.
- Become the trusted advisor – When you serve your clients best interests in a number of different ways, you take on the roll of trusted advisor to the family.
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“Re-tying The Knot” – Gary Altman Give Baby Boomers Things to Consider Before Getting Remarried
April 2008
In an article for DemoDirt.com, Altman & Associates founder, Gary Altman explains why Boomers should do their due diligence prior to getting remarried."As a Boomer and a romantic, I believe that marriage (even the second time around) is a wonderful thing. That said, the attorney and the realist in me knows that sometimes financial and estate issues can get in the way. Therefore, there are several things to consider when remarrying," says Altman.
Altman’s Top Points to Consider When Remarrying:
- Children from a first marriage
- How to care for them financially while providing for new spouse.
- How to leave assets fairly between children from first marriage and new spouse.
- Pre-marital agreements
- Consider signing to protect income, as well as children's inheritance rights.
- Living arrangements
- If life in one spouse's house, how to insure that surviving spouse is not kicked out by deceased spouse's family.
- Medicaid
- If one spouse goes into nursing home, then both spouses' assets must be used.
- Estate Taxes
- It can be easy to defer estate taxes when married in which cases the unlimited marital deduction may be used.
- Pensions/Social Security
- If one or both spouses are getting a pension, then new spouse may be entitled to survivor pension, same with social security.
- ERISA Plans / IRA
- May need/want waiver of Employee Retirement Income Security Act (ERISA) plans which has to be done after marriage. The same goes for IRAs in some states.
- Children from a first marriage
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Gary Altman Lends His Expertise to the Art of Gifting
April 2008
In an interview for Standard Poor’s Market Scope Advisor, estate planning expert, Gary Altman, Esq., comments on the pros and cons of various gifting techniques: Comments by: Gary Altman, Esq., President and founder of the Maryland-based estate planning law firm, Altman Associates, and Chairman of the National Capital Area Financial Planning Association.
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Is there an active campaign to get clients to consider gifting strategies? Why or why not? If so, how do you approach a client to start a conversation on the topic? What are some issues clients raise with regard to considering gifting over inheritance? Is it the perceived complication of creating a gifting plan, the costs, the entire estate planning process, etc .?
In the past 2 years, more and more clients have been interested in advanced gifting strategies. There is always a tradeoff between saving potential estate taxes and the complexity of many estate planning gifting strategies. I always start with the concept that it is simpler to purchase life insurance to replace the tax rather than create a complex gift tax technique to avoid or minimize estate taxes. However, when clients come to me with an asset that will explode in value, I try to get them to do a GRAT or other advanced trust concept to remove the appreciation from their estates.
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Do you or your firm apply a rule of thumb when it comes to inheritance vs. gifting? Is there a dollar amount? ($2 million cost basis/original value because of the estate tax implications, right?) How about capital gains on appreciated assets?
Unless someone is going to be subject to estate taxes, we do not recommend gifting for estate or gift tax purposes. Hence, unless a single person's assets exceed 2 million or a married exceed 4 million, we will not recommend any gifting. Even if a client is over these amounts, we will first try to see if we can achieve some valuation discounts by fractionalizing assets before we will discuss gifting.
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When does gifting or inheritance typically come into the planning discussion? At the time a will is made or adjusted; after a discussion about succession or estate planning with family? When one is ready to retire or another life event? What's the catalyst for most folks?
Usually when they are doing estate planning or reviewing a plan or when an asset is likely to increase significantly in value or when they are going to sell an asset.
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Is there just a general lack of interest or education about it at the client level?
No, not with my clients, it is part of the natural evolution of estate planning.
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Gifting and all the options afforded by this type of planning are daunting for most folks who meet the minimum requirements. So, how many professionals are typically needed by the donor to executive a good gifting plan as opposed to those needed to dole out inheritances.
Usually an estate planning attorney and either a CPA or financial planner who can show the client that even with making a gift, they will have more than enough for their own retirement. However, again, the first priority is the client and making sure that he/she/they feel comfortable with what they are going to accomplish.
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Any other benefits of gifting versus inheritance for the donor?
Gifting allows the donor to see how the donee will react to receiving money. Also will allow the donor to see the donee enjoy the money. How about for the recipients? Recipients love gifts, no taxes to be paid, just pure increase in assets. Any potential pitfalls that folks should know about? Some of the turn offs for donors include the language that tends to be spoken around such a topic i.e. CPA talk and lawyer's legalese.
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Would you be able to give us examples of investment portfolios of folks in the so-called "gifting stage?" Many of the strategies employed have to do removing risk from assets or portfolios, right? Wealth preservation and asset protection? Value investing? What kind of allocation are gifting-stage folks looking at? Percentage between cash, bonds, stocks, and other assets (home, business, etc…)
This is a hard question, it starts backwards. Our clients tend to have a goal in mind, either reduce estate taxes or I need to get this child this amount of money NOW. We then look at their assets and determine what is the best way to accomplish the goal. It is always easier to give an asset that you do not need for retirement, such as undeveloped land, or stock in a closely held company.
Two recent situations come to mind. I have a client who helps to support his daughter. He is about to run out of gift exemption and in a year or two he will be subject to gift tax. So, we decided to create rolling GRATS to hopefully get some appreciation out of his estate which would be used to substitute for his gifts to this daughter. If it works, we reduce his estate and do not incur any gift or estate taxes. We are taking all of his equity investments and putting them in one GRAT and taking all of his bonds into another. Due to the valuation, the bonds actually will return enough so that we will beat the actuarial number.
Another client wanted to give his girlfriend enough money so that she did not have to work. We had no gift tax exemption left. So, he was involved in a closely held speculative investment that recently sold interests to third parties. We sold some of his interest to a trust which would pay him back in a few years and any amount about the purchase price would be used to give to the girlfriend. The investment tripled in value and we were able to give the girlfriend the needed money without any gift and estate tax consequences.
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Gary Altman Selected for Inclusion in Super Lawyers–Rising Stars Edition 2008
March 2008
Gary Altman, founder of the estate planning law firm, Altman Associates, was named by Maryland Super Lawyers magazine as one of the top attorneys in the state for 2007. Only five percent of the lawyers in the state are named by Super Lawyers.The selections for Super Lawyers are made by Law Politics, a division of Key.
Professional Media, Inc. of Minneapolis, MN. Each year, Law Politics undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by Law Politics’ attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check.
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Gary Altman Sheds Light on How to Handle IRA/401(k) Custodians Upon the Death of the Owner
March 2008
In an interview for the Stamford Advocate, estate planning attorney, Gary Altman, shares some common issues with the handling of IRA/401K distributions are the death of the owner:
- Some custodians do not tell beneficiaries what their obligations are with inherited IRAs. In other words, they are not reminded of what their minimum distribution is.
- Some beneficiaries do not know what they have to do, so they do not take out enough or any.
- If/when beneficiaries fail to take out enough, there is a 50% penalty on the amount that should have taken out, but didn't. It is sometimes possible to get the IRS to waive this penalty, but this is a cumbersome process and should be avoided if at all possible.
- Clients do not change the beneficiaries of their IRAs/401k plans to reflect changes in life. Many times ex-spouses or girlfriends or dead parents are listed as beneficiaries, not current spouses or children.
- Sometimes, minor children are named, thereby causing problems because minors cannot inherit directly. They need a legal guardian and court supervision.
- Custodians are just that, they should not give advice, but clients sometimes rely on what the person on the phone tells them, which may or may not be correct.
- 401k plans and other qualified plans should be the same as an IRA, unless the plan has different rules.
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Gary Altman Weighs In On Selecting a Financial Advisor
January 2008
For an interview with Newsmax.com, Altman Associates founder and Chairman of the National Capital Area Chapter of the Financial Planning Association, Gary Altman, Esq., offered his advice on what to look for when selecting a financial advisor.Gary stressed the importance that the advisor will act in the client’s best interest, even if it means that they will make less or no money and suggests that the ideal advisor would be an experienced, fee-only, CFP.
When asked about setting realistic goals for retirement plan, Altman warns that withdrawing too much the first years can deplete the account too much. “It is really important what happens in the first few years after retirement. So, I would set a low withdrawal rate the first few years to allow for continued growth after retirement.”
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“Gary Altman Named as one of Worth Magazine’s 2007 ‘Top 100 Attorneys’
December 2007
Gary Altman, founder of the Rockville-based estate planning law firm Altman Associates, has been named a “Top 100 Attorney” by Worth Magazine.
“Top 100” lawyers are selected based on a rigorous research and evaluation process. Worth asks financial advisors, accountants, consultants, academics, and others who work closely with estate planning attorneys, to provide nominations. Only the very best make the final cut.
"I am honored to have been chosen as a “Top 100 Attorney” by Worth. This award is particularly gratifying because it signifies that I have earned the respect of my peers," says Altman.
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Gary Altman, Founder of Altman & Associates, Interviewed by The New York Times
August 2007
Founder of the estate planning firm, Altman Associates, Gary Altman, recently lent his expertise to the New York Times on the benefits of investing in sophisticated investment tools such as the Self-directed IRA.
During the interview, Altman shared that the Self-directed IRA is a powerful, yet relatively unknown investment option. He also stressed the importance of due diligence when it comes to investing in a Self-Directed IRA.
As the President of the Financial Planning Association of the National Capital Area, Altman has lectured extensively on various estate planning topics, specifically IRA distributions and planning and generation-skipping transfer tax planning.
