Friday, June 27, 2008

Same-Sex Marriage in California; Domestic Partnerships

As a result of the California Supreme Court's recent ruling that prohibiting gay marriage violates the California Constitution, many Golden State gay couples, who had previously registered at the state level as domestic partners, are wondering whether to dissolve their domestic partnership, before or following their gay marriage? This recent San Francisco Chronicle article sheds some light on the topic, and reports that state legislature attorneys advise that the domestic partnership need not be dissolved, prior to such any such marriage:
Same-sex couples who are registered as domestic partners do not have to dissolve that union before getting married, attorneys that advise the state Legislature said Thursday, just as county clerks and other local officials met to determine how they will enact last week's historic state Supreme Court ruling.
Given the possibility (perhaps even the likelihood, given the decisive ballot-box victory of the California Defense of Marriage Act in 2000) that California voters will turn out at polling places and amend the state constitution to prohibit gay marriage this November by passing Proposition 8, it is in fact probably advisable, though of course legally untested at this point, for gay couples to maintain domestic partner registration following and during their marriage, which would presumably remain in effect, following and despite any termination of their legal marriages due to a change in the law.

Sunday, June 22, 2008

Self-Directed IRAs and Real Estate Investing

Self-directed IRAs, for real estate investing and for other purposes, are gaining in popularity. One company that offers self-directed IRA services, Pensco Trust, has put together a plain-English overview that is recommended background reading for anyone who is interested in learning more about self-directed retirement account investing options:

Pensco Trust Self-Directed IRA Top 50 FAQs [Link opens a PDF document.]

Wednesday, June 4, 2008

Estate Planning: Charitable Giving as Part of Your Legacy

Financial education Web site today offers an overview of ten ways to give, to be implemented within an overall estate plan, some simple, some more complex to - in their words - "achieve both [your] financial and charitable goals. Whether you’re 20, 40, 60 or 80, the Minyan[] credo of earn, save, spend and give applies. I encourage you, no matter your age, to think about planning your legacy of goodwill and providing valuable lessons to your family through planned giving....
Here are ten options for deferred -- or planned -- gifts. It’s always best to select the option that matches your goals. Each of these options require a statement in your will (you have a will, don’t you?). Of course, all options should be explored with an estate planning attorney.

Type of gift: Bequest
Your goal: Defer a gift until after your lifetime.
How to make the gift: Name a charity in your will (designate a specific amount, percentage or share of the residue).
Benefits: Donation exempt from federal estate tax and control of your assets over your lifetime.

Type of gift: Living trust
Your goal: Make a revocable gift during your lifetime.
How to make the gift: Name a charity as the beneficiary of assets in a living trust.
Benefits: Control of the trust over your lifetime.

Type of gift: Gift of life insurance
Your goal: Make a large gift with little cost to yourself.
How to make the gift: Change ownership on a life insurance policy you no longer need.
Benefits: Current income tax deduction and possible future deductions through gifts to pay policy premium.

Type of gift: Outright gift of securities
Your goal: Avoid tax on capital gains.
How to make the gift: Contribute long-term appreciated stock or other securities.
Benefits: Immediate charitable deduction and avoidance of capital gains tax.

Type of gift: Gift of retirement assets
Your goal: Avoid the twofold taxation on IRAs or other employee benefit plans.
How to make the gift: Name a charity as the beneficiary of the remainder of the assets after your lifetime.
Benefits: Gift from the most highly taxed assets, leaving better assets for family.

Type of gift: Gift of real estate
Your goal: Make a gift of property no longer needed and generate an income tax deduction.
How to make the gift: Donate the property to a charity.
Benefits: Immediate income tax deduction and reduction or elimination of capital gains tax.

Type of gift: Retained life estate
Your goal: Give your personal residence or farm now, but continue to live there.
How to make the gift: Designate ownership of your home to a charity, but retain occupancy.
Benefits: Valuable charitable income tax deduction and lifetime use of residence.

Type of gift: Charitable remainder annuity trust
Your goal: Secure a fixed and often increased income.
How to make the gift: Create a charitable trust that pays you a set income annually.
Benefits: Immediate income tax deduction and fixed income for life, often at higher rate of return.

Type of gift: Charitable remainder unitrust trust
Your goal: Create a hedge against inflation over the long term.
How to make the gift: Create a trust that pays a fixed percentage of trust’s assets as revalued annually.
Benefits: Receive a variable income for life and an immediate income tax charitable deduction.

Type of gift: Charitable gift annuity
Your goal: Supplement income with steady payments that are partially tax-free.
How to make the gift: Establish a charitable gift annuity contract with a charity that pays a set amount for life.
Benefits: Current and future savings on income taxes and fixed payments for life for one or two individuals.

Type of gift: Charitable lead trust
Your goal: Reduce gift and estate taxes on assets you pass to heirs.
How to make the gift: Create a charitable trust that pays fixed or variable income for a specific term of years; principal is retained for heirs.
Benefits: Reduces your taxable estate and the property is kept by your family, often with reduced gift taxes."