When you’re planning your estate, among other things, you decide who should inherit your assets. You choose your beneficiaries, typically your children, grandchildren, or other close relatives. But what if all the beneficiaries you’ve chosen and all their descendants have died? Then it would fall to the “contingent remainder” beneficiary. Often the “contingent remainder” beneficiary has a slang nickname, like the “atom bomb” beneficiary or “exploding turkey” beneficiary. The contingent … [Read more...] about What’s an “Atom Bomb” or “Contingent Remainder” Beneficiary?
When deciding how to split your assets among your children at death, there are many different factors to consider. Equality is certainly one of those factors. But it’s not the only factor. Fair doesn’t always mean equal and vice versa. Here are some situations in which some parents might think an equal division isn’t necessarily the fairest result: One of the children has greater need due to no fault of their own. One of the children has won the lottery and has much, much more money … [Read more...] about Fair Isn’t Always Equal and Vice Versa
It’s important to consider whom you’d want to get your assets when you die. Most of us have an idea of whom we’d choose. But, it’s also important to consider who should get those assets if your preferred recipient isn’t around. Life is full of odd twists and turns. Unfortunately, sometimes people don’t die in the order you’d expect. (The deaths of Kobe Bryant and his daughter Gianna in a helicopter accident demonstrated this.) Let’s look at an example of the importance of naming contingent … [Read more...] about Whom Do You Want to Get Your Assets?
The “Kiddie Tax” is a tax on the “unearned” income of a child. In other words, it applies to the child’s income from interest and dividends, but not from wages from a job like their paper route or McDonald’s. The Kiddie Tax has been around since 1986 and applies to the unearned income of a child over a certain small amount. In 2019, that amount is $2,200. Prior to 2018, if a child had unearned income above that threshold, it would be taxed at the higher of the child’s marginal income tax rate or … [Read more...] about Kiddie Tax is Worse Than Ever