Category Archives: Estate Planning

The Marital Penalty in the Tax Code

The U.S. Tax Code has included subtle penalties (and occasional benefits) for married couples for as long as there have been tax tables, phase-outs, and deductions — sometimes two people are better off filing as separate taxpayers, while sometimes couples get a little bit of a break when they tie the knot. The penalties are hidden in various places throughout the tax code and are most easily spotted when looking at the tax brackets a married couple filing jointly uses versus the same two incomes applied to the single filing table.  Read more »

What Does the Baby Boom Mean for Your Future?

One of the more frustrating aspects of the political climate in 2018 is that no one seems to be comfortable discussing the elephant in the room: Americans are living longer and having fewer babies. As a result, the commitment the United States has made to healthcare and retirement benefits for baby boomers is likely to lead to substantially higher taxes and/or significant cuts to entitlement programs in the United States over the next few decades. Read more »

Building Walls of Financial Protection

There has been a lot of talk about building walls lately. Regardless of whether you are in favor of building physical ones, you ought to consider building some legal and financial ones, as we are each surrounded by potential liability threats. While the odds of any of these liability threats becoming a liability claim are incredibly low (the odds are about 1 in 2,000 that someone will have a serious slip and fall in the shower, for example), the impact these events have when they do happen can be profound (especially if that person fell in a shower at an apartment that you rented to them). Properly constructed walls can shield assets and provide a level of protection from claims. Read more »

Practical Planning – Understanding Life Insurance

The basic purpose of life insurance is simple: upon your death, a policy will pay out a set benefit (income tax-free and occasionally estate tax-free) to your beneficiaries. When considering life insurance options, however, it can be difficult to determine the amount of coverage your family needs and to understand the terminology and costs/benefits of different policies. Read more »

529 Plan Changes – Should you use your 529 Savings Plan to pay for elementary or high school?

Families saving for future educational expenses were granted an unexpected gift from the Tax Cuts and Jobs Act: up to $10,000 of elementary or high school tuition and fees may now be paid (tax and penalty-free) from 529 savings accounts. (Previously, 529 plans were limited only to college expenses.) In this post, I will address how this change to the tax code affects residents of Oregon and Washington and will answer some of the questions we have been getting here at our office. Read more »

Practical Planning – Advice for New Parents

Like a new year, parenthood brings with it many new experiences. Some are great — the first time you hold your child, the first time they smile, et cetera. Some are not — first diaper changes, the first all-nighter, and so on. The Arnerich Massena team is welcoming three babies in the coming months and we love hearing stories about these firsts from our new parents.

Sometime during those first few sleep-deprived months, most new parents stumble across the same thought: “Since I am now responsible for this other human being, I should probably get my finances and estate in order.” Read more »

Planning for Tax Reform

Republicans in the House and Senate have passed tax reform bills in their respective chambers. As the bills now go to committee for reconciliation, several items are clear: first, the text of the final bill is not likely to be set until around Christmas, leaving taxpayers no time to take action ahead of the new rules for the 2017 tax year. Second, some changes to the itemization of an individual taxpayer’s deductions are on the way. Third, the legislative and budgetary environment in Washington makes it likely that, if a bill is passed, interpreting that bill’s provisions is going to be something of a guessing game– one accountant recently described to me the current state of the environment as being, “akin to the Wild West, where anything goes.” Read more »

Family Finances: Starting the Conversation About Generational Wealth Planning

In the U.S. today, many families are beginning the process of transferring wealth to the next generation. For parents, this can feel daunting, uncertain, and intimidating; it can be a long and challenging transition. Some families want to start earlier, while others prefer to wait: there’s no right way or time to begin the process. Fortunately, in either case, there are steps you can take to facilitate a smooth transfer of wealth. If you are unsure of how to open the dialogue, read on for some helpful ideas. Read more »