I recently spent 4 days visiting my Mom in South Florida, enduring two long, uncomfortable air flights to be there for the short period of time I could afford to be away from the demands of my daily life. But I knew I just had to go, especially after reading a saying from Gandhi, “Actions express priorities”. I realized how important it was to carve out some time to see my Mom, who now lives alone since my Dad passed some 5 years ago.

As it turns out, I was very glad I did, but not for the reasons I had expected.

A Special Night Out – – or Two!

Two ladies out on the town! (Mom on the left)

My Mom was once a choreographer and loves live theater. However, she rarely goes any more since my Dad (who was an actor, singer and stage director) died. So I planned ahead to treat her with not only one, but two shows. I purchased three tickets for each, including one for my wife who was to join us. However, my wife couldn’t make the trip because her pregnant daughter was about to give birth any day. (Which she did, shortly after I returned – – to a 9 pound, 13 ounce boy!) Since I had an extra ticket for the shows, I suggested to my Mom that she invite her best friend, also a widow, to come along. Well, she and her friend were thrilled beyond words!

I really had no idea of what a big deal going out to these shows was to them. They spent hours going through their wardrobes and accessories to find (or buy) the perfect outfits. They went out and got their hair and nails prettified. And when I picked them up, they were decked out from head to toe, complete with stockings and high heels! (Not bad for two ladies in their 80’s!)

You should have seen the joy on their faces and heard the childlike lilt in their voices as they were chauffer driven (by me), taken out to fancy dinners and experienced delightful shows they would probably never had attended (Alvin Ailey’s Dance Troupe and Tchaikovsky’s 5th Symphony). Their gushing, heartfelt gratitude was a pleasant surprise to me.

However, much to their surprise, the best part came after our nights out ended. Both ladies realized how much they enjoyed getting out of their homes, where they alone spend most of their days 24/7. And when I took them home they also realized they lived a lot closer to each other than they had thought, just 15 minutes away. So I’ve now resolved to buy them some more show tickets, get them some prepaid restaurant cards and arrange for a taxi driver too! (Sorry Mom, for blowing this surprise, if you’re reading this.)

You Just Might Meet That Unexpected Someone

Another connected, recurring theme that came up during my trip was, when you finally do make the effort to get out of the house, you never know who you’ll meet (but if you stay in, you do know – – nobody!).

When the symphony orchestra took its intermission, my Mom’s friend (Mary) started chatting with a nearby lady in the audience. Mary remarkably found out (in order of the conversation) that the other lady’s parents grew up in the same city as her (Krakow, Poland), had come and settled in America at about the same time and in the same town (Vineland, New Jersey, where I also grew up), lived a short distance apart and Mary had met and knew the lady’s parents!

Two similar “coincidences” occurred at the tail end of my trip, when I was returning to California. The cab driver who drove me to the airport was, believe it or not, the same one who had taken me to the airport the last time I visited my Mom about a year earlier! He and I even remembered the details of our last conversation (remarkable given I often can’t recall if I had lunch today or what I ate), and our conversation continued from where we had left off as though we had never parted ways! Then, after he dropped me at the airport and I took a seat in the waiting area, I noticed a lady sitting across from me who looked familiar. After asking and answering a few questions of each other, we realized she was one of my clients, going way back to the early years of my firm! It was a pleasure to also meet her daughter, who was traveling along with her, and to know how our estate planning had helped them after the lady’s husband had passed. (Is your estate plan in place and up to date? You knew I ‘d tie this article back to estate planning somehow!)

The Moral of the Story

Think about it. How often do you promise to yourself to do or enjoy certain things – – but never get around to them or instead come up with easy to overcome excuses for not doing them? Get out of the house and once in a while enjoy an evening out. (If it’s your parent who is alone at home, take him or her out.) Plan and go on that trip you’ve always wanted to take.

That’s what I’m doing! On my flight back, with my visit to Mom as inspiration, I determined it’s finally time to attend my college class reunion – – after 40 years (how time does fly!) – – even though it will involve another long plane ride back East in just a few months. Hopefully, I’ll run into you at the airport next time!

Where are The Investment Markets
Headed and What Should You Do Now?

Many of our clients are retired, or about to retire soon, and often ask us the same questions – – “How can I have the peace of mind that I’ll have enough income for the rest of my life, while not risking my nest egg’s principal?”

We’re not retirement or investment advisors. So we’ve asked Dryden Pence, Chief Investment Officer of our affiliated firm, Pence Wealth Management, to share his insights with you. This is one of a series of market updates we’ll provide to our newsletter readers, “FYI”.

Taming Transfer Taxes

The Future of Your Business

It’s that time of year again! Taxes.

How many times have you seen or heard that phrase and thought, “Oh-oh, now what?”

While it is time to look at your income taxes and tax planning before filing your 2013 income tax return, this is a perfect time to review your estate plan, too. As you meet with your tax preparer, consider contacting your estate planning attorney to review your current estate plan generally and your “estate and gift” tax planning specifically.

Your Taxable Estate

Before reviewing some of the main points of estate tax planning, an appreciation for what makes up your “taxable” estate is in order. The list is quite extensive. After allowable deductions, it includes real estate, tangible personal property, life insurance proceeds, IRAs and other retirement plans, other investments, and business interests.
Many Americans work hard to save and accumulate wealth while they are alive. They also seek to share that wealth with loved ones and worthy causes while living and through their estates.
With strategic estate and gift planning, you may have more money to give and pass on to your own loved ones and worthy causes, with less of your wealth taken in taxes.
Accordingly, as tax planning is a broad subject, the focus of this article is limited to the estate exemption amounts and then on to gift tax planning.

Estate Exemption Planning

The good news is that federal estate tax exempts the first $5,340,000 of assets from being taxed with up to a 40% federal tax. Many states have decoupled from the Federal Estate Tax exemption, however, and impose their own estate tax based on lower thresholds. A qualified attorney can help you determine whether you would be exposed to state estate and inheritance taxes.

Also, the American Taxpayer Relief Act of 2012 made “portability” permanent, which means the tax law allows a surviving spouse to use the unused exemption of a deceased spouse, subject to some very specific requirements.

Fortunately, there are many strategies to transfer wealth while you are alive to minimize and, perhaps, even avoid estate and inheritance taxes.

Gift to Reduce Your Estate

Not only do lifetime gifts reduce your taxable estate at death, but they remove all future appreciation on the gifted assets from your estate as well.

Most taxpayers know they can transfer up to $14,000 to as many different individuals as they wish each calendar year. However, did you know one spouse may gift up to twice that amount to as many individuals as they wish with their own funds? Yes, that’s true, as long as each spouse agrees to “gift splitting” and files a timely Form 709 Gift Tax Return disclosing the gifts. This is especially powerful in blended families when each spouse may have brought separate children and assets to the new marriage. Also, don’t forget that transfers between spouses may be made without limitation under what is known as the Unlimited Marital Deduction.

Finally, certain opportunities for lifetime wealth transfer are completely gift tax-free, if done properly. For example, tuition paid directly to the university your grandchild is attending does not count against your annual gift tax exclusion limit for that grandchild. Also, if you pay any medical bills directly to the hospital that treated your son, then same result.

The result would be different in both of these common scenarios if you gave the money to your grandchild or son instead of to the institution providing services to them.


There is a lot to know when it comes to taxes. Period. Fortunately an estate planning attorney can help tailor a strategy for your wealth that makes sense for you now and for your heirs after you pass away.

The Future of Your Business

Who do you want to take the reins of your company?

Business Succession Issues

The Future of Your Business

If you are a small business owner, you are probably on high alert at all times. That means coming in early, staying late and working weekends. The buck stops with you, and you enjoy the wins and suffer the losses. It also means being a leader. You take the reins and drive your business to success. But who will take the reins and move the business forward when you are ready to retire?

Some small business owners see themselves running their companies until they can no longer make it in the front door each morning. Others dream of handing the business to a partner and taking a trip around the world.

Business succession means planning for the survival of your business upon your retirement, death or disability, or its own sale or merger. Staying on top of every aspect of your business is critical in order to give yourself the best chance to succeed. With the March 15th deadline approaching for filing corporate returns, no doubt you are working with your accountant preparing the required paperwork. With all of this information at your fingertips, this is also an ideal time for you to visit with an attorney about business succession.

Six Essential Considerations

Your attorney can help you with the following:

  1. Mapping out an exit strategy. Your attorney will assist you with all of the issues that need to be covered regarding your exit from the business – whether that is by your own doing or due to an unexpected event.
  2. Setting a timeline. Even if it isn’t set in stone, you should have a sense of when you would want to transition to a new owner or bring on a successor to lead your company.
  3. Examining tax ramifications for your estate. Your attorney can help coordinate with your life insurance agent so adequate insurance benefits are available immediately to pay for your share of the business at your death or for other liquidity needs. This forward thinking will alleviate headaches because of issues with the company’s cash flow or a need to liquidate the company to pay the cost of the deceased’s interest or provide funds to pay estate taxes.
  4. Discussing disability insurance. Unforeseen events can include becoming disabled. Again, your attorney can coordinate with your disability insurance agent to structure the proper type and amount of disability insurance you and your family will need. This includes disability “buyout” insurance as part of any buy-sell agreement.
  5. Starting a solid retirement plan. Your conversation with an attorney should include maximizing your income and investments for your later years.
  6. Identifying characteristics and developing a mentoring program to choose a successor. “Hand-pick” the person who will take over. Go through the exercise of defining the attributes that any person will need to lead your company.

Set time aside now to speak to your attorney and become comfortable with a plan for your future and the future of your business.