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Sing For A Cure

I recently performed in the lipsync contest called Sing For A Cure at York College.  Sing For A Cure is a charity event to raise money for the Alzheimer’s Association, and is done in conjunction with the Walk To End Alzheimer’s. Bellomo & Associates is proud to support such an incredible organization.  

My grandfather Alfonso Bellomo suffered through, and ultimately passed from, the disease.  I remember vividly going with my parents to see him in the nursing home and realizing that that was not the grandfather I had known. It was so hard to watch his health and cognitive skills deteriorate, and I promised myself that one day I do what I could to help find a cure. However, science was never my thing, so I wasn’t going to find a cure, so I did the best thing I know-how. I support incredible organizations such as the Alzheimer’s Association every time I can.  

Sing For A Cure was an incredible evening with nine talented, amazing acts. I did a medley of three songs, starting with Michael Jackson’s “Smooth Criminal”, then going to Will Smith’s “Fresh Prince of Bel-Air”, and ending with Cyndi Lauper’s “Girls Just Wanna Have Fun”. I had costume changes, and yes, I did wear a dress and a wig for “Girls Just Wanna Have Fun”.  What an incredible evening with great people, raising money for a great cause. I am so honored to have taken part in it and cannot express how incredible the entire night was.  

Hats off to everyone who made the event a success and to the Alzheimer’s Association for everything they do to put an end to this terrible disease.

If you are interested in learning more about Medicaid crisis planning, please call our office at 717-845-5390, or click here to RSVP to our upcoming workshops.

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Planning And Strategic Gift-Giving / York, PA

Giving-to-charity2While many popular gifting strategies involve charities, gifting to family members can be equally rewarding. Here are a few easy approaches that can reduce or avoid taxes, and are also effective wealth transfer techniques.

“Gifting strategies”: when you are young the only strategies out there are about picking the gift, the wrapping paper or maintaining the surprise. Later in life, however, gifting is serious business and there are some important strategies to consider when you have a lifetime of assets to pass on to your family and loved ones.

Gifting makes up one of the pillars of estate planning. Strategic gifting can mean all the difference between a plan for family wealth that works and a plan that doesn’t. Forbes recently offered a helpful list of strategies in an article titled “5 Family Gifting Strategies.” This article brings some important techniques front and center.

While it is worth your time to read the entire article, here is a quick list of the five strategies offered:

  1. Make use of your full annual exclusion with a tax-wise gift every year.
  2. Start a Roth IRA with a younger heir.
  3. Pay college tuition or medical bills directly and escape the annual exclusion requirement.
  4. Gift appreciated assets, especially to heirs in lower tax brackets.
  5. Gift in the form of 529 plan contributions and remember those state income tax deductions.

Gifting with purpose can provide many ways to work legally in and around the tax code to strategically move family wealth. Nevertheless, you have to start early and plan carefully. A powerful estate plan can use such strategic gifting to move a great deal of wealth over several years rather than all at once. The best part? You get to be there to see your heirs make use of the gifts you give.

For more information about planning and strategic gift-giving, please visit my estate planning website.

Reference: Forbes (May 8, 2014) “5 Family Gifting Strategies

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When Money Isn’t Everything But There Is Still Something Worth Fighting Over / York, PA

MP900442259A thoughtful distribution of your “stuff” is a gift more valuable than any item. After all, … “The last thing you want when you die is to put your family in a worse situation.”

“Money isn’t everything.” That is what most of us think when we hear about heirs fighting over an inheritance. Nevertheless, it’s a truth many heirs know all too well. Yes, sometimes heirs fight – even reasonable and emotionally upright ones – especially because money isn’t everything. How you split up priceless family artifacts and other physical goods can start or end fights before they happen. So how do you plan to fairly spread the relics and keep the peace?

Sure, there are many inheritance fights over dollars and cents. On the other hand, there are even more fights leading to protracted probate battles and just plain old hurt feelings over the disposition of physical goods, relics and family keepsakes. Unfortunately, it can be more difficult to plan for the disposition of these “things” in contrast to cash.

As you begin to think about your estate in this light and figuring out who wants what, consider the insights provided in a recent article in Consumer Reports, aptly titled “How to spare your heirs a battle over your estate.

Oftentimes, physical items are difficult to split up. For example, you can’t simply tear the painting in half, divide a book, or even realistically split a set of china. In the end, in order to end a debate about which direction an item will go, to one heir or the other, you have to write it out. A will is simply not enough, generally speaking. It is hard to capture the kind of detail needed. Consequently, the matter will go straight into probate.

Thankfully, many states allow you to attach a more informal writing to your will – a document that offers a list of “what” and “to whom”, and is far more easily updated. No one, however, can make the often tough distribution decisions and create the list for you.

This list is one of those many little tasks to take on as part of the overall plan, and one you must keep updating as you acquire or lose this or that asset or family heirloom. This is also a topic worth discussing with your heirs. That way you, and they, will know what things they may want. After all, with heirloom fights it is an emotional connection to an object at the heart of the matter rather than its intrinsic value. Remember, it’s not always about money, because money isn’t everything.

For more information about distributions and inheritance, please visit my estate planning website.

Reference:  ConsumerReport.org (April 2014) “How to spare your heirs a battle over your estate

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Handing Down the Family Home: A Potentially Dangerous Gesture / York, PA

MP900430804It may seem like a great idea: Parents, either because they want to help their kids out, or to reduce the taxable value of their estate, decide to transfer ownership of their home to their kids. Well, it may seem like a great idea. But it often isn't.

Giving the family home to your heirs early? Take great care! This is too important a gift to get wrong, and it’s too easy to do just that.

This challenge was the subject of recent article in The Wall Street Journal titled the “Dangers of Giving Your Home to Your Children.

The family home is often the most important gift you could ever give to an adult child or your adult children. It is meaningful simply by right of being the family home and its place in the family history. When given to a young couple it is also a gift of the future, and a very practical one if you don’t need the space anymore or just wish to downsize.

Nevertheless, houses are as complex as they are valuable when considered as assets and potential tax burdens. Giving the house away early means moving a taxable asset around, and doing so at different times and in different ways will bring different tax burdens. These issues include weighing the consequences of a lifetime gift versus as a testamentary bequest. In the end, you need to fit the house into your overall plan, and carefully at that.

Then there is even more to the financial side and the darker side of liability. A house as an asset is a magnet for creditors, divorce proceedings, and all manners of scaly legal problems that make claim or foreclose upon the house under the name of a younger, less financially stable, adult child. Giving it to them to live in forever might end up risking it to creditors, and if you intend to stay living there that means putting you out too.

And what about control? Not all family problems work themselves out, after all. It is now up to the kids to keep or sell the house, even against your wishes and, again, even to evict you right out onto the curb if you intend to still live there.

So, do appreciate the house and the gift of it to your loved ones. At the same time, however, also appreciate it as a difficult transition fraught with potential issues to guard against. Once you appreciate the issues you can appreciate the solutions, and depending upon the house, your heirs, and your own needs there are many powerful solutions at your disposal.

For more information about transfer of ownerships, please visit my estate planning website.

Reference: The Wall Street Journal (April 13, 2014) “Dangers of Giving Your Home to Your Children

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The IRS is Uneasy about Easement Valuations / York, PA

MP900411753The big problem with facade easements is valuation.

Knowing something is of value is one thing. However, being able to prove the value is something else. This challenge goes double when you are attempting to value an intangible, non-market benefit, and triple when it’s the IRS you’re trying to convince. Unfortunately, it seems like a particular intangible, non-market benefit of great importance has become all the harder: the easement valuation.

The developing trend against easement valuations was pointed out in a recent Forbes article titled “Easement Valuations Not So Easy Anymore.” If you have any possible interest in leaving an easement then it’s a problem well worth your planning attention.

So what is an easement and why would you be interested in leaving one? Essentially, an easement is a charitable gift of the right to change your property, or anyone else’s right should they purchase it from you. If you own forested land in the country and you want to conserve that forest as it is instead of putting up a strip mall, then protect it with a conservation easement. If you own historic property in the city and you want to conserve that historic building as it is instead of allowing for yet another contemporary high-rise, then protect it with a conservation easement.

There are lots of hurdles to qualifying as an easement and there must be a charity to eventually run it. Regardless, value is the utmost important hurdle to clear in taking a deduction for the donation without also ruining the value of the property itself. After all, just because you are foregoing utter capitalization of the property doesn’t mean you were hoping to debase any value at all.

As the original article points out, valuation has been a tricky game and it’s getting trickier. With nothing but rough estimates to live off of – there is no market rate for an “easement” after all – valuations fell to simple principles and the (hopeful) applications of percentages. This is what the IRS is now challenging. No surprise there.

Read the original article for a better understanding of the cases in the works and the challenges now being levelled by the IRS against easement valuations. The bottom-line: this should underscore how important valuation is and how important it is to build your easement plan carefully.

For more information about easement valuations, please visit my estate planning website.

Reference: Forbes (April 5, 2014) “Easement Valuations Not So Easy Anymore

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