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Article from CPA Insider "A false sense of security can lead a client (and his or her adviser) to make mistakes. September 2, 2014 by Patricia M. Annino, J.D. The American Taxpayer Relief Act of 2012 (ATRA), P.L. 112-240, changed the game in estate planning by significantly increasing the amount of wealth that a taxpayer may pass free of federal gift and estate tax to beneficiaries. Many advisers and clients who are under ATRA’s $5.34 million exemption (inflation-adjusted for 2014) believe their past planning is sufficient, that estate taxes are no longer relevant as part of their planning, and no further action is required. This false sense of security can lead a client (and his or her adviser) to make several mistakes. This article examines three of them. 1. Mistake: Ignoring the impact of the state estate tax I recently had a telephone conversation with a very angry client whose mother had recently died. Her mother’s net worth was under the federal exemption, and I told her that the Massachusetts estate tax was estimated to be $160,000. I wanted her to reserve the cash now to pay the tax instead of investing it. All the publicity about the increased federal exemption had led the daughter (and many Americans) to believe that estate taxes were no longer relevant. I explained to her that her mother had been very aware of the Massachusetts estate tax and did not want to gift any of her assets to reduce it, as she had begun her planning when her estate would have been subject to a much more significant federal estate tax. Many states have an estate tax, and the rates in some rise as high as 20%. Fewer people paid attention to state taxes back when the federal estate tax exemption was much lower. Now that the federal estate tax is out of play for some of them, clients need to revisit their planning for state estate taxes. This is especially true for clients who have real estate or tangible personal property located in more than one state. That’s because the estate may be subject to state estate tax in several jurisdictions and there may be a dispute as to which state the decedent was domiciled in. It is important to review the plans of those clients and consider what options exist now. 2. Mistake: Blind reliance on “portability” For federal estate tax purposes, the gift and estate tax exemption is now portable, meaning that if one spouse does not fully use his or her exemption during his or her lifetime, the surviving spouse can take advantage of it later. While clients and advisers may rely on portability as a default strategy, other considerations should be taken into account. Portability does not include an inflation-adjustment factor for the first spouse to die’s exemption. (This is different from a credit shelter trust where the funded assets and their appreciation will bypass estate tax at the death of the surviving spouse.) Portability is federal and is not recognized at the state estate tax level. Portability is an important planning strategy, but it should not be used as the absolute strategy. All factors should be considered and reviewed on an ongoing basis before assuming it is the “right” answer. 3. Mistake: Failing to understand that the cost of long-term care may cause more significant erosion to family wealth than estate or income taxes Families whose assets are under the exemption threshold and no longer have to plan to avoid or reduce the estate tax should still be concerned about the erosion of the family’s wealth. With an aging population that is living longer and needing additional assistance with custodial care, the key goals of estate planning could very well shift. Instead of focusing on how they can help clients protect their accumulated wealth from taxation, CPA planners may concentrate on helping clients protect their accumulated wealth from the escalating cost of health care. While the focus may change, the need for financial planning will be just as critical. The CPA, as a trusted adviser, is well-positioned to start that vital conversation and keep reviewing it as the client’s situation changes." I know my state of Oregon and also I believe Minnesota only have a $ 1,000,000 exemption. Oregon ' s rate is 10 %, so it doesn't take that large of an estate in Oregon before tax is due.

This is an endemic problem, and one that is highlighted (but not caused; correlation is NOT causation) by the technologies of email and texting. One of the things we worked on really hard when home-schooling Gwen for the last couple of years of high school was getting her to learn how to learn on her own. I discovered that kids are not "merely" not taught how to look things up on their own -- but in our schools, at least (supposedly some of the best in the state if not the country) -- they are actively DIScouraged from doing anything except taking what the teacher said, on faith, and looking nowhere else. We found the Gwen was asking us for help in various areas for problems that were explained IN HER TEXTBOOK. She had NO idea how to use a textbook as a resource, or to learn from. We were appalled. That got fixed. I researched and purchased texts for her that were designed to be learned from (high school, yes - but I chose college-level books in the appropriate subjects). The first thing she learned was how to learn from a book. Second was how to look for information herself. She is in her senior year of college now and top of every class she takes.

And just HOW does this snarky post add anything to the discussion? Perhaps you should remember what I'm sure your mother told you...."If you can't say something nice, or helpful, don't say anything at all." And, yes, of those items they do challenge, business-related driving expenses, especially when they involve local travel, are very high on the list.

Results of Professor’s Bold No Email Policy Enforcement Will Give You Something to Think About Spring-Serenity Duvall, an assistant professor at Salem College, was tired of spending hours and hours sifting through student emails that could be answered by what she had already covered in class, had been asked in class, or had simply already been written into the syllabus. So Duvall came up with a bold policy, one that she was a little nervous to enforce: No emails unless you are scheduling an in-person appointment. Duvall told the InsideHigherEd she experienced “unqualified success.” Students came to class better prepared and were turning in papers that were much higher quality. Her email inbox was less full, and her office hours and one-on-one time spent talking and bonding with students was the highest it had ever been in her academic career. She was, however, “afraid that maybe they were keeping their thoughts to themselves, and they would slam me on the evaluations on how much they hated the policy.” But not the case at all. On the contrary, students rated her availability as “excellent” and overall evaluations were higher than ever before, with many students citing that they felt Duvall genuinely cared for their education. Email is very convenient and fast, but for many situations, there really is nothing like talking things out face-to-face.

Gee, that seems like it should be the FIRST thing they are taught in school, doesn't it?

Those RAC fees amount to a pretty high interest rate on what amounts to getting your refund just days faster and not having to pay the prep fees up front.

After spending much of my professional career in academia, I too realized that the ease of email (and today, texting) made students too lazy to find their own answers. Why look up a reference or address or review your own notes when you can ask someone else in seconds? I would get emails from students at my own and other universities saying "I'm doing a paper on XXX" and hope you can point me in the right direction for sources. I learned the names of libraries at every major university and told them to go there! When I opened my email when I got to work in the morning I'd often find some sent at midnight with some question, and then I'd have another at 2AM wondering why I hadn't responded. Technology is an amazing tool that can give students access to a universe of information that was unheard of in my undergraduate and graduate days. But has it made them less reliant on their own abilities to figure things out?

My friend Sandy is an instructor at a nursing college. Very fair, very helpful, VERY tough. We were visiting her (and her husband) this weekend and she told us that in the early part of each semester, new students come to her on a regular basis, griping about how "they always got A's on their papers before!" -- by which they mean that SHE is scoring them too harshly. Her response to these kids is, "I see. So what do you think your problem is now?" And she manages to do this with not only a straight face, but also one indicating concern for the student. I just about fell off my chair laughing. She is SUCH a good teacher.

Sign me up, I can just imagine the fees they would charge.