Blog

Paying the Gift Tax

By Bruce Starks, CPA, CFP®

Course:  Estate PlanningLesson 4: Transfer Taxation I – Common Elements of Estate and Gift Taxes Student Question: Hello, Can I get some clarification on the Gift and Estate tax? As I understand it, individuals can gift up to $15,000 per year without “triggering” a gift tax; however, they still have the lifetime exemption of $11.58 million. Gifts over $15,000 per…

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Accelerated Death Benefits

By Dan Madden, CFP®

Which of the following individuals would typically qualify for accelerated death benefits under their term life insurance policy? Ida, who is expected to die within 7 months from cancer Jacob, who is expected to die within 10 months from AIDS Kay, who is expected to die within 3 months from kidney failure All of the…

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Good to Know: The CARES Act for the November CFP Exam

By Bruce Starks, CPA, CFP®

Good to Know The Coronavirus Aid, Relief, and Economic Security (CARES) Act provided vitally needed relief for individuals and businesses. However, not all of the Act’s provisions relate directly to CFP Board’s testing priorities. The purpose of this blog is to emphasize those portions of the Act highlighted as “key” by CFP Board in its…

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Vested versus Contingent Beneficiary

By Dan Madden, CFP®

Course:  Estate PlanningLesson 3: Understanding Trusts and Trust Documents Student Question: In the example, I would think Northwestern would have a future, contingent interest as their interest is dependent upon the death of the wife. But the feedback tells me it’s a vested interest. Do we assume death is inevitable and, therefore, not a contingent-worthy contingency? EXAMPLE: During the life of…

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Various Sources of Income

By Dan Madden, CFP®

A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C Corporation and an S Corporation. The C Corporation had net profits of $20,000 and the S Corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…

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CFP Board Takes Issue with Proposed DOL Investment Advice Rule

By Bruce Starks, CPA, CFP®

CFP Board Updates CFP Board, along with other members of the Financial Planning Coalition, penned a comment letter to the Department of Labor strongly objecting to a proposed retirement investment advice rule. The basis for the objections is that the proposal conflicts with: Employee Retirement Income Security Act (ERISA) requirements, and CFP Board Code of…

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Skip Persons and the Generation-Skipping Transfer Tax

By Dan Madden, CFP®

Course:  Estate PlanningLesson 7: Transfer Taxation IV – Generation-Skipping Transfers Student Question: Regarding the example below, would the death of the father Stephen not move Andrew one step up, making him only one generation below Mrs. Jones? Would this not remove the Generation-Skipping Transfer Tax? EXAMPLE: Upon her death, Mrs. Jones left her estate in trust to provide income for life to…

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Possible Penalties on Tax Return

By Dan Madden, CFP®

Terry received a notice from the IRS correcting a math error on his individual income tax return. As a result, Terry owes $1,000 in taxes, penalties and interest. Which of the following is the most likely penalty or interest assessed against Terry? Understatement penalty Failure to file penalty Fraud penalty Underpayment penalty CLICK TO REVEAL…

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Good to Know: Reducing Financial Exploitation of Seniors

By Bruce Starks, CPA, CFP®

The financial exploitation of seniors, especially those with diminished financial capacity, is an urgent issue. How prevalent is this shameful practice? The National Council on Aging estimates that seniors lose an estimated $37 billion annually or more in the U.S.A. The AARP makes this huge number a bit more personal when it estimates the average…

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