Page 28 - March 2018 FOP Newsletter

Keeping up with tax law changes
2018 has brought some important developments in the tax laws. Here are points of information to consider when filing this year:
Tax exemption. How is your current estate plan affected by recent tax legislation? The good news for many people is that the new act raises the
tax exemption to an adjusted $11.2 million
until 2026. Previously executed AB marital
trusts may not serve the same tax-saving purposes but can remain as your estate plan. Consider if you wish to make any changes.
Your living trust can protect the inheritance with special needs provisions. If you are uncertain whether your trust contains those provisions, call us today for a review.
Tax qualified accounts. Give careful consideration to naming beneficiaries for all inherited IRAs and deferred compensa- tion plans. While a spouse would be named a primary beneficiary in most situations, major tax consequences may result depending on how the successor beneficiary
is named, whether it is a nondisabled adult or a trust. 529 education plans. The tax law expands the tax and estate planning benefits of these education savings plans. Now, tax-free distributions from 529 plans can be used for el- ementary and secondary school expenses, not just higher edu-
cation expenses, making them even more valuable.
Living trusts. If you do not have one, you need one. If you have one, make sure there are no changes in beneficiaries or trustees status or updates that you wish to make concerning current or possible future disability protection, or if you are contemplating a move to another state. Be certain you have ti- tled all your property and nontax qualified financial accounts in the exact name of your trust. If you are ready for a review, call us
and schedule an appointment.
Insurance policies. For all property (auto, home, commer-
cial, act.) transferred into a living trust or an LLC or corporation, notify relevant companies for the title, homeowners, vehicle and title insurance coverage.
Title insurance. When you purchased your residence, vaca- tion or investment property, you also purchased title insurance at the closing. Title insurance is a policy that ensures your com- plete ownership of the property. You would have had a survey taken, and the title company would have conducted a thorough search of all public records to ensure there no are outstanding liens, filing errors, etc. A title insurance policy would have been issued to insure you against any errors or omissions that would affect the property title. For title insurance, you can decide for each property if you wish to obtain an additional insured en- dorsement for continuing coverage, depending on the proba- bility of unknown title issues that might arise in the future or at the sale of the property. Alternatively, you could obtain a new policy to protect against any title issues that may have occurred since the date of purchase and cover any increase in the proper- ty’s value from the original issuance date of the policy.
It is hard to keep up with changes in the law, and they can be confusing. If you have a question on these new laws or remind- ers, or any other legal issues, feel free to call me at any time. If you or a family member are ready to obtain your living trust, call today to lock in your FOP 50 percent reduced rate as an FOP Benefits Plan member.
Registration in the Benefits Plan for FOP members and family is free. Visit www.fopbenefitsplan.com or call 866-729-5454 for assistance with registering. d
Tom Tuohy is the founder of Tuohy Law Offices and the FOP Ben- efits Plan. He has been a police lawyer for 34 years. His father was a CPD detective, and his grandfather was CPD Chief of Major Investigations. You can reach Tom at 312-559-8400.
TOM TUOHY
FOP
Benefits Plan
Lifetime gifts. If you are giving a property to another person, you can do so within your lifetime tax exemption — however, it is important to remember that any gift is not giv- en on a “stepped-up basis,” meaning the recipient is subject to capital gains tax based on your original acquisition cost. A common and costly mistake occurs when people quitclaim their property deed or add another person to the title, causing a potentially large tax liability.
Disability. Any of us can acquire a disability through accident or illness. Are you prepared? Your estate plan should include current financial and health care power of attorney documents so that your chosen agent can take care of your finances and make health care decisions for you in the event of disability. If one of your beneficiaries has a disability at your death, whatev- er inheritance you leave them could eliminate their public ben- efits, such as Social Security and Medicare, or those gifts can be taken by the government as reimbursement for those benefits.
Knapp Medical Center
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• Serving Chicago Police Officers and their families since 1957
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Knapp Medical Center LTD Keith C. Knapp, Jr, MD
3303 S Halsted St • Chicago, IL 60608
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28 CHICAGO LODGE 7 ■ MARCH 2018