We can't expect to accomplish great things and reach our goals without a bit of opposition. There will undoubtedly be obstacles. But, what doesn't kill you makes you stronger, right? Marcus Aurelius said it this way hundreds of years ago:
Our actions may be impeded...but there can be no impeding our intentions or dispositions. Because we can accommodate and adopt. The mid adapts and converts to its own purposes the obstacle to our acting. The impediment to action advances the action. What stands in the way becomes the way.
There may be a giant ogre of an obstacle standing in your way, but that ogre cannot block your intention or happiness because you have it within your control to adapt. Change your perception. Use the ogre to help you advance your purposes. Let the obstacle be your way.
Josh Bryant, Attorney at Law
An article from the Tax Foundation reports that Arkansas ranked second in the country in charitable giving in 2016, despite being 48th in average income. Arkansans are as generous a people as you'll find. What if there were a way to give more while preserving and securing income? Here are a few tips from attorney Josh Bryant.
1. Make A Tax Plan
If the most effective people start with the end in mind, then being effective with your money in taxes requires you to have a plan. Plan on how much income you are going to get, how much tax you may have to pay, and then plan to give. Make it part of your routine to give money, especially from bonus checks, capital gains, and other funds that may be subject to higher income tax rates.
2. Establish a Charitable Lead Trust
Do you have an asset that you aren't going to need for a while, like a large CD or brokerage account? You can establish a Charitable Lead Trust for a specific term from which the income goes to the charity of your choice. You get the benefit of the charitable tax deductions while preserving the principal of the asset itself.
3. Establish a Charitable Remainder Trust
Do you have a piece of income producing property like a rental property or a farm that has grown in value but that you've had to depreciate over the years? A Charitable Remainder Trust is a great opportunity for you to continue to earn an income while giving property to the charity of your choice. You get a large tax deduction immediately, which varies depending on how long you retain an income interest in the trust. For that period, you continue to receive the income from the property, and at the end of the term the asset goes to that charity. You get the benefit of both the income tax deduction and the avoidance of capital gains when sold.
4. Establish a Private Foundation
You don't have to have a ton of money to establish a foundation. You can give you your foundation like you would give to any other charity. As long as you spend 5% of the foundation's assets every year for charitable purposes, you can write off everything you give to the foundation. In other words, you can get a $10,000.00 tax deduction but only spend $500 for charitable purposes. Think of it like a charitable savings account. This is a great way to teach your children about charitable giving and philanthropy.
You may just now be sitting down to do your 2018 taxes, but don't wait until this time next year to make a plan that securely, effectively, and efficiently puts you in a good tax position and makes the world a better place. Set up an appointment and let's get started. P.S. - I can help you prepare your taxes too.
Josh Bryant, Managing Attorney
Confused about the differences between wills and trusts? If so, you’re not alone. While it’s always wise to contact experts like attorney Josh Bryant, it’s also important to understand the basics. Here’s a quick and simple reference guide:
What Revocable Living Trusts Can Do That Wills Can’t
1. Avoid a guardianship.
A living trust allows you to authorize your spouse, child, or other trusted person to manage your assets should you become incapacitated and unable to manage your own affairs. Wills only become effective when you die, so they are useless in avoiding guardianship proceedings during your life. This provides a lot of security for many.
2. Bypass probate.
Property in a revocable living trust does not pass through probate. Property that passes using a will guarantees probate. The probate process, designed to wrap up a person’s affairs after satisfying outstanding debts, is public and can be costly and time consuming sometimes taking years to resolve. Josh Bryant believes this is probably one of the top two key benefits of a trust. Trusts are more effective and efficient in accomplishing your goals.
3. Maintain privacy after death.
Wills are public documents; trusts are not. Anyone, including nosey neighbors, predators, and unscrupulous “charities” can discover the details of your estate if you have a will. Trusts allow you to maintain your family’s privacy after death.
4. Protect you from court challenges.
Although court challenges to wills and trusts occur, attacking a trust is generally much harder than attacking a will because trust provisions are not made public. Court challenges make your estate distribution an inefficient process. A trust can provide you with security from this possibility.
5. Allow for structured payouts.
Under a will, once an heir turns eighteen, they automatically get everything under the will unless you have some sort of trust which requires a payout over time. Young parents and grandparents who may leave property to their grandchildren can use a trust to ensure that assets are paid out over time rather than given in lump sum to someone who may not be mature enough to handle it. Josh Bryant believes this is one of the two best reasons to have a trust.
What Wills Can Do That Revocable Living Trusts Can’t
1. Name guardians for children.
Only a will - not a living trust or any other type of document - can be used to name guardians to care for minor children. The courts are not required to follow your wishes if the judge believes that it would be in your children's best interest to be in the custody of another person, but most of the time the judge will follow your wishes. The security of knowing your children will be protected is in and of itself enough of a reason to get a will.
2. Specify an executor or personal representative.
Wills allow you to name an executor or personal representative - someone who will take responsibility to wrap up your estate after you die. This typically involves working with the probate court, protecting assets, paying your debts, and distributing what remains to beneficiaries. But, if there are no assets in your probate estate (because you have a fully funded revocable trust), this feature is not necessarily useful.
What Both Wills & Trusts Can Do:
1. Allow revisions to your document.
Both wills and trusts can be revised whenever your intentions or circumstances change so long as you have the legal capacity to execute them.
WARNING: There is such as a thing as irrevocable trusts, which can only be changed under certain circumstances, using very specific methods. These are powerful estate planning tools in certain circumstances, but should be entered into with care and the assistance of Josh Bryant.
2. Name beneficiaries.
Both wills and trusts are vehicles which allow you to name beneficiaries for your assets.
3. Provide asset protection.
Trusts, and less commonly, wills, can be crafted to include protective sub-trusts which allow your beneficiaries access but keep the assets from being seized by their creditors such as divorcing spouses, car accident litigants, bankruptcy
trustees, and business failure. This is just another level of security that estate planning can provide.
While some of the differences between wills and trusts are subtle; others are not. Together, we’ll take a look at your goals as well as your financial and family situation and design an estate plan tailored to your needs that leverages the law in your and your family's favor and secures your assets in an effective and efficient manner. Schedule an appointment and let’s get started.
I frequently get asked what I mean when I say "leverage the law." We have very little control over what the law is. You can vote - that makes a difference. You can lobby and petition government to change the law - that can make a difference. But ultimately, unless you are an elected official you do not get to make law.
We can control how we see the law, think about the law, and use the law. You already do it probably. Every time you fill out a tax return, counting every penny that can be deducted and looking for every credit that can be claimed, you are leveraging tax law to get a greater tax return or pay less to government. There are so many other ways you can leverage the law.
Here are a few.
You have to think about where you are going in life and how the law will intersect that path. A path without a destination is really no path at all. You're just wondering around in the woods hoping to stumble upon something great, hoping you don't get eaten by a bear in the meantime. But if you'll follow one of the 7 Habits of Highly Effective People and start with the end in mind, you'll be able to see the path to that point much more clearly. Do as the Proverbs say: "Let your eyes look directly forward, and your gaze be straight before you." Prov. 4:25
Josh Bryant is an attorney, entrepreneur, pastor, and visionary with a heart to see churches, businesses, and families more secure, more effective, and more efficient in fulfilling their mission and bringing glory to God.