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The Great Fake Out Of 2023 Is Poised To Extend Into 2024
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Test Your Financial Planning IQ
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Financial Crime Snitches Are In Stitches, Exacting Revenge Against Dishonest Former Employers
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Amid A Confluence Of Crises, Keep Financial History Top Of Mind
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The Federal Reserve Decided Not To Raise Rates
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Finding The Truth About Long-Term Investing Is Too Hard
The Wall Street Journal published an article on October 19 about investing that illustrates the difficulty for investors in understanding the basics of long-term retirement planning. Criticizing America’s No. 1 financial newspaper is not done lightly, and it’s important to see how the press often undermines prudent investing concepts crucial to retirement success. Here goes...
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Office Space Reckoning May Trigger Turmoil In Commercial Real Estate
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The Conference Board Predicts Short, Mild Recession For First Half Of 2024
A mild recession will begin in the first quarter of 2024 and end in the second quarter, economists at The Conference Board (TCB), a think-tank for the world’s largest companies predicted Wednesday.
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Strategic Investing Amid The Hot Labor Market
The number of job openings increased to 9.6 million on the last business day of August, the U.S. Bureau of Labor Statistics reported Tuesday, much more than the 8.8 million expected by Wall Street. It’s good news. If demand for workers stays this strong, a recession is unlikely because the number of workers earning income and spending will continue to rise as openings are filled in the weeks ahead.
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Planning Briefs
Foreign Intrigue In Estate Planning
Published Monday, September 18, 2017 at: 7:00 AM EDT
Are you married to someone who isn't a U.S. citizen? If you are, special estate planning considerations may come into play.
Whether your spouse is a citizen or not, you can use the same basic estate planning documents without any reservations. You can create a will bequeathing assets to your spouse, name him or her as a beneficiary of retirement accounts, and designate your spouse as the agent under a power of attorney. No problems there.
But things get trickier when your spouse inherits assets. Normally, property transferred from one spouse to another, during your lifetimes or when one of you dies, is completely exempt from gift or estate tax thanks to an unlimited marital deduction. But that doesn't apply to non-citizen spouses.
Instead, you can make use of a $5.49 million unified gift and estate tax exemption that covers transfers to any beneficiaries, including a non-citizen spouse.
In addition, you can give a non-citizen spouse as much as $149,000 (in 2017; the amount is indexed for inflation) in gifts during your lifetimes.
Other ways to avoid being subject to the rules for non-citizen spouses may include:
1. Have your spouse become a U.S. citizen. This can be an obvious solution. It allows your spouse to qualify for the unlimited marital deduction by the time your federal estate tax return is due. That's generally nine months after death, but the IRS may grant a six-month extension.
Because it takes time to obtain citizenship—there is a waiting period before you can even apply—it's important to start sooner than later.
2. Rely on a QDOT trust. With a qualified domestic trust (QDOT), you can leave property to the trust, rather than directly to your spouse. Then your spouse can receive income from the QDOT that is exempt from estate tax.
But there are a couple of extra wrinkles. If your non-citizen spouse withdraws principal from the QDOT, it will be taxed like a distribution from your taxable estate, which can increase estate tax liability. There are also limitations on investments made by QDOTs. In some cases, it could make sense to complement a QDOT with other kinds of transfers to your spouse. Finally, a QDOT can be structured to end if your spouse becomes a U.S. citizen.
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