A trust can help you pass wealth efficiently and privately to your heirs.  Perhaps the most powerful way to use a trust is to ensure that your heirs have timely access to your assets.  When you transfer your assets to your beneficiaries through a will, your estate is settled through state probate courts.  Probate is a public legal process that can create problems for your heirs, including delays of up to a year or more, during which time assets may not be easily accessible to pay funeral arrangements and other expenses.  Cost – probate can cost up to 5% of the estate’s value, depending on the state you live in.  Lack of Privacy – When your will is admitted to probate, it becomes a public record and your assets become known to the public. 

You can avoid probate and gain greater control over how your estate is settled by establishing and funding a revocable trust during your lifetime.  Because the trust is revocable, it can be altered, amended or revoked during your lifetime.  After your death, the trust acts as a will substitute and enables the trustee to privately and quickly settle your estate without going through the probate process. 

Some other important reasons to consider a trust: 

• A trust can preserve assets for heirs and favorite charities
• A trust can reduce estate taxes for married couples
• A trust gives you control over how your assets are distributed, for example, specifically to fund education expenses
• A trust can keep assets in your family
• A trust can ultimately help you realize a vision for your estate and in turn, your legacy

There are many ways to reach your estate planning goals.  Contact Joel Grundmeier, CPA, MST, CFP®, at (651) 483-4521 to discuss the different kinds of trusts and provisions that are right for you.  It is important that the trust be properly drafted and funded so that you and your beneficiaries can realize the benefits you intend.

The good news is that we are available to you all year.  We have a full-time, year-round staff of experts with extensive expertise in a broad range of financial areas.  We’re ready when you are to take some time reviewing your financial situation, helping you understand your options and make the best decisions.  We’re also here in an emergency to help address unexpected financial concerns.   So, give us a call to discuss your important financial issues whenever they arise.

Here are 10 facts from the IRS about the tax implications of an early distribution from your retirement plan.

1. Payments you receive from your Individual Retirement Arrangement before you reach age 59½ are generally considered early or premature distributions.
2. Early distributions are usually subject to an additional 10 percent tax.
3. Early distributions must also be reported to the IRS.
4. Distributions you roll over to another IRA or qualified retirement plan are not subject to the additional 10 percent.  However, you must complete the rollover within 60 days after the day you received the distribution.
5. The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.
6. If you made nondeductible contributions to an IRA and later take early distributions, the portion of the distribution attributable to those nondeductible contributions is not taxed.
7. If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
8. If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.
9. There are several exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home (up to $10,000), for certain medical or educational expenses, or if you are totally and permanently disabled.
10. For more information about early distributions from retirement plans, the additional 10 percent tax and all the exceptions, see IRS Publication 575, Pension and Annuity Income and Publication 590, Individual Retirement Arrangements (IRAs). Both publications are available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Contact Tia Elliott, CPA, at (651) 483-4521, with your retirement plan questions.

IRS estimates median potential refunds for taxpayers in Minnesota to be $584, Wisconsin-$592, Iowa-$658, North Dakota-$625 and South Dakota-$669.

Along with our other valuation experts, Tony will assist our clients with their valuation needs.

MBVG is a wholly-owned subsidiary of Olsen Thielen CPAs.  He will work out of the St. Paul office and can be reached at (651) 483-4521 or tstinar@otcpas.com.

If you have questions about your financial situation, remember that we can help.  Our firm is made up of highly qualified and educated professionals who work with clients like you all year long, serving as trusted business advisors. 

So whether you are concerned about budgeting; saving for college, retirement or another goal; understanding your investments; cutting your tax bite; starting a business; or managing your debt, you can turn to us for objective answers to all your tax and financial questions.

Amazon sells more e-books than printed books. 

All three founders of Apple worked at Atari before forming Apple. 

The average company saves over $7,000 for each employee suggestion that is enacted. 

Yahoo! was originally called “Jerry’s Guide to the World Wide Web.” 

The creator of the NIKE Swoosh symbol was paid only $35 for the design. 

Warner Chappel Music owns the copyright to the song “Happy Birthday.” They make over $1 million in royalties every year from the commercial use of the song. 

The first product that Sony came out with was a rice cooker. 

Henry Ford, father of the automobile, is also father of the charcoal briquette. 

Microsoft made $16,005 in revenue its first year of operation. 

Oil tycoon, John D. Rockefeller, was the world’s first billionaire.

These “phishing” schemes are especially clever and dangerous because they exploit people’s fear of the IRS at a time when they have the greatest chance of striking an authentic chord with the recipients. 

Here are some of the subject lines that you should watch for:

• Internal Revenue Service notification
• Your tax appeal is declined
• Your tax appeal motion is rejected

If you open the emails (and we don’t recommend doing so!) you will find that they all contain a link for you to click on for more information.  This is, of course, what you must never do!  If you simply hover your mouse over the link, you can quickly see that the destination of the link is not the IRS, but some server in another country like Russia or Hungary, which are well known spamming havens. 

Here are five things the IRS wants you to know about phishing scams:

1. The IRS doesn’t ask for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts.
2. The IRS does not initiate taxpayer communications through email and won’t send a message about your tax account. If you receive an email from someone claiming to be the IRS or directing you to an IRS site:
   –Do not reply to the message.
   –Do not open any attachments. Attachments may contain malicious code that will infect your computer.
   –Do not click on any links. If you clicked on links in a suspicious email or phishing website and entered confidential information, visit the IRS website and enter the search term “identity theft”  for more information and resources to help.
3. The address of the official IRS website is http://www.irs.gov. Do not be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.  If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on the suspicious site and report it to the IRS.
4. If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at (800) 829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence.
5. You can help shut down these schemes and prevent others from being victimized. Details on how to report specific types of scams and what to do if you’ve been victimized are available at http://www.irs.gov, keyword “phishing.”

Taxpayers are not the only ones being targeted.  Similar phishing emails are being sent out to accountants stating that their accountant status is being revoked due to income tax fraud accusations.  These emails appear to be coming from the AICPA, which is the national professional organization for CPAs in the United States.  

In this case the email subject lines read:

• Your return fraud notification
• Your accountant CPA license termination

The good news here is that these emails seem to have been identified by the spam filter services.  This should minimize their damage.  However, not all of them will be caught and people should continue to be leery of any type of authentic looking email that makes a suspicious claim and asks you to either click on a link, or provide any type of personal information via email.

The best course of action is to simply delete the email.