Many of our avid CLIENT ALERT readers have established overseas structures that require the filing of the Foreign Bank and Financial Accounts form, otherwise known as the FBAR. The FBAR would be required if you or your trust is the owner of (or has signature or other authority over) a foreign bank, securities, or other financial account. Moreover, additional reporting may be required as an attachment to your tax return on Form 8938 and, separately, on Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (“FBAR”), and you may have to check the box on Schedule B Part III, line 7 of your Form 1040 to report the account.

Effective July 1, 2013, those required to file the FBAR must do so electronically. According to the website of the Financial Crimes Enforcement Network of the Department of Treasury (FinCEN), failure to do so may impose civil monetary penalties for noncompliance with their regulations, including $500 for each negligent currency transaction or suspicious activity reporting violation.

Please contact your tax preparer to ensure compliance. Continue reading

So You Thought Your IRA is Protected From Lawsuits? Maybe Not…

There are very few assets we own that are more sacred than our retirement plans. Under general legal principles and public policy, most jurisdictions exempt retirement accounts, such as 401Ks and IRAs, from creditors. However, in a recent court case, the so-called “inherited IRA,” was held not to have such “firewall” creditor protection.

An inherited IRA is nothing more than an IRA that is passed from the owner of an IRA at his or her death to the designated beneficiary.  In general, sound public policy supports the stance that because retirement accounts are so critical to one’s financial resolve in later life, those assets should be inaccessible by creditors should any liability arise. It was therefore not hard to follow that one could give away the remaining assets of an IRA account, at which point the beneficiary would obtain the assets in the same form as they existed previously, that is to say, exempt from potential judgment creditors. Continue reading

The Pet Trust

Many of you have important members of your family which have been forgotten when you put together your estate plan — your pets. Do you have a Plan for your pets upon your passing? Who will take care of them? Are there sufficient funds set aside to provide for the best care for your pets? This Client Alert will introduce you to this process and may assist in answering these questions.

Until recently, attempted gifts in favor of specific animals failed for various reasons. However, under recent developments in the modern law, gifts to specific animals are being recognized as valid gifts. Below are a few options on how to make gifts to your pets. (Please note, this provides a general overview of the structures, and there may be minor alterations based on your local law.) Continue reading