Archive for October 30th, 2008

Scam Targeting the Elderly in Michigan

Written by Christopher J. Berry, Esq. on October 30, 2008 – 12:24 pm -

An attorney colleague in Michigan just made us estate planners aware of the following scam that is targeting the elderly.

We have encountered a scam targeted at seniors. A lady in her late 70s was persuaded by a salesman to sign up as a local representative of a satellite television company, apparently under the suggestion that she could sell

(recommend) the service to her friends and receive commissions. She was offered and did sign an agreement to serve in this capacity, and in so doing authorized a charge of $7,500 to her credit card.

At this point I will not name the company on the contract or the satellite provider, but all of us should be on the lookout for this kind of scam.

It’s unfortunate that this type of thing happens to our seniors.

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Michigan QPRT | Gifting Your House to Your Children

Written by Christopher J. Berry, Esq. on October 30, 2008 – 12:11 pm -

With the economy and real estate values falling to record lows in Michigan, there is a an opportunity to make use of a nifty estate planning technique.  Clients can put assets that have dropped in value into a trust now so that the appreciation occurs outside of your estate for tax purposes.

A real world application of one of these strategies involves using a Qualified Personal Residence Trust otherwise known as a QPRT (as an aside, us estate planners have acronyms for everything, RTL, CRT, CRLT, GRAT, GRUT, etc.).

The way it works is like this: you transfer your home into a QPRT now, with bargain basement values.  This locks in a lower-gift tax amount for the move from your possesion to the trust.  As an added benefit, if interest rates move higher, the discount can be even greater.  After 10 years, the home can then pass to your beneficiaries, typically children.  Now they own the home, outside your estate, free of any Federal Estate Taxes.  If however, after 10 years, you still live in the home, you willp ay your children fair-market rent to your kids.

The WSJ just had a piece about this strategy in more detail here.

If you have any questions, feel free to contact me.

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