Monthly Tips
August 2024
TIP 1 Special Needs
With the Olympics underway, many of us will be cheering on our favorite athletes in our favorite events as they compete for gold medals. As you consider the comradery and amazement of sporting events bringing people together, you might also consider how this is now done for those with special needs with the Special Olympics, and supporting them too. The Special Olympics delivers 30 Olympic-type sports and over 100,000 games and competitions each year!
Those that care for someone with special needs know that it’s not an easy job, or a job that you can be perfect at on day one, or day five, or day one hundred and five. The concern about who could take over that job isn’t an easy one. For the affluent, another concern is how to ensure that the person with special needs can have access to funds that could improve their quality of life without jeopardizing eligibility for government assistance. That’s where a special needs trust can help. Beyond managing the financial side of things, instructions can be included to ensure the special needs individual has access to things like their favorite sporting events, or even a list of their favorite foods can be included. At Garden State Trust Company, we’re proud to offer this service.
https://gstrustco.com/trusts-estates/special-needs-trusts/
TIP 2 CRTs
Americans are generous and charitably minded. How charitably minded? According to the latest annual report Giving USA 2024: The Annual Report on Philanthropy for the Year 2023, last year we broke the record once again in terms of total dollars given of $557.16 billion!
Although the record for total dollars given was broken, the increase did not keep pace with inflation. However, given heightened inflation and the tightening of belts going on elsewhere in life, one might have expected one of the first cuts to be charitable gifts, and that has not been the case.
If you are philanthropically minded and considering a substantial gift to charity, you might want to read our latest blog: Substantial Gifts Benefit From Substantial Planning
https://gstrustco.com/trusts-estates/charitable-trusts/
TIP 3 Investment Choices
It’s 10:00, do you know what your IRA is invested in?
A recent Wall Street Journal article pointed out the fact that not everyone does, and some people end up leaving their IRAs in cash after rolling over a 401(k) distribution, sometimes for years, missing out on the potential gains in that time.
Understanding, revisiting, and keeping track of all the different investment accounts and knowing how to best optimize them for risk and time horizon can be a full-time job. For trust officers, that’s exactly what it is. This is where a holistic view can save the day, taking a look at all the different accounts under your financial umbrella to ensure they are being managed according to your goals and timeline, and optimized for tax efficiency. Let Garden State Trust Company know if you’d be interested in a consultation.
https://gstrustco.com/investments/investment-policy-formulation/
TIP 4 IRS On Inherited IRAs
After the rules were changed so that in many cases an inherited IRA was subject to distribution within 10 years, it was unclear to estate planners and investment managers if that meant that a distribution was required every year, or if it could be deferred until year 10 and distributed at once.
The IRS kicked the can down the road for a few years, each year saying there would be no penalty for those that deferred the distribution from inherited IRAs, and now they’ve finally come to a judgment. According to this Thinkadvisor summary, they have said that if the deceased IRA owner had reached his or her required beginning date (and so was taking RMDs), the beneficiary will also be required to take an RMD each year, beginning in 2025. The amount of the distribution may be complex though, so we advise that you make sure to consult with your tax advisor if you have an inherited IRA and haven’t been taking distributions.