Estate Planning Revisited Due to the New Tax Law

Tax and Financial News March 2018

Estate Planning Revisited Due to the New Tax Law

Estate planning is never done. Just like a piece of real estate, it needs periodic maintenance and care to make sure it’s in good shape when you need it most. Provisions in the newly passed GOP tax plan mean it’s time to revisit a handful of key areas of your estate plan. Below we discuss the five areas you should check-in on.

Will the new tax law impact my estate taxes?

The new tax law exempts a portion of an estate’s value from what is commonly termed the “death tax,” just like to prior law did – but the thresholds have changed. The previous exemption limit was $5.6 million; this was bumped up to $11.2 million. This increase in the death tax exemption means that many wealthy families will see relief and a need to simplify their estate tax plans. Under the new threshold, experts estimate around only 5,000 estates per year will be subject to taxation above these limits. In other words, it’s a great time to be rich – but not too rich.

I’m married, so what happens to my surviving spouse?

You’re probably confused thinking about this because usually one spouse dies before the other. The exemption limit for married couples relates to portability, which is the term for how a surviving spouse avoids estate taxes on what they inherit from the deceased spouse. Portability as a rule was instituted back in 2012, and the new law preserves it.

An estate plan can invoke portability rules by using specific language, without which a spousal estate may have to create a bypass trust that will cost a lot of time, money and likely reduce the inherited amount.

How will my state estate tax be impacted?

Right now, 15 states have some type of estate tax. Out of these 15 states, a portion link to the federal exemption limits – so these will automatically increase. Others are completely independent, so unless these state legislatures act, nothing changes here. With some states having exemption limits as low as $1 million, there is a good chance of being exempt from federal estate taxes and subject to state estate taxes – so you still need to proactively estate plan.

Will my estate plan fulfill my wishes and avoid unintended consequences?

Boilerplate documents can cause outcomes that don’t align with your exact intentions and wishes. If you have particular needs or desires, you need to work with an estate planning attorney and accountant to set up or revise your estate plan. On the financial side, one example is the overly vague and general Power of Attorney (POA).

Without specific provisions that otherwise limit or prevent specific actions, a POA has the potential to allow the managing agent to engage in a variety of undesirable behaviors. For example, he might be able to legally make gifts to whomever he wants (including himself); change beneficiaries on financial accounts such as life insurance or 401ks; or discontinue financial support to a disabled relative, just to name a few. Ultimately, the only protection against someone exercising unwanted power over your estate when the time comes is to be specific and lay it all out ahead of time.

How often/soon should I review my estate plan?

A general industry rule of thumb is approximately every three years, assuming no significant life changes. Otherwise, anytime you experience a major life adjustment such as a divorce, birth of children or grandchildren, the sale of a business, retirement or a major change in health status, you need to revisit your estate plan and adapt it.


Changes in circumstances drive the need to modify estate plans – and the new tax law is one of those types of changes. The expansion of exemption limits may mean you have more money to go around, changing your wishes; or it could mean that previous plans are no longer necessary. Whatever the case may be, now is definitely the time to revisit your estate plan.



General Business News March 2018

How to Give Effective Feedback for Better Performance

When it comes to making the most of an organization, providing feedback to employees is imperative to ensure worker productivity is high and turnover is lowered. According to The Conference Board, nine out of 10 executive level officers are aware that employee engagement is key to an organization’s function, but only half understand how to work toward higher levels.

While employee engagement is a complex matter, one facet often includes giving employees feedback to tell them where they are doing well and where they need to improve. Since employees don’t fit into a single personality type, there needs to be a varied approach when it comes to giving feedback.

Understanding Why Feedback is Often Disregarded

Even the best performing employee with the greatest potential for advancement can still be resistant to coaching. Identifying resistance to coaching is the first step in making feedback more effective. Examples of being resistant to feedback include changing feedback meetings to a later date or feigning interest in the feedback itself, but never actually changing behavior based on the advice.

Other reasons employees may not listen to and apply feedback is that they’ve had a bad experience receiving it from past supervisors. This can occur when feedback was directed at employees by bosses who didn’t provide actionable tasks they can take to improve performance, or bosses who didn’t ask the employee to explain what they were struggling with in the course of their duties. Similarly, by not explaining how the feedback can help increase the chances of meeting a project’s goal or earning a promotion in the future, the lack of communication makes the feedback impersonal and less effective.

How to Deliver Feedback More Effectively

There are many strategies to help managers provide feedback that help develop a higher level of employee trust, increasing the chance of the employee receiving and applying the feedback. An initial way to develop a working relationship is for a manager to highlight what a worker does well and how and why it’s important to the company’s mission, even if they aren’t a top performer.

Another way to build trust with employees is to keep feedback and performance confidential. If the worker discovers his performance is being discussed beyond necessary supervisors or with other employees involved in related projects, it could damage whatever trust may already be established.

Allowing an employee the latitude to make errors, within reason, can give a subordinate the confidence needed to take the feedback to heart and incorporate it into areas where he may be struggling. Following up with a commitment to weekly mentoring sessions is another way to keep the level of trust high.

There are real world examples of how these approaches can work. For instance, while a newly hired candidate’s performance was rated as exceeding expectations at her first annual review, she had not been focused on building work relationships with her direct boss and colleagues. In an organization that values relationship building among supervisors, co-workers and subordinates, her boss should give her this feedback to help her become a more well-rounded employee.

Instead of diving in to the negative portion of the employee’s conduct (where she failed to reach out to her boss for advice and other colleagues in the same department to gain different perspectives to keep learning on the job), the employee’s supervisor focused on building a relationship with the new employee by highlighting her top-notch performance. By having the employee understand the supervisor’s empathy, the likelihood of the employee improving on relationship building was higher due to the supervisor’s empathetic feedback.  

While giving feedback varies with each employee, taking different approaches can and does have positive impacts when building organizational efficiency.




Tip of the Month March 2018

Protect Yourself from Tax Refund Scammers

Although tax filing season has been officially open only since Jan. 29, the Internal Revenue Service (IRS) is warning that reports of refund scams are already skyrocketing. Here’s an overview of the most common type of scam and tips to avoid becoming a victim.

The Scam

Hackers steal current data from tax returns, which also might include Social Security numbers and bank account information, from infected computer hardware. Using this stolen data, the cybercrooks file fraudulent claims on behalf of the victimized taxpayer. Refund payments are made to these innocent victims – often via direct deposit to their banking accounts. At this point, the scammers might pose as IRS agents and call the unwitting victims to demand return of the refunds. Sometimes the call is a recording accusing the taxpayer of fraud and threatening arrest and other scary consequences.

Red Flags and What To Do

Red Flag

What to Do

√ A refund check via direct deposit that you were not expecting.

Check with your tax professional to verify that the deposit is unexpected.

Contact your bank to discuss either changing your security information or closing that particular account.

√ A check arrives in the mail for a refund you did not expect.

Contact your tax professional.

Return the check promptly to the regional center that sent it. Write “VOID” on the check and include a copy of IRS Form 14039 and attach a note to let the receiver know you have been a victim of a refund scam.

√ Any type of phone call that is intimidating or threatening, or requires financial recompense from anyone claiming to represent the IRS. The IRS does not make phone calls like this to taxpayers.

Unsure? Call the IRS on its toll-free numbers (800-829-1040 for individuals or 800-829-4933 for businesses) to verify before you take any action.

√ A suspiciously fast refund check. It normally takes at least 10 days for a refund check to arrive by direct deposit (the fastest mode of refund). The IRS noted that fraudulent refunds were showing up in bank accounts just days after the Jan. 29 start of tax season.

Send the check to the IRS, and tell them you believe this refund resulted from hijacked data and that you are a victim of a refund scam.


Although the IRS has no explanation for how the thieves were able to get into the system within hours of the start of the filing season on Jan. 29, speculation has run rife. Some have wondered if the cybercrooks had inside help. The IRS emphatically denies that the problem originated within IRS systems or data. The hacking seems to have targeted businesses specifically created to prepare and file tax returns. Additionally, some think the recent major data breach at Equifax has placed millions of people at potentially greater risk of having their personal information stolen.

The IRS expects victims of refund scams to be proactive and return refunds promptly that were issued in response to a fraudulent claim. To add insult to injury, it may take up to four months before victims are able to get the legitimate refunds that are due to them.

Forewarned is forearmed. There are some things you can do to protect yourself. First, discuss this issue with your professional tax advisor. Plan to file as promptly as you are able to do so. Scammers count on being able to get their fraudulent filing to the IRS before the legitimate tax returns arrive.