by William Rizzo | Wealth Management
New verdicts from the U.S. Supreme Court could significantly impact several aspects of your personal finances, including the privacy of your bank accounts, the repayment of student loans, your home equity, and property taxes. It’s essential to understand these changes.
The U.S. Supreme Court has been in the spotlight recently for several reasons, including the controversial overturning of Roe v. Wade and news about justices receiving high-priced gifts and trips. Beyond these, the court has made a few crucial decisions that directly impact the financial affairs of millions of U.S. citizens.
Here are details on three critical rulings that could potentially influence your personal finances:
1. IRS Access to Your Bank Account
In the Polselli v. IRS case, the Supreme Court decided that the IRS has the right to privately examine bank records without the account holder’s prior notice. Under existing laws, the IRS can also request and scrutinize the bank records of individuals who do not have any outstanding debts with the IRS, such as the friends, family, and associates of a taxpayer who does.
What does the Polselli v. IRS case mean for your finances?
Your financial records may not be as private as you think. The IRS can access the financial information of you or your loved ones without your prior knowledge, especially if taxes are owed. This case emphasizes the importance of promptly settling any outstanding IRS debts, contemplating an installment plan, or negotiating a compromise offer.
2. Unconstitutional ‘Home Equity Theft’
The Supreme Court verdict in Tyler v. Hennepin County declared that ‘home equity theft,’ where a state seizes and sells your home to recover unpaid property taxes and keeps the excess profit, is unconstitutional.
What does Tyler v. Hennepin County mean for your finances?
Paying property taxes on time remains crucial; seek help if you cannot. This ruling ensures that the state or local government will not retain any excess profit from selling your property to recover unpaid taxes. The Pacific Legal Foundation reports that ‘home equity theft’ has affected over 8,950 homes, leading to a total loss of $860 million for American homeowners.
3. The Supreme Court Decision on Student Loans
The Supreme Court, in the Biden v. Nebraska case, ruled that President Biden didn’t have the authority under the HEROES Act to forgive federal student loans, up to $20,000 for eligible borrowers, on a large scale, as he had proposed.
What does Biden v. Nebraska mean for your finances?
The expected student loan forgiveness will proceed differently than planned, leaving over 40 million borrowers to deal with repayment without the proposed relief. The Department of Education has introduced several new programs to help lessen the burden on borrowers. Regardless of the Supreme Court’s decision, federal student loan payments will resume this fall. Planning for this and verifying the specifics of your loan(s) is important.
At Quantum Strategies Wealth Advisory, we are here to help you make informed decisions about your financial life. Contact us today to discuss your financial goals and explore the right strategies for you.
All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Quantum Strategies, LLC does not offer tax planning or legal services but may provide references to tax services or legal providers. Quantum Strategies, LLC may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters. You should always consult with a qualified professional before making any tax or legal decisions.
by William Rizzo | Wealth Management
There are four different ways to bequeath your heirs’ property. As no two families are the same, you should consider the following aspects in your estate plan when deciding which distribution strategy best suits your needs, values, and goals.
While reviewing your estate plan, deciding how to distribute your assets to your beneficiaries might be difficult. When deciding how to divide assets among heirs, it’s important to consider how and when each person can get their share. It is recommended that these terms be explicitly stated in your estate planning agreements.
Regarding estate planning, every scenario is unique, so something that works for one family might not work for another. There is no right or wrong way to divide an estate, but there are some things to consider to help you choose the strategy that best meets your needs, values, and goals.
Leaving assets unattended is the first strategy of an estate plan.
The easiest way to divide an estate is to give the assets to the heirs directly without limiting how they can use their inheritance. Even though this approach is typically the simplest, it could have some drawbacks. For example, estate heirs from wealthy families may be told not to work to support themselves but to rely on their inheritance since there are no rules about getting an inheritance. External risks like a divorced heir should be considered.
Even though some families might feel comfortable using this method, it is usually not recommended when giving a lot of money to younger family members or people who don’t know how to handle a lot of money.
Resource distribution progressively is the second tactic.
By slowly giving them assets, you can help your heirs manage their money without risking their entire inheritance. After placing their wealth in trust, families can decide how to share it. One example is to distribute a percentage of the trust to the beneficiary when they reach a certain age, such as 10% when they are 30, 20% when they are 35, and so on. Giving the recipient money when they complete a task, like reaching a specific academic milestone, is an additional option.
The third strategy is to leave assets in a discretionary lifetime trust.
Transferring property to a discretionary lifetime trust could be a better choice because the assets would stay in the trust as long as the beneficiaries lived. This tactic offers the highest level of protection against external threats such as divorce, legal action, and poor money management.
A family can leave a lasting legacy for future generations by putting assets in a lifetime trust. Beneficiaries must rely on the trustee’s judgment to decide on distributions, but the trustee may also be given specific instructions, such as to give money for a down payment on a house or to support a business venture.
The fourth strategy is combining distribution strategies.
A family may decide that the best thing to do is a combination of the above options, in which the heirs get some of their inheritance early and put the rest in trust for all time. This plan gives the beneficiaries of the trust unrestricted access to a certain amount of money so they can pursue their own goals and live their own lives without being totally dependent on the income from the trust.
If you have questions on this topic or others related to estate planning, please get in touch with the professionals at Quantum Strategies Wealth Advisory.
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All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.
Quantum Strategies, LLC does not offer tax planning or legal services but may provide references to tax services or legal providers. Quantum Strategies, LLC may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters.
You should always consult with a qualified professional before making any tax or legal decisions.
Advisory services are offered through Quantum Strategies, LLC dba Quantum Strategies, a Registered Investment Advisor in the State of Pennsylvania. Insurance products and services are offered through William Rizzo, Sole Proprietor.
