Assets Held As Joint Tenants With Your Spouse
Problem: At the first spouse’s death the surviving spouse will receive ONLY a 50% step-up in basis AND joint tenancy fails to take advantage of the decedent’s spouse’s applicable exclusion amount.
Solution: Form a trust and hold the asset as community property titled in both spouses’ names as co-trustee of the trust.
Benefits of the Solution:
- Full step up in basis at the first death, which means lower income tax liability.
- No court proceeding required to retitle the assets at death.
- Can be used to take advantage of the decedent’s applicable exclusion amount.
- Assets Held As Joint Tenants With Someone Else For Convenience
Problem: At the death of the true asset owner, the assets will receive ONLY a 50% step-up in basis, AND the assets of the account are subject to the debts of the convenience owner.
Solution: Form a trust, remove the convenience owner from title and hold the assets as trustee of a trust. The true asset owner can name the convenience owner as a co-trustee with the true asset owner or as a successor trustee.
Benefits of the Solution:
- Full step up in basis at death means lower income tax liability.
- No liabilities for debts of the convenience owner.
- The convenience owner will be able to help the true asset owner in the event of incapacity.
Assets Held As Joint Tenants With Someone Else For Shared Ownership
Problem: Both shares of the assets are subject to the debts of both owners.
Solution: Each owner form a trust, divide the assets into separate new accounts and each owner hold their own assets as trustee of their trust.
Benefits of the Solution:
- No liabilities for debts of “other owners”.
Assets Held As Tenants In Common With Someone Else For Convenience
Problem: At the death of the true owner, the assets will receive ONLY a step-up in basis for the portion of the assets held by the decedent, the assets will have to be retitled through a court supervised probate proceeding, AND a portion of the assets of the account is subject to the debts of the convenience owner.
Solution: Form a trust, remove the convenience owner from title and hold the asset as trustee of a trust. The true asset owner can name the convenience owner as a co-trustee with the true asset owner or as a successor trustee.
Benefits of the Solution:
- Full step up in basis at the first death, which means lower income tax liability.
- No court proceeding required to retitle the assets at death.
- The convenience owner will be able to help the true asset owner in the event of incapacity.
Assets Held As Community Property But Not In A Trust
Problem: At death the assets receive a full step-up in basis BUT the assets will have to be retitled through a court supervised probate proceeding even if left all to the surviving spouse, AND community property fails to take advantage of decedent’s applicable exclusion amount.
Solution: Form a trust and hold the assets as community property titled in both spouses’ names as co-trustee of the trust.
Benefits of the Solution:
- No court proceeding required to retitle the assets at death.
- Can be used to take advantage of the decedent’s applicable exclusion amount.
New Immigration Rules and Procedures for Mexico
Effective April 29, 2010, new rules and guidelines governing immigration controls on foreigners entering Mexico became effective, along with a publication of the National Immigration Institute’s new manual of criteria and immigration procedures. Among other changes, such rules provide for: (i) the creation of an Electronic Immigration Procedures System (Sistema Electrónico de Trámites Migratorios or […]