May 16

Top Five Regrets of the Dying

A palliative nurse who has counseled the dying in their last days has revealed the most common regrets we have at the end of our lives. Bronnie Ware is an Austrailian nurse who spent several years working in palliative care, caring for patients in the last 12 weeks of their lives. She recorded their dying epiphanies in a blog called Inspiration and Chai, which gathered so much attention that she put her observations into a book called the Top Five Regrets of the Dying.

Ware writes of the phenomenal clarity of vision that people gain at the end of their lives, and how we might learn from their wisdom. “When questioned about any regrets they had or anything they would do differently,” she says, “common themes surfaced again and again.”

Here are the top five regrets of the dying, as witnessed by Ware:

1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.

2. I wish I hadn’t worked so hard.
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3. I wish I’d had the courage to express my feelings.

4. I wish I had stayed in touch with my friends.

5. I wish that I had let myself be happier.

I work with people that are doing their estate planning, because they want to ensure that things are settled smoothly after they pass away, but this book helped me to see that, while planning for taxes and death is a great thing, we should not forget to enjoy ourselves and our loved ones while we are alive.

May 14

Strategies for moving wealth

One of the big announcements on Wall Street this summer is the Initial Public Offering (IPO) of Facebook. Some of the estimates that I have seen say it is possible that the IPO may bring in more than $100 billion for the company. That is a lot of cash for a new company and one that is founded and ran by people less than 30 years old.

But, as this is an estate and tax planning blog, the pertinent part I would like to discuss is the strategies of the founders to shift their wealth to their family without incurring excessive taxation. According to TaxProf Blog, some of the founders are using Grantor Retained Annuity Trusts (GRATs) to shift some of their stock to benefit other family members before the IPO.

The GRAT works by holding the property for the benefit of others, while still being income tax reported by the Grantor. When the Grantor sells his pre-IPO shares of Facebook to the GRAT, he takes a discounted value and a low rate of interest on the installment note. When the stock is offered at IPO and increases vastly in value, the other family members benefit from the appreciation.
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The headline I read stated that the combined strategies would save an estimated $200 million in taxes for these young entrepenuers!

So, the pertinent question for you here in Altus and southwest Oklahoma, is if a 30 year-old has already taken steps to protect his wealth for future generations, have you taken the necessary steps for your own family and your legacy?

May 03

Oklahoma Income Tax Developments

The Oklahoma Senate on Wednesday passed Gov. Mary Fallin’s tax-cut proposal.  The measure is expected to wind up in a conference committee with several other tax-cut proposals.  House Bill 3061 would reduce Oklahoma’s current tax structure to three brackets from seven.  Under the measure, individuals earning less than $15,000 a year and couples earning $30,000 or less would pay no state income tax.  Individuals earning at least $15,000 but less than $35,000 and couples earning at least $30,000 but less than $70,000 would pay 2.25 percent on all income.  Individuals earning more than $35,000 and couples earning more than $70,000 would pay 3.5 percent on all income.  Oklahoma’s current top income tax rate is 5.25 percent.  The measure would eliminate many tax credits and exemptions, according to Fallin’s office.

It would also provide for the eventual elimination of the state income tax, with additional yearly reduction of .25 percent to the tax rate linked to a 5 percent growth in state tax revenue collections, according to Fallin’s office.
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My opinion: All of this is well and good, but without reductions in spending, we may be looking at shortfalls in future years. Because of law in Oklahoma, about the only way to raise income taxes is through voter referendum, I do not like the thought of shifting losses in revenue to other exemptions (specifically, the proposal to eliminate the farm sales tax exemption) or shifting burdens to landowners (increases in property taxes). My proposal would be lower tax rates, but hold off on elimination until there is significant surplus for years that show the State is on the proper fiscal track.

May 01

Apple Avoids Billions in Global Taxes

An interesting article was in the New York Times recently how Apple, Inc., the world’s largest manufacturer now, avoid paying income taxes by shifting its places of operations. The article should be eye opening for most of the general population, not in the fact that tax avoidance is out there, but that all of this done legally and to show how tax rates affect business decisions.

With proper planning, you too, as a small business owner in southwest Oklahoma, can plan to lower your taxes and do your estate planning. I cannot guarantee you can save billions of dollars, but we can look at what is best for you.

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Apr 30

Victory for family farmers

In an announcement last week, the Department of Labor withdrew the proposed child labor rules that would have prevented any child (under the age of 16) from doing most labor on farms not owned directly by his or her parents. Further, the Department said that the regulation would not be pursued for the duration of the Obama administration.

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