At Price & Farrington, PLLC, we believe in educating ourselves and the clients and advisors we strive to help. We foster long-term relationships with trusted advisors and work hard to support and strengthen their relationships with their clients.

Volume 6, Issue 5: Harnessing the Power of Trusts to Help Your Clients and Grow Your Practice

"Trust planning is an area where the work of attorneys and financial advisors interfaces. It can be a powerful and effective tool in helping both disciplines to grow their practices.

"In this issue of The Wealth Counselor, we will look at how estate planning is changing after TRUIRJCA 2010, what clients want in estate planning, and how incorporating trust planning will benefit clients, their families and the professional advisors who serve them.

Volume 6, Issue 1: Highlights of the New Estate, Gift and Generation-Skipping Tax Legislation

"On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This legislation had some surprises for those who had been following the process. In addition to extending unemployment benefits, current income tax rates (the Bush tax cuts) were extended for all taxpayers for two years, and the estate tax was also extended for two years - with a $5 million exemption and 35% tax rate! (Wasn't it just a few weeks ago that, with this same Congress, come January 1, 2011, we were expecting to go back to a $1 million exemption and a 55% top tax rate?)

"In this edition of The Wealth Counselor, we will take a first glance at the changes in the federal estate, gift and generation-skipping taxes as included in this new law. Future issues will address planning options and concerns in more detail."

Volume 5, Issue 7: Understanding Business Transition Strategies

"As estate planners, we work diligently to help our clients with retirement and estate planning. For business owners, planning for the transfer of the business must be built into the process. An integrated approach to retirement and estate planning is especially important for these clients so they can understand the transfer options that are available to determine and is best for them, their families, their employees and others, taking into consideration current economic times, availability of financing, and financial and non-financial issues. Rather than just taking a salary for life, the client executes and implements the comprehensive plan that we have helped them develop.

"In this issue of The Wealth Counselor, we'll look at this process and some of the issues involved."

Volume 5, Issue 6:Trust & Estate Litigation: Its Common Causes

"Mixing family members and money doesn’t always lead to love and happiness. While the work we do is often challenging and rewarding, protecting our clients, our colleagues and ourselves from unnecessary litigation remains a high priority. In many cases, litigation can be avoided with some basic precautionary measures.

"This issue of The Wealth Counselor explores some of the most common reasons trusts and estates end up in litigation and some measures the planning team can take to help prevent it."

Volume 5, Issue 5: Special Needs Planning for Affluent Clients

"In a recent issue of The Wealth Counselor, we explored clients' potential planning needs that are unrelated to the economy or to the estate tax. One of these was special needs planning. Whether you realize it or not, you probably already have these clients, or you have clients who know someone who needs this planning.

"In this issue, we will look more closely at the increasing need for special needs planning, explain how you can work with a team in order to add a social service element to your practice, and look specifically at the needs and desires of your more affluent families with loved ones who require special care or assistance. We will also look at how special needs planning can be an entry to other planning opportunities across generations within the same family.

Volume 5, Issue 4: The Continuing Significance of Non-Qualified Deferred Compensation

"If you work with business owners and their key employees - or you would like to - you need to be conversant about Non-Qualified Deferred Compensation (NQDC) plans. NQDC is often a significant component of key employees' compensation because qualified plans are inadequate to meet the retirement needs of those with above average compensation. Also, many employers use NQDC as a tool to enhance retention of their key employees. NQDC plan design and funding is highly flexible so it is useful in many different situations. For all these reasons, it is important that all wealth planning professionals have a basic understanding of NQDC and its application. This issue of The Wealth Counselor explores NQDC plans that do not require current funding by employers."

Volume 5, Issue 3: Motivating Clients to Plan Now: Taking Advantage of Low Interest Rates and More

"With lingering uncertainty about the economy and the federal estate tax, many clients - and their advisors - are wondering what planning they should do now, if any. No one can predict how quickly we will experience an economic turnaround or whether Congress will act on the estate tax. However, there are many non-tax reasons why clients should plan today, irrespective of the economy or their estate tax. And for those clients who may be subject to estate tax, we know that it is generally better for clients to act now rather than to wait, particularly given our historically low interest rates and some of the structural estate and gift tax changes proposed by the IRS. This issue of The Wealth Counselor explores some reasons why it is in clients' best interest to act now and discusses strategies that may create the biggest opportunities for clients - and you - today.

Volume 5, Issue 2: The 2010 Basis "Step Up" Rule

"In the last issue of The Wealth Counselor, we examined the repeal (for 2010 only) of the estate tax and suspension of the generation-skipping transfer (GST) tax under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the need to review existing estate plans to ensure that they continue to meet the client's goals and objectives. This issue of The Wealth Counselor looks at the other provisions of the Internal Revenue Code (IRC) that apply only to estates of people who die in 2010.1 These provisions impose radically different basis-adjustment rules and new reporting requirements for certain non-taxable estates."

Volume 5, Issue 1: Planning After "Repeal" of the Federal Estate Tax

"From its inception, the 2001 tax act was scheduled to repeal the federal estate tax and generation skipping transfer tax (GSTT) for one year beginning January 1, 2010. This should come as no surprise. What is surprising, however, is the fact that the 2001 tax act has now played out and repeal of the estate tax, at least temporarily - and unless reinstated retroactively - is upon us. This issue of The Wealth Counselor explores how we got here (which may be instructive as to what will happen in the future) as well as some of the planning implications of no federal estate tax or GSTT for at least some part of 2010."

Volume 4, Issue 11: Charitable Lead Trusts

"For the right client, a charitable lead trust (CLT) can provide significant planning opportunities for reducing generation skipping transfer (GST), estate, gift, and/or income taxes. However, the CLT is an underutilized strategy today. This issue of The Wealth Counselor examines planning opportunities with CLTs, especially in today's low interest rate, depressed asset value environment."

Volume 4, Issue 10: An Introduction to Planning for Doctors

"Two strong indicators of the need for and willingness to plan for asset protection are having wealth and having a high income. Many doctors have both of these indicators. According to recent statistics, the wealthiest 10% of U.S. physicians and surgeons control over $350 Billion dollars in wealth. In what is currently an almost recession-proof business, 95% of the 700,000 to 1,000,000 U.S. physicians and surgeons earn over $250,000 per year. That is 665,000 to 950,000 U.S. physicians and surgeons."

Volume 4, Issue 9: GRATs vs. Sales to Grantor Trusts

"GRATs and sales to grantor trusts are two techniques that accomplish the same planning objective - transfer of assets to beneficiaries, often children, in a way that provides asset protection to the beneficiary. Both are also "freeze" transactions in which future growth in the value of the transferred assets inures to the beneficiary's (i.e., transferee's) benefit without estate or gift tax on the increase in value. Finally, both can create a steady income stream to the client without forcing the family to sell assets that the client would prefer the family hold on to."

Volume 4, Issue 8: The Continuing Relevance of ILITs

"Some clients and advisors are predisposed against irrevocable trusts because they are a ‘hassle.’ If an irrevocable trust is not a grantor trust for income tax purposes (i.e., if it must report income and expenses as a separate taxpayer), that requires separate accounting and a tax return, which has its costs. If annual exclusion gifts are made to an irrevocable trust, there is the cost of Crummey letters and perhaps gift tax returns to allocate generation skipping transfer tax (GST) exemption. Use of an irrevocable trust is appropriate only if the benefits of using an irrevocable trust to own property - any property, including life insurance - outweigh the costs.”

Volume 4, Issue 7: Paying for Large Insurance Premiums

"Adding life insurance owned by an ILIT is often the best way to achieve a client's estate and wealth planning goals. This presents two problems for the planning team - getting the client to act and, with large policies, creating a premium payment structure that minimizes the use of the client's gift tax lifetime exemption ($1,000,000 in 2009), because large policy premiums very often exceed the client's available gift tax annual exclusions ($13,000 per donor per beneficiary in 2009). This issue of The Wealth Counselor explores some solutions to these problems."

Volume 4, Issue 6: The IRS' Dirty Dozen

The Internal Revenue Service recently issued its 2009 "dirty dozen" list of consumer scams and tax evasion schemes that it warns the public to avoid and that it is targeting in audit and enforcement. This issue of The Wealth Counselor discusses this list and identifies resources to assist practitioners and clients in avoiding them.

Volume 4, Issue 5: Understanding Education Savings Vehicles

According to the College Board, the average cost of a four-year college or university is increasing at between two and three times the rate of inflation. For the 2008-2009 school year, total costs average more than $14,000 per year for an in-state four-year college and $34,000 per year at a private four-year college.

As a result, saving for college is often the most significant savings goal for adults facing college costs in the future, particularly in light of many clients' depleted portfolio and home values. Thus it is no surprise that advisors who understand all of the options bring significant value to their clients. This issue of The Wealth Counselor examines several alternatives to 529 plans, including their advantages and disadvantages.

Volume 4, Issue 4: Individual and Small-Business Tax Benefits in the Stimulus Package

The $787 billion, 1,100+ page American Recovery and Reinvestment Act of 2009 (ARRA) signed February 17, 2009 contains 575 pages of tax provisions. This issue of The Wealth Counselor highlights many of the more important of those tax provisions that affect individuals and small businesses, including some that, although not applicable to most of your clients, may affect their parents', children's, or grandchildren's taxes. Citations to the applicable sections of the ARRA are included.

Volume 4, Issue 3:
The Bear Market's Impact on Safe Retirement Withdrawal Rates

This issue of The Wealth Counselor examines "safe" retirement account withdrawal rates in light of the recent bear market and what adjustments clients should make, if any, to ensure that they do not run out of funds in retirement. These issues are critical to clients and can open the door to discussions of other topics, including the adequacy of funds for retirement, planning needs, and life insurance, among others. Therefore, these issues are equally important to all wealth planning professionals.

Volume 4, issue 2: Solidifying the Adviser Relationship through Creative Trust Planning

Your clients have worked hard to amass their wealth. Many have developed close ties to you as their adviser in the process. Will their ties to you be broken if they become incapacitated or die? Do they want their successor Trustee or their Personal Representative to make that decision? This issue of The Wealth Counselor examines some ways in which the planning team can help clients address this important issue and preserve their relationship with you and other trusted advisors.

Volume 4, Issue 1: New Opportunities Under the Worker, Retiree, and Employer Recovery Act of 2008

This issue of The Wealth Counselor examines two key provisions of H.R. 7327, the "Worker, Retiree, and Employer Recovery Act of 2008" (WRERA):

  1. The holiday from required minimum distributions (RMDs) from IRAs and qualified plans for 2009; and
  2. The long-anticipated requirement for qualified plans to allow non-spouse rollovers to Inherited IRAs (but not until 2010).
These provisions are very beneficial to clients and all wealth planning professionals who understand their implications.

Volume 3, Issue 9 - Year-End Planning Opportunities: More Than You Might Expect

With unprecedented stock market volatility, depressed real estate and business values, the banking, mortgage and automobile industry crises, and numerous negative economic indicators, many clients are wondering what planning they should do now, if any. Some may view planning as discretionary, and without education these individuals may not move forward because of their unwillingness to make large discretionary expenditures during these uncertain times.

Volume 3, Issue 8: New FDIC Rules: Are You Protected?

With the rash of bank failures, you may wonder whether - and to what extent - the FDIC (Federal Deposit Insurance Corporation) will protect your bank accounts. Fortunately, new rules from the FDIC clarify how you can ensure maximum FDIC insurance coverage. You may need to modify your planning slightly to take advantage of these new rules.

Volume 3, Issue 7 - "Portability" of the Federal Estate Tax Exemption - What does it Mean?

With the political and economic climate as it is in the summer of 2008, we are not likely to see total repeal of the federal estate tax in the foreseeable future. However, both Republican and Democratic Presidential candidates support estate tax reform. Realistically, such reform is at least one year away, but the outlines are already clear. And while the top estate tax rate and the exemption amount are not yet established, both candidates support making the exemption "portable" for spouses.

Volume 3, Issue 6 - Practical Applications of Non-Qualified Deferred Compensation

This issue of The Wealth Counselor examines a topic that is critical to business owners and key employees - non-qualified deferred compensation (NQDC). NQDC is often a significant component of these individuals' compensation and employers often use NQDC to try to ensure the retention of key employees. Given the flexibility of NQDC plan design and funding, it is important that all wealth planning professionals have an understanding of NQDC and its application.

Volume 3, Issue 5 - Tax Planning

This issue of The Wealth Counselor examines basic income tax rules as well as the useful strategies to defer income tax by making installment sales to grantor and non-grantor trusts. It is critical that all wealth planning professionals have a basic understanding of these rules and the ability to recognize the opportunities offered by these strategies.

Volume 3, Issue 4 - Planning for Long-Term Care

Studies predict that approximately 40% (2 out of every 5) of Americans reaching age 65 will need some type of long-term care (LTC). Some of your clients would prefer to stay at home, no matter what the cost. However, without proper planning, the lack of available services and the staggering price tag for fulltime home health care may leave them without that option.

Volume 3, Issue 3 - Planning for Unmarried Couples

The 2000 census counted nearly 5.5 million U.S. unmarried couples sharing the same household, almost 8 times the number counted in 1970 and nearly 10% of the 60 million U.S. couple households counted. Of these, many are widows and widowers who choose not to marry for various reasons, and approximately 1% of these unmarried couples are same-gender partners.

Volume 3, Issue 2 - Planning for the New "Zero Percent" Tax Bracket

This issue of The Wealth Counselor addresses a law change that is important to all wealth planning professionals and their clients. Beginning January 1, 2008 and continuing through at least 2010, a zero tax rate may apply to long-term capital gain and dividend income that would otherwise be taxed at the regular 15% and/or 10% rates. The new zero tax rate is available to the extent that the taxpayer's other taxable income minus exemptions and deductions is less than a specified amount.

Volume 3, Issue 1 - Exciting New Developments in Buy-Sell Planning

This issue of The Wealth Counselor examines exciting new developments in business succession planning - specifically, the use of LLCs or partnerships to own life insurance for buy-sell planning purposes. Such a structure obtains the advantages of cross-purchase and stock redemption buy-sell agreements without many of the disadvantages of either traditional structure. This development is significant to all wealth planning professionals and their businessowner clients.

Volume 2, Issue 12 - Opportunities for Planning with Pets

For many clients, pets are members of the family. These clients often say that if something happens to them, they are more concerned with what will happen to their pets than to their children or spouse. This issue of The Wealth Counselor examines the issues surrounding caring for pets after the disability or death of the pet's owner.

Volume 2, Issue 11 - New Planning Opportunities with Non-Spouse Rollovers

Before 2007, a non-spouse beneficiary of a qualified plan was stuck taking distributions under the terms of the plan, which typically required full distribution within five or fewer years of the participant's death. The Pension Protection Act of 2006 (PPA 2006) authorized non-spouse beneficiaries (before it was only surviving spouses) to roll over to an Inherited IRA.

This issue of The Wealth Counselor looks at a very recent pronouncement from the IRS that finally makes this PPA 2006 provision useable and, therefore, is very beneficial to clients and all wealth planning professionals who understand its implications.

Volume 2, Issue 10 - Simplifying the Taxation of Trusts

The last issue of The Wealth Counselor examined trusts and the asset protection benefits provided to trust makers and their beneficiaries through the utilization of ongoing trusts. This issue of The Wealth Counselor addresses related and important questions about the taxation of trusts, which are important to all wealth planning professionals.

Volume 2, Issue 9 - Understanding the Significance of Trusts

This issue of The Wealth Counselor addresses a topic that is important to clients and all wealth planning professionals - trusts. When used properly, trusts can provide significant advantages to clients and to the advisors who recommend them. Given the numerous types of trusts, this newsletter explores the general advantages of trusts as well as some of the most common types of trusts.

Volume 2, Issue 8 - Understanding the Opportunities with Aid & Attendance Benefits

A prior issue of The Wealth Counselor addressed the planning opportunities that exist with planning for Medicaid (Medi-Cal in California), particularly where the client's advisors work together to create a plan that addresses all aspects of the client's planning needs. This issue addresses a related topic, VA Aid and Attendance pension benefits.

Volume 2, Issue 7 - Life Settlements: Understanding the Opportunity for Your Clients

This month's issue of The Wealth Counselor addresses a topic that many professionals do not understand fully - life settlements. For the right clients, a life settlement offers a significant advantage over the alternatives - and one that the client and the planning team should at least consider.

Volume 2, Issue 6 - Understanding Medicaid Planning Opportunities For Your Clients and You

The last issue of The Wealth Counselor addressed the significant need for clients to plan for the possibility of disability, and how proper disability planning more often than not involves the coordination of financial and legal solutions. This issue addresses a related and often misunderstood topic, Medicaid planning.

Volume 2, Issue 5 - Planning for Disability

No one likes to think about the possibility of their own disability or the disability of a loved one. However, as we'll see, the statistics are clear that we should all plan for at least a temporary disability. This issue of The Wealth Counselor examines the eye-opening statistics surrounding disability and some of the common disability planning options. Disability planning is one area where we can give each and every one of our clients great comfort in knowing that, if the day comes for themselves or a loved one, they will be prepared.

Volume 2, Issue 4 - Planning for Tax-Qualified Plans

Planning for tax-qualified plans, which includes IRAs, 401(k)s and qualified retirement plans, requires a careful examination of the potential taxes that impact these assets. Unlike most other assets that receive a "basis step-up" to current fair market value upon the owner's death, IRAs, 401(k)s and other qualified retirement plans do not step-up to the date-of-death value.

Volume 2, Issue 3 - Policy Reviews of Trust-Owned Life Insurance (TOLI) - Why you should make it part of your standard estate planning process

This issue of The Wealth Counselor explores many of the common misperceptions about trust owned life insurance - plus a process for you to add significant value for your clients by incorporating policy reviews of trust owned life insurance.

Volume 2, Issue 2 - 10 Tips for Helping Families with Special Needs

This month's issue of The Wealth Counselor examines the unique planning requirements of families with children, grandchildren or other family members (such as parents) with special needs. There are many misconceptions in this area that result in costly mistakes in planning for special needs beneficiaries. It is, therefore, incumbent upon us - our clients' advisors - to ensure that clients understand all of their options.

Volume 2, Issue 1 - The Continuing Need for Life Insurance

Last month's issue of The Wealth Counselor examined the various educational savings vehicles available to clients, including 529 plans, UGMA/UTMAs, Coverdell Education IRAs and life insurance. Using life insurance as an education savings vehicle prompted several questions about other uses for life insurance. Therefore, this issue of the Wealth Counselor examines some of these other common uses.

Volume 1, Issue 3 - Understanding Educational Savings Vehicles

Last month's issue of The Wealth Counselor examined the many benefits of 529 Plans, including the income tax and gift and estate tax benefits of these popular educational savings vehicles. There are, however, several other educational savings vehicles that clients should consider; this issue examines some of these other vehicles and the advantages and disadvantages of each.

Volume 1, Issue 2 - 529 Plan Benefits Made Permanent by the Pension Protection Act

Whether your client is a parent with future educational obligations for young ones, or perhaps a loving aunt, uncle, grandparent, or stepparent, now more than ever 529 plans are an attractive tool for the escalating costs of education, as well as for income and estate planning purposes.

Volume 1, Issue 1 - The Pension Protection Act: New Opportunities for Retirement Planning

The new Pension Protection Act of 2006 (signed into law on August 17, 2006) creates significant planning opportunities for advisors and their clients who understand it. This newsletter focuses on two key provisions: (1) non-spousal rollovers from a qualified plan to an inherited IRA and (2) charitable contributions of IRAs during their lifetime.

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Price & Farrington, PLLC - Attorneys and Counselors at Law
Parkwood Office Center - 2370 130th Ave. N.E., Suite 103 - Bellevue, WA 98005
Phone: 425.451.3583.. Fax: 425.522.4818 ..E-mail:

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