By Michael L. Solomon of Solomon, Steiner and Peck
Most people think their will or trust provides that on their demise, that their assets pass to their children and if their children pass away the assets pass to their grandchildren. However, that only happens if your child dies before you. Hopefully, your children outlive you. If that happens, the typical will and trust have the money pass directly to your children immediately, or by the time they are a certain age. Either way, once the child inherits the money, it is
governed by your child’s will or trust, not yours. That means that upon your child’s death, the assets will most likely pay to your son-in-law or daughter-in-law and may pass on their death to someone else, such as a new spouse. For some people that is fine, but for others it may not be what you want. Many people want the money to stay in the family. To do that you need what we call a Bloodline Trust.
For example, let us say and husband and wife have an estate of $500,000 and one child who is married with two children. A typical estate
plan will provide that the inheritance pays outright to the child. Once the child inherits the money, his estate plan will say that all of his estate, including what the child inherits from you, pays to his spouse. With the Bloodline Trust the $500,000 will be held in a trust for the benefit of the child. The child can be their own trustee and they can control the investments and decide how the money is distributed. Also, this is a private document that avoids probate. The government is not involved in administering the trust. However, when your child passes away the trust assets will pay to your grandchildren, not your in-laws.
The other major benefit of the Bloodline Trust is that the assets in the trust are also protected against creditor claims or divorce. The only creditors that can attack the trust are child support payments (for your grandchildren) and the IRS or the State of Ohio for income taxes due
on trust earnings.
In summary the benefits of a Bloodline Trust are as follows:
• Assets will be available for your children and the remainder will pay to your grandchildren, not to your in-laws
• Protects the assets from your children’s creditors
• Protects the assets from being split up if your child is divorced
Similar to a Bloodline Trust is what is called a Marital Trust. A Marital Trust is used many times in a second marriage. For example assume Mary and Tom are married, but each had been married before and have children from the first marriage. Tom wants to provide that on his death Mary receive the assets to live on, but wants to make sure that on Mary’s death, the assets pass to his children not Mary’s children. The only way to guarantee that result is to have your assets held in a Marital Trust for Mary’s benefit during her life. But on Mary’s death the Marital Trust will mandate that the assets pay to Tom’s children and not Mary’s children. Without the Marital Trust, Mary’s will or trust may have all the assets pay to her children.
This tool is also valuable on first marriages. If Tom passes away and Mary remarries, she may end up providing that the new spouse inherits the assets. Even if Mary has a prenuptial agreement saying her new spouse is not entitled to any of the assets, she can always change her mind and
provide for her new spouse. The Marital Trust protects against that issue.
The Bloodline Trust and the Marital Trust are two important types of trust, that you should consider in your estate plan.
Posted By Lineweaver Financial Group
March 11, 2025
Category: Tax
By Mark Sipos, Director of LFG Tax Services The Tax Cuts and Jobs Act (TCJA) of 2017 is the signature tax legislation from Trump’s first term in office, and it cut income tax rates for many taxpayers. Some provisions — including the majority affecting individuals — are slated to expire at the end of 2025. The nonpartisan Congressional Budget Office estimates that extending the temporary TCJA provisions would cost $4.6 trillion over 10 years. For context, the federal debt currently rings in at more than $35 trillion, and the budget deficit is $711 billion. Below is an overview of anticipated changes for both businesses and individuals: Business Reduce the current 21% corporate tax rate to 20% or 15%, with the goal of generating growth. Eliminate the 15% corporate alternative minimum tax imposed by the Inflation Reduction Act (IRA). Individuals Eliminate the estate tax (which currently applies only to estates worth more than $13.99 million). Repeal or raise the $10,000 cap on the deduction for state and local taxes. Create a deduction for auto loan interest. Eliminate income taxes on tips, overtime and Social Security benefits. Possible Offsets The House GOP document outlines numerous possibilities beyond just spending reductions to pay for these tax cuts. These include: Tariffs There is a proposed 10% across-the-board import tariff. President Trump, however, has discussed and imposed various tariff amounts, depending on t
Posted By Lineweaver Financial Group
March 11, 2025
Category: Markets, Portfolio, Financial Planning, Managed Accounts
By Chad Roope, CFA®, Chief Investment Officer We recognize that the market is currently experiencing turbulence and volatility not seen in several years. Given the strong returns we experienced in 2023 and 2024, the instability of the last week feels particularly unsettling for most of us. Given this volatility, we’ve made recent trades and rebalanced our clients’ portfolios. Despite the current uncertainty, we anticipate that 2025 will be a reasonably good year for stocks. Our belief is that we will finish the year with returns in the mid- to upper-single digits. Over the course of the year, however, we expect the markets to be much more volatile than what we have experienced over the past few years. Our belief that the economy is still fundamentally strong has three supporting points. The first is earnings, which are growing at a strong rate. In addition to good earnings, we're beginning to see the market broaden beyond just a few top tech stocks. Many other stocks are also trending higher as we enter 2025. Finally, while there’s a great deal of uncertainty in terms of policy, tariffs, trade deals, and other changes in Washington, we also think that these changes – and the volatility that comes with them – are creating opportunity. Within our clients’ investment accounts, we've recently rebalanced our strategies. Some of the things that did so well last year were slightly above our target weights, leadi
Posted By Lineweaver Financial Group
February 12, 2025
Category: Tax, Scam, Fraud
By Mark Sipos, LFG Tax Director Tax season is here, and with it are scammers looking for their next victim. Scammers mislead you about tax refunds, credits, and payments, so it’s important to be aware of what their scams can look like. Common schemes Scammers are always changing their tactics in hopes of exploiting you. There are a flurry of deceptive schemes that pop up and this year will be no different. Recently, the IRS has seen scammers do the following: Request gift cards over the phone through a government impersonation scam or by sending a text message, email or social media message. Remember, the IRS never asks for or accepts gift cards as payment for a tax bill. Pose as an IRS agent and call the taxpayer or leave a pre-recorded voicemail stating they are linked to some criminal activity. Threaten or harass the taxpayer by telling them that they must pay a fictitious tax penalty. Instruct the taxpayer to buy gift cards from various stores. Pressure the taxpayer to buy gift cards, then ask the taxpayer to provide the gift card number and PIN. To verify it’s the IRS, go to IRS.gov and verify the form or visit the Let Us Help You page to verify tax information with self-service options. Know who’s calling If the IRS does need to contact you, they will typically contact you the first time through regular U.S. mail delivered by the USPS. The IRS doesn't initiate contact with taxpayers by email, text messages, or social media channels
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