Insurance Insights: The Cleary Insurance Blog
The Cleary Insurance blog covers insurance, risk management, and financial planning for New England businesses and individuals. Our team of licensed advisors and specialists publishes regular articles on commercial and personal coverage, employee benefits, life and financial planning, and insurance compliance. Browse recent articles below, or use the category filters to find topics relevant to your business or personal situation.
SCA Health and Welfare Fringe Benefit Changes
The prevailing health and welfare fringe benefit issued under SCA increased on June 17, 2011. The U.S. Department of Labor sent a memo dated June 10, 2011 to all contracting agencies of the Federal Government and the District of Columbia titled DOL ALL AGENCY MEMORANDUM NUMBER 210.
Effective June 17, 2011 the SCA health and welfare benefit increased from $3.50 to $3.59 per hour. You can find the updated postings on the Wage Determination www.wdol.gov and Wage and Hour Division (WHD) www.dol.gov/whd websites.
The agency memo includes a history of wage determinations, what contracts are affected and the wage determination for the state of Hawaii. If you have any questions about this memo, please feel free to contact Maral, LLC.
Many contractors have called us recently stating that their contracts have both fringe benefit rates in their respective wage determinations, and wondering if it is a mistake? We advised them that the “high” rate is only used for grandfathered contracts. Unless a new contract is issued which should have the “low” rate, there can only be one fringe rate on your contract for all sites under that procurement.
Please remember to have the contracting officer modify the new Health and Welfare rate in your contract before you begin paying it!
Effective Estate Planning
Make Good Decisions Now
A well-designed estate plan can help provide your family financial security – and give you peace of mind right now. The goal of estate planning is to help you accumulate, manage and conserve capital and income – taking into account your resources, goals and tax considerations – and preserve those assets for your heirs. It can also help you manage property in an efficient, profitable way during your lifetime. Every case is unique, but some of the key estate-planning challenges include the following.
Estate Taxes
Estate taxes can be a major concern for those with significant net worth. Without an effective plan in place, estate taxes can force heirs to sell real estate and other assets to raise cash to pay the taxes. However, planning can help reduce estate taxes by making lifetime transfers to heirs and providing a source of money to pay taxes, such as an irrevocable life insurance trust (see How an ILIT is used for estate planning).
Expect the Unexpected
To understand the value of working with a professional, you only have to take a look at recent changes to the estate tax code. The federal estate tax was officially repealed as of January 1, 2010, but is slated to return in 2011 with an even lower exemption amount and a higher tax rate. During 2010, beneficiaries could still be exposed to capital-gains liability because of a limitation to something known as the “‘step-up in basis’ for estate assets.” And additional changes to the estate tax structure are also possible before the tax returns in 2011. If you’re confused, you’re not alone.
Business Succession
For many business owners, their single biggest asset is the business itself, and they often plan to pass that business on to children or others who are actively involved in it. For that, they tend to hire a lawyer (similar to a Denver estate planning lawyer) for equal distribution of wealth and assets. In the event that estate planning is not handled properly, it could result in the heirs or children splitting a smaller part of the estate, which could be further reduced by estate taxes as well. If providing equal inheritances to your heirs is a goal, one possible solution is life insurance, used either to pay the estate taxes or to equalize the values going to children who are not involved in the business.
Gifts
Gifts made during your lifetime can allow you to transfer assets that will significantly appreciate, and would drive up estate taxes if still in your name when you die. In order to reduce the size of the taxable estate, you can transfer assets each year up to the level of the annual gift-tax exclusion. Another option could be a charitable remainder trust, which can allow you to direct income from certain appreciated properties to a designated charity, with possible tax advantages.
Other Options
There are a number of more complex solutions that may be appropriate depending on your specific situation and goals. These include Grantor Retained Annuity Trusts, Qualified Personal Residence Trusts, private annuities, and installment sales.
Estate tax issues are not impossible to solve. But to ensure you end up with the solution that addresses your situation most effectively, it makes sense to consult a trusted financial professional and your legal advisor.