CHOOSING the Right EXECUTOR (Your heirs may love you for it!) I was visiting Brother Tom, who is a resident at the Masonic Village at Dallas, the other day to go over his estate plan with him. He is widowed without children, but has several nieces and nephews he wants to remember in his will, along with the Masonic Villages. We talked about the usual issues regarding the most tax efficient manner to leave his estate to charity and his heirs, but his main concern was who to select as his executor. Tom exclaimed, “AI, I just can’t figure out who is the best person to handle my estate. I was thinking I should select the person closest to where I live and leave it at that. What do you think?” My response to Tom was rather pointed. “Tom,” I said, “keep your friends close and your executor choice closer.” Tom looked at me with bewilderment. He retorted, “What do you mean, Al? Please explain yourself.” By now, you all know what comes next with my stories. I summarize what I told Tom and, hopefully, you are a little wiser on the topic. I told Tom that your executor is the last chance you get to make sure your worldly possessions are properly disposed of, so the decision should not be taken lightly. The executor’s job is to marshal your assets, pay any taxes or debts due and dispose of your estate in the manner provided in your will. In Pennsylvania, the executor has the duty to pay an inheritance tax and file an inheritance tax return. If a charity is named in the will, the executor should file an account of the estate with the PA Attorney General for approval. No small tasks for even a sophisticated person. Consequently, the competency of the person selected is critical to success. BUT, there are some caveats here.
Information on Tax and Estate Planning from the Masonic Charities of the Grand Lodge of Pennsylvania
First, competency does not mean the person has the desire or time to be executor. I have personally found myself in this position, where I was picked as executor by a friend who owned a home far from me. The estate work was overwhelming, and I had little time to spare. Thankfully, I was able to hire a professional to assist me in cleaning and selling the home and gathering the personal property. Otherwise, I probably would have refused to serve. Then, there is the question of fees for the executor and the attorney for the estate. Executor fees are usually based on a percentage of the estate. For the attorney, the fee can be based on a percentage or an hourly rate. The hourly rate is more commonly used today, especially with larger estates where the percentage amount can greatly exceed the amount paid for the work done. The executor is free to decide which way to go. I would suggest having this discussion with your chosen executor now rather than later, for obvious reasons. Finally, I believe the most important decision in settling an estate is selecting counsel. Ideally, after you select your executor, you should introduce him or her to the attorney you would like to handle your estate. It is also helpful to select an attorney in the county where you reside, since in Pennsylvania (and most other jurisdictions), an estate is filed at the county courthouse where the decedent resided. A local attorney familiar with the local courts and professionals to help settle an estate in that area can make the estate administration process much less burdensome on the executor. If you have moved to a new residence lately, I highly recommend seeking out local counsel to prepare your estate plan. Your executor and heirs will remember you fondly for it. Tom then commented that since he moved to Dallas from Media several years ago, he hasn’t updated his will or sought out a local attorney. He asked if I could recommend anyone. I showed him our list of recommended attorneys whom we work with. He selected an attorney in Kingston and a nephew, who was a retired Army Colonel, as his executor. If you would like a list of attorneys and other financial and estate planning professionals in your area, you may email me at firstname.lastname@example.org or call our office at 1-800-599-6454.
I CAN'T BELIEVE IT ! Did You Say 9.62% on My Money, Guaranteed? I usually don’t talk about investing, especially in a particular financial product, but a previously unattractive savings bond issued by the U.S. Treasury has found a resurgence with inflation, and I even bought a couple the other day. I need to share my enthusiasm with you, since its apolitical (we all win). It’s the sleepy Series I Bond.
I Bonds are savings bonds that get their name from being inflation-adjusted bonds. Hence, the term I Bond. No one
wanted these bonds when inflation was low, but now they are attractive as inflation surges. Before you run out and bet the house on these bonds, you need to know a couple of rules about how they work.
First, where do you buy these bonds?
You can buy them electronically at the TreasuryDirect website. The account is easy to set up, and there is no cost to purchase the bonds. The limit is $10,000 per person per calendar year, so this isn’t any get rich quick scheme. You can also purchase an additional $5,000 in paper I Bonds with your tax refund, but since most of us have gotten our refunds, it is too late for this year. The rates for a bond change every six months, so the 9.62% for a May bond is good until Nov. 1 when it resets. I bought my bonds in April and got a measly 7.19% until Oct. 1, when it resets. Still, it’s better than sitting in my checking account earning 0.10%. The bonds earn interest monthly from the first of the month. So, if you buy the bond on May 28, you get a whole month’s interest. Interest is compounded twice a year and accrues for 30 years. You must hold the bonds for 12 months to cash out. Bonds cashed out within five years of purchase are subject to a three-month interest penalty.
You can even purchase these bonds for children and grandchildren. A child under
age 18 can’t open a TreasuryDirect account, but you can link the child’s account to your account to purchase bonds for them. What a great birthday gift!
Get the Latest TAX PLANNING NEWS! It seems we are all so busy today, even those who are retired. There are not enough hours in the day to keep up with the latest tax planning news. BUT WAIT! A quick answer to that problem may be just a click away. Go to our Masonic Charities website
at masoniccharitieslegacy.org and either sign
up for the weekly E-Newsletter or check out the latest news in Washington and with your friends at the IRS by clicking on the “NEWS” link at the top of the webpage. For those who want a more robust understanding of tax planning, you can click on the “ADVISORS” link at the top of the page. This website includes access
to a comprehensive tax-planning guide and tax deduction calculator. I use the guide
myself on many occasions for preparing charitable and estate plans. AND, don’t forget to download or request your copy of our Estate Planning Guide if you have not done so yet. It’s a great way to get your estate plan in order. Just think, you will be the life of the party when you are able to recite the latest IRS rulings to your friends and family. It can’t get any better than that!
So, there you have it. Happy investing!
Neither Masonic Charities of the Grand Lodge of Pennsylvania, nor Alvin H. Blitz, Esq., provide legal, financial or tax advice. None of the information in The Blitz should be deemed legal, financial or tax advice or acted upon by any person without prior consultation with appropriate professional advisors.
Higher Charitable Gift ANNUITY RATES STARTING JULY 1! One of the most attractive gift products we provide through our office is charitable gift annuities. A gift annuity provides fixed income for life. The rate is based on your age. The older you are, the higher the rate. A person age 85 now gets a payout rate of 7.6%. The association that sets the rates has approved increasing them for the first time in many years, starting on July 1. The minimum purchase price is $5,000. The annuity can be for just your life or for you and another person.
Upon your passing or the passing of the survivor of a two-life annuity, any amount remaining in your account passes to the Masonic Charity of your choice. If you are interested in finding out what your rate is and getting a personal illustration on the benefits of purchasing an annuity through our office, just email me at email@example.com or call my office at 1-800-599-6454 and say, “Al, I want that annuity illustration you talked about in The Blitz. My birth date is “x,” and I want to purchase a $______ annuity.” It’s that easy.
YO U R M A S O N I C C H A R I T I E S
Leave Your Legacy, starting monthly.
Support your favorite Masonic Charity with a monthly gift. Call 1-800-599-6454, email Giving@MasonicCharitiesPa.org or visit MasonicCharitiesPa.org to join the Cornerstone Circle Program.
1-800-599-6454 | MasonicCharitiesPa.org
Masonic Charities One Masonic Drive Elizabethtown, PA 17022
Join Me for Lunch Please see the dates below where I will be holding upcoming luncheons. To RSVP, call 1-800-599-6454 or email ABlitz@masonicvillages.org.
Nashville, TN July 12 - 13
Santa Monica, CA August 15 - 17
Brother Alvin H. Blitz, Esq., Carlisle Lodge No. 260, serves the Masonic Charities of the Grand Lodge of Pennsylvania, which consists of the Masonic Villages, the Masonic Children's Home, the Pennsylvania Masonic Youth Foundation, The Masonic Library and Museum of Pennsylvania and the Grand Lodge of Pennsylvania Charity Foundation.