What is the new state of your 2022 domain?

Whether you’ve gotten a raise or a retiree cost of living adjustment, the value of your estate is about to rise. Inflation ready!

Most people who reach federal retirement age have earned / earned a great benefit package. Plus a life annuity, as well as a bond, if not a Wall Street-like record of lifetime income. But due to the nature of the job, many public servants don’t think in “domain” terms even though they own a home and have a monthly inflation-indexed survivor / retirement benefit for life. And a Thrift Savings Plan account. But think again.

The numbers don’t lie. The greatest concentration of federal employees nationally is in grade 12. With the 2022 salary increase, the salary range for GS-12 employees in the Washington, DC metro area (301,906 people) will go from $ 89,834 for newbies to $ 113,000 and above for those at the top. of style. And this figure would be higher, except for the salary cap on civil service salaries. By far the most populous civil service rank is GS-12. In the Washington-Baltimore metro area and many other cities, the pay is higher. An employee starting or just promoted to Stage 1 GS-12 in Los Angeles-Long Beach will start at $ 91,254 next week.

With a good salary, maybe a house, insurance, a retirement plan, and a savings plan, many Feds are better off than they thought. And they may need to readjust their thinking on things like I have an estate? And if so, what is the plan? Download a will from the Internet and forget about it? Or do nothing and let the courts – possibly – decide? Meanwhile, your surviving spouse and kids may be at each other’s throats because they know what you really want!

So we’ve asked DC regional attorney Tom O’Rourke to join us today as well. It’s 10 a.m. EDT streaming here or on the radio at 3 p.m. in the DC area. If you miss the show, it will be archived on our home page. And if you have a question for Tom, an estate / tax specialist and former IRS employee, send them to me before showtime at [email protected].

To get you up to speed on today’s show and what a “domain” means, Tom has written this intro. Check it out and listen if you can. And tell another owner to listen too.

A revocable trust is a tool used in many estate plans. It is sometimes referred to as a living trust or revocable living trust. All of these terms refer to a trust that takes effect during the lifetime of the person who establishes it, and which can be revoked or changed at any time as long as the creator of the trust is alive and competent.

Trusts are often seen as tools for the wealthy, but are frequently used by people with smaller assets. All trusts are vehicles for the management and distribution of property or assets. A trust can be used to achieve any legally permitted purpose.

All trusts have three parts:

1. The settlor (also sometimes referred to as a settlor or trustee) is the person who establishes the trust and specifies how the assets of the trust are to be held, managed and distributed.
2. The trustee is the person or entity who manages the assets held in the trust.
3. The beneficiary (ies) is / are the person (s) for whom the trust assets are managed.

As is generally used, an individual establishes a trust during their lifetime. This person is the settlor, the trustee and the beneficiary during his lifetime. After the settlor’s death, a successor trustee is appointed and receives instructions on how to manage and distribute the trust property. Often, a trustee is responsible for distributing the property among the beneficiaries. However, the trust may continue to exist and be managed for the benefit of one or more beneficiaries.

A revocable trust has two advantages over a will. It can be used as a means of managing the settlor’s assets in the event of his incapacity. It can also avoid homologation following the death of the grantor. These goals can only be achieved if the trust is funded. The assets must be titled in the name of the trust. Establishing a trust, but not funding it, is a waste of time and money.

While establishing a revocable trust can be a most useful tool, it cannot achieve certain goals:

1. It does not reduce your income or your inheritance tax. A revocable trust is generally not a separate taxable entity. The trust uses the grantor’s social security number as its tax identification number as long as the grantor is alive. Following the death of the settlor, a revocable trust becomes irrevocable and must then obtain its own tax identification number. All assets held in the trust are included in the settlor’s taxable estate.
2. A revocable trust does not protect the assets of the settlor’s creditors.
3. Assets held in a revocable trust are treated as owned by the grantor in determining the grantor’s Medicaid eligibility.
4. A revocable trust only controls the assets titled in the name of the trust.

A revocable trust has no effect on assets held in common name or that are governed by a beneficiary designation.

Almost useless factoid

By Alazar Moges

With a wind chill of -18 degrees, the coldest ball drop to occur during the annual New Year’s Eve celebration in Times Square was in 1917. The hottest in 1965 and 1972 at 58 degrees.

Source: ABC7NY