|
|
|
IN THIS ISSUE
THE NEW MAILBOX RULE
A SURPISE BENFICIARY
GET READY FOR
TRUMP ACCOUNTS
ARTICLES OF INTEREST
|
| |
New Year's Resolutions That
Safeguard Your Family's Future
The start of a new year is a natural time for reflection and renewal. People frequently resolve to improve their health, spend more time with family, or get their financial house in order. Yet one of the most meaningful--and often overlooked--resolutions is reviewing your estate plan. While it may not feel as urgent as a new diet or exercise routine, estate planning is one of the most important steps you can take for your loved ones and to preserve what you have worked so hard to protect.
Estate planning is not a one-time task. Life changes, laws evolve, and family dynamics shift over time. A plan that made sense five or ten years ago may no longer reflect your wishes today. Making estate planning a New Year's resolution ensures that your intentions are clear and your plan remains aligned with your current circumstances.
A good first step is to review your core documents: your will, trusts, powers of attorney, and health care directives. Ask yourself a few simple questions. Are the people you named still the right choice? Have there been marriages, divorces, births, deaths, or changes in relationships since your documents were last updated? Even small life events can have major implications for how assets are distributed, or decisions are made on your behalf.
Beneficiary designations deserve special attention. Retirement accounts, life insurance policies, and certain investment accounts pass by beneficiary designation--not by your will. Outdated designations are one of the most common estate planning mistakes and can unintentionally override your overall estate plan.
The new year is also a good time to evaluate tax planning strategies. Changes in asset values, income, or tax laws may create opportunities to reduce future estate taxes or improve income tax efficiency for heirs. For some families, this may involve gifting strategies, trust planning, or charitable giving.
Charitable intentions, in particular, benefit from thoughtful planning. If philanthropy is important to you, the new year is an ideal time to consider charitable trusts or bequests that reflect your values while offering potential tax advantages.
Estate planning also entails making certain that you have a plan in place in the event that you can no longer care for yourself. Powers of attorney and health care directives ensure that someone you trust can manage your financial and medical affairs if you are unable to do so. Without these documents, family members may be forced to seek court intervention during already stressful circumstances. Making sure these provisions are current and clearly communicated is a gift to those who may one day need to step in for you.
A well-designed estate plan works best when those you entrust understand their roles. While you do not need to share every detail, having open conversations with trustees, executors, or family members can reduce confusion and conflict later. The new year offers a natural opportunity to have thoughtful discussions about values, responsibilities, and long-term goals.
Unlike many New Year's resolutions, estate planning does not require daily discipline--just periodic attention. Scheduling a review with your estate planning attorney or our professionals at Garden State Trust Company early in the year can set a positive tone and provide peace of mind. Once completed, you will know that no matter what the year brings, your plan is in order.
As you set intentions for the year ahead, consider adding estate planning to your list. It is a resolution that benefits not only you, but also your loved ones and causes that matter most.
| | MONTHLY QUESTION & ANSWER | | |
Q. I've inherited my father's Roth IRA, from which he never took any distribution as far as I know. Do I have to take Required Minimum Distributions (RMDs) from it now? I’m only 55 years old, by the way.
A. No and yes. You do not have to take annual distributions from your inherited Roth IRA. Annual distributions are what most people think of when discussing RMDs and how to manage them. You may want to allow the Roth IRA to grow without taxes for as long as possible if you do not need the cash. Your age is not relevant to the tax effects.
But you are subject to the ten-year rule, that is, the Roth IRA must be fully distributed by ten years after your father's death. Strictly speaking, this is your RMD. You will not owe income tax on the distribution, but if you fail to take it by then tax penalties will apply.
Different rules apply to surviving spouses, to minor children of the account owner, to disabled and chronically ill individuals, and to heirs who are not more than ten years younger than the Roth IRA owner. Different rules also apply to traditional IRAs.
This is a complicated area, so professional tax advice is strongly recommended.
(January 2026)
© 2026 M.A. Co. All rights reserved.
HAVE A QUESTION ON TRUSTS, WILLS, OR INVESTMENT MANAGEMENT?
| | For general informational purposes only. This information does not constitute legal advice. | | |
Did you know that the day you drop a letter into a mailbox may not be the day that the letter is postmarked? In November 2025, the United States Postal Service published clarification of how and when postmarks are applied. If you are someone who mails their tax returns at the last minute, this could impact you. Read our Informational Article, The New Mailbox Rule, to learn more.
In another Informational Article, A Surprise Beneficiary, learn why it is so important to review your will on a regular basis.
One of this month's Of Interest articles from Kiplinger titled, Being the Executor of An Estate Is a Thankless Job: Here's How to Do It Well, highlights something we discuss with our clients and prospective clients on a regular basis. We have even created our own pamphlet about how to choose the right executor. Click on Choosing the Best Executor for Your Family in the Of Interest Articles.
In keeping with the New Year's Resolution theme in this month's lead article, let me leave you with a quote from C.S. Lewis. "You are never too old to set a new goal or to dream a new dream."
Sincerely,
| | |
The IRS tends to be very strict about filing deadlines. Just a single day beyond a deadline has been enough to trigger penalties for tardy taxpayers. The general rule has been that if a return has been postmarked by the deadline, it is timely filed. Taking the tax return to the Post Office or depositing it in a mailbox before the posted final pickup has been assumed to be sufficient to satisfy that documentation.
Perhaps not any more. In November the Postal Service finalized a proposed clarification of how and when postmarks are applied. Mail may not necessarily be postmarked on the date it is received, and a postmark only means the mail was in the possession of the Postal Service on that date, not that it was deposited on that date. Some mail is sent to regional centers for automated cancellation. The delay may not be significant, but taxpayers should no longer assume that they will get a postmark on the day they drop off a return.
The best approach is to use registered or certified mail for proof of timely mailing. If one takes this approach, it's important to keep the receipt because the Post Office does not create an archive of this data. Alternatively, one can request a manual postmark at a Post Office. The Postal Service's advice on tax filings is here: https://www.usps.com/taxes/?utm.
By the way, the postmark from an office postage machine is not determinative for tax filing purposes, it only creates a rebuttable presumption of timely filing. The IRS has been known to successfully rebut that presumption when a return is received suspiciously late
(Janaury 2026)
© 2026 M.A. Co. All rights reserved.
| | |
In the 1950s, Father and Mother created four trusts--one for each of their four young sons. Those trusts included termination when each beneficiary son reached age 30, presumably with the expectation that he would then be financially mature and able to handle the money.
One of the sons, Charles, married and had a child in 1972. His daughter was named Zazulak. In 1975 Charles commenced divorce proceedings, and in 1976 he executed his will. Charles provided nothing to his infant daughter, instead directing that his estate be divided among his brothers' trusts. In the event that a brother died before Charles, that brother's share would go to their mother--and if she had also died, the money would be divided among the trusts of the surviving brothers.
There matters stood until 2020, when Charles died. Apparently, he never took another look at his will. After a brother was named executor of the estate and offered the will for probate, Zazulak objected, arguing that she was the sole heir of Charles' estate. The bequest to the trusts for the brothers failed, she argued, because by their terms those trusts had all terminated years earlier, when the brothers reached age 30. The mother had died as well, so she was also not a factor.
Zazulak won her case, and became Charles' sole heir. Question: Charles must have known that the trusts would terminate at age 30, because his own trust should have terminated in 1980. Why did he never revisit his estate planning documents? He took that secret to the grave [Estate of Long, (Tex. App. Apr. 29, 2025)].
How long has it been since you reviewed your will? Have there been any significant changes in your life since then? Do you still own all the assets mentioned in your will? Does a change in your wealth level suggest that new provisions should be considered for your estate plan? Please call upon us with your wealth management questions.
(January 2026)
© 2026 M.A. Co. All rights reserved.
| | Get Ready for Trump Accounts | | |
On December 2, 2025, the IRS issued Notice 2025-68 to provide a general overview of how Trump Accounts will work, and to address initial questions about eligible investments, distributions, reporting and coordination with the rules applicable to other types of Individual Retirement Accounts.
Trump Accounts can be established in 2026, using IRS Form 4547, for any child through age 17. The contribution limit will be $5,000 per child per year. Contributions may begin after July 4, 2026. Distributions from Trump Accounts generally will not be permitted until the year the child turns 18. At that point, the account will be treated similarly to a traditional IRA, so that distributions will be taxable and potentially subject to penalties if the account owner is younger than 591/2. There will be no tax deductions for contributions to Trump Accounts, but the account will grow tax-deferred until distributions begin. The accounts will be invested in certain mutual funds or exchange-traded funds that track the S&P 500 or another index of primarily American stocks.
In addition to creating a valuable financial resource for the child, the hope is that the beneficiary will become engaged in the growth of the free market economy.
Seed money. To encourage rapid adoption of the Trump Accounts, the federal government will make a one-time $1,000 contribution to the Trump Account of each eligible child born on or after January 1, 2025, through December 31, 2028. The child must have a Social Security number to be eligible.
In December, Michael and Susan Dell (of Dell Technologies) announced that they would contribute $250 to Trump Accounts for some of the children who are not eligible for the $1,000 seed money from the federal government, that is, the children born in the U.S. before January 1, 2025, who are up to 10 years old. The gift will be limited to zip codes where the median income is below $150,000. An estimated 25 million children could potentially receive this benefit, according to press releases. The pledge from the Dells is $6 billion. If the money is not used up by the younger children, the Dells may extend the program to children older than 10. The Dells also announced that Dell Technologies would match the $1,000 government contribution to Trump Accounts for their employees, and other companies may follow that lead.
Example. Here is an illustration of the potential of a Trump Account provided by an online financial planning site [https://www.kitces.com/blog/taxable-accounts-custodial-kiddie-tax-obbba-trump-accounts-one-big-beautiful-act-roth-rmd-529-plan/].
Parent contributes a maximum amount to a Trump Account for 17 years, plus the account has $1,000 in seed money. Inflation is assumed to be 3% per year for the period, and investments earn 8%. On the child's 18th birthday the account would be worth $250,069, after total Parent contributions of $116,300. The remaining $133,769 is the growth of the account. If the child leaves the account untouched, and assuming that the 8% growth continues, it will be worth $6,336,611 at age 59 1/2.
That sounds almost too good to be possible. On the other hand, no one predicted that IRAs and 401(k) accounts would, in the aggregate, be worth trillions these days.
(January 2026)
© 2026 M.A. Co. All rights reserved.
| | |
WALL - MAIN OFFICE
732-255-5000
SOUTH JERSEY / PHILADELPHIA REGION
856-281-1300
| | |
LEBANON REGION
908-287-7188
LINWOOD / SOUTH JERSEY REGION
856-281-1300
| | Because of the rapidly changing nature of tax, legal or accounting rules and our reliance on outside sources, Garden State Trust Company makes no warranty or guarantee of the accuracy or reliability of information contained herein nor do we take responsibility for any decision made or action taken by you in reliance upon information provided here or at other sites to which we link. ©2026. All rights reserved. | | | | |
