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Hello 2010!

By Corey May - Email Editor

Date : January 19, 2010

Many people would like to kiss 2009 goodbye. One thing most people can agree on is that 2009 has made us wiser as it became the poster child for estate planning. To exemplify how vulnerable our estates may be, we do not know what the estate tax will be if a family member dies during this year. We can only speculate what will happen. The House of Representatives have already signaled their desires as they voted to repeal the 2010 estate tax exemption passed by President Bush on June 7th, 2001. (The Economic Growth and Tax Relief Reconciliation Act of 2001) Effective January 1st, 2010, estate taxes and generation-skipping taxes have vanished for 2010, leaving the Congressional position undecided.

If you watch this story, you are sure to see some conflict where the Congress is likely to make the answer a retroactive taxation decision similar to the 2009 system: a $3.5 million exemption, a 45% tax rate, and the gift tax will remain disjointed from the estate tax exemption ($1 million versus the $3.5 million estate tax exemption). The challenges will arise due to conflict case results from past Supreme Court rulings over retroactive taxation where there is no system in place.

Story to Watch: Obama’s tax on the Wall Street bail out and the new regulations to come.

Where the meek are, the strong move in like a game of cat and mouse; therefore, after the legitimate rally in the Stock Market, President Obama will begin to move in with taxation on profits.

The proposed taxes would apply to financial institutions with more than $50 billion in assets and would extract about $90 billion over ten years. Obama’s fundamental assertion is that this would cover all losses incurred under the Troubled Asset Relief Program (TARP).

Story to Watch: Watch the CEOs statements, profits, employee bonuses and actions of J.P. Morgan, Citigroup, Bank of America, Wells Fargo and the like due to report profits this week.

Some banks are due to report better than expected profits, and President Obama has said recently that he will tax the bank profits.

Stories to Watch: The probe into AI and the SEC investigations into the CDO (Collateralized Debt Obligations) concerning the credit default swaps you have heard so much about in 2009.

Obviously no one is satisfied that the credit swap problems that exacerbated the recession will not happen again. This is going to be an ongoing process of probes and investigations.

The Securities and Exchange Commission sent subpoenas last month to banks including Goldman Sachs, Credit Suisse, Citigroup, Bank of America/Merrill Lynch, Deutsche Bank, UBS, Morgan Stanley and Barclays Capital. Additional requests for information came from the broker-dealer administrator, Financial Industry Regulatory Authority (FINRA).

Story to Watch: Google’s potential withdrawal from China.

This is what Google has said it will do after a series of cyber attacks believed to be aimed at censorship. There are other complaints by Google also.

The Chinese Ministry said this, “Foreign companies including Google should all follow international standards and respect local law and regulations and local culture and customs to shoulder social responsibility.”

Regardless of the outcome, not too many companies are positioned to take on the Chinese government. Chinese trade is going to become a hot topic. Since China is a major trade partner of the U.S., economists will track Google’s actions as well as watching the inflation rate in the Chinese economy.

Stories to Watch: Reform, reform reform! Keep an eye on your assets!

We are all keeping an eye on health care reform, but the reform ball does not stop rolling on health care. President Obama frequently uses the word, “Insurance Reform.” This could mean reform, taxation and new regulation on everything from healthcare and Medicaid to your 401K.

Stories to Watch: The Global Banking Community.

Top central bankers met last week to settle their differences. What are the major differences? The major topic was accounting; the standard setting process in terms of common methods such as mark to market accounting.

It seems there is a consensus toward common approaches and buffers such as allowing bank profits to be put away for rainy days, the tougher times of the market and bad loans.

This is a news report, not financial advice. We as consumers live in a time where our own education and awareness are very valuable. It is very easy to look at these events and put them on the back burner, however if you stay with us, we will keep you informed.

One sure way to stay well-versed on these subjects is with this newsletter. We bring the forefront experts to our staff to give you the latest on the laws and regulations that will affect your asset protection planning, your wealth preservation and your estate planning.

 

By Corey May
TrustMakers.com

Feel free to email us at info@trustmakers.com with any questions.

If you would like to discuss the use of trust for you, your family, or even as a marketing tool for your business, give us a call we would love to talk with you about it. Please contact us at info@trustmakers.com

By Corey May
TrustMakers.com

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