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All Kirtland CU branches and locations will be closed on Thursday, November 28 in observance of Thanksgiving.
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We have engaged Forvis Mazars, LLP (Attn: Bud Hollenkamp, 1801 California Street, Ste. 2900, Denver, CO 80202) to perform member verifications. Kindly compare the balance of your accounts on your September 2024 statement WITH YOUR RECORDS. If balances do not agree, please address your discrepancies directly to Forvis Mazars, LLP. Include your name, truncated account number, and an explanation of the difference noted. A reply is not considered necessary unless a difference is noted.
ROUTING NUMBER: 307070050
By Kirtland Financial Services
You may be surprised to learn that there are several ways you could end up paying unnecessary taxes after your death. Strictly speaking, you won’t be the one paying. But your estate will, and that could mean your heirs won’t receive the amounts you intend. Like most people, you probably would like to pay the taxes you owe – and nothing more.
The time to plan is now. And because the tax code is so complex, our first suggestion is that you seek out qualified advice to make decisions that are in the best interests of you and your family.
Is it really that complicated? In short, yes. That’s because there are a variety of asset types, each of which may be taxed differently; you may wish to pass your assets to a variety of heirs, each of whom may be taxed differently; decisions you make now and your heirs make later have an impact; and there are at least two overarching tax laws that can come into play.
If you’re like most people, your primary residence and your qualified retirement plan are your two largest assets. Some people also have an investment portfolio, real estate, collectibles, or other valuables. All of these are individual pieces of the puzzle. It’s important to seek advice from someone who understands the complete picture, and can help you make decisions based on that. Otherwise, your estate may be divided differently than you intend, and with a larger-than-necessary tax burden on your estate — which means your heirs stand to inherit less than you expect.
When you discuss your estate planning goals with an expert, the big picture is important. Accounts with beneficiary designations and those without must be coordinated, to ensure your assets are distributed as you wish. For example, if you want to distribute 25% of your total estate to each of your four children, look at the big picture. You could divide all of your assets equally among the four, or you could pass one asset type that is valued at 25% of your total assets to each one of them. But that balance could shift as one asset type increases in value as compared to the others, so allowing an expert to help you is time and money well spent.
Some of your assets will be valued as of the date of your death for future tax purposes. For example, real estate, collections, and closely held businesses (among others) can receive a step-up in value to your date of death. This is important so your heirs won’t face capital gains taxes based on a gain they did not receive. If you bought your home in 1985 for $65,000, for example, and sold it on January 1, 2019 for $650,000, your capital gain would be $585,000, which could mean a substantial tax bill. But, if you died on January 1, 2019 and passed the home to your children, the step-up in value means they start with a tax basis of $650,000 and only pay capital gains taxes on an increase from that point.
Assets in a qualified retirement plan, such as a 401(k), 403(b) or an Individual Retirement Account, are taxed uniquely as compared with your other assets. If you die before receiving all of the money in these qualified plans, there are stringent rules that must be followed to maintain their tax-qualified status. Tax consequences may also differ depending upon who eventually receives the accounts. For example, if your spouse inherits your IRA, it becomes his or hers. They will need to follow the rules, such as taking annual Required Minimum Distributions once they reach age 72, or as mandated by current legislation.
If your children inherit the account, though, the rules are different. It’s important to understand what the options are and how each will impact your heirs. In general, the person who takes a distribution from a qualified plan will be responsible for the taxes. If your IRA goes to your child who takes it out in a lump sum in the same tax year in which he or she earns a high salary, the tax burden could be significant.
As you go through your estate tax planning session, you’ll need to consider at least two kinds of taxes: estate taxes and income taxes. Each type is complex, and how your estate is impacted will depend on the decisions you make today and those your heirs make after your death. An expert can help you sort it out, preserving your estate to the fullest extent possible.
This material was prepared by LPL Financial, LLC.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Kirtland Federal Credit Union and Kirtland Financial Services are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Kirtland Financial Services, and may also be employees of Kirtland Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Kirtland Federal Credit Union or Kirtland Financial Services. Securities and insurances offered through LPL or its affiliates are:
Not NCUA Insured or Any Other Government | No Credit Union Guaranteed | Not Credit Union Deposits or Obligations | May Lose Value |
The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.
Kirtland Federal Credit Union (“Financial Institution”) provides referrals to financial professionals of LPL Financial LLC (“LPL”) pursuant to an agreement that allows LPL to pay the Financial Institution for these referrals. This creates an incentive for the Financial Institution to make these referrals, resulting in a conflict of interest. The Financial Institution is not a current client of LPL for advisory services.
Please visit https://www.lpl.com/disclosures/is-lpl-relationship-disclosure.html for more detailed information.
CRPC®️ conferred by College for Financial Planning.
Routing Number: 307070050
6440 Gibson Blvd. SE, Albuquerque, NM 87108
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