The Life Planning 101 Podcast
Episodes

3 days ago
Thinking About Gifting to Your Children?
3 days ago
3 days ago
This week Angela discusses the complexities and risks involved in gifting significant assets to children, such as land or businesses. She emphasizes the importance of proper planning and professional advice to avoid costly tax consequences and unintended liabilities. The episode focuses particularly on the tax implications of gifting versus inheriting assets and the importance of understanding cost basis.
Key Takeaways đź’ˇ
Many parents consider gifting significant assets like land, money, or business interests to their children as they age, but often do so without seeking comprehensive advice, which can lead to costly mistakes. Even when advice is sought, it is frequently from professionals who may not have a holistic understanding of estate and tax planning, resulting in overlooked risks.
Gifting assets without proper planning can expose the family to various risks including lawsuits, creditor claims, divorce risks affecting gifted assets, business liabilities of the recipient, and strained family relationships. Additionally, gifting can unintentionally disinherit grandchildren or transfer assets to unintended parties, such as a new spouse of a child’s widow(er).
One of the most significant and common financial pitfalls of gifting assets is the increase in taxes, particularly due to the transfer of the original cost basis to the recipient. When a gifted asset is sold, the recipient pays capital gains tax based on the original purchase price, which can be much higher than if the asset was inherited.
Cost basis is the original value of an asset for tax purposes, usually the purchase price minus any depreciation taken. When an asset is gifted, the recipient inherits the donor’s cost basis, meaning they may face large capital gains taxes upon sale. In contrast, if the asset is inherited after the donor’s death, the cost basis is stepped up to the asset’s fair market value at the time of death, potentially eliminating capital gains tax if sold immediately.
This difference in cost basis treatment between gifting and inheritance can result in significant tax savings if assets are held until death rather than gifted during life. For example, land purchased decades ago often has a very low cost basis compared to its current market value, so gifting it can trigger large capital gains taxes for the recipient upon sale.
Even if the family does not plan to sell the gifted assets, the cost basis remains important for other reasons, such as depreciation recapture on inherited rental properties or equipment. Inherited assets receive a stepped-up basis, allowing heirs to depreciate the asset anew, which can provide substantial income tax savings over time.
Farmers and ranchers may not realize they can depreciate certain components of their land, such as nutrients, which can offer additional tax benefits. This is an often-overlooked opportunity that can improve cash flow and reduce tax burdens across generations.
Angela stresses the importance of not making gifting decisions alone or without thorough professional guidance. While gifting can be beneficial in some cases, it must be done strategically to avoid unintended tax consequences and other risks. There are creative planning strategies available to mitigate these issues, especially in states like Texas.
The podcast concludes with a reminder that tax laws are complex and constantly changing, and that even accountants and tax professionals may not have complete knowledge of all relevant details. Therefore, a holistic life planning approach involving multiple professionals is essential to protect family wealth and minimize tax liabilities.

Wednesday Oct 30, 2024
Family Support Checklist (Rebroadcast)
Wednesday Oct 30, 2024
Wednesday Oct 30, 2024
As a life planning firm, it is our mission to help you take the essential steps needed to face each of life’s stages with confidence and clarity. We were asked if we could compile a list of the things that need to be addressed on every level when you find it necessary to assume physical, emotional, and financial responsibility for your parents.

Monday Aug 26, 2024
Are Your Assets Protected?
Monday Aug 26, 2024
Monday Aug 26, 2024
Are your assets protected? What good is all the hard work it took to build your success if you don’t take the time to protect it? We’re talking asset protection on this week’s episode. Here are some of the most common issues we see.

Wednesday Aug 14, 2024
Have You Outgrown Your Advisor?
Wednesday Aug 14, 2024
Wednesday Aug 14, 2024
I believe one of the hardest things to do is find the “right fit” advisor for you and your family. Because of this, I thought I might take a minute to educate you a little about our industry.

Wednesday Feb 21, 2024
When to Start Planning (Rebroadcast)
Wednesday Feb 21, 2024
Wednesday Feb 21, 2024
Angela was honored to be a guest on the Real Wealth podcast with Jim Silbernagel to share the benefits and pitfalls that could occur when starting a financial strategy later in life. Please enjoy this gem from our archive.

Wednesday Jan 03, 2024
Cybersecurity Tips (Rebroadcast)
Wednesday Jan 03, 2024
Wednesday Jan 03, 2024
This week we take a dive into our archive for this gem. In 2021, IT expert Mike Ahern with Kennedy Computer Solutions joined us as our special guest to share some important fraud prevention tips. You don't want to miss this!

Wednesday Oct 11, 2023
Two Reasons You Get Sued
Wednesday Oct 11, 2023
Wednesday Oct 11, 2023
There are an estimated 40 million lawsuits filed every year in the United States? Could you afford a lawsuit? Can you imagine the stress of getting sued? On this week’s episode, we’re discussing the importance of having a good asset protection plan for you and your family.

Wednesday Sep 27, 2023
The 8 Life Planning Issues
Wednesday Sep 27, 2023
Wednesday Sep 27, 2023
Over 35 years of working in various fields of Life Planning has shown us that most people don’t plan to fail –they just fail to plan. And one reason behind this procrastination is that they are overwhelmed by the complexity of the task and don’t know where to start. We feel it is very important for every family to seek help and take the time to focus on the questions that need to be addressed. I encourage you to be proactive as opposed to reactive and live your life on Purpose!

Wednesday Jun 21, 2023
Is Your Credit Score Important in Retirement?
Wednesday Jun 21, 2023
Wednesday Jun 21, 2023
The phrase “if you don’t use it, you will lose it” applies to more ways than one in retirement...It’s not just your health or mind – it could be your credit, too! Bottom line: There should be no expiration date for good credit. You may not need to work, but you do need to work at keeping your credit in shape. The only thing constant in life is change, so stay prepared.

Tuesday May 16, 2023
Decompress from Stress
Tuesday May 16, 2023
Tuesday May 16, 2023
Life gets stressful sometimes, there’s no way around it. This week we give you some tools you can use to help decompress from the stress…whether its financial, business, or life.

Tuesday Apr 18, 2023
Preventative Financial Care
Tuesday Apr 18, 2023
Tuesday Apr 18, 2023
Over 35 years of working in various fields of Life Planning has shown me that most people don’t plan to fail –they just fail to plan. I encourage you to be proactive as opposed to reactive and live your life on Purpose!

Tuesday Feb 14, 2023
Do You Cut and Paste Your Decisions About Money? (Rebroadcast)
Tuesday Feb 14, 2023
Tuesday Feb 14, 2023
Think of your 3 favorite restaurants. Now imagine the head chef from each made his/her very best dish for you. Sounds splendid, right? Now imagine if you took a big bowl and mixed these three dishes together with a wire whisk. How does that sound? Not so good, right? So why do we do that with our money? We cut and paste every strategy that sounds good and mix it all together. No matter how superb each strategy may be, when you mix the 3 they may not mesh well together at all.