JULY 28 – AUGUST 3, 2010

Business to Business

Valerie's Furniture and Accents carries fine western furniture with a mixture of cowboy antiques and western chic. According to the 2004 Phoenix Magazine, Valerie's has the best and coolest cowboy furniture. Visit Valerie's at 6070 E. Cave Creek Road to check out her home accents, call 480-483-3327 or visit valeriesfurniture.com for more information.

Play at Rancho Mañana Golf Club for $33 Monday – Thursday, $39 Friday – Sunday or just $29 after 4 p.m. everyday! Located at 5734 E. Rancho Mañana Blvd. in Cave Creek. Visit www.ranchomanana.com or call 480-488-0398 for more information.

It's time to "Chill at the Grille" ... Saguaro Grille, that is. The restaurant offers an array of chilled choices, including salad entrées, ice cream cups, cones, shakes, smoothies, splits, and sundaes, along with iced lattés, beer, wine and cocktails. In fact its signature drink is the "Carefree Cooler," a rum-based, lime-infused tall summer sipper. Saguaro Grille is located at 99 Easy St., Los Portales Mall, Carefree. For more information call 480-575-0021 or visit www.SaguaroGrille.com. See you at "The Grille!"

Z-Weight Loss is a medically supervised weight loss program that promises you can lose from 15-30 pounds in just 30 days. Call 480-570-9200 or visit them online at www.z-weightloss.com.

Antique Centre, Arizona's finest antique mall, is searching for your valuable antiques – vintage toys, clocks, collectibles, old marbles, and much more. The Centre is located just north of McDowell at 2012 N. Scottsdale Road. Call 480-675-9500 for additional information.

Messinger Pinnacle Peak Mortuary and Chapel, decorated in a beautiful Santa Fe style, serves all faiths while offering full service in burials, cremations, shipping and advanced planning. They are located at 8555 E. Pinnacle Peak Road. For more information call 480-502-3378 or e-mail them at [email protected].

Electric Eel Sushi and Teppan, located at the southeast corner of Cave Creek Road and Desert Willow Parkway, specializes in Japanese cuisine. Electric Eel provides live entertainment Friday and Saturdays starting at 8:30 p.m. Visit www.electriceelsushi.com to view the entire menu. Call 480-595-9000 for reservations.

Hobbyists to meet and support Arizona National Guard Families

ipms logo PHOENIX – The 46th annual National Convention of the International Plastic Modelers/USA Branch (IPMS/USA) will be held at the Phoenix Convention Center Aug. 4-7. A portion of the proceeds of this event will be donated to the Arizona National Guard Family Assistance Fund.

IPMS/USA is an organization “By modelers, for modelers.” Founded in 1962, the organization has held the National Convention annually since 1964. The Convention consists of a model contest, seminars, world’s largest traveling hobby store, and culminates with the Awards Banquet and presentation.

Over 2,000 models are expected to be entered in the contest. Models of cars, planes, tanks, ships, and science fiction subjects will be on display. The public is invited to look at the models and shop in the world’s largest traveling hobby store with over 80 sellers. The cost is $5 and children under 12 are free. Hours are Friday 9 a.m. – 9 p.m. and Saturday 9 a.m. – 5 p.m.

Promoting the hobby of model building is also a big part of IPMS/USA. With support from model manufacturer Revell, a make and take event will be held for kids of all ages. Under the guidance of experienced model builders, novice model builders have the opportunity to build a free model of the Space Shuttle and take the model home.

IPMS/USA has supported deployed troops for several years by providing model kits for the troops. IPMS/USA chapters regularly send kits and hobby supplies to the hobby clubs in Iraq and Afghanistan. This year, kits will again be collected to send overseas. In addition, IPMS/USA will be supporting the families of the Arizona troops at home. A portion of the general admission ticket revenue will be donated to the Arizona National Guard Family Assistance Fund.

For more information, visit www.ipmsusa2010.org or e-mail [email protected].

BY MATTHEW S. DANA | JULY 28, 2010

Estate tax repeal, is it for real?

What a mess Congress has created! We are now in a year where there is no federal estate tax – but hold the cheers. Congress has substituted the estate tax for another method of taxation that will have an even greater impact on taxpayers. This change could also unintentionally alter the distribution of your estate to your heirs.

The 2001 tax act, signed into law by President George W. Bush, gradually reduced the maximum rate of the federal estate tax (and the equally onerous Generation-Skipping Transfer (GST) Tax on transfers to grandchildren) to 45 percent. It also gradually increased the amount of property that you could pass free of federal estate tax to $3.5 million per person in 2009. Then, in 2010 only, the 2001 tax act repeals the estate tax. But, under the existing law the estate tax returns on January 1, 2011 – only at a much lower $1 million exemption and a higher 55 percent tax rate!

Paying for estate tax repeal
To make up for lost revenue, Congress replaced the estate tax with an increased income tax. Before, any assets received through inheritance were valued at fair market value at the date of death. Thus after death, when an heir sold any assets that had increased in value, they would not have to pay income tax on any of that growth that occurred during the decedent’s life (this is referred to as a “step-up in basis”).

In 2010 property that passes at death does not automatically receive this step-up in basis. Instead, each individual has a limited amount of property that can be “stepped-up” in value at the time of death ($1,300,000). Property that does not receive this step-up will be subject to tax on all increase in value from the date the property was originally acquired.

How are you affected?
Trusts for married couples commonly use a formula to divide assets when the first spouse dies to minimize the estate tax. Most of these formulas are tied to either the estate tax exemption or to the marital deduction. Since there is currently no estate tax, these formulas will not work as intended. If your spouse is not your sole beneficiary (for example, if you have children from a prior marriage) the existing formula could result in the disinheritance of your spouse.

Also, your estate plan should provide for the $1,300,000 of assets that can be stepped up to fair market value on your death. Your plan should take into consideration how this basis step up amount will be allocated among all of your assets, and who has the discretion and the authority to make that allocation.

With the repeal of the GST Tax, there may be formulas in your Will or Trust that need to be amended that allocate and divide your estate between your children and your grandchildren. Before, only $3,500,000 could be passed to grandchildren without incurring the GST Tax (in addition to the normal estate tax). Your formula may provide the maximum amount to your grandchildren without incurring a GST Tax, and give the remainder to your children. Since there is currently no GST Tax, your children could be unintentionally disinherited.

Opportunities under the new law
Since there is currently no estate tax, and the estate tax will likely be reinstated at some point in the future, prudent planners should seek ways to transfer assets beyond the reach of estate taxes in the future. Since there is no GST Tax, Generation Skipping Trusts can be created for the benefit of your children primarily, with your grandchildren as remainder beneficiaries, which will prevent a layer of estate taxes when our children die. Finally, since the maximum gift tax rate has been reduced to 35 percent, you can gift your already depressed real estate and stock portfolios out of your estate and remove them from future estate taxes, which will be at higher rates. These assets can be placed in trusts for your benefit, or for the benefit of your spouse.

We encourage you to meet with your attorney as soon as possible to review your estate plan and make any changes that are necessary to prevent any of your heirs from being unintentionally disinherited. If you would like to meet with a Dana Law Firm attorney to review your estate plan, please make an appointment by calling 480-515-3716.