LocumLife - January 2009 - (Page 17) RESOURCES Med Ec-cerpts Highlights from Medical Economics Money management BEWARE PLACING YOUR HOUSE INTO A TRUST Q: A California attorney recently explained how I could place my house into a trust to avoid the risk of losing it to a future malpractice creditor. Is there any downside to doing this? A: There are several substantial negatives that must be considered. If the trust owns the house, you could lose the deductibility of your home mortgage interest and the ability to deduct real estate taxes. Worse yet, the $500,000 exemption from capital gains upon the sale of the residence tax applies to individuals, not trusts, so you would change a tax-free gain into a taxable entity. Also, if you retain control of the trust and enjoy the home, it likely would not be immune from creditors. Finally, most states have a tax that applies when real estate is transferred from an individual into a trust, and this should be reviewed in advance of any transfer. ESTATE TAXES ON LIFE INSURANCE? Q: Is it true that life insurance is not subject to the estate tax? A: Life insurance is generally not subject to income or capital gains taxes upon the death of the insured. But a policy cashed prematurely (during life) could result in taxable gains because of cash build-up within the policy, similar to any other investment. For federal estate tax purposes, life insurance proceeds are taxable, although there is an exemption when the proceeds go to a surviving spouse. Furthermore, there is a way to have life insurance owned by a trust that will keep the proceeds out of your taxable estate and avoid the federal estate tax upon your death. A qualified tax attorney can help you with this. L L This department originally appeared in Medical Economics, a sister publication. For subscription information, call 877-922-2022. www.memag.com job you love. Travel the country. Perform the Your fans love what you do. ms , select the right agent: as a locu Before you book your locums tour ces. Delta Locum Tenens s and preferen provider, you have speciļ¬c need treat you like the star you are. identify where your heart is and will yOuR AGeNts, yOUR FAns. (877) 4-LOCUMS DeltaLocums.com Circle Career Card No. 603 www.LocumLife.com JANUARY 2009 LocumLife 17 http://www.memag.com http://blog.deltalocums.com http://www.deltalocums.com http://www.deltalocums.com http://www.LocumLife.com
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