Posts tagged with "tax"

Do I Have to Pay Tax on Money Inherited in Connecticut?

Whether inheritance may be taxed depends on the specific facts of your case.  If the money was inherited from an estate outside of Connecticut, it may be subject to an estate tax from that foreign state.  Heirs are generally exempt from paying taxes on any inheritance in Connecticut.  It may be helpful to consult an experienced trusts and estates lawyer in Connecticut who has dealt with similar questions in the past and can educate you on the law.

If you have any further questions regarding trusts and estates in Connecticut, please contact Joseph C. Maya, Esq. at (203) 221-3100 or e-mail him directly at

Overseas Tax Shelters Now Complying With IRS

Some of the world’s most notorious secret account havens have agreed to give information about U.S. tax payers to the Internal Revenue Service.

In a 24-day span ending December 19, eight jurisdictions — the Cayman Islands, Costa Rica, Jersey, Guernsey, the Isle of Man, Bermuda, Malta and the Netherlands – signed separate agreements with the IRS to help it implement the Foreign Account Tax Compliance Act (FATCA), enacted by Congress to uncover offshore tax evasion. Deals with more countries are in the works.

IRS Intergovernmental Agreements

An IRS intergovernmental agreement “obligates the foreign country to require its investment funds and other financial institutions, unless they are exempt, to collect certain information from their U.S. account holders and report it to their country’s tax authority, which will then report the information to the IRS,” explains accountant Jay Bakst, a partner in the financial services practice of EisnerAmper LLP, an advisory and accounting firm in New York.

Institutions in countries that have yet to ink an intergovernmental agreement must enter into an agreement with the IRS to report directly to it or face 30-percent withholding on certain income from U.S. sources.

Reportable data includes the client’s name, address and tax identification number, plus information on account deposits, withdrawals and balances. Reporting begins in 2015, when 2014 account data will be furnished to the IRS.

Considering the Cayman Islands

For advisors and their U.S. clients, the Cayman Islands accord is particularly significant. The British territory’s money and secretive banks, private funds and insurance outfits are popular with affluent Americans, and for some of them the new pact could prove a game changer.

Prior to the Cayman government’s November 29 agreement with the IRS, Cayman banks that didn’t have income from the U.S. — and which were therefore unaffected by FATCA’s withholding on U.S.-source income — had little motivation to comply with the American law.

The same was true for Cayman funds with no U.S. income. But the intergovernmental agreement means an institution will be breaking its own country’s law by failing to report U.S. investors’ information to its government. That is a “strong incentive” to turn over the data regardless of whether withholding would apply, Bakst says.

International Clients

For advisors with international clients, attorney Frank L. Brunetti points out that most IRS intergovernmental agreements are reciprocal. For example, the IRS will be reporting to Costa Rica about its taxpayers in the U.S.

International clients should also be aware that multilateral agreements are expanding, where “multiple countries are sharing in the same exchange-of-information protocol,” says Brunetti. He is a partner at Scarinci Hollenbeck in Lyndhurst, N.J., as well as an academic observer to the United Nations Committee of Experts on Cooperation in International Tax Matters.

“Governments are cooperating with each other because they are looking for revenue, and they’re getting much better at it with the technology and the laws,” Brunetti says. “There are not many places for the international billionaire to hide assets anymore.”

Credit: Eric Reiner

If you have any questions relating to tax law, please do not hesitate to contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or to schedule a free initial consultation.

Keep Your Estate Planning Documents Current

Too often we will responsibly execute legal documents, put them in a safe place and then promptly forget about them. An experienced estate planning attorney can assist with keeping your important legal documents current by making appropriate changes to these documents based upon your life or lifestyle.

There is no set schedule for updating your will, living will, durable power of attorney or living trust, etc. but there are some life events that may serve as a guideline. Some of those events could be getting married or a change in your marital status whether that is a divorce, the death of a spouse or a remarriage. Another may be becoming a parent.

Events That Impact Estate Planning

Other life changing events impact our assets, perhaps making a major purchase like becoming a homeowner or selling a property, receipt of a substantial inheritance, moving to another state or even a change in the tax code would merit a review of our important documents. Changes in financial status, whether positive or negative, may warrant an update to your existing estate planning documents or in some instances, be better served by more complex legal documents.

Retirement is another milestone that can impact estate planning with regard to changes in financial needs and status. Sometimes life challenges like becoming disabled or other serious physical ailments may force us to re-evaluate our needs. Also, as we advance in years or experience negative changes to our health, we may wish to modify our estate planning documents.

It is important to periodically contact your attorney so that you can discuss life changes, review your important legal documents and effectively plan for the future. Like any successful partnership, you will want to trust and be comfortable with the lawyer with whom you choose to do business. Evaluate your research, use common sense and hire the attorney you feel will best represent and champion your needs.

If you have any questions regarding estate planning or estates and trusts in general, please contact Joseph Maya and the other experienced attorneys at Maya Murphy, P.C. at (203) 221-3100 or to schedule a free initial consultation.