Estate planning is more than just writing a will

Estate planning is more than just writing a will

The term “estate planning” covers a broad set of topics and can be both confusing and overwhelming to anyone who isn’t familiar with the concept. There is a wide variety of estate planning strategies available. Regardless of wealth, everyone should consider establishing a plan for themselves and their families. What is estate planning? Simply put, it’s the process of ensuring your assets are distributed according to your needs, wants and wishes. It also includes other matters like powers of attorney and advanced medical directives, which help dictate how finances and medical care are handled in the event you become incapacitated. There are a number of different estate planning techniques ranging from relatively straightforward to extremely complex. As an estate planning introduction, let’s focus on three fundamental elements: Wills Trusts Charity   Wills Most people understand what a will is, but what exactly does it do, and more importantly, what doesn’t it do? The goal of a will is to designate who receives your assets after you’ve passed, including any charities you would like to support. A will also allows you to name someone to oversee the distribution of your estate. The named individual is called the “executor” or “executrix.” One

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Four year-end tax strategies to consider

It’s hard to believe we’re fast approaching the end of 2019, but it’s true. Here are four things to consider as you weigh potential tax moves between now and the end of the year. 1. Be smart about your charitable giving If you’re already inclined to donate to charity, then consider donating appreciated securities rather than cash to your favorite charity or to a donor advised fund. Donors who can afford to put away more than $100,000 may want to consider starting a charitable lead trust (CLT). Charitable lead trusts are designed to provide income payments to at least one qualified charitable organization for a period measured by a fixed term of years, the lives of one or more individuals, or a combination of the two; after that, trust assets are paid to either the grantor or to one or more noncharitable beneficiaries named in the trust instrument. 2. Maximize retirement savings Deductible contributions to a traditional IRA and pre-tax contributions to an employer-sponsored retirement plan such as a 401(k) can reduce your taxable income. If you haven’t already contributed the maximum amount allowed, consider doing so by year-end. If you’re a business owner, consider opening a traditional 401(k) profit

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5 tips for tax-smart charitable giving in 2018

U.S. tax law has changed since you filed your federal taxes for 2017; the Tax Cuts and Jobs Act takes effect for 2018 tax filings. Since charitable giving is one of the few deductions that wasn’t eliminated or capped, donations to registered nonprofits are one of the best ways to reduce tax payments for taxpayers who itemize. If charitable giving plays a role in your tax filing, here are five things you should keep in mind for tax-smart strategic giving and your 2018 taxes. 1. Start planning now If you plan to claim charitable donations on your 2018 taxes, it’s a good idea to start talking to your financial advisor now so you have time to make informed decisions. If you received a windfall or more taxable income than you expected this year, charitable giving can be especially important to help offset the corresponding increase in taxes. This could apply if, for example, you got a big bonus this year, if you sold a business, or if the assets in your portfolio greatly increased in value in 2018.   2. Evaluate your options for HOW to give You may already know which charities you want to support, but from a

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Turn lemons into lemonade during periods of volatility

Staying focused on the bright side is admittedly hard to do when the markets are volatile. Fortunately, there are always some silver linings amid market volatility. For investors who feel the urge to do something in response to the markets, here are four things you can do to help minimize your tax exposure without altering your asset allocation or getting off track from your investment plan: For your taxable accounts, a good strategy is to harvest portfolio losses when volatility strikes in order to offset gains elsewhere in your portfolio. You “harvest losses” when you sell a security that has experienced a loss and use that loss to offset realized gains. The goal is to reduce your overall tax liability in your portfolio. Harvesting throughout the year, in response to market declines, can be a smart way to maximize the value of this strategy. Of course, you’ll want to steer clear of the Internal Revenue Service’s wash sale rules. Market declines can offer you a good opportunity to convert your IRA into a Roth IRA. When an IRA declines in value, the conversion taxes won’t be quite so burdensome. And once in a Roth account, all future growth of those

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Azzad clients to donate more than $4 million in charity this Ramadan

FALLS CHURCH, Va., June 21, 2016 — Azzad Asset Management, a socially responsible, faith-based investment firm, announced today that its Muslim clients are expected to donate a record amount of money this year in order to fulfill their religious obligation of giving in charity a certain percentage of their wealth. The company calculates that its clients will give approximately $3.5 million in mandatory charitable giving, or zakah, and an additional $550,000 in purification dues, bringing the total to more than $4 million. Azzad reports the amounts to clients in an annual statement issued during the month of Ramadan. Many Muslims choose to pay their Zakah during Ramadan–a month of fasting, worship, and giving–which began this year on June 6. “Azzad Asset Management is dedicated to helping American Muslims practice this important pillar of their faith,” said Azzad President and CEO Bashar Qasem, CSAA. “And in today’s challenging climate, it is all the more important to facilitate the good that observant Muslims contribute to their communities. As the financial services industry’s sole provider of tailored zakah calculations for clients, we are pleased to be a part of such a meaningful and socially conscious activity.” Clients are responsible for donating the calculated amounts to the charity or charities of their choice. The Azzad

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Four year-end tax strategies to consider

It’s hard to believe we’re fast approaching the end of 2015, but it’s time to start thinking about the 2015 tax season. Here are four simple yet effective tax minimization strategies to consider before the end of the year: 1.     Harvest capital losses. While the recent market volatility has been frustrating, it does provide opportunities to realize capital losses. With high-income taxpayers facing federal income taxes of up to 23.8% on long-term capital gains, harvesting losses can be an effective way to increase after-tax returns. Before the end of the year, offset gains in your portfolio by selling securities with losses. Be careful to avoid the “wash-sale” rule, which doesn’t allow you to claim losses when you buy replacement securities either before or after you sell substantially identical securities. 2.     Contribute appreciated securities to charities. Donating appreciated securities (held for at least a year) to charity can be a great way to minimize your taxes. You will receive a deduction for the fair market value of the security on your taxes. You’ll avoid paying capital gains tax on that security and the value of your contribution will be enhanced because the charity (as a tax-exempt organization) will also avoid paying

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Azzad clients to give $3.7 million in charity

FALLS CHURCH, Va., July 8, 2015 — Azzad Asset Management, advisor to the Azzad Funds and sponsor of the Azzad Ethical Wrap Program, announced today that its Muslim clients are expected to donate a record amount of money this year in order to fulfill their religious obligation of Zakah, or giving in charity a certain percentage of one’s wealth. The Islamic investment firm calculates that nearly $3.2 million will be given in mandatory charitable giving, with an additional $500,000 in purification dues. The amounts are determined using proprietary software and reported to clients in an annual statement. Clients are responsible for donating the amount to the charities of their choice. The third pillar of Islam, Zakah (sometimes spelled Zakat) is universally recognized among the faithful as an obligation–usually stated as 2.5%–that every Muslim must pay on assets above a minimum threshold if held for a full lunar year. Many Muslims choose to pay their Zakah during Ramadan, a month of fasting, worship, and giving, which began this year on June 18. For this reason, Azzad calculates annual charitable amounts for its wealth management clients during this month. Why Zakah Matters Zakah is an important part of maintaining the Islamic ideal of

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Zakah and Purification: Forgotten Pillars of Islamic Finance?

Most people know the basics of Islamic finance: avoid interest, stay away from prohibited lines of business, and make sure your advisory board has the right credentials. But it’s not every day that people talk about zakah and purification. Both concepts are inseparable from Islamic finance but are regularly omitted from the conversation. Let’s look at why this is and what’s being done about it. Key terms As the third pillar of Islam, zakah is universally recognized among Muslims as a requirement for the proper management of their finances. Every Muslim must pay zakah on certain types of assets that have a value above a minimum amount and that they have owned for at least 12 lunar months. Purification is an essential though lesser known aspect of Islamic investing that involves the donation of income earned from any unacceptable business activities by companies in which a shareholder is invested. Since it is possible to unintentionally earn small amounts of prohibited income from otherwise permissible investments, Islamic scholars advise cleansing accounts of such money. Because zakah is not paid on amounts coming from unacceptable or impure sources, purification amounts are calculated first and then subtracted from account balances before determining zakah

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Azzad clients expected to donate a record $3 million to charity this Ramadan

(Falls Church, Virginia, 7/10/14) – Azzad Asset Management announced today that it has mailed annual Zakah and purification totals to clients. Observant Muslims will use the calculated figures to fulfill their charitable giving obligations for the year. Assuming clients donate the amounts reported on their statements, Azzad representatives say that approximately $3 million will be donated to charitable causes in the United States and abroad. In a statement, Azzad said: “Zakah and purification are essential to the proper practice of halal investing, and we hold ourselves to the highest standard when it comes to calculating accurate amounts for our clients. We are gratified to facilitate the donation of $3 million to those in need, a record-breaking amount for the firm. We remain committed to the ethical, Islamic business practices on which we were founded and look forward to providing this essential service for many years to come, God willing.” In addition to providing asset management and investment advisory services to clients, Azzad is an outspoken advocate of the Seven Tenets of Halal Investing, including zakah and purification, and regularly educates the American Muslim community on these sometimes complex issues. See: Calculating Zakah on Modern Financial Assets (YouTube) As the third

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Azzad issues annual zakah and purification statements to American Muslim clients

(Falls Church, Virginia, 7/24/13) – Azzad Asset Management, advisor to the Azzad Funds and sponsor of the Ethical Wrap Program, announced today that it has completed annual Zakah and purification calculations for investors. Statements have been delivered to clients, who will use the calculated figures to determine their required charitable giving for the year. Assuming clients donate the amounts reported on their statements, Azzad representatives say that approximately $2 million will be donated to charity in the United States and abroad. The firm uses a proprietary, self-developed software program to calculate the amount of money clients are advised give to charity in order to fulfill their religious obligations. Clients disburse the money to the charity or charities of their choice. In a statement, Azzad said: Charity is essential to the proper practice of Islamic investing, and we hold ourselves to the highest standard when it comes to calculating accurate Zakah and purification amounts for our clients. We are honored to help our clients with their religious duties and are gratified to facilitate the donation of close to $2 million to the underprivileged in society. We remain committed to the ethical, Islamic business practices on which we were founded and look

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What to do with your required minimum distributions (RMDs)

Required minimum distributions, better known as “RMDs,” refer to the amount of money that is required to be distributed from pre-tax retirement accounts, like IRAs, after age 70.5. If the amount is not withdrawn, a 50% penalty may be assessed. While some retirees might take the RMD for necessary personal expenses, there are other options available to those who do not need the money. Here are two simple ideas for what you can do if you don’t anticipate needing your RMD: 1)      Convert your IRA to a Roth:  The RMD itself is not available for a conversion (after all, the government wants its tax dollars), but you can convert an IRA account into a Roth IRA. The conversion will be taxable, but the post-tax money can grow in a Roth IRA account tax-deferred afterwards without any RMDs. This is a good solution for those who are looking to leave their IRA account to heirs who may be in the same or higher tax bracket than themselves. Please speak with your investment and tax advisor before doing a Roth conversion as mistakes can be very costly. 2)      Donate to charity: In 2013, up to $100,000 can be transferred directly from an

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