2 options for creating a charitable legacy: Lifetime gifts and charitable bequests at death

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A single joint living trust with your spouse can simplify the management of shared assets, but separate trusts may offer enhanced asset protection and tax planning opportunities. Which option is right for your estate plan depends on a variety of factors, including your and your spouse’s combined assets, financial goals, family circumstances and applicable state law. Living trust benefits There are many benefits of including a living trust (also known as a “revocable” trust) in your estate plan. This trust type allows you to minimize probate expenses, keep your financial affairs private and provide for the management of your assets in the event you become incapacitated. Importantly, a living trust also offers flexibility: You’re free to amend the terms of the trust or even revoke it altogether at any time. A single joint trust If you’re comfortable with your spouse inheriting your combined assets (and vice versa), a joint trust can be a good choice because of its simplicity. It avoids the need to divide assets between two separate trusts, and funding the trust is a simple matter of transferring your combined assets into it. In addition, during your lifetimes, you and your spouse have equal control over the trust’s assets. This can make it easier to manage and conduct transactions involving the assets. But it can be a negative for spouses who aren’t comfortable sharing control of their combined assets. Separate trusts Not wanting to share control of assets is one reason to set up separate trusts. Another is asset protection. If shielding assets from creditors is a concern, separate trusts can offer greater protection. With a joint trust, if a creditor obtains a judgment against one spouse, all trust assets may be at risk. But a spouse’s separate trust is generally protected from the other spouse’s creditors. Also, when one spouse dies, his or her separate trust becomes irrevocable, making it more difficult for creditors of either spouse to reach the trust assets. Keep in mind that the degree of asset protection a trust provides depends on the type of debt involved, applicable state law and the existence of a prenuptial agreement. Don’t forget to consider taxes For most married couples today, federal gift and estate taxes aren’t a concern. This is because they enjoy a combined gift and estate tax exemption of $30 million in 2026 (adjusted annually for inflation ). However, if your family’s wealth exceeds the exemption amount, or if you live in a state where an estate or similar “death” tax kicks in at lower asset levels, separate trusts offer greater opportunities to avoid or minimize these taxes. For example, some states have exemption amounts as low as $1 million or $2 million. In these states, separate trusts can be used to maximize each spouse’s exemption amount and minimize exposure to state death taxes. It’s also important to consider income tax. As previously mentioned, when one spouse dies, his or her separate trust becomes irrevocable. That means filing tax returns for the trust each year and, to the extent trust income is accumulated in the trust, paying tax at significantly higher trust tax rates. A joint trust remains revocable after the first spouse’s death — it doesn’t become irrevocable until both spouses have died. In this case, income is taxed to the surviving spouse at his or her individual tax rate. Arriving at a decision There’s no one-size-fits-all answer when deciding between a joint living trust and separate trusts. What works well for one married couple may not be the best choice for another, especially as family dynamics, wealth and tax laws evolve over time. If you’re unsure whether having one or two trusts better fits your needs, we can help. Contact us today. © 2026 

Whether you’re launching a start-up, expanding into different markets, developing a new product or pursuing a business acquisition, attracting investors requires more than a good idea. Investors want to see a compelling opportunity supported by solid financials and a realistic growth plan. One of the most effective ways to communicate all of this is with a digital presentation known as a pitch deck. Here’s how to build yours. Short and sweet Most investors review dozens of investment opportunities each year. So your pitch deck should capture their attention quickly by explaining what your business does, why it matters and why now is the time to invest. Early in the presentation, lay out: Your business’s mission and long-term vision, The problem your business solves, Your unique value proposition, The amount of funding you’re seeking, and How investment will help achieve specific business objectives. Keep it brief, with no more than 10 to 12 slides. You can share additional financial schedules and technical documentation later in the process. Defining the opportunity An effective pitch deck clearly defines the market opportunity. Be sure to explain the solutions you’re offering by using straightforward language and avoiding unnecessary technical jargon. And describe your target market using credible research and realistic assumptions. Include information about market size, customer demographics, industry trends and expected growth. Next, discuss revenue generation. Describe your pricing strategy and business model, including whether you’ll pursue sales through subscriptions, direct sales, licensing or other channels. Talk about your marketing plans as well. Investors will want to know how you’ll build brand awareness and acquire and retain customers. Existing customer relationships, strategic partnerships, recurring revenue and a growing social media presence can strengthen your case. People and financials Investors often invest in people as much as ideas. Introduce your leadership team and explain why it’s qualified to execute your business plan. Highlight relevant industry experience and previous entrepreneurial success. If your management team has complementary skill sets, emphasize how those strengths work together. Financial information should reinforce your story rather than overwhelm it. Use charts and graphs to illustrate historical performance, revenue growth, profit margins and future projections. Forecasts should be ambitious but grounded in reasonable assumptions and current market conditions. Investors also appreciate evidence that your business is gaining momentum. If applicable, include key metrics such as customer growth, recurring revenue, retention rates, strategic partnerships, product milestones and other measurable achievements. Equally important is explaining how you intend to use the capital you’re raising. Break down how the funds will be allocated to, for example, hiring, expanding operations, developing products and purchasing equipment. Focus on substance Increasingly, entrepreneurs are using AI to develop pitch decks. AI-powered software can assist with design, organization and content suggestions. However, if you use AI, be sure to review all financial information and statistics to ensure accuracy and content to ensure personalization. Experienced investors can usually recognize generic or overly polished presentations that lack substance. Be sure to contact us for other pitch deck suggestions. We can help you develop reliable financial data that strengthens your overall investment presentation, making you more likely to get to “yes.” © 2026 

Last year, the new tax deduction for taxpayers 65 and older was sometimes referred to as “no tax on Social Security.” In actuality, this up-to-$6,000-per-individual deduction, also known as the “senior” deduction, is generally available whether or not someone receives Social Security benefits. (But other limits do apply, such as an income-based phaseout.) Of course, the senior deduction can help reduce taxes on Social Security benefits. However, some retirees are already exempt from tax on Social Security, while others may have to report benefits that far exceed their senior deduction. How much of your Social Security benefits must be reported as taxable income depends on your provisional income, your overall income and IRS thresholds. How much is your provisional income? The first step in calculating provisional income is subtracting your Social Security benefits from your adjusted gross income (AGI). AGI is your income from taxable sources after certain so-called “above-the-line” adjustments but before the standard deduction or itemized deductions and certain other deductions, such as the senior deduction, are applied. Examples of above-the-line adjustments include traditional IRA contributions, Health Savings Account contributions and student loan interest. Because many Social Security recipients have fewer of these adjustments (or none at all), their AGI is often close to (or even the same as) their total income from taxable sources. After your Social Security benefits have been subtracted from your AGI, the following are added to it: 50% of Social Security benefits, Any tax-free municipal bond interest income, Any tax-free interest on U.S. Savings Bonds used to pay college expenses, Any tax-free adoption assistance payments from your employer, Any deduction for student loan interest, and Any tax-free foreign earned income and housing allowances, and certain tax-free income from Puerto Rico or U.S. possessions. The result is your provisional income. Once you know your provisional income, you can see what portion, if any, of your Social Security benefits will be subject to income tax. Will all your benefits be tax-free? Generally, your Social Security benefits will be federal-income-tax-free if: Your provisional income is $32,000 or less and you file a joint return with your spouse, or Your provisional income is $25,000 or less and you don’t file jointly — unless you’re married and file separately from your spouse who lived with you at any time during the year (in which case, see “Will up to 85% of your benefits be taxable?” below). These thresholds went into effect in 1984 and have never been adjusted for inflation. As a result, the number of retirees subject to federal tax on some of their Social Security benefits has been increasing over the years. Also keep in mind that you might owe state income tax even if you don’t owe federal tax, depending on your state. Will up to 50% of your benefits be taxable? Generally, up to 50% of Social Security benefits must be reported as taxable income on Form 1040 if: Your provisional income is over $32,000 but not more than $44,000 and you file jointly, or Your provisional income is over $25,000 but not more than $34,000 and you don’t file a joint return (again — unless you’re married and file separately from your spouse who lived with you at any time during the year). In general, the taxable portion of Social Security benefits gradually increases as provisional income rises. So if your provisional income is near the bottom of the range, you may have to report only a small portion of your benefits as taxable income. If your provisional income is near the top, you may have to report close to 50%. However, the reportable percentage also is affected by the amount of your Social Security benefits relative to other income. Will up to 85% of your benefits be taxable? Generally, up to 85% of Social Security benefits must be reported as taxable income on Form 1040 if: Your provisional income is over $44,000 and you file jointly, or Your provisional income is over $34,000 and you don’t file a joint return (unless you file a separate return from your spouse who lived with you at any time during the year, in which case you must report up to 85% of your benefits if your provisional income is above $0). The exact percentage depends on the amount by which your provisional income exceeds the applicable threshold and the size of your Social Security benefits relative to other income. Project provisional income and plan If you have to report a portion of your Social Security benefits as taxable income, smart tax planning can potentially reduce or even eliminate the liability. We can help you accurately project your provisional income, assess your eligibility for the senior deduction and review your overall tax situation to identify strategies that make sense for you. © 2026 

Start-ups must choose a legal entity for their business activities. The type of entity you select affects how the business is taxed and who may be held personally liable for its debts and obligations, among other things. Two popular options — assuming you’re going into business with one or more other people — are S corporations and multimember LLCs treated as partnerships for tax purposes. Both are pass-through entities, meaning tax items pass through to the individual owners and are reported on their personal federal income tax returns. And both offer liability protection. But there are subtle differences to factor into your decision. Here’s a closer look at the pros and cons of each. Multimember LLCs A multimember LLC essentially combines the legal advantages of corporations with the tax benefits of partnerships. If you operate your business as an LLC, your personal assets are generally protected from exposure to entity-related liabilities under applicable state law. In addition, all LLC members can participate in management without losing their liability protection (unlike partners in a limited partnership). Members of this type of LLC are subject to the federal income tax rules for partners. That means your share of the LLC’s taxable income items, gains, losses, deductions and credits will pass through to you and be reported on your personal return. The LLC itself doesn’t owe federal income tax. In addition to paying income taxes on your share of the LLC’s income, you may owe self-employment tax on that income. This includes Social Security tax at a rate of 12.4% on the first $184,500 of self-employment income in 2026 and Medicare tax of 2.9% on all self-employment income. However, half of your self-employment tax is deductible on your return. It’s also important to note that this business structure isn’t available to all businesses. Certain types of professional practices may be prohibited from operating as LLCs under the laws of some states or applicable professional standards, such as state bar association rules. S corporations An S corporation is a special tax designation available to qualifying domestic corporations. Like a traditional C corporation, an S corporation shields its shareholders from personal liability for the corporation’s debts. At the same time, it provides many — though not all — of the tax benefits associated with partnerships. If you structure your start-up as an S corporation, your share of the business’s taxable income items, gains, losses, deductions and credits will pass through to you and be reported on your personal return. The entity itself doesn’t owe federal income tax. S corporations have one important advantage over LLCs treated as partnerships: Shareholder-employees aren’t required to pay self-employment tax on their shares of the profits, provided they receive “reasonable” compensation that’s subject to Social Security and Medicare taxes. However, there are some downsides to consider. Notably, some partnership tax rules that apply to multimember LLCs and their members are significantly more favorable than the rules that apply to S corporations and their shareholders. Here are some examples: LLC members receive additional tax basis for loss deduction purposes from entity-level liabilities, but S corporation shareholders receive additional tax basis only from loans they make to the corporation. This difference allows LLC members to deduct more losses. When an LLC member purchases an interest from another member, the tax basis of the new member’s share of LLC assets can be stepped up. This lowers the new member’s tax obligation when LLC assets are sold or converted to cash. LLCs and their members have greater flexibility to arrange tax-free transfers of assets (including cash) between themselves. In addition, LLCs can make disproportionate allocations of taxable income, losses and other tax items among their members. In contrast, S corporations must allocate all pass-through tax items among the shareholders strictly in proportion to their stock ownership percentages. Also, be aware that not all entities are eligible to make a Subchapter S election. S corporations must comply with strict requirements that limit the number and types of shareholders, prohibit complex capital structures, and impose other restrictions (such as transfers to ineligible shareholders). Make a tax-smart choice Choosing your business entity requires careful consideration. Taxes play a pivotal role in this decision. Electing S corporation status or forming an LLC that’s treated as a partnership for tax purposes can provide tax advantages, but only if you structure the entity correctly. Before making your decision, consult with us. We can work with you and your legal advisors to determine the optimal setup for your situation. © 2026 

When a loved one passes away, settling his or her financial affairs can be an emotional and complex task. One legal process that often comes into play is probate. Understanding how probate works — and implementing strategies to minimize or avoid it — can help you protect your assets and simplify matters for your family after your death. Downsides (and upsides) of probate Probate is a legal procedure in which a court establishes the validity of your will, determines the value of your estate, resolves creditors’ claims, provides for the payment of taxes and other debts, and transfers assets to your heirs. Depending on applicable state laws, the probate process can be expensive and time consuming. Not only can probate reduce the value of your estate due to executor and attorney fees, but it can also force your family to wait through weeks or months of court hearings. In addition, probate is a public process, so you can forget about keeping your financial affairs private. However, there are instances where the probate process can work in your favor. Under certain circumstances, for example, you might feel more comfortable having a court resolve issues involving your heirs and creditors. Another possible advantage is that probate places strict time limits on creditor claims and settles claims quickly. Simple strategies to avoid probate The simplest ways to avoid probate involve designating beneficiaries or titling assets so they can be transferred directly to beneficiaries outside of your will. So, for example, have appropriate, valid beneficiary designations for assets such as life insurance policies, annuities, IRAs and other retirement plans. For assets such as bank and brokerage accounts, consider the availability of pay on death (POD) or transfer on death (TOD) designations, which allow these assets to avoid probate and pass directly to your designated beneficiaries. Keep in mind that while the POD or TOD designation is permitted in most states, not all financial institutions offer this option. Strategies for homes and other real estate Some people avoid probate on their homes or other real estate (as well as bank and brokerage accounts and other assets) by holding title with a spouse or child as “joint tenants with rights of survivorship” or as “tenants by the entirety.” But joint ownership has several significant drawbacks. First, unlike with beneficiary designations, once you retitle property you can’t change your mind. Second, holding title jointly gives your spouse or child some control over the asset and exposes it to his or her creditors. Finally, adding someone to the title may be considered a taxable gift of half the asset’s value. A handful of states permit TOD deeds, which allow you to designate a beneficiary who’ll succeed to ownership of your real estate after you die. TOD deeds allow you to avoid probate without making an irrevocable gift or exposing the property to your beneficiary’s creditors. Strategies using trusts For larger, more complicated estates, a living trust (sometimes called a revocable trust) is generally the most effective tool for avoiding probate. It involves setup costs but allows you to manage the disposition of your wealth in a single document while retaining control and reserving the right to modify the trust’s terms. Assets in the trust will be distributed to your heirs according to the trust’s provisions, without having to go through probate. Other types of trusts can be beneficial for specific situations. For example, placing life insurance policies in an irrevocable life insurance trust (ILIT) can provide significant tax benefits. Making it easy for your family Avoiding probate isn’t appropriate for every situation, but thoughtful estate planning can reduce costs, delays and administrative burdens for your surviving family members. We can help you develop strategies to minimize probate costs, reduce taxes and achieve your other estate planning goals. Contact us today. © 2026 

Every business will eventually face leadership transitions. Whether key people retire, pursue new opportunities or become unable to do their job, your business must maintain continuity. Often, smooth transitions depend on “bench strength.” This refers to the depth of employees prepared to step into critical roles. Developing this internal talent pool is one of the most effective ways to support your succession plan and protect your organization’s stability and well-being. Why it matters Succession plans are only as strong as the individuals available to carry them out. Many organizations identify successors for specific positions. But what if a designated successor leaves your business or is unable to assume the role when needed? Bench strength enhances flexibility by preparing multiple employees to step into critical roles as circumstances change. Cultivating your bench can reduce the risk of operational disruptions and help preserve institutional knowledge. Instead of launching a time-consuming external search if a vacancy arises, your business can promote qualified employees who already understand your culture, customers and strategic priorities. Internal promotions often accelerate leadership transitions while reassuring employees that advancement opportunities exist within your organization. Deeper talent pool To build bench strength, start by identifying promising employees and assessing potential leadership gaps. Regular performance reviews can help you evaluate employees’ skills, career aspirations and readiness for future roles. At the same time, examine upcoming organizational needs and determine which positions are essential for your business’s long-term success. Leadership training, mentoring programs, cross-functional projects and job rotations can help employees gain experience beyond their current responsibilities. For example, a high-performing sales manager might be asked to lead a companywide initiative. A finance leader might participate in strategic planning discussions. These experiences broaden skills and prepare staffers for leadership responsibilities. Connecting the two Bench strength and succession planning are closely related, but they generally serve different purposes. Succession planning focuses on identifying and preparing specific individuals for key leadership positions. Bench strength, by contrast, emphasizes maintaining a broader pool of employees who can fill roles as business needs evolve. The most resilient organizations integrate both activities. Your succession plan should ensure your business has qualified successors for critical leadership positions. Strong bench strength, meanwhile, provides the flexibility to respond to unexpected departures, organizational growth and changing market conditions. Together, these strategies help reduce talent gaps and support long-term business continuity. Move forward confidently Leadership transitions are inevitable, but disruption doesn’t have to be. Organizations that consistently develop internal talent are better positioned to manage change and maintain stability. When leadership transitions become necessary, a strong bench allows your business to move forward confidently, knowing capable successors are ready to step in and lead. For help building your bench and planning for succession, contact us. © 2026 

Home values have risen significantly in many areas of the country over the last several years, leaving some homeowners with substantial gains when they sell. Of course a large profit is generally a good thing. But, depending on the amount of your gain, how long you’ve owned and resided in the home, and your income level, a sale may trigger capital gains tax and, in some cases, the net investment income tax (NIIT). Save tax with the gain exclusion If you’re selling your principal residence and meet certain requirements, you can exclude from tax up to $250,000 of gain ($500,000 for married couples filing jointly). To qualify for the exclusion, you must: Have owned the property for at least two years during the five-year period ending on the sale date. Have used the property as a principal residence for at least two years during the five-year period. (Periods of ownership and use don’t need to overlap.) In addition, you can’t use the exclusion more than once every two years. Be aware of ineligible gain What if you have more profit than your gain exclusion? Any gain in excess of the exclusion generally will be taxed at your long-term capital gains rate (typically 15% or 20%), as long as you owned the home for more than one year. If you didn’t, the gain will be considered short-term and subject to your marginal ordinary-income rate (usually 22% to 37%). If you’re selling a second home (such as a vacation home), it isn’t eligible for the gain exclusion and the entire gain generally will be subject to capital gains tax. But if the home qualifies as a rental property, it can be considered a business asset. In that case, you may be able to defer tax through an installment sale or a Section 1031 like-kind exchange. Watch out for the NIIT When does the NIIT apply to a home sale? If you sell your principal residence and qualify for the gain exclusion, the excluded gain isn’t subject to the 3.8% NIIT. However, gain that exceeds the exclusion is subject to the NIIT if your modified adjusted gross income (MAGI) is over a certain amount. Gain from the sale of a vacation home or other second residence, which doesn’t qualify for the exclusion, may also be subject to the NIIT. The NIIT applies only if your MAGI exceeds $200,000 ($250,000 for joint filers or $125,000 for married taxpayers filing separately). If your MAGI is above the applicable threshold, additional factors will affect your NIIT liability. Be aware that the NIIT kicks in before the top long-term and ordinary-income rates apply. Keep track of your basis Gain on your home is calculated by subtracting your tax basis in the home from the sale price. Your basis generally includes what you paid for the home plus major improvements you made to it. To support an accurate basis, be sure to maintain complete records, including information about your original cost and subsequent improvements (such as a kitchen remodel or a new roof). But basis-increasing improvements don’t include maintenance and repairs (such as painting your kitchen or fixing a leak in your roof). Also, you must reduce your basis by any casualty losses or depreciation claimed for business use (such as if a portion of your home was rented out or you claimed the home office deduction). If your basis is more than what you sell your home for, your loss generally won’t be deductible. But if a portion of your home was rented out or used exclusively for business, the loss attributable to that part may be deductible. Plan for the tax impact A home sale can be tax-free or create a sizable tax liability — or result in a tax bill between those extremes. If you’re thinking about selling your home, it’s important to know the potential tax impact. Contact us before putting your home on the market so we can help you estimate the tax impact and discuss possible planning opportunities. © 2026 

Do you operate a side gig in addition to your regular day job? Whether you’ve turned a love for crafting into an online store or you play the guitar at a local venue, you’ll need to report the income from your sideline activity on your tax return. But can you deduct the related expenses? The answer depends on whether the IRS classifies your activity as a business or a hobby. Let’s take a closer look. Why the distinction matters If your activity incurs significant expenses — or even losses in some years — how the IRS classifies it can have a major impact on your taxes. For-profit businesses can deduct “ordinary and necessary” business expenses. So, if you operate an unincorporated for-profit business activity that generates a net tax loss for the year (deductible expenses in excess of revenue), you can use the loss to offset income from other sources, such as salary and self-employment income, subject to annual limits. In 2026, the limit is $256,000 ($512,000 for married couples filing jointly). You can carry any excess losses forward to later tax years. Conversely, hobbies receive less favorable treatment. Before 2018, hobby expenses could be claimed as miscellaneous itemized deductions subject to the 2% of adjusted gross income floor. Recent tax law changes permanently repealed itemized deductions for miscellaneous business expenses. So you generally can’t deduct hobby-related expenses for federal income tax purposes — even though you’re still required to report 100% of hobby-related income. Potential safe harbors for profitable ventures If you can show a profit motive for your sideline activity, the IRS will classify it as a for-profit business, and you can generally write off related expenses as the cost of doing business. Two safe harbors create a presumption that an activity is engaged in for profit: Your activity produces positive taxable income (revenues in excess of deductions) for at least three out of every five years. You’re engaged in a horse racing, breeding, training or showing activity, and your activity produces positive taxable income in at least two out of every seven years. Proactive tax planning can help you qualify for these safe harbors — and earn the right to deduct your losses in unprofitable years. Factors that demonstrate a profit motive If you aren’t eligible for one of the safe harbors but can demonstrate an honest intent to make a profit, you may still be able to treat your side gig as a for-profit business. After all, many start-ups take years to become profitable. Questions the IRS considers when determining whether your activity is a business or a hobby include: Do you carry on the activity in a business-like manner? Does the time and effort put into the activity indicate an intention to make a profit? Do you depend on income from the activity? If there are losses, did they occur due to circumstances beyond your control or in the start-up phase of the business? Have you changed methods of operation to improve profitability? Do you (or your advisors) have the knowledge needed to carry on the activity as a successful business? Have you made a profit in similar activities in the past? Does the activity make a profit in some years? Do you expect to make a profit in the future from the appreciation of assets used in the activity? The degree of personal pleasure you derive from the activity is also a factor. For example, most people would say that woodworking is more fun than working in a high-stress executive position — so the IRS is far more likely to classify the former is a hobby if you start claiming recurring losses on your tax returns. Year-by-year determination The IRS tests each year separately when determining whether an activity is a for-profit business or a hobby. So what once was considered a hobby can become a business — and vice versa. However, you generally bear the burden of proving your profit motive each year. For example, you might be able to persuade the IRS that you’ve established a profit motive by keeping more detailed records, advertising and devoting more time to your side gig. It also helps to report profits for a few years, rather than just recurring losses. In fact, a pattern of losses over multiple years can sometimes trigger IRS scrutiny of whether an existing business is operating with a profit motive. Start planning now If you have a side business that isn’t yet profitable, we can evaluate your situation and offer suggestions to help improve your odds of business tax treatment. But don’t wait until year end — many factors the IRS considers when evaluating your profit motive require proactive planning throughout the year. We can help strengthen your position in case the IRS questions your deductions. Contact us to learn more. © 2026