Kari Skauge is the new kid on the block at Heartland Trust. She came onboard this quarter as our compliance officer. We are very glad to have her.

Tell us about yourself

I grew up in Hawley, Minnesota, and then attended the University of North Dakota where I earned a degree in business management. I started my career in the financial industry in 2013 and found my niche with compliance. Through our journey, my husband and I ended up building a home on the same farm where I grew up. I can honestly say, there is no place like home!

What do you like to do in your spare time?

I like to spend time with family playing pinochle and cribbage, traveling, ice fishing, snowmobiling, and skiing. My favorite chore is mowing the lawn – there is nothing more relaxing!

Adapted from Broadridge Investor Communication Services

If you give away money or property during your life, those transfers may be subject to federal gift and estate tax and perhaps state gift tax. The money and property you own when you die (i.e., your estate) may also be subject to federal gift and estate tax and some form of the state death tax. These property transfers may also be subject to generation-skipping transfer taxes. You should understand all of these taxes, especially since the passage of the Economic Growth and Tax Relief Reconciliation Act of 2001 (the 2001 Tax Act), the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Tax Act), the American Taxpayer Relief Act of 2012 (the 2012 Tax Act), and the Tax Cuts and Jobs Act. The recent Tax Acts contain several changes that make estate planning much easier.

Background on federal gift and estate tax

Under pre-2001 Tax Act law, no federal gift and estate tax was imposed on the first $675,000 of combined transfers (those made during life and those made at death). The tax rate tables were unified into one — that is, the same rates applied to gifts made and property owned by persons who died in 2001. Like income tax rates, gift and estate tax rates were graduated. Under this unified system, the recipient of a lifetime gift received a carryover basis in the property received, while the recipient of a bequest, or gift made at death, got a step-up in basis (usually fair market value on the date of death of the person who made the bequest or gift).

The 2001 Tax Act, the 2010 Tax Act, the 2012 Tax Act, and the Tax Cuts and Jobs Act substantially changed this tax regime.

Every six years the Internal Revenue Service (IRS) requires certain qualified retirement plans to be fully amended and restated to comply with law changes. The Cycle 3 Defined Contribution (DC) Plan Restatement period began on August 1, 2020, and plan sponsors of defined contributions plans (401(k), profit-sharing, and money purchase pension plans) will have until July 31, 2022, to comply. Plans that do not restate their plan document by this date will be subject to IRS-imposed penalties, which, in extreme cases, could jeopardize the plan’s tax-qualified status.

So why is this important? Plan documents are the framework that an individual retirement plan must follow. They are drafted based on laws and regulations set forth by three federal regulators: Congress, the Treasury Department (IRS), and the Department of Labor (DOL). The IRS is the main overseer, and it has the ability to “pre-approve” plan documents. 

Naomi is a native of Garrison, North Dakota, and she has called Fargo home since 2002. She works on the trust side of HTC and has been a welcome addition to our team.

Tell us about yourself.

I received both an associate of science and an associate of arts degree from Williston State College. I continued my education and received a bachelor of arts degree in communications from North Dakota State University. Go Bison!

Adapted from Broadridge Investor Communication Services

If you care about what happens to your money, home, and other property after you die, you need to do some estate planning. There are many tools you can use to achieve your estate planning goals, but a will is probably the most vital. Even if you are young or your estate is modest, you should always have a legally valid and up-to-date will. This is especially important if you have minor children because, in many states, your will is the only legal way you can name a guardian for them. Although a will does not have to be drafted by an attorney to be valid, seeking an attorney’s help can ensure that your will accomplishes what you intend.