Occasionally, I run across a great article written by someone else. Today is one of those days and I just had to share it with you. Clients are often confused when they come in for initial consultations and have preconceived notions about planning their estates based on things that they’ve heard from their friends, neighbors, hairdresser, etc. Most of the time the information shared is incorrect, or at least incorrectly applied to their situation. This article does a great job of debunking the most popular “myths” of estate planning. I only added one little thought in bold below. Thank you to my colleague, Attorney Gina Barry, from Bacon & Wilson in Springfield for putting this article together…. and as far as I know unicorns are still mythical creatures. [Read more…]
Letting Software or Online Service Plan Your Estate: Is It Worth the Risk?
There are several websites that offer customized, do-it-yourself wills and other estate planning documents. These computer-based services appear to offer the consumer a cost-effective and convenient alternative to visiting an Estate Planning or Elder Law attorney. Or do they? Is online estate planning worth the convenience and initial savings? How do the documents created compare to those that a qualified attorney would produce? [Read more…]
Aging With Dignity: LGBT Seniors
Aging with dignity is not always an easy task, especially for LGBT seniors who can feel isolated from a society that continues to not always welcome them. In fact homophobia and discrimination can run rampant within an assisted living and/or long-term care facility, especially from the other residents, and leave these elders feeling depressed, isolated, and alone. Many times these elders refer to their partners as siblings to avoid any unnecessary scrutiny by other residents. In 2007, The New York Times ran an article that opened some eyes to the challenges of being gay in a nursing home. Fortunately, Massachusetts is a fairly progressive state with organizations that are interested in the well-being of LGBT residents. [Read more…]
No, You Can’t Just Give It Away! The Dangers of Gifting When Considering Long Term Care
Hardly a day goes by when I don’t have a client who tells me that they can give away a certain amount of money free and clear, avoiding look-back periods for long-term care planning. They inform me that their neighbor, friend, or cousin told them that this is allowable. I then have the unfortunate task of telling them that they are wrong and that most states that have enacted the Deficit Reduction Act. After February 8, 2006, the rules relative to gifts changed.
Regardless of the amount, any gift that is made is a transfer and is subject to a look-back period of five-years for MassHealth (Medicaid) purposes. This doesn’t mean that the State will take that money, but rather, that the State will not pay for the donor’s long-term care costs until the five-year look-back is exhausted, or in the alternative, until all the gifts that have been transferred are used to pay for the institutionalized person’s care. [Read more…]
Irrevocable Trusts & the Current Federal Estate Tax (IRC 1022), Friend or Foe?
The following is a repost of a blog recently written by Attorney Dale Krause of Krause Financial Services. Attorney Krause is also a fellow member of the National Academy of Elder Law Attorneys (NAELA).
An Irrevocable Trust can offer a grantor lifetime control over his or her assets of the trust is established with the following provisions:
- All taxable income shall be disbursed to the grantor;
- The grantor shall have the right to direct how the trust assets are held or reinvested; and
- The grantor shall have a limited power of appointment over the final distributions of the trust; this power shall be in favor of a limited class of beneficiaries, consisting of the grantor’s children and grandchildren; the disbursements do not have to be in equal amounts or shares. [Read more…]
Congress Does Unthinkable by NOT Addressing Estate Tax
Who wants to ring in the New Year with uncertainty? Well, that’s what Congress did by not getting around to extending the estate tax before December 31, 2009. Many experts believed this would NEVER happen. I discussed this in several past blog entries in September and December of last year.
Flashback to 2001: At that time, a largely Republican coalition in Congress tried to repeal the estate tax completely, but they were unable to get past a filibuster. So, instead, the changes were put into the tax code when then-President George W. Bush signed a bill that was designed to phase out the estate tax so that by January 1, 2010, the estate tax would no longer exist. However, since this was done through the tax code, Congress would have to revisit the changes within ten years, or the estate tax would come back into effect on January 1, 2011, at a higher rate. Generally all experts in the field believed that Congress would act and not allow the estate tax to disappear completely in 2010. But, Congress was so busy debating health care reform this fall that we have entered 2010, and the estate tax is temporarily gone. [Read more…]
Congress is Down to the Last Hour When it Comes to the Estate Tax Sunset Rules
Tick, tick, tick… The clock is ticking for Congress to act to extend/amend the current estate tax laws. They have about three weeks to prevent the federal estate tax to disappear all together in 2010. Experts agree that it is unlikely for Congress not to act.
The question is, however, will they act in time? [Read more…]
Congress Begins to Work on the Federal Estate Tax
Experts view the current Federal Estate Tax system as a ticking time bomb. Some don’t consider planning for estate taxes because the 2009 threshold is set at $3.5 million. In other words, if you die in 2009 owning less than $3.5 million in total assets, you are not subject to a Federal Estate Tax.
If you die in 2010, as the law currently is written, no one owes estate tax, even if they had one hundred billion dollars (Dr. Evil reference, couldn’t resist). But here’s the rub: if you pass in 2011, the threshold reverts back to $1 million dollars. [Read more…]