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…]
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.