Is Favoring a Caregiver Child in a Will Unequal?

Category:Estate Planning

Joshua C. Tate, Esq., a professor at Southern Methodist University - Dedman School of Law; University of Pennsylvania Law School, writes a compelling new article about the need for revised thinking is testamentary planning to incorporate unequal distributions to reflect the contributions of a caregiver child.

Abstract: Almost all U.S. states allow individuals to disinherit their descendants for any reason or no reason, but most of the world's legal systems currently do not. This Article contends that broad freedom of testation is defensible because it allows elderly people to reward family members who are caregivers. The Article explores the common-law origins of freedom of testation, which developed in the shadow of the medieval rule of primogeniture, a doctrine of no contemporary relevance. The growing problem of eldercare, however, offers a justification for the twenty-first century. Increases in life expectancy have led to a sharp rise in the number of older individuals who require long-term care, and some children and grandchildren are bearing more of the caregiving burden than others. Recent econometric studies, not yet taken into account in legal scholarship, suggest a tendency among the American elderly to bequeath more property to caregiving children. A competent testator, rather than a court or legislature, is in the best position to decide how much care each person has provided and to reward caregivers accordingly. Law reform, therefore, should focus on strengthening testamentary freedom while ensuring that caregivers are adequately compensated in cases of intestacy.

Slow Medicine - A Different Approach to End of Life Care

Category: Elder Law

A recent New York Times article "For the Elderly, Being Heard About Life’s End" describes the benefits of of "“slow medicine,” an approach that encourages less aggressive — and less costly — care at the end of life."

There is an institutionalized bias to give any and all medical care. However, when a person is in their late 80's or 90's this aggressive care may hinder their quality of life and control over the quality of that life.

Aggressive medical care is sometime an exercise is substituted decision making - I can, so therefore I will. What "slow medicine" seems to promote is the question of - you can, but should you?

The article advised that "slow medicine" is "Grounded in research at the Dartmouth Medical School, slow medicine encourages physicians to put on the brakes when considering care that may have high risks and limited rewards for the elderly, and it educates patients and families how to push back against emergency room trips and hospitalizations designed for those with treatable illnesses, not the inevitable erosion of advanced age."

And the irony to this. As a class of population, the treatments are the most expensive, although the results may be limited. "The costliest patients — the elderly with chronic illnesses — are the only group with universal health coverage under Medicare, leading to huge federal expenditures that experts agree are unsustainable as boomers age. "

Survey Says! Majority of Americans don't have Wills

Category: Estate Planning

In looking for some statistical evidence of the extent to which Americans don't have an estate plan, I came across this Lexis-Nexis Press Release: Majority of American Adults Remain Without Wills, New lawyers.comSM Survey Finds. Of note:

• "[O]ver half (55 percent) of all adult Americans do not have a will, a new survey shows, a percent that has remained virtually unchanged over the past three years."
  
• "Among non-white adults, the lack of wills is even more pronounced. Only one in three African American adults (32 percent) and one in four Hispanic American adults (26 percent) have wills, compared to more than half (52 percent) of white American adults."
  
• "Living wills (also known as medical directives) have jumped in popularity since 2004. Two in five adults (41 percent) now have living wills in place, a full ten percent more than those who had one just three years ago. "
  
• "[T]wo in five (38 percent) American adults report assigning a power of attorney for healthcare purposes, compared to 27 percent in 2004."

Any for answers to the key question "Why don't you have a Will?" Survey Says! the top three are:

"• Ignorance is bliss: One in ten (10 percent) American adults who do not have any elements of an estate plan say it’s because they don’t want to think about dying or becoming incapacitated.

• Where to begin?: Similarly, nearly one in ten (9 percent) adults say they don’t have an estate plan in place because they don’t know who to talk to about creating such documents. This percentage nearly doubled from 2004 (5percent).

• But I don’t need a will: Nearly one in four (24 percent) of adults say their biggest reason for not having an estate plan is a lack of sufficient assets. This was also the top reason cited in the 2004 survey (21 percent)."

Ah, but since a Will is the only place to name guardians for your children, shouldn't that be "sufficient"?

Paid Family Leave now Law in NJ

Category: Elder Law, Business Law and Planning

Hot from njbiz.com, Corzine Signs Paid Leave Bill in 'Legacy Moment' New Jersey's Governor Corzine today signed paid family leave into law. "Calling it a "legacy moment" and a "moral necessity," Gov. Jon S. Corzine today signed into law a bill that will give government and private-sector workers six weeks of paid leave to care for newborns or seriously ill immediate family members."

New Jersey becomes only the second state in the nation to have 6-weeks mandatory paid family leave. The new law is not without its detractors. "Supporters of the bill say the new law will help workers balance their work and family life. Business lobbyists and other critics argue that employers—especially small ones like doctors' offices and car repair shops—cannot afford to lose key workers for up to six weeks at a time. The critics say that becoming the first state in the region to mandate paid leave would further damage the state’s image as a place to do business."

Business owners are obviously concerned that they can't afford key employees to be gone for 6 weeks at a time, regardless of who is paying for the time off. On the flip side, caregivers should take heed of a law that may allow them to devote their full time and efforts to a family emergency without fear of losing their job and all of their salary.

The article outlines the details of the new law are as follows:

"Under the law, workers will get two-thirds of their regular pay, up to $524 per week. Employees could collect the money for up to six weeks and employers would have the option of requiring the workers to first take two weeks of fully paid vacation or sick leave.

The program would be funded by workers, who would pay about 75 cents a week more into the existing state Temporary Disability Insurance fund through payroll deductions. That translates into about $35 per year.

State and federal law now entitles workers to 12 weeks of family leave, but it is unpaid and employers with fewer than 50 employees are exempt. While the new paid family leave bill covers all employers, those with fewer than 50 employees are not required to hold open jobs for workers on paid leave.

Payroll deductions would start on Jan. 1, 2009, with workers able to take paid leave starting July 1, 2009, according to the bill. The Department of Labor estimates that approximately 38,000 individuals, or about 1 percent of New Jersey's work force, will collect benefits annually, but business lobbyists have argued it will be much higher."

Tax Evasion - If it sounds too good to be true, it probably is

Category: Tax Law and Planning


Actor Wesley Snipes has been given the maximum jail sentence of 3 years in federal prison for his failure to pay over $15 million in taxes. Snipes legal team essentially relied on the age old excuse of "but he said it was OK" in trying to sway the judge that he shouldn't be held responsible for following some one's advise to just stop filing tax returns. The "he" in this were a group of "tax protesters" who sold a system to thousands under the auspices of "taxes are illegal and you don't have to pay". There are more details in the Orlando Sentinel. Well, life is tough ladies and gentlemen, and just because you don't want to do something doesn't mean that you don't have to do it anyway (think of kids who have to eat their vegetables).

It is hard to say what is most offensive about the Snipes case. It could be that we all pay our taxes, and who are other people to simply choose not to participate? If you want the tax laws change, that is what the elective process and democracy (and hiring lobbyists) is all about. Or, it could be that some people (look at any recent story from Entertainment Tonight for a list) believe that because they have wealth, they don't have to play by the same rules. Well, let me clue you in on one of Benjamin Franklin's most lasting adages "Certainty? In this world nothing is certain but death and taxes" (and there wasn't even an income tax back then). Or maybe it is that the role of a tax professional is and should be to make sure a person pays their fair share under the law - not more, and not less. Here, "tax protesters" bilked thousands of people that they had the secret of getting rich quick - no more taxes. And I am sure they made millions by selling this idea to people with a lot less resources then Mr. Snipes, whose suffering for their bad decisions will never make the front page (not that there should really be any sympathy for those who bought into the system - but what about their spouses and families?).

Well, we will just have to see how Mr. Snipes looks in his orange jumpsuit what it is not coming from a Hollywood costume trailer.

Parsippany lawyer's practice a senior matter

Category: Elder Law

Elder law is pressing for seniors and their families. The biggest barrier to planning is lack of information. I was happy to do my part this past Sunday in the Daily Record article "Parsippany lawyer's practice a senior matter".


Parsippany lawyer's practice a senior matter
She's one of 39 N.J. attorneys who specializes in elder law
By MARK KITCHIN • Daily Record • April 27, 2008

Deirdre Wheatley-Liss gets the same type of phone call several times a week. It's usually from a man, often a war veteran in his 60s. The house he bought 40 years ago for $4,000 is worth $400,000 now. He and his wife have spent their life raising their children and putting a little bit of money away for their retirement.

Now, one of them is sick and perhaps in need of long-term care and they are wondering, because of the skyrocketing costs of health care, if they will be able to keep their house.
"People call up thinking that their problems are so much different than everybody else," Wheatley-Liss said. "In reality, a lot of them are looking at the same problems."
And those problems are getting larger and more numerous.

Click here for the entire article.

Mandatory Arbitration May be Coming Out of Nursing Home Contracts

Category: Elder Law, Estate Planning, Estate and Inheritance Tax, Business Law and Planning, Tax Law and Planning, Probate and Estate Administration, Financial Planning, Miscellaneous Musings

As I have blogged before in Nursing Home Admission Contracts, Be Aware, Be Very Aware, a careful review of these contracts is a must. A growing concern is that they are drafted to take advantage of a family in the direst of circumstances by using the terms of the the contract to limit their own liability. This can leave a family with no contractual recourse when their loved one does not receive the care they deserve. One example of this is a damages limitation clause to $10,000 - this is obviously inadequate to address damages from a sub-standard level of care. Another favorite is the mandatory arbitration provisions - which eliminates the family's right to go to court. Instead, any disputes are decided by a panel of industry experts. As J. Michael Young, Esq. points out in his posting Mandatory Arbitration, in his new blog Texas Probate Litigation not only can arbitration be much more expensive than litigation (you are paying the arbitrators as well as your attorney):

Apart from the cost issue, Defendants often prefer mandatory arbitration because the arbitrators are drawn from the industry and perceived to be more conservative than a jury in awarding damages. For that reason, mandatory arbitration clauses are often attacked as unfair, particularly when the parties are in positions of unequal bargaining.

These clauses are becoming increasingly favored by nursing homes trying to limit liability for substandard care. However,nothing would seem more unequal than an elderly patient "negotiating" with the management of a nursing home. The reason people are admitted to nursing homes is because of failing physical and/or mental
health. Not an ideal circumstance for well informed, arms-length negotiating.

As this article details, Congress has become concerned and a bipartisan bill in the US Senate would curtail the use of such clauses, particularly as a pre-requisite for care.
I imagine this bill has a decent chance of passage, but would likely face a veto from President Bush.

A senisble bill coming out of Congress - who would have thunk it? But note the veto forecast.

Is your Life Insurance Rated due to Travel?

Category: Financial Planning

Life insurance companies are allowed to "rate" policies, i.e.: charge higher premiums, based on factors such as health or lifestyle. Up until yesterday, in New Jersey, one of those lifestyle factors was travel. However, Governor Corzine just signed legislation prohibited insures to rate policies based on travel.

From Scott Goldstein at NJBiz - Corzine Signs Bill Ending Life Insurance Denial Based on Travel

Life insurance companies can no longer charge higher premiums to people based on past and future travel plans to places like Israel and Indonesia, according to a bill (A-1586) signed into law yesterday by Gov. Jon Corzine.

The new law, which takes effect immediately, prohibits companies from determining premiums or denying insurance "based on an individual's intent to travel abroad, unless the decision is based on sound actuarial principles."

What does this mean to you? If your present policy was rated for travel (which applies to many New Jersey executives of global companies) you may want to look at replacing the policy as you may get a lower premium.

Estate Tax in the Spotlight Again

Category: Estate and Inheritance Tax

Congress is again considering a permanent modification to the federal estate tax.

At present, US residents have a $2 million exemption from federal estate tax. That exemption is scheduled to increase to $3.5 million in 2009. There is NO federal estate tax in 2010, and the federal estate tax in re-instituted in 2001 with a $1 million exemption. (Doesn't congress just make the clearest laws).

The Senate recently voted 99-1 in favor or a proposal to fix the exemption permanently at the 2009 levels. This would be good as it would impose some certainty on planning, and remove the incentive for wealthy heirs to have the parents not survive past 2010 (the dark side to a 1 year repeal). Of course, this is merely a resolution, not a law, but it is interesting that it comes to the forefront again in an election year in the midst of a recession.

Enticing the "elderly" to turn in their driver's licenses?

Category: Elder Law, Miscellaneous Musings

We all complain about other drivers, particularly here in New Jersey where we probably have the most awful traffic, road conditions and convoluted traffic patterns (we can't just turn left - we have a lovely invention called jug-handles instead) in the country.

Elderly drivers tend to get much of the ire - for right or for wrong. In Japan, they are trying to entice "elderly" drivers to turn in their licences ("elderly" is in quotes as they define it as 65 - odd for the country with the one of the longest life expectancies). Yahoo News reports:

Tokyo businesses are to start offering benefits to elderly people who give up their drivers' licences, backing a police effort to cut back on the ballooning number of traffic accidents caused by drivers over 65.

Among more than 30 special offers, one small bank will give higher interest rates, while Mitsukoshi department store chain plans to provide free delivery from its Tokyo stores and a hotel will offer a 10 percent discount on meals in a program starting next month, Tokyo police said on their Web site.

"Have the courage to give up your licence," the police say on the site. "If you have lost confidence in your driving ... if your family says they are worried about you driving ... please think about handing in your licence."

What about some sort of accelerated re-licensing system instead after a certain age? And where does 65 come from (John McCain is 72 after all, and he claims to be spry enough).

Seniors - File a Tax Return with "Stimulus Payment" at the Top to get your Rebate

Category: Tax Law and Planning

Dailyrecord.com tells Seniors about the Tax Rebate: "Get this straight: If you can pick up an easy $300 or more by summer, it's worth the trouble."

As the Article illuminates, the problem with the tax rebate ($300 for singles, and $600 for couples) is that to get the tax rebate you need to file a return. Many seniors haven't filed a return in years and have no idea how to go about it. Well, here's the answer:

From "Rebates could return some seniors back to filing taxes - Simplified steps in place to allow taxpayers on limited income to qualify for check"

If you normally file a tax return, file the return as usual. Otherwise, follow these steps.

• First, get a 1040A or 1040 form from a post office, local library, http://www.irs.gov/ or by calling the IRS at (800) 829-3676. If you're filling out a form by hand, get the 1040A. If you're using software, it might be easier to use a 1040.

• If you normally do not have to file a tax return, write "stimulus payment" on the top of the form.

• Fill out your name, address and Social Security numbers for you and your spouse at the top of the form.

• Fill out the tax filing status.

• Fill out exemptions for yourself, spouse and dependents. Be sure to list all qualifying children on line 6c to get any possible rebate money for them.

• Go to Line 14a of Form 1040A or Line 20a of Form 1040. Here's where you list Social Security benefits. See Form 1099-SSA, which the Social Security Administration sent out earlier this year to report 2007 benefits.

If you do not have a Form 1099-SSA, you may estimate your annual Social Security benefits. Take your monthly benefit and multiply it by the number of months that you received it in 2007.

If you normally do not have to file a return and do not owe taxes, you're going to fill out the entire amount of Social Security benefits, plus other benefits like some veterans' and Railroad Retirement benefits.

Supplemental Security Income, or SSI, cannot be used to count as qualifying income in order to get this economic stimulus rebate.
• If this applies to you, see Form 1099-RRB for Railroad Retirement benefits to report those benefits on Line 14a of Form 1040A or Line 20a of Form 1040.
• Or, if this applies to you, you're going to need the sum of veterans' disability compensation, pension or survivors' benefits received from the Department of Veterans Affairs in 2007. You can estimate the annual benefit by taking the monthly amount you receive and multiplying it by the number of months in 2007 that you received the benefits.

• Sign the return, date it, fill in your occupation and give a daytime phone number. If you're filing a joint return, your spouse must sign the return as well.

• Keep a copy of the return.

• Mail the return to Department of the Treasury, Internal Revenue Service Center,
at the address for your state.

Find that at the IRS Web site, click on Individuals in the tabs across the top of the page, then click on Where to File under IRS Resources in the left rail. Then click on the link that says "Individual Taxpayers -- Where to File Your Own Individual Return" and a map of the states will pop up. Click on your state.

Use the address for your type of form and the one where you won't be sending in any money.

• Know that the first rebate checks won't go out until May.

Ledger's will leaves nothing to daughter - Parental Responsibility to Prepare a Will?

Category: Estate Planning

While Heath Ledger's death may have been an accident, his failure to provide for his minor child is an example parental hubris I see all too often in parents of young children.

Yahoo News reports that Ledger's will leaves nothing to daughter : "Heath Ledger's will leaves nothing to his former girlfriend and their 2-year-old daughter because it was never updated after they became part of his life."

Parents of young children don't intend to die, but part of being a parent is being responsible for life of another person who cannot take care of themselves. Yes, you are young. Yes, you are healthy. Yes, life is good. However, as Mr. Ledger's unfortunate example shows, you can have it all, and bad things can happen to you too.

What I find particularly concerning is that Mr. Ledger was undoubtedly surrounded by scores of financial advisers - accountants, money mangers, attorneys. While I have probably heard all the reasons why a person can't make out a Will to protect their kids ("I don't have time", "I don't have enough money for it to matter", "I can't pick a guardian") all of these seem rather weak in retrospect. I assume if Mr. Ledger could have predicted his untimely death, he would have made sure his daughter was taken care of. While his family has said they will step up to the plate, shouldn't a parent do more then leave their child's future to the best intentions of others? Shouldn't a parent take the time to map that future out - just in case?

February Dubbed "Let's Review our Will Month"

I have dubbed February as "Let's Review our Will Month" and it is rapidly coming to an end. To help you and those in your network look at this critical document and determine if what the Will says continues to meet the maker's goals and needs, I have developed an Estate Plan Review Checklist.

The Estate Plan Review Checklist is a detailed checklist poses questions to help a person evaluate the suitability of their current estate plan. Some questions posed include:

* Do you have a (i) Last Will and Testament, (ii) General Durable Power of Attorney, and (iii) Health Care Power of Attorney/Health Care Proxy/Living Will? Every complete estate plan must contain at least these 3 documents.

* Have you moved since you last updated your estate planning documents? If you moved from one state to another, there may be questions of the interpretation or validity of your existing estate planning documents in your new state of residence. Generally, estate planning documents executed in one state will be valid in another state, but your new state of residence may have specific statutes or tax laws that are not addressed in your existing estate planning documents. You may want to contact an attorney in your new state of residence to advise you as to what might need to be updated.

* Do you have a separate personal property designation? This is a separate writing where you indicate who should receive specific items of your personal property such as photographs, jewelry, art work, etc. If you have one, you should review it and make sure that it is still is an expression of your wishes. If you don’t have a personal property designation, you may want to consider creating one so that specific items will go to specific people.

* Is any person receiving your personal property a minor (under 18)? If so, your estate plan should make provisions for that property to be held by the minor’s Guardian until he or she attains an appropriate age.

* Do you have any specific gifts or bequests you want to make? Any gift of a cash amount or of an asset other than personal property should be stated in your Will. If you have given away a specific asset to a person in your existing Will (i.e. your shore house), be sure that the asset still exists. Also, your Will should provide for what happens if the specific asset is sold during your lifetime.


and many more.....

Economic Stimulus Package now Law

Category: Tax Law and Planning

President Bush signed the new Economic Stimulus Package into law today. For an excellent and detailed summary look to CCH 2008 Tax Alert.

Some quick hallmarks:

Tax Rebates for induvidual taxpayers with incomes less than $87,000/$174,000: At least $300 to almost everyone earning a paycheck, including low-income earners. Social Security recipients and disabled veterans making too little to pay income taxes would receive $300 checks as well, as long as they have at least $3,000 in income from various sources in 2007.

Families with children would receive an additional $300 per child. The full rebate would be limited to individuals earning $75,000 or less and couples with incomes of $150,000 or less, but a partial rebate would go to individuals earning up to $87,000 and couples earning up to $174,000. The caps are higher for people with children. Illegal immigrants are disqualified.

_Business tax write-offs: So-called bonus depreciation and more generous expensing rules to spur investment.

_Housing rescue: Allow more subprime mortgage holders to refinance into federally insured loans by raising the limit on Federal Housing Administration loans from $362,790 to as high as $729,750 in expensive areas. Increase the availability of mortgages by providing a one-year boost to the cap on loans Fannie Mae and Freddie Mac can buy, from $417,000 up to $729,750 in high-cost markets.

Information Courtesy of:
Assocaited Press

The package amounts to about 1% of U.S. gross domestic product.

Taxpayers will not have to apply for the rebate; it would come automatically based on their 2007 tax return.

Economists who have analyzed the numbers say it will give the economy a much-needed boost in the middle of the year. But almost every economist agrees that the business tax breaks will have very little impact on the economy this year. See Capitol Report.

Surveys show most consumers say they'll save the tax-rebate money, or use it to pay down debts. Only a minority of consumers say they'll spend it. To be an effective short-term stimulus to the economy this year, the money would have to be spent.

Information Coutesy of:
marketwatch.com

Estate Planning - Men v. Women (these are the jokes)

Category: Miscellaneous Musings

A totally non-serious estate planning tale, but good for a chuckle....

Estate Planning

Dan was a single guy living at home with his father and working in the family business. When he found out he was going to inherit a fortune when his sickly father died, he decided he needed a wife with which to share his fortune.

One evening at an investment meeting he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away.

"I may look like just an ordinary man," he said to her, "but in just a few years, my father will die, and I'll inherit 20 million dollars."

Impressed, the woman obtained his business card. Three days later, she became his stepmother.

Women are so much better at estate planning than men.

How Long Should you be keeping Financial Documents

Category:Tax Law and Planning, Financial Planning

I met with a client yesterday to go through decades of files to answer the question of "what papers do I still need to keep?" This seems to come up often around tax time, so much so that the question was posted on Yahoo Answers today. Yahoo's answers with my comments are below:


Dear Yahoo!:
How long should you keep personal financial records like bank statements, receipts, tax statements, etc.?

Our first stop was a web page from Bankrate.com with the perfect title: "What financial records to keep and how long to keep them." The information is laid out in an easy-to-read table format. Here's a quick overview -- for details, check out the web page.

Taxes -- Seven years. The IRS has three years from your filing date to audit your return if it suspects good faith errors, and six years if it thinks you underreported your gross income by 25 percent or more. DWL adds - Keep your returns and all the supporting information (W-2, 1099, etc.) that you relied on to fill out the return.

IRA contributions -- Permanently. DWL adds - To "keep" does not mean you need paper files - an annual scanning program, with a copy back-up'ed elsewhere, is encouraged.

Retirement/Savings plan statements -- From one year to permanently. Keep the quarterly statements until you receive your annual summary; keep the annual summaries until you retire or close the account. DWL adds - Make sure the summaries are correct before you toss the interim. And remember that scanning is your friend.

Bank records -- From one year to permanently. Throw away checks that have no long-term importance, but keep checks related to your taxes, business expenses, and housing and mortgage payments. DWL adds - If you can get on-line statements and save electronically, you can back those up separately and rid yourself of the statements and checks.

Brokerage statements -- Until you sell your securities. DWL adds - If you can get on-line statements and save electronically, you can back those up separately and rid yourself of the statements and checks.

Bills -- From one year to permanently. In most cases, when you receive the canceled check, the bill can be tossed. However, you should keep bills for big purchases (e.g., jewelry, appliances, cars, collectibles, etc.) for proof of their value in the event of loss or damage. DWL adds - Again, to "keep" does not mean you need paper files - an annual scanning program, with a copy back-up'ed elsewhere, is encouraged.

Credit card receipts and statements -- From 45 days to seven years. Keep the statements seven years if they document tax-related expenses. DWL adds - Again, if you can get on-line statements and save electronically, you can back those up separately and rid yourself of the statements and checks.

Paycheck stubs -- One year. If your W-2 form matches your stubs, you can toss your stubs.

House/Condominium records and receipts -- From six years to permanently. DWL adds - Again, to "keep" does not mean you need paper files - an annual scanning program, with a copy back-up'ed elsewhere, is encouraged.

We found a couple of other helpful articles in the search results -- one from Kiplinger.com and another from BlueSuitMom.com. Kiplinger.com suggests you keep your tax returns forever, while the blue-clad mother says it's a good idea to routinely purge and file your receipts on a monthly or quarterly basis.

All the sites offer the same piece of advice -- whether you use a filing cabinet, shoebox, or desk drawer, find a system that works for you and stick with it.

Key NJ Medicaid Figures - Starting 2008

Category: Elder Law



In starting 2008, some key Medicaid figures for New Jersey:




Minimum Community Spouse Resource Allowance - $20,880.00

Maximum Community Spouse Resource Allowance - $104,400.00

Resource Allowance for an Individual - $2,000.00

Resource Allowance for a Couple (both husband and wife in a nursing home) - $3,000.00

Minimum Monthly Maintenance Needs Allowance - $1,711.25

Maximum Monthly Maintenance Needs Allowance - $$2,610.00

Monthly Personal Needs Allowance - $35.00

Shelter Standard - $514.00

Standard Utility Allowance -

$344.00 – heating
$210.00 – non-heating
$29.00 – telephone

Divestment Penalty Divisor - $6,655.00

Income Cap Amount - $1,869.00

Home Equity Limit - $750,000.00

Your Estate is Going to the Dogs

Category: Estate Planning

This news story about estate planning for pets is not as rare as you might think. For many people, the care of their beloved pets is a primary concern should they become ill or pass away.

3 Md. dogs enjoy $800,000 inheritance - Yahoo! News: "The dogs — named Buckshot, Katie and Obu-Jet — inherited $400,000 and a house in Hagerstown with the death last year of owner Ken Kemper. Altogether, their estate is worth about $800,000.

The beagle and two Labrador mixes were strays when Kemper adopted them. They now live at their house with caretaker Roy Grady.

They might not be aware of their wealth, but they do know that on one night a week Grady treats them to spaghetti dinner, with meatballs and garlic bread."

Interestingly, I find that people with pets and people with small children share the same rationale/excuse for not preparing an estate plan "We can't agree on who to name to care for our children/our dogs should we die." Now, I remind people with children that not naming guardians is a true dis-service to your kids because if you don't name Guardians a total stranger who you have never met will name Guardians - and you might not like who they name.

The difference is that with children the law provides a mechanism to provide someone to be in charge of them and the cost of caring for them if you can't (not that this should be an excuse for not creating a Will and naming Guardians). With pets, there is no built-in protection of laws to provide for a home, costs of food, medicine, etc., and most important, loving guidance and supervision. You the owner must do that or your best friend may end up in the pound. This doesn't need to be a difficult or insurmountable task - it just requires a bit of forethought and planning. Some ideas:

+ Leave your pets to a relative who will love and care for them. Give the person a cash bequest to cover potential costs of care.

+ Don't know who to leave the pets to? Direct your Executor to find an appropriate home, and give your Executor the ability to make a cash bequest up to a certain amount to cover the costs of care.

+ Create a "Pet Trust" for the care of the your pets during their lifetimes. In the news article above, the pets house went in the trust and the trust paid to maintain their home, as well as acquire a care-giver for them. Make sure you consider mechanism to have an outside party verify the caregiver is doing a good job.

+ Research an "old-age" home for pets and leave your pets to them together with the requested bequest from the pet home.

Whatever you do, tell the person who is the immediate caregiver if you are hurt that they need to take the pets into their care immediately. After all, your pets can't call in the phone to order a pizza if nobody gets out their chow at the normal time.

Whats missing from the Candiates Quick Fixes for the tax code?

Category: Tax Law and Planning



Op Ed pieces about taxation are usually so "Opinion" and so "Editorial" that they might better be called infomercials for a better tax system. So, when I stumble on a piece that is equally critical of all of the candidates vying for the Oval Office in 08, I stop to take a look.



What's missing in tax talk - Opinion - USATODAY.com: "Set aside for a moment the biggest issue of all, which is uncontrolled spending. Tax revenues, even without further cuts, are nowhere near the level necessary to cover the massive increase in costs that will come with the retirement of the baby boomers and relentless health care inflation. Every candidate knows this, but fiscal responsibility is painful, so the campaign debate is focused mostly on tinkering."



The author goes on to tout simplification as the goal all the candidates are missing, and points out very valid items of "the other side" to all their tax plans. But to the author's main point, while having a "simplified" tax code is a wonderful goal, the idea that reducing the size of the tax code would solve all tax problems is, in a word, and "oversimplification." The tax code is the main means by which government can influence behavior - and whether you think they should be or not, government is in the business of behavior modification. Want to smoke? It will cost you more. Want to get a mortgage instead of a loan for your car? It will cost you less. So maybe the candidates need to better address the role of "governance" then use the tax code to take from one hand and give to the other.

Good - Avoiding AMT; Bad - Waiting for your Tax Refund

Category: Tax Law and Planning

As with all things dealing with tax law, when the government giveth, it also takes away. Per USATODAY.com - Tax change may mean delay in refunds : "More than 20 million taxpayers will escape the alternative minimum tax this year, thanks to a stopgap measure Congress approved Wednesday. But lawmakers waited so late in the year to vote that many early filers could have to wait until March to get their refunds."

The article contains a good explanation of the AMT or Alternative Minimum Tax - a tax originally designed to prevent very wealthy taxpayers from essentially "deducting" their tax returns down to a zero tax. The AMT is a parallel calculation of tax, that does not incorporate certain deductions. While the theory behind the AMT is sound, the problem is that the income levels that AMT impact were not legislated to be adjusted for inflation. As such, as income grows through inflation, such that salary is higher, but wealth is not necessarily greater, the AMT captures more and more taxpayers, but not necessarily those taxpayer the law was intended to address.

If you were counting on that refund any time soon, this is another example of why you should try to minimize your refund instead of giving the government an interest free loan.