The Administration on Aging, in partnership with five national non-profit organizations, launched a new web site intended to empower legal and aging services advocates with the resources necessary to provide high quality legal help to older adults. The site is part of AoA’s National Legal Resource Center initiative, created in 2008.
AoA’s five national non-profit partners are: the National Senior Citizens Law Center, the National Consumer Law Center, The Center for Social Gerontology, The Center for Elder Rights Advocacy, and the American Bar Association Commission on Law and Aging.
The blog reports information of interest to seniors, their families, and caregivers. Recurrent themes are asset and decision-making protection, and aging-in-place planning.
Monday, February 1, 2010
Yes, You Can Follow Michael Jackson's Estate!
If you are interested, you can follow developments in the Estate of Michael Jackson. It only takes a few minutes of searching to locate the public website for viewing the court dockets for estates being probated in the Los Angeles County Superior Court. So if you're interested in keeping up to date on what's going on with the probate of Michael Jackson's will and estate, then follow the links and instructions provided below.
Even if you are not interested, the fact that you can follow the developments in probate court is instructive; it speaks volumes to the level of privacy one can expect in probate cases. It also serves to illustrate what can be accomplished with trust planning. You will note that Michael Jackson's estate plan included a revocable trust. Although the probate court will involve numerous issues, such as guardianship of the children, if Michael Jackson;s trust was completely funded, identification and valuation of assets, and court overseen administration of them, would be limited.
How to View the Court Docket for Michael Jackson's Estate:
Even if you are not interested, the fact that you can follow the developments in probate court is instructive; it speaks volumes to the level of privacy one can expect in probate cases. It also serves to illustrate what can be accomplished with trust planning. You will note that Michael Jackson's estate plan included a revocable trust. Although the probate court will involve numerous issues, such as guardianship of the children, if Michael Jackson;s trust was completely funded, identification and valuation of assets, and court overseen administration of them, would be limited.
How to View the Court Docket for Michael Jackson's Estate:
Saturday, January 30, 2010
Things to Remember at Tax Time
Tax time is rapidly approaching. You want to file all the proper forms and take all deductions you're entitled to. Following are some things to keep in mind as you prepare your tax form.
- Gifts. Did you give away any money this year? The gift tax can be very confusing. If you gave away more than $13,000 in 2009, you will have to file a Form 709, the gift tax return. This does not necessarily mean you will owe taxes on the money, however, and most folks making gifts will owe no tax. Click here for more information.
- Medical Expenses. Many types of medical expenses are tax deductible, from hospital stays to hearing aids. To claim the deduction, your medical expenses have to be more than 7.5 percent of your adjusted gross income. This includes all out-of-pocket costs for prescriptions (including deductibles and co-pays) and Medicare Part B and Part C and Part D premiums. (Medicare Part B premiums are usually deducted out of your Social Security benefits, so be sure to check your 1099 for the amount.) You can only deduct medical expenses you paid during the year, regardless of when the services were provided, and medical expenses are not deductible if they are reimbursable by insurance. Click here for more information.
Thursday, January 28, 2010
Carryover Basis Complicates Planning / Settlement
I have been asked a lot of questions about the new carryover basis rules and what this means for someone who inherits property in 2010. Simply put, repeal of the federal estate tax that has taken effect in 2010 means that the stepped up basis that the inheritor would have received in 2009 and prior years is officially gone.
The good news is, that for most smaller estates, the practical effect of the change is non-existent. Moderate and larger estates, however, will now find additional taxes, and complications.
A stepped up basis means that the recipient of an inherited asset gets to increase the income tax basis of the asset to its date of death fair market value, which in turn is the basis used for calculating capital gains taxes when the inherited asset is sold. But not so now - instead for deaths occurring in 2010 an heir will receive the decedent's original basis in the inherited asset, which can be adjusted by the executor or personal representative using the new modified carryover basis rules. The personal representative call allocate additional basis to the property received by the beneficiary, in order to reduce the capital gain.
In 2009 and years prior, for example, if a beneficiary inherited a house that cost the decedent $500,000 but
The good news is, that for most smaller estates, the practical effect of the change is non-existent. Moderate and larger estates, however, will now find additional taxes, and complications.
A stepped up basis means that the recipient of an inherited asset gets to increase the income tax basis of the asset to its date of death fair market value, which in turn is the basis used for calculating capital gains taxes when the inherited asset is sold. But not so now - instead for deaths occurring in 2010 an heir will receive the decedent's original basis in the inherited asset, which can be adjusted by the executor or personal representative using the new modified carryover basis rules. The personal representative call allocate additional basis to the property received by the beneficiary, in order to reduce the capital gain.
In 2009 and years prior, for example, if a beneficiary inherited a house that cost the decedent $500,000 but
Wednesday, January 27, 2010
No Estate Tax in 2010 - Good and Bad News
There is currently no tax on the estates of those dying during 2010. Although it is possible that Congress could reinstate the tax retroactively in 2010, the possibility is uncertain, at best. If Congress fails to act, however, although a few wealthy families will benefit, many families with smaller estates will pay capital gains on inherited assets. Moreover, executors and successor trustees must contend with new, and what may prove to be significant, administrative burdens.
Under the provisions of a Bush-era tax-cut bill enacted in 2001, the value of estates exempt from the tax has increased over the past eight years while the tax rate on estates has been reduced, so that in 2009 only an individual estate worth $3.5 million or more is taxed, at a rate of 45 percent. For the year 2010, according to the 2001 law, the estate tax disappears entirely, only to be restored in 2011 at a rate of 55 percent on estates of $1 million or more.
For persons with larger estates, their estate plans will need to reviewed and reconciled with the lack of
Under the provisions of a Bush-era tax-cut bill enacted in 2001, the value of estates exempt from the tax has increased over the past eight years while the tax rate on estates has been reduced, so that in 2009 only an individual estate worth $3.5 million or more is taxed, at a rate of 45 percent. For the year 2010, according to the 2001 law, the estate tax disappears entirely, only to be restored in 2011 at a rate of 55 percent on estates of $1 million or more.
For persons with larger estates, their estate plans will need to reviewed and reconciled with the lack of
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