No Change In Amount Of Veterans Aid & Attendance Benefits For 2011

Posted December 30, 2010 by Glenn Matecun
Categories: Asset Protection, Estate Planning, Veterans Benefits & VA Planning

The Social Security Administration has announced that no cost-of-living adjustments will be made to Social Security benefits in 2011 because the consumer price index has not risen since 2008 when the last Social Security increase occurred.

Like recipients of Social Security and other federal benefits, Veterans, their families and survivors will also not see a cost-of-living adjustment in 2011 to their compensation and pension benefits from the Department of Veterans Affairs (VA). 

Under federal law, the cost-of-living adjustments to VA’s compensation and pension rates are the same percentage as for Social Security benefits.

One of the benefits left unchanged is the Aid and Attendance (A&A) Pension, which provides benefits for veterans and surviving spouses who require the regular attendance of another person to assist in eating, bathing, dressing and undressing or taking care of the needs of nature.  It also includes individuals who are blind or a patient in a nursing home because of mental or physical incapacity. Assisted care in an assisting living facility also qualifies.

To qualify for A&A it needs to be established by your physician that you require daily assistance by others to dress, undress, bathing, cooking, eating, taking on or off of prosthetics, leave home etc. You DO NOT have to require assistance with all of these.  There simply needs to be adequate medical evidence that you cannot function completely on your own.

The A&A Pension can provide up to $1,644 per month to a veteran, $1,055 per month to a surviving spouse, or $1,949 per month to a couple (tax free, by the way).  If you are aware of a veteran or surviving spouse of a veteran who may be in need of assistance — whether in an assisted living facility or at home — we offer a free review and analysis to determine whether that person qualifies for Aid and Attendance benefits.

Glenn Matecun

VA Accredited Attorney/Veterans Benefits

www.MichiganEstatePlans.com

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Mom and Dad, Can We Talk? Answers to Top Questions About Discussing Long-Term Care Planning

Posted December 21, 2010 by Glenn Matecun
Categories: Durable Power of Attorney, Estate Planning, Medicaid Planning, Nursing Home Planning

Recently, the founder of Elder Law Answers, Harry Margolis, answered some questions relating to talking with aging parents or other family members about sensitive issues such as wills, funeral arrangements, assisted living and medical treatment wishes. The questions and answers are good ones, so I am passing them along:

At what point is it appropriate for grown children, spouses, caregivers or friends to attempt to discuss these issues with aging parents, relatives or friends?  

The earlier the better, but every family is different, and raising these issues can be more or less uncomfortable depending on the family dynamics. Certainly, if there is an illness or medical emergency, that can serve as justification for beginning the discussion.

What’s the best way to broach the subject?

Rather than focusing on the parent or other family member’s current or possible future physical and mental decline, it often works better for the person starting the conversation to focus on his or her own concerns. She can say that she was meeting with her own estate planning attorney, which made her think about her parents’ situation. Or she can talk about how she is nervous about being able to care for her parents when and if the need comes up. Often parents won’t take measures to protect themselves, but they never stop being parents and will respond to a call for help from a child.

Where’s the best place to have such a discussion?

In the parent’s home.

Should you seek legal counsel first before initiating a talk?

Not necessarily. A legal consultation would help the children or other family members know what issues to discuss and some of the available options. But the ultimate goal should be for the elder to consult himself or herself with an attorney with elder law experience.

 Should it be one-on-one or should family members, friends or those with specific expertise in an area be part of the discussion?

That has to be determined on a case-by-case basis. We always encourage transparency so that all family members are in the loop. However, scheduling can be difficult and too many people involved can be overwhelming. In addition, depending on the circumstances, elder care and planning issues can take several meetings to resolve. Different people may be involved in different meetings depending on the issues being discussed at each.

What if your parent, spouse, etc., refuses to talk about these issues? How do you overcome this?

Follow the advice above. If it’s a parent, the child may have to be patient and wait until an opportunity arises to bring the subject up again. Ultimately, it may be impossible to get the parent to participate in any planning. If it’s a spouse, this is also true. However, a spouse may be able to take some planning steps on his or her own.

What steps can you legally take if an elderly person such as a parent or spouse refuses to take care of issues dealing with a will, housing, medical treatment or related areas?

It depends on the parent or spouse’s mental capacity. If they are incompetent, it is possible to go to court to be appointed conservator or guardian and to take over decision making in these areas. Unfortunately, this can be an expensive, time-consuming and cumbersome process. [Glenn speaking here: This is a good way to help a parent or other loved one understand why he or she needs an estate plan, including a durable power of attorney and health care power of attorney.  Without a good plan, if your parent becomes incapacitated, it will be necessary to go through court to obtain a guardian and/or conservator.]

 What can seniors do in advance, to avoid becoming embroiled with grown children, relatives, or friends over these issues.

Plan ahead. All seniors should sit down with an elder law attorney to discuss their goals, concerns and hopes and to develop a plan to reach the goals, address the concerns and give their hopes the opportunity to become realities.

 Glenn Matecun

Michigan Estate Planning & Elder Law Attorney

www.MichiganEstatePlans.com

Estate Tax Update: Tax Relief Act of 2010 Passes House

Posted December 17, 2010 by Glenn Matecun
Categories: Estate Planning, Estate Tax

Moments ago the House passed HR 4853 by a vote of 277-148 approving the Tax Relief Act of 2010 as passed by the Senate yesterday.  The bill now goes to the President for signature.  More analysis to come tomorrow and in the days ahead.

Glenn Matecun

Michigan Estate Planning & Elder Law Attorney

www.MichiganEstatePlanning.com

Updated Summary Of The New Tax Relief Act Of 2010

Posted December 12, 2010 by Glenn Matecun
Categories: Estate Planning, Estate Tax

It is not yet law, but here is the most recent summary (12/10/2010) of the new tax releif act.  The source is the United States Senate Committee on Finance.

Summary of Tax Relief Act

For those who don’t want to read the whole 12-page summary, here are the details about the estate tax:

Temporary estate, gift and generation skipping transfer tax relief. The EGTRRA phased-out the estate and generation-skipping transfer taxes so that they were fully repealed in 2010, and lowered the gift tax rate to 35 percent and increased the gift tax exemption to $1 million for 2010. The proposal sets the exemption at $5 million per person and $10 million per couple and a top tax rate of 35 percent for the estate, gift, and generation skipping transfer taxes for two years, through 2012. The exemption amount is indexed beginning in 2012. The proposal is effective January 1, 2010, but allows an election to choose no estate tax and modified carryover basis for estates arising on or after January 1, 2010 and before January 1, 2011. The proposal sets a $5 million generation-skipping transfer tax exemption and zero percent rate for the 2010 year.

Portability of unused exemption. Under current law, couples have to do complicated estate planning to claim their entire exemption (currently $7 million for a couple). The proposal allows the executor of a deceased spouse’s estate to transfer any unused exemption to the surviving spouse without such planning. The proposal is effective for estates of decedents dying after December 31, 2010.

Reunification. Prior to the EGTRRA, the estate and gift taxes were unified, creating a single graduated rate schedule for both. That single lifetime exemption could be used for gifts and/or bequests. The EGTRRA decoupled these systems. The proposal reunifies the estate and gift taxes. The proposal is effective for gifts made after December 31, 2010.

 More to come as we get closer to a vote.

Glenn Matecun

Michigan Estate Planning & Elder Law Attorney

www.MichiganEstatePlans.com

Posted December 8, 2010 by Glenn Matecun
Categories: Estate Planning, Estate Tax

Following is a link to a good summary of what the new tax deal means for you. Next step, getting the deal through Congress.

What The Tax Deal Means To You

Glenn Matecun
Michigan Estate Planning & Elder Law Attorney
http://www.MichiganEstatePlans.com

Summary Of Middle Tax Class Act of 2010

Posted December 3, 2010 by Glenn Matecun
Categories: Estate Planning, Estate Tax

Here is a summary of the Middle Class Tax Cut Act of 2010 released by the Senate Finance Committee Chairman.  Note that this summary only relates to estate taxes.  The full summary is available at the Finance Committee’s website at  Summary of Tax Cut Act.   At this time, this is just a proposal and is not the law — but it appears Congress is at least moving toward resolving the tax issues before the new year.

Permanent estate, gift and generation skipping transfer tax relief. The EGTRRA phased-out the estate and generation-skipping transfer taxes so that they were fully repealed in 2010, and lowered the gift tax rate to 35 percent and increased the gift tax exemption to $1 million for 2010. The proposal reinstates the 2009 law for the estate, gift, and generation skipping transfer taxes permanently, setting the exemption at $3.5 million per person and $7 million per couple and a top tax rate of 45 percent. The exemption amount is indexed beginning in 2011. The proposal is effective January 1, 2010, but allows an election to choose no estate tax and modified carryover basis for estates arising on or after January 1, 2010 and before the date of introduction. The proposal is effective upon date of introduction for gift and generation skipping transfer taxes.

Portability of unused exemption. Under current law, couples have to do complicated estate planning to claim their entire exemption (currently $7 million for a couple). The proposal allows the executor of a deceased spouse’s estate to transfer any unused exemption to the surviving spouse without such planning.

Deferral of estate tax for farmland. The proposal allows taxpayers to defer the payment of estate taxes on farmland of a family farm until the farmland is sold or transferred outside the family or ceases to be used for farming. The proposal also increases the valuation adjustment for donations of a conservation easement.

Increase of special use revaluation amount. The proposal increases the amount of the revaluation to the exemption amount, allowing up to a $3.5 million adjustment.

Minimum 10-year term for grantor retained annuity trusts (GRATs). The proposal requires that GRATs be set up for a minimum 10-year term. The proposal applies to transfers made after the date of enactment.

Basis for estate and income taxes. The proposal clarifies that the basis of property in the hands of the heir is the same as its value for estate and gift tax purposes. The proposal also requires the executor or donor to report the value to the IRS and heir. The proposal applies to transfers for which returns are filed after the date of enactment.

Stay tuned for more updates . . .

Glenn R. Matecun

Michigan Estate Planning Attorney

www.MichiganEstatePlans.com

Posted December 1, 2010 by Glenn Matecun
Categories: Estate Planning, Estate Tax

Here is an interesting Bloomberg News article about the situation surrounding the extension of the Bush tax cuts, including the estate tax.

Bloomberg News – Return of Estate Tax?

The government’s inaction has resulted in extreme uncertainty for anyone putting together an estate plan.  When will this situation be resolved?  Stay tuned for more updates, likely soon . . .

www.MichiganEstatePlans.com