Posts Tagged ‘Medicaid’
Tuesday, January 15th, 2013 by Moore McLaughlin
The American Taxpayer Relief Act of 2012 (2012 Taxpayer Relief Act) extends through 2013 the provision which allows individuals who are at least 70½ by the end of the year to exclude from gross income qualified charitable distributions up to $100,000 from a traditional or Roth IRA that would otherwise be included in income. Married individuals filing a joint return are allowed to exclude a maximum of $200,000 for these distributions ($100,000 per individual IRA owner).
Congress waited until it was too late to make a 2012 qualified charitable distribution before extending the benefit, so it provided two forms of relief. First, you may elect to treat a qualified charitable distribution made in January of 2013 as having been made on December 31, 2012. Second, you may treat any portion of a distribution made in December 2012 as a qualified charitable distribution if it is transferred to a qualified charity in January of 2013. When these relief provisions are properly executed, the distribution made or transferred in January 2013 counts toward the $100,000 exclusion limitation and the required minimum distribution for the 2012 calendar year.
A review of your tax return indicates that you may be eligible to take advantage of these opportunities. As you may know, IRA owners must either withdraw the entire balance or start receiving periodic distributions from their traditional IRAs by April 1 of the year following the year in which they reach age 70-½. The minimum distribution that is required each year is computed by dividing the IRA account balance as of the close of business on December 31 of the preceding year by the applicable life expectancy. An IRA owner who does not make the required withdrawals may be subject to a 50-percent excise tax on the amount not withdrawn.
Many taxpayers like you, who receive taxable distributions, also contribute to charitable organizations. You can reduce your taxable income by excluding up to $100,000 of your IRA distribution from gross income when you transfer it directly to a charitable organization. This exclusion is available for taxable Roth IRA distributions as well as minimum required distributions from a traditional IRA.
Although a charitable contribution may be motivated by humanitarian reasons rather than by tax considerations, it is, nevertheless, wise to take tax considerations into account when making a contribution. Since this distribution must be made by the IRA trustee directly to a qualified (i.e., 50-percent) charitable organization, you should review your charitable tax giving as soon as possible. Please call our office at your earliest convenience to discuss this option.
Tags: American Taxpayer Relief Act of 2012, asset protection, Asset Protection Planning, business tax, Capital gains tax, charitable contribution, charitable organization, corporate tax, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, Providence, Rhode Island, Roth IRA distributions, tax, Tax planning, Thomas P. Quinn
Posted in Asset Protection Planning, Current Events, Elderlaw/Law For Life, Estate Planning, Self-directed IRAs, Tax Current Events and News, Tax planning
Wednesday, July 11th, 2012 by Moore McLaughlin
For Rhode Island property tax purposes, legislation is enacted that increases the amount of the homestead exemption protected from attachment from $300,000 to $500,000. The legislation provides that the exemption extends to an owner of a home or an individual who rightfully possesses the premises by lease, as a life tenant, or as a beneficiary of a revocable or irrevocable trust who occupies or intends to occupy the home as his or her principal residence. An exemption, freeze of tax rates and/or valuation granted to any individual created by a public law or municipal ordinance would not be affected by the transfer of an ownership interest in property if the transferor: (1) retains a life estate in the property; (2) transfers an ownership interest while leasing the property back, but only where the lessee was the owner of the property prior to the transfer to the lessor; or (3) transfers the property to a revocable or irrevocable living trust. The individual must reside in the property, and the individual or a trustee must be legally obligated to pay property tax on the property by contract, agreement, the terms of the trust instrument, or otherwise by law. These provisions are applicable to any such transfer, regardless of when the transfer is made. Effective June 21, 2012.
Tags: asset protection, Asset Protection Planning, collection, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, homestead exemption, income tax, IRS, IRS and state tax collections, Jill E. Sugarman, Jill Sugarman, lien, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, Providence, real estate, Rhode Island, Rhode Island Division of Taxation, Rhode Island homestead exemption, seniors, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in Asset Protection Planning, Bankruptcy, Elderlaw/Law For Life, Estate Planning, Financial workout, IRS and state tax collections, Tax Current Events and News, Tax planning
Thursday, May 24th, 2012 by Moore McLaughlin
More and more seniors are living together without getting married. According to U.S. Census data, the number of cohabiting seniors nearly doubled between 1989 and 2000. For some seniors, marriage isn’t financially worth it‚ they don’t want to lose their former spouses’ military, pension, or Social Security benefits. Other seniors don’t want to have to pay their partners’ medical expenses or deal with the objections of children worried about their inheritance.
There are risks to cohabiting without marriage, however. You have no rights with regard to your partner’s health care decisions. In addition, you may be considered “common law” married by a court after you die, possibly causing a dispute between your partner and your children. If you and your partner plan to live together without getting married, you can take a number of steps to ensure that you are protected and your wishes are followed.
- Sign a cohabitation agreement. If you live in a state that recognizes common law marriage or even if you don’t (some courts have recognized the rights of unmarried partners who lived together in non-common law states), you may want to enter into a cohabitation agreement with your partner. The agreement can state your intentions not to marry or to make any claims against each other. It can also specify the division of household expenses and what will happen to your house in the case of death or breakup. You should consult a lawyer for assistance in drawing up an agreement.
- Provide access to health care decision making. If you are not married, you have no right to participate in your partner’s health care decisions or even, in some circumstances, to visit your partner at the hospital. To avoid this situation, you need several documents. You can sign a Health Insurance Portability and Accountability Act (HIPAA) medical release to allow each other access to the other’s medical information. In addition, you should have a health care proxy and/or a durable power of attorney for health care, naming your partner as your agent to make health care decisions.
- Sign a durable power of attorney. A power of attorney allows your partner, or whomever you appoint, to make financial decisions for you if you become incapacitated. Without a power of attorney, the court will have to appoint a conservator or guardian to make those decisions and the judge may not choose the person you would prefer.
- Update your will. Your will should be clear about what happens to your possessions when you die, including your house and its contents. It is particularly important to specify what will happen to your house if it is owned by only one partner.
- Think about the tax consequences of gifts. Married couples can leave each other as much as they want without paying estate taxes; unmarried couples cannot. If you want to leave money to your partner, consult an estate planning attorney or tax expert to find ways to limit estate taxes. For more on estate planning, contact Jill E. Sugarman, Esq. at JSugarman@McLaughlinQuinn.com.
Look into registering as domestic partners. Some cities and states have domestic partnership laws, which may allow unmarried couples to take advantage of their partners’ health insurance or to participate in health care decisions.
Tags: asset protection, Asset Protection Planning, assisted living facilities, cohabitation agreement, durable power of attorney, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, income tax, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, power of attorney, Providence, Rhode Island, seniors, social security, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Tuesday, May 15th, 2012 by Moore McLaughlin
Private fee-for-service (PFFS) plans are a way to give private insurance companies access to the vast Medicare market and are part of an effort to further privatize Medicare. PFFS plans are the fastest-growing Medicare Advantage plans on the market. While the additional benefits these plans often offer may look attractive, Medicare beneficiaries should look carefully before they leap into one.
In a PFFS, Medicare pays a set amount each month to a private insurer to provide health coverage on a fee-for-service basis to Medicare beneficiaries. Unlike a health maintenance organization (HMO) or preferred provider organization (PPO), PFFS members can choose from any Medicare-approved provider as long as the provider is willing to accept the plan’s payment terms. PFFS plans differ from original Medicare in that there is no limit to the premiums or co-payments a PFFS can charge. PFFS plans may offer additional benefits, such as vision or dental, but members may have to share some of the costs with Medicare. PFFS plans may let providers charge up to 15 percent above the plan’s payment amount for services.
Although the additional benefits offered through a PFFS plan may seem advantageous, a report by the Medicare Rights Center finds that private Medicare plans actually offer many disadvantages compared to original Medicare. For example, care can be more expensive because co-payments may be higher. In addition, it may be more difficult to find a doctor who will accept the plan’s payment terms. PFFS plans have also come under scrutiny for their aggressive marketing practices. Sales agents have been accused of fraud for signing up seniors who were not aware how PFFS plans differed from original Medicare.
Before you enroll in a PFFS plan, look closely at the monthly premium, co-payments, and the cost of extra benefits to make sure that this is a plan you can afford. You can call 1-800-MEDICARE or go to www.medicare.gov to compare plans.
Prescription drug coverage
Some PFFS plans offer prescription drug coverage. If the plan you choose has drug coverage, you must use the coverage offered by that plan. You may not enroll in a separate drug plan. If your PFFS plan does not offer prescription drug coverage, you can either switch to another plan that has drug coverage or add this coverage separately.
Switching plans
You can only switch to a different PFFS plans or back to original Medicare at certain times of the year. You can switch during the election period from November 15-December 31 or during the open enrollment period from January 1-March 31 of each year. Note that if you are switching from a PFFS plan with drug coverage to one without, the only time you can add drug coverage is during the election period from November 15-December 31.
For more information on how PFFS plans work, click here.
Tags: asset protection, Asset Protection Planning, assisted living facilities, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, health maintenance organization, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, Massachusetts, mclaughlin & quinn, Medicaid, Medicaid planning, Medicare, Medicare Advantage, nurses, nursing homes, PFFS, Private fee-for-service, Providence, Rhode Island, seniors, social security
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Wednesday, May 2nd, 2012 by Moore McLaughlin
If you are caring for your mother or father, you may be able to claim your parent as a dependent on your income taxes. This would allow you to get an exemption ($3700 in 2011) for him or her.
There are five tests to determine whether you can claim a parent as a dependent:
- The person you are claiming as a dependent must be related to you. This shouldn’t be a problem if you are claiming a parent (in-laws are also allowed). Keep in mind, however, that foster parents do not count as a relative. To claim a foster parent, he or she must live with you for a year as a member of your household.
- Your parent must be a citizen or resident of the United States or a resident of Canada or Mexico.
- Your parent must not file a joint return. If your parent is married, he or she must file separately. There is an exception if your parent is filing jointly, but has no tax liability. If your parent files a joint tax return solely to get a refund, you can claim him or her as a dependent.
- Your parent must not have a gross income of $3,700 (in 2011) a year or more. Gross income does not include Social Security payments or other tax-exempt income. (For those with incomes above $25,000, some portion of Social Security income may be includable in gross income.)
- You must provide more than half of the support for your parent during the year. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Even if you do not pay more than half your parent’s total support for the year, you may still be able to claim your parent as a dependent if you pay more than 10 percent of your parent’s support for the year, and, with others, collectively contribute to more than half of your parent’s support. To receive the exemption, all those supporting your parent must agree on and sign the applicable Multiple Support Declaration (Form 2021).
If you cannot claim your parent as a dependent because he or she filed a joint tax return or has a gross income above $3,700 (in 2011) but you have been paying your parent’s medical expenses, you may be able to deduct those expenses from your taxes. For more information on this, contact your CPA or one of the tax attorneys at McLaughlin & Quinn, LLC.
Tags: asset protection, Asset Protection Planning, assisted living facilities, dependent, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, exemption, income tax, income taxes, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, Multiple Support Declaration, nursing homes, parent, Providence, Rhode Island, seniors, tax, Tax planning
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Thursday, April 26th, 2012 by Moore McLaughlin
A Chicago judge has reversed a death sentence that has been hanging over Boots the cat for months. The feline’s owner, Georgia Lee Dvorak, died last Christmas Eve at age 76. Dvorak left no survivors, and her will, written in 1988, included a provision directing that any cat or cats she owned at the time of her death be euthanized “in a painless, peaceful manner.” 
But trust officers at Fifth Third Bank, which was appointed to manage Dvorak’s $1.4 million estate, were reluctant to follow through on the will’s terms when it came to Boots, age 11.
The bank asked a Cook County (Chicago) probate court to set aside that provision of Dvorak’s will. In its arguments to the judge, the bank noted that Dvorak had left the bulk of her estate to twelve animal-related charitable organizations. They also cited legal precedents in which courts had spared other animals in similar legal predicaments, including two Irish setters in Pennsylvania who had been ordered destroyed in their owner’s will, and horses in Vermont and Canada that had been similarly condemned.
The judge allowed the bank to search for a suitable home for Boots to live out the remainder of her life, and one was found. Cats-are-Purrsons-Too agreed to care for Boots provided it could receive a $2,000 endowment. On April 3, 2012, the judge ruled that $1,000 of Dvorak’s estate could go toward the endowment, and the bank agreed to forego fees of $1,000, according to an article in the Chicago Tribune.
In its fact sheet “Providing for Your Pet’s Future Without You,” the Humane Society of the United States warns that when a pet owner puts a request in a will that an animal be put to death, “that provision is often ruled invalid by the legal system when the animal is young or in good health and when other humane alternatives are available.”
For more on including a pet in an estate plan, contact estate planning attorney Jill E. Sugarman at JSugarman@McLaughlinQuinn.com or by phone at 401-421-5115 ext. 215.
Tags: asset protection, Asset Protection Planning, Boots the cat, cat, cats, dog, dogs, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, nursing homes, pet, pets, probate, Providence, Rhode Island, seniors, will, wills
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Monday, April 2nd, 2012 by Moore McLaughlin
Following the death of singer Amy Winehouse from alcohol poisoning last July, the British paper the Daily Mail reported that not only did the 27-year-old have a will but that she had recently updated it to ensure that her ex-husband Blake Fielder-Civil would not inherit any of her estate. That the troubled singer could be organized enough to plan her estate seemed somewhat incongruous, but news sources picked up the story as an example of the importance of planning no matter one’s age. 
It turns out the story was too good to be true. Winehouse died intestate, in other words without having executed any will at all, according to probate documents reported by the Associated Press. Her entire probate estate, which has an after-tax value of $4.7 million, will go to her parents. Winehouse may have wanted to leave some of that money to others besides her parents – perhaps to her brother or to Fielder-Civil — but if she did, she failed to make a will to make that clear.
Winehouse’s fortune was earlier estimated to be about $16 million, and it may turn out to be more than $4.7 million because a probate estate does not include assets held held jointly with someone else, or that had a beneficiary designation (like an insurance policy), or held in trust (although it is unlikely Winehouse had a trust if she had no will).
“By having no will at all, despite earning millions of dollars in her short career, Winehouse joined the dozens of other famous celebrities who procrastinated with their estate planning,” celebrity estate experts Danielle and Andy Mayoras write in Forbes.
Although it turns out Amy Winehouse had no will, the moral of the story remains the same: it’s never too early to plan your estate. If you have accumulated some assets (it doesn’t have to be Winehouse’s millions) or have young children that will need a guardian, then it is time to start thinking about an estate plan. Planning your estate with a will or trust is the best way to ensure your estate is distributed the way you want it to.
For more on estate planning, contact elderlaw attorney Jill E. Sugarman at 401-421-5115 ext 215 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: Amy Winehouse, asset protection, Asset Protection Planning, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, income tax, Jill E. Sugarman, Jill Sugarman, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, nursing homes, Providence, Rhode Island, seniors, Tax planning, Winehouse
Posted in Asset Protection Planning, Current Events, Elderlaw/Law For Life, Estate Planning, Tax Current Events and News, Tax planning
Friday, March 9th, 2012 by Moore McLaughlin
Is having an out-of-date will better than having no will at all? While wills do not have expiration dates, certain changes can render them useless. When this happens, having an out-of-date will can be the same as having no will at all. It is important to review your will periodically to ensure it still does what you want. The following are five ways your will can become out-of-date:
- Your beneficiaries have died. What happens if your will leaves your estate to your two siblings, but both siblings die before you? If your beneficiaries predecease you, your will is still technically valid, but it will have no effect on who will inherit from your estate. Instead, your estate will be distributed according to the law in your state, just as if you had died with no will at all.
- You have potential new beneficiaries. A will that was written before you got married or had children will be of little assistance in distributing your estate. States have provisions that protect spouses and children that come after a will is written. In most states, spouses are entitled to a certain percentage of an estate. In addition, many states have laws that protect children born after a will was written, allowing them to inherit from the estate. It’s possible that under the laws of your state, a spouse and children not named in your will may not receive as much as you would have wanted them to. In both of these circumstances, state law is dictating where your estate is going, not you.
- Your executor is dead or unable to serve. The executor (also called a personal representative) is the person named in your will who oversees the distribution of your property. If the person you named as executor is unable to serve, the court will have to appoint someone else. Beneficiaries may have a say in who is chosen, but it may not be someone you would have wanted in the position.
- You no longer own property named in the will. Suppose your will attempts to divide up your estate equally by giving cash to your daughter and property of equal value to your son. If the property is sold before you die, your son will receive nothing. In this case, your will is no longer ensuring your estate is divided equally.
- The law changes. If your estate plan was designed specifically to avoid estate taxes and the estate tax law changes, your will may no longer serve its purpose.
Contact elderlaw attorney Jill E. Sugarman at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com to ensure your will is still up to date or if you have no will at all.
Tags: asset protection, Asset Protection Planning, assisted living facilities, elder law, elderlaw, estate, Estate Planning, Estate tax, Jill E. Sugarman, Jill Sugarman, living will, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, nursing homes, Providence, Rhode Island, seniors, will, wills
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Monday, February 13th, 2012 by Moore McLaughlin
Americans are living longer than they did in years past, including those with disabilities. Planning by parents can make all the difference in the life of a child with a disability, as well as that of his or her siblings who may be left with the responsibility for caretaking (on top of their own careers and caring for their own families).
Supplemental needs trusts (also known as “special needs” trusts) are an important component of planning for a disabled child (even though the child may be an adult by the time the trust is created or funded). These trusts allow a disabled beneficiary to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose her eligibility for certain government programs. The trusts are drafted so that the funds will not be considered to belong to the beneficiary in determining her eligibility for public benefits.
As their name implies, supplemental needs trusts are designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts typically pay for things like education, recreation, counseling, and medical attention beyond the simple necessities of life.
For more on supplemental needs trusts, including the different kinds of trusts available, contact Jill E. Sugarman, Esq at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: asset protection, Asset Protection Planning, assisted living facilities, disabilities, disability, disabled beneficiary, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, nurses, nursing homes, Providence, Rhode Island, seniors, social security, special needs, special needs trust, supplemental needs trust
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Friday, December 9th, 2011 by Moore McLaughlin
Social Security doesn’t just pay retirement benefits to retired workers; in some circumstances, it also provides benefits to a worker’s spouse or ex-spouse and to a deceased worker’s surviving spouse. Here are the ins and outs of spouse and survivor benefits.
Spousal Benefits
Spouses are entitled to benefits if the marriage lasted at least 10 years. A spouse is entitled to an amount equal to one-half of the worker’s full retirement benefit. To receive this benefit, you must be at your full retirement age or caring for a child who is under 16 years old. In addition, your spouse must have filed for Social Security retirement benefits even if he or she isn’t receiving them.
If you could receive more from Social Security based on your own earnings record than through the spousal benefit, the Social Security Administration will automatically provide you with the larger benefit. If you have reached your full retirement age, you may also elect to receive spousal benefits and delay taking your benefits, allowing your own delayed retirement credits to accrue, and switch to your own benefit at a later date. However, you cannot elect to receive spousal benefits below your retirement age and later switch to your own benefits.
If you begin collecting your spousal benefit before your full retirement age, your spousal benefit will be permanently reduced. But if your spouse retires early, but you wait until your full retirement age, you will still receive benefits based on one-half of his or her full retirement benefit.
For more from the Social Security Administration on spousal benefits, click here.
Divorced spouses
An ex-spouse is also entitled to receive one half of the worker’s full retirement benefit as long as the marriage lasted at least 10 years. Unlike a current spouse, a divorced spouse can begin receiving benefits even before the worker has applied for benefits. The worker must be at least 62 years old and the divorce must have been final for at least two years.
For more from the Social Security Administration on qualifying for divorced spouse benefits, click here.
Survivor Benefits
If you are a surviving spouse at full retirement age, you are entitled to the worker’s full retirement benefits. If the worker delayed retirement, the survivor’s benefit will be higher. Survivors are entitled to benefits even if they are divorced as long as they had been married for at least 10 years. If you file for benefits before you are over age 60, but below full retirement age, you will receive a reduced percentage of the worker’s benefits. Surviving spouses who are younger than 60 receive benefits only in limited circumstances, such as cases of disability or caring for a disabled child.
For more from the Social Security Administration on the requirements for survivor benefits, click here.
Tags: asset protection, Asset Protection Planning, assisted living facilities, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, Providence, Rhode Island, seniors, social security, Social Security Administration, spousal benefits, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
