fall 2014 irs extends deadline to elect...
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THEInformaTIon To TrusT. counsElors To rEly upon.
120 East PalmEtto Park road, suitE 400 • Boca raton, Florida 33432 • Ph 561.347.1700 • Fax 561.391.9944
www.redgraveandrosenthal.com
fall 2014irs ExtEnds dEadlinE to ElEct PortaBility
In 2012, Congress e n a c t e d t h e American Taxpayer Relief Act of 2012, which extended the d e a d l i n e f o r surviving spouses to elect portability. Portability allows the surviving spouse to transfer, or “elect portability”, of their deceased spouse’s unused estate tax exemption to their own estate tax exemption. The unused estate tax exemption is also known as the “deceased spousal unused exemption amount” or “DSUE amount”. In 2014, spouses are able to make tax-free gift of $5.34 million each, for a total of $10.68 million.
Generally, to elect portability, an estate tax return must be filed within nine months after the death of the spouse, with an additional 6 month extension, for a total of 1 year and 3 months.
When the Act was first passed, many people missed the deadline to file an estate tax return and elect portability for the surviving spouse. However, in February of this year, the IRS extended the deadline to file an estate tax return to December 31, 2014 under the following circumstances:
1. The decedent had a surviving spouse;
2. The decedent died after December 31, 2010, and on or before December 31, 2013;
3. The decedent was a citizen or resident of the United States on the date of death; and
4. The only reason for filing the estate tax return is to elect portability.
If you think you may qualify to elect portability, please do not hesitate to contact us to review your options.
arthur r. rEdGraVE Board Certified Wills, Trusts & Estates Direct Dial 561.362.0383 [email protected]
JEnniFEr E. Zakin Direct Dial 561.226.7819 [email protected]
a. richard rEdGraVEDirect Dial 561.362.5683 [email protected]
rEBEcca F. winnEr Direct Dial 561.226.4284 [email protected]
alan B. rosEnthal Direct Dial 561.362.9572 [email protected]
stEPhEn G. mElcEr Board Certified Wills, Trusts & Estates Direct Dial 561.226.4277 [email protected]
sara J. lEroy Direct Dial 561.347.6980 [email protected]
rEBEcca l. JEnkins Direct Dial 561.362.0834 [email protected]
www.redgraveandrosenthal.com
our attornEys
120 East PalmEtto Park road, suitE 400 Boca raton, Florida 33432
A recent statistic found that over one half of individuals over the age of 80 will ultimately reside in a skilled nursing facility or an assisted living facility before they die. With nursing home care costs averaging anywhere between $7,500/month to over $15,000/month, an individual living in a skilled nursing facility for an extended period of time can quickly deplete his/her hard earned savings and retirement funds. Planning for this life event often requires the assistance of an Elder Law attorney.
Elder Law is a subset of Estate Planning that specifically addresses matters relating to planning for aging, illness and incapacity. Elder Law strategies include creating plans to address long term care, asset protection and public benefits, including Medicaid. An Elder Law strategy shifts the primary focus from the client’s death to the client’s lifetime needs and goals. Once those lifetime needs are met, the estate plan can then provide for the disposition of one’s assets following death.
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EldEr law: how to Plan For your lonGEVity
Article continued on the back page.
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nEws notEsAaron Millman, an associate in our Elder Law practice group, devotes his legal practice to serving the needs of the elderly population, including assisting with guardianships, long term care, advance directives, Medicaid and nursing home planning, disability and incapacity planning and special needs trusts.
Mr. Millman is very active in the Palm Beach County community including currently serving as a board member of the Adolph & Rose Levis Jewish Community Center of Boca Raton.
Mr. Millman is a “Triple Gator”, graduating cum laude from the University of Florida Levin College of Law and receiving both his Bachelor and Master Degrees in Accounting from the University of Florida. He is admitted to the Florida Bar and is a Florida Certified Public Accountant.
mEEt our attornEys
1. I Can Only Qualify for Medicaid By Gifting All of My Assets
Away and Waiting for the 5 Year Look Back. Although qualification can be done through the gifting of all assets 5 years prior to a Medicaid application, there are numerous other strategies which can be utilized in order to allow an individual to qualify for Medicaid prior to a 5 Year Look Back period. Often times an individual can become Medicaid eligible with no look back at all and without fully depleting their asset base.
2. Medicare will cover my Skilled Nursing Care. In order for Medicare to cover any part of your stay in a skilled nursing facility, you must first have a qualifying hospital stay (at least 3 days as an inpatient). If you enter a skilled nursing facility within 30 days of your hospital stay, Medicare will pay for days 1 20 with no co pay. For days, 21 100 you are responsible for a $152 coinsurance per day. Following that, you are responsible for the full cost of your skilled nursing home care.
Our firm welcomes the opportunity to discuss your longevity plan and long term needs. Please contact our office for a complimentary consultation with our Elder Law attorney.
lEssons lEarnEd From thE rich and Famous: rEVisit your EstatE Plan
common misconcEPtions:
The recent deaths of actress Lauren Bacall and legendary American Top 40 host Casey Kasem have thrust estate planning and its potential pitfalls into the national spotlight. Bacall’s estate plan failed to implement appropriate estate tax planning causing her heirs to lose a substantial portion of her assets to estate taxes and Kasem’s family was entrenched in a bitter and emotional court battle over whom had the right to make health care decisions on his behalf, which continued until the day he passed away. These celebrity examples serve to remind us of the importance of revisiting your estate plan while you are physically and mentally able to do so.
What changes have occurred in your life over the last 5 years? Has your family expanded or contracted due to the birth of grandchildren, divorce, remarriage or death? Does your estate plan instruct family members should you become unexpectedly incapacitated or disabled? As the years progress, families and assets can change quite a bit and such changes can greatly impact how you look at your estate plan and how you may wish to update it to ensure it reflects your final wishes.
While changes within your family can largely impact your planning, pivotal changes in both Federal and Florida law can also greatly affect your existing estate plan. For example, the United States Supreme Court recently issued a significant ruling in Clark v. Rameker regarding inherited IRAs. In short, Clark
held that assets received by a beneficiary in an inherited IRA lose their character as “retirement funds” and, thus, would not be protected from the claims of the beneficiary’s creditors in a bankruptcy proceeding. This decision not only opens the door for bankruptcy creditors and their aggressive attorneys to go after an inherited IRA, but it raises awareness that there are other types of creditors (i.e., a divorcing spouse or lawsuit) who may seek to attach your assets without proper planning.
In addition, Florida has adopted significant changes to its statutes governing powers of attorney. Most notably, the statutes now require that the document specifically authorize each power granted to your agent and even goes so far as to require you to initial certain “superpowers” in order for these grants of power to be effective. Further, under the statutes, any person or institution must allow you to exercise the powers your documents specifically grant, or they can be liable not only for your damages, but also for your attorney’s fees in pursuing those damages.
As the law, family circumstances and assets are ever changing, we strongly suggest that you review your estate plan every two to three years in order to make sure it accomplishes the desired result with respect to your family and loved ones. We therefore highly encourage you to contact us to review and update your estate plan as necessary.
Rebecca Federspiel Winner is an associate in the Estate Planning Group. She focuses on the drafting of basic yet comprehensive and tax-efficient estate plans, including wills, revocable trusts, advance directives, durable powers of attorney, and complex gifting techniques. Additionally, Ms. Winner counsels high net worth individuals on estate planning strategies to help them achieve their personal objectives, whether that involves preserving assets for future generations or leaving a charitable legacy.
Ms. Winner graduated cum laude from Barry University Dwayne O. Andreas School of Law and received her undergraduate degree cum laude from the University of Florida. She is a member of the
Real Property, Probate and Trust Law of the Florida Bar as well as its Young Lawyers Division. Ms. Winner is admitted to the Florida bar.
Kelly Forrest oversees the administration of estates and assists clients navigate through the often complicated probate and administration process. She a lso helps personal representatives and family members reduce estate taxation through post-mortem estate planning.
In addition to her legal experience, Ms. Forrest formerly
served as past president and treasurer of the Real Property,
Probate & Trust Law Society and former chief ambassador and deputy chief of social development at the Stetson Ambassador Program. She also received many accolades for her legal efforts throughout the community including the Attorneys’ Title Insurance Fund Award and the William F. Blews Pro Bono Service Awards.
Ms. Forrest received her undergraduate degree from the University of Florida and her legal degree from Stetson University College of Law. During law school, Ms. Forrest was a member of the regional championship team of the American Bar Association Law Student Division Regional Arbitration Competition. Ms. Forrest is admitted to the Florida bar.
EldEr law: how to Plan For your lonGEVity (cont. from previous page)