Massachusetts remains in the minority of states that have not increased their estate tax exemption since the federal estate tax exemption was raised in 2001. The Massachusetts estate tax exemption is currently $1,000,000 per person (though it disappears if you die owning more than this amount) while the federal estate tax exemption is now $5,450,000 per person.
Legislation introduced in Massachusetts would increase the Massachusetts estate tax exemption to 50% of the amount of the federal estate tax exemption. The legislation would also eliminate the disappearing nature of the current exemption. The legislation is currently under review in committee. However, the legislation’s future is uncertain given the loss in tax revenues that would result from its enactment. Continue reading
Most of us are familiar with the small heart or other symbol on a driver’s license signifying that a person is an organ donor. But what if you would like to donate your entire body—organs and all—“to science,” as it is commonly phrased? How does one go about doing this? This post discusses how estate planning can address body donation; note that this discussion covers only the donation of one’s entire body, not the donation of one’s organs.
The Boston Globe recently published an article concerning MassHealth’s proposed regulatory ban for transfers of assets to pooled trusts for individuals over the age of 65. The article profiles a typical client who might use a pooled trust, an elderly and disabled gentleman with minimal savings who uses his trust funds to pay for the services of a companion caregiver.
The client is a nursing home resident. By using the pooled trust, he is able to pay for basic essentials and enjoy meals out at local restaurants. If the pooled trust is eliminated as an option for him, presumably he would then be forced to spend down the remaining funds in the trust on nursing home care—which would be depleted in a matter of months—or else be disqualified from receiving MassHealth long-term care benefits.
The oral arguments in Nadeau v. Thorn were heard by the Massachusetts Supreme Judicial Court last week on January 5, 2017. Mirick O’Connell’s Lisa Neeley argued on behalf of the Appellant, Lionel C. Nadeau. Please click here to view the arguments. We will update you once the case is decided.
Pets are part of the family. They eat special food, require daily care and medications, and even sleep with their owners at night. But have you considered actually leaving money to your pet after you die? It may sound crazy, but under the law, pets are considered tangible personal property, similar to a car, jewelry, or furniture. Therefore, you can and should consider including your pet in your overall estate plan, because otherwise you risk your pet going to a shelter or being left homeless after you die. Continue reading
This past summer, the Treasury Department issued a controversial set of proposed regulations designed to prevent the long-standing practice of discounting the value of interests in family businesses given to other family members. The regulations have received significant criticism from family business owners and their professional advisors, who claim that the regulations are too broad and constitute an impermissible exercise of Treasury’s regulatory authority. Public comment on the proposed regulations is due in November and Treasury will hold a public hearing on December 1st. The regulations will not take effect until they are issued in final form, which is not expected until early to mid-2017 or later. Until then, taxpayers may continue to claim discounts in accordance with current practice.
Since most practitioners believe that the final version of the regulations will retain the anti-discount bias of the proposed regulations, family business owners contemplating large gifts to family members over the next 6-12 months should consider accelerating their timetable for making these gifts to take advantage of the discount benefits allowed by current law before the final regulations take effect.
On January 5, 2017, the highest court in Massachusetts will hear oral arguments in two cases concerning the use of irrevocable trusts in Medicaid planning and denials of long-term care benefits. A synopsis of each case is provided below: Continue reading
We are approaching the end of 2016, and attention should now turn to, what else, year-end income tax planning. The end of the year should be used to review your tax situation and determine what, if anything, can be done to minimize your income tax bill come April 2017.
There has not been much income tax legislation this year, nor is there expected to be any significant legislation prior to year-end. Thus, we are left with the tried and true planning methods. I will briefly discuss several of the planning techniques to take into consideration.
Please note that these techniques are time sensitive, meaning they must be done by the end of 2016.
On November 23, 2016, MassHealth issued proposed regulations that seek to implement sweeping changes to the Commonwealth’s health insurance program, also known as MassHealth. Thousands of seniors and disabled individuals rely on MassHealth benefits to provide for their skilled nursing and home care. Any change to the program will therefore affect the benefits of the many Massachusetts citizens who rely on MassHealth for their critical medical needs.
The proposed regulations were issued following Governor Charlie Baker’s Executive Order 562, which instructed administrative agencies to streamline their regulations to “reduce unnecessary regulatory burden.” However, the proposed MassHealth regulations could make the program more difficult to navigate, and possibly, result in an increase of denials, appeals, and lawsuits filed by applicants in order to protect their benefits.
There are a number of reasons to make lifetime gifts: to express affection, to provide financial assistance, or to support a charitable organization, to name a few. In some cases, you may even receive a tax benefit from making the gift, although most donors are motivated to make gifts for other reasons. As the end of the year draws near, people often think about making gifts, and, regardless of your motivations, it makes sense to consider how such gifts can affect your taxes.
The simplest form of gift, whether to a person or a charity, is an outright gift with no strings attached. The donor retains no legal ability to control the gifted property. When giving gifts to a younger person, you can transfer property to an account under the Uniform Transfers to Minors Act, which allows some control at least until the donee is 21. Other gifts provide more continued control, such as a gift to a trust for the donee’s benefit. Such trusts are usually irrevocable, and they often provide tax benefits to the donor.
Remember that if you want your gift to count for 2016, there are certain deadlines to meet. If your gift is to a person, your check must clear by year-end. If your gift is to a charity, the check must be written by year-end.