Trying to Outsmart the Government
June 23, 2008
I had a call not too long ago from a woman who was concerned about avoiding probate and paying estate taxes upon her death. She had figured out, or so she thought, how she could solve both problems and wanted confirmation from me that it would work. She had written out a check to her son leaving the dollar amount blank. She then instructed her son that upon her death, or if her passing was imminent, that he should write in the dollar amount and deposit the check in his account.
Of course, trying to outsmart the government in this way won’t work. Firstly, going through probate will still be necessary as long as there are any assets that can only be accessed by appointing an executor. In many states probate is not something to fear anyway. Usually it is an inexpensive process that can be handled with little or no court involvement. In those states where probate is messy and expensive, however, this woman’s solution still won’t work as long as she has even a single asset that requires the appointment of an executor. Often, refund checks payable to the person who died will necessitate the appointment.
As for estate taxes, the government is smarter than that. In determining the size of one’s estate all assets transferred within 3 years of one’s death are included as part of the estate for tax purposes. This will specifically prevent the strategy of transferring all of one’s assets before death to eliminate the estate tax. Now, you might be thinking that the estate tax is not something to worry about since the federal estate tax only kicks in on estates over $2,000,000 (and will go up to $3,500,000 in 2009). However, most states have their own estate tax as well and the amount exempt from tax is much lower. In New Jersey, for instance, the estate tax is owed on estates greater than $675,000 and in New York on estates greater than $1,000,000.
There are other ways this woman may be able to minimize taxes on her estate but writing blank checks with instructions to cash them when she dies is not one of them. The government is much too smart for that.
Elder Law Podcast Show #6 Long Term Care Planning – Are You Prepared?
June 4, 2008
Podcast: Play in new window | Download
In the sixth installment of his podcast, Elder Law Today, Yale Hauptman invitesguests Heidi Rinsky Schnapp and Lisa Cook Bayer of Life Management Resources, an elder care consulting firm and Gregory W. Bushwell, of B & M Brokerage Services, a long term care insurance specialist to a roundtable discussion on long term care.
The panel first discusses preplanning options and Greg shares his advice on long term care insurance products and services. Learn why there is no such thing as one size fits all when considering the amount of insurance coverage for long term care, what pitfalls to avoid when purchasing long term care insurance, what additional services besides nursing home care are covered and the difference between disability insurance and long term care insurance.
If you or your loved one is already in the midst of a long term care crisis, then youâll want to hear Heidi and Lisa discuss with Yale the types of services their elder care consulting firm provides. Youâll learn how elder care mediation can help families stay out of a public and expensive legal battle. Heidi explains what geriatric care managers do and how they can help families separated by long distances. Lisa shares with the audience what daily money management services are and how essential they can be for the elderly.
Yale then takes listener emailed and live call in questions as he and his guests discuss the goal that each of us wants to accomplish when we face the aging process, that is, to age in place and remain in our
homes as long as possible.
Click here to listen to the show
Heidi Schnapp Lisa Bayer Life Management Resources
Life Management Resources 973-533-0839
Greg Bushwell B & W Brokerage Services
bushwellorg@yahoo.com 973-716-7594
To subscribe to our podcasts click here
Please send us your feedback
