Welcome to the Winter Edition of my
Newsletter. This newsletter is meant to give you useful information
regarding issues that impact your life
First, I want to wish you and yours a very
Happy New Year!
I truly hope that it brings good health, success and happiness to you
To read on any topic, click the heading below:
Higher Exemption Amount *
Retroactive Estate Tax For 2010 – With Election To Forego The Tax
Portability Of Unused Exemption Between Spouses
ABOUT GIFT TAXES? *
New, Higher Exemption Amount *
Pays The Gift Tax? *
What Is Considered A Gift? *
What Can Be Excluded From Gifts?
I Deduct Gifts On My Income Tax Return?
Many Annual Exclusions Are Available?
What If My Spouse And I Want To Give Away Property That We Own
What Is "Fair Market Value?" *
SELECTED NEW LAWS *
Medicare "Donut Hole" *
Insurance Profit Rule *
California Hmo Rules *
REGISTERING HEALTH CARE DIRECTIVES *
Step 1 *
Step 2 *
POLST FOR THE SERIOUSLY ILL? *
When is a POLST necessary (particularly in addition to or instead of
an Advance Health Care Directive)?
UPCOMING WORKSHOPS *
Available Packages *
ADDITIONAL INFORMATION *
Estate taxes have been the subject of much
controversy, despite the fact that very few have ever had to pay the
infamous "death tax". Congress has just passed a revision of the tax
laws so that estates with a gross value of under $5 million per person
will not be subject to any taxation at all.
The gross value of an asset is its current
market value before deduction of any mortgage or debt. For estate tax
purposes, this includes the proceeds of life insurance proceeds in most
Once you have accounted for the Gross Estate,
certain deductions (and in special circumstances, reductions to value)
are allowed in arriving at your "Taxable Estate." These deductions may
include mortgages and other debts, estate administration expenses,
property that passes to surviving spouses and qualified charities. The
value of some operating business interests or farms may be reduced for
estates that qualify.
The tax rate for estates over the exemption
amount is now 35%.
California continues to not have any estate or
inheritance taxes at all.
Estate Tax For 2010 – With Election To Forego The Tax
For decedents dying in 2010, the estate tax is
retroactively restored, with an exemption of $5 million and a top rate
of 35%. The estate’s executor, however, is given the option to forego
estate tax, but must then also forego a step-up in basis of the
decedent’s assets, except to a limited extent.
Unused Exemption Between Spouses
Beginning in 2011, this provision will permit
a decedent’s unused estate tax exemption to be added to and used by a
surviving spouse during the surviving spouse’s lifetime for gifts, or be
available at death for estate tax purposes. The unused exemption will be
available to the surviving spouse only if a timely election is made on
the predeceased spouse’s estate tax return.
The generation-skipping transfer (GST) tax
will spring back to life in 2011 with a rate of 35% and an exemption of
$5 million. The estate, gift and GST exemption is further increased for
inflation for 2012.
All of these changed rates and exemptions will
once again "sunset" at the end of 2012, and 2013 will usher in a 55% tax
rate and a $1 million exemption.
WHAT ABOUT GIFT TAXES?
In the recently passed legislation, the
lifetime exemption amount for gifts was raised from $1 million to $5
million. The maximum tax rate on gifts over that lifetime exclusion
amount is now 35%.
Who Pays The
The donor is generally responsible for paying
the gift tax. Under special arrangements the donee may agree to
pay the tax instead. Please visit with your tax professional if you are
considering this type of arrangement.
What Is Considered A Gift?
Any transfer to an individual, either directly
or indirectly, where full consideration (measured in money or money's
worth) is not received in return.
What Can Be Excluded From Gifts?
The general rule is that any gift is a taxable
gift. However, there are many exceptions to this rule. Generally, the
following gifts are not taxable gifts.
Gifts that are not more than the annual
exclusion for the calendar year.
Tuition or medical expenses you pay for
someone (the educational and medical exclusions).
Gifts to your spouse.[Note: remember
that a Domestic Partner or same-sex spouse is not a "spouse" under
Gifts to a political organization for its use.
In addition to this, gifts to qualifying
charities are deductible from the value of the gift(s) made.
May I Deduct Gifts On My Income Tax
Making a gift or leaving your estate to your
heirs does not ordinarily affect your federal income tax. You cannot
deduct the value of gifts you make (other than gifts that are deductible
charitable contributions). If you are not sure whether the gift tax or
the estate tax applies to your situation, refer to
Publication 950, Introduction to Estate and Gift Taxes.
How Many Annual Exclusions Are
The annual exclusion applies to gifts to each
donee. In other words, if you give each of your children $13,000 the
annual exclusion applies to each gift.
What If My Spouse And I Want To Give
Away Property That We Own Together?
You are each entitled to the annual exclusion
amount on the gift. Together, you can give $26,000.
What Is "Fair Market Value?"
Fair Market Value is defined as: "The fair
market value is the price at which the property would change hands
between a willing buyer and a willing seller, neither being under any
compulsion to buy or to sell and both having reasonable knowledge of
relevant facts. The fair market value of a particular item of property
includible in the decedent's gross estate is not to be determined by a
forced sale price. Nor is the fair market value of an item of property
to be determined by the sale price of the item in a market other than
that in which such item is most commonly sold to the public, taking into
account the location of the item wherever appropriate."
SELECTED NEW LAWS
Among the provisions of the much disputed
federal Health Care Reform legislation are the following provisions:
Beginning in 2011, seniors on Medicare will
get a 50 percent discount on brand-name drugs while in the "Donut Hole,"
a gap in the Medicare Part D prescription drug coverage plan. Medicare
Part D currently covers up to $2,700 per year in prescription drug
payments then stops paying for medications until costs exceed $6,100.
This means Medicare Part D coverage recipients are responsible for
paying all their own drug costs between $2,700 and $6,100. This gap in
coverage will be eliminated completely by 2020.
Beginning on January 1, 2011, insurance
companies that provide individual and small group policies will be
required to spend 80 percent of their premium dollars on medical
services. Previously, insurance companies could pocket high profits
without being accountable for the level of services provided to their
Patients who seek urgent care that doesn't
require prior authorization must be seen within 48 hours. Otherwise,
patients must get an appointment within 10 days for general treatment
and an appointment within 15 days for specialist treatment. Telephone
calls to doctors' offices will have to be returned within 30 minutes,
and physicians or other health professionals will have to be available
24 hours a day.
California says it is the first state to set
time standards for HMOs, which serve nearly 21 million of its residents.
I have long advocated that everyone adopt an
Advance Health Care directive for themselves. For a review of the
purpose and nature of this critical document
Having a Directive is only part of the story. Access to the document is
I advocate keeping your Advance Directive in a
spot that is known to the person(s) you appoint in the document so that
it is available if needed. In addition, I recommend you have a scanned
copy of the signed Directive on a USB drive and taking it with you when
In addition, California has a program whereby
you can register your Advance Health Care Directive with the state.
A person who has executed an advance health
care directive may register information regarding the directive with the
Secretary of State. This information is made available upon request to
the registrant's health care provider, public guardian, or legal
Once the advance health care directive has
been prepared and executed, information regarding the advance health
care directive may be registered with the Secretary of State by
Registration of Written Advance Health Care Directive
(pdf ~62KB). The Registration of Written Advance Health Care Directive
is a voluntary filing. The registration form is provided in PDF file
format and can be viewed, filled in and printed from your computer using
the most current version of the Adobe Reader (available for free from
Once the Registration of Written Advance Health Care Directive form has
been completed, the form should be mailed to:
Secretary of State
Advance Health Care Directive Registry
P.O. Box 942877
Sacramento, CA 94277-0001
There is a $10 fee for filing a new
registration form or a revocation of prior directive combined with a new
The same form can be used to amend information
on a previously filed registration form or revoke the registration by
checking the applicable box on the form. There is no fee for filing an
amendment or revocation.
The advance health care directive can be made
a part of the Secretary of State registry by attaching a copy of the
advance health care directive to the Registration of Written Advance
Health Care Directive filed with the Secretary of State. As an
alternative to providing a copy of the advance health care directive,
its location can be indicated on the registration form.
A registrant must re-register upon execution
of a subsequent advance directive.
For further information, please refer to
Probate Code sections
and to the
Office of the Attorney General's website.
WHAT IS POLST FOR THE
The POLST program consists of a coordinated
system for eliciting, documenting and communicating life-sustaining
treatment wishes of seriously ill patients. The heart of this program
is the POLST form, which includes medical orders signed by both a
physician and the patient. These orders instruct health care
professionals of the patient's wishes regarding medical treatment and
become part of the patient's medical record. The POLST form is designed
to be easily recognizable by health care providers (it is to be printed
on brightly colored paper and kept at the front of the patient's chart)
and totally portable, as part of the patient's medical record, between
The California form has three sections for the
physician to document the patient's wishes: Cardiopulmonary
Resuscitation (CPR), Medical Interventions and Artificially Administered
Nutrition. The patient may specify whether CPR should be performed, and
in not quite so immediately dire circumstances, the level of medical
intervention he or she wants: "comfort measures only," "limited
additional interventions," or "full treatment." Patients may further
indicate whether nutrition may be supplied by tube, and for how long.
By comparison, traditional DNR order covers only resuscitation measures.
When is a
POLST necessary (particularly in addition to or instead of an
Advance Health Care Directive)?
A POLST form is not an Advance Health Care
Directive and it does not include the appointment of an agent to speak
on behalf of the patient. The goal of the POLST form is to provide a
specific set of immediately active medical orders, determined by the
physician and patient with reference to the patient's current medical
condition. Thus, the POLST form is best suited for those who are
already seriously ill, allowing the avoidance of delay in decisions
regarding treatment by providing the patient's wishes without the
process of locating and consulting an Advance Directive agent. Because
a POLST form must be completed with the assistance of a health care
professional (a physician, social worker or nurse) and signed by a
physician, it also allows the patient to start a dialogue with his or
her physician about important end of life choices.
There are several things to keep in mind when
recommending the completion of a POLST. First, if an emergency service
responder is not made immediately aware of the existence of a POLST
form, the responder may perform treatments against the wishes of the
patient. Executing a DNR order and wearing a "Do Not Resuscitate - EMS"
medallion will prevent this occurrence. Second, a POLST form will
override previous instructions, including an existing Advance Directive
if there is a discrepancy between the two. Finally, it is important to
note that a patient's appointed agent may modify a POLST while the
patient is incapacitated.
For the past several years I have teamed with
Wells Fargo Associates in presenting workshops that address the
financial and estate planning issues facing unmarried persons. While
these issues specifically affect lesbian and gay couples, they also
impact any unmarried individual or couple. The key is whether the
federal government recognizes your relationship as "spouses" or not.
For gays and lesbians, the Defense of Marriage
Act (DOMA) specifically prevents those married or in civil unions and
domestic partnerships from taking advantage of federal laws available to
heterosexual married couples. Although several courts have found DOMA
unconstitutional, it is still recognized by the IRS.
In these workshops we will discuss new tax
filing requirements for California Domestic Partners and how to plan
around DOMA and other laws to maximize your investment and estate
This coming January and February we will hold
a series of workshops in Pasadena, Long Beach, Pacific Palisades, Palm
Springs and West Hollywood. The schedule includes:
January 22 from 11am-2pm
548 Palisades Drive, Pacific Palisades, CA
** Brunch will be served
January 26 from 7-10pm AND February 5 from
Pasadena Convention Center
300 E. Green Street, Pasadena, California
** Light refreshments will be served
January 29 from 11am – 2pm
Café Piccolo – Long Beach
3222 East Broadway, Long Beach, CA 90803-5818
** Lunch will be served
February 9 from 7-9pm AND February 12 from
L.A. Gay & Lesbian Center
The Village at Ed Gould Plaza
1125 N McCadden Place, Los Angeles, CA
February 19 from 10am-12:30 pm
Indian Wells Golf Resort
44-500 Indian Wells Lane
Indian Wells, Ca 92210
** Breakfast will be served
If you or a friend is interested in attending
any of these events, please send me an email at
and I will make sure a space is reserved for you and/or them.
I have developed the most cost-effective
program to give you the benefit of attorney drafted, customized estate
plans that can save you thousands of dollars. I accomplish this using
the same document drafting techniques used by those charging up to five
times as much as our fees. I am able to do this simply because of my
commitment to provide high quality legal services at the most affordable
And if you choose to use a living trust, you
will avoid the costly, time consuming, emotionally draining probate
experience, saving your loved ones a great deal of time and money.
Estate Planning is as much about providing for
your own life as it is about planning for what happens when you die.
Because we, as normal human beings, often postpone planning for our own
disability or death, estate planning is, likewise, postponed. Sometimes
this has disastrous effects.
As a way of making Estate Planning affordable
and available to all, I have special package offers for you. Each
package comes with a Client Guide and easy to complete forms for you to
complete so that I know what your desires are.
Included in the fee are as many meetings,
telephone calls or e-mails as you may need to make your selections. I
want to make certain you get the documents you want and that you
understand them. I am also available on SKYPE by pre-arrangement.
All documents are custom drafted by me to suit
your individual needs. Other online services use non-attorneys to
prepare documents but I believe you deserve the individual attention of
an experienced attorney.
The Individual Complete Package includes, at
your option, a Living Trust, a Will, a Health Care Directive and a
General Durable Power of Attorney. The low price for this complete
estate planning package, including a Client Guide, is only $895.00. A
minimum payment of $450 is required.
The Couples Complete Package - for Married
Couples, Unmarried couples or Domestic Partners -- includes, at your
option, a Living Trust, a Will, a Health Care Directive and a General
Durable Power of Attorney for each of you. The low price for this
complete estate planning package, including a Client Guide, is only
$1,195.00. A minimum payment of $600 is required.
Additional optional fees which depend on your
individual needs include a deed to transfer real property to your trust
at $100 per deed and recording; if you wish to sign and notarize at my
office there is a fee of $10 per notarization; and if you wish me to
assist with the transfer of other assets it is at my hourly rate.
Call now for a free appointment to discuss
these Special Offers in more detail by visiting our office (310)
209-8080 or get started online now.
I truly hope that the information in this
newsletter is useful to you. However, nothing contained in this email is
intended as advice on any issue discussed nor is it intended to create
an attorney-client relationship if it did not exist prior to this.
Philip J. Hoskins
Attorney at Law
10940 Wilshire Blvd., Suite 1400
Los Angeles, CA 90024
310-209-8080; fax 310-208-8582