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 cases.

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.

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.

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.

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%.

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.

Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

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 federal law]

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.

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.

You are each entitled to the annual exclusion amount on the gift. Together, you can give $26,000.

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."

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 insureds.

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 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 you travel.

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 representative.

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 registration.

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.

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 care facilities.　

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.

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 planning goals.

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:

Mogan’s Café

548 Palisades Drive, Pacific Palisades, CA 90272

** Brunch will be served

Pasadena Convention Center

300 E. Green Street, Pasadena, California 91101

** Light refreshments will be served

Café Piccolo – Long Beach

3222 East Broadway, Long Beach, CA 90803-5818

** Lunch will be served

L.A. Gay & Lesbian Center

The Village at Ed Gould Plaza

1125 N McCadden Place, Los Angeles, CA 90038-1212

Indian Wells Golf Resort

44-500 Indian Wells Lane

Indian Wells, Ca 92210

** Breakfast will be served

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 prices around!

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