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Philip J Hoskins, Attorney at Law

Welcome to the Fall edition of my Newsletter. This newsletter is meant to give you useful information regarding issues that impact your life.

FALL edition

SEPTEMBER 2010

 

Contents (click a title)

Nursing Home Alternatives *

Improving the Lives of LGBT Older Adults *

Estate taxes *

Do you have a current estate plan? *

Is Your Estate Plan up to date? *

Additional Information *

Nursing Home Alternatives

If you have a loved one that has begun to show signs that they may need more care than what you can provide, you may be thinking about a nursing home. This can be a very traumatic experience for both the person being admitted to the facility, as well as those that have to make this decision.

Before your loved one becomes incapacitated, make sure they have executed an Advance Health Care Directive giving you or someone else the authority to act on their behalf regarding medical decisions. At the same time have them execute a Durable Power of Attorney for Financial Matters so that money and legal decisions can be made once they become legally incapacitated.

Without these important documents, a court supervised conservatorship may be the only solution. They are expensive, public and time consuming.

It is not easy to come to the decision to put a parent in a nursing home, and often people just don’t know how to recognize when it is truly time to do this. Some of the signs to look for to determine if your parent or loved one requires more care than they can get from family members include:

  • Inability to live independently
  • The need for 24-hour supervision
  • They need help with everyday personal care, such as bathing, eating, walking, etc.
  • There are excessive demands on your time and finances, which is causing a major strain on your family.

If the above describes your parent or loved one, they may be ready to live in a an environment providing professional care. This doesn’t necessarily have to be a nursing home. Much depends on the extent and type of care that your loved one needs.

  • Home Health Care – This is one alternative to a nursing home. Home health care will keep your loved one at home where they will be happiest, but they will get visits from nursing assistants, nurses, doctors, and even therapists. This will help ease the burden on you, the family.
  • Adult Day Care – This is an option that more and more people are choosing; the loved one goes into the facility during the day so that their family can work, and during the evening they return home. This alternative also works well when combined with home health care.
  • Retirement Community – There are many assisted living retirement communities that will provide a number of services to their residents; these services include housekeeping, meals, social events, and even personal care. Although these services are available, your loved one will still have their own apartment and the ability to prepare their own meals and care for their own needs, if they are capable.

No one wants to put their loved ones in a nursing facility, especially considering the risk of abuse, but there may come a time when you are no longer able to care for them. Before choosing a facility, consider the alternatives to find the best possible choice for you and your loved one. Speak with their physician, ask friends, family and neighbors if they have any experience or recommendations. And of course, online searches can sometimes yield valuable information.

Improving the Lives of LGBT Older Adults

Although largely invisible until very recently, lesbian, gay, bisexual and transgender (LGBT) older adults make up a significant (and growing) share of both the overall LGBT population and the larger 65+ population. While confronted with the same challenges that face all people as they age, LGBT elders also face an array of unique barriers and inequalities that can stand in the way of a healthy and rewarding later life. The additional challenges to successful aging faced by LGBT elders are gaining visibility with the aging of LGBT Baby Boomers, who are the first generation of LGBT people to have lived openly gay or transgender lives in large numbers.

Improving the Lives of Older Adults examines these additional challenges and how they make it harder for LGBT elders to achieve three key elements of successful aging: financial security, good health and health care, social support and community engagement. The report also offers detailed recommendations for improving the lives, and life chances, of LGBT older Americans. To read more,
click here for the S.A.G.E. website.

Estate taxes

As part of the 2001 tax act, Congress increased the amount persons were permitted to give away tax-free at death (the "Exemption Amount"), with the increases phased in over a ten year period. The Exemption Amount increased over the years, reaching $3,500,000 in 2009 and ultimately became unlimited this year.

However, because the votes of 60 Senators could not be obtained back in 2001, the tax law changes were limited to a duration of 10 years, meaning that in 2011, the estate tax will be reinstated with an Exemption Amount of only $1,000,000 and a rate of tax equal to 55%, the exemption and rate of tax that were in effect before the 2001 tax act was passed. Certain larger estates will be subject to an extra 5% surtax that was repealed altogether in 2001, but which will also be reinstated in 2011.

Estates in excess of the exemption amount must file tax returns within nine months of the decedent’s death and taxable estates usually wait as long as possible before filing. Thus, most returns filed in 2007 were for people dying in 2006 when the estate tax exemption was $2 million. About 2.4 million people died in that year; of those, only 1 in 73 (.01%) generated an estate tax return and only 1 in 163 (.006%) had to pay any estate tax.

In 2009, the estate tax exemption increased to $3.5 million. It is anticipated that 14,900 estate tax returns will be filed for people who died in that year, of which only 5,500 will owe estate tax totaling about $13.8 billion.

After a single year hiatus in 2010, the estate tax will return in 2011 with a $1 million exemption and many more estates will have to file returns. It is anticipated that 108,200 estates of people dying that year will file estate tax returns and 44,200 of those estates will pay taxes totaling $34.4 billion.

Thus, in recent years the estate tax has only affected a exceedingly small percent of the population. However, if the 2001 legislation is not changed, a much larger percentage of estates will be required to file returns and pay estate taxes.

Congress has yet to act on this issue and several proposals are under consideration, ranging from abolishing the estate tax to raising the exemption amount to $5 million. The proposal which seems to have the most support would raise the exemption amount to $3.5 million and keep the tax rate at 45%.

click here If you would like to read an analysis of current proposals, .

If you might be at risk for estate tax exposure there are a number of planning options available to you.

  • Making lifetime gifts to loved ones. You can make a gift of up to $13,000 per year to as many people as you wish. Doing so lowers your taxable estate and if done over a number of years, this may bring your estate under the exemption amount.
  • Insurance. In addition to the traditional uses for life insurance, you can buy a policy that is designed to cover the amount of estate taxes which you expect will be applied to your estate. Of course, since few of us know when we will pass on, this can only be a rough estimate. There are minefields with regard to insurance policies that can make the problem worse, so I urge you to talk with me about your insurance policies so that they do not add to your estate tax problems rather than solve them.
  • Charitable giving. Gifts to federally recognized charities are exempt from estate taxation and can be a benefit to both the charities and your other beneficiaries. In some cases a gift to a charity will reduce your estate below the exemption amount and actually increase the amount your other beneficiaries receive. If you wish to discuss charitable giving techniques, please call me to set up a meeting.

If you think your estate may be subject to estate tax, I encourage you to speak with me or your tax advisor about what you can do to minimize the problem.

Do you have a current estate plan?

If you have done nothing to create your own estate plan, the State of California has made one for you. It is called the laws of intestacy (click here to see the State’s plan for you). To protect yourself, those who depend upon you and those who may have to take care of you in your later years, I encourage you to develop your own estate plan.

To make this process easier for you, I offer affordable packages that not only hold down the costs but provide high quality documents with your convenience in mind. I know that in these times money may be tight, but estate planning actually saves money – in some cases a great deal.

For example, if you or a loved one becomes incapacitated and cannot take care of their financial or personal needs, a court supervised conservatorship would need to be set up. The inconvenience and expenses associated with a conservatorship can eat up remaining resources rapidly.

Likewise, without a proper estate plan, when a loved one dies, their estate may need to go through court probate, where fees can take as much as 6 or 7% of the gross value. Good estate plans avoid both of these unfortunate results and also make sure your estate goes exactly where you want it.

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.  Some clients prefer to complete the process entirely online at their convenience. I can often arrange to meet at your home if necessary.

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.

Available Packages

The Individual Complete Package includes, at your option, a Revocable (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 and all meetings, phone calls, etc., 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 and all meetings, phone calls, etc., 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.

For more information or if you want to get started in the comfort of your home, please go to my website or call for an appointment to 310-209-8080.

Is Your Estate Plan up to date?

It is important to check whether your estate plan documents are up to date at least once every year. Use this checklist to make sure you are fully protected and current:

  • Is everyone named in your documents as a successor trustee, executor or agent still alive, available and willing to act as you have planned?
  • Are all of the people you have named to receive your estate still alive and is this still the way you want your estate to be distributed?
  • If you created a revocable trust, have all of your assets been transferred to the trust?
  • If you purchased new assets since the trust was created did you properly designate the trust as owner?
  • If you refinanced your real estate did the property get transferred back into your trust? Often in a refinance you will be required to transfer the property from the trust to yourself – frequently the property is not put back into the trust when the refinance is completed.
  • Have you had children, formed a new relationship, married, or divorced since your trust was created? Each such event can invalidate the documents if you do not take steps to take into account these changes.
  • Have laws changed since you created the estate plan documents? As noted elsewhere in this Newsletter, estate tax laws are in a state of flux and may require you to re-evaluate your overall estate plan.
  • Finally, if you have not yet done so, I urge you to scan your Advance Health Directive and Durable Power of Attorney documents and copy them to a USB drive so that you can take them with you when you travel. Emergencies can happen and having a signed digital copy may save time, money and even your life. If you do not have a digital copy let me know and I can provide one for you free of charge.

Additional Information

Nothing contained in this email is intended as advice on any issue discussed nor is it intended to create an attorney-client relationship.
Philip J. Hoskins
Attorney at Law
10940 Wilshire Blvd., Suite 1400
Los Angeles, CA 90024
310-209-8080; fax 310-208-8582
https://www.estateprobatelawyer.com

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