Skip to main content
Monthly Archives

February 2014

How much can I give away as a gift without having to pay gift taxes?

By Estate Planning, Tax Law

Question: How much can I give away as a gift without having to pay gift taxes?

Answer: For gifts made in 2013 and 2014, the gift tax annual exclusion is $14,000. This means that anyone can gift up to $14,000 to another person in these years without using any of their lifetime exclusion for estate, generation skipping and gift taxes. Married couples can gift up to $28,000 to any person in 2013 and 2014.

You only have to begin paying gift taxes after you have transferred more than the lifetime exclusion amount, which is $5,340,000 for 2014.  However, you will have to file a gift tax return on any gifts to a specific individual in excess of $14,000 ($28,000 for married couples), even if you do not actually owe any gift taxes.

Attorney Fred Jacobs is Florida Board Certified in Tax Law.  Call Bach & Jacobs at (941) 906-1231 to schedule an appointment with Fred if you have questions about how the gift and estate tax laws affect you and your family.

February 27, 2014
Love0

What is the 2014 federal estate tax rate and lifetime gift exclusion amount?

By Tax Law

Question:  What is the 2014 federal estate tax rate and lifetime gift exclusion amount?        

Answer:  For gifts made or deaths occurring in 2014, the estate, generation skipping and gift tax lifetime exclusion is $5,340,000. For transfers in excess of these limits, the federal government will levy a 40% tax on any amount that exceeds the exclusion amount.

If you need legal advice for tax matters, VA benefits, Medicare, Medicaid planning, estate planning, probate or trust administration, please contact our office for an initial consultation at (941) 906-1231.

February 25, 2014
Love0

What is Dependency and Indemnity Compensation and how do I qualify for it?

By Government Benefits, Veterans Affairs

Question: What is Dependency and Indemnity Compensation and how do I qualify for it?

Answer: Dependency and Indemnity Compensation (DIC) is a tax free monetary benefit paid to eligible survivors of military service members who died in the line of duty or eligible survivors of Veterans whose death resulted from a service-related injury or disease.  In order to apply for DIC in Sarasota or Manatee County, contact Terry Acton at 941-861-2899.  At the time of application, you will be required to supply documentation that substantiates that the surviving spouse qualifies for the benefit.  A surviving spouse can qualify for DIC if the surviving spouse was either: (1) Married to a service member who died on active duty, active duty for training, or inactive duty training; OR (2) Validly married the Veteran before January 1, 1957; OR (3) Married the Veteran within 15 years of discharge from the period of military service in which the disease or injury that caused the Veteran’s death began or was aggravated; OR (4) Was married to the Veteran for at least one year, OR (5) Had a child with the Veteran.  In addition, the surviving spouse must have (1) cohabited with the Veteran continuously until the Veteran’s death or, if separated, was not at fault for the separation AND (2) Is not currently remarried.  Note: A surviving spouse who remarries on or after December 16, 2003, and on or after attaining age 57, is entitled to continue to receive DIC. The VA is now recognizing same sex legally married couples for all VA benefits.

If you need legal advice for VA benefits, Medicare, Medicaid planning, estate planning, probate or trust administration, please contact our office at (941) 906-1231 for an initial consultation.

February 20, 2014
Love0

What are the new 2014 benefits for Aid and Attendance pension for wartime Veterans and their surviving spouses?

By Government Benefits, Long-Term Care, Veterans Affairs

Aid and Attendance is a pension for Veterans and surviving spouses who require regular care attendance form another person to assist with the activities of daily life such as eating, bathing, dressing, medication allocation, blind, or need for assisted living or skilled nursing care.
Aid and Attendance benefits can assist paying for the costs of a caregiver in the home, assisted living and skilled nursing costs.

Aid and Attendance benefit for wartime Veterans for 2014 is as follows:

  • Single Veteran = $1,758 a month
  • Married Veteran = $2,085 a month
  • Surviving Spouse of at Veteran = $1,130 a month

If you need legal advice for VA benefits, Medicare, Medicaid planning, estate planning, probate or trust administration, please contact our office at (941) 906-1231 for an initial consultation.

February 17, 2014
Love0

How do I benefit from setting up a QIT or Qualified Income Trust for Florida Medicaid – and what is it?

By Estate Planning, Medicaid Planning

Question: How do I benefit from setting up a QIT or Qualified Income Trust for Florida Medicaid – and what is it?

Answer: A Qualified Income Trust is commonly called a QIT or a Miller Trust.  It is necessary under Florida Medicaid law when the Medicaid applicant for skilled nursing home care or Medicaid diversion has gross monthly income of $2,163 or greater. (2014 figures).

When set up properly, this irrevocable trust enables a person to deposit income into a trust account each month.  The money in the QIT account will not be counted as an asset for Medicaid or Long Term Care Benefits eligibility.  However all monies deposited into the QIT can only be used to pay for the applicant’s medical expenses, care costs and spousal or other court ordered support.  The goal of the QIT is to secure all of the income for medical necessities and spousal support and to provide a Medicaid lien on the account upon the passing of the applicant.

Only an attorney is licensed to draft an irrevocable QIT.  Once established the trustee needs to be advised as to how to set up and correctly fund the account.  If the QIT account is not correctly funded, the applicant will be either denied or disqualified from receiving Medicaid.  These accounts are monitored by the Florida Department of Children and Families and the trustee must produce all bank statements, proof of gross income and receipts for all disbursements.  Be careful to save all records.

Upon the death of the Medicaid applicant, Medicaid has a lien on all assets remaining in the QIT and the trustee is responsible to satisfy this lien and to provide documentation.  This is another time that professional assistance is recommended.

For this reason, it is often recommended that board certified elder law attorney is consulted. It is also worth noting that this type of trust is irrevocable which means it cannot be cancelled and any funds remaining in the account at the time of your death are paid to the State up to the value of benefits paid out to you.

Please call us at (941) 906-1231 to schedule an appointment for assistance with Medicaid planning.

February 11, 2014
Love0

What are the tax rules on giving away gifts during your lifetime?

By Estate Planning, Tax Law

Question: I want to give gifts to my family. What are the tax rules on giving away gifts during your lifetime?

Answer: You are free to give away gifts forming part of your estate while you are alive without incurring any federal gift tax or estate tax but there are limits to be aware of which do change from time to time.

For 2014, the limit has been raised to $5.34 million which means that you can gift this amount away during your lifetime without owing this tax. Annually, you are entitled to gift up to $14000 in cash or other assets to as many recipients as you would like which is the annual exclusion amount.

In addition, other gifts which are not subject to tax include:

• Schooling fees, if paid directly to the school

• Medical expenses also if paid directly to the treatment provider

• Gifts to your spouse (if your spouse is a U.S. citizen)

• Gifts to a political organization for its use

• Gifts to certain charities

It is worth noting that the current federal gift/estate tax rate is 40% and that if a gift is subject to taxation then it is the person who makes the gift, not the person receiving the gift, who has to pay the tax due.

For more in depth advice specific to your family’s situation, please contact us and we will be happy to set up an initial consultation with one of our highly experienced tax attorneys.

February 5, 2014
Love0