Question: I am interested in doing Medicaid planning for potential future long term care costs, but I don’t know for sure that I’ll even need skilled nursing care or long term care. Should I start the Medicaid planning process ahead of time or wait until I need the nursing home care to make the plans?
Answer: Because there is a look back period, there are risks to waiting until a crisis hits to plan for Medicaid. It is more advantageous to make an appointment with an elder law attorney to evaluate your situation, income, and assets at the outset of a gradual condition that may cause you to eventually need long term care. Babette Bach is a Florida Board Certified Elder Law Attorney and an expert in public benefits and asset protection planning. Call Bach & Jacobs today at (941) 906-1231 to make an appointment for a consultation with her.
Question: When is ancillary administration necessary for non-Florida residents who die owning real estate in Florida? What are the options for ancillary administration?
Answer: When a resident of another state dies owning real estate in Florida titled in the decedent’s name, probate proceeding must be commenced to validly transfer the property after the death. This is the case even if a personal representative has been appointed in the decedent’s home state. If the decedent left a will, any person may petition to admit the Foreign Will to Record in the Florida County where the property is located. The person petitioning for admission of the will should have “authenticated copies” (learn more about authenticated copies here). The probate court will appoint an ancillary personal representative who is qualified under the Florida Probate Code who will administer the ancillary probate for the Florida estate. There are other options available to certain ancillary estates that have values less than $50,000 called short form ancillary administration. There is also a proceeding called summary administration available to estates with property subject to Florida probate that are worth less than $75,000. If you are seeking to administer the Florida assets of a non-Florida resident decedent who has died, contact Bach & Jacobs, P.A. to learn which options are available to you under Florida 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.
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.
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.
Question: Are the federal income tax incentives for donating conservation easements going to change in 2014?
Answer: The “enhanced conservation easement incentive,” which applied to conservation easements donated in 2013, raised the maximum deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%. It also allowed qualified farmers and ranchers to deduct up to 100% of their AGI, and increased the number of years over which a donor can take deductions from 6 years to 16 years. Policy makers at the federal level had given conservation easement donors this tax benefit to encourage them to conserve land. Because Congress did not renew the enhanced conservation easement incentive prior to the end of the year, it expired on Dec. 31, 2013. Unless Congress acts, the tax deduction for a donation of a qualified conservation contribution will be the same rates as other charitable gifts. Attorney Sean Byrne of Bach & Jacobs has represented parties in multimillion dollar conservation land transactions and can advise you of your options regarding conservation easement donations.
Question: I was the guardian for a ward who has recently died. Can I petition to open a probate proceeding and be appointed personal representative also?
Answer: Usually, the named personal representative in the decedent’s will is the one who initiates the probate proceeding. The guardian, who typically will have all of the deceased’s personal records, would normally notify all the family members and the personal representative designee upon the ward’s death. However, sometimes the decedent dies intestate (without a will) or the designated personal representative is unable to serve. The guardian is considered an “interested person” under the Florida Probate Code for the purposes of commencing probate proceedings and can open the probate. The guardian may be required to commence the probate proceedings to transfer the guardianship assets to the probate estate. However, there could be some cases where the guardian’s appointment as personal representative of the ward’s estate is inappropriate. For example, if a conflict of interest existed between the ward and the guardian prior to the death of the ward, then the court may be inclined to appoint a guardian ad litem, an administrator ad litem, or a different personal representative all together. If you are the guardian for a recently deceased ward or want to petition to be appointed the personal representative for a deceased ward, contact Bach & Jacobs to schedule an appointment with one of our attorneys.
Question: Should I let the person I have designated as my personal representative know about my estate plan?
Answer: Your personal representative—referred to as an executor in some states—is the person responsible for carrying out the provisions of your will. That person could be a reliable family member, but can also be a trust officer, attorney, or even a trusted friend. It is often advisable to at least let the individual or entity know that you have chosen them and confirm they are willing to serve in that role. You should know that there are eligibility requirements for personal representatives under Florida law. For example, those who have a felony conviction, as well as non-Florida residents who are not related to the deceased, cannot qualify as a personal representative. Whether you walk that person through the details of your will is a personal decision—you certainly have the right to keep it private. Although, it can sometimes be helpful to at least discuss some practical matters relating to your estate, such as who to contact upon your passing, how to pay for basic expenses like funeral costs and taxes, and what your funeral and burial wishes are. The paperwork a family and personal representative may have to deal with regarding a deceased loved one’s estate plan can be overwhelming if they do not know who to go to for help. The attorneys at Bach & Jacobs can advise you about the eligibility of your preferred personal representative. Call Bach & Jacobs, P.A. to schedule an appointment to review your estate plan.
