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Tax Law

Changes in Estate Tax Law Alter Use of Bypass Trusts

By Asset Protection Planning, Elder Law, Estate Planning, Tax Law

In 2013, changes were made to estate taxes and now few people are subject to federal estate taxes. For those who die in 2016, the first $5.45 million of an individual’s estate is exempt from federal estate taxes, which means that up to $10.90 million is exempt for a married couple’s estates.

With these changes it now may be that a bypass trust is unnecessary for someone’s estate. Due to the restrictions put in place on the bypass trust, the surviving spouse has less control over the assets.

However, a bypass trust is still useful for estates larger than the current estate tax exemption. Additionally, even married couples who have less than the exempt amount of assets may still choose to use a bypass-style trust in order to provide for a surviving spouse’s income needs during their remaining life while still protecting an inheritance for children from a prior marriage.

To see a bypass trust would be appropriate for your family and financial situation, call our office at (941) 906-1231 to schedule an appointment with one of our attorneys.

November 15, 2016
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What is a Bypass Trust?

By Asset Protection Planning, Estate Planning, Tax Law

An estate planning tool that couples have utilized for years is the bypass trust. The trust is a long-term planning device that allows a spouse to leave property that will not be subject to estate taxes when he or she passes away.

For couples that plan their estates together, they can make sure that the property will be taxed only once between the two of them by leaving it in a bypass trust. In order to keep the trust from being taxed when your spouse dies, you must ensure two provisions in your documents—you must limit your spouse’s power to access the trust during his or her lifetime and you must restrict your spouse’s power to distribute assets upon his or her death.

These conditions must be in place to satisfy the rules set up by the IRS. However, you may give your spouse the right the withdraw principle for his or her health, education, and support. You can also appoint him or her as trustee of the bypass trust. While your spouse is not allowed to give the assets to himself, his estate, or his estate’s creditors, you can grant him the right to name specific individuals in his will who will succeed to the trust upon his death.

November 11, 2016
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What is an elder law attorney?

By Elder Law, Estate Planning, Guardianship, Medicaid Planning, Medicare, Probate, Tax Law

An elder law attorney, also known as an elder care attorney, is familiar with the state and federal laws that impact seniors and their well-being.

These attorneys are well-versed and specialize in a range of areas:

  • Estate planning
  • Powers of attorney
  • Medicaid
  • Medicare
  • Veterans benefits
  • Probate and trust administration
  • Nursing homes
  • Elder abuse and fraud

Elder law attorneys allow you to plan ahead. By meeting with an elder law attorney and setting up documents, you can protect your assets, properly pass your estate to heirs, and name individuals to make health care and financial decisions for you when you are unable.

If you have further questions or wish to set up documents, contact our office at (941) 906-1231 to schedule an appointment with one of our attorneys.

September 30, 2016
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What educational institutions qualify for the tuition gift tax exclusion?

By Government Benefits, Tax Law

According to the Internal Revenue Code, an educational organization is an institution that “normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on.” This includes all primary schools, secondary schools, preparatory schools, high schools, colleges and universities. However, some pre-schools do not qualify for the exclusion because the schools do not satisfy the Internal Revenue Code’s standards.

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.

September 2, 2016
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Alert To New IRS Phone Scam

By Firm News, Tax Law

If you have recently received a computerized call or a call from a real person stating that you are being investigated for tax fraud and asking you to call a specific telephone number, chances are this was a scam call to try to trick you into providing a criminal with your personal information and ultimately trick you out of your money. This has been happening to numerous people across the country so please be on alert and do not give up your personal information over the telephone no matter how convincing the caller sounds.
There are some points you can consider to help you to identify whether an IRS caller is a fake. Remember that the IRS will NOT:

1. Call to demand immediate payment, nor call about taxes owed without first having mailed you a bill.
2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
3. Require you to use a specific payment method for your taxes, such as a prepaid debit card.
4. Ask for credit or debit card numbers over the phone.
5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

Things you can do if you suspect you have been a victim of an IRS telephone scam:
Contact the IRS office at 1.800.829.1040.
Contact the Treasury Inspector General for Tax Administration (TIGTA) to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.
Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov.

Please share this information with friends and family to ensure that they are also on alert especially if they are elderly and particularly vulnerable to scams of this sort.

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 any questions.

September 1, 2016
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What is the tuition gift tax exclusion limited to?

By Government Benefits, Tax Law

This exclusion is limited to tuition. For example, the exclusion does not apply to expenses for books, room and board, or meal plans. The tuition expense exclusion applies only to enrollment to the institution.

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.

August 30, 2016
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What is the Tuition Gift Tax Exclusion?

By Government Benefits, Tax Law

Oftentimes, grandparents will give grandchildren and other relatives financial gifts which can be subject to taxation by the IRS. One can gift up to $14,000 to a single person without the transaction being taxed by the IRS. And for married couples, the IRS does not tax any gifts of $28,000 or less.

However, payments for tuition are not treated as taxable gifts, if given directly to the institution or medical provider.

In the next week, check the blog to see what the tuition gift tax exclusion is limited to and what educational institutions qualify for the exclusion.

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.

August 26, 2016
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How can I pay someone’s medical expenses and still qualify for the medical expense gift tax exclusion?

By Asset Protection Planning, Government Benefits, Tax Law

To qualify for the medical expense gift tax exclusion, one has to give the payment directly to the medical provider. For example, one can make the payment out directly to the provider or they can give the check to a relative, as long as it is only payable to the provider. You should not “reimburse” the patient for an expense the patient already paid for or it will not be covered.

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.

August 23, 2016
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What expenses does the medical gift tax exclusion cover?

By Asset Protection Planning, Government Benefits, Tax Law

The Internal Revenue Code states that the medical expense gift tax exclusion applies to the transfer payments for “the diagnosis, cure, mitigation, treatment or prevention of disease, or for the purpose of affecting any structure or function of the body,” or “transportation primary for and essential to medical care.” For example, hospital bills, doctor’s visits, medication, and nursing home care are all expenses that qualify for the exclusion. Some long-term care services, health insurance payments, and travel to receive the care also qualify for the exemption.

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.

August 19, 2016
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What is the Medical Expense Gift Tax Exclusion?

By Government Benefits, Tax Law

A taxpayer can gift up to $14,000 to an individual each year without having to file a gift tax return. This is referred to as the “annual gift tax exclusion.”

If one wants to make additional gifts but has reached their limit on their annual gift tax, there are still other ways to gift money. One can give tax-free gifts directly to medical providers to cover medical expenses for someone else.

This week we’ll be posting about what expenses are covered and how to qualify for the exclusion for medical expenses.

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.

August 16, 2016
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