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Elder Law

What is a Qualified Income Trust?

By Estate Planning, Medicaid Planning

If your income exceeds the amount to qualify for Medicaid long term care services, ($2,094.00 per month for 2012) a Qualified Income Trust allows you to become eligible by depositing income into an irrevocable income trust each month that you qualify for Medicaid.The QIT involves a written trust agreement and a separate bank account for making deposits.  The income you deposit into the QIT account is used to pay for the Medicaid recipient’s patient responsibility payments and medical expenses.

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

August 31, 2012
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How to Avoid Problems as a Trustee

By Elder Law, Estate Planning

Being a trustee requires significant legal knowledge and if one does not perform their duties properly, a trustee may be personally liable. That’s why it’s important to have legal guidance.

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” If you have been appointed the trustee of a trust, this is a strong vote of confidence in your judgment, ethics and skill sets.

A trustee’s duties include locating and protecting trust assets, investing assets prudently, distributing assets to beneficiaries, keeping track of income and expenditures, and filing taxes.  As a trustee, you have a fiduciary duty to the beneficiaries of the trust, meaning that you have an obligation to act in the best interest of the beneficiaries at all times.

A trustee is usually entitled to hire an attorney (and other professionals like an accountant) to assist in trust administration. The attorney’s fees will be paid from the trust funds. While hiring an attorney will cost money, not having an attorney at all could cost a trustee much more if errors are made.

A trust can be administered without court involvement, but that doesn’t mean that the administration is simple. There are many areas where problems can arise — for example, if assets aren’t invested properly, taxes are late, or if proper records aren’t kept. If something goes wrong during the administration of the trust, the trustee can be removed and held personally liable for any costs incurred or losses suffered. Even if a spouse is the trustee, he or she should still consult with an attorney.

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

August 24, 2012
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Business or Hobby? Answer Has Implications for Deductions

By Tax Law

The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.

In order to educate taxpayers regarding their filing obligations, this fact sheet explains the rules for determining if an activity qualifies as a business and what limitations apply if the activity is not a business. Incorrect deduction of hobby expenses account for a portion of the overstated adjustments, deductions, exemptions and credits that add up to $30 billion per year in unpaid taxes, according to IRS estimates.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

In order to make this determination, taxpayers should consider the following factors:

  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Does the taxpayer depend on income from the activity?
  • If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
  • Has the taxpayer changed methods of operation to improve profitability?
  • Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
  • Has the taxpayer made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

For your tax advice needs, please contact our office for an initial consultation at (941) 906-1231.

August 23, 2012
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Estate Tax

By Estate Planning, Tax Law

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 ). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your “Gross Estate.” The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions 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.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit.

Most estates do not require the filing of a federal estate tax return. Under current law, a filing is required for estates with combined gross assets and prior taxable gifts exceeding $5,000,000 or more for decedent’s dying in 2011.

August 2, 2012
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Babette B. Bach, attorney in Sarasota, Florida, chosen as a 2012 Florida Legal Elite Honoree

By Firm News

Babette B. Bach, Esquire chosen as a 2012 Florida Legal Elite Honoree

Babette B. Bach will be featured in the July 2012 issue of Florida Trend magazine as a Florida Legal Elite Honoree.  She was selected by the members of the Florida Bar voting on attorneys that they hold in the highest regard and would recommend to others.  Babette is flattered to be a part of such a prestigious group.

Babette B. Bach is a board certified Elder Law attorney.  She is experienced in estate planning, guardianship, Medicaid planning and VA benefits.

Please call our office for an initial consultation at (941) 906-1231.

June 28, 2012
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IRS Identity Theft Protection Steps

By Tax Law

Identity theft occurs when someone uses another’s personal information without their permission to commit fraud or other crimes using the victim’s name, Social Security number or other identifying information. When it comes to federal taxes, taxpayers may not be aware they have become victims of identity theft until they receive a letter from the IRS stating more than one tax return was filed with their information or that IRS records show wages from an employer the taxpayer has not worked for in the past.

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.

Please contact our office for an initial consultation if you need legal advice at (941) 906-1231.

June 21, 2012
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Definition of a Florida Power of Attorney

By Elder Law, Estate Planning

A Power of Attorney is a legal document appointing authority to another individual to act as your Agent on your behalf.   The authority granted depends on the specific language you choose to include in your Power of Attorney.

 

A Power of Attorney is an important and powerful legal document.  One should always consult an attorney to have the appropriate preference made for clear instruction on how you would like your affairs managed if you are unable to do so yourself.

 

Most Power of Attorneys give their Agent  the right to sell vehicles, real or personal property on your behalf, to enter into a contract on your behalf, to handle financial transactions or to sign legal documents for the maker of the Power of Attorney.  Your Agent must always act in your best interest.

 

The designated person appointed to act on your behalf is called an Agent or Attorney-in-Fact.  Any competent person over the age of 18 or, in certain situations, some financial institutions can serve as an Agent.  It is very important to choose someone reliable and trustworthy.  The Attorney-in-Fact is a fiduciary who is held to a high standard of care and record keeping.  Power of Attorneys are a valuable tool to avoiding a guardianship if you become incapacitated.
Contact our office to schedule an initial consultation for any Estate Planning, Medicaid Planning, or Veterans Benefits needs.

 

June 18, 2012
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New Face to Face Meeting Requirements for patients receiving Medicare, Home Care or Hospice

By Long-Term Care, Medicare

New Face to Face Meeting Requirements for patients receiving Medicare, Home Care or Hospice

By Babette B. Bach Esquire, Sarasota, FL

A requirement that health care providers have a face-to-face meeting with patients was added as a Medicare payment requirement for home health and hospice care by the Affordable Care Act (ACA). Implementation of the requirement was effective April 1st 2011.The Face-to-Face requirement is intended to be a tool for reducing fraud and abuse by assuring that physicians or other healthcare providers have actually met with potential home health patients to determine their specific care needs.

The specifics of the Face-to-Face requirement for home health care are included in CMS regulations that were issued on November 17, 2010.  The regulations establish that a face-to-face encounter must have “occurred no more than 90 days prior to the home health start of care date or within 30 days of the start of the home health care by including the date of the encounter.” The certification of the need for home health care must include an explanation as to why the physician’s clinical findings support the need for home health care, including that the patient is homebound and the need for either intermittent skilled nursing services or therapy. Regulations provide that a face-to-face encounter can be by tele-health as provided in the Social Security Act.

If the face-to-face encounter occurred within 90 days of the start of care, but was not related to the primary reason that the patient requires home health services, or if the patient has not seen the certifying practitioner within the 90 days, the practitioner must have a face-to-face encounter with the patient within 30 days of the start of the home health care.

If you need legal advice for estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation.

 

Babette B. Bach, Esquire, Board Certified Elder Law

Bach & Jacobs, P.A.

240 S. Pineapple Avenue, Suite 700

Sarasota, FL 34236

941-906-1231

941-954-1185 facsimile

www.bachjacobs.com

 

June 11, 2012
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Medicaid for the Aged or Disabled

By Medicaid Planning

Medicaid for individuals who are either aged (65 or older) or disabled is called SSI-Related Medicaid.

Florida residents who are eligible for Supplemental Security Income (SSI) are automatically eligible for Medicaid coverage from the Social Security Administration. There is no need to file a separate ACCESS Florida application unless nursing home services are needed.

Individuals may apply for Medicaid coverage and other services using the online ACCESS Florida Application and submitting their application electronically. If long term care services in a nursing home or community setting are needed, the individual must meet a health test, an income test and an asset test. Long-term Care Diversion provides in-home or assisted living services that help prevent institutionalization.  Long-term Care Diversion also has a health test, an income test and an asset test.

For more information on Medicaid and Medicaid programs, visit www.dcf.state.fl.us

If you need legal advice for Medicaid planning, VA planning or estate planning, please contact our office for a consultation.  We do not recommend an application be filed if one is not asset qualified.

 

Babette B. Bach, Esquire, Board Certified Elder Law

Bach & Jacobs, P.A.

240 S. Pineapple Avenue, Suite 700

Sarasota, FL 34236

941-906-1231

941-954-1185 facsimile

www.bachjacobs.com

June 5, 2012
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Medicaid Adult Protective Services Program

By Medicaid Planning

The Adult Protective Services Program is charged with protecting vulnerable adults from being harmed (Chapter 415, F.S.). These adults may experience abuse, neglect, or exploitation by second parties or may fail to take care of themselves adequately. Florida statutes require any person who knows or who has reasonable cause to suspect any abuse of vulnerable adults to report that information to the Florida Abuse Hotline at 1-800-962-2873.

The Florida Abuse Hotline screens allegations of adult abuse/neglect to determine whether the information meets the criteria of an abuse report. If the criteria is met, a protective investigation is initiated to confirm whether or not there is evidence that abuse, neglect, or exploitation occurred; whether there is an immediate or long-term risk to the victim; and whether the victim needs additional services to safeguard his or her well-being.

In addition, Adult Protective Services assists vulnerable adults to live dignified and reasonably independent lives in their own homes or in the homes of relatives or friends so that they may be assured the least restrictive environment suitable to their needs (s. 410.602, F.S.).

For more information on Medicaid and Medicaid programs, visit www.dcf.state.fl.us

If you need legal advice for Medicaid planning, VA planning or estate planning, please contact our office for an initial consultation.

Babette B. Bach, Esquire, Board Certified Elder Law

Bach & Jacobs, P.A.

240 S. Pineapple Avenue, Suite 700

Sarasota, FL 34236

941-906-1231

941-954-1185 facsimile

www.bachjacobs.com

May 28, 2012
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