When people move, they usually remember to get a new driver’s license, to update their voter’s registration, and to find a new doctor. Did you know that  updating their estate plans should also be on their to-do lists? While your existing estate plan is probably still valid in your new state, parts of it may prove invalid or ineffective under the laws of your new state. Laws can vary significantly between states, and may impact items like your income tax, state estate tax or inheritance tax, and whether your property is considered marital or separate. What makes a good plan in California or Florida may not be favorable in Texas, New York, or Washington, and vise-a-versa. 

In addition, it can be important to review your estate plan every 5 years. When you review your plan, look for any significant life changes for you, your beneficiaries, or your fiduciaries, such as birth, death, marriage, or divorce among family or loved ones and for changes in tax laws that could impact your estate. Updating your plan can reduce unnecessary stress or unintended consequences resulting from differences in laws. Let us review some of the key reasons why your plan might be impacted by your move. 

You will be taxed according to the state in which you are domiciled. Your domicile is your “permanent home,” and can be determined by a variety of factors, such as where you own a home, where you spend your time, where you work, where you are registered to vote or drive, and the address in your legal documents. If your domicile state changes, so will the laws governing your estate plans.

Furthermore, changes in state can mean significant changes in applicable marital property laws. Marital property laws determine the division of assets between spouses upon death or divorce. In nine states, almost all property acquired during a marriage is community property, meaning it is owned equally by both spouses. Upon the death of the first spouse, all of the community property automatically transfers in full to the surviving spouse, and he or she receives a step up in basis for capital gains and income tax on that property. The other 41 states treat each spouse’s property as individually owned. Thus, a trust prepared in a separate property state may be detrimental to the surviving spouse once domicile is established in a community property state, where the laws are more favorable to spouses. 

Health care directives, including living wills and health care surrogates, can also vary by state. While they may be technically valid across the country, medical personnel may only be familiar with their home state’s typical forms. Legal counsel may be needed to confirm the validity of out of state documents, which could delay decision-making in your care. 

Additionally, geography can be an important factor in selecting your fiduciaries, such as an agent under a power of attorney or the personal representative of your estate. It can be logistically difficult to make decisions on your behalf from another state. Some states do not allow non-residents to serve as personal representatives or executors, unless they additionally have an in-state agent or post a bond to protect your estate. 

There can also be big estate tax changes when you move to a different state. While federal estate tax only applies to decedents with estates above $11.5 million, state estate, inheritance, and gift taxes may be imposed on decedents with significantly lower net worth. The tax rate as well as the amount that may be excluded, varies between states. In Massachusetts and Oregon, the exemption limit is $1 million, while Maine’s exemption limit is $5.7 million. The tax rate on amounts over the exemption can be as high as 20%, like it is in Hawaii. 

These are just a few of the key reasons why you should meet with a local attorney who is experienced in estate planning when planning to move. Our office is available to act as a resource to those who have recently relocated. Please contact us to schedule an appointment time.

Does your aging parent seem more and more forgetful these days? If so, you may want to consider whether your parent needs memory care.  Memory care is a type of assisted living for seniors that focuses on providing specialized care and activities for people with memory issues.  If your parent has received an Alzheimer’s or dementia-related diagnosis, you should consult with his or her doctor regarding if and when memory care will be needed.  Even if your parent has not received a diagnosis, however, he or she may be struggling with memory loss and it can be important to understand some key signs of when memory care may be necessary.

One very important sign that memory care should be considered can be if your parent is having trouble with normal daily activities. These include eating, bathing, and dressing. Additionally, if your parent is getting disoriented or lost in places or on routes where he or she is normally familiar, that can be another sign that your parent may need memory care.

Another important sign can be a change in your parent’s behavior. Does your parent seem more aggressive or more easily agitated? Is your parent withdrawn from his or her family and friends? Is your parent nervous to leave the house? These could all be signs of memory issues requiring your loved one to get memory care.

If you notice these signs in your aging parent, make sure you consult with a doctor so that your parent can be evaluated for memory issues and obtain the best care for his or her condition.  If you believe memory care is needed now, or will be needed in the near future, you should also consult with an elder law attorney to ensure that a plan is in place to enable your loved one to afford memory care when it is needed. An experienced elder law attorney can also help make sure that your parent executes the necessary estate planning documents that will help make sure assets are managed in the way they would want if the time comes that they are unable to manage those assets themselves. For more assistance with these and related matters, please reach out to our office to schedule an appointment.

Did you know that, generally speaking, Florida’s lack of an inheritance tax, also commonly called an estate tax or death tax, means that the state of Florida does not impose any taxes when an estate is transferred at a person’s death to his or her heirs? Florida residents, however, are still subject to the federal estate tax, and if you live in Florida but own property in another state, your property might be subject to that state’s estate tax. Let us talk more about how inheritance tax works for Florida residents.

The Florida state constitution bans inheritance tax, gift tax, and even income tax at the state level. The state legislature would not be allowed to impose an estate tax that goes against the state constitution, and Florida voters would need to vote yes to amending the state constitution in order to change this. Since state constitutional amendments in Florida require a minimum of 60% approval of the voters, it is highly unlikely this will change anytime soon.

Florida residents do not pay state income tax, but they still owe federal income tax and pay into Social Security and Medicare taxes just like residents of other states in the United States. Similarly, when it comes to the estate tax, Floridians who have large enough estates to exceed the federal estate tax exemption may still owe estate tax at the federal level. The current estate tax exemption is $11.7 million for an individual and $23.4 million for a married couple, so very few Floridians need to worry about this. These exemption levels, however, may change, so if you have a sizable estate that is below these thresholds but still in the millions of dollars, it may be time for some estate tax planning.

Even if you are a Florida resident, if you own a second home in another state you may owe estate tax in that state when the property is transferred at your death. It depends on whether the other state has its own state estate tax and what the threshold is for your property to be captured by the tax.

For assistance navigating estate tax implications and more, please reach out to our office to schedule an appointment.

Did you know that the estate planning process can be more complicated if you own real estate in different states? This can be due to each state’s probate court only having authority over property located in their own state. Thus, if you are a Florida resident and own a home in Florida, a Florida probate court can oversee that property’s transfer to your heirs, but it cannot do anything about your timeshare in Hawaii or your mountain vacation home in Colorado. The properties in those states will have to go through an ancillary probate process in the states where they are located. Your personal representative may have to travel there, and you may need a lawyer in each state.

There may be several ways to avoid complicated, lengthy, and expensive probates in multiple states. For instance, you can consider:

1. Owning the property jointly with your spouse, with a right of survivorship. This can allow the property to pass directly to your spouse without probate and without a specific gift in your will. 

2. Setting up a revocable trust and putting your real estate in the trust. Your property will pass according to the instructions in the trust, without going through probate. In some states, this can also minimize estate taxes and probate-related expenses. 

3. Setting up an LLC and putting your real estate into the company. While an LLC may not avoid probate in the state where you are domiciled, it removes the property from your estate directly. Instead of owning real estate, you now own a business, and the business can pass pursuant to the instructions in the operating agreement. This can be a great solution for property that is part of a family business, like a farm, or rental properties. 

It is important to consult with a knowledgeable estate planning attorney about these options. Our office can evaluate the laws in the states where you own property and help you select the right solution for you and your family. Please contact our office to schedule an appointment.

Are you or someone you love considering moving into a skilled nursing or assisted living facility? If so, it can be important to understand some of the primary differences between them.  

The first big difference involves the type and level of care provided by skilled nursing homes and assisted living facilities. An assisted living facility provides more of a residential setting, allowing residents to live independently in apartments or townhomes while providing access to simple medical care, assistance in some daily activities, and community events and activities. A skilled nursing home provides around-the-clock care for seniors who have more complex medical needs or require constant monitoring and assistance.  Because of the 24-7 access to medical care that a skilled nursing home provides, the setting can feel more clinical and less residential, but residents can take comfort knowing their medical and daily needs are being met.

The second important difference between skilled nursing and assisted living facilities is their cost and the availability of coverage and benefits to pay for it. The American Health Care Association and the National Center for Assisted Living, estimates the cost of a skilled nursing home to be over $100,000.00 per year, which is nearly double that of an assisted living community. It can be important that you consult an elder law attorney so that you understand the options for having these costs covered in whole or in part. For example, Medicaid will pay for the costs associated with a skilled nursing home but will not provide full benefits for assisted living.  An elder law attorney can analyze your finances and help you create a plan so that you can obtain the best coverage for your situation.  

To learn more about skilled nursing homes, assisted living facilities, and covering the costs of long-term care, please reach out to our office to schedule an appointment.

Have you heard that, this year, World Elder Abuse Awareness Day (WEADD) falls on June 15th? WEAAD was launched by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations. It’s purpose is to promote a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic processes affecting elder abuse and neglect. In recognition of, WEADD let us discuss three ways to advocate for elders at risk this month. 

• Help Prevent Seniors From Becoming Isolated. As people age, they tend to become less connected to the community, which makes them more susceptible to elder abuse, which occurs in many forms, including: neglect, physical abuse, sexual abuse, financial abuse and exploitation, and emotional or psychological abuse. Abusers also come in many forms, including family members, caretakers and even strangers. Risk increases if the elder has dementia or is in poor physical health. If you have an elderly family member, friend or neighbor, make it a point to visit regularly. By developing a trusting relationship, you may create a safe space. If he or she is experiencing abuse, having regular conversations can help develop an open line of communication in which you can make him or her aware of the potential of abuse and be a person to help if ever he or she is in need of assistance.
• Protect Your Community From Scams. Financial scams against the elderly can be all too common. These range from high pressure sales tactics, too high fees, and even elders turning their banking and other financial information over to others. If you know seniors, make sure they sign up for the Do Not Call Registry, shred their personal documents, and inform them that if something does not feel right, it is probably best to say no. Caregivers should also be carefully screened, as they will have access to an elder’s financial documents.  
• Spread the Word on How to Report Elder Abuse. Elder abuse is often under identified and under reported. This may be both because elder abuse is often not seen, due to the elder’s isolation, and people’s hesitancy to get involved. If you suspect that an elder is being abused, you can report it to your local adult protective services agency, long-term care ombudsman, or a law enforcement agency, who can investigate further and get the elder the necessary services. Be sure to spread the word to your friends and family on how to report elder abuse.

By following these tips, we can all do our part to make our community a safer place for our elders. For more elder support and access to resources, our office is here to help. Please reach out to us today to schedule an appointment.

Are you a Florida resident? If so, you are lucky to live in a state that has no estate or inheritance tax. In fact, state statutes prohibit any kind of this tax from being levied. Floridians are, however, subject to the same federal estate tax as all other residents of the United States. These limits are currently so high, at $11.7 million for individuals and $23.4 million for married couples, that few Floridians need to worry about the tax. There is a bill in Congress, right now, that would lower these limits by approximately two-thirds each, to $3.5 million for individuals and $7 million for married couples, that would impact more Floridians. Let us review some estate planning tips Floridians need if they are nearing the proposed new federal estate tax limits.

1. Consider How Close You Are to the Proposed Limits. The proposed limits may be significantly lower than the current limits. They may or may not, however, end up impacting your estate if your estate size is hovering somewhere near the proposed limits. Assets can increase or decrease in value over time, and you may not know what the precise balance will be at the time of your death, particularly in stock-heavy assets. If you are concerned that your estate may just approach the limits, a gift-making approach may be less time-consuming and require less administration than creating a trust, which may be a better option if you are fairly certain your estate will exceed these new limits by a significant amount.

2. Make Gifts to Your Heirs Right Now. If your estate is just at the point where you might go over the federal estate tax exclusion limits, making annual gifts to your heirs can keep the balance below that limit. You can currently gift up to $15,000 per year from an individual to any given recipient, or $30,000 per year from a married couple to a given recipient. If you are married and you have three children and six grandchildren, you can gift up to $270,000 per year by making a $30,000 gift to each of the nine recipients. This means that after four years of such gifts, you will have removed over $1 million from your estate. If you may be approaching the tax limit by a number that is in the hundreds of thousands, rather than millions, this idea of giving your heirs their inheritance a little early is an easy approach.

3. Create a Trust. If you are fairly certain your estate size will significantly exceed the proposed estate tax limits, it may be the right time to look into an irrevocable trust, which can remove assets from your estate for tax purposes entirely. Consult with a qualified estate planning attorney in your local area to learn more.

For assistance in establishing your estate plan or updating your estate plan in a way that accounts for changes in the law and your personal circumstances, please reach out to our office to schedule an appointment.

Are you aware that, currently, the federal estate tax is something very few Americans need to worry about? Right now, the exclusion is approximately $11.5 million per individual person or $23 million for a married couple. There are, however, a few reasons that you may begin to wonder if you need to engage in more careful tax planning when it comes to the estate tax. One reason may be that the current federal limits expire at the end of 2025 and may revert to their prior, lower levels at that time, or could be lowered earlier than the set expiration date by the current presidential administration. The other is that you may live in a state with an estate tax exemption that is far lower than the federal limit. Let us go over three tips to keep in mind if you are nearing the tax exemption limits for the estate tax.

1. Create an Irrevocable Trust. Different types of irrevocable trusts can exclude your assets from being subject to estate tax if you are nearing the limits. If you are just at the point where estate tax becomes a worry, you can opt to put in as little as you need to so that you do not go over the limit. The downside may be that once you put money into an irrevocable trust, you cannot get it back. Popular choices for irrevocable trusts include Spousal Lifetime Access Trusts (SLATs) and Life Insurance Trusts (LITTs). In a SLAT, one spouse, the donor, makes a gift to the trust for the benefit of the other, non-donor, spouse. Any appreciation of assets gifted to the trust will be excluded from the estate of both spouses for tax purposes. In a LITT, you may set up the trust and direct that your life insurance proceeds eventually be paid into the trust, to shield the insurance money from becoming part of your taxable estate.

2. Make Gifts to Family and Friends. If you are close to, but not at or above, the current estate tax exemption limit, you might consider making annual gifts to your heirs. A married couple can gift up to $30,000 and an individual can gift up to $15,000 annually to any individual recipient free of tax. If you have two children and four grandchildren, you can give this amount to each of them annually, which might ultimately add up to enough to keep you under the limit.

3. Keep Abreast of Changing Limits. Whatever strategy you choose, stay current on the estate tax limits at both the federal and state level. If you have two homes in two different states and one state gets rid of or lowers its exemption, you might consider making that state your primary residence.

For assistance addressing these important estate planning issues and more, our office is here to help. Please contact us to schedule a meeting time.

Are your parents close to the point where they might need to consider nursing home care? If so, it can be important for both you and them to know that they do not need to go through the process alone. You can and should find a qualified elder law attorney who can guide them and assist in choosing among the many options that may be available, as well as help them figure out how to pay for nursing home care without burning through their life savings quickly. Since May is National Elder Law Month, now may be a particularly good time to reach out to an elder law attorney. In the meantime, let us discuss some possible resources for your loved ones to help them get the coverage they need for nursing home costs.

Chances are your parents are already using Medicare for their health insurance if they are over 65. You may be wondering if Medicare will cover some nursing home costs. Unfortunately, while Medicare is the primary health insurance for seniors, it usually has a very limited nursing home benefit, paying only for 100 days of care. If your parents are starting to think about nursing home planning, it can be important to know that this is not a long-term solution if they envision needing to live in a nursing home permanently as they get on in years. For long-term coverage, it may be a good idea to check and see whether they qualify for Medicaid. Qualification depends on how much income they have at the time they apply for the program, and how much they have in terms of assets. 

An elder law attorney can help your parents figure out whether Medicaid might pay for nursing home costs. If your parents have a reasonable amount of savings but not enough to cover nursing home costs without burning through everything, an attorney can recommend estate planning strategies that may help them qualify for Medicaid. If there is some time left before nursing home care is needed, they may be able to shield some assets completely. Medicaid has a 5-year (60-month) look-back rule, so if they are within 5 years of needing care, they may not be able to protect everything, but can still save some of what they have. A qualified elder law attorney will be the best guide here, and ensure your parents do not have to go it alone when it comes to nursing home planning. 

For assistance in navigating the cost of long-term care, our office is here to help. Please contact us to schedule a meeting time.