Estate Taxes

Tuesday, July 7, 2015

Estate Planning for Same-Sex Married Couples

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho 


The legal rights for married same-sex couples shifted in lots of ways with the June 26, 2015 United States Supreme Court decision Obergefell v. Hodges.

Starting with estate planning, married individuals will be able to inherit property from a spouse without paying any death taxes. The surviving spouse will have priority over other family members to administer a deceased spouse’s estate, bring wrongful-death actions, and make medical decisions.

As married persons, same-sex couples have the same property rights in assets accumulated during a marriage as all other married persons. This means divorce laws will apply when a marriage does not work out.

Social security spousal and survivor benefits are available to each spouse. When a spouse dies, the surviving spouse can receive the deceased spouse’s social security benefit, if that benefit is higher than the surviving spouse’s benefit

Married same-sex couples may file joint returns for both federal and state taxes.

Some same-sex couples entered into “domestic partner” agreements as a way to obtain benefits, such as health insurance, for their spouse/partner. A number of large employers, Verizon, Delta Air Lines and IBM for example, provided domestic partner benefits to employees living in states where same-sex marriage was not recognized. The continuation of these benefits after this Supreme Court decision is in question, now that same-sex marriage is recognized in all 50 states.

Friday, May 10, 2013

Traditional Death Tax Estate Planning gone for most. Now what?

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho


The federal death tax free estate in 2013 is set at $5,000,000 or less.  That means if you die as a single person owning less than $5 million, there is no death tax to pay to the IRS.  Who does that impact?  Not many.  In the year 2000 when the federal death tax free estate was $675,000, there were just over 50,000 federal death tax returns filed (officially called a 706 death tax return).  In the year 2011, when the death tax free estate was $5,000,000, there were approximately 1,500 federal death tax returns filed.

What does that mean for you?  Forget about death taxes as a reason to plan.

Unless you have an estate in excess of $5 million it is not necessary to focus on tax avoidance as the motivator for planning your estate.  Instead, focus on what is important to you personally.  Most good plans include:

  1. maintaining your personal independence for the rest of your life,
  2. planning for the possibility of being unable to care for yourself (you have a 50-70% chance of needing care before you die), and
  3. protecting the assets you have worked a lifetime to create so they are available for you and those you care about after you are gone. 

If you have no plan in place, your state government has one for you.  Most likely the state plan for you is way off the mark of what you would like. 

What should you do?  Contact your estate planning attorney to put a plan in place that covers you now, during the good days.  More importantly, it is there should you be unable to care for yourself or when you die.

Friday, February 22, 2013

New Tax Laws -- an opportunity to review your plan

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

We have new federal tax laws adopted in early 2013.   What does that mean for you?

Some of the tax laws are generous, such as allowing the federal death-tax-free estate to remain at over $5 million.  If you are a single person and assets you own, including the death benefit of life insurance, have a value of less than $5 million, there is no federal death tax (officially called an estate tax) to be paid.  If you live in Idaho, there is also no Idaho death tax (called an inheritance tax) to be paid.  If you are a resident of another state, such as Oregon, there is a state death tax on estates in excess of $1 million.

Some laws are not so generous to the taxpayer.  For example, the federal capital gains tax has been raised from 15% to 20%.  The result will be 5% more being paid as tax on the sale of an asset that has increased in value.

Estate planning has many facets.  For most people tax planning should not be the controlling motivation.  The best plans include some or all of the following features.

•   Flexibility to address foreseeable changes in the future. 

•   A team of professionals to share ideas and coordinate plans to meet your goals.  This team may include an attorney, certified public accountant, financial planner and insurance agent.

•   If you are married, issues to be addressed will include second marriages and asset protection for the surviving spouse.

•   Steps to be taken for asset protection.

•   Retirement planning so you can live the life you want in retirement.

•   Business succession planning to assure a smooth transition that is financially equitable to all the parties.

•  Investments that match your goals.

•  Creditor protection.

Call your planning professional and start the process so you get the maximum benefit of the new laws.  

Friday, May 18, 2012

Do You Know Your Taxes Are Going Up?


By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

In April, I attended a national meeting of the American Academy of Trust, Estate and Elder Law Attorneys, a premier educational seminar for attorneys like me who do estate planning.  From that experience, I want to share some important information with you.

Taxes are scheduled to increase dramatically in 2013: 


                                                                             2012                  2013

Estate and Gift Tax – Top Tax Rate                     35%                   55%

Estate and Gift Tax Exemption                             $5 million           $1 million

Federal Income Taxes – top rates

         Capital Gains                                                15%                   20%

         Qualified Dividends                                       15%                   39.6%

         Interest & Compensation Income                  35%                   39.6%


In the current political climate, Congress and the President are not likely to reach a compromise on these issues, and in fact the President wants to make “the rich” pay their “fair share” in taxes.

What does this mean for you?  2012 is a year of opportunity while taxes are lower.  It would be wise to schedule an appointment to review your estate plan before September 1, and see if there are steps you can take to improve your family’s position.  If you wait to the last minute, it may not be possible to put a plan in place before the law changes.


Friday, February 11, 2011

"Nice" Lawyer Costs Family $300,000.00

by Michael Ettinger, Esq.

A couple came in to see me today for the husband's 88 year old father who is a nursing home in Florida. They now wish to bring him up to New York to be nearer to the family. He has about $600,000 in assets, including his home.

They told me about the very nice lawyer he has down on the west coast of Florida, who set up a revocable living trust for Dad and for Mom who died last year, in February of 2006, and amended it in March of 2010.

They had a great deal of confidence in the lawyer, especially since he had won an award as one of the top lawyers in the locality.

Regrettably, while the attorney prepared a fine estate plan, he was not an elder law attorney and took no steps to protect the couples' assets back in 2006, when they were well into their eighties.

Had the lawyer been knowledgeable in elder law, which unfortunately so many estate planning attorneys are not, he would have set up a Medicaid Asset Protection Trust (MAPT) and started the five year "look back" period running. It is now February, 2011, five years later. Had the MAPT been set up when it should have, in February 2006, instead of the revocable living trust, all of Dad's assets would now be protected and he would be eligible for Medicaid benefits to pay for the cost of his nursing home care.

Instead, the couple will only save half the assets by using the "gift and loan" strategy developed by elder law attorneys to save half the assets on the nursing home doorstep when the client has failed to set up the MAPT. The technique is also call "half a loaf" planning after the old expression.

Nevertheless, the "nice" lawyer ended up costing the family $300,000.00 and it is not the first time we have seen it happen. Indeed, it is the reason your writer published "Ettinger on Elder Law Estate Planning", available on We believe that clients need a new york "elder law estate planning" attorney and not just an "estate planning" attorney so mistakes like this no longer happen to good people.

Wednesday, June 25, 2008

Estate Tax Puzzle Becoming Clearer According to Kiplinger

According to a recent Kiplinger Report, the future of estate taxes is becoming clearer:

"A quick refresher course: Back in 2001, Congress passed a law to phase out the tax. The amount Americans can pass to their heirs tax-free was set to rise from $675,000 in 2001 to $3.5 million by 2009 (it's $2 million this year). Then, in 2010, the estate tax was supposed to expire. But there was a catch: The tax was also scheduled to rise from the dead in 2011 with a paltry $1 million exemption.

That seesaw scenario is what had a lot of people pulling out their hair instead of planning. Although the schedule is still in place, it's clear that it will never happen. Why not? The next president is against it. John McCain and Barack Obama oppose repeal of the estate tax.

Obama would let the $3.5 million exemption continue; McCain would prefer a $5 million exemption. Because the law allows married couples to double the tax-free amounts, it's likely that, in the future, couples could leave their heirs a minimum of $7 million -- and maybe up to $10 million -- before Uncle Sam gets a bite of their assets."

For the full report, click

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