Category Archives: Taxation
A Potpourri of Basic Federal Tax Rules Regarding Death and Taxes
Pre-death gifts that are in excess of $14,000.00 per person per calendar year can reduce the amount that can be left behind as a tax-free inheritance. Someone who does not exceed that amount with gifts can leave $5,450,000.00 free of federal estate tax as an inheritance. For example, if a person makes a pre-death $17,000.00 […]
Life Estate Can Be Retained for Estate Tax Purposes Without Being Reserved in Deed, and Result in a Step-up in Basis for Capital Gains Tax Purposes
Estate Tax Inclusion Results in a Step-Up in Basis and Eliminates Capital Gains Taxes on Transferred Real Estate. For many elderly persons in the middle class, a key tax goal is to keep the home includable in the person’s gross estate for federal estate tax purposes. Doing so results in a step-up in the basis of […]
Problems with Outright Gifts in the Medicaid Planning Context
An Irrevocable Trust Is Sometimes a Better Planning Maneuver Than an Outright Gift. There are several problems with outright gifts in the Medicaid planning context that can lead to the recommendation of the use of an irrevocable trust. Below are a few of these problems. (1) Appreciated Assets Clients are often concerned about leaving behind […]
Creating Jointly-Held Assets in Massachusetts: The Good, the Bad and the Ugly
Adding someone’s name to an asset of yours can be done all too easily, without your realizing all of the ramifications. There are many issues that come into play when deciding whether making an asset jointly-held is the right move. Among those issues are the common issues raised in any estate plan: creditor protection; family […]
Income Tax Planning for a Terminally Ill or Recently Deceased Person
The following are notes for lawyers from the Massachusetts Bar Association’s program which I moderated entitled “Estate, Tax and Health Care Planning for the Terminally Ill Client.” Some income tax planning for a person’s final income tax returns can be done not only immediately prior to the person’s death, but also after the person’s death. […]
A Primer for Elder Care Professionals on the Use of Reserved Special Powers of Appointment in MassHealth Planning
Clients Can Make Some Types of Transfers for Medicaid Planning Purposes Yet Still Reserve Some Degree of Control. Due to their concerns about possible impact of nursing home costs (and the Medicaid disqualification period) on their assets, many aging clients feel under pressure to make transfers of their assets earlier than may otherwise be advisable. One […]
Proper Medicaid Planning May Permit Keeping the Home in the Family (as Published in Estate Planning)
This article of mine was published in the April 2001 issue of Estate Planning. (Note to reader: The Medicaid lookback/disqualification laws changed to 60 months on 2/8/06, after this article was published; otherwise, the rest of the article remains valid.) Many aging clients are concerned that, after a lifetime of hard work to acquire and maintain […]
Limited Liability Companies Combine the Best Parts of Partnerships and Corporations
A limited liability company (LLC) offers protection from personal liability for business debts, just like a corporation. Unlike a corporation, which must pay its own taxes, an LLC is a pass-through tax entity, so the profits and losses of the business pass through to its owners, who report them on their personal tax returns just […]
Deathbed Estate and Tax Planning
When Death Is Imminent, Some Quick Moves Can Make a Great Deal of Sense. Deathbed Income Tax Planning Capital losses should be recognized via sale, as they will be lost upon death. A conversion of a qualified plan or IRA to a Roth IRA should be considered to allow future tax-free accumulations for the beneficiaries. Post-death medical […]
