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There are two broad categories of assets which are includable in your gross estate which is subject to tax: property you own at the time of your death and certain property transfers you make during your life. See Internal Revenue Code Sections 2033-2044.

The effect of these Sections is that property you own jointly with another individual will be taxed at your death, even if you did not purchase the property or do not have complete rights to the property.

For example, if you and your spouse own an asset as joint tenants with rights of survivorship and you die first, at your death one-half of the value of the asset will be included in your taxable estate. Your estate will include this one-half value regardless of how the asset was acquired or who paid for it.

A second example is where you own the asset with your sister (or anyone other than your spouse) as joint tenants with rights of survivorship. If you die before your sister, the full value of the asset will be includable in your estate unless you and your sister received the asset as a gift or your sister paid part of the purchase price for the property when it was acquired.
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Elder care managers evaluate the needs of an older individual. Often care issues have been over looked. For example, 12 million Americans live with chronic pulmonary disease, 1.5 million have Parkinson’s disease and researchers estimate that by 2050, 13.2 million Americans will have Alzheimer’s disease.

Care managers meet with individuals at their homes and get a feel for the personal and medical considerations which should be taken into account. If the individual has special health care funding requirements now or in the future, care managers have first hand knowledge and are in a position to accurately project future cash needs.

Because many children live far from their elderly parents, elder care managers provide independent evaluations and send their findings in a report to the children. This gives the children peace of mind knowing that an independent evaluator with no ties to local siblings, institutions or medical providers is generating the report.

ElderCareSolutions, Inc. provides care managers and serves the Chicago area. It is based in Naperville, Illinois.
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In his article in the Wall Street Journal Online, Charles Passy points out that the current federal tax exemption on estates and gifts is set to change on January 1, 2013. The exemption is currently $5.12 million and will change to $1 million. Individuals should consider making large gifts under the current limits so that they can reduce the size of their estates, and the accompanying taxes due, when they die.

No one knows what Congress will do regarding the $1 million exemption which will become law on the first of next year. While many Republicans have advocated eliminating the tax completely, President Obama has proposed a $3.5 million exemption. Accordingly, the current $5.12 million exemption may not be available again and may be worth taking advantage of while it is possible.
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Avoiding probate is usually the most significant benefit of holding property in joint tenancy. Gift tax consequences are also important.

When a parent adds a child to the title of property as a joint tenant, the parent has made a gift to the child of one-half of the value of the property. If the value of the gift exceeds the annual gift tax exclusion amount ($13,000 in 2012), it is a taxable gift which requires the filing of a gift tax return. In some cases a gift tax must be paid.
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Prices for long-term care insurance policies jumped between 6 and 17 percent in the past year.

A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2700 per year (combined) for about $340,000 of current benefits, according to the 2012 Long-Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance. The same coverage would have cost the couple $2350 in 2011.

The steep rise in price is primarily due to historic low interest rates and yields on fixed-income investments.

The Association annually analyzes what consumers will pay for the most popular policies offered by ten leading long-term care insurance carriers. The study found that the average cost for a 55-year-old single individual who qualified for preferred health discounts is $1720 for between $165,000 and $200,000 of current coverage. In 2011, the same coverage would have cost an average of $1480 annually.

The study suggests that it is more important than ever to shop around for coverage because the range between the lowest-cost and the highest-cost policy has increased compared to the prior years. For the 55-year-old single policy applicant the highest-priced policy cost almost 80 percent more than the lowest-priced policy. For some categories, the difference was as much as 132 percent and no single company always had the lowest or the highest rate.
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When a Seller assures a Buyer that he will stand behind the title to the property he is conveying, the Seller executes a Warranty Deed. With a Warranty Deed, the Seller discloses to the Buyer all of the encumbrances on the property and certifies to the Buyer that no other outstanding claims against title to the property exist. The Seller stands behind this certification by guaranteeing that if there is a problem with the title, the Seller will compensate the Buyer for any loss.

When a Seller does not assure the Buyer that he will stand behind the title he is conveying, the Seller executes a Quitclaim Deed. With a Quitclaim Deed, the Seller conveys to the buyer only the right, title and interest that he has, whatever that may be. The Seller does not guarantee that other parties do not have an interest in the property, and the Seller does not agree to compensate the Buyer for any loss because of these outstanding interests.

Both Warranty Deeds and Quitclaim Deeds have there useful place when parties are interested in transferring title to property.
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In a recent article, Laura Saunders points out the advantages to a Grantor Retained Annuity Trust (GRAT).

GRATs transfer asset appreciation from one taxpayer to others, virtually tax free, and the benefit can be huge.

A taxpayer can set up a GRAT with a set term of two years or longer and transfer assets to the trust before the assets’ values surge (such as shares of stock). Over the life of the trust, the person who put the trust in place receives annual payments adding up to the asset’s original value plus a return based on a fixed interest rate determined by the Internal Revenue Service. That rate is currently 1.6%.

If that asset increases in value, the growth is outside of the grantor’s estate. When the GRAT’s term ends, the asset goes to the beneficiary. The result is no gift or estate tax on the appreciation. And if the asset decreases in value by the end of the term, it is simply returned to the taxpayer.
Beneficiaries can be unborn children as well as future spouses and current friends and relatives.
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As Kelly Greene points out in her recent article in the Wall Street Journal, families are looking to take advantage of the $5 million gift tax exemption which will expire at the end of the year, but at the same time they are worried that they will change their minds down the road or will need to get the money back from the irrevocable trust they are creating to take advantage of the gift tax exemption.

One way to make a trust more flexible is to designate a Trust Protector. This is an individual, often a relative, who oversees the Trustee of the Trust. The Trust Protector can remove a beneficiary, veto a distribution, move the trust to another state with more favorable tax laws or amend the Trust’s terms.

Ms. Greene goes on to point out the importance of designating the Trust as a Grantor Trust so the donor pays any income tax or capital-gains tax owed on the assets each year so those payments are not considered additional gifts. The payment of the tax is not considered a gift there is a legal obligation to pay it.
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When an individual dies with a Will, once it is located, it should be given to the estate’s attorney. The attorney will send copies of the Will to anyone who may have an interest in it.
The executor is entitled to a copy. He is in charge of opening probate, managing the decedent’s property and making sure the provisions of the Will are carried out.

All beneficiaries are entitled to a copy. If any minor children or incapacitated individuals are named as beneficiaries, their guardians receive a copy of the Will.

If the Will funds a revocable trust, the successor trustee of the trust is entitled to receive a copy of the Will.

Once a Will is probated, it is available to the public, and anyone can read it.
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A federal appeals court has ruled that those over age 65 and eligible for Social Security cannot escape their automatic entitlement to Medicare Part A benefits unless they repay all the Social Security funds paid to them.

Three retired federal workers who have reached age 65 and are receiving Social Security sued because they want to disclaim their legal entitlement to Medicare Part A coverage, which pays for care in institutions like hospitals. They want to disclaim the entitlement because their private insurance plans limit coverage for those who can get coverage from Medicare. The retirees claim they would get superior coverage from their private insurers.

A U.S. district court judge ruled against the federal workers, and they appealed. The U.S. Court of Appeals for the District of Columbia Circuit ruled that while the retirees have the right to refuse Medicare payment for services, they remain legally entitled to them because they signed up for Social Security. The judges in the majority pointed out that while entitlement to Social Security is optional because an application must be filed in order to receive the program’s benefit, no such application is required for Medicare Part A.
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