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Archive for February, 2012

PLANNING OPPORTUNITY ENDS IN 2012!

Thursday, February 23rd, 2012 by

No, we are not referring to the Mayan calendar-end of the world hysteria! Instead, we are referring to the end of the “Tax Relief Unemployment Insurance Reauthorization Job Creation Act”, which dies on December 31, 2012. That law provides unprecedented gift tax, estate tax, and generation-skipping transfer tax exemption amounts of $5,000,000 per person. (Indexed for inflation so that it is $5,120,000 this year.) If Congress fails to act to extend this law, then these $5,000,000 exemption amounts will all be reduced to $1,000,000 by automatic operation of law on January 1, 2013. Will Congress act? Who knows?

We do now know President Obama’s proposed law to modify estate and gift tax provisions. He is proposing that the gift tax exemption be returned to a maximum amount of $1,000,000 and that the estate and GSTT be reduced to $3,500,000 and that the top tax rate on those estates be increased from 35% to 45%. Considering all available information, as careful planners, we believe that this unique window of opportunity for gifting likely will close on December 31, 2012.

One of the reasons this gifting opportunity is so important is that by gifting assets now, you not only remove their present value from your estate, but you also remove all future appreciation of those assets. By removing appreciating assets from your estate now, the impact of that gift can be doubled, tripled or more over time. This is why we are encouraging anyone who may potentially benefit from this unique planning opportunity to run, don’t walk, to an estate planning attorney of your choice. If that choice should be Cramer Law Center, we are ready and standing by to help explain your options.

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Categories : Estate Planning, Trusts
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Medicare/Medicaid Planning: Why to consult an attorney before your parent is placed in a nursing home

Thursday, February 16th, 2012 by

We recently have been helping a family try to untangle a mess created by the lack of planning. The matriarch of the family (“Mom”) became ill and was hospitalized. Her condition was very serious, so the decision was made to place her in hospice care after the hospitalization. However, she recovered and then was transferred to a nursing home. During this trying process, her children were besieged with requests, such as “you must complete this Medicaid application immediately”, “sign this”, “sign here”…Finally, it all became overwhelming and they sought my advice.

As we often say, what you don’t know can hurt you. When Mom was placed in the nursing home, the family learned that Medicare would not pay any of the bill. This is because Medicare pays nursing home bills only under very limited circumstances. In order for payments to be made to a nursing home, Medicare rules require that the patient be admitted directly from a hospital stay of three (3) days or more and be undergoing some type of rehabilitation designed to improve the patient’s condition. If this criteria is met, then Medicare pays one hundred percent (100%) of the first twenty (20) days stay in the nursing home, and eighty percent (80%) of the next eighty (80) days’ stay. This can provide a family with some cushion of time within which to make plans to apply for Medicaid assistance, if necessary.

In our situation, because the family was unaware of this rule, they agreed to place Mom in hospice care first rather than the nursing home. Had they been aware of the rule, they would have been able to request that Mom be placed directly into the nursing home and that hospice perform its services there. Not knowing this fact, and without having consulted an attorney previously for advice, the family was required to pay several thousand dollars in expenses that it otherwise could have avoided.

The next mistake our clients made was succumbing to the pressures from the nursing home to “hurry up and complete your Medicaid application”. The family applied for Medicaid when Mom was ineligible to receive this assistance. Although Medicare is an entitlement to persons over the age of sixty-five (65) who are enrolled, Medicaid is need-based assistance, which is available only to impoverished citizens who meet Medicaid eligibility criteria. This criteria includes having no more than $2,000 in non-exempt assets and a limited amount of monthly income. In our family’s situation, Mom’s assets were limited, but slightly over the eligibility limits when the application was completed. By applying to Medicaid too soon, the family was forced to pay $6,700.00 out of pocket for the first month’s nursing home stay while taking the necessary steps to comply with Medicaid regulations and revising their application to reflect those steps.

Had Mom or her family planned for this eventuality ahead of time, the attorneys’ fees spent on such planning would have been far less than the out of pocket costs actually incurred. Plus, the family would have had peace of mind knowing how to orchestrate an orderly transition into the nursing home and would have avoided the stress and upset of being rushed into making decisions which were not in their best interests.

Our goal as elder law attorneys is to help as many people as possible avoid the Mom situation. If you or anyone you know may be dealing with Medicare or Medicaid in the near future, we would be happy to assist you with your planning needs.

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LEAVING A LEGACY OF LOVE

Friday, February 10th, 2012 by

Love is in the air with Valentine’s Day just around the corner – wouldn’t you like to start working on one of the greatest gifts you could give to the ones you love?

Although the words “estate planning” bring to mind death, money, and taxes for many people, we at Cramer Law Center believe that estate planning can and should be about love.

As part of our estate planning process, we offer our clients the opportunity to have a Priceless Conversation* with us at the beginning of our relationship and each year thereafter. In a Priceless Conversation, you will sit down with us and answer questions which are designed to capture as much of your personal and family story as you are willing to communicate. We record each conversation and give it to you in CD form so that you may share it with your loved ones at whatever time you deem best.

The Priceless Conversation topics are focused on helping you to leave a legacy that is more precious than money or possessions: your personal wisdom and life story. Topics include:

- The story of:
o Your life
o Your love with your significant other
o Your child(ren) or grandchild(ren)
o Your home
o Your treasured keepsakes
o Your pets

- Your views on and stories about:
o Money
o Success
o Business
o Faith
o Values
o Giving

Please feel free to post comments on our Facebook or Twitter or make an appointment if you have individual questions or concerns.

Cramer Law Center offers full estate planning services including wills, trusts, durable powers of attorney, health care surrogate designations, living wills, designations of preneed guardian, and more.

*™ Designed by Scott Farnsworth, Sunbridge, Inc.

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Categories : Estate Planning
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Common Estate Planning Myths and Superstitions

Thursday, February 2nd, 2012 by

In honor of today’s holiday, Groundhog Day, we wanted to share some common myths and superstitions about estate planning. Most Americans know the story of Groundhog Day: if a groundhog comes out of its burrow this morning and sees its shadow, it will retreat back into the burrow and six more weeks of winter weather will follow. On the other hand, if the groundhog does not see its shadow and remains aboveground, winter will soon end.

Most of us recognize that the ability of a groundhog to accurately forecast the weather is just a myth. (The reality is that groundhogs get it right only 39% of the time.) However, many people still believe in the following estate planning myths and superstitions (or at least use them as an excuse not to plan):

#1: You are more likely to die once you complete your estate planning. This is simply absurd; generally, the only people who die shortly after executing an estate plan are people who waited ALMOST too late to plan in the first place.

#2: Estate planning is only for the wealthy. When you hear the word “estate,” do you think of a palatial mansion or fine jewels? The truth is that if you own a home, a car, a bank account, life insurance, etc., then you have an “estate”.

#3: Estate planning only matters after death. A big part of the estate planning we do at our firm is planning for possible future disability. Wouldn’t you like to leave directions for how you want to be treated if you become incapacitated as well as for who gets your stuff when you’re gone? What about requests for who will care for you and/or your children?

Please feel free to post comments on our Facebook or Twitter or make an appointment if you have individual questions or concerns.

Cramer Law Center offers full estate planning services including wills, trusts, durable powers of attorney, health care surrogate designations, living wills, designations of preneed guardian, and more.

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Duval County
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