States You Shouldn’t Be Caught Dead In:

Robert Negele is a 90-year-old retired executive who has lived in Connecticut for almost 40 years. Despite decades of community involvement, including service on corporate and charity boards, he and two of his children who live nearby are seriously considering leaving the state.

“It’s a prime possibility we discuss at Sunday night dinners,” Mr. Negele says.

Nineteen states and the District of Columbia, home to just over one-third of the U.S. population, levy an estate tax on the assets of people who die or an inheritance tax on heirs receiving assets. Jim Haynes

A big factor in their deliberations: Connecticut’s estate and gift taxes, which tax assets above $2 million per individual at rates as high as 12%. Mr. Negele says some snowbirds at his Stamford retirement home have shifted their tax home to Florida, while others he knows have left the state altogether.

Mr. Negele is far from alone, estate planners say. “State death taxes are considerably more important than they used to be, and we spend a lot of time planning for them,” says Beth Kaufman, an estate-tax lawyer at Caplin & Drysdale in Washington, in part because of changes in the federal tax laws.

Nineteen states and the District of Columbia, home to just over one-third of the U.S. population, levy an estate tax on the assets of people who die or an inheritance tax on heirs receiving assets. Maryland and New Jersey have both, although each allows offsets to prevent double taxation.

ImageIn January, Congress voted to keep Uncle Sam’s inflation-adjusted estate exemption above $5 million per individual ($10 million per married couple). The change excluded almost all Americans from the federal levy, so state-level taxes loom larger by contrast. (This year, the federal exemption is $5.25 million.)

Many states also have far smaller exemptions than Uncle Sam’s. The threshold is $1 million for estate taxes in Massachusetts, New York, Oregon and Minnesota, and just $675,000 in New Jersey. Pennsylvania’s and Iowa’s inheritance taxes have no exemption in some cases.

However, all states allow surviving spouses to inherit tax-free from their partners, says James Walschlager, an estate-tax specialist at CCH, a unit of Wolters Kluwer.

Only Delaware and Hawaii track the U.S.’s $5 million-plus exemption, according to Mr. Walschlager (see table on page B10).

Rates can be high as well. The top rate often is double digits, with Washington state’s the highest: 20%.

Read the full article>

Stay well,

Brian

Download a Free Guide to Medicaid’s Asset Transfer Rules:

This handy guide explains “countable assets” and “qualifying expenses” and also provides case studies as examples. Know who can give and receive and how.

medicaid planning
Plan Wisely

Lacking access to alternatives like long-term care insurance or Medicare, most people pay out of their own pockets for long-term care until they become eligible for Medicaid. Since few people have long-term care insurance or can
afford to pay the high cost of nursing home care out-of-pocket, most people eventually qualify for Medicaid. By default, it has become the primary source of
funding for nursing home care and the long-term care insurance of the middle class. Download the Free Guide by Clicking here. 

Be sure you plan accurately and wisely. Any errors can cause Medicaid to deny your claim, impose a penalty period–setting back your plans for you and your family, and cost you money. Let me know if you have any further questions. Our Free Medicaid Planning Consultation (a $450 value) ends 8/31/13.

Regards,

Brian

http://www.RaphanLaw.com

What are the advantages of a PrePlan — pre-paying funeral expenses?

  • There are many advantages. Both financial and practical. On the financial side, New York State allows an individual applying for Medicaid or Supplemental Security Income (SSI) to set aside funds in an irrevocable account for their funeral and burial expenses. These funds are considered an excludable asset, meaning they are not counted as a resource when determining eligibility. A Medicaid/SSI applicant also has the option of setting funds aside to pay the funeral/burial expenses of certain family members. Any account established for the benefit of a family member must, under New York State law, also be irrevocable, as any and all funds in such account would be an excludable asset as well.
  • On the practical side, a PrePlan makes it easier on your family members or loved ones. With everything planned and prepaid there is less stress and burden on others and better decisions can be made at a much less emotional time. Eliminating financial and logistic decisions also allows for less anxiety at a time when fond memories, sharing and grieving are important.
  • How to Choose a funeral home: Get recommendations from family, friends and neighbors, or even contact the New York State Funeral Directors Association at       1-866-644-PLAN for a list of member funeral homes in your community.                 For my clients and readers in the NYC area I recommend the GREENWICH VILLAGE FUNERAL HOME and the BETH ABRAHAM MEMORIAL CHAPEL both at              199 Bleecker Street. They offer a wide array of services and provide professional, caring, and compassionate service. Funeral Directors Peter DeLuca and Jennifer Greenberg are very knowledgeable about Pre-Planning. If you mention my name, they’ll offer you a free, no pressure consultation. I highly recommend doing that. I always advise my friends and clients…“be informed and then you can make a sound decision.” As a special accommodation, they will also provide a guaranteed price for my clients. All funeral home service charges, livery and merchandise items will be price guaranteed to the time of death per the terms of the New York PrePlan contract.  This can possibly save you thousands of dollars as well.                         Call Peter DeLuca or Jennifer Greenberg at 212-674-8055 or 212-614-2300.  Links:
  • http://www.greenwichvillagefuneralhome.com  Pre Plan funeral
  • http://www.bethabrahammemorialchapel.com    Beth Abraham Funeral Home                                                                     If you have any questions about how a PrePlan fits into your Estate Planning or Medicaid Planning needs, feel free to email me or call.                                       Regards, Brian                                                                                                                braphan@raphanlaw.com  212-268-8200

The Law Offices of Brian A. Raphan, P.C.
7 Penn Plaza, 7th Ave/31st, New York, NY 10001 http://www.RaphanLaw.com