Tax Planning: Year End Alert for 2012

Financial Cliff Poses Several Strategies To Consider For End Of Year Tax Planning

tax planningThe end of the year is always a good time to speak with your financial advisor and discuss any potential last minute tax planning that may be appropriate before the new year begins.  This year is extremely unusual due to the tax cuts set to expire at the end of the year as well as federal programs that are to be cut.  Beginning next year, federal income tax rates are set to increase and the capital gains and dividend tax rates are also set to increase.  The federal estate/gift exemption is set to revert back from $5,000,000 to $1,000,000.  This “fiscal cliff”, as it has come to be known, is set to commence January 1st of 2013 unless Congress and the President reach an agreement before then.  If one assumes that it is unlikely that an agreement will be reached before the end of the year, there are a number of strategies to consider.

Tax Planning Considerations

It is unlikely that anyone’s income tax rates will go down in 2013 and very possible that income tax rates will go up.  Therefore, the traditional strategy of deferring income … Read More... “Tax Planning: Year End Alert for 2012”

Care Insurance: Long-Term Health Care Update

How Ohio’s Long-Term Care Insurance Program Can Make Sense For You!

Care InsuranceIt is now almost 5 years since Ohio’s long-term care partnership program was implemented in order to allow Medicaid participants to protect more of their assets from the Medicaid spend down process.  With the rising cost of long-term care and the effect that the recession has had on most individual’s savings, this program is more valuable than ever.  A long-term health care insurance policy that meets certain criteria can provide tremendous savings and asset protection against future health care needs by allowing an individual to shelter an amount of assets equal to the amount of coverage under the policy.

Once again, the policy must meet the following criteria:

  1. Must be issued after September 10,2007;
  2. The insured must be a resident of Ohio when coverage first becomes effective;
  3. The policy must be a federally tax qualified plan based on IRS Code;
  4. The policy must meet strict consumer protection standards; and
  5. The policy must include certain protections against inflations.

It was recently estimated that a 65 year old has almost a fifty percent chance of spending some time in a long-term care facility.  The average length of stay is 2 ½ … Read More... “Care Insurance: Long-Term Health Care Update”

Palimony Not Recognized in Ohio

Palimony Not Recognized in Ohio – Resuming a Romantic Relationship is Insufficient to Establish a Contract

PALIMONY DEFINED

palimonyPalimony is a form of alimony awarded to one of the unmarried partners in a romantic relationship after the breakup of that relationship following a long period of living together. Unlike alimony which is typically provided for by law, palimony is not guaranteed to unmarried partners.  Generally, a palimony plaintiff must prove an underlying contractual basis for his/her claim, such as an express (written or oral) or implied contract.  My research shows that approximately 23 states have enforced a cohabitation agreement, either express or implied.

Palimony cases are determined in civil court as a contract matter, rather than in family court, as are divorce cases. The “palimony” phrase was coined by celebrity divorce attorney, Marvin Mitchelson, back in 1977 when his client Michelle Triola Marvin filed an unsuccessful suit against the actor Lee Marvin.  The two were not married.

Palimony: Ohio Supreme Court Rules on Ownership of Unmarried Couple’s Home

It is rarely a good idea for unmarried individuals to purchase property together as their joint residence. Should the relationship fail, issues inevitably arise, often leading to disputes.  Who will … Read More... “Palimony Not Recognized in Ohio”

Social Security ALERT: No More Annual Earnings Statements

Social Security Annual Earning Statements Eliminated

social security alert annual earnings statementsIf you look forward to receiving your social security yearly earnings statements in the mail and you had a birthday last summer, you may have wondered why you did not receive your statement.  Effective April 1st of 2011, in a cost cutting move, the Social Security Administration ceased mailing the yearly statements.  The elimination of the
statements, mailed to 150 million people a year, will save $70 million a year.  However, this savings also comes with a cost.

What are the costs with eliminating annual social security earning statements?

These annual earnings statements are an invaluable tool that helps millions of Americans plan for their retirement. These four-page statements, which had been sent to all Americans over age 25,  provide a detailed record of each individual’s earnings record, an estimate of their expected retirement benefit, the approximate amount they will receive each month if the worker becomes disabled, and how much a worker’s family will receive if the worker dies in the coming year. They also allow workers to check for any errors in their recorded earnings and taxes paid.  Finally, it was a tangible document that gave people confidence in the social security … Read More... “Social Security ALERT: No More Annual Earnings Statements”

Postnuptial Agreements — Are they Valid in Ohio?

PUBLISHER’S NOTE:

Finally Ohio has joined 48 other states and is now permitting postnuptial agreements to be executed and recognized. This is extremely significant news for married couples in Ohio! Click the following blog articles about this law change. Also, please see our new Postnuptial Agreements help page by clicking here.

Did not make a Prenuptial Agreement, Are Postnuptial Agreements allowed?

postnuptial agreements in ohioI am often asked whether a couple that never got around to executing an antenuptial (or prenuptial) agreement before they got married can execute a postnuptial agreement after the marriage ceremony. The answer varies greatly from state to state, and it is important to get an answer from an advisor familiar with the laws of the state in which the couple is residing.

Does Ohio Allow  Postnuptial AgreementS?

In Ohio, the answer is clearly “no”. This goes back to the concept in Ohio that a husband and wife have a duty to support each other. In furtherance of this notion, Ohio statutory law specifically states that a husband and wife cannot alter their legal relations with each … Read More... “Postnuptial Agreements — Are they Valid in Ohio?”

ELDER LAW UPDATE: The Legal Implications of Multiple Generations Living Under One Roof

gen_roof.jpgDue to the sputtering economy, the baby boomer generation approaching retirement age, and the ever increasing life expectancy, multi-generational households are becoming more common than they have been in decades.  Due to the need to combine family incomes or in order to take care of an elderly or ill relative, grandparents, parents and children are sharing living space in increasing numbers.  According to the Pew Research Center in Washington, D.C., in 2008, 49 million Americans or 16 percent of the population lived in households with at least two adult generations, an increase of 17 percent from 2000.  This trend comes with numerous legal implications and issues, some of which are discussed below.

When a parent and adult child choose to live together, numerous elder law and estate planning issues arise. First, Medicaid issues need to be considered.  What if a parent contributes money for the child to add an addition to the child’s home for the parent to live in?  This could be construed as a gift that might affect parent’s eligibility for Medicaid if this becomes necessary within the next five years.  What if parent and child purchase a home together?  If parent is on the deed, parent’s ownership … Read More... “ELDER LAW UPDATE: The Legal Implications of Multiple Generations Living Under One Roof”

Highlights of the 2010 Tax Relief Act

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The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, signed into law December 2010, finally brought some certainty to estate tax, gift and generation skipping tax, at least temporarily.  Although estate planning attorneys now have a better idea as to advising clients in wealth management opportunities, the new law only applies through December 31, 2012. Thus, we may find ourselves back in this position of uncertainty in two years.  Some of the major aspects of the Act are summarized below:

  • Estate tax exemptions and estate tax rates: Under President Bush’s Tax Relief Act of 2001, the federal estate tax exemption had increased to $3.5 million dollars in 2009, was unlimited in 2010, and was set to fall all the way back down to $1.0 million dollars in 2011.  This problem was solved for the short term by setting the exemption at $5.0 million dollars for 2011 and 2012.  Thus the first $5.0 million dollars of any estate is exempt from federal estate taxes.  The maximum federal estate tax rate on those estates over $5.0 million dollars was capped at 35%.  This will greatly decrease the number of estates subject to federal estate taxes.  However, once again, this
… Read More... “Highlights of the 2010 Tax Relief Act”
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