Idaho Estate Planning

Idaho Estate Planning Attorney, Mark Wight - You Tube Star!

Regular readers of our blog have probably noticed the addition of videos to some of our articles. We are excited to have these educational and promotional videos available for the public. We invite you to visit our You Tube Channel, browse the videos and let us know what you think. If you know someone who might benefit from watching one of our videos be sure to let them know about this great resource.

 

Treasure Valley Moms Know Best - Have "The Talk" With Her

Oh the dreaded “talk.” Where do you start? Who should you approach first, Mom or Dad? Experts suggest starting the money and finances “talk” with Mom.

Fidelity Investments specifically suggests that moms are the best source of open dialogue, even when it comes to the “money talk.” In fact, MarketWatch recently considered this in an article titled “In family-money talks, start with mom.”

A summary of the numbers from that article:

In the survey of 975 parents and 152 adult children, 64% of mothers said it was “not at all difficult” to start a conversation with an adult child about their finances; only 54% of fathers felt the same way. In addition, 79% of women, versus 69% of men, reported having had “comprehensive discussions” with their adult children about estate planning or wills.  The same was true of 66% of women vs. 56% of men about health and elder-care topics and 70% of women vs. 55% of men about running out of money in retirement.

Although there are many reasons why moms might be the best to approach, most of them are mere conjecture. More important, however, is the reality that senior parents really do not enjoy talking about their finances. That is understandable.

All that noted, “the talk” needs to be had, sooner rather than later. At Idaho Estate Planning, we can help. We know how to help your family get things moving forward. Call us now to schedule a consultation. Remember, good planning is no accident.

Bookkeeping Critical For Idahoans Caring For Parents

If you find yourself taking on the responsibility of a caretaker to your elderly parents, are you documenting your efforts? If you are giving time and money for the care of loved ones and would like to take tax deductions for your efforts, you ought to make sure you brush up on your bookkeeping skills. Otherwise, when it comes to tax time, you may be out of luck (and money).

The case of Estate of Olivo v. Commissioner is most instructive.

Forbes examined the Olivo case in an article titled “Mother's Day? Son Claims $1.2M Tax Write-Off For Helping Mom.” From the title of the article, it is clear that the son may have been a bit generous in his claim. To make matters even more interesting, the son was a tax attorney.

Background: Anthony Olivo was the son/tax attorney. He took nearly ten years away from his law practice to care for his parents. Accordingly, Anthony lost his law practice income. However, he did collect fees from his parents for managing their estates. When Anthony’s mother died, he sought to deduct $44,200 in administrator’s fees, $55,000 in accountant’s and attorney’s fees, and a whopping $1,240,000 for a near-decade’s worth of lost wages (he did manage his own firm, after all).

The IRS raised an eyebrow, and then raised it further when they took a look at his documentation of all of these fees and amounts. Problem: there was no contract, no invoice, and no evidence. Not good.

Even when Anthony was handling the estate and filing the tax return he didn’t keep track of his time and just estimated. Also, not good.

In reality, not everything claimed may have been deductible. Nevertheless, the lack of recordkeeping killed any chance for success.

If you and your loved ones are entering a period of caregiving, then a little forethought and planning can go a long way. In the end, a little recordkeeping can be the deciding factor in making your claim. 

For more information on this and other Elder Law issues, contact Idaho Estate Planning and schedule a consultation. If you are caring for a veteran you need to investigate the VA Pension Benefit as well. Remember, good planning is no accident.

 

Hospice in Idaho Still On Hold From Medicare

U.S. health care has been in flux since 2010, with many aspects of health care reform still on hold. Hospice is one area that is still waiting for help with protecting the elderly and those in end-of-life care.

As reported quite recently through the Kaiser Health News, hospice care has yet to be expanded under the Medicare project set out three years ago.

The article titled “Medicare Lags In Project to Expand Hospice” examines the very real conflict between “curative” treatment and “palliative” treatment. The former is meant to cure a condition and thereby prolong life, and the latter is meant to ease the pain caused by a condition without a focus on effecting a cure.

Naturally, the curative and palliative treatments are often considered opposites. In fact, choosing palliative care would mean giving up all hope on curative care. Consequently, it is only natural that rapidly declining patients delay their entry into palliative hospice care.

The 2010 law was to begin inroads into exploring combined care, the possibility of both curative and palliative concurrently. Logically, this should ease transitions without forsaking hopes, likely reducing costs in the process. To date, however, this has not happened.

Health care planning is complicated, and since so much is at stake be sure to consult a professional when exploring your options.

For more information on Elder Law and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Inherited IRAs in Idaho Still Require RMDs

The different ways you inherit assets are just as varied as the assets themselves. Such is the case with an inherited IRA. When is it “yours” and how do you avoid tax issues?

The Slott Report recently addressed the consequences of when a surviving spouse inherits the IRA of their deceased spouse and both have reached age 70 ½, the age for Required Minimum Distributions (RMDs). The article titled “Inherited IRA: When do You Own It?” noted that one must be very careful.

For starters, the inheriting spouse must be the “designated” beneficiary. Assuming that is the case, what happens when your spouse dies in December and has not withdrawn the required RMD? Must you as the surviving spouse calculate your RMD on both account balances, your spouse’s and your own?

RMDs are always tricky because the penalties are steep, with a 50% penalty tax on the amount required but not taken.

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

 

Get Out of Bed & Get Better Idaho

We first published this blog in June of 2011. We hope you enjoy it as it is still timely.

As we and our loved ones age, we put a lot of effort (and resources) into making sure a hospital bed is available when needed. New research shows that while that hospital bed may sometimes be necessary, getting up and out of it as quickly as possible is key to recovery. As it turns out, the hospital bed is a huge contributor to old-age infirmity, as studies prove that bed-rest and immobility slow healing and stunt recuperation.

A recent New York Times column, “The New Old Age” covered the results of a study conducted by University of Texas physician, Dr. Steve Fisher. Using a step activity monitor (a fancy pedometer), the Texas team found that just an extra 600 steps a day, or about 12 total minutes of slow walking, could significantly shorten hospital stays. Although Dr. Fisher calls for further study, he still offered his optimism, “It’s encouraging to think that small changes can be of broad benefit.”

Though physicians may have advised nursing staff to help the patient ambulate, nurses and aides frequently have little time for these tasks and the patient may not get up and walk enough. Dr. Fisher recommends that family members take the initiative and ask about getting a physical therapist involved early on and about whether the family is permitted to help the patient walk.

One obstacle to an aggressive mobility plan is the risk of falls. Not only are they a valid concern for you and your loved one, but also for the hospital. Since 2008, a fall is grounds for Medicare to refuse to reimburse a hospital for a patient’s care. So, it’s understandable that the hospital might be overly cautious about families helping elderly patients walk. Nonetheless, Dr. Fisher still encourages families to look for safe ways to help elderly patients get up and walk. While falls can indeed be dangerous, the consequences of prolonged immobility may be worse.

For more information on this and other elder law subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

 

Careers for Boise Idaho Retirees

This "best of" blog comes from June of 2011. Enjoy!

If you are a Baby Boomer nearing retirement, you probably have a different concept of retirement than your parents. Retirement for you may not mean an extended vacation on some sunny shore, but rather a new phase of your working career. A phase that may, perhaps, bring more than just another paycheck, but a new sense of meaning to your life. Morningstar recently referred to this career transformation as the “encore career.”

Of course, it’s not just the search for meaning that motivates Baby Boomers to pursue an encore career. As Morningstar points out, tough new economic realities have transformed career reinvention from a virtue into a necessity for millions of older Americans who aren’t ready to retire or simply can’t afford to quit working. 

Interestingly, though the job market looks fairly bleak today, some economists predict labor shortages in key social sector jobs. Barry Bluestone, an economist at Northeastern University in Boston, predicts that within the next eight years, there could be at least five million job vacancies in the U.S., nearly half of them in social sector jobs in education, health care, government and non-profit organization. Bluestone also predicts that Baby Boomers are going to be filling those jobs, "We're going to see a remarkable reshaping of our labor force. The rate of labor force participation by the 55-plus population is going to be much higher, and older workers will represent a much higher percentage of the overall workforce."

The Morningstar article includes a table ranking Projected Encore Career Growth 2008-2018. You might want to check it out. I note that job growth is predicted to be particularly strong for teachers, nurses and other health care providers … and not so much for lawyers.

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

The LLC in Idaho - Powerful Asset Protection When Used Wisely

Business owners often focus on the tax consequences of business structure. But asset protection is a growing concern in these litigious times, leading to the rising popularity of “limited” forms of business such as the Limited Liability Company (LLC).

LLCs have a unique asset protection feature against charging orders. Maybe you have heard of these? A recent Forbes article titled “The Misunderstood Charging Order,” offers a basic explanation:

The charging order itself is not the lien; rather, the lien is what is placed by the charging order. Think of the charging order as a can of spray paint, and the paint is the lien. The charging order basically sprays the lien on the debtor/member’s interest. Stated differently, the charging order is the vehicle by which the lien is placed on the debtor/member’s interest — it is not the lien itself.

While this is a complex subject, basically a charging order is a creditor’s first and last tool to extract your interests and capital from your business (assuming they don’t try to pierce the veil). In a corporation, a charging order can allow a creditor to actually gain a debtor’s stock interests in the business. This can be disastrous. “Limited” company structures are specifically designed with charging order protection, something that could be important to you as a business owner. 

The original article goes into greater detail, but essentially the charging order protection means that while a creditor can place a lien on your LLC membership interests and claim any distributions, a creditor cannot claim the membership interest itself and sabotage the business.

While a “limited” company structure does provide a level of asset protection, keep in mind it is not a panacea. Do not just presume that a creditor will see an LLC and run away or settle for pennies on the dollar (as LLCs are often marketed), as that is rarely the case.

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

Should Estate Planning Attorneys in Idaho Fire Their Unmarried Clients?

According to the U.S. Census Bureau, the divorce rate of first marriage is around 50 percent; second marriages are at 60 to 67 percent and third marriages are at 73 to 74 percent. The fact is married couples frequently disagree … even when it comes to estate planning.

Marriage counselors stay in business because of marital disharmony. Commonly, they represent both spouses and seek to find common ground in a team approach. When it comes to estate planning, however, attorneys face a potential ethical dilemma. For example, estate planning attorneys cannot favor one spouse over the other, nor can they keep the secrets of one spouse from the other spouse in the course of “dual representation.”

While there’s no sense starting trouble where there is none, nor in approaching anything in an overly legal or litigious way, sometimes spouses really do have different estate planning interests. It’s an ethical problem for the spouses and their estate planning attorney alike, as pointed out in a recent Forbes article titled “Ethics in Estate Planning for a Married Couple.” This certainly is an issue for attorneys (and their malpractice carriers) to fret about, but also for their clients to understand and appreciate. 

Indeed, at certain junctures it might be necessary for spouses to even engage separate counsel to wrangle their way through an estate planning impasse. This happens many times with prenuptial and postnuptial agreements, but in other instances as well.

Do you not need separate counsel? Great! Still, take a moment to read the Forbes article about potential hazards.  Above all, if you choose “dual representation,” make sure you both truly are represented – and included in all attorney-client communications.

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Idahoans Beware of the Time Traveling IRS

Why wouldn’t you file a gift tax return if you made a taxable gift? Well, for a lot of people, the answer might be “I didn’t know it was required.” But, in this case, Redstone argues the transfer wasn’t gift, but rather the result of an “intra-family lawsuit” and thus “an ordinary business transaction.”

So, how long does (or can) the IRS scour your financial history to find taxable gifts? Well, it seems they do (or can) go back some 41 years. Whether you are a billionaire or a regular “Joe,” this case is worth watching.

You can get the high points of the case from a recent Bloomberg article titled “Billionaire Redstone Challenges IRS on Tax for 1972 Gift.” Normally the IRS is bound by a statute of limitations set to about three years. However, an exception to this rule includes the failure to file a tax return like the allegedly missing gift tax return of Mr. Redstone.

Apparently, the difficulty arose over certain shares of National Amusements Inc., and a family lawsuit resulting in a “transfer” of shares. The IRS is now calling that “transfer” a “gift” with $1.1 million in taxes, penalties, and interest due and owing.

According to Richard Behrendt, a former estate and gift tax auditor turned director of estate planning, “This is unheard of… I can’t remember ever hearing of anybody going back 41 years to raise an issue. It’s really unprecedented in my experience.”

Note: Mr. Redstone may have become a target, given the fact he is the chairman of both Viacom and CBS, not to mention National Amusements and all the related subsidiaries of the three. Reportedly, Mr. Redstone is worth approximately $4.9 billion. Nevertheless, this 41-year-look-back is a troublesome precedent.

The take-away (even if you have a smaller fortune) is that timely filing of an accurate gift tax return will start the clock running on a three-year statute of limitations. If no gift tax return is filed, the statute does not apply. Thus, if a taxpayer fails to file a gift tax return, the IRS can pursue you indefinitely.

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.