Current Death Taxes – Federal and Maryland

Under current law, the Federal estate tax exemption is $5 million. While there may be pressure in Congress in 2013 to lower this exemption amount, it is unlikely to be reduced significantly. In Maryland, the estate tax exemption is $1 million.

Maryland has no inheritance tax for those directly in the family line (for example, parents, children or grandchildren). The tax rate is 10% for all other beneficiaries with the exception of charities.

Do You Need a Living Trust?

You’ve undoubtedly heard the ads on the radio or seen newspaper articles recommending a living trust, instead of a will, as your major estate planning document. Is a living trust better than a Last Will and Testament? It depends.

Generally, the answer is no. Most people are under the impression that a living trust, also called revocable or inter vivos, will save your estate inheritance and death taxes. That is false. There is also a belief that a living trust will avoid the necessity of filing for probate. That is generally true, except that if the reason for someone wishing to avoid probate is to save money, that is probably a false savings, since probate fees in Maryland are approximately one-tenth of 1% of the total estate value. That means that the probate fee on an estate valued at $1,000,000 would be $1,000. The preparation of a living trust is likely to cost much more than that.

However, there are certain circumstances where a living trust is preferable to a will. If an individual owns real estate in more than one state, having a living trust makes the transfer of that real estate easier upon the owner’s death (because technically, the individual doesn’t own the property in various states, his trust does).  

A living trust is a private document and, unlike a will, is not required to be filed with the probate court where it would become available for public inspection. Thus, if someone was interested in concealing the amount of his assets or the identity of his beneficiaries, a living trust would be the way to go.

Do You Have Backups for your Powers of Attorney or your Will?

Many people think that they only need to name one person as their personal representative (executor) or power of attorney-holder. Because, they say, if something happens to that person, they’ll have time to appoint a replacement. Alas, human nature being what it is, they may delay acting until it is too late.

By naming a back-up when the legal papers are first prepared, you’re much less likely to have a power of attorney that can’t be used because the person named is no longer “available”.

Looking for a Nursing Home?

A source of information and ratings on quality of care in the 17,000 Medicare and Medicaid-certified nursing homes in the country can be found at http://www.medicare.gov/NursingHomeCompare.

Included are health inspection results and complaints with detailed and summary information about deficiencies found during the three most recent state inspections and recent complaint investigations.

Reminder – Medicare Part D Enrollment Period

Changes in Medicare enrollment for 2013 can be made from October 15 – December 7, 2102. It’s a good idea to check to your plan every year.

Nursing Home Contracts: READ BEFORE YOU SIGN!

When a person enters a nursing home or assisted living facility, typically the arrangements are made by a loved one. That individual should be acting on behalf of the parent or spouse.  Thus, financial obligations should be the obligation of that person and not the person helping him or her.  The nursing home would love to have another individual “on the hook” for care obligations. You are not required to assume that liability. Be sure that you don’t assume a financial responsibility that you didn’t intend to undertake.  Read carefully. Best of all, have a lawyer review the document before you sign it.

Controlling the Behavior of Your Loved One with Alzheimer’s

Probably the most difficult aspect of dealing with someone with Alzheimer’s is coping with occasional physical aggression.

Understand that the person’s inability to communicate effectively causes frustration and resulting acting out. Keep things simple in both communication and environment, and that will probably diminish aggressive or angry conduct. Interestingly, it also appears that over-stimulation can generate an aggressive reaction. The best approach, again, is to keep life as simple as possible for the person. Unfamiliar events or surroundings can be very confusing and upsetting to a person with Alzheimer’s, and those feelings can result in a physical lashing-out.

Consider that when memory is lost, it is only immediate emotions that matter. Memory is no longer available to provide the individual with guidance as to what conduct is appropriate and what’s not. In a very literal sense, people with Alzheimer’s typically live in the moment. That’s all that matters. There is no sense of what happened 15 minutes ago or what is likely to happen 15 minutes hence.