Currently, the value of assets passing to heirs upon the death of a U.S. citizen free of federal estate taxes, called the federal estate tax exemption amount, is $5.12 million dollars per person. This federal estate tax exemption amount is valid through the end of 2012. In the past, upon the death of the first.. read more →

In this case, the decedent, William McLellan, created an irrevocable life insurance trust for the primary benefit of his wife and children in 2006. The life insurance trust was funded with a $2.5 million life insurance policy. Plaintiff, Lois Jean McLellan, the spouse of the decedent and mother of two of decedent’s four children, was.. read more →

Senate Majority Leader Harry Reid (D/NV) has introduced legislation designed to enact the tax cut compromise that was reached last week between President Obama and Senate Republicans. Entitled the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,” the present bill is structured as an amendment to current law enacted in 2001 under.. read more →

Contrary to the expectations of many practitioners including the writer, Congress did not amend the federal estate tax laws in 2009. As a result, the Economic Growth and Tax Reconciliation Act of 2001 (“EGTRA”), passed by President George W. Bush, controls. EGTRA makes substantial changes to the  federal estate tax laws in 2010 and thereafter… read more →

The tax law changes that became effective on January 1, 2010 and affect estate and elder law planning are as follows. These changes include the possible elimination of the stepped-up tax basis for assets in irrevocable trusts and life estates, the repeal of the federal estate tax and the allocation of basis increase by the.. read more →

An amendment to a military act gives spouses of military personnel new residency rights, creating income and estate tax planning opportunities for military families. Because military families move, on average, every three years, the families often have to pay taxes in a new state or locality and lose the right to vote in the place.. read more →

Did you know that, under New Jersey law, you are entitled to receive compensation for services rendered as a fiduciary, such as an Executor, Administrator, Trustee, Guardian, Agent under a Power of Attorney and Conservator? Well, you are. Any compensation paid to a fiduciary in New Jersey is called a “commission”.  The amount of any.. read more →

On December 3, 2009, the House of Representatives passed the “Permanent Estate Tax Relief for Families, Farmers, and Small Business Act of 2009” (H.R.4154). If adopted by the Senate, the bill will freeze the estate and gift tax status quo as of this year. The House Bill eliminates the one-year repeal of the federal estate.. read more →

The gift tax annual exclusion is the maximum amount which a taxpayer can gift each year to any beneficiary without being required to use his or her $1 million lifetime gift exemption amount. If gifts are limited each year to the annual exclusion amount established in the year of the gift, the person making the.. read more →

Under the law passed by President Bush, the Economic Growth and Tax Reconciliation Act of 2001 (“EGTRA”), there is no estate tax in 2010, and estates pay only capital gains tax; then the estate tax returns with a $1 million exemption in 2011. President Obama wants to prevent this one year gap by making the.. read more →

The American Recovery and Reinvestment Act of 2009 (Recovery Act) was signed into law by President Obama on February 17th, 2009. As part of the Recovery Act, nearly 55 million Social Security and Supplemental Security Income (SSI) beneficiaries will receive a one-time payment of $250 each. To receive a payment, the beneficiary’s address of record.. read more →

President Bush’s tax cut law passed in 2001, called the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub.L. 107-16, 115 Stat. 38, June 7, 2001 (hereafter “EGTRRA”) gradually phased out the estate tax by raising the exemption level and reducing the top rate; in 2009, only estates valued at more than $3.5 million.. read more →

The Wall Street Journal recently reported here and here that the new administration has decided to permanently lock the estate tax in at the rate and exemption levels that took effect this year. That change in the law would exempt estates of $3.5 million — $7 million for couples — from any taxation. The value.. read more →

New Jersey allows a deduction of medical expenses, including long-term care insurance premiums, to the extent that they exceed 2% of adjusted gross income. N.J. Stat. Sec. 54A:3-3 New York, on the other hand, provides a tax credit of 10% of the premiums for long-term care policies approved by the Superintendent of Insurance pursuant to.. read more →

Every year the Internal Revenue Service publishes new rates and tables for a variety of tax exemptions. Here are the 2009 annual estate and gift tax exclusions, effective as of January 1, 2009. 1)  The Annual Gift Tax Exclusion is $13,000 in 2009. As a result of  the 2009 annual gift tax exclusion, any person.. read more →

The costs of nursing home care can be deducted on federal individual income tax returns as medical expenses under Internal Revenue Code (IRC) § 7702B because they are considered “qualified long-term care costs”.  However, the status of assisted living facility (ALF) costs has not been as clear. To assist readers, below we have summarized an.. read more →

Congress approved legislation that would allow retirees to defer withdrawals from their 401(k) plans and individual retirement accounts in 2009 without triggering a penalty. President Bush is expected to sign the bill. Ordinarily, seniors age 70½ and older are required to withdraw a minimum amount from their tax-deferred retirement savings plans every year and pay.. read more →

The recently passed Emergency Economic Stabilization Act of 2008 (aka “the bailout bill”) temporarily raises the basic limit on federal deposit insurance coverage (FDIC) from $100,000 to $250,000 per depositor. The legislation provides that the basic deposit insurance limit will return to $100,000 after December 31, 2009. “This temporary increase in deposit insurance coverage should.. read more →

The Internal Revenue Service has announced the maximum tax deduction that can be taken on qualified Long Term Care Insurance premiums in 2009. Maximum Deduction for Qualified LTCI Premiums Under Code 213(d)(10) Attained Age Before Close of Year 2008 2009 40 or less $310 $320 More than 40 but no more than 50 $580 $600.. read more →

The annual gift tax exclusion will increase from $12,000 to $13,000 effective January 1, 2009, the Internal Revenue Service (IRS) has announced. The gift tax exclusion is the amount the IRS allows a taxpayer to gift to another individual without reporting the gift. The increase means that more can be given away for estate tax.. read more →

Many people continue to work beyond retirement age, either by choice or out of necessity. But if you are receiving Social Security benefits, working may affect your benefit payments. Earning income above Social Security thresholds can cause a reduction in benefits and mean your benefits will be taxed.  If you work and are “full retirement.. read more →