Planning for Life

Harry S. Margolis

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How Many Agents Do You Have?

Posted by Harry S. Margolis on January 24, 2018

By Harry S. Margolis

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You may have a lot of people who you have appointed to act for you at various times who are your agents. And you may be an agent for a number of other people without thinking about it, or perhaps without even knowing about your role.

Agency relationships can be created in a myriad of ways. Some come about formally via specific nomination in an estate planning document, while others result from a position of trust and authority created in less formal ways. Here are some of the agents you may have or roles in which you may serve:

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Topics: durable power of attorney, trustee, proxy

Be Nice to Your Beneficiaries, or Don't Be Their Trustee

Posted by Harry S. Margolis on January 16, 2018

By Harry S. Margolis

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Dad created an estate plan that distributed three quarters of his estate to three of his children and the fourth quarter in trust for one of his daughters, Elaine, and her two children, Paul and Alicia. He named another daughter, Madeline, and her daughter, Paula, as trustees.

Dad died in 2001. The trust for Elaine and her children originally held $542,042. For the next 15 years, Madeline and Paula distributed nothing to Elaine or her children, until 2016 when a court ordered them to make distributions to Elaine so that she "could pay her medical bills and obtain housing." Madeline and Paula did, however, spend more than $50,000 paying for storage of personal items left to Elaine and paid themselves and their attorney.

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Topics: trusts, trustee

Another Reason to Support the Estate Tax

Posted by Harry S. Margolis on January 9, 2018

By Harry S. Margolis

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Last month while it was still pending, I wrote a post about the competing versions of the GOP tax law with regard to federal estate tax. The House bill would have eliminated it entirely. The Senate version, which ultimately passed, doubled the threshold for taxation to $11.2 million for individuals and $22.4 million for married couples. At the risk of getting too political, I made my pitch as to why an estate tax is important in terms of equity and democracy.

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Topics: estate taxes

What Do You Do When the Bank is Unreasonable?

Posted by Harry S. Margolis on January 2, 2018

By Harry S. Margolis

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We advise our clients to execute durable powers of attorney to make sure that someone can step in and take care of their legal and financial matters in the event of incapacity. Sometimes, individuals use these documents to take advantage of seniors and on very rare occasions banks are held responsible when that happens. As a result, they are often reluctant to accept durable powers of attorney for their intended purpose. This can cause real problems and costs for families.

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Topics: durable power of attorney

What's In the New Tax Law?

Posted by Harry S. Margolis on December 26, 2017

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By Harry S. Margolis

While it will take some time to understand all of the effects of the new tax law, and most of it has to do with reducing the corporate tax rate from 35% to 21%, here's some of what we know that relates to individual taxpayers. But before we get into the details, be aware that almost everything listed below sunsets after 2025, with the tax structure reverting to its current form in 2026 unless Congress acts between now and then. The corporate tax rate cut does not sunset. Here are the principal changes:

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Topics: income taxes, estate taxes, tax law

Should My Financial Planner Be a CFP, CLU, or a What?

Posted by Harry S. Margolis on December 19, 2017

By Harry S. Margolis

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Acronyms, acronyms. Does your financial planner have a lot of initials after her name? Is she a CFP, a CLU, a ChFC or a CFA? What do these designations mean and do they matter?

As with all designations and certifications, they matter a bit, but only a bit. Some advisors with lots of designations will not have their clients' best interests at heart. Others with no designations are very knowledgeable and take great care of their clients. That said, these designations can be used as one of several data points in choosing your financial advisor.

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Topics: financial planning

The Estate Tax: Going, Going, Gone?

Posted by Harry S. Margolis on December 5, 2017

By Harry S. Margolis

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Both the House and Senate versions of the tax bill would increase the exemption for estate taxes from the current $5.5 million for individuals (and $11 million for married couples) to $11 million (and $22 million, respectively). The House bill would ultimately eliminate the tax all together in 2024. This is the culmination of a long-term campaign against the estate tax which began more than two decades ago when the threshold for taxation was just $600,000.

Already, the result is that only about 5,000 estates per year pay estate taxes, down from 52,000 in 2000.

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Topics: estate taxes

Can You Name More Than One Person on a Health Care Proxy?

Posted by Harry S. Margolis on November 28, 2017

By Harry S. Margolis

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We advise all of our clients to name an agent under a health care proxy to make health care decisions for them when and if they cannot do so for themselves. Many clients want to name more than one person to this role.

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Topics: health-care decision making, proxy

What Happens If Your Trustee Can't Serve?

Posted by Harry S. Margolis on November 14, 2017

By Harry S. Margolis

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So you've appointed your brother-in-law as the trustee for a trust for your children in case you die before they reach age 25. Or he and his wife have appointed you as trustee on a special needs trust for their daughter with Down's syndrome. Or, finally, your mother has her assets in a revocable trust. In any of these situations, what happens if the trustee becomes incapacitated?

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Topics: trustee

What Would the House Tax Bill Mean for Seniors?

Posted by Harry S. Margolis on November 7, 2017

By Harry S. Margolis

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Perhaps we shouldn't be concerned with the House Republicans' proposed tax bill. With no Democratic support, a slim Republican majority in both houses, and a somewhat more moderate Republican majority in the Senate, it is unlikely to become law in its current form, if at all. On the other hand, the Republicans need a victory and will do everything they can to pass the law in something close to its current form.

So, what does it mean for seniors and people with disabilities? The two largest impacts would probably result from the projected loss of tax revenue and the elimination of the medical expense deduction.

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Topics: Medicare, income taxes, seniors, Medicaid

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