Estate Planning

On March 25, 2021, Senators Sanders, Gillibrand, Reed, Van Hollen, and Whitehouse released a bill to the Senate that, if signed into law, will cause substantial changes to the Internal Revenue Code that pertain, among other things, to estate, gift, and generation-skipping transfer taxes.. A similar bill was read into the House by Representative Gomez. The bill, commonly known as “For the 99.5% Act” (the “Act”), was drafted with an effective date of January 1, 2022, but may be effective earlier if included as part of the Senate’s Budget Reconciliation Process before the end of this year. We understand that…
Ruder Ware’s Trusts & Estates blog has featured several blogs (for example, Call to Action: Review Your Estate Plan in Light of the SECURE Act and Why SECURE Act Matters to You) on the SECURE Act, a federal law effective January 1, 2020,  that made significant changes to the payout provisions of inherited retirement benefits, such as 401(k) plans and IRAs. The most dramatic change brought about by the SECURE Act was the elimination of the ability of a “designated beneficiary” (in most cases an individual, such as a child) to “stretch out” distributions from an inherited retirement benefit…
Much attention has been paid in recent weeks to President Biden’s infrastructure plan as well as its key sources of funding, including, among other things, raising the corporate tax rate. In the shadow of this legislation, two bills have recently been introduced in the Senate that would take direct aim at current wealth transfer planning techniques. While neither bill is likely to survive in its current form, a recent ruling by the Senate parliamentarian has made imminent estate tax reform more likely. These proposals, their effective dates and the possible timeframe for estate tax reform are discussed below. Typically, to…
An algorithm is a set of steps that leads to a conclusive result. Both humans and computers can process algorithms – even simple arithmetic is an algorithm. Computers use complex algorithmic formulas that reference large quantities of data in order to make automated decisions. Governments, employers, insurance companies, and health care providers are dramatically increasing their reliance on automatic decision-making software. Decisions as diverse as evaluating risk during criminal sentencing, deciding where to prioritize police resources, sorting resumes, ranking patients by greatest medical need, and determining eligibility and quantity of public benefits may all rely on computer automation. Julia Veenendaal,…
In the United States Congress, there is an arduous journey before a bill becomes law.  See https://youtu.be/FFroMQlKiag.  But there is a common theme running through some gift and estate tax bills that have been introduced in Congress this year.  That is: an appropriate way to raise revenue (for pandemic relief, infrastructure improvements, jobs, whatever the reason) is to collect more taxes when so-called “wealthy” individuals transfer their assets through lifetime transfers and transfers at death. In this context, “wealthy” generally means an individual who is likely to own assets at death that are worth more than $3.5 million ($7…
Our team here at Ruder Ware has focused previous blogs and other educational materials on ways to avoid adult guardianship (see Related Articles section at the end of my post); however, there may be some instances where guardianship is unavoidable.  Earlier this month, I attempted to simplify the guardianship process in my vlog.  This blog is a continuation and aims to remove the mystery around guardianship for those unavoidable instances. First, there are two types of guardians; a guardian of the person and a guardian of the estate.  A guardian can be appointed for either or both, the Court…
Farmers know there’s going to come a day when they’re no longer around to run their farms – and they know they should have plans in place for when that day comes. But farmers often delay planning because it forces them to think about difficult topics and make difficult decisions. The first step to beginning a succession plan is to pull together a team to help build and implement a plan. The team should consist of trusted professional advisers, successors who will continue the farming legacy and other family members to help make those difficult decisions. Having a strong team…
Earlier this month, I provided a very brief overview of the estate tax in a vlog.  You can view the vlog here.  In this blog post, I’ll expand on estate tax basics. What is the estate tax?  At its foundation, the estate tax is a tax imposed on the transfer of property upon death.  It is distinct from other taxes imposed on the transfer of property, including the gift tax, the generation-skipping transfer tax, and in some states, the inheritance tax.  For purposes of this blog post, I’ll focus on the estate tax, but make sure that you subscribe…
It seems as if we are starting to see, once again, some of the actions of Wisconsin nursing homes that led to the original Nursing Home Reform Act. Now is a good time to take a look back and review what that federal law was all about. The Nursing Home Reform Act of 1987 In 1986, Congress authorized the Institute of Medicine to conduct an analysis of complaints against the nursing home industry by its residents and their families. The study found that an alarming number of nursing home residents were abused, neglected, or given inadequate care. Further, legislation from…
On Monday, February 8, 2021, US Representative Alexandria Ocasio-Cortez and Senator Chuck Schumer announced that part of the December COVID-19 relief bill will include $2 billion in funds to FEMA for the reimbursement of funeral expenses for those who have died from COVID. Exact details are limited, but families will be eligible for a reimbursement up to $7,000 for funeral assistance. The funds will be available for COVID deaths dating back to January of 2020. Funeral expenses are often a source of stress incurred at a time when families are grieving their loss. Many funeral homes will require a substantial…
The Elder Law and Special Needs Section (ELSNS) Board has had a carryforward of funds from one budget to the next. While the board will use some funds in an emergency or for unforeseen circumstances, it also plans to spend funds each year to further the goals of the section, its members, and the public. Fund Policy The board has a policy to set forth the use of the funds. The board plans to spend funds on the following: Education, such as pamphlets, books, education materials, videos, or other methods to educate on elder law and special needs topics including…
Buying or selling a home is an incredibly exciting process. After all, it is often one of the biggest purchases one will make, and is often the most valuable asset in a person’s net worth. Unfortunately, the process of buying or selling a home does not always go smoothly. A recent decision by the Wisconsin Court of Appeals in Parks v. Wucherer is one of many cases that demonstrate why you should always hire an attorney when buying or selling a home in a trust or estate. In 2017, the Parkses purchased a home from the Wucherer Trust. Throughout the…
If 2020 has given us anything, it is the opportunity to become more flexible. Flexibility is key to any good wealth transfer plan. Below is a review of a few significant transfer tax planning considerations to keep in mind: 1. Gift and Estate Tax Exemption. The gift and estate tax exemption amount will increase from $11.58 million per person to $11.7 million in 2021. For married couples, each spouse can use the exemption, resulting in a combined 2021 exemption amount of$23.4 million (assuming proper planning and elections are made). Note: Per the 2017 Tax Cuts and Jobs Act, on January…
It is becoming increasingly common for people to get divorced and then remarried. In these situations, one or both spouses entering into a new marriage usually has children from a prior relationship. Anyone who has children from a prior relationship and remarries should review their estate plan and make any necessary updates to ensure their assets are distributed according to their wishes. Under Wisconsin law, the assets of a deceased spouse who dies intestate will automatically pass to the surviving spouse. When there is a second marriage and children from a prior relationship, however, the assets of a deceased spouse…
In Being Mortal: Medicine and What Matters in the End, Dr. Atul Gawande writes about how often medicine fails the elderly and those with terminal illness. His first example is a man who chose a surgery that didn’t stand a chance of giving him what he really wanted (“his continence, his strength, the life he had previously known”). Despite seeing his wife die in intensive care and resolving to avoid the same fate, the man chose a risky surgery that led, 14 days later, to exactly that. To Gawande, the remarkable thing was not the poor choice; it was…
On July 1, 2019, I did something I never thought I would do: I became “of counsel” to my firm. During most of my career as an elder law attorney, I planned to keep working until I died. I remember mentioning this to a colleague, Robert Fleming, when I was at his office in Tucson in 1996. Robert, Charlie Sabatino, Craig Gordon, and I – all National Academy of Elder Law Attorneys (NAELA) members – were at Robert’s office grading CELA exams. We were talking about our practices. I mentioned that I never intended to retire. Robert replied, “You don’t…