Estate Planning
But I Have Power of Attorney
Posted by: Abby Meares
March 29, 2011
Haller & Colvin attorneys Stephen E. Lewis and Melanie L. Farr explain the importance of reviewing your power of attorney forms and executed medical directives.
BUT I HAVE A POWER OF ATTORNEY
If you have previously signed a Power of Attorney or executed medical directives giving authority to someone to make decisions for you, there are several reasons why you should consider having Haller & Colvin review the document and your current circumstances to determine if new documents would be advisable.
Time. Just like automobiles, investments and Wills, circumstances change over time and things become outdated. A Power of Attorney document signed more than 5 years ago is frequently not accepted by financial institutions. There is a document which may be prepared by Haller & Colvin to verify the existence of an older Power of Attorney and make it acceptable. However, it comes with a cost, just like a new Power of Attorney document.
Changes in the Law. Since 2005, there have been significant changes in Indiana law which affect who may plan your funeral (extremely important in blended families and subsequent marriages), changes which allow the attorney-in-fact named in the Power of Attorney document to plan for Medicaid and make transfers to avoid probate.
Funeral Declaration. Indiana law now provides for a funeral declaration that allows you to name a specific person to plan your funeral or allows you to identify your wishes with reference to your funeral.
To make sure you have the most up-to-date information in your Power-of-Attorney documentation, call one of our Estate Planning team members.
The contents of this blog post are intended for general information purposes only and should not be construed as legal advice.
Attorney Melanie Farr gives an update on the status of SB 148
Posted by: Melanie Farr
February 17, 2011
Columbia City Representative Senator Jim Banks introduced Senate Bill 148 to the Senate Tax and Fiscal Policy Committee. Senate Bill 148 proposes to eliminate state inheritance tax with a phase out of the tax over a five (5) year period starting in 2013.
Currently, there is a $100,000 exemption for each parent, child, grandparent and grandchild inheriting property from each other. The inheritance tax rate for inheritances over the exemption amount ranges from 1% to 10%. The exemption amounts are much less for other relatives and non-relatives and the tax rates are higher. The result in eliminating the state inheritance tax is an estimated lost tax revenue of $135 million annually.
Due to this result, the bill will not be considered this session. Stay tuned.
Attorney Melanie Farr explains a recent tax court decision dealing with life insurance proceeds
Posted by: Melanie Farr
February 15, 2011
Haller & Colvin attorney Melanie L. Farr explains a recent tax court decision.
On February 8, the Indiana Tax Court issued an opinion regarding the taxation of annuity benefits transferred as a result of death. The Indiana Department of Revenue, Inheritance Tax Division, appealed a probate court's ruling that an estate was not obligated to pay inheritance tax on death benefits paid to the deceased's brother from an annuity contract. The Department had sought an order from the probate court for the estate to file a return and remit tax on the transfer to decedent's brother. The probate court found that the brother was a transferee of life insurance and no tax was due. The Department appealed the probate court's ruling to the Tax Court. In reviewing the transfer of certain death benefits, the Tax Court found that life insurance proceeds are exempt from taxation as long as the benefits are not distributed to the estate. Likewise, annuity payments are exempt from taxation but only if two requirements are met: (1) the annuity contract was entered into after March 3, 1931, and (2) the annuity was payable to the decedent, or the decedent possessed the right to receive the payment either for his life, for any period not ascertainable without reference to his death, or for any period which does not in fact end before his death.
The Tax Court found that the evidence did not support the conclusion that the checks were life insurance proceeds. The checks clearly stated that they were "proceeds from [an] annuity contract." The Tax Court remanded the case back to the probate court with instructions to order the estate to produce a copy of the contracts at issue and determine whether the estate was required to file a return and remit inheritance tax. The full opinion can be found in Indiana Department of State Revenue, Inheritance Tax Division v. In the Matter of the Estate of Deloras J. Biddle, Deceased, Case No. 49T10-1007-TA-35.
The contents of this blog post are intended for general information purposes only and should not be construed as legal advice.
The impact of the 2010 Tax Relief Act
Posted by: Abby Meares
January 28, 2011
Melanie Farr and Stephen Lewis explain the 2010 Tax Relief Act's impact on estate taxes
On December 17, President Obama signed "The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010," which is more commonly known as "The 2010 Tax Relief Act."
The Act prevented the return of the 2001 federal estate tax exemptions and rates. However, many of the provisions in the act will expire at the end of 2012.
The Act increased the exemption amount to $5 million for estate, gift and generation skipping transfer (or GST) taxes for deaths that occur in 2011 and 2012. The maximum tax rates for estate, gift and GST taxes were also reduced to 35 percent for those two years. The Act re-unifies the gift and estate tax exemption amount and revives the rule that property inherited at death will have a step-up in the basis.
If a person died in 2010, the Act allows for an election to have the new rules apply or to have no estate tax liability and to use the modified basis rules.
The Act also permits a transfer of any unused portions of the estate and gift tax exemptions between spouses. This means that any amount not used at the death of the first spouse can be added to the surviving spouse's exemption at his or her death.
With the new changes in the federal estate and gift tax laws, as well as the normal matters of Indiana inheritance tax and probate, this is a great time to review your estate plan or to begin working on one.
To begin working on your estate plan or to review your current estate plan, contact Haller & Colvin attorneys Stephen Lewis or Melanie Farr, or one of our other estate law attorneys.
The contents of this blog post are intended for general information purposes only and should not be construed as legal advice.
