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    Monthly Archives: January 2012

    Savvy Givers Give Strategically

    It’s hard to comment on the recent outpouring of information about presidential hopeful Mitt Romney and his tax records.

    First, since he is a potential presidential candidate, there are political ramifications, as he is a wealthy individual there are ideological (if not also political) ramifications, and as he is a Mormon who practices tithing there are theological ramifications. That said, and whatever your opinions on the man are, it’s hard to deny that he is a very real life example of some serious charitable giving at work.

    As reported by BusinessWeek (and a thousand other places besides), the Romneys gave about $7 Million dollars to charitable causes over the past two years. Interestingly, their giving wasn’t just a matter of simply writing a check (although, granted, a great deal of it was by cash donation). No, the Romneys make use of their own charitable organization. If you, too, are a serious donor, then this may be a worthwhile strategy to consider.

    As an individual giving to charity you are somewhat limited, especially when it comes to the tax year and claiming deductions. By using a charitable organization as a conduit you can give during a given tax year, take the deduction from your personal taxes, and then, as a leader in the charitable organization, still work to grow that gift and take the time to make it do the most good. Likewise, you can lead others and implore them to your causes. (Think Bill and Melinda Gates Foundation.)

    Of course, starting a foundation and maintaining it are often difficult tasks, even though they don’t have to work on such a grand scale as the famous examples. As far as tax advantages, a similar benefit can still be wrought from a form of pooled charity trust, set up by a charity or investment company and able to grant you a tax deduction on your gift in the current year while waiting to pool resources and do the most good.

    Still both approaches are elaborate ways of practicing your charitable giving and either may just be the right method for you. Be sure to consult with appropriate legal and tax counsel to determine the appropriate method for your objectives.

    Visit Meier Law Firm to learn more about charitable giving.

    Laura K. Meier, Esq.

    Reference: BusinessWeek (January 24, 2012) “Romney Tax Returns Show $7 Million in Donations Over 2 Years

    Asset Protection Requires Proper Planning

    It’s unclear how long this economic slump will last. One thing is certain, however, it’s not likely to change anytime soon. And, while the “times” have taken their toll on people, so have “creditors.”

    If you want to protect your assets from “future creditors,” then know that planning must take place well in advance.

    As a reminder of some of the basics of asset protection, I happened upon this article on the topic of “fraudulent conveyance.” Simply put, creditors and the laws that protect them have every reason to be wary of those last minute tricks some people try to pull to hide their assets (it would be pretty difficult to be a creditor if last minute tricks were allowed).

    As a result, laws are set up to void slick moves to defraud just creditors. In fact, they are aptly designated “fraudulent transfers.” Bottom line: If there’s already a creditor in the picture, and one that’s sniffing around no less, then it’s already too late.

    Of course, you have every reason to want to protect your assets. Who doesn’t? Accordingly, make sure you seek qualified legal counsel before making moves with your assets that will be ineffective… or get you in legal trouble.

    Contact Meier Law Firm today and learn how to protect your assets.

    Laura K. Meier, Esq.

    Reference: NuWire Investor (January 17, 2012) “Asset Protection in Uncertain Times

    ELDER LAW

    On the topic of disclosures, a reader inquired about what to do about her family of eight siblings and one elderly father. Long ago the siblings got together and put two of the sisters in charge of their father, largely because his will and other directives advised as much. As a result, they were granted power-of-attorney and access to his accounts.

    Now, the reader has discovered that they aren’t forthcoming with information about their father, his care, and his finances. The reader is worried that she won’t hear anything until there’s a demand for money to care for their elderly father, and, perhaps, that the original funds weren’t adequately used.

    The response of Craig Reaves is tailored to the reader’s unique situation, but his advice is applicable for many in this same or similar position. As a preliminary caveat, there are specific state laws (i.e., like those regarding “powers of  attorney”) that govern the authority, responsibility and liability of agents and fiduciaries.

    Read Craig Reaves’ enlightening response in his original post.

    And visit Meier Law Firm to learn more.

    Laura K. Meier, Esq.

    Reference: The New York Times – The New Old Age Blog ( January 18, 2012) “Ask the Elder Law Attorney: Disclosures and Loans

    Small Business “Smoke And Mirrors”?

    There’s a lot of movement on Capitol Hill these days, or at least there is the potential for it, and it’s largely in the name of small business. President Obama has recently expanded his cabinet with the addition of the chief of the Small Business Administration (SBA). 

    Is it going to work for you?

    As reported here in Businessweek, and in many places beyond, President Obama has launched an initiative to reorganize and condense six of the agencies responsible for various segments of the economy, not least of which being the SBA.

    There is still concern that it may end up being a largely symbolic gesture, and perhaps also only a pre-election “political move.”

    So, how will it affect you?

    According to Robb Mandelbaum over at the New York Times, the reaction is mixed amongst small business persons.

    Learn how to protect your loved ones no matter what.  Contact Meier Law Firm today.

    Laura K. Meier, Esq.

    Reference: Bloomberg Businessweek (January 13, 2012) “Obama Makes SBA Chief a Cabinet Member

    Hospice: Medicare and Medicaid Profit Center?

    Healthcare lawsuits involving the various ways that the elderly can be taken advantage of turn up in the news on a daily basis these days. Why? Well, partly for political reasons and partly for the sheer number of egregious situations that have been created.

    As an informed citizen/taxpayer, it’s important to think about and understand the big picture. However, as a family member, it’s vitally important to remember them for the sake of your elderly loved ones.

    A new legal battle has begun to churn, as recently reported at Kaiser Health News. Yet another healthcare company is being accused of taking advantage of the elderly and their families to draw the greatest yield from Medicare and Medicaid coffers. Here a large company, operating across several states, is accused of actively recruiting and cycling patients through nursing home and hospice services.

    Such companies are compensated by Medicare based on the length of time patients receive care. Medicare picks up the entire nursing home tab for the first 20 days (after that the patient has to contribute), and conversely, if a patient spends too much time in hospice care, Medicare demands their money back since the patient was clearly admitted to end-of-life care under false pretenses.

    Here’s the rub: If you cycle between nursing home regimens and then jump into hospice care as early as possible (but not too early), Medicare will pick up the entire tab and for the maximum amounts, and that’s the issue.

    The legal battles, as well as the politics and economics aside, stories like these also demand a certain amount of attention since they could directly impact your family.

    If you have a loved one in need of nursing home and/or hospice care, it’s important that they find and receive that care… and that they not be abused by an uncaring system.

    Contact Meier Law Firm today and learn how you can protect the people you love.

    Laura K. Meier, Esq.

    Reference: Kaiser Health News (January 4, 2012) “Lawsuit Accuses Company of Fraudulently Cycling Patients through Nursing Homes, Hospice Care.”

    Estate (Tax) Planning Perspectives

    Don’t be lulled into a false sense of security when it comes to estate law. That’s the lesson from a recent article out of Investment News, a gentle reminder that the estate law trap may be closing soon.

    As many taxpayers are well aware, the current laws related to wealth transfers (i.e., the estate tax, the gift tax, and the generation-skipping transfer (GST) tax) were set just over a year ago in the final days of December. Those laws offered fairly generous policies, effective rates, and exemption amounts, generous enough to surprise even the experts and to calm the thousands of families just spared from the estate tax. According to a Trusts & Estates magazine survey of legal and financial advisors, over the past year tax avoidance dropped from the primary concern of many to the fourth place concern.

    The gentle reminder: The laws are only good until 2013 and, barring any sudden outburst of non-partisan productivity at Capitol Hill, are set to expire within a year’s time.

    Snap, the tax trap shuts!

    While tax avoidance need not be your primary concern when it comes to planning, it’s likely to be a very important factor for purely economic reasons and, since estate planning is about the long haul in the first place, you can’t base it on short-term laws.

    Of course, however you rate the importance of tax avoidance when it comes to estate planning; it is rarely the sole concern. This lull in the taxes also can help clarify your goals in other areas.

    If tax avoidance dropped from number 1 to number 4, what did people start thinking about? According to the survey, people began planning in earnest to avoid chaos and discord among beneficiaries, to avoid probate, and to protect children from mismanaging their inheritance.

    To plan your estate with tax avoidance strategies, contact Meier Law Firm today.

    Laura K. Meier, Esq.

    Reference: Investment News (January 15, 2012) “Estate tax lull may trap wealthy

    Foreign Accounts – In the News Again

    If you’ve been keeping up with the IRS news, then you’ve probably been watching the developments on the treatment of offshore accounts. On one hand the IRS has been stepping up its treatment of foreign accounts and noncompliant taxpayers, but with the other hand it has been offering amnesty and incentives for coming clean. As a result, we’ve entered the third period of amnesty for foreign accounts.

    With all the commotion over illegal foreign accounts, it’s good to know that not all foreign dealings are illegal (or even especially taxed by the IRS), as a recent article from the Wall Street Journal points out. In fact, there’s actually an expanding number of legal ways to follow offshore dealings and with great tax advantages.

    With offshore funds, specifically hedge funds, a number of different deduction possibilities come into play and a number of taxation levels fall away with jurisdiction issues. For example, holders can take state-tax and other deductions curtailed by the alternative minimum tax, avoid some or all of the 3.8% Medicare tax on investment income taking effect in 2013 for most couples with adjusted gross income above $250,000 ($200,000, single), and avoid limitations on itemized deductions for upper-bracket taxpayers.

    Of course, there also are significant drawbacks to bear in mind, but those depend on how you employ the accounts. Finally, while powerful, funds aren’t the only means for taking advantage of acting as an “international citizen” first.

    Visit us at Meier Law Firm and learn how to properly set up your accounts.

    Laura K. Meier, Esq.

    Reference: The Wall Street Journal (December 10, 2011) “What’s Next for Offshore Accounts?

    Unclaimed “Death Benefits” Await Claims

    The reality is that life insurance companies do not always pay out claims.

    A recent article in the Wall Street Journal may give you pause regarding whether you might be owed some life insurance money.

    According to state regulators, as much as one billion dollars is languishing in the form of uncollected life insurance death benefits. All is right by the insurers, however, as most policies require the beneficiary to file a claim to collect. This occurs when a beneficiary doesn’t collect or doesn’t know that they are entitled to collect.

    Unjust or not, this phenomenon has raised regulator suspicions and, out of good will or regulator urgings, some companies have started programs to determine if policy holders have passed and whether claims ought to be filed.

    Still, it is a difficult enterprise, and one of the reasons insurers let beneficiaries make the claims in the first place, so there is room for error. So, if you want to ensure that you (or your loved ones) receive all that is owed, consider doing some sleuthing yourself. The original article has some advice regarding how to find out about a missed policy.

    An even bigger lesson is for policy holders, and estate planners generally. One billion dollars sits in policies that were meant to care for the policy holders’ families, and it is there mostly because it’s unknown.

    As a result, the most important part of proper planning, whether elaborate or simple, is making your family aware of what you own, what your plan is, and how it is to work. This especially includes any life insurance you may own.

    To learn how we can help your family have a plan in place to transfer wealth, visit us today at www.meierfirm.com.

    Laura K. Meier, Esq.

    Reference: The Wall Street Journal (December 31, 2011) “Are You Owed Life Insurance?”

    Family Limited Partnerships – The Mega-Wealth Transfer Tool For 2012?

    There are a number of incredibly powerful estate planning tools available for leveraging intergenerational wealth transfers. Naturally, the appropriateness of a given tool hinges on the assets your family controls. For some, one of those tools worthy of serious consideration is the Family Limited Partnership (FLP). However, you must take care to get it right.

    As a testament to the power of the FLP and the costs of failing to use them correctly, Peter Reilly at Forbes has assembled the six developments of 2011. I commend them to your reading. When FLPs work, they work. Consider the cases of Natale Giustina and Anne Y. Petter. However, since we so rarely learn our best lessons from our successes, there are four developments to instruct us regarding what not to do: LINTON v. U.S, Axel Adler, Jorgensen v. Comm’r. 107 AFTR 2011,and Paul H. Liljestrand.

    The Forbes article gives a “moral of the story” of sorts regarding each case. In the end, the overall moral to the FLP – as we head into 2012 and ever closer to the unknown tax laws of 2013, and an election year no less – is that this may be your last year to fully leverage the wealth transfer power of the FLP.

    Making use of the FLP tool requires dedication to the process and setting it up now (rather than later) may guarantee your ability to make use of the current laws.

    Regardless, 2012 may be the year for a mega-gift. Visit us at www.meierfirm.com today to learn how we can help your family plan for the best in life.

    Laura K. Meier, Esq.

    Reference: Forbes (December 30, 2011) “6 Family Limited Partnership Developments In 2011”




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