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Potential Decrease in Federal Gift and Estate Tax Exemption, Did it Pass and Does it Impact You?

A hot topic among our clients is the proposed amendment to the Federal Lifetime Gift & Estate Tax Exclusion and how it may affect their current estate plan.  At this point Congress did not pass the proposed amendment to the law that was to go into effect January 1, 2022.  And there does not seem to be a lot of talk of bringing this to the forefront again for a vote anytime soon.  

The current law doesn’t reduce the exemption until January 1, 2026, when it would revert to $5 million.  The exemption is a lifetime exemption per person and applies to gifts you make during your life or distributions to your beneficiaries after your death.  Any amounts gifted or passed through your estate in excess of the deduction amount will be subject to either federal gift tax or federal estate tax.  

This change will only impact you if your net worth is in excess of $5 million (adjusted for inflation).  If you are like many people, me included, who can only dream of having $5 million dollars of assets in your lifetime then the reduction of the exemption on January 1, 2026, or before, will have no effect on you or your planning.  However, if you do have significant assets you may want to consult a qualified estate planning attorney to determine if you can make additional gifts before the law rolls the exemption amount back to $5 million in approximately 4 years.  The attorney will also be able to advise you if establishing and funding a grantor trust prior to the exemption being reduced would benefit you and help to reduce any federal gift or estate taxes.  Please keep in mind that this law and any changes applies to federal gift and estate taxes and has no effect on the assets or value of the assets subject to Pennsylvania inheritance tax.  Inheritance tax in Pennsylvania is separate and apart from any federal laws and currently inheritance tax is assessed on almost every asset you own with the exception of life insurance.  

For questions on if the proposed changes in the federal gift and estate tax laws in early 2026 will negatively impact you or your estate planning or questions on Pennsylvania inheritance tax, please consult a qualified estate planning attorney for a review of your estate plan.  We would be happy to schedule a time to speak with you regarding your individual situation.  

Please feel free to give us a call if you have any questions or comments at 717-845-5390.

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Comparing Life Care Planning to Traditional Elder Law

This year, we are getting the word out there about the Life Care Planning we offer that involves a licensed social worker to act as the Client Care Advocate. A question that we keep getting is what is “What is the difference between Life Care Planning and Elder Law and why did you make the change?” The way that I explain it is that a traditional elder law firm prepares documents for an individual and then either waits until the client passes or until they need to go to a nursing home and will qualify them for public benefits.

A life care planning firm is a more holistic approach to providing care. Our licensed social worker, Meg Motter, works with families to assist in figuring out ways to keep their loved ones home and how to receive care in a home or in a less restrictive environment than a nursing home. A licensed social worker will be able to provide different cognitive assessments and evaluate safety and necessity of levels of care, unlike an attorney. The elder care coordinator allows the firm to provide a more comprehensive approach, separate from just estate planning documents or qualification for Medicaid. The care coordinator allows the firm to provide information and advice that was not otherwise available to the firm prior to becoming a life care planning model firm.

We are ecstatic to have Meg Motter onboard as our elder care coordinator and we look forward to assisting you and your family in the future.

Please feel free to give us a call if you have any questions or comments at 717-845-5390.

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Lottery Scams are on the Rise

At first, you might think your prayers have been answered.

A recent woodtv.com article, “88-year-old nearly scammed by fake lottery, warns others,” tells the story of an elderly couple who love their home. Unfortunately, they are running out of money and may need to move. That’s why it was such a godsend when a letter came in the mail telling Betty that she’d won $4.5 million in a Madrid-based lottery.

Money-256319_640“It was stamped by the government, approved by the government,” Betty said. “I just figured, all these stamps, it’s got to be real.”

The letter from Portugal arrived weeks after she’d mailed a different ball-related game of chance, a Pick Quick card that had come in a Publishers Clearing House mailing. She thought the letter was notification that her Pick Quick card was a winner.

But this was different. The letter from “The Mega Lottery Picker 2017” explained that she’d have to give 5% of her winnings to a “promotions company” and they offered to wire the money to her bank account. How convenient, Betty thought.

Fortunately, before calling the lottery company with her banking information, she first called an attorney who she was already scheduled to meet the next day to talk about the couple’s finances. Betty thought there was no need to meet because she was now rich. But the paralegal she spoke with at the law firm was suspicious and asked Betty not to call the “lottery.”

After investigating, the law firm saw that it was a scam, much to Betty’s disbelief.

This scam isn’t uncommon. For example, the federal government is now prosecuting several Jamaicans in a telemarketing lottery scheme that allegedly bilked around 100 Americans out of more than $5.7 million. Many of the victims were elderly. There’s no evidence the letter Betty received is linked to the Jamaican scam.

The Federal Trade Commission offers the following tips to recognize a scam and to avoid being scammed.

  • There’s a fee to pay;
  • You must wire the company money;
  • You’re required to deposit a check sent to you;
  • They say they’re from the government;
  • It’s a bulk mail notice;
  • They call you, even though your number is on the Do Not Call Registry;
  • You get a text message about a prize; and
  • A review online shows complaints.

If you have any questions about estate planning and/or elder law for ourself or your family, we can help.  Just click here and give us a little information and we'll get back to you!

Reference: woodtv.com (June 30, 2017) “88-year-old nearly scammed by fake lottery, warns others”

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New York Police Officer Sued for Welfare Check on Senior

Tablet with penThe New York Law Journal reported in a recent article, “Officer's Welfare-Check on Elderly Man Is Shielded by Immunity, Court Says,” that New York Judge Frank Geraci said the search by Orchard Park Police Department Lt. Joseph Buccilli was permissible, when lives or health could be at stake based on a 911 call.

The judge said the police officer was protected by his good faith actions in responding to an emergency. He had qualified immunity from a suit filed by the owners of the home he entered, in alleged violation of residents' Fourth Amendment rights to privacy. The judge went on to say that even if Buccilli's beliefs that his actions were justified in entering the home were based on wrong assumptions, the officer’s actions weren’t so "plainly incompetent" as would qualify as a violation of the resident's Fourth Amendment rights.

The judge said "…no one has pointed this court to any controlling case that clearly establishes the answer to this question: When performing a welfare check on an individual in response to a request from adult protective services (or a similar agency), may a police officer enter a location to determine the welfare of that individual?"

Buccilli was called to the Buffalo area home of the Batt family. LuAnn was the daughter of the elderly Fred Puntoriero, whom the family had taken in after he was diagnosed years earlier with dementia. Fred's daughter-in-law called the local Adult Protective Services in April 2012, complaining that she and her husband hadn’t been permitted to see Fred for several weeks. They were concerned about his condition. Fred’s son (Joe) and daughter (LuAnn) each had power of attorney over their father, according to the ruling.

Adult Protective Services made a 911 call to Buccilli the next day. Joe didn’t want to let the officer in, but Buccilli followed Joe through a side door and found wheelchair-bound Fred inside the home. Fred looked well-groomed and well-fed. He was able to identify himself, and an Adult Protective Services case worker later confirmed that Fred was under hospice care and was receiving good care. Fred died later in 2012, at age 76.

The daughter sued the police officer for violation of their Fourth Amendment rights in a 42 U.S.C. §1983 action.

Reference: New York Law Journal (April 3, 2017) “Officer's Welfare-Check on Elderly Man Is Shielded by Immunity, Court Says”

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Some Facts about Elder Financial Exploitation

Old lady on computer“As with those who have endured other types of abuse, victims of financial elder abuse often feel they can't or shouldn't seek recourse.”

Perpetrators of financial exploitation are frequently family members, caregivers or other people who are known and trusted by the elderly. This makes many seniors who are financially exploited, even more reluctant to come forward. Perpetrators often depend on this or pressure victims to keep quiet.

As Yahoo Finance recently posted in “What to Do If You or Someone You Love Has Been Financially Exploited,” betrayal by a family member or another trusted person is especially hard on those who are financially abused. Seniors who've been financially exploited, may feel shame and guilt. Consequently, they do not feel entitled to help or support, let alone to feel victimized.

The widespread nature of financial exploitation shows that it can happen to almost anybody. More states are trying to find ways to legally address financial exploitation and to better address and deter this abuse, as the population ages and an increasing number of seniors are vulnerable.

Most states criminalize financial elder abuse.

This means that, in addition to laws already in effect to prosecute theft, there are added penalties, which can be filed in financial exploitation cases involving seniors or vulnerable adults,  increasing the jail time for perpetrators.

Some states also now have statutes allowing older or vulnerable adults to sue specifically for elder financial exploitation. The states include Arizona, California, Florida, Oregon, Minnesota, Utah, Illinois and Washington.

A key feature of elder financial exploitation cases is that they allow victims to sue for multiple times the amount lost (usually two or three times the amount) and to recover attorneys' fees. This punishes perpetrators more and acts as a deterrent. This approach also encourages settlement of these cases. Awarding attorneys' fees is another incentive for seniors to secure legal representation.

Remember that the cost of financial abuse goes beyond the monetary loss. Victims and their families should access services, like counseling and case management, to help them heal after being financially abused.

Reference: Yahoo Finance (March 14, 2017) “What to Do If You or Someone You Love Has Been Financially Exploited”

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