Category Archives: Uncategorized

President Obama makes “permanent” estate tax temporary again.

President Obama proposed 2014 budget:  Changing the Estate Tax and Gift Tax Rates AGAIN!!!

 

From January 1, 2001 through December 31, 2012,  Congress seemed intent on making planning for death more complicated than it already is by  creating a series of “temporary” estate tax laws.   These temporary tax rates and estate tax and gift tax exclusion amounts created turmoil for software companies, lawyers, accountants and ordinary people.

As part of the 2012 “Fiscal Cliff” compromise, President Obama signed legislation that appeared to make permanent the 2012 estate tax exclusion amount of $5 million for estate and gift taxes and a top estate tax rate of 40 percent.    The exclusion amounts would be indexed for inflation.  The statements from Congress and the President made it seem we FINALLY had permanent rules regarding federal estate and gift taxes.  Software companies could stop revising code.   Families could make permanent plans for death.  

So much for compromise.  The Obama “Green Book” Budget for 2014 puts us back in the guessing game about estate and gift tax rules.     Page 138 of the budget has these words:  ”Beginning 2018, the proposal would make permanent the estate, GST and gift tax parameters as they applied during 2009.  The top tax rate would be 45 percent and the exclusion amount would be $3.5 million for estate and GST taxes, and $1 million for gift taxes. There would be no indexing for inflation.”

You can find out more here:

http://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2014.pdf

The Cost of Dying

Paying For Long Term Care.

Today’s front page article in the San Jose Mercury News is titled “The Cost of Dying.”      The article  talks about the cost and blessing of taking care of a loved one dying a lingering death.

If you are one of the estimated  55 million caregivers now caring for a parent, a spouse, or a child,  you are familiar with the pain and strain of a lingering death.    Costs  that families pay out of their own pockets because Medicare pays only for treatment, not in-home “custodial care.”   Hospice helps, but patients must be judged to be within six months of death and its benefits don’t cover prolonged care.    Private insurance doesn’t cover care, unless the patient has a long term care policy.    Costs that aren’t included in our retirement budgets, but can bankrupt a family.

Resources:

http://www.mercurynews.com/cost-of-dying/ci_22102247/cost-dying-at-home-caregivers-face-challenges-sacrifice

Die Smart Plan For Old Age

Green funerals – Make your last act a “green” one.

Just as people have become more environmentally conscious and have focused on living “green”, many are thinking about a last green act – a green funeral. This is one where the end-of-life ritual does as little harm to the environment as possible.

It can include such simple things as reducing carbon emissions by carpooling to the funeral, encouraging charitable donations instead of cut flowers and selecting a funeral home that has energy efficient methods, recycles and is energy conscious.

Burial can be in a traditional or a green cemetery. If you choose to have a greener burial in a conventional cemetery, you can do so by opting to use a shroud and a simple, biodegradable casket. An eco-friendly casket is usually made of bamboo, sea grass or willow. It can also be made of heavy cardboard or a soft wood such as pine.

May conventional cemeteries require either a vault or a grave liner but there are some conventional cemeteries that are beginning to allow vault-less burial. A compromise is the liner with no bottom, which allows the body or casket to rest directly in the earth.

In a green cemetery, trees or shrubbery is often planted in place of headstones or other traditional markers. This creates a living memorial instead of a “dead” one. A green cemetery is basically a nature preserve that has trails to walk through. There used to be very few of these green cemeteries but the number is growing.

If burial is in a conventional cemetery, choose the smallest headstone allowed and try to find a monument builder who uses indigenous stone to reduce the carbon footprint of production and transportation.

Full body sea burial can also be made greener by not embalming it but merely wrapping the body in a shroud.

If you prefer cremation, there are biodegradable urns that can be used for ground or water burial. They are often made from sustainable, recyclable materials such as Himalayan rock salt and handmade paper. These urns degrade in a matter of days once they are placed in the earth or the sea.

For more information about green funerals, there’s a video from KQED that might be of interest.  You can also check out the information from the Green Burial Council.

Estate Planning and Family Feuds

Family feuds and estate planning were an oxymoron in the 50′s and 60′s.

The family consisted of a mother, a father, and children who shared the same mother and father.     Whether someone died with or without a will, the results were usually the same.     If the spouse made a will, they named the surviving spouse and the children as beneficiaries.   If a spouse died without a will, state intestate laws named the surviving spouse and the children as beneficiaries.

People died fast.    There were no caregivers or need to pay for long term care from family resources.

Fast forward to today. According to a recent USA article: Blended families are now the norm.   “More than half of all first marriages end in divorce and about 75% of divorced people will marry again, according to the National Stepfamily Resource Center. About 65% of these unions will include children from previous marriages. More than 40% of American adults have at least one step-relative, according to a Pew Research Center study earlier this year.”

If you are part of a blended family, dying with or without a will may not provide the results you want for children from a prior marriage.   If your surviving spouse dies without a will, state intestate laws do not provide for step children.     The parents or siblings of your surviving spouse will inherit any property you gave to a surviving spouse before state intestate laws grant any inheritance rights to your children from a first marriage.      If you think a surviving spouse has provided for your children from a first marriage in their will, remember a will is a revocable document.   A surviving spouse has the right to change a will after you die and give property you intended to be left to your children from a first marriage  to his or her children from another marriage.

We no longer die fast.     As we age, we lose our ability to manage our own affairs.    Our children are often our caregivers.    A caregiver may believe they deserve more than other siblings for taking care of their parents.

In a recent conversation with an estate planning lawyer, we talked about the growing demand for estate planning lawyers with litigation experience.   He explained families usually fight for two reasons.  The siblings fight because they believe the caregiver doesn’t deserve any special treatment.  The children from a first marriage and a surviving spouse from a second marriage fight because the children want to protect their future inheritance.

Banana sheaves & bamboo – unusual combo for a casket? Not anymore.

Many people today are looking for a green burial solution.  That’s one that doesn’t use chemicals that pollute the earth and doesn’t leave a body in a metal casket for many years.  They also want something that is cost effective.  Two such solutions have been around for years – cardboard and wood.  A cardboard coffin can cost as little as $50 and weighs next to nothing.  A plain wooden box – often made of pine – can cost anywhere from $500 up and weighs between 80 and 90 pounds.  A third solution has just been introduced – a casket made of banana sheaves and bamboo.   It’s cost starts at $800, weighs about 80 pounds and is completely biodegradable.

Does the combination of banana sheaves and bamboo sound weird?  You may not know that in the 1950′s and 1960′s funeral homes often used woven baskets to transport bodies from health facilities.   And wicker coffins were popular in the United States for many years.   

So if you’re looking for a green, cost friendly casket in which to bury a loved one, this is an option you should consider.
http://www.ecoffinsusa.com/home.htm