If federal estate and Pennsylvania inheritance taxes are not a concern, then why plan your estate?  Actually, tax considerations are only one of many reasons to plan one’s estate.  Here are a few:
 

1. To choose who will benefit from your estate, rather than defaulting to the government’s plan to distribute your assets.


2. To avoid disputes among family members.


3. To provide for an orderly process of settling your estate.


4. To protect your children and grandchildren in the event of divorce, lawsuit, or premature death—to make sure what you leave behind stays in the family.


5. To provide long-term tax deferral of retirement assets.


6. To provide for your own care and well-being and management of your assets in the event of incapacity.


7. To protect your assets in the event you need long-term care or are sued.


8. To provide for children and others with special needs in a way that will protect your estate from poor management decisions and allow your heirs to continue to qualify for public benefits.


9. To benefit charities you value.

As you can see, estate planning involves a lot more than tax issues.  Vasiliadis & Associates can help with these and other related concerns.

Question:  Will my kids be liable for the cost of my nursing home care if I go broke?

Answer:  No, provided you qualify for Medicaid benefits immediately after your funds exhaust. That won't happen if (1) you engage in an improper pattern of gifting; or (2) your agent under power of attorney or other family representative fails to timely and properly file your Medicaid application. In Pennsylvania, under the so-called "filial responsibility" law, children who knowingly or even unintentionally violate Medicaid requirements can and have been held liable for the cost of a parent's nursing home care.

Question:  My wife is entering a nursing home.  Must I disclose all of our assets? 

Answer:  Yes.  But don’t worry.  Federal law guarantees the right of a nursing home resident to legally protect assets via Medicaid planning.  Your wife can’t be evicted.  Some families intentionally understate assets in the mistaken belief that will protect them.  Instead, this may have the unintended consequence of preventing admission to the facility.  Nursing homes understandably want to see some “key” money before unlocking the door.

Beneficiaries generally receive life insurance proceeds income tax-free. But one must also consider the federal estate tax. This
levy applies to virtually all assets of a decedent. In particular, it encompasses life insurance. It also covers annuities, jointly owned
property, investments held by qualified retirement plans, and, of course, all probate property (assets that pass in accordance with
one's will). So who needs to worry about federal estate tax? You do if you die on or after January 1, 2011 with a taxable estate
(including life insurance proceeds) of over $1 Million. This tax (temporarily suspended in 2010) returns with a vengeance. The tax
rate for persons dying on or after January 1, 2011 jumps to an astounding 55%. But with proper planning, you can avoid taxation
of your life insurance. Consider transferring your policy to an irrevocable life insurance trust— an "ILIT". The trust becomes both
owner and beneficiary of the insurance. You select the trust beneficiaries and the trustee. Typically, two persons will serve together
as co-trustees. One will be your spouse or another "family" trustee. The other will be an unrelated trustworthy person or institution
of your choosing, referred to as the "independent" trustee. If you decide to transfer a life insurance policy, do it right away. The
insurance proceeds will be pulled back into your taxable estate if you die within three years after the policy is transferred. A properly
drafted irrevocable life insurance trust will minimize and, in some cases, completely eliminate federal estate taxes.

Persons who receive Social Security benefits after their full retirement age may work and still keep their full benefit amount
regardless of how high their earnings. Not so for those who elect early retirement and work before reaching their full retirement age.
If their earnings exceed certain dollar amounts, some of their Social Security benefits are withheld. Here's the good news: reduced
benefits for those who choose early retirement but continue to work are not lost. Benefits are increased after reaching full retirement
age based upon the amount withheld. Persons born during the years 1943-1954 must wait until age 66 before attaining full
retirement age. For more information, go online to www.socialsecurity.gov and see Publication No. 05-10069.

Question: I added my kids' names to our bank accounts. Is this money protected if I enter a nursing home and try to qualify for
Medicaid benefits?

Answer: No. The entire amount is a "countable" asset and is therefore not exempt. It's counted because you can withdraw the
entire amount even though someone else's name is on it. However, if a jointly owned asset, such as a certificate of deposit, U.S.
Savings Bond, or brokerage account, cannot be accessed unless the other non-spouse co-owners consent and they refuse to consent,
then the asset is unavailable and therefore doesn't count. But beware: if the asset is unavailable, a Medicaid transfer penalty in the
form of a period of ineligibility for benefits will be imposed if benefits are sought less than sixty months after the asset is placed in
joint names.

Veterans and their surviving spouses can get significant financial help to pay for the cost of their care at home or in an assisted living or skilled nursing facility.  Under the Department of Veterans Affairs (VA) Pension program, a veteran with a spouse could receive up to $1,949 per month, a single veteran $1,644, and a surviving spouse $1,056.  These benefits help people who require assistance with activities of daily living, such as walking, bathing, dressing, etc.   The VA and various veterans’ service organizations provide assistance with the application process, which can be very time consuming, complex and frustrating.  But competent legal advice and assistance may be needed in order to arrange one’s affairs so as to meet the net worth threshold and other eligibility criteria.   That planning needs to be implemented before the application process begins.  Attorney Pappas , a VA accredited attorney, will be lecturing to Pennsylvania lawyers on behalf of the Pennsylvania Bar Institute on the topic, Veterans’ Pension Benefits, at various locations throughout Pennsylvania , including Hershey, on July 28, Mechanicsburg on August 18, Philadelphia on August 24 and in Pittsburgh on August 27.

Incapacitated seniors overwhelmingly prefer to receive needed care at home by family rather than transferring to an institution.  Unfortunately, care at home is not always possible.  But proper advanced planning in the form of a legally binding contract between a care recipient and a family caregiver can help.  Sound silly?  Perhaps, until one realizes that absent a legally binding Caregiver Agreement, transfers of any kind by a care recipient to the family caregiver are deemed as made out of love and affection and will incur a transfer penalty in the form of a period of ineligibility for Medicaid benefits.  Also note that a properly drafted contract, in the case of a veteran or spouse of a deceased veteran, can provide access to Veterans’ benefits to compensate a stay-at-home caregiver child or other family member.  Stanley M. Vasiliadis is scheduled to lecture on the topic “Family Caregiver Agreements” at the Pennsylvania Bar Institute in Philadelphia on October 20, 2010 and again in Mechanicsburg on October 28, 2010.

While any new power of attorney should state that old powers of attorney are revoked, you should also put the revocation in writing. The revocation should include your name, a statement that you are of sound mind, and your wish to revoke the power of attorney. You should also specify the date the original power of attorney was executed and the person selected as your agent. Sign the document and send it to your current agent as well as any institutions or agencies that have a copy of the power of attorney. Attach your new power of attorney if you have one.

You will also need to get the old power of attorney back from your agent. If you can't get it back, send the agent a certified letter, stating that the power of attorney has been revoked.
Because a durable power of attorney is the most important estate planning instrument available, if you revoke a power of attorney, it is important to have a new one in place. An elder law attorney can assist you in revoking an old power of attorney or drafting a new one.

If you or a family member lives in an assisted living facility, you know that assisted living costs continue to rise every year. But did you know some of those costs may be tax deductible? Medical expenses, including some long-term care expenses, are deductible if the expenses are more than 7.5 percent of your adjusted gross income.

In order for assisted living expenses to be tax deductible, the resident must be considered "chronically ill." This means a doctor or nurse has certified that the resident either:

In addition, to qualify for the deduction, personal care services must be provided according to a plan of care prescribed by a licensed health care provider. This means a doctor, nurse, or social worker must prepare a plan that outlines the specific daily services the resident will receive. Though not required by law, most assisted living facilities prepare care plans for their residents.
Generally, only the medical component of assisted living costs is deductible and ordinary living costs like room and board are not. However, if the resident is chronically ill and in the facility primarily for medical care and the care is being performed according to a certified care plan, then the room and board may be considered part of the medical care and the cost may be deductible, just as it would be in a hospital. If the resident is in the assisted living facility for custodial and not medical care, the costs are deductible only to a limited extent. In any case, the expenses are not deductible if they are reimbursed by insurance or any other programs.

Residents who are not chronically ill may still deduct the portion of their expenses that are attributable to medical care, including entrance or initiation fees. The assisted living facility is responsible for providing residents with information as to what portion of fees is attributable to medical costs.

In some circumstances, adult children may also get a tax deduction if their parents or other immediate family members (including in-laws) live at an assisted living facility and qualify as their dependents. The family member must be a U.S. citizen or legal resident or resident of Canada or Mexico and the adult child must provide more than half of the family member's support for the year. Even if the adult child is not paying more than half the family member's total support for the year, the child may still be eligible for a deduction if he or she contributes to the family member's support according to a "multiple support agreement." The adult child must pay more than 10 percent of an individual's total support for the year, and, with others who also support the resident, collectively contribute to more than half of the resident's support. All those supporting the individual must agree on and sign a Multiple Support Declaration.

How can you ensure that your special needs child will remain well cared for and secure once others assume the role of guardian or caregiver? While creating a financial plan and establishing a specialized trust are central to preparing for your child's future, special needs planners also advise families to write down their intentions and expectations in a document referred to as a Memorandum of Intent, also known as a "Letter of Intent."

The Memorandum is not legally binding and, when directions conflict, those in wills, trusts and other legal documents take precedence. But for "non-legal" matters, it will serve as the primary source of information about your child, providing a roadmap for the courts, guardians, caregivers and others involved in your child's life. That can be critical in easing your child's transition, ensuring continuity of care and treatment, as well as appropriate decision making regarding living arrangements and other lifestyle choices.
Topics that can be included in a Memorandum, include the following:

While writing a Memorandum of Intent can be time-consuming and emotionally taxing, it's very important not to postpone this task. Once the Memorandum is complete, place the original in a secure location and distribute copies to others involved in your child's life. Then, mark your calendar, setting aside time to revise the Memorandum at least once a year so it will continue to reflect your child's current life stage and situation.