Save Your Estate

Why should the government or anyone else direct what happens with your estate assets? Why should a court, a stranger, or someone other than your choice make the medical and financial decisions for you if you become sick and incapacitated? Why should anyone other than your spouse, life partner, or the one you choose make the decisions about your illness, hospital visits, your funeral and what happens to your estate?

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Name:

Ronald J. Cappuccio, J.D., LL.M.(Tax) is a tax and business attorney practicing since 1976. Ron is a Graduate of Georgetown University, the University of Kansas and the Georgetown University Law Center. He also studied at Exeter University, UK.


Ron protects business and individual taxpayers from IRS Audits, Tax Collections (including bank levies, wage executions) and IRS Appeals. Employee vs. Independent Contractor Issues, Manufacturer, Pharmaceutical and Restaurant and Pizza audits are a special area of emphasis.

Monday, January 31, 2005

Capital Gains on Sale of Home

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Question:
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Category: Tax and Taxation Law
Location: FL
Subject: Capital Gains

We are planning on selling our home that we've lived in for 7 yrs. At the moment, we do not have plans on purchasing a new one. Is there a way we can defer the capital gains taxes on the proceeds we get from selling? We owed approx. $88K and will sell for around $150K.


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Reply:
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Category: Tax and Taxation Law
Location: FL
Subject: Re: Capital Gains

Since the home has been your principal residence for more than two years, and the gain is less than $500,000, you will not pay any federal income tax on the gain.

For further tax planning information, see my web site at:

http://www.saveyourestate.com/

I hope this helps!

Tuesday, January 25, 2005

Are Insurance Proceeds subject to decedent's creditors?

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: intestate

When a person dies intestate and owes money, is insurance subject to garnishment. There was a salary garnishment in place at the time of death.


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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: intestate

If the insurance policy names a specific beneficiary, other than the estate, the policy proceeds pass outside of the estate. Therefore, the creditor would not have a claim against the named beneficiary. If there is not a named beneficiary, or if the estate is named as a beneficiary, the creditor could have a claim against the policy proceeds in the estate.

My website contains other estate administration information: http://www.taxesq.com/

I hope this helps!

Saturday, January 22, 2005

Is a Power of Attorney Valid after death of the Grantor

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NY
Subject: Power Of Attorney

When a person has power of attorney can they sign the name of the person they have power of attorney for on legal documents? For example lets say Mary has POA over her mother Sue. They have joint bank accounts so Mary can pay her mom's bills but all the money in the accounts belongs to Sue. Mary does not contribute any money to these accouts. Can Mary sign Sue's name on a bank document having Sue's name removed from these accounts so that the accounts now belong to Mary? Now that Mary has passed away is the signing of these documents considered forgery?


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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NY
Subject: Re: Power Of Attorney

Here are my answers:

When a person has power of attorney can they sign the name of the person they have power of attorney for on legal documents?

Ans: Not exactly. Sue would sign "Mary XXX, Attorney In Fact for Sue XXX."

For example lets say Mary has POA over her mother Sue. They have joint bank accounts so Mary can pay her mom's bills but all the money in the accounts belongs to Sue. Mary does not contribute any money to these accouts. Can Mary sign Sue's name on a bank document having Sue's name removed from these accounts so that the accounts now belong to Mary?

Ans: It depends on the language of the Power of Attorney document. If the language specifically permits Mary to make gifts to herself on behalf of Sue, then she would have the authority. Otherwise, the power to make a self-gift is not normally in a Power of Attorney.

Now that Mary has passed away is the signing of these documents considered forgery?

Ans: The Power of Attorney expires at death of the grantor of the power (in this case Sue.) Mary does not have the legal authority, but to call it "forgery" seems an overstatement.

The reality is this sounds like a sibling dispute that would best be handled by discussions rather than litigation and charges.

Please check my web sites http://www.taxesq.com/ and http://www.saveyourestate.com/ for mor help.

Ron Cappuccio

Thursday, January 20, 2005

Sibling Dispute over father's Will

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Question:
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Six siblings and myself are disagreeing on the distribution of remaining items not specified in my father's will. There is a varied interpretation of verbal statements my father made while still alive regarding these items, ie ''xxx can work on the boat'' is believed to be that he is to be given it. My position is that if it is not in the will, the items are to be appraised and sold, or compensation given for shares. Does the executrix have the power to distribute property based on verbal statements passed on by other members of the estate?


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Reply:
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Family disputes over inheritances are very disturbing and are an endless source of family strife. Unfortunately, it appears that your father's Will did not clearly reflect his intention. The Executor must follow the language of the will not a verbal intention. Nevertheless, the boat does not necessarily have to be sold. It could be distributed to one or more of your siblings in lieu of their portion of the estate. My suggestion is that you try to reach a consensus with your family. In the long run family relations are far more important than the money in dispute.

I hope this helps!

Wednesday, January 19, 2005

What if Beneficiary dies first?

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Question:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Inheritance

If a sister is named as a benificiary in her brothers will,but dies before he does.Does her spouse or her children inherit her share of the will?


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Reply:
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Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: Re: Inheritance

The language of the Will controls what happens to the disposition.Your lawyer would need to look at the actual language to make a determination. If the Will says "to my sister, xxxx." then it typically would go to her estate. If the will says, "to my sister, xxxx, per stirpes." then the disposition would be to her children. This would also hold true for "to my brother, yyy and sister, xxxx, per stirpes." If the Will says "to my brother yyy and sister xxxx, per capita." then her brother would receive the disposition.
As you can see this is complicated, and you really need to consult a lawyer. I have some information about probate on my website http://www.taxesq.com/ and also on http://www.saveyourestate.com/
I hope this helps!

Saturday, January 15, 2005

NJ Restrictions against Medicaid Annuities held Invalid

The New Jersey Appellate Division held that a Medicaid annuity should not be counted towards a patient's economic resources in determining Medicaid eligibility. In Estate of F.K. vs. Division the Court held using immediate annuities as an asset protection tool is permitted under federal law and invalidating New Jersey's Medicaid regulations prohibiting such annuities.

In the FK case, the husband entered a nursing home while suffering from Alzheimer's disease. His wife bought an irrevocable, non-assignable immediate annuity for $274,000 tied to the wife's life expectancy. The monthly income from the annuity was payable to the wife. Under federal law, the purchase of the immediate annuity made the husband eligible for Medicaid to cover his nursing home costs. The New Jersey agency denied Medicaid coverage by considering the annuity as the husband's assets. The Court overturned the agency and granted Medicaid eligibility.

Friday, January 07, 2005

Supreme Court Address Gay Adoption Rights

Gay rights are back on the U.S. Supreme Court's agenda. If the justices grant review, the gay adoption case will give the Court its first chance to comment on the scope of its 2003 Lawrence v. Texas ruling, which announced due process and privacy rights for homosexuals. The 11th Circuit narrowly applied Lawrence in 2004, when it upheld a Florida law excluding gay people from eligibility as adoptive parents.
For full article:
http://www.law.com/jsp/article.jsp?id=1104759344046

Thursday, January 06, 2005

Is it a good idea to gift a primary residence to children?

QUESTION:
Category: Tax and Taxation Law
Location: TN
Subject: Put home in children's name

I am elderly and want to put my home in my children's name so that if I have to go into a nursing home they will not take my home away from my family. Will my children have to pay taxes when the home is put in their names? It will be stated on paper that I can life in the home the rest of my life. I know people in NY that did this and did not have to pay taxes. Is there a different in state laws.

ANSWER:

Do not put the home into your children's name until you consult with an Estate Planning lawyer! The transfer is a gift which may be taxable. Also, you will lose the $250k exemption for the sale of a personal residence. Finally, the transfer may make you ineligible for medicaid for several years.

Validity of a Power of Attorney

Question:
Category: Probate, Trusts, Wills & Estates
Location: NJ
Subject: POA - only for family or for state

I was appointed as Durable POA for my father, as he is terminally ill. I moved in to my father's home to take care of him. I, my brother (who will be executor) and sister agreed this was the best for Dad, and all approved my ''appointment'' as POA. Sorting through Dad's financial affairs (he has no debt)I found a paper in Dad's handwriting describing his intent of consolidating annuities, giving gifts, etc., and ''rearranging'' benificiary status of family as Mom passed away last January. After showing the appropriate banks my POA papers, I have done all Dad's intentions. Now my brother is afraid of legal backlash as he accuses me of overstepping my authority - even though he wrote the POA from a computer program. Are the POA docs just for family protection of assets or for state probate scrutiny?

ANSWER:

YOU NEED A LAWYER NOW! Unfortunately, in a vain attempt to save a few dollars in legal fees, you may have an invalid or inappropriate Power of Attorney. Estate Plans are not simply copying "form" documents. They need to be custom crafted for each particular situation. You need immediate legal help to analyze whether you have exceeded your authority!Good Luck!

Monday, January 03, 2005

Starting a Divorce - Change your Estate Plan

I just saw the HBO movie The Life of Peter Sellers. At the end of the movie, it mentioned that Seller's was divorcing his 4th wife, but because he did not change his will, she inherited his millions, and his children were practically disinherited.

Have you checked your estate plan?