– How Will the New Tax Law Signed by President Trump Affect Your Estate Planning?

With respect to Estate Planning, some things change, and some things remain the same, under the Tax Cuts and Jobs Act recently signed by President Trump.

Some Things Change

  • The Federal estate, gift and generation-skipping transfer (“GST”) tax exemption amounts increase from $5 million to $10 million per individual, with additional inflation adjustments as under prior law.
  • The increased, inflation-adjusted exemption amounts – $11.2 million for an individual, or a combined $22.4 million for a married couple – are effective January 1, 2018.The Act also provides for future inflation adjustments for 2019 and beyond.
  • The increases are set to expire on December 31, 2025, at which time the Federal estate, gift and GST tax exemption amounts will revert to the current $5 million amounts, (as adjusted for inflation).

Some Things Remain the Same

  • The highest Gift and Estate tax rate is still 40%.
  • Beginning January 1, 2018, the annual gift tax exclusion is 15,000.
  • Unlimited gifts between US Spouses
  • There are still gift tax exclusions for qualified direct payments of tuition and medical expenses.
  • Stepped-up basis for property passing at death remains.

Amanda and I would be happy to meet with you to explore how these changes impact your estate plan.


– Michigan’s New Qualified Dispositions In Trust Act Makes Asset Protection Easier

Episode Video

Episode Podcast

Tom discusses Michigan’s new Qualified Dispositions in Trust Act that makes it easier to create a trust to protect your assets from your creditors. Find out how simple it can now be to protect what you own from risks of lawsuits and creditors.

Listen to Tom’s Interview of Steve Peckham, Certified Funeral Planner

Tom interviews Steve Peckam, Certified Funeral Consultant, and owner of Mid-Michigan Funeral Consulting.

Steve talks about:
– Pre-planning your funeral
– Creating a funeral planning checklist
– Involving your family in your planning
– Whether you should pre-pay for your funeral
– Things to know when planning a traditional funeral
– Whether you have to buy your casket from the funeral home
– Things to know about cremation
– The Importance of shopping around
– and much more

Click HERE to listen to the interview on Tuesday with Tom

Report Shows Electronic Health Records Fail to Let Doctors Obtain Advance Directives

You enrolled in the DocuBank electronic registry for advance directives to make sure your advance directives (i.e. Health Care Powers of Attorney) are always available at the hospital. Now there are new reasons why you need this instant access.

Doctors cannot easily get hold of their patients’ advance directives at the hospital, even in an emergency, and, Electronic Health Records (EHRs) don’t help solve this availability problem, according to a news report in USA Today/Kaiser Health News.

Advance directives, as you may recall, are the documents that give you control over your medical care if you’re unable to speak for yourself. We helped you create these documents as part of your estate plan. In your advance directive you designated someone to make health care decisions for you if you can’t and also gave guidance on the types of treatments you would or would not want.

Ironically, electronic medical records, which are supposed to help find patient information, create their own problems, the article explains. One problem is that different medical records are incompatible, meaning that hospitals usually can’t share your advance directive among them or even, more surprisingly, between different departments of the same hospital. As a result, you could be admitted to an Emergency Department, which may have one EHR, and it might not be able to get hold of your advance directive in the hospital’s main EHR.

Another problem is that it takes too long to find your advance directive because most EHRs aren’t set up to store one. “If [medical staff are] not able to access the advance directive quickly and easily, they’re honestly likely not to use it,” says Torrie Fields, senior program manager for palliative care at Blue Shield of California.

In addition, the article affirms what we already know: patients frequently (and understandably) forget to bring their advance directives with them.

Lack of availability of your advance directive can be an especially big problem in the ER, where it’s extremely important that your doctors and loved ones have instant access to these documents and therefore to your wishes. A survey of ER doctors last year found that 93% are “less frustrated” when advance directives are “easily accessible,” and the vast majority of them said the documents let them provide better care and that family members are more satisfied.

Is Your Health Care Power of Attorney Available?

According to a recent American Academy of Estate Planning Attorney’s article, when emergency medicine physicians were surveyed about the availability of advanced directives (i.e. Health Care Powers of Attorney):

•93% reported  less frustration in situations where advance directives are easily accessible

•88% said having an advance directive helped ensure better quality patient care

•85% indicated that families were more we’re more comfortable with how doctors cared for their love ones when they patient had an advance directive

•and 55% were relieved upon learning that a patient already had an advance directive.

If you do not already have an advance directive, you should make getting one prepared a priority. Moreover, if you have one, you need to make sure that it is readily available when it is needed. One author suggests taping a copy to your refrigerator or carrying one in your glove box. An alternative that we are now making available to our clients is to enroll in DocuBank, a service that makes your advance directive available 24/7 through a simple phone call to DocuBank.

More information on DocuBank and how to enroll is here.

How Long Is A Will Valid?

Passage of time has no effect on the validity of a Will. So, even though your family needs likely have changed over the past 10 or 20 years, that long ago prepared Will is still controlling. Tax laws, and laws concerning Wills might have changed as well.

To be sure your estate plan is up to date, it should be reviewed by you annually. Have there been major life change such as a death in the family, the birth or adoption of a child, a divorce or marriage, or a significant change in assets.

New Tax Benefit of Charitable Contribution From Your IRA

The recently passed Protecting Americans from Tax Hikes (PATH) Act of 2015 made Charitable IRA rollover legislation permanent for 2015 and future years.

With the Charitable Rollover IRA, you can make a contribution to a public charity directly from your IRA (or Roth IRA). To qualify:

  • you must be at least age 70 ½ on the date of the contribution
  • the contribution may not exceed $100,000
  • the contribution has to be made directly by the IRA custodian to the charity.

To take advantage, simply direct the custodian of your IRA to make the charitable contribution. The portion of the IRA so contributed (up to $100,000) never comes into your income.

Please note, a 401k or other retirement plan is not eligible unless it is first rolled into an IRA.

A Tax-Smart Strategy for Managing Retirement Withdrawals

Here is a link to a  Morningstar interview of Vanguard retirement expert Maria Bruno in which she discusses strategies for managing retirement withdrawals to minimize tax consequences. Maria explains which accounts (i.e. taxable investments, IRAs, 401ks, Roth IRAs) should be used before others in order to minimize your taxes.



New Medicaid Planning Alert for Married Couples

As of August 2014, the Michigan Department of Human Services (DHS) has started rejecting “solely for the benefit of” trusts. There hasn’t been a change in the law, but in the way that DHS interprets policy. Previously, a married couple could utilize a “solely for the benefit of” trust for the spouse not entering a nursing home and preserve a majority of a couple’s estate, while the spouse entering the nursing home still qualified for Medicaid coverage. This tool was not employed until a married couple knew which spouse would need nursing home care (i.e. when said spouse went into the nursing home). However, DHS has begun treating assets in these trusts as countable for Medicaid eligibility purposes. This means that the assets are not excluded and may have to be spent before the spouse requiring care will qualify for Medicaid.

For now, planning with a “solely for the benefit of” trust is not a practical solution. As such, it is even more important to discuss and consider other Medicaid planning options ahead of time.