It’s the end of the month, which means it’s time to check out the elder law landscape and share items that we think are interesting or newsworthy, or both. For the May review, there’s politics, planning, and Prince:
Power and Politics
Mandatory Visitation. Topping the politics list is Arizona’s Senate Bill 1417, which Governor Doug Ducey signed into law. It adds specific requirements for agents under powers of attorney for health care (HCPOAs) to encourage contact with those who have a “significant relationship” with the principal. If the agent wishes to restrict contact, he or she must get court approval. Much of the language (and logic) comes from similar requirements for Guardians and their Wards. Principals, however, can give their agents the authority to make contact decisions without court intervention. (Health care agents also got some clarity regarding agreeing to arbitration in a court ruling, Heaphy v. Willow Canyon Healthcare, Inc., which we wrote about last week.)
Ups and Downs of Basis. President Biden’s tax plans are still getting a lot of attention, especially the threat to limit the basis adjustment at death. This article includes stats and this little bit of history: “The stepped-up basis provision, which has been used for decades to pass on wealth, was designed for that purpose. According to congressional records, the exemption was drafted in 1927 as a part of the Internal Revenue Act by House Ways and Means Committee Chairman William R. Green with help from Treasury Secretary Andrew Mellon, the son of one of the wealthiest families of the time.”
Assessing Policies for the Aging. The National Conference of State Legislatures, a bipartisan organization that tracks and researches state and state-federal legislation, takes a look at policies addressing challenges of the aging population. The report notes that “[l]egislators have an opportunity to lead their state in a comprehensive planning process with coordinated efforts across sectors—like health, housing, transportation and social services—and to engage a multitude of experts and community members to achieve long-term success.” In Arizona, it seems we’re only worried about who gets to visit grandma.
Keep Planning Ahead
We may be in a “golden age” of estate planning that is coming to an end. But, even if some of today’s wealth-transfer techniques disappear, the three planning steps advocated here will remain relevant: 1) Decide what your wealth’s purpose is; 2) Decide what it means to treat beneficiaries fairly; and 3) Communicate because it’s hard to execute an estate plan successfully unless all of the relevant stakeholders are aware aware of it. As for more specifics:
Estate Tax Strategies. Worried about that exemption dropping to $5M or lower? Here’s how QTIP trusts can offer some protection, and how trusts for spouses called SLATs work.
Retire Wisely. When deciding which assets to spend and to save in retirement, consider how income taxes will affect your beneficiaries. Or consider whether converting to Roth would pay off. But don’t forget to plan ahead for long-term care.
Estates and Trusts. What does an executor (called Personal Representative in Arizona) actually do? Before you name yours, find out; here’s a place to start. And if it’s you who is named, try to do a good job. (An attorney can help.)
May Review of Dead Celebs
Michael Jackson. The King of Pop’s estate got a win in tax court. The IRS challenged the valuation of Jackson’s estate, and the estate fought back. The estate’s convincing argument: taxes should be based on the value on the date of Jackson’s death, when he was trying to turn around his flagging career. The value: $111.5 million, still is A LOT higher than the estate’s initial $5.1 million.
George Michael. The dispute between the former Wham! singer’s estate and his ex-partner Kenny Goss has been resolved. Goss had argued he was reliant on Michael’s support after giving up his own career to look after Michael. Details of the deal are private.
Prince. The music legend’s estate has paired with cosmetics’ company Urban Decay for a special edition collection. Items include a liquid gold highlighter and two eyeshadow palettes, featuring, of course, plenty of purple. And later this summer, there will be an exhibit of his extensive collection of custom shoes at Paisley Park.
