Monsoon season

Monsoon Season Review: Taxes, Planning, Dementia & Dead Celebs

As we’ve been enjoying a fabulously soggy monsoon season in Tucson, suddenly August is around the corner. That means it’s time to survey the elder law landscape and share various items of interest. We delayed the June review because Britney Spears’ legal struggles took center stage. So this monsoon season review spans the two months of elder law-related news nuggets.

Monsoon Season Taxes: Danger Ahead?

Joe Biden’s tax plans are continuing to cause anxiety among planners. One analysis stated that, if enacted as-is, his American Families Plan alone would be the largest tax increase in more than a century on the wealthiest Americans. The president’s “Green Book” explanation of proposals came out in late May, and analysis followed.

For estate planning, there would be major changes in transfer taxes. Currently, transfers by gift are not taxable, and for transfers at death, the there’s a “stepped up basis” to fair market value to date of death. Under the Green Book, transfers appreciated property during life and at death would be treated as realization events, and gain would be taxed if the asset were sold. There would be a $1 million lifetime exclusion indexed for inflation. Gifts or bequests to charity or spouses would not be recognized, and spouses get no basis adjustment. It’s all interesting to think about, but it’s hardly cause for worry. As one writer put it, the “crystal ball still lacks clarity because it’s just another set of proposals in a near evenly divided Congress.”

Another target: The donor advised fund (DAF), which critics say allows the wealthy to hang onto money rather than distributing it to charitable organizations. There’s now a push to force assets out more quickly.

Worried? There some strategies that can be employed, regardless of what the future holds, and if you are worried about employing a tax-avoidance strategy, consider tax insurance.

Planning Pointers

529 education plans are good for more the books and tuition. They also can facilitate transfer of wealth without the downsides that come with outright gifts.

One of the most important decisions in any plan is who will serve as Personal Representative (a/k/a “executor”) or agent under power of attorney. Clients often need a push to carefully consider what’s really happening in their families before deciding.

Inheriting IRAs has long been tricky territory. Here are mistakes spousal beneficiaries should try to avoid.

By the numbers:

And our favorite article of the monsoon season: Consider hiring an estate planning attorney.

Dementia Developments

Our own Pima County aims to be dementia-friendly community. What is that exactly? A community that “fosters quality of life for people living with dementia and their care partners by decreasing stigma, increasing opportunities for meaningful social interaction, and offering support in addressing the changing needs of people living with dementia.”

The FDA approved is the first new treatment for Alzheimer’s since 2003, the controversial Aduhelm. The drug has its pros and cons. One of the cons is its $56,000.00 yearly cost, and some say we may never know if it really works. Regardless, it generated $2 million in first few weeks, and now Medicare and insurance companies are struggling with deciding whether cover it.

Dementia progresses in stages, and this article explains each one.

Meanwhile, studies pointed to a slew of dementia risks: blood type, diabetes, tooth loss, and (oh no)  too much coffee.

Monsoon Season of Dead Celebs

James Brown: After almost 15 years of litigation, most of the disputed issues regarding the soul legend’s estate have been resolved. Although the details are secret, it appears some funds will go to education. A source close to the deal says it will “fulfill Mr. Brown’s noble estate plan to fund scholarships.”

Martin Luther King Jr.: The civil rights leader’s estate reached a new publishing deal with HarperCollins that aims for an impact world wide. The “manager of the estate” said: “Dr. King’s prophetic message of peace, hope, love and equality continue to impact the world today. That message is needed now more than ever. We look forward to utilizing HarperCollins’ global footprint to continue the perpetuation of Dr. King’s wonderful legacy through new creative literary projects.”

Robert Indiana: The artist’s estate is moving on after some nasty litigation, reaching a settlement with an art foundation to promote and preserve Indiana’s work.

Prince: Still exploiting their asset, the estate released “Born 2 Die,” a five-minute new single from album “Welcome 2 America,” due July 30.

And last but certainly not least, Britney Spears has spent the monsoon season making progress. She is slowly getting some rights back. She won the right to choose her own attorney, can drive again, and hopes to file to have her father removed. Various parties continue to argue about how to move forward. So far, apparently not taking the judge’s advice:  “Everybody should be working collaboratively. It’s not about anybody else, it’s about her.”

Something to Think About

The use of artificial intelligence to re-create Anthony Bourdain’s voice in a new documentary has the New York Times asking, “What Should Happen to Our Data When We Die?”  The story notes that currently, United States federal law does not recognize the dead’s right to privacy. But something called the Stored Communications Act protects disclosure of information without prior consent. “And obviously, if you’re dead, you can’t consent,” says a legal expert. Nevertheless, people are managing to piece together digital versions of the deceased, both famous and not. Asks philosopher Patrick Stokes: “If I do start interacting with these things, what does that say about my relationship to that person I loved? Am I actually doing the things that love requires by interacting with this new reanimation of them? Am I protecting the dead? Or am I exploiting them?”

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