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A New Year Offers Opportunities

For Change
The New Year is ap- back to being nontaxable.
proaching—definitely Keeping your estate plan
time to celebrate. But once updated in light of the es-
you’re done eating, drink- tate tax law can be a bit like
ing and making merry, re- keeping your eye on a fast-
member that there are im- moving yoyo. If you’re
portant tasks that require married, one way to pro-
your attention. tect yourself regardless of
Lots of people change the law is by creating a
out the batteries in their spousal option trust. This
smoke detectors at the turn document allows you the
of the year. That’s also the
Joseph S. Karp, option—not the legal ob-
perfect time to check out ligation—to set up a cred-
your estate plan. After all, your estate it shelter trust IF your estate is tax-
plan is as important to your family able at the time of the first spouse’s
and financial safety as your smoke death.
detector is to your physical safety. You also should examine your IRA
First, take a look at your powers withdrawals in light of your current
of attorney and your trustees. Are these income tax situation. You may need
people still willing, and/or able to do to increase the amount of your with-
the job? I have seen powers of attor- drawals.
ney where the primary agent is some- If you do not have long-term care
one who has died, been diagnosed insurance and lack the funds to pay
with Alzheimer’s, or moved to Hawaii. out of pocket should you need such
If your power of attorney for health, care, the new year should be your call
or property, or any of your trustees to action. The President signed The
can no longer serve, it’s time to pick Deficit Reduction Act on Feb. 8, 2006.
new people for these jobs and to mod- Although Florida is still working out
ify your documents accordingly. its interpretation of the law, it is cer-
Fortune smiled on the stock mar- tain that qualifying for Medicaid ben-
ket this year, and many people’s port- efits will become much more diffi-
folios regained ground lost when the cult. Lookback periods will probably
dot com bubble burst. As a result, your be lengthened, and the rules regard-
once-nontaxable estate may now be ing types and amount of exempt trans-
taxable, even factoring in the current fers will become more restrictive. The
$2 million estate tax exclusion. If you time to plan is now, so see a certified
wish to pass as much tax-free money elder law/estate planning attorney
as possible to your heirs, you may without delay.
wish to start a gifting program. Cur- Enjoy the New Year, and here’s to
rently, you may give away as much a healthy, happy 2007.
as $12,000 per year per individual, to Joseph S. Karp is a nationally certified
as many individuals as you wish, with- and Florida Bar-certified elder law attorney
(C.E.L.A.) specializing in the practice of Trusts,
out reporting the gift. If you have a Estates and Elder Law. His offices are locat-
spouse, that means together you may ed at 2500 Quantum Lakes Drive, Boynton
give away as much as $24,000 to each Beach; 2875 PGA Blvd., Palm Beach Gar-
child or other loved one. dens; and 1100 SW St. Lucie W. Blvd., Port
When the estate tax exemption re- St. Lucie. Call him at 561-752-4550 (Boyn-
ton); 561-625-1100 (Palm Beach Gardens);
verts back to $1 million in 2011—as or 772-343-8411 (Port St. Lucie). Toll-free
it is scheduled to unless Congress from anywhere: 800-893-9911. E-mail: KLF@
acts—your taxable estate may revert or website