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INCOME TAXATION OF CONFIDENTIALITY AGREEMENTS IN PERSONAL INJURY CASES

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Frequently, large personal injury settlements contain confidentiality agreements. Unless these agreements are handled properly, they can result in a significant income tax liability to the plaintiff. As a general rule, recoveries in personal injury actions are excluded from federal income tax under §104 of the Internal Revenue Code. However, the exception only applies to damages received on account of personal physical injuries or physical sickness. This exclusion is not available to monies attributable to medical deductions allowed in any prior taxable year. As a general rule, punitive damages are considered taxable income. If a […]

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WHAT BLENDED FAMILIES SHOULD KNOW ABOUT ESTATE PLANNING

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by Thomas D. Begley, Jr., CELA What Are Blended Families? Blended families take several forms: Married couples in which one or both spouses have children from a previous marriage. Families with children who are in second or subsequent marriages and who have children from previous marriages. Families with children whose spouses have children from previous marriages. Blended families can face complex estate planning challenges. Issues can arise between spouses, or between children and their spouses. Typically, individuals in blended families want to provide for the spouse as well as the children from the previous marriage. In some cases, they also […]

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ADVANTAGES AND DISADVANTAGES OF ABLE ACCOUNTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA Congress enacted and the President has signed legislation known as the Achieving a Better Life Experience (ABLE) Act of 2014.387 The Act is modeled on 529 Plans and will provide tax-favored accounts for individuals with disabilities to pay for qualified expenses. Before these accounts can be implemented, two things must happen: (1) the federal government must adopt regulations governing the accounts, and (2) state must either create their own ABLE accounts or contract with other states to do so. It is likely that these accounts will operate in a manner similar to existing […]

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Filed under Blog, Blog Special Needs Planning, Estate Planning, Estate Planning, Long Term Care, Medicaid Applications, Medicaid Planning, Special Needs Planning.
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MILLER TRUSTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA For purposes of Medicaid long-term care services, New Jersey has always been an income cap state. That means that an individual’s income must not exceed 300% of the Federal Benefit Rate (FBR). Beginning January 1, 2017 that means that an individual’s monthly income cannot exceed $2,205. Historically, individuals in nursing homes were able to qualify for a “Medically Needy” program to spend their income down and qualify for Medicaid. Individuals requiring care in assisted living or at home were not eligible for the Medically Needy program and could not become eligible for Medicaid, […]

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10 THINGS YOU NEED TO KNOW ABOUT ABLE ACCOUNTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA On December 16, 2014, Congress enacted and sent to the President for signature an Act known as Achieving a Better Life Experience (ABLE) Act of 2014.[1] This Act is to provide a tax-favored account, similar to a 529 Plan, for individuals with disabilities to pay for qualified expenses. The effective date of this legislation was December 31, 2014. Highlights of this Act are as follows: State Established or Contracted. Each state is authorized to establish and operate an ABLE program. This must be done by each state before these accounts can be opened […]

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Filed under Blog Special Needs Planning, Estate Planning, Life Care Planning, Medicaid Planning, Medicaid Planning.
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THE IMPACT OF FUNDRAISERS ON BENEFICIARIES WITH DISABILITIES

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA   Crisis and Kindness In times of crisis, people often show just how caring humanity can be. Major humanitarian relief efforts respond to large-scale natural and unnatural disasters. Strangers donate time and money to individuals injured in tragic accidents. Often, the first instinct upon learning that someone is hurt is to give money. Unfortunately, unbeknownst to the donor, this kind and selfless act can have devastating ramifications for the injured individual and his or her family. If the injured individual or a family member is receiving means-tested government benefits, such as SSI or Medicaid, […]

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Filed under Estate Planning, Estate Planning, Medicaid Planning, Special Needs Planning, Special Needs Planning, Special Needs Trusts.
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Financing Long-Term Care in New Jersey 2017

Posted by: Begley Law Group

Statistics show that approximately 70% of the population age 65 or over will require some form of long-term care. Some will be there for relatively short periods of time. These are usually stroke or accident victims or surgery patients who are doing rehabilitation. A significant percentage will remain in a nursing home for an extended period of time. These are usually Alzheimer’s, Parkinson’s or other Dementia patients. A statistic widely quoted is that the average stay in a nursing home is 2.9 years. This statistic is somewhat misleading, because the persons receiving rehabilitation are often discharged in one month or […]

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ESTATE PLANNING FOR DIGITAL ASSETS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA The Uniform Law Commission has proposed an Act titled “Revised Uniform Fiduciary Access as to Digital Assets Act” (Revised 2015). The Act has been adopted in 20 states.[1] The Act was introduced in 2016 in 12 additional states.[2] Under the Act, a fiduciary is defined as a person appointed to manage the property of another person, subject to strict duties to act in the other person’s best interest. Common types of fiduciaries include executors of a decedent’s estate, trustees, conservators, and agents under a power of attorney. The purpose of the Act is to […]

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NON-TAX REASONS FOR ESTATE PLANNING

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA In calendar year 2000, the exemption from federal estate tax was $675,000. Clients who owned a home, had a retirement plan, and even modest other assets, had to consider this tax. Beginning in 2002, the exemption gradually increased from $1,000,000 to the current level of $5,490,000. Only two-tenths of one percent of decedents dying in 2016 had to file a federal estate tax return. New Jersey decoupled from the Federal Estate Tax at the $675,000 level. Many individuals still had to plan to avoid or minimize this tax. Beginning January 1, 2017, the New […]

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WHEN YOUR CHILD BECOMES AN “ADULT”

Posted by: Begley Law Group

by Kevin M. Buttery, Esquire Believe it or not, when your child turns 18 he or she is considered a legal adult, and that means that even as their parent you no longer have the ability to control their financial or personal decisions. This makes it difficult to safeguard their physical and financial well-being. Even parents with the most responsible children may have restless nights knowing their child is now exposed to the world without protection. Particularly when your child goes off to college, it becomes important to be able to manage their finances and have access to medical records […]

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Five Questions with Jack W. Kennedy III, President & CEO of Kennedy Investment Group

Posted by: Begley Law Group

At first glance, the advisors at Kennedy Investment Group (KIG) may appear to be just another financial planning team. But, that’s where the similarities end. With over 125 years of combined experience, Jack W. Kennedy III and his team have forged a long-standing reputation as one of the region’s premier financial planning and wealth management practices. KIG’s success stems from its personal client-centric focus and commitment that’s built on a culture of dedication, care and service. The Begley Law Group is pleased to announce Jack will be co-presenting a financial planning seminar on June 21st. In advance of the event, […]

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Annuities – The Good, the Bad, and the Ugly

Posted by: Begley Law Group

Thomas A. Lane, Jr., ChFC®, CFP® of the Lane Hipple Wealth Management Group “I HATE annuities, and you should too” is a popular marketing campaign utilized by a national investment advisory firm to create uncertainty and fear among annuity owners with the hope they will seek out their firm who will then “rescue” them from these “horrific” products. Is there any basis or truth to such a comment? I can only assume that the owner of that firm probably does hate annuities. That said, he is making a very broad statement inferring that ALL annuities are bad, which, of course, […]

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CORPORATE TRUSTEES HATE THIS! ONE SIMPLE TRICK TO SAFEGUARD YOUR TRUST

Posted by: Begley Law Group

by Kevin M. Buttery, Esquire When planning your estate, it is often advisable to utilize a trust to effect one or more of your goals. The trustee of such a trust can, and in certain circumstances should, be a corporate entity, also known as a corporate fiduciary. However, you may not want to relinquish control of your assets to somebody outside of the family. To overcome this uncomfortable proposition, your attorney may suggest that you appoint a “Trust Protector” for your trust. While a Trust Protector may sound like a super hero wielding unending power, the role is really meant […]

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MEDICAID AND MEDICARE 2017 COLA NUMBERS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA CMS has released the Medicare and Medicaid numbers for 2017. They are as follows: Medicaid Income Cap[1] $2,205 Maximum Community Spouse Resource Allowance (CSRA)[2] $120,900 Minimum CSRA[3] $24,180 Maximum Minimum Monthly Maintenance Needs Allowance (MMMNA)[4] $3,022.50 MMMNA (July 1, 2016 until June 30, 2017)[5] $2,002.50 MMMNA (July 1, 2017 until June 30, 2018)[6] $2,030.00 Excess Shelter Allowance (July 1, 2016 until June 30, 2017)[7] $600.75 Excess Shelter Allowance (July 1, 2017 until June 30, 2018)[8] $609.00 Maximum Resource Limit (Individual)[9] $2,000 Minimum and Maximum Cap on Equity in the Home[10] $560,000 –$840,000 Medicare […]

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Filed under Blog, Estate Planning, Life Care Planning, Medicaid Applications, Medicaid Planning, Medicaid Planning, Special Needs Planning, Special Needs Trusts.
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What Blended Families Should Know About Estate Planning

Posted by: Begley Law Group

By Thomas D. Begley, Jr. Esquire, CELA CASE STUDY 1: SIMPLE WILLS INADEQUATE TO PROTECT CHILDREN FROM PREVIOUS MARRIAGES Andy (age 77) and Maureen (age 75) are in a long-term second marriage. Andy has two children from a previous marriage, Alexis (age 50) and Kit (age 48). Maureen also has two children from a previous marriage, Lauren (age 45) and Misty (age 44). Andy and Maureen have simple wills that give their entire estate to the surviving spouse with contingent gifts for the four children. After Andy dies, Maureen moves closer to her children and becomes estranged from Alexis and […]

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Estate Planning for Parents of Children With Disabilities

Posted by: Begley Law Group

Case Study: Special needs child – public benefits retained   The Situation Harry and Sally have a 21-year-old son, Bill, who has autism and lives at home with them. The couple is concerned about protecting Bill’s welfare after they die. They had always expected Bill to go live with his sister, Joan, who is married and has three children. But recently, they learned that Joan’s husband does not want to take on this responsibility. Harry and Sally now need to make alternate arrangements for their son’s future. Harry and Sally own a home, and they have retirement plans, life insurance, […]

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Filed under Estate Planning, Estate Planning, Special Needs Planning, Special Needs Planning, Special Reports.
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Third Party Special Needs Trusts

Posted by: Begley Law Group

By Thomas D. Begley, Jr., CELA A Third Party Special Needs Trust is usually used in a Medicaid context not for the benefit of the grantor of the trust, but for the beneficiary. The grantor of the trust is typically a parent, but could be grandparent, sibling, other relative or friend. The grantor uses the grantor’s assets to fund the trust. The assets of the beneficiary cannot be used to fund a Third Party Special Needs Trust. In order for the trust to be a Special Needs Trust, the beneficiary must be disabled. Disability is usually determined ,y the fact that […]

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Filed under Blog, Estate Planning, Life Care Planning, Medicaid Planning, Personal Injury Consulting, Special Needs Planning, Uncategorized.
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ABLE ACCOUNTS ARE COMING TO NEW JERSEY

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA New Jersey has passed the Achieving a Better Life Experience ACT (“ABLE”). While the Act has passed, it will take some time to implement. Many commentators believe that by the end of the year accounts will be authorized. Under the ABLE Act, people with disabilities and their families may set up special savings accounts similar to 529 Plans to be used for disability-related expenses. Earnings on these accounts are non-taxable. Generally, if the fund does not exceed $100,000, it will not be counted for Supplemental Security Income (“SSI”) purposes. If the fund exceeds $100,000 […]

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WHAT IS A THIRD PARTY SPECIAL NEEDS TRUST?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA A Third Party Special Needs Trust is usually used in a Medicaid context not for the benefit of the grantor of the trust, but for the beneficiary. The grantor of the trust is typically a parent, but could be grandparent, sibling, other relative or friend. The grantor uses the grantor’s assets to fund the trust. The assets of the beneficiary cannot be used to fund a Third Party Special Needs Trust. In order for the trust to be a Special Needs Trust, the beneficiary must be disabled. Disability is usually determined by the fact […]

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TAX AND ESTATE RECOVERY ISSUES IN CONNECTION WITH INCOME ONLY TRUSTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA An Income Only Trust can be designed as a grantor trust. The trust assets are unavailable for Medicaid, but there are some potentially significant tax benefits to the grantor. The Internal Revenue Code contains certain requirements for a grantor trust.[1]  Income Tax. Income is taxed at the grantor’s individual tax rate, which is usually less than the trust’s compressed tax rate. Capital Gains Tax. Capital gains tax treatment is maintained. This is particularly important if the trust is funded with a primary residence. The §121 exclusion from capital gains tax can be maintained. The […]

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THE PROBLEM WITH INCOME ONLY TRUSTS IN MEDICAID PLANNING

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA   Purpose Income Only Trusts are a means by which seniors transfer assets to a trust rather than to their children. Seniors tend to view transfers to trusts as protection, while they tend to view transfers to children as gifts. Trusts provide them with a sense of dignity and security. Requirements Income only trusts are permitted by OBRA-93.[1] They must be irrevocable. The trust instrument provides that the grantor or the grantor’s spouse receive all of the income from the trust, but has no access to principal. Design of the Trust In order to […]

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RETIREMENT ACCOUNT TRUSTS – Part 2

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Separate Trust A separate trust designed specifically to control the retirement account is recommended. It is best that the trust not be part of a revocable living trust or any other trust. A “standalone retirement trust” is preferred. Professional Trustee When an IRA is paid to a standalone retirement trust or any other trust, it is important to consider a professional trustee. The rules regarding inherited retirement accounts are complex and family member trustees are often unfamiliar with them. This could cause a loss of important tax benefits. Most family members do not understand […]

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RETIREMENT ACCOUNT TRUSTS – PART 1

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Introduction The United States Supreme Court in a 9-0 unanimous ruling held that an inherited IRA is not protected in bankruptcy under federal law.[1] Heidi Heffron-Clark inherited an IRA from her mother in 2001 and filed for bankruptcy nine years later. The court held that the IRA was not shielded from her creditors, because the funds were not earmarked exclusively for retirement. The Supreme Court indicated that creditor protection does not apply to inherited IRAs for a number of reasons: Beneficiaries cannot add money to an inherited IRA like IRA owners can to their […]

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DO WE STILL NEED TO WORRY ABOUT MEDICARE SET-ASIDE ARRANGEMENTS?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA For many years a debate has raged as to whether Medicare’s interests must be considered with respect to future medical payments in the context of a third party liability settlement (“TPLS”). The issue is simple. If a plaintiff in a TPLS receives money to pay for future medical care, is he free to pocket that money and send the bill for the future medical care to Medicare? Under the Medicare Secondary Payer Act (“MSPA”), Medicare is prohibited from making a payment for future medicals to the extent that such payment has been made under […]

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FAMILIES WITH A MEMBER WITH DISABILITIES MOVING TO A NEW STATE

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA It is always difficult to move from one state to another, but when a family member has disabilities there are a number of considerations that should be addressed as early as possible. Health Care. Establish a “safety net” well in advance. Research the doctors, therapists and other service providers available in the new location and reach out to local advocacy organizations for referrals. Be sure your medical insurance serves the area to which you are moving. Otherwise, it may be necessary to obtain other medical insurance. Most medical insurance policies have geographic limitations. Special […]

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WHY A WILL?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA Wills are designed to transfer property on death. If there is no Will, the State writes a Will for the deceased individual. While those Wills make sense for many people, they do not make sense for everyone. Assuming a client has mental capacity, the first step would be to review any existing Wills and bring them up to date, or, if there are no Wills, then to put them in place. Wills can contain appropriate tax planning techniques. Typically, the beneficiaries of Wills include a spouse, children, and other family member, friends or […]

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WHY A LIVING TRUST?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA A revocable Living Trust is designed to avoid probate on the death of the individual. If the individual owns real estate in more than one state, the real estate can be transferred to a Living Trust to avoid probate in multiple states. Some states have very difficult and expensive probate procedures, and a Living Trust can be used to avoid the process entirely. In these cases, the Will simply leaves everything to the Trust, and the Trust spells out to whom the assets are to be distributed. The Trust can be funded during […]

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WHY A FINANCIAL POWER OF ATTORNEY?

Posted by: Begley Law Group

by Thomas D. Begley, Jr., Esquire, CELA The Financial Power of Attorney is also known as a General Durable Power of Attorney. The principal designates an individual to serve as an Agent to transact financial decisions on the individual’s behalf. The document should be state specific, because laws in different states vary. It should also be detailed as to exactly what powers are included. Some states have statutory forms of powers of attorney, but these are generally not as effective as individually-customized documents. If a Power of Attorney is not in place, a guardianship may be required in order to […]

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RESOLVING HOSPITAL, CHILD SUPPORT AND DIVISION OF DEVELOPMENTAL DISABILITIES LIENS IN PERSONAL INJURY CASES

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA   Hospital Liens Generally, every hospital, nursing home, licensed physician, or dentist may assert a lien for services rendered by way of treatment, care, or maintenance to any person who has sustained personal injuries in an accident as a result of negligence or alleged negligence of any other person.[1] The lien attaches to the proceeds of any settlement, award, or judgment an injured person may obtain from a third party as a result of the injuries for which services were provided.[2] Hospital liens may be difficult to negotiate; however, such liens are subject to […]

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Understanding Estate Planning

Posted by: Begley Law Group

By Thomas D. Begley, Jr. WHAT IS ESTATE PLANNING? Estate planning is the process by which an individual defines his or her goals for passing assets to beneficiaries and chooses appropriate tools and strategies for achieving those goals. The process begins with a careful analysis of one’s situation, objectives, and potential tax liability. Only after all of those factors have been considered is it possible to select the tools and strategies that will allow assets to pass in the most effective manner. It is important to coordinate estate planning decisions with broader financial plans. Absent adequate financial planning, even the […]

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