A Professional Corporation
2173 Salk Avenue, #250
Carlsbad, California 92008
Phone (760) 579-7684
Fax: (760) 579-7685
825 College Blvd., #102-423
Oceanside, California 92057
Phone: (760) 631-6360
Fax: (760) 295-0005
Also serving the Big Bear mountain communities
P.O. Box 1491
Sugarloaf, CA 92386-1491
Phone: (909) 281-4442
Certified Specialist in Estate Planning, Trust & Probate Law by The State Bar of California Board of Legal Specialization
State Bar #125515
Federal Estate Tax Exemption and Gift Tax
Effective January 1, 2013, under the American Taxpayer Relief Act of 2012, an individual’s federal gift, estate, and generation-skipping transfer tax exemption amounts will remain at $5,000,000, subject to an annual inflation adjustment, so the basic exclusion amount for 2015 has increased from $5,340,000 to $5,430,000. The tax rate for amounts above the exemption is 40%. The capital gains tax basis of assets acquired from a decedent will continue to be the fair market value of the property at the date of the decedent’s death. Estate tax exemption “portability” continues to be an option for the surviving spouse, where the surviving spouse can transfer any unused portion of the predeceased spouse’s estate tax exclusion, thus allowing married couples to shield up to $10 million, adjusted for inflation, from estate tax without the use of the traditional A-B Trust. However, the surviving spouse must file a timely 706 death tax return and elect portability to preserve it. Thus, 706 returns will become more common. The gift tax annual exclusion has been increased from $13,000 to $14,000 per year per donee, indexed for inflation.
Increased Maximum Values for Transferring Small Estates Without Probate
Effective January 1, 2012:
- The size of an estate that can be collected by affidavit or by court order without formal probate increased from $100,000 to $150,000.
- The maximum value of real property that can be transferred by affidavit increased from $20,000 to $50,000.
- The amount of salary that a surviving spouse can collect by affidavit immediately after death increased from $5,000 to $15,000.
New Tort recognized: Intentional Interference with an Expected Inheritance
Required elements: (1) an expectation of receiving an inheritance; (2) the intentional interference with that expectancy by a third party; (3) the interference was independently wrongful or tortious; (4) there was a reasonable certainty that but for the interference, the plaintiff would have received the inheritance; and (5) the plaintiff incurred damages.
Double Damages for Elder or Dependent Adult Financial Abuse
Probate Code Section 859 was amended to allow double damages in actions against persons exercising undue influence or gaining property through elder or dependent adult financial abuse.
FDIC Insurance Limits
The FDIC insurance limits will remain at $250,000 through the end of 2013; however, revocable trusts may qualify for up to $500,000 coverage (or $1,000,000 if two settlors) based on the number of trust beneficiaries.
New no-contest clause legislation became effective January 1, 2010, greatly restricting the enforcement of such clauses. Under current law, such clauses only will be enforced against a “direct contest” brought without “probable cause” and under other very limited circumstances. Furthermore, contestants of a trust or a will can no longer file a “safe harbor” petition to determine if a particular action constitutes a “contest.”
Under current California case law, a no contest clause contained in a trust document does not apply to trust amendments. Those amendments should contain their own no contest clause. This same reasoning will apply to a codicil or to a will. You should check your estate planning documents to determine whether any of them need to be revised.
Spousal impoverishment transfer protections for Medi-Cal nursing home care benefits have been extended to same-sex spouses and registered domestic partners.
Under the Deficit Reduction Act of 2005, several important changes are pending, which will affect Medi-Cal eligibility, including the extension of the previous 30-month "look back" period to 60 months, and the change of the ineligibility period from the application date, instead of from the transfer/gift date. The Department of Health Care Services, however, still has not finalized regulations to implement such changes, and if and when such regulations are implemented, they will not be retroactive.
2015 Medi-Cal Rates
- Community Spouse Resource Allowance (CSRA) has increased to $119,220
- Minimum Monthly Maintenance Needs Allowance (MMMNA) has increased to $2,981
- Average Private Pay Rate has increased to $8,092
- Resource Allowance $2,000
- Personal Needs Allowance: $35