Legal Updates
Contents:- New Medical Privacy Rights Law (HIPAA) Could Render Your Existing Powers of Attorney and Trustee Provisions Useless
- Continual Changes in the Federal Estate Tax Exemption through 2011
- New IRA and Annuity Beneficiary Rules
- The New California Domestic Partnership Law Has Revolutionized the Law
A. Medical Privacy Rights Law (HIPAA) Could Render Your Existing Powers of Attorney and Trustee Provisions Useless
The federal law known as the Health Information Portability and Accountability Act of 1996, or "HIPAA", has all but eliminated the right of your physician to give an opinion as to your competency, or lack of competency, without a detailed authorization signed by you and referring to the specific provisions required under the Act.
Without this form, your appointed decision maker, in many cases, would have to get a court order to act on your behalf under your power of attorney or living trust. This is a serious problem and could cost thousands of dollars in unnecessary legal fees and court costs. It is our opinion that everyone needs to execute a HIPAA form. If you would like more information about the HIPAA form, please contact us at 415-925-5200.
B. Continual Changes in the Federal Estate Tax Exemption through 2011
The per-person federal estate tax exemption has been raised by Congress from $625,000 in 1998 to $3,500,000 in 2009. In 2010, estate taxes will be completely eliminated, and in 2011 estate taxes are reinstituted with a $1,000,000 exemption. At Kelley & Farren we expect new laws to be passed relative to the federal estate tax exemption, and we are committed to staying abreast of the latest developments in this area.
Because of the shifting nature of the exemption amount, your estate plan provisions should be reviewed to determine if they are still effective or necessary. We strongly recommend that couples who have Bypass, Residual, or Exemption Trusts, in particular, review their estate plans. An unnecessary Exemption Trust could result in avoidable capital gains taxes and become an unfortunate administrative burden and/or financial hardship on the survivor and future heirs.
C. IRA and Annuity Beneficiary Rules
The laws regarding transfer and income taxability of IRAs and annuities at death have dramatically changed. If your estate has substantial tax-deferred assets we highly recommend review of your beneficiary designations to be sure you are taking full advantage of the new rules.
D. The New California Domestic Partnership Law Has Revolutionized the Law
California's new Domestic Partnership Law grants legal status, benefits, and obligations to unmarried couples who register. It applies to couples of the same sex and to some heterosexual couples over age 62. This law creates, among other things, intestacy rights and property tax exemptions for qualified couples. You should seek immediate advice if you think this law might apply to you.
Please contact us if you would like more information about changing laws and regulations.
Also, see our questionnaire to help you determine if you need to review your estate plan.