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Tax Law Overhaul Lead to Substantial Employer Pension Contributions in 2017

Published on: June 4, 2018 | by Ettinger Law Firm

A recent analysis by researchers at the University of Wisconsin-Madison revealed that employers contributed significantly higher amounts of capital to defined-benefit pension plans in 2017, likely because of the new tax law signed by President Donald Trump. That law cut tax corporate tax rates from 35 to 21 percent starting this year and provided an incentive for corporations to increase deductions in 2017, including deductions for pension contributions.

The study analyzed data samples taken from over 400 non-financial firm which calculate their financial statements on a calendar-year basis and found that, on average, that firms increased their unexpected pension contributions by $16 million each. These unexpected pension contributions are considered the difference between the amount a firm contributed and the amount of money it was expected to contribute on prior-year financial statements.

Those numbers came out to a 24-percent increase in 2017 on average compared to the same averages for individual firms from 2014 to 2016. Furthermore, the study determined that taxpaying firms made larger unexpected contributions than non-taxpaying firms which the researchers took as a sign that the increased contributions could be due to the cut in corporate tax rates.

University Poll Shows Elders are Slow to Use Health Care Provider’s Online Access Portals

Published on: June 1, 2018 | by Ettinger Law Firm

A recent poll conducted by the University of Michigan showed that older Americans are slow to embrace the use of their health care provider’s secure online patient access portals to communicate with the doctors and other health care providers. Despite the widespread availability of online healthcare access portals, only about half of people between the ages of 50 to 80-years old have set up an account on a secure online access sites offered by their health care provider, according to the new findings from the National Poll on Healthy Aging conducted by the University of Michigan.

However, those with higher educations and income levels had higher rates of patient portal use even though those with lower household incomes and less education generally have more healthcare needs. Additionally, age appears to play a role in adoption rates of the technology as those aged 65-years and older were more likely than people in their 50s and early 60s to report they do not like using computers to communicate about their health or are generally comfortable with technology.

The poll, sponsored by AARP and University of Michigan’s academic medical center, Michigan Medicine, analyzed the preferences of over 2,000 participants and found that among older adults who had not yet set up access to a patient portal, 52-percent cited concerns about communicating online about health information. Another 50-percent reported they did not see the need for this kind of access to their health information and about 40-percent simply had not gotten around to setting up their access yet.

How Spousal Rollover IRAs Allow Estate Holder to Reduce Required Minimum Distribution from a Defined Contribution Plan

Published on: June 1, 2018 | by Ettinger Law Firm

Depending on the terms and conditions of a defined contribution plan, a participant may elect to extend the tax-deductible life of those assets by transferring them to an estate or trust prior to death. A key incentive for extending the distribution period of defined contribution plan assets is transfer of tax-deductible eligibility to beneficiaries of an estate or trust. Surviving spouses can consider a Spousal Rollover Independent Retirement Account (“IRA”) to shelter beneficiary distribution of those assets after the death of a defined contribution plan participant.

Required Minimum Distributions

The ratio of required minimum distributions (“RMDs”) from a defined contribution plan is generally more favorable in treatment during an estate holder’s lifetime. RMDs can be calculated during a participant’s lifetime, and initially based on a distribution period specified by the Uniform Lifetime Table.

“Unified Credit” Exemption Rules for Estate, Gift, and Formula Bequest Transfers

Published on: May 27, 2018 | by Ettinger Law Firm

With the enactment of the U.S. federal Tax Cuts and Jobs Act of 2017 (“Tax Act”) estate and gift transfers became more attractive in the planning of trusts (Pub. L 115-97). The unified credit exemption accorded under the Act, offers a global elimination of transfer tax on a set level of asset holdings gifted or transferred by an individual decedent. The rule change, however, reduces the availability of federal estate tax exemption for gifts and transfers not eligible under the Act. Generation-skipping tax exemption per decedent remains separate from the unified credit exemption from gift and estate taxes.

New IRS Tax Exemption Rules

As of January 1, 2018, the IRS raised tax exemption for gift and estate transfer amounts to 11,180,000 for single individuals, and $22,360,000 for married couples. This is an increase from 2017 levels from $5,490,000 for single individuals, and $10,980,000 for married couples. Modifications of the law before January 1, 2026 are possible, and estate planners are advised to take advantage of the latest exemptions as part of trust planning strategies in advance.

Proposed Bills Could Help Americans Save for Their Retirement

Published on: May 20, 2018 | by Ettinger Law Firm

A pair of proposed bills are working their way through the halls of Congress that could help encourage Americans to make voluntary contributions to their retirement funds, helping them live more comfortable and financially stable lives in their golden years. With looming changes to Social Security and rising healthcare costs, Americans young and old need to take heed of warnings by economists and activity plan for their retirements.

One of those bills is the Retirement Enhancement and Savings Act of 2018, jointly sponsored by Orrin Hatch (R-Utah) and Ron Wyden (D-Oregon), which is a collection of smaller bills that combined call help ordinary people make larger contributions to their retirement accounts. This legislation mirrors a similar proposal approved by the Finance Committee in 2016 but floundered when Congress adjourned before taking any action on the bill.The bill would help participants in retirement savings programs think in terms of lifetime income instead of accumulated balances.

The Retirement Enhancement and Savings Act of 2018 would require benefit statements include estimates of lifetime income at least once a year and would direct the Department of Labor to develop a model for constructing income estimates. The Act would also provide fiduciaries a safer place for selecting a lifetime income provider thus eliminating uncertainty concerning applicable fiduciary standards for offering lifetime income benefits under a defined-contribution plan.

CMS Issues New ID Cards, Announces Increased Payments to Private Plans

Published on: May 17, 2018 | by Ettinger Law Firm

The Centers for Medicare and Medicaid Studies (CMS) recently made a pair of announcements regarding changes to some of the important services the agency offers to millions of seniors across the country. Both of which aim to improve customer experience for CMS enrollees and help combat the threat of identity theft against those seeking vital medical treatments paid for in part by the federal government.

To help protect seniors from identity theft, CMS has begun phasing in new Medicare cards that no longer display enrollees’ Social Security numbers. Pennsylvania residents will be among the first to receive the new cards that assign each person a randomly generated eleven-digit number.

Social Security numbers are vital for accessing key financial information, medical records, and legal documents and should a Medicare enrollee’s card fall into the wrong hands, it could result in a serious case of identity theft. The new cards are tied directly to existing accounts so those who receive the new cards will have all their medical information will still be available with their doctors.

Estate Bitcoin Assets Taxable End to “Like Kind Exchange”

Published on: May 1, 2018 | by Ettinger Law Firm

Beginning Tax Year 2017, the U.S. federal Internal Revenue Service (IRS) will now require some taxation of cryptocurrency that may affect estate planners and executors. As of this tax season, capital gains and losses on property transactions involving cryptocurrency, for example, must now be reported to the IRS (Notice 2014-21). Before the current tax year, the IRS offered exemption for “like kind exchanges” of crypto assets allowing swaps of digital currency for other assets. With IRS rule changes, and latest insights into the fluctuation of cryptocurrency value, make those assets a bit less attractive to investors than in recent years.

Capital Gains, Estate Tax, ICOs

If market analysts have advocated cryptocurrency as an estate asset in the past several years, the rule reform will impact investors seeking tax-exemption from Bitcoin, Ethereum and Litecoin earnings. Once considered property rather than fiat currency by the IRS, the rules of have changed. The rules now also distinguish between the tax-exempt proceeds of equity funded trades, and cryptocurrency Initial coin offerings (ICOs), requiring that proceeds from the latter be treated as taxable income. In the short-term, it is likely that investors, including those responsible for estate trusts, will continue to invest in tax-exempt ICOs offered by off-shore banking institutions.

Changes to National Labor Laws May Change Home Health Care for Those Who Need it the Most

Published on: April 9, 2018 | by Ettinger Law Firm

If you have a beloved elder who currently needs or will eventually need long term, in-home health care, you need to know about new changes to federal labor laws that may not only raise the cost of these services but potentially alter quality aspects. In addition to federal labor and wage laws, state and even local laws may impact what you pay for in home health care and who provides it.

When a person suffers from dementia, alzheimer’s, or or another cognitive health condition, he or she will likely need the aid of a home health care aide to provide even the most basic of care needs. For many years, home health care providers who also lived in the patient’s home were subject to different portions of the federal Fair Labor Standards Act (FLSA) which made them exempt from overtime and would essentially earn less than minimum wage because the individual was expected to be on call even during the evening.

However, a recent legal decision determined these in-home health care workers were not overtime exempt and must be paid one and a half times their average hourly wage when working more than 40-hours per week. This meant that it became economically feasible for many families to maintain constant care to their loved one from a familiar person that could be counted on to provide attentive, individualized service to the patient.

Immigration Policy Could Affect Home Healthcare Market Providers

Published on: April 6, 2018 | by Ettinger Law Firm

The Trump administration recently issued a directive to revoke the Temporary Protected Status (TPS) for tens of thousands of immigrants from poverty stricken countries living in the country, many of whom who have found roles in the home healthcare market. With the cost of in-home and assisted living facility growing every year, the change could potentially add to those costs and put seniors and the disabled in a more difficult financial situation.

Approximately 59,000 Haitians came to live in the United States after the 2010 earthquake which devastated the country. Nursing homes and in-home care providers are already reporting staffing shortfalls as immigrants who found employment in their sectors have returned home for fear of forced deportation after losing their legal status. Even despite the threat of deportation, many immigrants working in nursing homes and as in-home health aides do not stay long in these jobs as they find professions in much higher paying sectors of the economy.

In Boston, Massachusetts for example, some elder care providers are speaking out about the selfless, hard work that their immigrant employees living on TPS status perform for long hours and modest pay. With many coming from nations where the witnessed humanitarian crises and seek to give back as part of the aid they themselves received in their times of need.

Assisted Living Facilities in Many States Have Little Federal Oversight Despite CMS Funding

Published on: April 1, 2018 | by Ettinger Law Firm

The dream of Americans is to age with dignity and independence while enjoying their golden years with family and friends and avoiding the need for any type of long term institutionalized care. However, trends in aging show that more and more Americans these days are relying on some type of intermediate institutionalized care before eventually moving into a nursing home to receive the attentive services they need.

However, despite receiving an estimated $10 billion in federal funding from the Centers for Medicare and Medicaid Studies (CMS), states encounter little oversight from regulators over the quality of care residents receive. Furthermore, over half the states do not report “critical incidents” to the federal government that include unexplained deaths, abuse, neglect or financial exploitation. All of that is according to a recent report from the Government Accountability Office (GAO).

Advocacy group Justice for Aging issued its own response to the GAO report to highlight the lack of accountability from many states and facilities receiving CMS funding. The directing attorney for Justice in Aging went as far as to point out that even among the 22 states that do provide the federal government with data on critical incidents the information is hard for the public to obtain and may not even illuminating enough.