The Florida Estate Planning and Probate Law Blog is focused on recent federal and state case law and planning ideas.


Each year, the IRS considers inflationary adjustments to the estate and gift tax exemption amount and gift tax annual exclusion amount. The 2022 adjusted numbers are: 2022 Exemptions and Exclusions: The estate and gift tax exemption amount has increased to $12.06 million per person in 2022 (from $11.7 million per person in 2021) 2022 generation-skipping transfer tax (GST tax): The exemption amount has increased to $12.06 million per person. January 1, 2026: If Congress takes no action between today and December 31, 2025, the exemption amounts will revert to pre-2017 Tax Act levels ($5 million per person, adjusted for inflation) of approximately $6.5 million per person. Gift annual exclusion: Every year an individual is permitted to gift another individual, excluding their spouse, a certain amount without incurring any gift tax liability. Effective on January 1, 2022, the annual exclusion amount increased to $16,000 (up from $15,000). The annual exclusion is a powerful tax-saving tool because the person making the gift can transfer wealth without using any of his or her estate and gift exemption amount and without needing to file a gift tax return. A married couple can make a combined gift of $32,000.


On September 13, 2021, the Congressional House Ways and Means Committee introduced legislative tax proposals to help fund the House’s proposed $3.5 trillion stimulus package. A brief summary of the trust and estate and retirement asset taxation proposals included within it follow: 1. Trusts and estates with taxable income of over $12,500 (adjusted for inflation) would be taxed at a 39.6% rate, increased from the current 37% rate. 2. Trusts and estates would be taxed on capital gains at a top rate of 25%, increased from the current 20% capital gains tax rate. 3. Trusts and estates with adjusted gross income (“AGI”) over $100,000 would be subject to a 3% surcharge on their income. 4. High-net-worth individuals would be subject to this additional 3% surcharge tax on their income on AGI greater than $5 million (for married filing jointly) or $2.5 million (for single taxpayers or married filing separately). 5. The federal estate tax exemption would return to the 2010 amount of $5 million (increased for inflation each year thereafter) from its current $11.7 million. In contrast, the value reduction for qualified real property used in a family farm would increase from $750,000 to $11,700,000. 6. In contrast with current federal tax law, an intentionally defective grantor trust would be treated as part of the grantor’s taxable estate for estate tax purposes. 7. Valuation discounts for lack of marketability or for minority ownership would not apply to the transfer of non-business assets. Currently, the IRS and courts permit such discounts to the fair market value of property for gift tax purposes. 8. Taxpayers with IRA or 401k (or other employer contribution plan) assets greater than $10,000,000 would no longer be permitted to contribute to their Roth or traditional IRAs, if their AGI exceeds $450,000 (for married filing jointly taxpayers) or $400,000 (for single taxpayers). 9. Employers would have to report to the IRS 401(k) balances that are greater than $2.5 million. 10. Taxpayers with AGI of $400,000 or more (or $450,000 or more in the case of married filing jointly taxpayers) would no longer be able to convert tax-deferred IRA or 401k account balances to Roth IRA accounts. 11. Taxpayers would no longer be able to use IRA assets to invest in private securities offered only to accredited investors.


Unfortunately, divorce is a part of society. Many individuals seek legal counsel on how to protect an inheritance they may receive from a parent or family member proactively in the event they become divorced. The following is a brief list of ideas to consider implementing: (i) do not add your spouse’s name to the title of inherited assets; (ii) do not use inherited assets to purchase assets that will be titled with your spouse unless you intend to create a marital asset; (iii) do not use inherited assets to satisfy marital debt or pay marital expenses (home mortgage); and (iv) do not mix marital and inherited asset. It will also be important to maintain good records showing that you alone received the inheritance and the accounts you maintained them in. The records should include who the inheritance was from, documentation of how the inheritance was received (for example, a copy of a will, trust or beneficiary designation), what assets were inherited and the value of the inherited assets, when the inheritance was received, and what you did with the inherited assets after you received them. Another option is to create a Trust to hold title to the asset(s) (cabin, brokerage account, etc..) and maintain them separate from your marital assets.

Funding Different Types of Long-Term Care

Even if you are currently in perfect health, there is a significant chance you will eventually require some form of long-term care as you age. While it is common to do some sort of planning for the expenses of retirement, fewer people prepare in advance for long-term care, with the result being that many people end up blindsided by the sheer amount of expenses on a month-to-month basis. The cost of care is only increasing, and current government programs will not cover all facets of long-term care. This is why it is important to begin planning for long-term care as early as possible to ensure you or an aging loved one will receive the best possible care, without having to go into debt or sacrifice your needs. Here are some ways you can begin preparing today. Be prepared to pay for the cost Education is critical when you are planning for long-term care. For instance, how much do you know about the inner workings of Medicare and Medicaid? Contrary to popular belief, Medicare does not actually provide coverage for the ‘care’ part of long-term care. In other words, while it generally will help with critical care hospital visits and prescriptions, Medicare will not cover the cost of a nursing home, senior care facility, or an untrained caregiver over an extended period of time. There are many other circumstances, as well, in which Medicare will not cover the cost of long-term care. By planning and taking action early on—for instance, like signing up for long-term care insurance when you are younger—you can save a large amount of money. Rates increase by 2 percent to 4 percent in your 50s, compared to 6 percent to 8 percent in your 60s. Starting early will allow you to find a reasonable premium that will allow you to rest easy about long-term care decades in advance. One way to pay for long-term care is to sell your home. If you’re considering this option, make sure to either get your home professionally appraised or use an online home-value estimate. You can also sell a life insurance policy for a lump sum of money. Medicaid may cover the costs of doctor visits, as well as in-home or nursing home care services—however, seniors must meet some stringent requirements to qualify, which you can learn more about here. To learn more about your options and how to overcome financial or legal headwinds you may encounter when planning for long-term care, it’s a smart idea to contact an elder law attorney. Marc J. Soss specializes in handling elder law, estate planning, and much more. Know your long-term care options Unless you begin planning now, you run the risk of being blindsided with having a large portion of the cost of long-term care fall directly on your shoulders. Most people drastically underestimate the yearly cost of long-term care. While the specific number varies depending on your location, the quality of the facility, the amenities available, the level of specialization, and so on, expect to pay around $50,000 per year for the most basic level of care. There are several major categories of long-term care, each with their own pros and cons. Home healthcare allows you or your loved one to age in place, staying in your own home, with a skilled aide or nurse coming to provide assistance with basic necessities, like getting dressed and moving around, as well as with more serious medical situations requiring specialized knowledge and experience. This is typically the least-expensive option (the hourly rate increases as the aide’s experience and training becomes more extensive). Next, there are assisted living facilities, which strike the balance between care and independence. Assisted living facilities provide observation, assistance with daily living, and easy access to healthcare professionals and emergency services. Finally, you can also choose skilled nursing homes, which offer continuous care and support for the highest price. Which option is best depends on your needs and abilities. Long-term care shouldn’t be a burden. By planning for the cost in advance, you will help make the decisions surrounding long-term care much easier on your family, should they be necessary. To learn more, contact Ted James at tjames@tedknowsmoney.com.

Federal Court Affirms Employer Right To Require Employees To Be Vaccinated

On June 12, 2021 a federal judge in Houston, Texas issued the first federal court decision addressing whether an employer may require its employees to be vaccinated as a condition of employment. The federal judge ruled that Houston Methodist Hospital (the “hospital”) did not violate the law by requiring, as a matter of policy, that all employees be vaccinated against COVID-19 by June 7, 2021. The court rejected multiple arguments, including that the COVID-19 vaccines currently available “are experimental and dangerous,” the injection requirement violated public policy, employees cannot be required to receive “unapproved” medicines and that “no currently-available vaccines have been fully approved by the Food and Drug Administration,” and that the hospital’s policy was “coercion.” To learn more go to www.fl-estateplanning.com.


On April 8, the IRS released Notice 2021-25, which provided guidance in determining which meals may be fully deductible under the new IRS rules and which are remain subject to the fifty (50%) percent limitation. Under long-standing IRS rules, the deduction for food or beverage expenses is generally limited to fifty (50%) percent of the amount. In order to be deductible as a business meal, the food must not be lavish or extravagant or the taxpayer (or an employee of the taxpayer) must be present at the furnishing of such food or beverages. The Consolidated Appropriations Act of 2021, expanded the deduction of business meals to one hundred (100%) percent, if the food or beverages for the meal are provided by a restaurant. This expanded deduction is only allowable for amounts paid or incurred during the calendar years 2021 and 2022. The term “restaurant” is defined as “a business that prepares and sells food or beverages to retail customers for immediate consumption, regardless of whether the food or beverages are consumed on the business’ premises.” The notice also clarified whether certain employer-provided meals would qualify as restaurants under the regulations.


The cost of long-term care is a concern for all seniors. The annual cost continues to rise and makes it untenable for most to afford it. It is estimated that an individual turning age 65 has a seventy (70%) percent chance of needing long-term care at some point. The most expensive state for care is Alaska, while the least expensive state is Missouri. The annual Genworth study showed how Florida ranked. 2020 MEDIAN ANNUAL COSTS National Florida Nursing Home, Private Room $105,850 $117,804 Nursing Home, Semi Private $93,075 $104,025 Assisted Living $51,600 $44,400 Home Health Aide, 24/7 $209,664 $196,560 Home Health Aide, 40 hrs $49,920 $46,800 If you have not started already, it is important to plan for these expenses before your entire nest egg is expended.

2021 Tax Information

Although our 2020, Federal Income Taxes are not due until April 15, 2021, it is important to start planning today for 2021. The following is a list of some important tax thresholds: 2021 Annual Exclusion for Gifts In 2021, the first $15,000 of gifts to any person are excluded from tax. The exclusion is increased to $159,000 for gifts to spouses who are not citizens of the United States. 2021 Federal Income Tax Brackets For Single Individuals 10% Up to $9,950 12% $9,951 to $40,525 22% $40,526 to $86,375 24% $86,376 to $164,925 32% $164,926 to $209,425 35% $209,426 to $523,600 37% $523,601 or more For Married Individuals Filing Joint Returns 10% Up to $19,900 12% $19,901 to $81,050 22% $81,051 to $172,750 24% $172,751 to $329,850 32% $329,851 to $418,850 35% $418,851 to $628,300 37% $628,301 or more 2021 Standard Deduction Single $12,550 Married Filing Jointly $25,100 Head of Household $18,800


Americans gave nearly $450 billion to charity last year, which is one of the highest amounts ever recorded. This number comes as lawmakers have been looking for ways to expand tax breaks for donors amid the coronavirus pandemic. Charitable donations rose 2.4 percent in 2019 according to an annual survey by Giving USA. Individual giving accounted for about 69% of all donations, but the biggest jump came from the generosity of corporations. In 2019, businesses gave about $21 million, an increase of 11.4% from 2018. Also, giving by foundations reached a record high of $75.7 billion. "In March, lawmakers included a measure in the coronavirus economic rescue bill that allows individuals to write off as much as $300 in donations for 2020 even off they don't itemize their taxes."Typically, deductions for charitable donations are only afforded to those who itemize their tax returns or add up all of their individual tax breaks, which is only about 10% of taxpayers.