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Eustice, Laffey, Sebranek & Auby, S.C. is a full-service law firm located in Sun Prairie, Wisconsin. Our attorneys are skilled in multiple practice areas, with different areas of expertise. We are client focused and success driven.

The Wisconsin 2013-2014 Budget Bill May Have Severe Results for Medicaid Recipients

This is a very good article by Carol Wessels, who is an attorney who practices elder law in the Milwaukee area at the firm of Nelson, Irvings & Wessels, S.C.

http://wesselselderlaw.wordpress.com/2013/07/09/will-medicaid-recipients-ever-be-able-to-sell-their-homes-under-wisconsins-new-budget-law/

This article discusses the potential impact of the new real estate notice requirements for recipients of Medicaid. These new notice requirements were part of Wisconsin’s 2013-2014 Budget Bill that was signed into law on June 30, 2013.  This Budget Bill incorporates changes to the Medicaid program, including changes to the rules governing estate recovery, which expand the state’s ability to recover Medicaid costs from the estate of a deceased recipient of Medicaid.  The new real estate notice requirements are part of these changes to the estate recovery rules.  As pointed out in this article, these new rules could have severe effects on recipients of Medicaid and those recipients’ families.

If you or a close family member is a Medicaid recipient, you may want to consult an elder law attorney on what effects these new rules may have on you and what planning options may be available to avoid those effects.

The U.S. Supreme Court’s Decision in U.S. v. Windsor and Its Effect on Estate Planning

On June 26, 2013, the United States Supreme Court issued an opinion, U.S. v. Windsor, in which it struck down a major part of the Defense of Marriage Act (DOMA) as unconstitutional because it denies same sex couples equal protection under the law in violation of the Fifth Amendment.  In that case, Edith Windsor, who was married to her same sex partner in New York, where the couple also resided, and which recognizes full marriage rights for same sex couples, was denied the opportunity to claim the marital exemption from federal estate taxes upon her partner’s death based on the definition of marriage under Section 3 of DOMA.  This Section defines marriage for federal purposes as “only a legal union between one man and one woman.” 1 U.S.C. § 7.  The U.S. Supreme Court, however, in a 5-4 decision determined that Section 3 of DOMA unconstitutionally denied Edith Windsor from taking advantage of the estate tax marital exemption, which would have been available to opposite sex married couples.  This thus violated the Fifth Amendment’s directive for equal protection under the laws by singling out and demeaning a certain class of people – same sex couples.  The Court also indicated that this provision interferes with the states’ power to regulate marriage.  Therefore, the Court struck down this section of DOMA.  Windsor, No. 12-307 (U.S. 2013).  For further information on the Windsor decision, see the article, “Supreme Court strikes down Defense of Marriage Act in estate tax case” at http://www.journalofaccountancy.com/news/20138222.htm.  See also the article, “The Same Sex State Death Tax Trap Post DOMA” at  http://www.forbes.com/sites/ashleaebeling/2013/07/01/the-same-sex-state-death-tax-trap-post-doma/.

The effect of this ruling is that legally married same sex couples can now claim the same federal benefits and marital tax exemptions as opposite sex married couples can.  It remains unclear, however, whether federal benefits will be available to same sex couples who do not live in a state that recognizes same sex marriage.

What this means for estate planning is that the same estate planning tools and techniques utilized in opposite sex couples’ estate plans to minimize the federal estate tax owed may be used in same sex couples’ estate plans in states that allow same sex marriage.  In states that do not recognize same sex marriage, however, these estate planning techniques would not be effective and same sex couples in those states would not be able to avoid estate taxes in that way.

In Wisconsin, though domestic partnerships are recognized between same sex couples, same sex marriage is not.  It is therefore uncertain whether same sex couples would be able to take advantage of the federal estate tax marital exemption, since these couples cannot be legally “married” in Wisconsin.  We are hoping, however, that both the federal and state governments will provide guidance as to these issues and questions in the near future and will establish processes and procedures that will facilitate the implementation of these new policies.

Sun Prairie’s Sunshine Supper $5 Family Challenge

For the past three years, the Sun Prairie community has been hosting the Sunshine Supper, which is a free, nutritious dinner open to the public every Monday evening.  The dinner is sponsored and coordinated by a dedicated bunch of volunteers with the assistance of various community groups within Sun Prairie.  Throughout its three year history, the Sunshine Supper has moved from place to place but for a number of reasons has never been able to establish a permanent home . . . until now.

In May 2013, the Sunshine Supper hopes to move into its new, permanent, location in Sunshine Place at 1632 West Main Street.  In order to support its move and help open its doors, the Sunshine Supper is putting on the $5 Family Challenge.  Due to a generous dollar-for-dollar match donation, all donations to the “Open the Doors Campaign” will be doubled, and the Sunshine Supper is encouraging families to make a donation in the amount of $5 or more in order to maximize the dollar-for-dollar match.

It is very easy to participate:

1.  Send your $5 (or more) to Sunshine Place, $5 Family Challenge, 18 Rickel Road, Sun Prairie, WI  53590 or donate online.

2.  Print this challenge sign.

3.  Get a photo of your family with this sign and post it on the Sunshine Supper facebook page.

4.  Post your sign in your front window so that all your friends and neighbors can see that you participated in the challenge.

For more information or to donate online, visit the Sunshine Supper website at http://sunshinesupper.org/..

ANNOUNCEMENT!

Eustice, Laffey, Sebranek & Auby, S.C. was ranked in the top 25 law firms in Dane County by In Business Magazine’s 2013 “Book of Lists,” based on the number of attorneys.  That makes ELSA one of the largest firms in the Greater Madison area, and we are right here in Sun Prairie!.

Thoughts on Black History Month

The month of February is designated as Black History Month, or African-American History Month. African-American historian Carter G. Woodson is widely credited for creating and championing the original celebration in 1926, which was known as “Negro History Week”. This week-long observation was held during the second week of February because it covered the birthdays of both President Abraham Lincoln and abolitionist Frederick Douglass.  Woodson hoped that the holiday would someday be eliminated when African-American history was recognized as fundamental to American history.  In 1976, the federal government recognized the expansion from Negro History Week to Black History Month. In doing so, President Gerald Ford encouraged Americans to “seize the opportunity to honor the too-often neglected accomplishments of Black Americans in every area of endeavor throughout our history.”[1]

In addition to recognizing and celebrating the accomplishments of African-Americans, Black History Month is an important reminder of how far our Nation has come and how much remains left to be done to ensure equality for all.  The year 2013 marks two significant anniversaries impacting African Americans and the United States: the 150th Anniversary of the Emancipation Proclamation and the 50th Anniversary of the March on Washington.

On January 1, 1863, President Abraham Lincoln issued the Emancipation Proclamation, thereby proclaiming that all slaves in the confederate territories be forever free. Because the fight between the Union and the Confederacy was raging on, Lincoln’s Proclamation did little to immediately free those enslaved, but it progressed the self-emancipation movement and further cemented the idea for the Union that the war was one against slavery.

Even though the Thirteenth Amendment abolished slavery, having studied cases like Strauder v. West Virginia, Plessy v. Ferguson, Brown v. Board of Education, and Loving v. Virginia, in law school, we know that for the next 100 years and beyond, the majority of African-Americans were not treated as equals in daily living or under the law.  On August 28, 1963, hundreds of thousands of Americans of all races, ages and religions came to Washington, D.C. to march for the end of legal segregation and discrimination in the United States.  Ultimately, they marched to the Lincoln Memorial where Martin Luther King Jr. gave his “I Have a Dream” speech.  The Civil Rights Act of 1964 followed shortly thereafter.

President Barack Obama’s January 21, 2013 inauguration ceremony on Martin Luther King, Jr. Day was a wonderful reminder that the ultimate glass ceiling in this country for African-Americans has been broken.  While we can all agree that our Nation has a long way to go to achieve true equality on issues of race, gender, socio-economic status, sexual orientation, and religion, we are moving forward in the right direction.

I’ll end with my favorite Martin Luther King, Jr. quotation – “Injustice anywhere is a threat to justice everywhere.”

— Written by Joshua J. Kindkeppel, President of the Dane County Bar Association and shareholder at Eustice, Laffey, Sebranek & Auby, S.C.



[1] The following sources were used in preparing this column: Association for the Study of African American Life and History website, www.asalh.org; Paul Brest, et al., Processes of Constitutional Decision Making: Cases and Materials (4th ed. 2000); and Wikipedia articles on Black History Month, Carter G. Woodson, the Emancipation Proclamation, Frederick Douglass, and the March on Washington for Jobs and Freedom.

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What to Expect From the New Tax Bill

On January 1, 2013, Congress finally passed a tax bill that avoided the so-called “fiscal cliff” and included significant changes to the tax laws.  Some of the key provisions are summarized here.

The change that will probably have the greatest impact on most taxpayers is the expiration of the payroll tax reduction.  Congress did not renew the 2% payroll tax holiday, so the employee portion of the Social Security tax will return to 6.2%, thus decreasing slightly most employees’ paychecks.

Also of significant impact: the Bush income tax cuts were made permanent for all but the highest-income-earners.  For this purpose, the highest-income-earners are those who have taxable income over $400,000 for singles and $450,000 for married couples.  The income tax rate for them was raised from 35% to 39.6%.  The capital gains tax rate on these highest-income-earners was also increased to 20%.

This chart, from the Kiplinger Tax Letter, summarizes the income tax rates for 2013:

Marrieds: If taxable income is The tax is
Not more than $17,850 10% of taxable income
Over $17,850 but not more than $72,500 $1,785.00 + 15% of excess over $17,850
Over $72,500 but not more than $146,400 $9,982.50 + 25% of excess over $72,500
Over $146,400 but not more than $223,050 $28,457.50 + 28% of excess over $146,400
Over $223,050 but not more than $398,350 $49,919.50 + 33% of excess over $223,050
Over $398,350 but not more than $450,000 $107,768.50 + 35% of excess over $398,350
Over $450,000 $125,846.00 + 39.6% of excess over $450,000
Singles: If taxable income is The tax is
Not more than $8,925 10% of taxable income
Over $8,925 but not more than $36,250 $892.50 + 15% of excess over $8,925
Over $36,250 but not more than $87,850 $4,991.25 + 25% of excess over $36,250
Over $87,850 but not more than $183,250 $17,891.25 + 28% of excess over $87,850
Over $183,250 but not more than $398,350 $44,603.25 + 33% of excess over $183,250
Over $398,350 but not more than $400,000 $115,586.25 + 35% of excess over $398,350
Over $400,000 $116,163.75 + 39.6% of excess over $400,000
Household heads: If taxable income is The tax is
Not more than $12,750 10% of taxable income
Over $12,750 but not more than $48,600 $1,275.00 +15% of excess over $12,750
Over $48,600 but not more than $125,450 $6,652.50 + 25% of excess over $48,600
Over $125,450 but not more than $203,150 $25,865.00 + 28% of excess over $125,450
Over $203,150 but not more than $398,350 $47,621.00 + 33% of excess over $203,150
Over $398,350 but not more than $425,000 $112,037.00 + 35% of excess over $398,350
Over $425,000 $121,364.50 + 39.6% of excess over $425,000

The standard deduction and personal exemptions were raised slightly, but these, along with itemized deductions, are being phased out for high-income-earners.  For these purposes, high-income-earners are those whose Adjusted Gross Income (AGI) is over $250,000 for singles and $300,000 for married couples.

The alternative minimum tax (AMT) exemptions were also increased and will be permanently adjusted for inflation.

The Medicare surtax for high-income-earners (total earnings of over $200,000 for singles and $250,000 for married couples), which was included in the health care reform bill, will take effect in 2013, as will the Medicare surtax on net investment income for high-income-earners (modified AGI of over $200,000 for singles and $250,000 for marred couples), both at the rate of 3.8%.

The tax rates for Social Security will also be higher, due to the expiration of the 2% tax holiday and the 0.9% increase for high-income-earners, mentioned above.  The Social Security wage base, however, was raised to $113,700, and Social Security benefits go up by 1.7%.

With regard to the federal estate and gift tax, the $5 million exemption was made permanent and was increased for inflation to $5.25 million in 2013 and will continue to be indexed for inflation.  This continues to be the unified exemption amount for the estate and gift tax, and it continues to be portable between spouses.  Portability means that a married couple has $10.5 million in exemption between the two of them with the first spouse to die passing his or her unused share to the surviving spouse.  In order to use this portability, however, the surviving spouse must file an estate tax return indicating that election.  The tax rate on estates beyond the exemption amount was increased from 35% to 40%.

The annual gift tax exclusion was also increased to $14,000 per donee.  This means that in 2013 a person may gift $14,000 per donee without being required to report it or count it towards the $5.25 million lifetime exemption amount.

If you have questions regarding the new tax laws or about how these changes will affect your estate plan, please contact us, and we will be pleased to assist you..

Leadership Sun Prairie

I began my career as a full time attorney with ELSA back in August 2011.  Although I had spent some time in Sun Prairie while in law school at UW, I knew relatively little about the city and its people.  Eager to learn more, I enrolled in the Sun Prairie Chamber of Commerce’s “Leadership Sun Prairie” course.  The seven-session course is designed to expose participants to various different aspects of life in Sun Prairie, including business and industry, education, government, media and communications, and community health and wellness.  Additionally, each Leadership Sun Prairie class is responsible for completing one community service project.

Our Leadership class is the 15th in the program’s history and we packed a lot into our seven sessions.  We delivered meals with the Meals on Wheels program, volunteered at the Sunshine Supper, wrote letters to Badger Honor Flight honorees, filmed vignettes for the local cable access channel, and helped out in local elementary school classrooms.  For our service project, we organized a night out for 10 local kids to have dinner at a local restaurant and attend a UW men’s basketball game.  With each session, I found myself more and more impressed with not only the abundance of talented people here in Sun Prairie, but also with the strong sense of community that is pervasive throughout the city.

ELSA has a history of involvement with Leadership Sun Prairie.  Three other ELSA team members, Kathy Curran, Connie Birkrem and Eric Ristau, each graduated from the course.  This past fall, Attorney Ristau gave a presentation to our class about the importance of having properly executed power of attorney documents as a part of a comprehensive estate plan.

The Leadership Sun Prairie course has helped confirm what the other members of ELSA have known for a long time; namely, that there’s more to Sun Prairie than meets the eye and that it is a great community in which to have our legal practice..

National Estate Planning Awareness Week

If you are amongst the estimated 120,000,000 Americans who do not have up-to-date estate plans, you probably do not know that this week, October 17–23, 2011, is National Estate Planning Awareness Week.  In 2008, the House of Representatives passed a bill making the third week in October a week to build awareness of the need for estate planning and to educate the public regarding estate planning resources and services.

This bill was passed in response to the general lack of awareness that many Americans have as to the importance of estate planning and the consequences of not having a plan in place.  Many Americans assume that only the wealthy need estate planning, but in a time when life expectancies are rising along with the cost of healthcare and retirement planning is falling increasingly on the shoulders of the individual, no one can afford to be without a plan for the future.

So if you are one of those Americans without an updated estate plan, this is a great time for you to take that step to safeguard your future security and that of your family and loved ones.  Careful estate planning can be an essential tool to ensure that you have adequate funds for retirement, that the assets you have built up over your lifetime are preserved for the benefit of your family and heirs, and that, should you in the future be unable to make healthcare or financial decisions, the person of your choice is designated to do so for you.

If you are interested in learning more about the estate planning options that would be most appropriate for your situation, you can visit the National Association of Estate Planners & Councils (NAEPC) website for educating the public about the many aspects of estate planning (http://www.estateplanninganswers.org/) or you can call and make an appointment to speak to one of our firm’s estate planning attorneys..

Attorney Kevin M. Henry Joins the Firm!

Eustice, Laffey, Sebranek & Auby, S.C. is pleased to announce that Attorney Kevin M. Henry, a 2011 University of Wisconsin Law School graduate, has joined the firm!  Mr. Henry is a graduate of St. John’s University in Collegeville, Minnesota where he was a linebacker for the football team and active in the student government.  After receiving his college degree in 2005, Mr. Henry taught 2nd grade on a Navajo Indian reservation for three years as a Teach for America corps member.

Attorney Henry will be concentrating his practice in the areas of creditors’ rights, real estate, business law, estate planning, civil litigation, and contracts..