Monthly Archives: June 2012

2012 Medi-Cal Rates

Community Spouse Resource Allowance (CSRA):  $113,640.

Minimum Monthly Maintenance Needs Allowance (MMMNA): $2,841

Annual Private Pay Rate (APPR):  $7,092

Skilled Nursing Facility (SNF) Coinsurance:  $144.50 per day for days 21-100

Resource Allowance:  $2,000

Personal Needs Allowance:  $35

Who has the right to administer the probate estate?

California law dictates who has priority to serve as administrator of your probate estate if you died without a will and with a California estate large enough to require a California probate. And what appears also applies if you had a will but failed to name an executor who was able to serve as executor.

In such cases, a person in the following relation to the decedent is entitled to appointment as the California administrator in the following order of priority:

  1. Surviving spouse or registered domestic partner
  2. Children
  3. Grandchildren
  4. Other descendants
  5. Parents
  6. Brothers and sisters
  7. Descendants of brothers and sisters
  8. Grandparents
  9. Descendants of grandparents
  10. Children of a predeceased spouse or domestic partner
  11. Other descendants of a predeceased spouse or domestic partner
  12. Other next of kin
  13. Parents of a predeceased spouse or domestic partner
  14. Descendants of parents of a predeceased spouse or domestic partner
  15. Conservator or guardian of the decedent
  16. Public administrator
  17. Creditors
  18. Any other person (i.e. friends)

(See Probate Code Section 8461 and the exceptions at 8462-8469.)

Of course, these statutory rules do not apply if the decedent had a will that nominated an executor who would be willing and able to act. Nor should these rules apply if the decedent’s assets were titled properly in a living trust and with proper beneficiary designation (to avoid probate).

Chart of our past, present, and future nonsensical estate tax laws: how much can pass tax free depends on year of death.

 

Here is  chart of our nonsensical estate tax laws.  Note the wildly different amounts that can pass (or did pass) without estate tax, depending solely on the year of death. Yet, over the last 30 years, the amount that can pass without estate tax has never gone down, starting with President Reagan to President Clinton to President Bush to President Obama. (See * at end.)  There is great uncertainty as to what the tax free amounts will be for those dying after this year.

The chart below also shows gift tax exemptions and generation skipping transfer tax exemptions.

  2010    2011    2012    2013   
Estate Tax   
Exemption amount * $5.0 million $5.0 million $5,120,000 $1.0 million *See note below **
Tax rate Flat (35%) Flat (35%) Flat (35%) Progressive (up to 55%)
Elections Can elect out of estate tax, but §1022 carryover basis will apply ($1.3 million “free-basis” + $3.0 million spousal bonus) Can elect to add “deceased spousal unused exclusion amount” (basically, the unused exemption from the estate of the decedent s last deceased spouse or the exemption amount in effect at the decedent s death, whichever is less) to the exemption amount Can elect to add “deceased spousal unused exclusion amount” (basically, the unused exemption from the estate of the decedent s last deceased spouse or the exemption amount in effect at the decedent s death, whichever is less) to the exemption amount None** Note that President Obama’s approved  a $5 million dollar exemption and also supported a $3.5 million dollar exemption, while all Republican presidential candidates favor repeal of estate tax.

 We probably won’t know what the 2013 exemption will be until after the November election.

Gift Tax   
Exemption amount $1.0 million $5.0 million (plus, if elected, the “deceased spousal unused exclusion amount”) $5,120,000 (plus, if elected, the “deceased spousal unused exclusion amount”) $1.0 millionSee note above.
Tax rate Flat (35%) Flat (35%) Flat (35%) Progressive (up to 55%)
Generation-Skipping Transfer Tax   
Exemption amount $5.0 million $5.0 million $5,120,000 $1.0 millionSee note above.

(indexed from 1997)

Tax rate Zero Flat (35%) Flat (35%) Progressive (up to 55%)

* Note the evolution of estate tax exemption amounts: $161,000 in 1980; $225,000 in 1982; $275,000 in 1983; $325,000 in 1984; $400,000 in 1985; $500,000 in 1986; $600,000 from 1987 – 1997; $625,000 in 1998; $650,000 in 1999; $675,000 in 2000-2001; $1,000,000 in 2002-2003; $1,500,000 in 2004-2005; $2,000,000 in 2006-2008; $3,500,000 in 2009; $5,000,000 in 2010-2011.

  

©JAMES J. PHILLIPS, P.C. June 2, 2012