Why Everyone Over the Age of Eighteen Should Have a Durable Power of Attorney and an Advance Health Care Directive
Imagine if your adult child is in a car accident and brought to the hospital unconscious, don’t assume that the hospital will talk to you automatically, like they did when they were minors. Due to HIPAA restrictions, hospitals have to adhere to strict guidelines as to whom they can communicate with regarding health information. EVERYONE (even 18-year-olds) should designate parents as agents in a Durable Power of Attorney for finances and an Advance Health Care Directive. These documents will ensure that you, as a parent, will be able to advocate for your young adult children if they cannot speak for themselves. Consider paying for them to execute the documents for your peace of mind.
Do I need to worry about estate tax?
If you are a Maine resident and your assets are less than $5.7 million dollars (2019), then the answer is “no.” The amount is doubled at the Federal level. This number includes all your assets – retirement, life insurance, real estate, and even assets held in revocable and many irrevocable trusts. If you die with real estate in Maine, a simple form stating that your estate is under the amount is all that is necessary to be filed to release the property. As a result of these higher exemption amounts, most people can have fairly simple estate plans, if they choose. Some people with trusts may find that they have old language in their documents that is outdated and unnecessary. If you are nearing the exemption levels in Maine it’s never too late to start gifting to keep your estate under the exemption amount.
To gift money to friends or family or not?
Many people want to give cash to friends and family, but are afraid they will have to pay tax on the gifts. Good news- it turns out that it has never been easier to give away money. Each person has the right to give $15,000 per person, per calendar year, with NO reporting to anyone. This means you can give $15,000 to your son, $15,000 to his wife, $15,000 to each grandchild, $15,000 to your neighbor, etc. There is no limit to the number of people. But, if you give more than $15,000 to any one person, you do have to report it through an informational return. This return would merely state the gift and counts toward your ability to give a total of $5.7 million away (2019 amount in Maine) during your life, and double that at the Federal level. See blog post about estate tax. If you are like most people, you will be well under these exemption amounts and you never have to worry about triggering any taxes. So, if you want to help someone out with a down payment on a house, or whatever else and you think you can afford it, talk to your accountant first, but chances are that taxes will not be due on gift.
Why everyone needs a Will
What happens to your assets (real estate, bank accounts, etc.) that are in your name alone if you die without a will? Your assets will go to whoever the State of Maine, or whatever State you are a resident when you die, thinks they should. When you die without a will you die intestate, and the laws of intestacy kick in. Sometimes this can lead to disastrous results. For example, you own a home alone but have lived there with a life partner for many years, and you die without a will, your life partner is not a beneficiary under the laws of intestacy. If you have no children that house could go to your parents or your siblings or even your distant cousins, that you may have nothing to do with. The simplest way to ensure that your assets go to the people you want is to execute a will.
Do you have a Registered Agent?
Many LLC’s, small business corporations, and condominium associations doing business in Maine do not have a Maine Registered Agent. The State of Maine requires all such for-profit and non-profit entities (foreign and domestic) to have a Maine Registered Agent, which means a person or entity with an office located in Maine available to receive court related documents during normal business hours. It is vital that you do not serve as your own Registered Agent. If your business or association is sued or subpoenaed the sheriff will appear at your place of business potentially causing an embarrassing and awkward situation. A Maine Registered Agent will also ensure that you are promptly informed about the court related documents and deadlines. Maine law also requires annual reporting and fee filing with the Maine Secretary of State’s office, which are services we also provide as part of our Maine Registered Agent services. Call today to have Ballou & Bedell serve as your Commercial Registered Agent.
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