“Nothing is certain but death and taxes” — right? Taxes are a certainty in the United States, but how much you pay in taxes is far from certain. Ironically, the amount you pay in death taxes is often the most uncertain. In the United States, a decedent’s estate is subject to estate taxes if the total estate assets are greater than the current lifetime exemption amount. That limit is set to make a substantial change in 2013 that all taxpayers should know about and incorporate into their estate plan.

Under the current structure, an estate is entitled to a lifetime exemption amount of $5.12 million. In other words, your estate will not be taxed unless your countable estate assets at the time of your death are greater than $5.12 million. Any assets above that amount are currently taxed at the rate of 35 percent. Unless Congress acts before the end of the year, however, both the lifetime exemption amount and the tax rate will make significant changes. In 2013, the lifetime exemption amount will plummet to just $1 million and the estate tax rate will climb to 55 percent. These changes could mean a substantial loss of estate assets for those who do not revise their estate plans accordingly.

Congress may choose to extend the current limit and tax rate. They could also decide to revisit the issue altogether and come up with a new regime for estate taxes. Taxpayers, however, should consider the impact of the automatic changes that will take place at the end of the year absent action by Congress. If your estate will be affected by the changes, be sure to consult with your estate planning attorney now.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Actor Gary Sinise, known by many for his portrayal of Lt. Dan Taylor in the film Forest Gump, recently launched a project aimed at building smart homes for America’s seriously wounded veterans. Sinise’s role as Lt. Dan Taylor back in 1994 caught the attention of many veterans at the time. Since that time, Sinise has had a very close relationship with veterans and veteran causes. In 2003, Sinise joined the USO tour where he took the time to visit as many wounded veterans as possible. He was honored and humbled by the service they have given to our country. For years, Sinise’s band, the “Lt. Dan Band” has raised money for veteran causes. Now, Sinise’s foundation, aptly named the Gary Sinise Foundation, will be partnering with the Tunnel to Towers Foundation to build smart homes for severely wounded veterans as part of the Building for America’s Bravest project.

Many veterans who have been seriously wounded in combat cannot perform simple household tasks that most of us take for granted. The purpose of the project is to provide homes for these heroes that they can essentially run off of a smart phone. The keys to the first home were given to the new occupant just last month with many more planned for the future.

If you have a cause that is close to your heart or would like to make a charitable foundation part of your estate plan, be sure to talk to your estate planning attorney about how to make that wish a reality.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

When a power of attorney is not well drafted or when the person executing the power of attorney does not fully understand what the document does, a power of attorney can wreak havoc on a person’s estate. On the other hand, when one is well drafted and used appropriately, it can be a beneficial estate planning tool. For these reasons, think twice before using a boilerplate power of attorney found on the Internet or anywhere else.

In today’s digital age, it is incredibly easy to locate form documents for almost anything on the Internet. Just because you can find one does not mean you should depend on the accuracy of the form, much less use the form. Many boilerplate forms do not take into account state specific laws, recent changes in the law or specific needs of the person using the form. In the case of a power of attorney, many forms found on the Internet are general in nature and may give the agent, or person to whom you are granting authority, much more authority than you intended to grant. At the same time, the power of attorney may not accomplish your desired goals, such as giving the agent authority to make medical or financial decisions in the event you become incapacitated.

As with all legal documents and forms, the best way to avoid making a mistake is to consult with your estate planning attorney before attempting to draft, much less sign, one.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Careful estate planning includes understanding your tax consequences and minimizing your estate taxes. Generally, the Internal Revenue Service (IRS) uses the value of your “gross estate” to determine your tax liabilities. The fair market value on the date of death determines a decedent’s estate tax liabilities. Your gross estate typically includes your probate property and other non-probate property. It does not include specific types of property, including spousal property jointly owned with a surviving spouse. Furthermore, it does not include some lifetime gifts. You can also reduce your estate taxes by claiming the following top five deductions:

1. Mortgages and excludable debts owed on the date of the decedent’s death.

2. Any expenses paid by the decedent’s estate or executor to administer the decedent’s estate.

3. Charitable deductions, if paid to qualifying charities.

4. Marital deduction for a surviving spouse for property jointly owned.

5. Any losses incurred by the estate during administration of the decedent’s estate.

Talk to your accountant or tax planner to see if any of these deductions apply.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Elderly people today have more housing options than they had in the past. Elderly individuals who are no longer able to live completely independent lives no longer have to make the tough decision to live with family or friends or live in nursing homes. Now, they can live in alternative housing, including assisted living facilities, board and care facilities and continuing care retirement communities. Thus, you can find supportive housing communities that help you live somewhat independently while providing you with medical assistance and self-care options. The alternative supportive housing communities and institutions range in size and price. If you need specialized medical care and live in a high-cost area, you may have to pay more.

Many elderly individuals choose to live in assisted living facilities instead of traditional nursing homes. Typically, residents enjoy more freedom and space in assisted living centers than nursing homes. Although medical care and other services are available 24 hours a day, patients enjoy more privacy and less medical supervision in assisted living facilities.

Some continuing care retirement communities offer even more options and personal freedoms than assisted living facilities. If you have less serious medical needs and can move around independently, you may want to consider these types of housing arrangements. Whatever you decide, make sure you talk to your friends and family about your needs. They may ask you to live with them instead.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Estate planning for a married couple generally starts by establishing some important timelines for the couple. For example, a general idea of when children will finish college, when the couple will retire and when long-term care is likely to be needed are milestones that are often important. When the couple has a significant age difference — defined as ten years or more — between them, estate planning can be somewhat more complicated because many of those milestones will not be reached at the same time for the partners in the marriage.

Retirement is a big issue when it comes to estate planning. Making sure that you have enough money socked away when you reach retirement age and making sure that you will continue to have a steady income stream after retirement are important issues in your estate plan. When one partner will be retiring a decade or more before the other partner, this can require some creative estate planning to make sure that your finances are where you want them to be. Some IRAs, for example, will allow you to take out less in your mandatory distribution if your spouse is at least ten years younger than you. Not knowing this is an option, however, can cause you to lose money by overfunding the early years of your retirement.

As with all estate planning obstacles, an age difference can be accounted for in your estate plan as long as you start planning early. Talk to your estate planning attorney now to ensure that your plan reflects the issues that go along with an age gap marriage.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

In the age of computers, the risk of having your identity stolen is a concern for everyone. Seniors, however, are particularly vulnerable to the crime of identity theft. If you are the loved one of one of America’s millions of senior citizens, there are steps you can take to help educate and protect your loved one from identity theft.

Seniors are often in a vulnerable position, in general, given the fact that many are dependent on outside help for medical care, personal care or household help. This typically results in numerous strangers being allowed into a senior’s home or in close proximity to a senior on a regular basis. Close proximity often gives someone that opportunity and access to steal documents or information that can be used to steal an identity. Of course, most home health workers and other individuals who provide assistance to seniors are honest and trustworthy, but it only takes one person to steal an identity and wreak havoc with an individual’s life.

Sitting down and discussing the risk of identity theft with your loved one is a great place to start if you want to help protect him or her. Many seniors are unfamiliar with computers, for instance, and do not fully realize how easy it is to use one to access personal information. Along with talking to your loved one, you may wish to speak to your estate planning attorney about creating a power of attorney. With power of attorney, you can oversee and monitor financial accounts to look for signs of identity theft and put a stop to it before it completely devastates your loved one.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Most challenges to the estate of a deceased are over money or assets in the estate. In the case of baseball great Ted Williams, an estate battle waged over something different — his physical body.

Believed by many to be one of the greatest baseball players to ever pick up a bat, Ted Williams died in 2002. Prior to his death, Williams executed a Last Will and Testament in 1996 that directed his executor to have his body cremated and the remains scattered in the ocean off the coast of Florida. When he died, one of his daughters presented the 1996 Will to the probate court and requested that his body be cremated pursuant to the terms of the Will. Shortly thereafter, two of his other children came forward with a handwritten note that Williams allegedly signed in 1999 which expressed his wish that his body be put in Bio-stasis, or cryogenically frozen. According to his children, Williams changed his mind and wanted all of them to be frozen in the hope that they would be together again in the future.

Williams’ daughter eventually withdrew her request to have his body cremated citing financial reasons that prevented her from continuing with the estate battle, but not before money and time were exhausted on the litigation and a rift was born between the children.

If you decide to change something in your estate plan, make sure that you talk over the intended changes with your estate planning attorney so that they can be incorporated into your estate plan in order to avoid an unnecessary battle after your death.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

During 2011, the Internal Revenue Service (IRS) revoked the tax-exempt status that thousands of charities enjoyed solely for failing to file annual returns for three consecutive years. Under Section 6033 of the Federal Internal Revenue Code, charities with Federal tax-exempt status are required to file annual tax returns or notices for three straight years. A charity that doesn’t comply with the filing requirements automatically loses its tax-exempt status on the date it was supposed to file its third annual return or notice. If a charity loses its tax-exempt status with the IRS, it must apply for reinstatement. The IRS provided a limited exemption for certain small charities, but this may no longer be the case for them. This means that affected charities must reapply if they lose their tax-exempt status, even if they were not required to apply for tax-exempt status at the outset. Part of a charity’s reapplication process involves paying user fees.

What does all of this mean for estate planning purposes? This means that if you were one of many millions of American taxpayers relying on the federal income tax benefits of being able to deduct your charitable contributions to reduce your taxable estate, you may no longer be able to deduct your charitable donations to those charities that are no longer receiving tax-exempt status by the IRS’ ruling. Before you make those large donations, you may want to verify the charity’s tax-exempt status.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.

Based on a true story, this blog could be the storyline for a murder, drama, or even sci-fi television show. Following the murder of lawyer Rodrigo Rosenberg on May 10, 2009, details of his previously recorded videotape were released. Rodrigo Rosenberg was an attorney from Guatemala who videotaped himself revealing the identity of his murderer, if he was ever murdered.

In his videotape, Rosenberg pointed to the President of Guatemala, Alvaro Colom Caballeros, as the party responsible for his death. He claimed that his involvement with former clients led to this allegation. However, shortly after his death, the United Nations launched an investigation partly due to his self-made videotape. The FBI and other prominent organizations participated in the investigation to ascertain whether Rosenberg’s incriminating statements contained any truth. According to the results of the formal investigation, Rodrigo Rosenberg committed suicide by paying someone to kill him as part of his mission to incriminate Guatemala’s President. Only time will tell whether the videotape seemingly made from Rosenberg’s grave posthumously told the genuine story.

Pyke & Associates, P.C. is a member of the American Academy of Estate Planning Attorneys.