MOERTL, WILKINS & CAMPBELL, S.C.

OUR BILLPAYING SERVICE

2008/2009 TAX SEASON!

The 2008 tax season is almost over. If you filed an extension, that deadline is nearly upon us. The 2009 tax season will be upon us before long. Now is a good time to start gathering paperwork in preparation for your return. Remember, we prepare individual income tax returns for clients and are always accepting new tax clients. Please contact us for more information.

TITLE 19/MEDICAID CHANGES ENACTED!

On February 8, 2006 President Bush signed into law the Deficit Reduction Act of 2005. This law places severe restrictions on a person's ability to transfer assets before qualifying for Title 19/Medicaid coverage. Some highlights, or better stated "low lights," include:

• The law dramatically increases the penalty period, sometimes called the "look back" period, from three years to five years.
• The law provides for new treatment of annuities, including a requirement that the state be named as a remainder beneficiary.
• The law makes any individual with home equity above $500,000 ineligible for Title 19/Medicaid nursing home care, although state's have the option of increasing this threshold to $750,000.

Wisconsin began its implementation of the Medicaid revisions with the introduction of the 2007-2009 biennial budget. As of January 1, 2009 Wisconsin has determined how the effective date rules will work and have provided clarification regarding divestments and other asset transfers. These new rules have not been tested yet, so we have little guidance on how the implementation will work county by county.

If you are considering any asset transfers in connection with Title 19/Medicaid planning, please contact us immediately.

GIFT TAX ALERT!!

Just a reminder - the annual gift tax exclusion increased from $12,000 to $13,000 effective January 1, 2009. This means that you can give up to $13,000 each to any number of people in 2009 and none of the gifts will be taxable and you do not have to file a gift tax return. If you are married, both you and your spouse can separately give $13,000 to the same person in 2009 without creating a taxable gift.

TOD DEEDS

Real estate has often been a sticking point when it comes to planning to avoid probate, particularly where the use of a revocable living trust is unnecessary. While it was possible to use a transfer on death (TOD) designation with real estate in the form of a TOD deed, until recently, there was very little statutory support for such deeds. 2005 Wisconsin Act 2006 (the Act), effective April 11, 2006, provides that statutory support, particularly through the creation of § 705.15 and other related statutes. The Act provides a nonprobate method for transferring real estate at the death of the property owner.

There are pros and cons to using a TOD Deed, and each client's situation needs to be reviewed carefully. Please contact us for more information and to find out if a TOD Deed is right for you.

TRANSFER BY AFFIDAVIT PROVISIONS

Wisconsin recently modified the provisions of the Transfer by Affidavit, which allows immediate transfer to an heir or guardian if the value of all of the decedent's solely-owned property in Wisconsin is under $50,000. These provisions are effective for deaths occurring on or after April 11, 2006 and can be very helpful in avoiding probate for small estates.

JUST A REMINDER

We are asking other professionals to provide articles of interest that we will include as additional inserts in our quarterly newsletter, YourLaw. If you have suggestions for future topics, please feel free to contact us via our website at http://www.lawmwc.com/