Posted on March 30, 2009 by Jon Gruber

Tax Time Audit for Estate Planning Documents

At tax time, many people consider their financial status. Many of us are looking at broker statements for the first time because we have been unwilling to face the bad news. Regardless of how difficult the year has been financially, however, this is an appropriate time to consider looking at your estate planning documents to see whether those documents are up-to-date. For example, are the persons that you have appointed as your executors or trustees still the best choices for those jobs?

The fact that your estate may be less than it was last year at this time does not make the proper choice of persons any less important. Indeed, shrinkage in estates makes it all the more important to select the right people for these important positions of trust and responsibility, so called fiduciary positions, who will be careful and able to adapt to changing market conditions.

Do you have a current power of attorney? Stockbrokers, banks and transfer agents are becoming more insistent that these documents be current. Are the persons you have appointed as your agents or powers of attorney still the ones who are best suited for those positions to manage your assets if you became incapacitated? 

Are the persons that you have appointed as agents on your living wills or health care powers of attorneys able to cope with what can be difficult medical decisions, especially in light of insurance carriers that can be unwilling to pay for unnecessary tests and procedures. Are these the people who would act as your advocates in the face of an insurance carrier that would want to save money at the expense of your health care.

If you have a family business, you may want to provide for the succession of management because any disruption in a smooth transition of the operation of the business could be disastrous in an era of tight margins and challenging business conditions.

Perhaps most important, if somewhat elementary, can you locate your documents in the event of an emergency? The best drafted documents are of little use if they cannot be located.  Our office provides clients an Estate Planning Document Checklist which can be invaluable to an agent or executor who may need to locate documents and contact brokers, bankers, insurance agents, etc.   

Tags:
Posted on March 26, 2009 by Aaron Zeamer

Is Your Small Business Affected By the New COBRA Subsidy?

The American Recovery and Reinvestment Act (ARRA) provides a COBRA subsidy for Employees who lost or will lose health insurance coverage under an employer-sponsored plan due to an involuntary termination of employment between September 1, 2008 and December 31, 2009. Many employers have no doubt that they are subject to these changes and are currently in the process of implementing updates. However, with the recent news about changes to COBRA, some small employers are asking themselves, do my employees qualify and am I required to provide COBRA continuation coverage? The good news is that the ARRA has not expanded the type of employer-provided plans subject to the Act, so if employers were not required to provide COBRA continuation coverage prior to the ARRA, they would not be required to do so now. 

COBRA continuation coverage applies to all private sector group health plans which are maintained by employers that have at least 20 employees on more than 50% of its typical business days in the previous calendar year. In determining the total number of employees, full and part-time employees are counted. However, each part-time employee counts as a fraction of a full-time employee. The fraction for a part-time employee equals the number of hours the part-time employee worked, divided by the hours an employee must work to be considered full-time. Therefore, if a private sector employer is offering a group health plan with at least 20 employees as calculated above, the employer must provide COBRA continuation coverage and will be required to abide by the new provisions in ARRA. COBRA continuation coverage also applies to state and local government-sponsored plans, but does not apply to plans sponsored by the federal government or by churches and church-related organizations. 

If you are not currently providing COBRA coverage but you think you may be nearing the threshold described above, it is imperative that you carefully review your 2008 employee census to determine if you are required to provide continuation coverage under COBRA.

Tags: , ,
Posted on March 19, 2009 by Christina Hausner

Updated Resources for COBRA Continuation Assistance under ARRA

Many employers and third party administrators have been waiting for guidance from the DOL before issuing the new COBRA notices required under the American Recovery and Reinvestment Act (ARRA). The wait is over. The Department of Labor has finally updated its FAQs For Employers About COBRA Premium Reduction Under ARRA.  It now includes the much anticipated  model notices. The DOL website gives the following guidance for notice requirements and deadlines:

  • A general notice to all qualified beneficiaries, whether they are currently enrolled in COBRA coverage or not, who have a qualifying event during the period from September 1, 2008 through December 31, 2009. This notice may be provided separately or with the COBRA election notice following a COBRA qualifying event.
  • A notice of the extended COBRA election period to any Assistance Eligible Individual (or any individual who would be an Assistance Eligible Individual if a COBRA continuation coverage election were in effect); who had a qualifying event at any time from September 1, 2008 through February 16, 2009; and who either did not elect COBRA continuation coverage or who elected but subsequently discontinued COBRA. This notice must be provided within 60 days following February 17, 2009.

The DOL’s COBRA Continuation Coverage Assistance Under The American Recovery And Reinvestment Act Of 2009 page continues to be updated with additional resources. You can download Job Loss Posters and Flyers and review Frequently Asked Questions for employers and employees.

In addition the DOL site also provides a link to the page the IRS has dedicated to COBRA Health Insurance Continuation Premium Subsidy. This page includes the updated Form 941 and Instructions and information on the phase out of the subsidy:

 

  • This subsidy phases out for individuals whose modified adjusted gross income exceeds $125,000, or $250,000 for those filing joint returns. Taxpayers with modified adjusted gross income exceeding $145,000, or $290,000 for those filing joint returns, do not qualify for the subsidy.
Tags: , ,
Posted on March 11, 2009 by Julie Miller

Managing Your Support Order in the Face of Decreased Earnings

No one is immune from the realties of today’s economy. Since the economic downturn I have had a number of inquiries from clients regarding their Child Support Order if they are laid off or are receiving support payments from a payor who has been laid off.

First, if you pay support and you experience a decrease in your income due to a layoff, a decrease in the number of hours you are able to work, or a reduction in your salary and/or bonuses, your monthly child support obligation could be reduced. Under the Pennsylvania Support Guidelines, a payor's support obligation is based on the parties' combined monthly net incomes. If your monthly net income decreases, it is likely that your support obligation will decrease as well, provided that the payee has not had a decrease in his/her income and child care expenses have not changed. It's advisable to contact an attorney to assist and advise you about recalculating your support obligation using your most recent paystubs, unemployment statements or 2008 W-2’s.

Continue Reading...
Tags: