Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

Tax Update

This Tax Update article is authored by Laurie A. Hunter, Kevin D. Millard, Jonathan F. Haskell and Heidi J. Gassman.

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364 Hits

IRS Annual “Dirty-Dozen” List of Tax Scams to Avoid is Highlighted as April 18 Tax Deadline Approaches

The Internal Revenue Service just issued a warning that scammers may try using the April 18 tax deadline to prey on hard-working taxpayers by impersonating the IRS and others with fake phone calls and emails.

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825 Hits

Protecting Americans from Tax Hikes Act (the "PATH" Act)

PATH Act of 2015 - Makes 3 charitable giving incentives permanent; clarifies valuation of charitable remainder trust interests.

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Equal Dignity: U.S. Supreme Court Validates Same-Sex Marriage

The United States Supreme Court entered its opinion this morning validating same-sex marriage at the federal level. Importantly, the majority opinion in Obergefell v. Hodges recognizes that “No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. ... [the challengers] ask for equal dignity in the eyes of the law. The Constitution grants them that right.”

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2015 Projected Inflation Adjustments

Certain income, estate and gift tax figures are adjusted for inflation annually based on the Consumer Price Index (CPI).  After the Department of Labor announced the August 2014 CPI figures, RIA and other economists released the following 2015 projected inflation adjustments, all of which will be effective January 1, 2015:

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1653 Hits

U.S. Supreme Court Declines to Hear Same Sex Marriage Appeals

On Monday the U.S. Supreme Court let stand appeals court rulings from five states which legalize same sex marriage.  This clears the way for same sex marriages in Indiana, Oklahoma, Utah, Virginia and Wisconsin.  The Court gave no explanation for its decision not to hear those cases.  This non-action lets stand decisions from three federal appeals courts, which together have jurisdiction over additional states of Colorado, Kansas, North Carolina, South Carolina, West Virginia and Wyoming.  This brings the number of states with legal same sex marriage to 30.  Colorado’s Attorney General, John Suthers, stated county clerks will now issue same sex marriage licenses in every county.  It is unknown what will happen to Colorado civil unions, and the state’s civil union statutes.  For some clients, the legalization of same sex marriage will impact tax related estate planning, and you should review your current estate plan if you believe this change will impact you. And if this change in Colorado’s law signals wedding bells, be sure to contact us to discuss whether preparation of a prenuptial agreement is right for you. For more information, see Denver Post.

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1405 Hits

Colorado Secretary of State Announces Fee Holiday

On June 9th, Colorado Secretary of State Scott Gessler announced a "fee holiday" for all new entities in Colorado.  Instead of the scheduled $50 fee for creating and registering a new entity, such as an LLC or a partnership, the fee is now $1.  Citing a repayment from the Colorado legislature and a department budget surplus, Secretary Gessler said the State Department’s office now has the financial resources to enact this reduction.  He hopes the fee holiday may encourage Coloradans to start new businesses.  No end date to this fee holiday has been announced.  If you have considered creation of an entity for business or estate planning purposes, give our office a call and we can discuss how to properly plan for your needs.

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1240 Hits

Social Media Provisions in Marital Agreements

A new trend in marital agreements involves the use of social media during the marriage. Couples are considering the inclusion of a provision which describes acceptable use of Facebook, Twitter, Instagram, and other on-line social websites, and penalties for unauthorized use. For example, a couple might state that neither will post any pictures which include nudity or could be detrimental to a professional career. Ann-Margaret Carrozza, a New York state attorney, says it is only recently she has seen these kinds of clauses, but reports 1/3 of her clients now want to include such a provision. A violation of such a clause often comes with a monetary penalty for the offending spouse. Although we here at Wade Ash have yet to hear such a request, we feel certain it's coming soon. For more on this trend, see Social Media.

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New Form 1023-EZ Released

On July 1st, in Rev. Proc. 2014-40, the IRS released the much anticipated Form 1023-EZ application which is intended to make it easier for smaller organizations who wish to apply for 501(c)(3) status. The new application is a much simplified version of the full Form 1023 and must be filed electronically. Mirroring the 990-N eligibility requirements, the streamlined application process is generally available to organizations that anticipate having annual gross receipts of $50,000 or less and assets of $250,000 or less.  The user fee is also reduced to $400 (down from the $850 required for the full 1023).  It is hoped that the new application process will help relieve the huge backlog of IRS exemption applications. The IRS currently has more than 60,000 pending applications for exemption, many of which have been waiting for approval for more than 9 months. 

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Controversy in the Estate of Mickey Rooney

The legendary screen actor Mickey Rooney died on April 7, 2014, leaving behind his wife, Jan, eight children and three step-children. During the last few years of his life, Mr. Rooney and his wife of 37 years were separated, but not divorced. As the result of prolonged litigation, in which Mr. Rooney accused some of his children of physical and financial abuse, a court-appointed conservator was managing his financial affairs. On March 11, 2014, Mr. Rooney signed a Will which left his estate to one step-son, as that step-son had been caring for Mr. Rooney during the last years of his life. Shortly after his death, Mr. Rooney's widow and Mr. Rooney's biological children all filed lawsuits contesting the validity of the Will. The children contend the step-son exerted undue influence over Mr. Rooney, resulting in a Will that disinherited them. Mrs. Rooney claims that in written agreements between herself and Mr. Rooney's conservator following her separation from Mr. Rooney, she never waived her rights as his surviving spouse. Most states, including Colorado, give surviving spouses the right to inherit from the deceased spouse, based on the length of the marriage and the assets of the spouses. The executor of the estate stated the agreements between Mrs. Rooney and Mr. Rooney executed upon their separation explicitly waived her right to inherit from his estate. The executor also stated Mrs. Rooney did not waive her rights as a surviving spouse for purposes of social security and pension benefits. The sad fact is that Mr. Rooney died with very few assets (approximately $18,000 in personal property) and with large medical bills and amounts owed to the government. However, the potential for rights to likeness, royalties, and other intangible valuables may create an incentive to move forward on these Will contests. After payment of taxes, debts and attorneys, it is doubtful anyone in Mr. Rooney's family will walk away with anything besides memories.

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Aid in Dying

Should Colorado enact legislation to allow physicians to aid terminally ill patients in dying? In response to one Colorado man's plea to legislators prior to his death on March 6th, Colorado State Rep. Lois Court, D-Denver, may be looking into the issue for the next legislative session. Mr. Selsberg was suffering from ALS and choose to end his life on his own terms, before succumbing to the disease. Mr. Selsberg is not alone; more and more terminally ill patients are taking on the medical establishment and choosing to die rather than to fight for a life in which they foresee continued suffering, pain and loss of dignity. Currently five states - Oregon, Washington, Montana, Vermont and New Mexico, have constitutional laws allowing physicians to assist terminally ill patients in dying; and three other states - Connecticut, Massachusetts and New Hampshire, are reportedly working on legislation. Colorado lawmakers rejected legislation twice in the mid 1990s, but it remains to be seen whether Colorado voters are supportive of a measure to allow for terminably ill patients to receive assistance in dying.

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1656 Hits

Tax Extender Legislation (including renewal of IRA Charitable Rollover) Clears First Hurdle

The effort to renew the IRA Charitable Rollover provision, which expired at the end of 2013, recently gained some momentum in Congress. On April 3, 2014, the Senate Finance Committee approved the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which would retroactively extend a number of important and popular tax provisions through December 31, 2015. The House Ways and Means Committee Chair has also recently indicated that a vote would be permitted on an extenders package. The date of any vote on this or similar extender bills in the House and the full Senate is yet to be determined, but it may well be postponed until after the fall elections.

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1597 Hits

Colorado Court of Appeals Reaffirms Critical Element of Fraudulent Concealment Claim

On March 27, 2014, the Colorado Court of Appeals issued its published Opinion in Jehly v. Brown, affirming the trial court's findings in favor of the Defendant, Allen Brown.

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Tips for Seniors in Avoiding Financial Abuse

Financial scams and abuse are more prevalent now than ever before. Many of these scams specifically target seniors. It’s important to take affirmative steps when it comes to protecting your personal and financial information. Consider these fundamental tips in protecting your own information and share them with your loved ones, as well. In general, seniors should be reminded:

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1537 Hits

Pregnancy and Advanced Directives

In recent news a Texas man, Erick Munoz, is suing the hospital treating his brain-dead wife for refusing to honor his direction to take her off life support. Marlise Munoz has been on life support since November 26, when her husband found her unconscious in their home. Complicating matters is that Ms. Munoz was 14 weeks pregnant at the time. Ms. Munoz gave clear instructions that she did not want to remain on any type of artificial life sustaining treatment; however, under Texas law, advanced directives are automatically invalidated if the patient is pregnant. Colorado law takes a different stance on the issue, invalidating advanced directives only when a medical evaluation determines that the fetus is viable. Under the same situation in Colorado, Mr. Munoz would be able to remove his wife from life support. Should the fetus near the gestation of viability, however, Mr. Munoz may have the same issue. The generally accepted limit for fetal viability is 24 weeks gestation and 500 grams, though advances in modern medicine continue to push this limit, opening the doors to a gray area as to the exact gestational age for viability. Important in considering your options, especially in the case of pregnancy, is to execute a living will detailing your wishes and to fully discuss your wishes with your medical agents. For practitioners, it is important to counsel your clients on their options and in the case of a pregnancy or an anticipated pregnancy to alert your clients to the potential invalidation of their advanced directives.

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Digital Accounts - User Names and Passwords

Most of us not only do a lot of our banking, paying bills and managing investments on-line, but we also store photos and other important documents “in the cloud.” On death or incapacity, who would know how to access your accounts? Who would receive notice of bills that are due, and know where you might keep assets? We include references to online accounts, bills and Facebook accounts in our “Family Financial Questionnaire” that we give to our estate planning clients, but it may not be complete. We have also created an Excel spreadsheet with a quick list of common types of online accounts that you can fill out to keep with your important documents and/or give a copy to the person(s) named as your personal representative and agent in the event of incapacity.

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IRS Issues Interim Guidance for Type III Supporting Organizations

On December 23, 2013, the IRS issued Notice 2014-4 providing interim guidance for certain “Type III” Supporting Organizations. Supporting Organizations are generally granted tax-exempt status under Section 501(c)(3) because of their close relationships with other publically supported charities. Because donations to Supporting Organizations qualify for a higher percentage limitation than donations to private foundations (e.g., a 50% of adjusted gross income limitation rather than the 30% limitation applied to most gifts to private foundations) some families historically opted to create and fund what are known as Type III Supporting Organizations rather than Private Foundations. Prior to the Pension Protection Act of 2006 (“PPA”), the Type III Supporting Organizations offered a great deal of flexibility to donors and the fewest ties and least oversight by supported public charities of all Supporting Organization types. However, because of Type III Supporting Organization abuses, the PPA placed more stringent requirements on these organizations and, in turn, their donors. Since the PPA was enacted, periodic guidance has been issued to help taxpayers and other charities understand when an organization qualifies as a Type III Supporting Organization and when it does not.

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IRS issues Proposed Regulations re Political Activity for 501(c)(4) Social Welfare Organizations

On Friday, November 29th, as a black Friday gift, the U.S. Department of the Treasury and the Internal Revenue Service issued guidance regarding qualification requirements for tax-exemption as a social welfare organization under I.R.C. §501(c)(4). This proposed guidance attempts to clarify the extent to which social welfare organizations can engage in political activity. The proposed regulations define the term “candidate-related political activity,” and would amend current regulations to provide that organizations engaged this kind of activity do not promote social welfare, and as such would not qualify for tax-exemption under I.R.C. §501(c)(4). The proposed guidance also seeks initial comments on other aspects of the qualification requirements, including what proportion of a 501(c)(4) organization’s activities must promote social welfare.

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1769 Hits

Charitable Giving Guidelines and Scam Alert

Mitch Morrissey, the Denver District Attorney, released this special edition of Consumer Alerts. The aftermath of the Colorado floods are fertile ground for scam artists to take advantage of people who are still struggling to get back on their feet. Go to Colorado Flood Scam Alert for more information.

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1129 Hits

Marvin Gaye’s Heirs Sued Over “Blurred Lines”

If you’ve been anywhere near a radio, television or the internet this summer, you’ve undoubtedly heard the song or seen the video for “Blurred Lines,” by Robin Thicke, Pharrel Williams, and T.I. (whose real name is Clifford Harris, Jr.). In fact, these performers themselves boast that the video for “Blurred Lines” has been viewed on YouTube.com over 140 million times.

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1822 Hits