Supreme Court Upholds Health Care Law

In a dramatic victory for President Barack Obama, the Supreme Court upheld the 2010 health care law Thursday, (June 28, 2012) preserving Obama’s landmark legislative achievement.

The majority opinion was written by Chief Justice John Roberts, who held that the law was a valid exercise of Congress’s power to tax.

Roberts re-framed the debate over health care as a debate over increasing taxes.  Congress, he said, is “increasing taxes” on those who choose to go uninsured.

Here is the link to the full text of the ruling: http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf    

The 2010 law, the Affordable Care Act, requires non-exempted individuals to maintain a minimum level of health insurance or pay a tax penalty.

The essence of Roberts’ ruling was:

• “The Affordable Care Act is constitutional in part and unconstitutional in part,” Roberts wrote.
• “The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause.  That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.”
• But “it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but (who) choose to go without health insurance.  Such legislation is within Congress’s power to tax.”

Roberts made a point of noting that he and the other justices “possess neither the expertise nor the prerogative to make policy judgments.  Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them.  It is not our job to protect the people from the consequences of their political choices.”

The law, Roberts wrote, “makes going without insurance just another thing the Government taxes, like buying gasoline or earning income.  And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress’s constitutional power to tax.”

He said, “The question is not whether that is the most natural interpretation of the mandate, but only whether it is a ‘fairly possible’ one.”

He said the Supreme Court precedent is that “every reasonable construction” of a law passed by Congress “must be resorted to, in order to save a statute from unconstitutionality.”

Veteran Supreme Court lawyer Tom Goldstein told NBC’s Pete Williams that “the Affordable Care Act was saved by Chief Justice John Roberts.”  Goldstein said the Obama administration “got the one vote they really needed in Chief Justice John Roberts.”

Obama hailed his victory: “The highest court in the land has now spoken.  We will continue to implement this law and we’ll work together to improve on it where we can.”  But he urged Americans to refrain from re-fighting “the political battles of two years ago” or trying to “go back to the way things were.”

For individuals who choose to not comply with the individual insurance mandate, Congress deliberately chose to make the penalty fairly weak: only $95 for 2014; $325 for 2015; and $695 in 2016.  After 2016, that $695 amount is indexed to the consumer price index.

Congress specifically did not allow the use of liens and seizures of property as methods of enforcing the penalty.  Non-compliance with the mandate is also not subject to criminal or civil penalties under the Tax Code and interest does not accrue for failure to pay the penalty in a timely manner, according to the congressional Joint Committee on Taxation.

NBC’s Pete Williams reported that Roberts reasoned that “there’s no real compulsion here” since those who do not pay the penalty for not having insurance can’t be sent to jail.  “This is one of the scenarios that administration officials had considered that if the court did this they would consider it a big victory.”

In his reaction to the court’s decision, Republican presidential contender Mitt Romney said, “What the court did today was say that Obamacare does not violate the Constitution.  What they did not do was say that Obamacare is good law or that it’s good policy.”  He said the ruling had made it clear “If we want to get rid of Obamacare, we’re going to have to replace President Obama.”

But in a major victory for the states who challenged the law, the court said that the Obama administration cannot coerce states to go along with the Medicaid insurance program for low-income people.  The financial pressure which the federal government puts on the states in the expansion of Medicaid “is a gun to the head,” Roberts wrote.

“A State that opts out of the Affordable Care Act’s expansion in health care coverage thus stands to lose not merely ‘a relatively small percentage’ of its existing Medicaid funding, but all of it.”  Roberts said.  Congress cannot “penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” Roberts said.

The Medicaid provision is projected to add nearly 30 million more people to the insurance program for low-income Americans – but the court’s decision left states free to opt out of the expansion if they choose.

Source: Tom Curry, msnbc.com National Affairs Writer, June 29, 2012, 7:15am.

Appeals Court: Denying federal benefits to same-sex couples is unconstitutional

A federal appeals court has ruled that the Defense of Marriage Act, a law that denies a host of federal benefits to same-sex married couples, is unconstitutional.

The 1st U.S. Circuit Court of Appeals in Boston ruled Thursday that the act known as DoMA, which defines marriage as a union between a man and a woman, discriminates against gay couples.

The law was passed in 1996 at a time when it appeared Hawaii would legalize gay marriage.  Since then, many states have instituted their own bans on gay marriage, while eight states have approved it, led by Massachusetts in 2004, and followed by Connecticut, New York, Iowa, New Hampshire, Vermont, Maryland, Washington state and the District of Columbia.  Maryland and Washington’s laws are not yet in effect and may be subject to referendums.

The appeals court agreed with a lower court judge who ruled in 2010 that the law is unconstitutional because it interferes with the right of a state to define marriage and denies married gay couples federal benefits given to heterosexual married couples, including the ability to file joint tax returns.

The 1st Circuit said its ruling wouldn’t be enforced until the U.S. Supreme Court decides the case, meaning that same-sex married couples will not be eligible to receive the economic benefits denied by DoMA until the high court rules.

“We are thrilled that another court – this time, the 1st Circuit Court of Appeals – has ruled that it is unconstitutional to deny respect to the marriages of lesbian and gay couples,” said Camilla Taylor, National Marriage Project Director for Lambda Legal.  “We congratulate our colleagues at GLAD (Gay and Lesbian Advocates & Defenders) for achieving this wonderful victory.”

During arguments before the court last month, a lawyer for gay married couples said the law amounts to “across-the-board disrespect.”  The couples argued that the power to define and regulate marriage had been left to the states for more than 200 years before Congress passed DoMA.

An attorney defending the law argued that Congress had a rational basis for passing it in 1996, when opponents worried that states would be forced to recognize gay marriages performed elsewhere.  The group said Congress wanted to preserve a traditional and uniform definition of marriage and has the power to define terms used to federal statutes to distribute federal benefits.

More than 1,000 benefits in question
Two California federal judges earlier said the act violated constitutional standards.

Judge Claudia Wilken of Oakland ruled May 24 that the law legalized bigotry by withholding more than 1,000 federal benefits – such as joint tax filing, Social Security survivor payments and immigration sponsorship – from gays and lesbians legally married under state law.

Judge Jeffrey White of San Francisco also declared DoMA unconstitutional and ordered the government to provide family insurance coverage to the wife of a lesbian court employee.  White’s ruling has been appealed to the Ninth U.S. Circuit Court of Appeals, which will hear the case in September.

President Barack Obama withdrew his administration’s defense of the law in February 2011, saying he considered it unconstitutional, but it is being defended by lawyers hired by House Republican leaders.

On May 9, Obama declared in an interview with ABC News his unequivocal support for gay marriage, becoming the first president to endorse the idea.

Obama said, “I have hesitated on gay marriage in part because I thought that civil unions would be sufficient.”  He added that he “was sensitive to the fact that for a lot of people the word ‘marriage’ was something that invokes very powerful traditions, religious beliefs and so forth.”

Now, he said, “it is important for me personally to go ahead and affirm that same-sex couples should be able to get married.

We here at Davidow, Davidow, Siegel & Stern agree with this decision and will keep you posted on further developments.

Source:   www.msn.com, May 31, 2012, Msnbc.com’s Miranda Leitsinger and Jim Gold and The Associated Press contributed to this report.

What are you waiting for?

Let's say you have a child with "special needs," or a sister, brother, mother or other family member. You have not created a special needs trust as part of your own estate plan. Why not?
We know why not. We have heard pretty much all the explanations and excuses. Here are a few, and some thoughts we would like you to consider:
I don't have enough money to justify a special needs trust. Really? You don't have $2,000? Because that's all you have to leave to your child outside a special needs trust to mess with their SSI and Medicaid eligibility.
I can't afford to pay for the special needs trust. We apologize that it can be expensive to get good legal help. But the cost of preparing a special needs trust for your child is likely to be way, way less than the cost of providing a couple of months of care. That is what is likely to happen if you die without having created a special needs trust, since it will take several months of legal maneuvering to get an alternative plan in place. Even if there is no loss of benefits, the cost of fixing the problem after your death will be several times that of getting a good plan in place now.
I've already named my child as beneficiary on my life insurance/retirement account/annuity. Ah, yes – our favorite alternative to good planning. If your child is named directly as beneficiary, you may have avoided probate but complicated the eligibility picture. Their loss of benefits will occur immediately on your death, rather than waiting the month or two it would have taken to get the probate process underway. This just might be the worst plan of all.
It'll all be found money to my kids. I'll let them take care of it if I die. We have bad news for you: "if" is not the right word here. That aside, you should understand that a failure to plan means you are stuck with what's called the law of "intestate succession." That means that everything will go to some combination of your spouse and children – state rules vary slightly on this subject. If your child on public benefits gets a share of your estate, he will probably need to either (a) spend it all quickly or (b) put it into a "self-settled" special needs trust. That means higher cost to set the trust up, more restrictions on what the money can be used for, and a mandatory provision that the trust pays back Medicaid costs when your child dies. The Medicaid repayment requirement applies to all of the Medicaid benefits your child received during his lifetime, including anything Medicaid has provided before your death. Wouldn't you like to avoid that result? It's simple: just see your special needs planning lawyer about a "third-party" special needs trust. The rules are so much more flexible if you plan in advance.
My child gets Social Security Disability Insurance (or Childhood Disability Benefits) and Medicare. Good argument. Because those programs are not sensitive to assets or income, your child might not need a special needs trust as much as a child who received Supplemental Security Income (SSI) and Medicaid. But keep these four things in mind:

1.     Even someone who gets most of their benefits from SSDI and Medicare might qualify for some Medicaid benefits, like premium assistance and subsidies for deductibles and co-payments. Failure to set up a special needs trust might affect them, even if not as much as another person who receives, say, SSI and Medicaid.

2.     Future changes in both Medicare and Social Security might result in reduced benefits for someone who has assets or income outside a special needs trust.

3.     Your child's living arrangements may change dramatically after your death. Community living arrangements are often paid for or subsidized by Medicaid, and not by Medicare.

4.     If your child has a disability, it might be that some kind of a trust is needed for management of the inheritance you leave him. If he is unable to manage money himself the alternative is a court-controlled conservatorship (or, in some states, guardianship). That can be expensive and constraining. Good trust planning, with a lawyer who can figure out which benefits rules are relevant, is worth the expense.

I'm young. We agree. And we agree that it's not too likely that you will die in the next, say, five years (that's about the useful life of your estate plan, though your special needs trust will probably be fine for longer than that). But "not too likely" is not the same as "it can't happen." You cut down your salt and calories because your doctor told you it'd be a good idea – even though your high blood pressure isn't too likely to kill you in the next five years, either. We're here to tell you that it's time to address the need for a special needs trust.
I'm going to disinherit my child who receives public benefits and leave everything to his older brother. That will probably work. "Probably" is the key word here. Is her older brother married? Does he drive a car? Is he independently wealthy? These questions are important because leaving everything to your older child means you are subjecting the entire inheritance to his spouse, creditors, and whims. And have you thought out what will happen if he dies before his sister, leaving your entire inheritance to his wife or kids? Will they feel the same obligation to take care of your vulnerable child that he does?
I'll get to it. Soon. OK. When?
I don't like lawyers. We do understand this objection. Some days we're not too fond of them, either. But they are in a long list of people we'd rather not have to deal with but do: doctors, auto mechanics, veterinarians, pest control people, parking monitors. We understand, though, that if we avoid our doctor when we are sick the result will not be positive. Same for the auto mechanic when our car needs attention. Also for the vet and all the rest. In fact, the only one we probably could avoid altogether is the barista, and we refuse to stay away on principle.
Seriously – lawyers are like other professionals. We listen to your needs, desires and information, and we give you our best advice about what you should do (and how we can help). Most of us really like people. In fact, all of us involved with the Special Needs Alliance really like people – it's a membership requirement. We want to help, and we have some specialized expertise that we can use to assist you. Give us a chance to show you that is true.


Source:  The Voice, Official Newsletter of Special Needs Alliance, April 2012, Volume 6, Issue 6.

How to Select an In-Home Aide

Studies show that older Americans want to remain in their homes for as long as possible – even when they are struggling. For growing numbers of elders – and concerned family members – the solution to their struggle is a home aide.

If your family is considering hiring an aide, the first decision is what type of aide you need.  There are two basic choices: a home health aide or a home care aide.   Home health care aides provide personal care (bathing, grooming, etc.); assist with range-of-motion exercises and provide some medically-related care (empty colostomy bags, dress dry wounds, check blood pressure, etc.); and provide assistance with housekeeping and errands.  They are often referred to as personal care assistants.  Home care aides provide companionship and socialization and assist with meal preparation, housecleaning, laundry, shopping and errands.  They are also called homemaker or chore aides.
“The level of care the person requires determines who should be providing the home care and what it will cost,” says Mary Hujer, MSN, a gerontological clinical nurse specialist in Cleveland, Ohio.

Getting Started
Before beginning the search for an aide, download the National Caregiver Library’s Needs Assessment Checklist.  Not only will it help you determine the level of care a loved one needs, it will also help you write the aide’s job description.  In addition, it may inform the decision of whether to hire independently or through an agency. 

With an agency, the aide has been screened and trained, and they will be supervised, explains Byron Cordes, LCSW, a certified care manager and the current president of the National Association of Professional Geriatric Care Managers.   But, Cordes adds, there are other benefits of hiring through an agency: “Clients have access to all the resources the agency has.  They have back-up if the scheduled caregiver can’t be there and the agency handles all the administrative responsibilities – reimbursement forms, payroll, taxes, workers’ compensation, insurance, and background checks and bonding of the employee.”
Hiring independently means you will be doing the screening and interviewing, supervision, coordination of care and all administrative paperwork.  But, says Hujer, it also means you are able to hire someone – a friend or relative—who may already know the person, “so the trust factor is higher…and you will usually be paying less, too.”

To locate potential candidates, “cast a wide net,” says Hujer.  Get suggestions from the older person’s primary care physician or nurse; the local hospital’s social work department; local social service and/or disease-specific organizations; your community’s office on aging or senior center; the older person’s minister or rabbi; and/or friends and neighbors who have previously used a home aide.

Source:  www.elderlaw.us, Browning, Meyer & Ball Col, LPA

NEW YORK STATE BAR ASSOCIATION UPDATE - Trusts & Estates Law

On Tuesday, March 27th, the New York State Legislature voted to repeal the regulations utilizing an expanded definition of "estate" for Medicaid recovery purposes.  As a result, the prior definition of estate recovery, which limited estate recovery to only those assets included within the individuals's estate and passing under the terms of a valid will or by intestacy, is back in effect.  


Additionally, the proposed elimination of spousal refusal has been rejected.  This is a major triumph for our client and all who contributed to the effort.

Source:  www.nysba.org

QUESTIONS HELP TELL MEMORY LOSS FROM DEMENTIA

Researchers found that a simple questionnaire can help differentiate individuals experiencing normal age-related memory loss from those likely to be developing dementia.

Note that those who often repeated questions, statements, and stories on the same day also were at very high risk for the development of amnestic mild cognitive impairment.

A simple questionnaire can help differentiate individuals experiencing normal age-related memory loss from those at risk for developing dementia, most notably by their orientation to time and patterns of repetitive speech, researchers found.

On the 21-item Alzheimer's Questionnaire, patients having trouble remembering the day, month, year, and time of day were almost 18 times more likely to have amnestic mild cognitive impairment, a precursor to dementia, according to Michael Malek-Ahmadi, MSPH, and colleagues from the Banner Sun Health Research Institute in Sun City, Ariz.

Those who often repeated questions, statements, and stories on the same day also were at very high risk, the researchers reported online in BMC Geriatrics.

Distinguishing mild cognitive impairment, particularly when associated with memory loss rather than loss of other functional domains, can be clinically challenging and time consuming, and brief screening tools are sorely needed as the aging population expands, according to the researchers.

"Additionally, as new therapies for Alzheimer's disease transition from being symptomatic to disease-modifying, identifying individuals who are at risk or in the earliest stages of the disease will be crucial in determining and improving disease outcome," they wrote.

A pilot study by these researchers recently showed good sensitivity and specificity for the Alzheimer's Questionnaire, with responses about various aspects of memory and related cognitive concerns being provided by caregivers or other informants.

To see if certain components of the questionnaire were particularly accurate in pinpointing these types of impairments, Malek-Ahmadi's group compared responses among 47 patients who had been diagnosed with amnestic mild cognitive impairment and 51 controls who were participants in a program involving posthumous brain and body donation.

The diagnosis of cognitive impairment had been made clinically and with neuropsychological testing, with scores on verbal memory recall measures falling 1.5 standard deviations below normal ranges for age and educational attainment.

Cognitively normal participants all scored higher than 1.5 standard deviations on the neuropsychological tests.

The Alzheimer's Questionnaire assesses memory, language, orientation, visuospatial competence, and functional capacity by a series of yes/no questions such as, "Does the patient have trouble remembering to take medications?"

On almost all questions, significantly more "yes" responses were seen for the cognitive impairment group.

Regression analysis determined that, along with repetitive speech and disorientation as to time, two other questions were highly predictive.

One was whether the patient has trouble dealing with financial matters such as paying bills, and the second was if the patient showed an impaired sense of direction, according to the researchers.

Further analysis indicated that the four identified items could account for a substantial proportion of the variance between patients with amnestic mild cognitive impairment and those who were cognitively normal.

"These data indicate that problems with orientation to time, repeating statements and questions, difficulty managing finances, and trouble with visuospatial orientation may accompany memory deficits in amnestic mild cognitive impairment," the researchers stated.

Source:  Nancy Walsh, MedPage Today, 2/212


UPDATE:  Once again, Spousal Refusal is on the New York State budget chopping block.  There is a current proposal in the budget bill that, if becomes law, would make the use of Spousal Refusal available ONLY to those with absent spouses.  Although these proposals are not law at this time, the window to use certain planning techniques is apparently closing.  With these impending restrictions looming, advance planning is needed now more than ever.  Stay tuned!

Trusts and Trust Taxation

Two Categories of Trusts: Revocable and Irrevocable Revocable Trusts A revocable trust is a trust which can be revoked or amended by its creator at any time and without anyone's consent. Of course, the creator of the trust retains the unrestricted control of the trust assets so long as he or she is competent. After the creator's death, the trust usually continues for traditional estate planning purposes. When planning for a family member with special needs, his or her parent(s) or other relatives often create a revocable special needs trust but expect to delay funding until the creator's death. The trust creator may declare the trust irrevocable at any time and may even provide for an automatic shift to irrevocable status under a specific circumstance, such as funding by someone other than the trust creator. Revocable trusts give the creator significant flexibility to address changes in the lives of those expected to be involved in the future administration of the trust. Irrevocable Trusts Irrevocable trusts are the other (and more commonly used) category of trusts used in special needs estate planning. The primary characteristics of an irrevocable trust are that the creator cannot amend the provisions of the trust and cannot spend trust funds for the benefit of anyone other than the beneficiary unless the terms of the trust document specifically authorize it. Sometimes the trust document grants the trustee a limited right to amend certain provisions if changes in the beneficiary's life justify or require an amendment. For example, this need could be triggered by the beneficiary moving to another state with different laws or policies, or by changes in trust, tax, or public benefits law. SNTs created by and funded with the assets of the parents, grandparents or other relatives are called "third-party" SNTs, whether they are irrevocable at the time of creation or become irrevocable later. SNTs funded with assets of the beneficiary are called "first-party," "self-settled" or "Medicaid payback" trusts and must be irrevocable from the beginning. First-party trusts can receive and hold any assets of the beneficiary, such as his or her injury settlement funds and gifts and inheritances left directly to the beneficiary. Whether a first- or third-party irrevocable SNT, the creator is prevented from accessing the funds unless those funds are to be spent for the benefit of the trust beneficiary according to the trust's terms. Trust Taxation Family members should have a general understanding of the basic income tax rules that will apply to the trusts they create for their loved ones. Where is the trust's income reported? Who is responsible for the payment of tax on the trust's income? The remainder of this article addresses questions like these. Revocable Trusts Revocable trusts are the simplest of all trust arrangements from an income tax standpoint. Any income generated by a revocable trust is taxable to the trust's creator (who is often also referred to as a settlor, trustor, or grantor) during the trust creator's lifetime. This is because the trust's creator retains full control over the terms of the trust and the assets contained within it. Typically during the creator's lifetime, the taxpayer identification number of the trust will be the creator's Social Security number. All items of income, deduction and credit will be reported on the creator's personal income tax return, and no return will be filed for the trust itself. Revocable trusts are considered "grantor" trusts for income tax purposes. One could think of them as being invisible to the IRS and state taxing authorities. Grantor trusts are discussed in more detail below. Irrevocable Trusts Most irrevocable trusts have their own separate tax identification numbers, which means that the IRS and state taxing authorities have a record of the existence of these trusts. Income of a trust that has a tax identification number is reported to that tax identification number with a Form 1099, and a trust reports its income and deductions for federal income tax purposes annually on Form 1041. There are two primary taxation categories of irrevocable SNTs: (1) grantor trusts and (2) non-grantor trusts. Grantor Trusts If a trust is considered a grantor trust for income tax purposes, all items of income, deduction and credit are not taxed at the trust level, but rather are reported on the personal income tax return of the individual who is considered the grantor of the trust for income tax purposes. The concept of who is the grantor can sometimes be confusing, especially in the context of a first-party SNT. For income tax purposes, the grantor is the individual who contributed the funds to the trust, not necessarily the person who signs the trust as the creator. Generally all first-party trusts (those funded established with the beneficiary's own assets) are considered grantor trusts for income tax purposes and so all of the items of income, deduction and credit will be reportable on the beneficiary's personal income tax return. Third-party SNTs can also be created as grantor trusts, as sometimes the creator of the third-party SNT wants to remain responsible for payment of the income taxes during his or her lifetime. In those instances the creator of the trust retains certain rights which cause the trust to be treated as a grantor trust for income tax purposes. At the time the creator of the trust passes away or otherwise relinquishes the rights causing the trust to be a grantor trust, the trust's income will no longer be taxable to the grantor, and the trust will no longer be considered a grantor trust. Non-Grantor Trusts When a trust doesn't qualify as a grantor trust for income tax purposes, how is the trust taxed and who pays the taxes on the income? To the extent the trustee of a non-grantor trust pays expenditures on behalf of the beneficiary of the trust, the trust receives a deduction, and all or a portion of the trust's income will be taxed to the beneficiary. This relates to a provision in the Internal Revenue Code that states distributions to or for the benefit of a non-grantor trust beneficiary carry out income to that beneficiary. For example, if in 2012 a taxable trust generated $3,000 of interest and dividend income, and the trustee made distributions of $5,000 for the benefit of the beneficiary in 2012, all of the $3,000 of income would be treated as having been passed out to the beneficiary and thus taxable to the beneficiary on his or her personal income tax return. Though at first blush this may not seem ideal, in many cases the result is good because the beneficiary, earning little or no income, is in a low income tax bracket. The beneficiary will often have his or her own personal exemption ($3,800 for federal income tax purposes in 2012), and in many cases the standard deduction available for individual taxpayers ($5,950 in 2012). Unless the beneficiary has other sources of taxable income, the only trust income ultimately taxable to the beneficiary will be the amount of income that exceeds the total of the beneficiary's standard deduction and personal exemption. By contrast, to the extent that trust income is not distributed to or expended on behalf of the beneficiary in a given year (or by March 5th of the following year), that retained income is taxed to the trust. Using the same example above, if a taxable trust generated $3,000 of income in 2012, and only $1,000 was expended on the trust beneficiary in 2012, $1,000 of income will be passed out and taxable to the trust beneficiary, but the remaining $2,000 of income will be taxable at the trust level. Dramatic Differences in Tax Rates Understanding the income tax treatment of taxable trusts is important because trusts have highly compressed tax brackets. For 2012, trusts reach the highest federal tax bracket of 35% at taxable income of $11,650 (except for capital gains, which are taxable at a lower rate). By comparison, the tax rate for single taxpayers on taxable income of $11,650 is only 15%. The highest federal tax bracket of 35% does not apply to most individual taxpayers until their taxable income reaches $388,350. In addition, many states also tax the income of trusts. Exemptions Taxable trusts have a very small exemption of only $100. (If the trust requires that all income be distributed annually, the exemption is $300, but a SNT should not have such a requirement.) If the third-party SNT and its beneficiary meet certain requirements, the trust can be considered a Qualified Disability Trust (QDT) for federal income tax purposes and allowed a larger exemption. The next issue of The Voice will discuss the QDT, the higher federal income exemption QDTs are allowed, and when a third-party SNT can or should be drafted as a QDT. Conclusion Family members and the professionals helping them often fail to consider and discuss the various options available in establishing a SNT and how choices affect the taxation of the trust. Being aware of the income tax aspects of these commonly used estate planning tools can help the attorney and client make choices that can minimize the federal and state income taxes payable at different stages of the trust's existence. Failing to consider these consequences may result in unintended contributions being made to the IRS. As one can glean from this article, trust taxation is a complex but very important topic. Families and trustees need to work with a practitioner who has both knowledge and experience with SNTs and trust taxation. Source:  www.specialneedsalliance.com