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An Overview of Medi-Cal Benefits

Medi-Cal is the primary source of medical insurance coverage for more than thirteen million California residents. Or, viewed another way, a third of the Golden State’s population. Low-income families rely on Medi-Cal for access to healthcare services. Also, seniors, people with disabilities, and expectant mothers can often qualify for this insurance coverage as well. The following article is a general overview of Medi-Cal benefits and eligibility.

Medi-Cal Eligibility

There are certain factors that determine whether or not you qualify for Medi-Cal benefits. For instance, there are financial parameters to consider that are based on your income and family size.

You may also qualify for Medi-Cal benefits if you are:

  • Blind
  • A senior citizen
  • Pregnant
  • Under the age of 21
  • In a skilled nursing home or intermediate care home
  • The parent or guardian of an eligible child
  • Claiming refugee status
  • In need of the (Breast and Cervical Cancer Treatment Program)

Additionally, if you’re currently enrolled in any of the following programs, you’re also eligible for Medi-Cal benefits:

  • CalFresh
  • SSI/SSP
  • CalWorks (AFDC)
  • Refugee Assistance
  • Foster Care or Adoption Assistance Program

Overview of Medi-Cal Benefits

Medi-Cal can be used to access essential healthcare services that would otherwise be unavailable to an individual. This can include things like prescription drug coverage, emergency services, including hospitalization, laboratory tests, and preventative care. If you have a chronic condition that requires careful monitoring, then Medi-Cal benefits can help mitigate the costly nature of managing such conditions. There are a wide range of services made available through Med-Cal. For instance, mental health and substance abuse services, and physical and occupational therapy. And finally, Medi-Cal benefits also provide access to prenatal and newborn care, as well as pediatric services that include oral and vision care that covers important things like regular teeth cleanings. You can use your medical card in case of an emergency, too, or if you’re involved in an accident.

Are Medi-Cal Benefits Right For You?

If you’re a senior, you may qualify for Medi-Cal benefits. The advantage of this is that it covers some services that aren’t included under Medicare, such as skilled-nursing-facility benefits and other important elderly needs. Learn more today by calling Lewman Law at (925) 447-1250, or learn more by clicking here.

Filed under Estate Planning Tips

Clarification to November 2020 Newsletter

In our efforts to quickly provide you with the most up to date information on the potential tax ramifications stemming from these unique election events, we did not include the 2018 update of the Tax Cuts and Jobs Act (TCJA) limiting Section 1031 like-kind exchanges to real property.  

Under current law, exchanges of real property used in a business, trade, or investment enjoy Section 1031 like-kind exchange treatment, whereas, as a result of the change made by the TCJA, like-kind exchanges of personal or intangible property are now a taxable event. A transition rule allowed for like-kind treatment in some exchanges of personal property if the taxpayer disposed of the personal or intangible property before the law went into effect. Please note that it will not constitute a like-kind exchange when the real property is held primarily for sale.  

Now that more states have declared Joe Biden as the President-elect, we will continue to keep you updated on his proposed tax plan and laws that will impact you.  

Interested to Learn More?

Our sincerest apologies for any inconvenience or confusion this may have caused. If you have questions about estate planning, please contact us at Lewman Law by calling (925) 447-1250.

Filed under Estate Planning Tips, Uncategorized

Election Update: Planning Under the Biden Administration

After several days of counting ballots, Joe Biden has been declared the winner of the 2020 Presidential election by many major news outlets. Although we await the official certification of the election by each state, an official concession by President Trump, and the outcome of several pending lawsuits–which could take us into December or even January–the 2020 election and its aftermath promise significant changes in how Americans will be taxed. While it is unlikely that every proposal discussed during President-Elect Biden’s campaign will become the law of the land, we can still glean essential details from all the campaign rhetoric to help us prepare to weather these possible changes.

Proposed Policy Adjustments Under a Biden Presidency

Here is what we know so far about some of President-Elect Biden’s key proposals that are most relevant to your estate planning:

Estate, Gift, and Generation-Skipping Transfer (GST) Taxes

For 2020, the estate and gift tax exemption is set at $11.58 million (indexed for inflation), with any wealth over that amount taxed at 40 percent as it passes to heirs. This exemption amount is scheduled to be lowered in 2025 to $5 million (also indexed for inflation) unless new legislation is passed before then.

President-Elect Biden suggested during his campaign that he would support legislation that would reduce both the estate and GST tax exemptions to $3.5 million per individual and would lower the lifetime gift tax exemption to $1 million. President-Elect Biden has discussed other proposed legislation, favorably proposed by Senator Bernie Sanders, that aims to place annual, aggregate donor limits on gifts to certain types of entities such as irrevocable life insurance trusts and certain pass-through entities such as family limited partnerships.

In addition to reduced transfer tax exemption amounts, several Democratic tax reform proposals have suggested returning estate tax rates to historical norms. What does that mean? In the 1940s, the top estate tax rate was 77 percent, and under 2001 federal tax law, it was as high as 45-55 percent. As a result, we may well see an upward adjustment in the estate and gift tax rates.

Capital Gains Taxes

Our current law taxes capital gains as regular income if those gains are realized on property held for less than one year. For long-term capital gains (gains on property held for a year or longer), there is a graduated tax rate depending upon the tax filer’s income level (0 percent, 15 percent, or 20 percent). For individuals and couples who earn more than $200,000 and $250,000 per year respectively in net investment income, there is an additional 3.8 percent surtax added to their capital gains tax rate.

The current law also allows for a step-up in basis of appreciated property if the property is held until the owner dies. This allows for inherited property to be sold or liquidated shortly after the owner’s death with little to no capital gains taxes assessed on the sale of the property.

Today’s law also allows for like-kind exchanges on appreciated property such as artwork and rental properties. This allows people to reinvest the gains that they earn on appreciated property into similar types of property without ever having to pay capital gains taxes when the property is sold. If the individual keeps making such like-kind exchanges on appreciated property until the individual’s death, the capital gains built up in that property will be erased by the basis step-up rules.

Proposed changes under a Biden presidency would either (1) eliminate the step-up basis rule for inherited property and impose a carryover basis rule for inherited property or (2) impose recognition of gain on property at the owner’s death. Additionally, the Biden tax plan proposes eliminating like-kind exchanges and imposing a 39.6 percent long-term capital gains tax rate on individuals earning more than $1 million per year. And if the 3.8 percent surtax on net investment income remains in place, the effective federal tax rate on long-term capital gains could exceed 43 percent.

If these changes are implemented along with the changes to the estate tax laws discussed above, many estates could see significant tax bills at the death of the estate owner.

What to Do in the Meantime

Although it may be too early to know exactly what the tax laws will look like in 2021, we can still take some concrete steps to prepare while we wait for answers. Tax issues, while certainly important, should not overshadow the need to get your affairs in order in case of an untimely death or disability. If it has been some time since you reviewed your estate planning documents such as wills, trusts, powers of attorney, and healthcare directives, now is a great time to do so. Reviewing these important aspects of your estate planning can go a long way toward creating peace and security for you and your loved ones in these uncertain times.

We are Here to Help

No one knows for sure what the future holds for our country. However, what is certain is that we will continue to monitor the latest tax law developments closely and keep you updated as they unfold. In the meantime, if you have any questions or concerns, please do not hesitate to contact us at (925) 447-1250. We are here for you.

Filed under Estate Planning Tips, Uncategorized

3 Reasons to Plan Your Estate When Starting a Business

If you have business partners, one of the most important details is to establish an estate plan for your shared business. No one can predict the future, so make sure that the business you’re investing so much time and money in has clear terms. You need to plan your estate to ensure that, in the event of your death, all of your affairs are in order and properly carried out.

Most business owners decide to take this extra step, but the estate planning process requires the help of a skilled lawyer to protect your company from potential financial losses. Things become more complex when, for example, you have children you want to include in your estate plan. So, here are three top reasons to plan your estate when starting a business.

Buy-Sell Agreements

If you aren’t the only owner of the business, a buy-sell agreement is a precaution worth learning more about. In the event that something were to happen to one of the partners, a buy-share agreement allows the remaining owners to purchase the business shares. Or, they can pass to the deceased or disabled partner’s heir. Having a plan in place can make unforeseen transitions easier to manage for everyone involved, and also help to prevent conflict.

Leave a Legacy

When you have an estate plan, you can rest assured that your business is taken care of by qualified people who have the best interests of your company at heart. It’s important to have a succession plan if you’re the sole owner. In this document you can specify things like your preferences for how the business is operated or sold.

A Living Trust

You may wish to plan your estate to include a living trust. A living trust is separate from your will and can help to keep your business assets out of the court system. This is because the assets you place in a living will aren’t subject to probate. There are a number of advantages to this, from privacy to cutting down on legal fees and estate taxes.

Plan Your Estate

The estate planning process isn’t something that can be completed overnight. You’ll need the help of an experienced lawyer to guide you through the process. When you’re ready to learn more about planning your estate, contact Lewman Law by calling (925) 447-1250. In the meantime, feel free to browse our testimonials by clicking here.

Filed under Estate Planning Tips