CHAPTER 3: The Web site for the FAA is http://www.faa.gov.
The telephone number to call is (866) 835-5322.

Virginia law allows people who have possession of the decedent’s personal property to turn the property over to the decedent’s spouse, or if no spouse, then to whoever is entitled to the property under Virginia law, provided the total value of the property transferred in not greater than $15,000. The beneficiary can get possession of the item by giving the person who holds the property a SMALL ESTATES AFFIDAVIT.

LOST INSURANCE POLICIES (CHAPTER 2)
The American Council of Life Insurers does not assist in locating lost insurance policies, but they do offers suggestions about how to find a policy at the Missing Policy Inquiry page of their Web site     http://www.acli.com

MAY 2001:  CHANGE IN ESTATE TAX (CHAPTER 2)
Both the federal and state government have the right to impose an Estate Tax on property transferred to a beneficiary as a result of the death. All the property owned as of the date of death becomes the decedent’s Taxable Estate. This includes real property (homestead, vacant lots, etc.) and personal property (cars, life insurance policies, business interests, securities, IRA accounts, etc.). It includes property held in the decedent’s name alone, as well as property that he held jointly or in Trust. It also includes gifts given by the decedent during his lifetime that exceeded $10,000 per person, per year. That value (the Annual Gift Tax Exclusion) is now based on the cost of living index and for 2002 is increased to $11,000. For most of us, this is not a concern because no federal Estate Tax need be paid unless the decedent’s Taxable Estate exceeds the Estate Tax Exclusion amount. That value is currently one million dollars and is scheduled to go even higher:

There is an unlimited marital tax deduction for property transferred to the surviving spouse; so in most cases, no Estate tax need be paid if the decedent was married. Regardless of whether taxes are due, federal and state Estate tax returns must be filed whenever the decedent’s Estate exceeds the Exclusion Amount in effect as of his date of death. The law as passed in May, 2001 phases out Estate taxes for the year 2010, but the law is effective only until December 31, 2010. If lawmakers do nothing, then in 2011, the Federal Estate Tax goes back into effect; and estates that exceed one million dollars will once again be subject to Estate taxes. And that is not the only uncertainty. Each state has its own Estate Tax structure. It remains to be seen how each state will react to the Federal change. Some states may follow the lead of the Federal government and increase the Exclusion amount in the same manner. Other states may see this as an opportunity to "pick up the slack" i.e., to have a lesser Exclusion value, so that Estate taxes will now be paid to the state instead of the Federal government.

THE UN-UNIFIED GIFT TAX
Up until the year 2002, if you gave someone more than $10,000 in any given year you had to report that gift to the IRS. The Annual Gift Tax Exclusion is now adjusted for the cost of living and is $11,000 for the year 2002. The IRS keeps a running count of amounts that you give over the Annual Gift Tax Exclusion. Although you are required to report the gift, no tax need be paid unless that running total is more than the federal Estate Tax Exclusion amount. If your running total does not exceed that amount during your lifetime, once you die, the cumulative value of gifts reported to the IRS will be added to your Taxable Estate. Up until the change in the tax law in 2001, the Gift and Estate tax were unified. No Gift Tax needed to be paid unless the total value of the taxable gifts exceeded the federal Estate Tax Exclusion amount. That changes in 2004. In 2004, the Estate Tax Exclusion amount goes up to $1,500,000, but the amount for the Gift Tax Exclusion remains at $1,000,000, so they are no longer unified.

Up to 2009, there is no limit to amount you can take as a step-up in basis. But in 2010 caps are set in place. The surviving spouse is allowed to take a step-up in basis of up to 4.3 million dollars. Property inherited by anyone else is allowed a 1.3 million dollar step-up in basis. Significant Capital Gains taxes could result. For example, suppose in 2010 you inherit a business from your father that he purchased for $100,000 and it is now worth 2 million dollars. There is a capital gains of 1.9 million dollars, but you are allowed a step-up in basis of only 1.3 million. $600,000 of your inheritance is subject to a Capital Gains tax. No one knows how the new law will be applied in 2010, but it could well be that the Capital Gains tax turns out to be the same as, if not more than, what you would have paid in Estate Taxes, before they were "phased out."

CHAPTER 4 2004 MEDICARE UP-DATE
There are many new changes in the Medicare system.

MEDICAL BILLS COVERED BY INSURANCE
If the decedent had health insurance you may receive an invoice stamped "THIS IS NOT A BILL." This means the health care provider has submitted the bill to the decedent’s health insurance company and expects to be paid by them. If the decedent was receiving Medicare, you will receive a Medicare Summary Notice listing all of the services or supplies that were billed to Medicare for the prior 30 days. In some areas of the country, you can get a copy of the decedent’s Medicare Summary Notice from the Internet: http://www.medicare.gov

HOW TO CHECK MEDICARE BILLING
The structure of Medicare has been changed giving people in some parts of the country, the option of staying with the Original Medicare Plan or choosing one of the Medicare + Choice Plans. Coverage differs depending on which plan is chosen. If the decedent was covered by Medicare, you need to determine whether he was covered under the Original Medicare Plan, or whether he chose a Medicare + Choice Plan. The publication Medicare and You explains coverage under the different options. See Chapter 2 to obtain a copy of the booklet.

To check the decedent’s Medicare billing, you first need to determine whether he was in the Original Medicare Plan or in one of the Medicare + Choice Plans. The Medicare and You booklet explains what is covered under the Original Medicare Plan. You will need a copy of the contract for the Medicare + Choice Plans to determine what is covered under that plan.  If the decedent was in the Original Medicare Plan, you need to determine whether the health care provider accepted assignment; and if not whether the Limiting Charge applies to the services provided. Finally if assignment is accepted or the Limiting Charge applies, you need to determine the Medicare-approved amount.