WASHINGTON UPDATE  

It is the goal of EAGLE PUBLISHING COMPANY to keep our publications fresh and up to date. To do so we will print changes in the law and corrections to the book that have come to our attention after the book has gone to print. 

 

THE WASHINGTON STAND-ALONE ESTATE TAX
 Prior to May 17, 2005, the Washington State Estate Tax was based on the federal Estate Tax. No Estate Tax was paid to the state of Washington unless the decedent’s Taxable Estate exceeded the federal Tax Exclusion Amount then in effect. With the federal Estate Tax scheduled to be phased out in 2010, the state of Washington amended its Estate Tax Code creating a Stand-Alone State Estate Tax. Under the new code, Estates that exceed $1,500,000 are taxable for those dying in before January 1, 2006 and $2,000,000 for those dying after that date  (RCW 83.100.020).

The Web site for the Washington State Department of Social & Health Services has been changed to http://wwwl.dshs.wa.gov

TRANSFER OF WAGES

An Affidavit can be used to transfer the decedent’s final wages to his spouse, provided no one has been appointed as Personal Representative, and the wages are not greater than $2,500. In 2005, the amount that can be transferred for an employee of the state of Washington was raised to $10,500.

 

Updates to Guiding Those Left Behind in Washington

NOTE: The following changes to the GUIDING book are current through 2004.  See the 2005 edition for changes after that date.

CHAPTER 1: VA Pamphlet 051-000-00228-8 FEDERAL BENEFITS FOR VETERANS AND DEPENDENTS now costs $7, however you can download it without charge: http://www.va.gov.

CHAPTER 1: The telephone number for the Arlington National Cemetery is (703) 607-8585. 

The number for the Funeral & Cemetery Licensing program has been changed to (360) 664-1555.

Chapter 2: The number for information about COBRA has been changed to (866) 444-3272 

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

The number for the Office of the Insurance Commission has been changed to (800) 562-6900.  Out of state call (360) 725-7080.

The number for the Funeral & Cemetery Licensing program has been changed to (360) 664-1555

CHANGE IN ANNUAL GIFT TAX EXCLUSION FROM $10,000 TO $11,000 (PAGE 37)

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:

YEAR ESTATE TAX EXCLUSION AMOUNT
2004-2005 $1,500,000
2006-2008 $2,000,000
2009 $3,500,000

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.

CHAPTER 6: TRANSFER OF WAGES
An Affidavit can be used to transfer the decedent’s final wages to his spouse, provided no one has been appointed as Personal Representative, and the wages are not greater than $2,500. In 2005, the amount that can be transferred for an employee of the state of Washington was raised to $10,500.

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.

An important billing question is whether the health care provider agreed to accept Medicare assignment, meaning that they agreed to accept the Medicare-approved amount. If so, the patient is responsible for the coinsurance (usually 20% of the approved amount) and any deductible amount. Doctors and health care providers who do not accept assignment, are limited in the amount they can charge for a Medicare covered service. The highest they can charge is 15% over the Medicare-approved amount. This Limiting Charge applies only to certain services and does not apply to supplies and equipment.
If all of this appears confusing, it is.

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.

NOTE: A doctor or supplier can give the patient an Advance Beneficiary Notice that says Medicare probably will not pay for a service. If the decedent received such notice and signed an agreement saying he wants the service and agrees to pay for it, then if he received the service, his estate is now liable to pay that debt.

 

 

Update to A Will Is Not Enough In Washington

CHAPTER 9: MEDICARE UPDATE
The 2006 figures for a stay in a skilled nursing facility (i.e., a nursing home) under the Original Medicare Plan are as follows:
You pay nothing for the first 20 days of skilled nursing care and $119 for days 21-100; i.e., you pay up to $9,520 for the next 80 days of a stay in a skilled nursing facility.
You are responsible for all costs thereafter.

The 2007 Medicare value for a stay in a skilled nursing facility for days 21 through 100 is $124 per day.

CHAPTER 10: 
The Web site for the Washington State Department of Social & Health Services has been changed to http://wwwl.dshs.wa.gov

The 2006 values set by the federal government are as follows:

The maximum Community Spouse Resource Allowance is $99,540

The minimum Community Spouse Resource Allowance is $19,908.

The Monthly Maintenance Needs Allowance is $2,488.50.

CHANGES MADE BY CONGRESS IN 2006
Congress passed the following changes to the Medicaid law:
FIVE YEAR LOOK BACK
The Look-back period is extended from three years to five years.

PENALTY PERIOD STARTS WHEN YOU APPLY
Under the prior Medicaid law the Penalty Period started from the day the transfer was made. Under the new law the Penalty Period begins on the day the Applicant applies for Medicaid, meaning that the Penalty clock doesn’t start ticking till the Applicant actually applies. For example, if a person makes an uncompensated transfer during the five year period before he applies for Medicaid, the Penalty Period will begin as of the day he applies for Medicaid.

HOMESTEAD WITH EQUITY OF $500,000 OR MORE
 If the equity in the Applicant’s home (current market value less mortgages and liens) is equal to $500,000 or more, he will not be eligible to receive Medicaid benefits. States are given the option of increasing this value to $750,000 or more.

 These changes need to be adopted by the states, so it may take several months before these laws are put into effect.

Check with an Elder Law attorney to determine the status of the Medicaid law in Washington.