Climate Change Bill Brings a Bright Spot of Good News for Americans

We welcome any good news in a dismal news cycle, but the healthcare provisions built into the “Inflation Reduction Act” are worth a special mention.

The New York Times calls it “the most substantial changes to health policy since the passage of Obamacare in 2010.”

Passed by the U.S. Senate on August 8 and expected to pass in the House of Representatives on August 12, President Biden says he is looking forward to signing the bill into law. Here’s what we are looking forward to:

What seniors have needed for decades: giving Medicare the power to negotiate directly with pharmaceutical companies to reduce the astronomical costs charged for many drugs seniors need to stay alive and healthy.

The bill, beginning in 2025, sets a cap of $2,000 yearly for how much seniors pay for drugs. After reaching the cap, funds will come from the federal government, private insurers, and drug companies.

Federal subsidies for people who buy private health insurance through the Obama exchanges will be extended for three additional years, as they were during the coronavirus pandemic. For example, someone who pays about $80 in premiums will continue to pay that amount. These costs would double in 2023 without the bill.

Adult vaccines will be free starting in 2023 for seniors and people on Medicaid.

The bill uses federal subsidies to reduce the cost of health insurance and prescription drugs, insidious economic difficulties suffered by middle class and senior Americans.

Many benefits of this bill may not be evident to the people they help, as they are not visible directly. For instance, people won’t see large medical bills and may not be fully aware of free vaccines. But for the millions of Americans, particularly seniors, who struggle to pay for their prescription medications, the bill will be life-changing.

By design, the legislation will pay for itself and reduce the federal deficit over time while cutting prescription drug costs for the elderly and tightening enforcement on taxes for corporations and the wealthy.

It sounds like good news to us.

Football’s Hall of Fame and Estate Law Changes Both Moving to the End Zone

The Pro Football Hall of Fame recently announced the finalists for the Class of 2022, and it occurred to me that estate law legislation is a lot like the Pro Football HOF. The list is announced, some fall by the wayside, but eventually, fifteen names make it and the number of bronze statues in Canton, Ohio increase.

Federal lawmakers work in the same way. We have a long history of laws being delayed, revised, failing to get passed on the first and even the second go-round. For example, the carry-over basis laws put into place in 1976 were repealed, then added back. The child-care credit took four times to make it into law.

Just because the changes regarding the carry-over basis and other laws that will impact estate and tax planning didn’t make it through in 2021, don’t count them out just yet.

I’m advising clients to act now, because when these laws do eventually pass (and I believe many of them will), it will be too late to take advantage of the current laws.

That includes the mega-Roth IRA, which was created as a means of encouraging regular Americans to save for retirement and bloomed into a way for wealthy Americans to tuck away millions, or billions, in accounts with no requirements for withdrawals and no taxes due on withdrawals (taxes are paid when the money is contributed to the account).

We were concerned in December 2020 that Congress would enact retroactive changes, which may happen for taxes, but not for estate and gift taxes, which are rarely retroactive. Logistics make it near impossible. When the law changes regarding estate and gift taxes, the IRS has to get forms and tables to millions of practitioners. Even when everything is online, it does not happen fast enough. Taxpayers and executors would run into countless complexities, like filing a final tax return within in the nine-month period allotted and then having to file an amended return—possibly more than once.

If you really want something to worry about, some legislation contains the phrase “effective on enactment,” which means the minute President Biden’s pen is lifted, the law is in effect and must be complied with. But estate planning matters are pretty complex, and lawmakers know it takes time to prepare for changes.

Greek philosopher Heraclitus said change is the only constant in life. This applies to Congress as well.

Stephen J. Silverberg Named a Top Business Leader by Prominent Nassau Publisher

I am honored to be named to Blank Slate Media’s first Top Business Leaders of Nassau County Award and invite you to join me on Thursday, February 18, at 7 PM for a virtual awards event with Michael Dowling, CEO of Northwell Health as a fellow honoree and keynote speaker.

As if being honored along with Michael Dowling wasn’t enough, I am pleased to find myself in such good company. Other local luminaries being honored that night include:

  • Stuart Rabinowitz, President, Hofstra University
  • Andrew Malekoff, CEO North Shore Child and Family Guidance Center
  • Michael N. Rosenblut, President & CEO, Parker Jewish Institute
  • Jeffrey L. Reynolds, President & CEO, Family and Children’s Association
  • Phil Palumbo, Founder, CEO, Palumbo Wealth Management
  • Jan Burman, President, The Engel Burman Group
  • Edward Blumenfeld, President & Founder, Blumenfeld Development Group
  • Richard Kessel, Chairman, Nassau County IDA/LEAC

We were asked about the business impact of the pandemic in March 2020 when the state placed all but essential services on “pause.”

We transitioned to remote work smoothly, as our firm’s management, document storage, and communications systems were all internet and cloud-based even before the pandemic, allowing attorneys and staff to work in the office, at home, or anywhere. Investing in technology has always been a high value at the firm, and clients benefited from our ability to keep working without interruption. Since returning to the office, we have followed all CDC guidelines, including masks and sterilization requirements.

To see the complete list of honorees and register for this virtual event, click here.

To see the journal for this event, click here.

We hope to “see” you on Thursday, February 18!

Estate Planning Tells Them You Really Care

Another box of chocolates, another dozen roses, but after Valentine’s Day has been and done, and these are fleeting moments. What is not fleeting is an estate plan, which may not sound romantic until considering how much an estate plan shows your love.

We’re not kidding.

An estate plan includes a will. That gives your loved ones security, in knowing you have planned for their well-being after you are gone. A surviving spouse will know what your intentions are and, if they are named the executor, be able to put your plan into effect.

Without a will, your surviving spouse and family members must go to court and an extensive process to determine what happens to your assets. The time and expense in settling your estate far exceed the cost of a proper will.

An estate plan also includes trusts. A trust can be either created while you are living or in your will. The use of trusts can prove essential to protecting your family from outside claims such as healthcare costs and marital and creditor claims. It is a great kindness, ensuring that your loved ones can access assets (depending upon the terms of the trust) and have one less pile of paperwork to deal with.

An estate plan addresses taxes. While most Americans do not come near today’s current federal estate tax exemption of $11.7 million per person, odds are the estate tax exemption will soon be reduced to somewhere between $3.5 million to $5 million. This will cause a tenfold increase in taxable estates. And there are state taxes to deal with and taxes on certain inherited assets. Creating a comprehensive estate plan address tax issues, including retirement accounts and real property. Tax planning could make a significant difference in the quality of life for your surviving spouse.

Estate plans include documents that protect you and your family while you are living. A health care proxy will give your loved ones the ability to decide on your behalf if you are severely sick and cannot communicate your wishes. An Advance Directive will clarify your wishes for end-of-life care.

Think of the stress alleviated if your spouse need not play guessing games about what you want to happen. And the years of guilt if they decide in haste and during the high emotions of your illness without knowing what you wanted.

A few other steps to take to complete your estate plan:

  • Review your power of attorney to make sure it is still current and valid.
  • Review your life insurance beneficiary designations.
  • Review all accounts with beneficiary designations to ensure you still want the people named to receive your assets.

You can always go out to dinner or send your true love a gift. But the gift of an estate plan demonstrates love in a much deeper way – by showing your loved ones you care enough about their lives when you are not with them.

Medicare requires a specific form or it won't provide information

Power of Attorney is Not Enough for Medicare

A power of attorney is usually enough to take charge of a loved one’s financial and medical matters when they become incapacitated. But with Medicare, you need more than a POA.  Many people learn this the hard way. It is a problem that can be easily solved and will save you and your loved ones a great deal of trouble.

A refresher:

  • A Financial Power of Attorney (POA) allows you to name a person handle your financial and legal affairs if you are incapacitated.
  • The Medical POA allows the named person to make critical medical decisions on your behalf.
  • You must sign both of these documents while you are of sound mind and able to decide on your own.

Medicare does not care about your POAs. Medicare requires you to use its form to give a family member permission to discuss your condition, treatments, coverage issues, manage claims, and file appeals. Without it, Medicare will not speak to a family member – even a spouse. You need to do this at once if you or your loved one has enrolled in Medicare. The form is available online (https://www.cms.gov/Medicare/CMS-Forms/CMS-Forms/Downloads/CMS10106.pdf.

And there’s more.  You will need separate authorizations for any other Medicare benefits, including Medicare Advantage, Part D prescription drugs, and Medicare supplement plans. It is further complicated since they all have separate authorization forms. Although they do the same thing, they often have different names. The forms are needed to authorize a personal representative to speak with plan administrators about claims and coverage.

These are challenging times when we don’t know what’s coming next. We can’t stop everything, but we can prepare.