Hello from the Chair Scott M. Nelson
At the end of March, our Section sponsored a luncheon CLE entitled “Elder Victims: Abused, Exploited, Alone,” which featured a panel put together by Derrick Doerr. This issue is growing exponentially with the demographics and wealth of the current elder generation, and needs to get increased attention from the professions most likely to encounter this population.
Efforts will continue to be made to identify and assist those most in need. Aside from the medical profession, lawyers, bankers and notary publics are most likely to encounter the victims prior to the abuse being reported. We need to look for the signs of abuse, and recognize that the victim frequently is not able or willing to come forward. I heard recently that they estimate that only about 1 in 5 cases are ever discovered or reported. As a profession, we also need to recognize that not only is this a crime against the individual, but it tears at the fabric of our society. Persons 65 years of age and older represented 13% of the population in 2008, but the estimates of illegal or improper use of their funds, property or assets were estimated to be at least $2.6 billion in 2008. In one state, there was a 94% increase in reports of elder abuse to local departments of social services over the prior decade.
Financial abuse is regarded as the third most commonly substantiated type of elder abuse, following neglect and emotional/psychological abuse. It often occurs in community or institutional settings, accounting for 30-50% of all forms of elder abuse. Unfortunately the other suspect group is family. As we meet with our elderly clients, we need to be sensitive to the signs of any form of abuse. Resources cited in a video that was viewed at the CLE included www.safemn.org, and Senior Linkage Line at 1-800-333-2433. In addition, Kim Dayton, Professor of Law at William Mitchell College of Law and Director of the Center for Elder Justice and Policy mentioned a new app, which has been developed by her students entitled MN S.A.F.E. Elders.
Our next CLE is scheduled for May 6, 2014 at Dorsey & Whitney, and will feature a presentation on working with clients with diminished capacity. Teleconferencing will again be available.
Registration is coming in strong for the annual Probate & Trust Law Section Conference to be held again at RiverCentre on June 2 & 3, 2014. We expect it will draw close to 800 professionals. You can access conference information and registration at the Minnesota CLE website, www.minncle.org under the seminar tab. The conference will feature a strong slate of national and local speakers, including an added presentation from Terry Slye and Jennifer Lammers on the changes to Minnesota gift and estate taxes, and QTIP drafting and portability issues.
At its last meeting in March, the Council voted to keep our dues for the 2014-2015 fiscal year the same as they were this year. We hope that you will renew when the time comes this summer, and encourage others to join.
By now, most of you are aware of the tax bill signed by the Governor on Friday, March 21, conforming several of the individual middle class tax provisions to federal law, retroactive for 2013 returns. In addition to middle class tax relief, we also saw retroactive repeal of the Minnesota gift tax, and adoption of an increased estate tax exemption, which will be phased in and increased to $2 million by 2018. There is a possibility of some other technical corrections and revisions to our estate tax law when the legislature agrees on an omnibus tax bill later this session. Stay tuned.
As we have mentioned, if you have articles that you would be interested in submitting for our Section’s members, please feel free to submit them to our editors, David Joyslin and Jen Santini.
Wills for Heroes
The following clinics are still in need of volunteers:
- Monday, April 28, 2014 – Hanover Fire Department
- Monday, May 12, 2014 – Litchfield Fire Department
For those interested in volunteering, to sign up for any of those clinics or for more information on Wills For Heroes, please contact Andrea Bischoff (firstname.lastname@example.org) or Susan Link (email@example.com) or visit http://www2.mnbar.org/willsforheroes/index.asp.
To make a tax-deductible donation directly to the program – you can do so at: http://www2.mnbar.org/willsforheroes/Donate.asp.
Upcoming Events and CLE Programs
- Greater MN Probate & Trust Study Group Conference Call
- Wednesday, April 16, 2014 at 9 a.m.
- Call-in Number: (800) 406-9170 passcode: 1491722
- Contact either Bradley Hanson (320-251-1414 ext. 1119) or JoEllen Doebbert (320-763-7838) with any questions or to join the group.
- MSBA Probate & Trust Law Section Monthly Meeting
- Thursday, April 17, 2014 at 3:30 p.m.
- Location: MSBA Offices
- Call-in Number: (800) 406-9170 passcode: 1491722
Federal & Minnesota State Tax Update
By: Joe Higgins
Briggs and Morgan, P.A.
On March 21, 2014, a new tax law relating to the Minnesota estate and gift tax was approved and signed. The new law made the following changes to the Minnesota estate and gift tax:
Minnesota Gift Tax. The new law repeals the Minnesota state gift tax that was enacted in May 2013 and applied to gifts made after June 30, 2013. The repeal is made retroactive to the inception of the gift tax. As a result, donors who made a taxable gift after June 30, 2013 will not have to file a Minnesota gift tax return.
Minnesota Estate Tax. The new law makes several changes to the Minnesota estate tax:
- Effective Date. The estate tax changes are effective retroactively for estates of decedents dying in 2014, even those who died before the enactment of the law.
- Minnesota Estate Tax Exemption. The new law gradually increases the Minnesota estate tax exemption over a five year period as follows:
- 2014: $1.2 million
2015: $1.4 million
2016: $1.6 million
2017: $1.8 million
2018 and thereafter: $2.0 million
- Simplified Tax Calculation Method. Calculating Minnesota estate tax under the old law required two separate calculations, one of which was based on federal estate tax laws that were repealed in 2001. The new law creates a new method, which stands alone and does not require use of the old federal provisions. The law also eliminates the possibility that some smaller estates would pay substantially higher marginal rates of tax than larger estates.
- Minnesota QTIP Marital Deduction Election. With limited exceptions, the state of Minnesota did not previously allow an estate to make a QTIP marital deduction election for Minnesota estate tax purposes unless a comparable election was made on a filed federal estate tax return. The new law now authorizes a QTIP marital deduction election to be made for Minnesota estate tax purposes regardless of whether the election is made for federal estate tax purposes.
- Non-Minnesota Resident's Ownership of a Pass-Through Entity. In 2013, the legislature added a provision affecting non-Minnesota residents owning any interest in a "pass-through entity" which owned certain assets, such as real or tangible personal property located in Minnesota. For purposes of this provision, the pass-through entity included electing S-corporations, entities taxed as partnerships, single member LLCs or similar entities, and certain trusts. The new law creates a new exclusion, so that Minnesota property held within a company sold on a regulated public exchange will not be pulled back into a non-Minnesota resident's estate in Minnesota. This provision applies to estates of decedents dying after December 31, 2013.
Joe Higgins is an associate at Briggs and Morgan, P.A. Joe is based in the firm’s St. Paul office and is a member of the Estate Planning and Administration Section where he focuses his practice in estate planning, trust and estate administration, and nonprofit law. Joe is admitted to practice before Minnesota, Wisconsin and Florida state courts.
Charitable Donations NOT a Factor in Residency for Income Tax Purposes
By: Myron Frans
Minnesota Revenue Commissioner
Written for the Minnesota Council of Nonprofits’ 2014 Spring Edition of Nonprofit News.
Newsletter Committee Co-Chairs: David Joyslin and Jennifer Santini
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