Business Times – Winter 2013

THERE ARE TWO SPECIAL OPPORTUNITIES THAT EXPIRE AT THE END OF THIS MONTH.

1. You can make a direct distribution between now and January 31, 2013 from your IRA to a charity and then elect to have that distribution considered to have been made on December 31, 2012.
2. If you received your IRA required minimum distribution in December 2012 and you made or will make a cash gift to a charity between the December receipt of your distribution and January 31, 2013, your gift will qualify as a direct IRA transfer for the 2012 calendar year to the extent it does not exceed the amount of the distribution you received.

Please keep in mind the following points as you consider a direct IRA transfer to a charity.

• You must be 70 ½ or older on the date of transfer.
• The total maximum distribution per person is $100,000.
• Distributions can be made only from a traditional or Roth IRA.  Other retirement plans, such as pensions, 401(k) plans, and other similar plans are not eligible.
• The distribution must go directly to the charity from your IRA administrator.
• There is no charitable deduction, but the amount sent to the charity is excluded from your adjusted gross income, is not subject to gift limitations, and is not taxed when received by the charity.

This is only a brief summary.  If you wish to pursue this, please contact us for additional information and details.

SCHOLTEN FANT ESTATE PLANNING GROUP

Also the bill includes a continuation of the portability rule which expired December 31, 2012. This rule allows the unused exemption at the death of the first spouse to be transferred to the surviving spouse. This means spouses will have a total combined exemption of $10,000,000, which can be utilized without the need for a trust to be established at the death of the first spouse or a need to split assets between spouses.

The changes are being characterized as “permanent.” This just means there is no expiration date, as has been previously the case for all estate tax law changes from 2000 on. Amendment of the estate tax law at a later date is still always possible.

If these changes had not been made, beginning this year the exemption would have become $1,000,000 per person and the estate tax rate would have been as high as 55%.

In the coming weeks we will be reviewing and analyzing the fine print in the bill. We then plan to be in contact with you by letter if we conclude your estate planning should be reviewed and/or revised to take account of the tax bill. In the meantime, if you have questions, please call.

As always, if you have had significant family or financial changes since we last worked with you on your estate planning, please contact us.  Also, we suggest a review every three to five years.

Scholten Fant Estate Planning Group

For now, here is what schools need to know: Undocumented youth applying for this deferred action need proof of certain requirements, such as enrollment in or graduation from school, and a continuous presence in the United States for five years.  Students may ask a school for assistance in proving some of these requirements through school records.

Some of the items a school may provide include the following: school issued photo identification; school transcripts or report cards showing the name of the school and time period of attendance; high school diploma or GED certificate.  Other items that may be helpful could include awards or recognitions provided by the school that contain the name of the school, student, and date. Original or certified documents are not necessary unless specifically requested by U.S. Citizenship and Immigration Services.

If you have questions on turning over certain records, what you can and cannot do for the student, and how FERPA applies, please contact one of our school law attorneys.

A power of attorney is an instrument given by an individual (the “principal”) to a designated agent (or “attorney-in-fact”) which allows the agent to act on behalf of the principal, such as the authority to manage the principal’s business and financial affairs, including banking matters, signing a deed, making investments, paying bills, etc. DPOAs are typically utilized when a principal is incapacitated or unable to act on his/her own.

The new requirements do not apply to DPOAs signed prior to October 1, 2012. However, even if you have an pre-existing power of attorney, banks and other financial institutions may nevertheless require your designated agent to sign an acknowledgement of his/her duties and responsibilities.

In addition, the law exempts certain specific types of powers of attorney from the new requirements, including powers of attorney which are given for a business or commercial purpose, executed as a part of a loan agreement, or those which relate to health care decisions for the principal (which are governed under a separate law).

If you have any questions regarding these changes in the law, an existing power of attorney, or whether you should execute a new power of attorney, please contact any one of Scholten Fant’s experienced estate planning attorneys.

Michael L. Bevins passed away on August 3, 2012, at the age of 54, after a courageous battle with cancer. His family includes his parents, John (Sandy) Blair of Sparta, GA; his daughter, Brie Rantala of El Paso, TX; his granddaughter, Bella Coleman; his sister, Marlene (Rick) Jackson of Duluth, GA; his brother, Mark (Becky) Willman of Savanna, GA; his fiancée, Mary Pollock of Holland; his nieces and nephews, Kim, Amie, Nathan, Stephen, Ian, and Devin; several grand-nieces and nephews; and his beloved companions, Amber and Jack.

A service will be held at 1 p.m. on Thursday, August 9, at the Clock Chapel-Grand Haven with Rev. Ben Jansen officiating. Visitation will be held from 2 to 4 p.m. and 7 to 9 p.m. on Wednesday at Clock Life Story Funeral Home – Grand Haven. Memorials may be made to the American Cancer Society-Research or the Hospice.  For more information we provide the following link:  http://www.lifestorynet.com/memories/82331

Bruce P. Rissi, age 59, passed away at The Poppen House in Muskegon, MI on Saturday, July 14, 2012. Bruce was born on December 27, 1952 and was a resident of Whitehall, MI. He is survived by his wife of 27 years, Valerie K. Rissi; one daughter, Connie (Dan) Sparrow; two sons, Jacob and James (Mitch) Rissi; two granddaughters, Madeline and Mckenzie; two grandsons, Nathan and Corbin; three brothers and one sister, Charles (Gloria) Rissi, Paul (Gayle) Rissi, Donn (Debby) Rissi, Marie Coffey (Jerry); and numerous extended family members and friends. In lieu of flowers, memorial gifts may be directed to The Community Foundation for Muskegon County, 425 W. Western Ave., Ste 200, Muskegon, MI 49440 where the ‘Rissi Glioblastoma’ fund has been established to honor Bruce’s life. A memorial tribute will be held on Monday, July 23, 2012 at 8:00 P.M. at the Duck Lake Channel on Scenic Dr., located 1/2 mile north of Duck Lake Rd. in Whitehall, MI.

On April 2, the Ingham County Circuit Court issued a preliminary injunction which halted Act 53’s “immediate effect” while judicial challenges to it were pending.  Therefore, the Act’s prohibition against the deduction of union dues became inapplicable, at least temporarily.

Most recently, however, on April 9, the Michigan Court of Appeals overturned the Ingham County Circuit Court’s preliminary injunction and reinstated Act 53’s “immediate effect,” while judicial challenges and appeals are pending.  Therefore, public school employers should once again refrain from the payroll deduction of union dues or service fees unless obligated to do so pursuant to an existing and unexpired CBA.

There will obviously be further developments as the pending litigation progresses.  If you have questions regarding this evolving issue in the meantime, however, please contact one of our school law attorneys.

While the new law takes immediate effect, there is a provision that allows a public school employer to continue to collect union dues and service fees pursuant to a collective bargaining agreement that was in effect on March 16, 2012, up until that collective bargaining agreement expires, or is terminated, extended or renewed.

For school districts in the process of negotiating an expired contract, the school district should immediately cease collecting dues or service fees under the expired contract. This should be accomplished with the next payroll process following March 16, 2012. The school district should also consider giving the union prior notice of its intent to comply with the law as a matter of common professional courtesy.

Please note the prohibition on collecting union dues will likely be subjected to a legal challenge, especially since it singles out schools as opposed to being applied to all public employers. We’ll keep you posted on the outcome of any such legal challenge.

If you have any questions regarding the effects of this new law, or any other school law issue, please contact one of our school law attorneys.