Maryland Business and Estate Law Firm

From Mark Pallack, New York Life

Suspension of the 2009 Required Minimum Distribution (RMD) requirement

President George W. Bush recently signed H.R 7327, the “Worker, Retiree and Employer Recovery Act of 2008.” One of the provisions of the bill suspends the Required Minimum Distribution (RMD) requirements applicable to qualified retirement accounts, such as IRAs and TSAs, for 2009.

Due to this legislation, IRA and TSA owners who are age 70 ½ or older and inherited IRA owners are not required to take an RMD for 2009. This also includes any clients who first become RMD eligible in 2009. However, please be aware that this provision does not apply to any 2008 RMD that is permitted to be made in 2009 because the individual’s required beginning date is April 1, 2009. These individuals will still need to take their 2008 RMD by April 1, 2009.

If you or your clients have a previously established RMD Periodic Partial Withdrawal disbursement arrangement, the companies will continue to honor these payment requests. Any individuals or clients who wish to suspend their RMD PPW arrangement for 2009 will need to contact their respective financial advisor.

Domestic Partner Update

Effective 7/1/08, Maryland’s Health Care statutes were revised to recognize Domestic Partnerships.  These revisions legislate the rights of domestic partners to visit their partner in a health care facility and elevates domestic partners to the rights of a spouse to act as one’ health care agent. 

This change not only impacts same-sex couples, but unmarried opposite-sex couples who qualify as domestic partners.  Legally, a domestic partnership is a relationship between two people who are not related to each other, are not married or in a civil union or in a domestic partnership with someone else, and who agree to be in a relationship of mutual interdependence in which each contributes to the maintenance and support of the other, although they are not required to contribute equally.

2009 Gift Tax Exclusion

 Effective January 1, 2009, each individual can gift up to $13,000 tax free to any other individual, an increase from the previous $12,000 Gift Tax Exclusion.

This increase means that more wealth (including LLC interests and closely held stock) can be transferred for estate tax planning purposes. For example, a married couple with two married children will be able to give away up to $104,000 in 2009 with no gift tax implications. (2 x 4 x $13,000).

 To discuss other ways of moving funds to your family or friends in order to reduce the effects of estate taxes, Contact a Maryland Estate Planning Lawyer.