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If the spouse had not been named the owner but was named beneficiary, he or she could have left the account in the decedent''s name, and taken the earnings out without paying income tax or penalties. free tax forms 1040 tax form. The IRS recently announced that it will allow owners to amend their beneficiary designation choices. If you wish to do so, or if you are not sure whether you need to, feel free to call us to discuss your particular estate plan. NEW LEGISLATION CHANGES PENNSYLVANIA POWER OF ATTORNEYGovernor Ridge recently signed new legislation that makes many changes to the Pennsylvania statutes governing powers of attorney. free tax forms 2002 federal income tax tables. Under the new law, the person holding the power is referred to as the "agent" rather than the "attorney-in-fact. " While not substantively significant, this more properly reflects the principal/agent relationship that is created when a power of attorney is executed. More substantive changes involve new rules on the power of an agent to make gifts on behalf of the principal and certain added requirements to the execution of the power of attorney. free tax forms Free tax return. From a tax standpoint, a power of attorney can be a useful device to reduce estate tax by allowing the agent to make gifts for a disabled person. Under the new law, an authorization in a power of attorney "to make gifts" will now be interpreted to authorize gifts not to exceed the $10,000 annual exclusion amount of the principal and his or her spouse. The statute also limits the parties to whom the agent may make such gifts to certain family members. A person who wishes to give his or her agent the power to make gifts in excess of the annual exclusion amounts or to persons other than the statutorily defined group must specifically grant such a power in the document. The new statute directs that a power of attorney must include a statement on the front of the power signed by the principal stating that he or she is aware of the effect of the power and a statement at the end signed by the agent that he or she understands the fiduciary nature of the relationship. Failure to attach the statement signed by the principal will not render the power of attorney invalid. However, if questioned, the agent will be required to prove that the power was properly granted and thus make it difficult to use the power effectively. Failure to attach the statement signed by the agent will render the power of attorney ineffective. Does this mean that you should execute new powers of attorney? No. The new law applies to all powers of attorney executed after April 12, 2000. However, as banks and other institutions become aware of the new requirements, powers executed under the old statute may become more and more difficult to use. Therefore, you should consider executing new powers of attorney as part of your next estate planning review. Of course, if you wish to act sooner, we are ready to help. THE TOTAL RETURN TRUSTIn today''s investment environment, income yields are at historic lows while appreciation in stock values soars.
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