m

MACRS Back to Top

Modified Accelerated Cost Recovery System. See Accelerated Cost Recovery System.

Marital Deduction Back to Top

Where you and your spouse are legally married, either of you can transfer an unlimited amount of assets to the other without incurring any gift or estate tax cost. This is too often used as a simplistic approach to eliminate the entire estate tax on the death of the first of you or your wife.

Marriage Penalty Back to Top

The tax cost affecting married couples, as compared to the tax cost applicable to two unmarried single taxpayers, is called the marriage penalty.

Mass Affluent Back to Top

Mass Affluent is a term used by some to describe investors with $500,000 to $3 million of investment assets. Although it is at best a generalization it might be safe to assume that these investors typically have estates valued at between $1 million to $5 million. From an investment perspective people in this class reach the point where they might want more tailored and personal investment planning than just mutual funds used by the mass public. Often at this range investors are into the minimum levels of investment assets which financial planners, wealth managers and private banks will personally manage and tailor a portfolio. From an estate planning perspective, these investors should evlaute hiring more specialized estate planners, consider by pass and other trusts, comprehensive powers of attorney to permit gifts and more sophisticated investment decisions, and insurance trusts. At this stage of wealth a larger term insurance policy, which is likely to be common for younger families in this wealth range, might be enough to trigger a state and even federal estate tax. So the ownership of insurance by a properly structured insurnace trust can be very important. At this stage of wealth, the "mass affluent" should be certain that they have a substantial umbrella, or personal excess liability, insurance policy. Consumers below this threshold often don't, and the mass affluent has more asstes to risk and the mass market often relies on 1-800 or other standardized insurance providers, which is not sufficient for the mass affluent. The challenge for the mass affluent investor in all these areas is that the services, products and decisions needed are more complex and different that the vast majority of the population, but they are just below the threshold of wealth which many of the higher end professionals and advisers have focused on.

Material Participation Back to Top

The passive activity rules create three general types of income

Means tested benefits Back to Top

Means tested benefits– Government benefits that have a financial requirement. You must prove you qualify to the government agency providing benefits. It is vital in SNT planning that the beneficiary not be disqualified. If a trust beneficiary can compel a distribution from the trust, the trust assets will be countable. For example, if you have a first party special needs trust or third party supplemental benefits trust pay rent for the beneficiary with disabilities, you may disqualify the beneficiary since SSI benefits are intended to pay for shelter. If money is used to pay a provider it is treated as in kind. If a trust is established under someone’s Will that disqualifies the beneficiary, all is not lost. You can go to court and try to reform the trust by showing the probable intent of the testator not to disqualify the beneficiary from government benefits.

Medicaid Back to Top

Medicaid – A means tested government medical program. The limit on countable resources varies from as low as $2,000, depending on the specific Medicaid program. Medicaid pays for long-term, custodial type care and includes physician, hospital and prescription coverage. Those with disabilities typically have very high medical bills and Medicaid is a very important resource. In many states, if an individual qualifies for SSI they automatically qualify for Medicaid. So for many individuals with disabilities one of the most important benefits of SSI is that it gets you Medicaid qualification.

Medical Authorization Form Back to Top

The term "medical authorization form" refers to either or both of two documents used to enable medical decisions to be made for you when you cannot. The first is a medical directive or living will. This document is a statement of your health care wishes. See the sample forms on this website. The second document is a health care power of attorney or health care proxy. This latter document authorizes someone, your agent, to act on your behalf to make medical decisions for you when you cannot do so for yourself.

There is a third medical authorization form which was created by the authors of this website, referred to as a child emergency medical form which is intended to deal with medical issues and decision making for your minor child. See the illustrative form in the estate planning section of this website.

For more information see Shenkman and Klein, "Living Wills and Health Care Proxies: Assuring Your End of Life Decisions are Respected", available on www. amazon.com.

Medical Directive Back to Top

See "Living Will". A medical directive or living will, is a document in which you express your health care wishes. While most forms focus on not providing heroic lifesaving measures if you are terminally ill, etc. this document can address (and should!) a wide range of personal health care and related end of life issues: burial or funeral arrangements, living preferences during your last years (e.g., at home versus in a facility), religious beliefs, and more.

Medicare Back to Top

Medicare – For those over age 65 and those under 65 who are disabled who contributed to Social Security system. If you never contributed to Social Security but were disabled prior to age 22 you can collect under a parent’s Social Security. If you collect Social Security disability for two years you qualify for Medicare. It is not means tested (i.e., there are no income or countable resource limits). If the only government benefit you get is Medicare you will not need a SNT. Medicare does not cover long-term custodial care.

Member Back to Top

A Member of an LLC is an owner of part (or in some states, all) of the LLC. A Member in an LLC is analogous to a shareholder in a corporation or a partner in a partnership. Some key characteristics and rights of a Member may be set forth in the LLC's Certificate of Formation. An Operating Agreement should be drafted which provides details as to a Member's rights, liability, etc.

Midmonth Convention Back to Top

To calculate depreciation write-offs for buildings, you are entitled to claim one-half month's worth of depreciation for the month you buy the property and one-half month's worth of depreciation when you sell the property.

Minimum Contacts Back to Top

For a court in a particular state to hear a case, that parties in the case must have sufficient involvement with that state. For example, if a corporation in State Z ships a product to a customer in State A, but has no other involvement in State A -- no employees, no direct advertising, nothing but the single shipment to the customer. Does that one transaction constitute sufficient contacts that it would be reasonable and fair for the courts in State A to hear a suit by the customer against the corporation? If your business, trust or other entity has (or may have) multiple state contacts you should consult with an attorney to determine if you should limit or otherwise control those contacts to avoid suit in a state. Similarly, if you conduct business in a state, you should consult with your attorney to determine if your contacts with that state have risen to the level where your entity should file to become authorized to conduct business in that state.

Minor Back to Top

Person who is not old enough to be an adult under state law. The age varies by state. When drafting a certain trusts consideration should be given to limiting the remainder beneficiaries solely to the adult children of the Grantor. If the trust had to modified or changed, having only adult children (e.g., excluding the common bequest to issue of a deceased child, or heir), and instead providing that in the event a child died prior to the end of the Trust term, the deceased child's siblings would inherit.

Minority Discount Back to Top

If you make a gift of an interest in your LLC, FLP or other entity to your child, the value of the gift must be determined to ascertain whether a gift tax would be due. The gift is generally valued at its fair market value (see above). However, this value may be reduced for a minority discount. This is based on the concept that no person would pay as much for a noncontrolling interest in an asset (such as an LLC) as they would for an interest that is controlling (generally speaking more than 50%).

Minutes Back to Top

When a corporation has a meeting (such as an annual meeting of shareholders or a quarterly meeting of directors) a formal record of the meeting, called minutes, can be prepared and signed. For corporate minutes, these are often stored in formal record book for the corporation called a corporate kit. For many closely held businesses, instead of a formal meeting, a written document is signed called a "consent" is used instead of a meeting.

Partnerships and Limited Liability Companies can also have meetings of partners or member (or general partners or managers) and draft and sign minutes as a record of the agreements or actions.

Minutes Back to Top

Formal records of a meeting of a corporation or other entity. Minutes can address the appointment of officers and directors who manage a corporation. Although not necessary for limited liability companies or other entities, they too may prepare minutes to document certain official entity actions.

Modified Adjusted Gross Income Back to Top

This is your gross income (wages, dividends, rents, and so forth) less adjustments from gross income (business deductions, rental expenses, alimony, moving expenses after 1993, and so forth) plus certain modifications. The modifications depend on the particular use of the modified adjusted gross income. For example, a modified version of adjusted gross income is used to calculate the taxable portion of your Social Security benefits. See Adjusted Gross Income.

Monitor Back to Top

The New York law governing power of attorney permits you, the person signing and establishing a power of attorney, to appoint in that document a person to watch or "monitor" the actions of the agent appointed by you under the power of attorney. The Monitor is given by law the right to ask for a copy of the power of attorney and any documents the agent signed/used to carry out transactions for you. You could go further and authorize the monitor to receive copies of bank and brokerage statements, gift tax returns, etc. Consideration should also be given to indemnifying the person serving as monitor so he/she does not have to be as fearful of a suit. The concept has tremendous merit and could, if used, reduce the incidences of agents abusing powers of attorney. If you don't reside in NY you should discuss the concept of using a monitor in your powers of attorney with your lawyer and he/she might use the NY statute as a model of some of the concepts to use in your document.

Moving Expenses Back to Top

If you have to move to a new home in connection with starting work at a new principal place of work, you may qualify to deduct, as an itemized deduction, a number of expenses of the move. Deductible expenses may include the costs of moving your household goods. To qualify, your new principal place of work must be at least 50 miles farther from your former home than was your former principal place of work.