Most people will qualify for Medicare when they reach the age of 65. This is well and good, but Medicare will not pay for a stay in a nursing home or assisted living community. For this reason, the majority of the long-term care that is received by seniors in the United States is paid for by the Medicaid program. Medicaid Planning Medicaid is a government health insurance program that is jointly administered by the federal government along with each respective state. It is intended to provide …
What Are the Advantages and Disadvantages of a Guardianship?
People are living longer and longer lives, and this is fantastic on the one hand. On the other hand, when you reach an advanced age, incapacity becomes a very real possibility. If you want to be comprehensively prepared, you should take action in advance to brace yourself for possible incapacity late in your life. Guardianship People who are close to you could petition the state to appoint a guardian to act on your behalf if they feel as though you can no longer handle your affairs on your …
Trusts for Estate Tax Efficiency
The federal estate tax can dramatically reduce the wealth that you are passing along to your family members. At the current time the top rate of this tax is 40 percent. This is quite a sizable chunk to be leaving behind to Uncle Sam as a parting gift. The amount of the federal estate tax exclusion is $5.34 million. Only the portion of your estate that exceeds this amount is potentially subject to the federal estate tax. If you intend to transfer assets that exceed this amount, you must …
Do I Pay Taxes When Someone Leaves Me Money?
People invariably have questions when they hear about taxes on inheritances, and this is understandable. In this post we would like to look at transfer taxes and provide some useful background information. Income Tax In general, if you receive an inheritance you are not required to report the bequest as income on your income tax return. However, the situation becomes more complicated if you inherit appreciable assets. This is a matter that you should discuss with a tax lawyer or estate …
When Does a Power of Attorney Become Effective?
Incapacity planning should be part of the equation when you are planning your estate. Of course you want to arrange for the transfer of your monetary assets after you die. But what about the period of time that will precede your passing? You should prepare for latter life contingencies as well. Possible Incapacity Many people become incapacitated to one extent or another before they pass away. If you were to become unable to handle your own financial decision-making, who would act on your …
Do All Trusts Preserve Wealth?
Estate planning for high net worth individuals will involve the implementation of wealth preservation strategies, because the proverbial tax man is standing at the ready prepared to pounce as soon as you pass away. Some people are under the assumption that you are surrendering personal possession of assets once you place them into a trust of any kind. This would lead you to the belief that assets that you have conveyed into a trust would not be counted by the IRS when your estate tax exposure …
Creating a Joint Tenancy With Your Child: Pros & Cons
If you add a joint tenant to the title or deed of your property, this person would become a co-owner. Joint tenancy with right of survivorship allows the surviving joint tenant to inherit the portion of the property that was owned by a deceased joint tenant. This transfer would take place outside of the legal process of probate. Probate provides some useful protections, and the state of New York delivers a streamlined probate process. However, there is no getting around the fact that it is …
How Do You Find an Elder Law Attorney?
Everyone should discuss the future with an elder law attorney. There are certain contingencies that you may face during the latter stages of your life. You may not be aware of the facts, and negative consequences can result if you don't act because of a lack of information. Long-Term Care: Who Needs It? We are all aware of the existence of nursing homes and assisted living communities. However, when you are younger and capable of handling all of your activities of daily living on your own, …
What Is the Cost of Probate?
The process of probate comes into play if you pass away in possession of personally held assets. Most people will use a will to direct the transfer of these assets. If you go this route, the will must be admitted to probate. During the probate process the court will determine the validity of the last will and supervise the administration of the estate. Probate Expenses There are some considerable expenses that can pile up during the probate process. The court will require a filing fee, …
“Green Book” Released; Estate Tax Rate Hike Proposed
Every year the president puts together a proposed budget for the following year that is called "The Green Book." The proposal for 2015 has been released, and this is newsworthy to the estate planning community. Rate Hike In 2018? The proposal targets a number of different areas of the tax code that are relevant to the field of estate planning. For one thing, the proposal would increase the maximum rate of the estate tax. The increase would take effect on the first day of January in 2018. The …
Who Can Create a Power of Attorney?
Powers of attorney are frequently used within the legal field. If you are granting a power of attorney you are called the grantor or principal. As the grantor you empower an agent or attorney-in-fact. This individual could act on your behalf in a legally binding manner. Creating a Power of Attorney Any adult who is of sound mind can technically create a power of attorney. However, we are talking about a legally binding document. The wise course of action would be to retain a licensed lawyer to …
What Is Medicaid?
The Medicaid program is a health insurance safety net for people who have very limited financial resources. If you can prove that your resources are within Medicaid income and asset limits, you can qualify for the program, regardless of your age. Medicare, Medicaid & Senior Citizens Medicare is also a government health insurance program. Unlike Medicaid, Medicare is for the most part intended for senior citizens. (It should be noted that some people with disabilities who are not …
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