View Cart []Pre-Planned Funerals as Part of Medicaid Planning
Joining us this week in our first of many guest interviews is Julie Graf-Skinner at Busch Funeral Homes. Today, she will be discussing the importance of pre-planning funerals as part of a Medicaid
The End of Step-up Basis?
The Possible Loss of Step-up Basis A step-up in basis, or more accurately, a basis adjustment, has been a cornerstone of many estate plans throughout the years. Let’s take a look at what a basis adjustment is, how a step-up in basis works, and some recent news about its possible demise. The basis of property is a tax term and it is the amount that someone paid for it. If that property is later sold, capital gains or losses must be reported. This would be an amount taxed on the difference of the original basis amount and the amount of the sales price. However, a basis adjustment occurs when the property is inherited. Meaning, the beneficiary of that property receives it with a basis of its current fair market value instead of its original purchase price. Let’s look at an example. Nancy bought stock in XYZ Corp. in 1970. She paid $100,000 for it. It is now worth $500,000. If she sold it this year, she would have to pay capital gains tax on the $400,000 profit. Instead, if Nancy died this year and her son inherited the property, he would take the property with a basis of $500,000. He received a step-up in basis. Nancy’s son could then sell the property at its fair market value of $500,000 with no capital gains tax due. A basis adjustment can even be preserved in irrevocable trust planning. In our intentionally defective grantor trust, a basis adjustment is achieved via reserving a limited power of appointment. Per Treasury Regulation
Essential Services Beyond Legal Elder Care Planning
In the next four weeks, we will be posting a mini-series of guests who can help those who are taking care of a loved one. Check out our guest lineup in this
What are Federal Benefits for Veterans, Dependents and Survivors?
What are Federal Benefits for Veterans, Dependents and
New Medicaid Case Law from New Jersey
New Case Law: How to Transfer your Home Without Penalty Qualifying for long-term care Medicaid can be tricky. There are strict asset and income limits. Elder law attorneys help clients get qualified for Medicaid using variety of strategies. Some of these strategies revolve around how to plan for the client’s home. In most states (Ohio), the home is an exempt asset if the client has an intent to return home. The home is also exempt if there is a community spouse, disabled or blind child, or child under the age of 21 still living in the home. However, planning is still sometimes sought in these situations to avoid estate recovery. One planning technique is to transfer the home to a child caretaker. This planning strategy is the result of 42 U.S.C. § 1396p(c)(2), which states: 42 U.S. Code § 2F1396p(c)(2): “(2)An individual shall not be ineligible for medical assistance by reason of paragraph (1) to the extent that— (A)the assets transferred were a home and title to the home was transferred to— … (iv)a son or daughter of such individual (other than a child described in clause (ii)) who was residing in such individual’s home for a period of at least two years immediately before the date the individual becomes an institutionalized individual, and who (as determined by the State) provided care to such individual which
Have a Question? Submit It!
If you have a question about Medicare, Medicaid, Estate Planning, or Veteran's benefits, contact us
More Mistakes to Avoid When Planning Your Estate
Estate planning can seem like a big job, with lots of documents and moving parts. But it is so important to have one put together! We have a few blogs on our website about the most common estate planning mistakes, but here are a few
Top Mistakes of Estate Planning
There are many mistakes that can be made when planning an estate, but the biggest mistake is not having a plan!
What is the Medicaid 5 Year Look Back?
The 5 year lookback is simply a 5 audit of your assets and what has been given away. To be eligible for Medicaid, the individual can't have assets over the limit that Medicaid
Medicaid Eligibility When You Have a Spouse in a Nursing Home
If you are married, and either you or your spouse have to move into a nursing home, Medicaid eligibility can become hard to manage. There are so many moving parts within Medicaid, especially for a married couple.
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