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Suffolk County, NY Estate Planning and Elder Law Blog

Friday, January 30, 2015

Joint Accounts and Medicaid

Question: My mother is 85 years old and in good health.  She has $75,000 in a joint bank account.  If she becomes ill and needs Medicaid, will they consider one-half of that account to be mine?  Is there any way she can gift those monies to me and still be eligible for Medicaid if she requires care in a Nursing Home?

Answer: First, to answers your questions, monies held in a joint bank account are presumed to be 100% the property of the applicant unless she can prove that the money was not hers.  Any transfer of that money will create a penalty period during which time your mother will be ineligible for coverage for Nursing Home care through the Medicaid program. It is important to note that there is no look-back when applying for Community Medicaid and therefore a transfer in that instance would not create a penalty.  When, and if, your mother applies for Medicaid, she is only permitted to have $14,550.00 in liquid assets.  She is also permitted to have qualified or “retirement” funds in any amount so long as she is taking a monthly distribution and an irrevocable pre-paid burial account in any amount.  The money in the joint bank account will be deemed 100% belonging to her despite the fact that the account is held jointly with you.  You can overcome that presumption if you are able to prove that you deposited those monies into the account and that they belonged to you prior to the deposit.  As is in most cases, assuming that these funds belong to your mother and your name exists on the account for convenience purpose, the entire account will be considered hers.  If on the other hand, you put $25,000 in the account, you can overcome the presumption by providing the agency with documentation showing that you took $25,000 from your account and transferred it to your mother’s account.   


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Wednesday, January 21, 2015

Transferring Property into a Trust

Question:  My aunt has a home that she purchased in 1980.  It is now worth $300,000.00 and she wants give it to me to protect it from the cost of nursing home care.  Can she just deed it to me?  My lawyer is suggesting a trust.  What is the difference?

Answer:  This is a good question.  If you aunt wants to protect her house, why not just transfer it to you?  The problem is that there may be adverse tax consequences if the real property is transferred to you outright.  First, you would take the property at your aunt’s cost basis.  Given that she purchased it in 1980, her basis is probably quite low.  That means that you would owe capital gains when you eventually sold the property.   In addition, she would no longer be entitled to her capital gains exemption if she sold the property before her death.  Presently, the capital gains exemption is $250,000. 


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Thursday, January 15, 2015

FIDA: You Must Opt Out
Beginning in March 2015, if you are Medicare and Medicaid eligible (dual eligible) in Suffolk County, you will receive a notice alerting you of the option to enroll in a FIDA plan.  FIDA stands for Fully Integrated Duals Advantage.  This is a new health coverage program which will allow you to throw away all your health insurance cards and replace them with one FIDA card. FIDA will cover doctor and hospital visits, medicines, and long term care, including home care and nursing home care and will replace Medicare Parts A, B and D and Medicaid. 
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Monday, January 05, 2015

Taxation of a Decedent

Q: My brother passed away in September 2014, and I was recently appointed Executor of his estate.  I have started to get 1099s for his various financial accounts. I know that tax season is right around the corner and I have to file tax returns, but am not sure what returns need to be filed and when they are due. Could you explain it to me?

A: You are correct that tax returns will have to be filed; the types of returns and when they are required to be filed are explained in greater detail below:


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Friday, January 02, 2015

Update Your Simple Will

Question: My parents are currently in their 80s and still have their Last Will and Testaments which were prepared 40 years ago. The Wills say that everything goes to the surviving spouse and then to their children if the spouse is deceased. Are these Wills still valid? Are there any updates which should be made?

 Answer: Your parents’ Wills are still valid, however, they should consider updating them to take advantage of some new planning techniques. One of the most important provisions which all Wills should incorporate is a trigger “Supplemental Needs Trust.” This is a trust for the benefit of beneficiary who is disabled in order to preserve the inheritance so that the disabled beneficiary can continue to receive their Medicaid or SSI benefits.  The trustee can use the trust assets to provide for the needs of the beneficiary which will supplement, but not supplant, their government benefits. We use the term “trigger” because Wills can be drafted so that the trust only becomes effective if, after the testator’s demise, a beneficiary is disabled and in need of this type of trust. If no beneficiary is disabled, the trust will not be triggered.


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Wednesday, December 24, 2014

Can We Avoid Capital Gains

Question: I am considering creating an Irrevocable Trust to protect my house and other assets, but I am concerned about creating a situation where my children will have to pay Capital Gains tax.

Answer: An "Irrevocable Trust' can offer the creator, often referred to as the  “grantor,” lifetime control over his or her assets, without creating a capital gains issue so long as the trust is a Grantor Trust for income tax purposes.  Certain provisions within the trust create grantor trust status allowing the grantor to maintain his or her tax exclusion if the house is sold during their lifetime and also providing the beneficiaries with a fully stepped up basis and therefore no capital gains tax due at the time of sale.


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Tuesday, December 16, 2014

Consenting to a Probate of a Will

Q: My mother recently passed away and I received something in the mail from an attorney’s office called a “Waiver of Process; Consent to Probate”, what does this document mean?

A: You received this document because the nominated Executor is trying to “probate” your mother’s Will.  Probating a Will means that the nominated Executor is submitting a petition to Surrogate’s Court and asking that the Court issue “letters testamentary” which basically validates the Will and allows the Executor to act.  Most people think that upon death, the Executor is automatically empowered to act.  However, the Executor must first be appointed by the Court.  The Will must be probated in the Surrogate’s Court before the Executor can act for the estate.  The law requires that every person that has an interest in the estate be given notice and an opportunity to object to the Will.  If your mother died without a Will, her spouse and all of her children are “interested parties” and “natural distributees” which means that those parties would inherit from her estate if she died without a Will.


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Monday, December 15, 2014

Not Your Grandmother's Will
If you happen to have a copy of your  parent’s  or grandparent’s Last will & Testament, it is likely that the estate plan was simple- everything to the spouse, then when the second spouse dies, everything to the children. We call these “sweetheart” or “I Love You” Wills.  While these were easy to understand, they did not give much protection to a surviving spouse that might need Medicaid to pay for homecare or nursing home care.  The problem, or maybe the benefit of living longer is that we are likely to live out our last days needing some care.  With the cost of care both at home and in a facility reaching astronomical amounts, putting together a plan to preserve assets is of paramount importance. 
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Friday, December 05, 2014

UTMA and 529 College Accounts

Q:  My parents set up UTMA and 529 College Savings accounts for my children.  I am not sure exactly what effect these accounts have on their financial aid in the future or whose assets they are if my parents need nursing home care.

A: UTMA, or the Uniform Transfer to Minors Act are custodial accounts that are set up by an adult on behalf of a minor. All the money and assets in these types of accounts are turned over to the beneficiary’s control at the age of 21. Once the beneficiary reaches age 21, they can use the funds in any way they choose regardless of your expectations on how the funds should be spent.


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Wednesday, December 03, 2014

Outright Transfer of Home

Question: My friend suggested that I transfer my house to my children in case I need nursing home care in the future. Is this advisable?

Answer:  In almost all cases our answer to this question is no. Your friend is likely suggesting this because she has heard of the five year look-back. The look-back refers to the time period immediately prior to the filing of a Medicaid application.  During this time period the Department of Social Services will review your assets and any transfers that you have made.  To the extent that you have made transfers or have too many assets in your name to qualify, further planning will have to be done in before you can qualify for Chronic Medicaid to cover the cost of Nursing Home care.  Because of the look-back, in some cases, planning and transfer of assets is recommended.


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Monday, November 17, 2014

A DIY Disaster in Estate Planning
As a recent first time homeowner, the phrase “Do It Yourself” or “DIY” takes me back to the late nights this past February of spackling, sanding and painting all of the walls in my house with my husband. We were fortunate that this was the only work that needed to be done. We were also fortunate because there were no structural, electrical or plumbing problems. I say fortunate because we know our limits; we know that we are not equipped or skilled enough to take on major plumbing or electrical projects. I know that it is hard to resist the temptation of trying to save money in the short term by tackling these repairs and projects on your own. However, one has to be realistic about the possibility of a DIY disaster when trying to take on projects that should be left to professionals. This rule applies to home improvement as well as to estate planning.  
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© 2014 Nancy Burner & Associates, P.C.
12 Research Way, East Setauket, NY 11733 | Phone:631-941-3434
82 Main St., Westhampton Beach, NY 11978 | Phone: 631-288-5612
1115 Broadway , Suite 1100, New York, NY 10010 | Phone: 631-941-3434

Attorney Website Design by
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