Placing your home into an irrevocable trust may cause you to lose any tax abatements you may currently receive. Additionally, if you have recorded a homestead on your primary residence and then subsequently transfer your home into an irrevocable trust, you may lose the protection afforded by the homestead. Also, if you currently have a mortgage on your property, it may technically become due upon transferring the property into an irrevocable trust. Finally, we recommend that you inform your insurance company that your trust is the owner of your home. Your insurance company should change the home owner’s policy to reflect that an irrevocable trust is the new owner.
As always please contact us if you have any questions regarding your irrevocable trust or future Masshealth issues.
Friday, July 31, 2009
Thursday, July 30, 2009
Probate issues with Irrevocable Trust
Any property held in an irrevocable trust will avoid the probate process and pass directly to the beneficiaries named in your trust. Should you ever wish to change the beneficiaries of the irrevocable trust, please contact our office so we can assist you further.
Contact your Elder Law Attorney in Boston, Cohen & Oalican, LLP
Contact your Elder Law Attorney in Boston, Cohen & Oalican, LLP
Saturday, July 25, 2009
Tax consequences of an Irrevocable Trust
An irrevocable trust is written so that if your home or other appreciated assets are sold after your death, your heirs will receive what is called a “step-up” in the tax basis. This means that the ultimate beneficiaries of the irrevocable trust will pay little or no capital gains taxes if they decide to sell property after your death. If your primary residence is owned by an irrevocable trust and it is sold while you are alive, you will be able to utilize your $250,000, or $500,000 in the case of couples, capital gains exclusion.
An irrevocable trust property will be included in your taxable estate. A Massachusetts estate tax will only be owed upon the surviving spouse’s death if your total estate (including the irrevocable trust's assets) exceed $1 million.
If you have only placed real estate into your irrevocable trust, you can continue to file your annual income taxes as you have in the past. Accordingly, you will not need a new tax identification number for the irrevocable trust. Further, you will still be able to claim any deductions related to your home on your taxes.
If you have placed liquid assets into your trust, you will need to apply for a new tax identification number (EIN) and file an annual trust tax return. An irrevocable trust is drafted so that all the income earned on the irrevocable trust's assets will be taxable to you. You should contact your accountant who will need to complete the necessary tax forms for the irrevocable trust.
Pulbished by Cohen & Oalican, LLC Special Needs Trusts Attorneys in Boston
An irrevocable trust property will be included in your taxable estate. A Massachusetts estate tax will only be owed upon the surviving spouse’s death if your total estate (including the irrevocable trust's assets) exceed $1 million.
If you have only placed real estate into your irrevocable trust, you can continue to file your annual income taxes as you have in the past. Accordingly, you will not need a new tax identification number for the irrevocable trust. Further, you will still be able to claim any deductions related to your home on your taxes.
If you have placed liquid assets into your trust, you will need to apply for a new tax identification number (EIN) and file an annual trust tax return. An irrevocable trust is drafted so that all the income earned on the irrevocable trust's assets will be taxable to you. You should contact your accountant who will need to complete the necessary tax forms for the irrevocable trust.
Pulbished by Cohen & Oalican, LLC Special Needs Trusts Attorneys in Boston
Monday, July 20, 2009
Irrevocable Trust For Medicaid Eligibility Boston Medicaid Planning
Check out this SlideShare Presentation:
Protecting Your Assets From The Cost Of Nursing Home Care Part 2
Medicaid Eligibility
Published by Cohen & Oalican, LLC Elder Law Attorneys in Boston
Tuesday, July 14, 2009
Protecting Your Assets From The Cost Of Nursing Home Care
Your irrevocable trust will protect the trust assets should you or your spouse ever apply for MassHealth nursing home benefits. MassHealth will only consider the trust assets to be “non-countable” if your access and rights to the trust property are limited. Please review this form carefully so that you and the trustee understand how the trust will work and your obligations and rights to the trust property.
Irrevocable
The enclosed trust is irrevocable, meaning that you cannot change it. You have no right to demand that the trust assets be returned to you. The trust does, however, contain language which allows you to appoint a new trustee. The trust also gives you a power of appointment. This means that you can change the interests of the beneficiaries upon your death by changing your will. Once you place an asset into your irrevocable trust you no longer own it, the trust does. However, you can still benefit from the trust asset in many ways.
Principal and Income
By the terms of the trust, none of the trust principal can be paid to you under any circumstances. This is critical in order to make sure that the trust assets are protected from MassHealth. Think of your trust like a locked safe. Although assets placed into the trust must remain in the trust, they can be sold. For example, if real estate is placed in the trust and it is subsequently sold, the proceeds from the sale must remain in the trust. Likewise, the trustee could be use the proceeds to purchase a new home for you. However the new home would be titled in the name of the trust.
You also have a continuing right to live in real estate owned by the trust. Additionally, the interest and dividends earned on the trust property or rental income can be paid out to you. Because you no longer own the property held in the trust, you will most likely not be able to mortgage or take out an equity loan on the property.
An attorney well versed in Irrevocable Trust Law in Boston is invaluable when making these decisions.
Irrevocable
The enclosed trust is irrevocable, meaning that you cannot change it. You have no right to demand that the trust assets be returned to you. The trust does, however, contain language which allows you to appoint a new trustee. The trust also gives you a power of appointment. This means that you can change the interests of the beneficiaries upon your death by changing your will. Once you place an asset into your irrevocable trust you no longer own it, the trust does. However, you can still benefit from the trust asset in many ways.
Principal and Income
By the terms of the trust, none of the trust principal can be paid to you under any circumstances. This is critical in order to make sure that the trust assets are protected from MassHealth. Think of your trust like a locked safe. Although assets placed into the trust must remain in the trust, they can be sold. For example, if real estate is placed in the trust and it is subsequently sold, the proceeds from the sale must remain in the trust. Likewise, the trustee could be use the proceeds to purchase a new home for you. However the new home would be titled in the name of the trust.
You also have a continuing right to live in real estate owned by the trust. Additionally, the interest and dividends earned on the trust property or rental income can be paid out to you. Because you no longer own the property held in the trust, you will most likely not be able to mortgage or take out an equity loan on the property.
An attorney well versed in Irrevocable Trust Law in Boston is invaluable when making these decisions.
Wednesday, July 8, 2009
Medicaid Planning - Boston Attorneys - Conclusion
The possibility for a spouse or parent to need nursing home care is the greatest financial risk facing most seniors. Given Massachusetts' tightening budget, it has become even more difficult to obtain Medicaid eligibility and protect your assets. For your own peace of mind, it’s more important than ever to hire an experienced Elder Law Attorney to create a comprehensive Asset Protection Plan to preserve all that you have worked for.
Sunday, July 5, 2009
Medicaid Law - Boston Attorney Protecting your spouse and Assets
Protecting Your Spouse/Assets
Medicaid law provides for special protections for the spouse of a nursing home resident, known in the law as the "community" spouse. The spouse of a Medicaid applicant is entitled to keep a portion of the couple’s assets. The community spouse is entitled to keep a maximum of $109,560 (2009 figures). This assessment is not affected whether the assets are jointly held by the couple or they are all in the name of the nursing home spouse. For example, if a couple owns $75,000 in countable assets on the date the applicant enters a hospital, the community spouse will be entitled to a resource allowance of $75,000. If they have $250,000, the community spouse can keep the maximum of $109,560.
As always, if you are in our area, engaging Boston attorney specializing in Medicaid Law and Elder Law is always in your best interests a you plan for your future reliance on Medicaid, and work to protect your assets from a Medicaid Lien.
Medicaid law provides for special protections for the spouse of a nursing home resident, known in the law as the "community" spouse. The spouse of a Medicaid applicant is entitled to keep a portion of the couple’s assets. The community spouse is entitled to keep a maximum of $109,560 (2009 figures). This assessment is not affected whether the assets are jointly held by the couple or they are all in the name of the nursing home spouse. For example, if a couple owns $75,000 in countable assets on the date the applicant enters a hospital, the community spouse will be entitled to a resource allowance of $75,000. If they have $250,000, the community spouse can keep the maximum of $109,560.
As always, if you are in our area, engaging Boston attorney specializing in Medicaid Law and Elder Law is always in your best interests a you plan for your future reliance on Medicaid, and work to protect your assets from a Medicaid Lien.
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