Preview of the Proposed New Tax Relief Act of 2010 - Part 4

 

Once again.. this is a preview of what is currently under discussion.  It is NOT law, and should not be looked at as political, legal, or financial advice.  This is only  a brief look at some of the currently debated act, as it impacts our senior clientele.

 

Tax Free Distributions to Charity from IRA Account
Continuing on the theme of philanthropy, if approved, there will continue to be opportunity to make charitable contributions from your retirement account without attracting a tax penalty.

The bill if approved in its current form extends through 2011 the provision that permits tax-free distributions to charity from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer, per taxable year. The bill allows individuals to make charitable transfers during January of 2011 and treat them as if made during 2010.

 

To Be Continued…

 

Your friends at…

 

Cohen & Oalican, LLP

Boston Elder Law Attorneys
Raynham Elder Law Attorneys
Andover Elder Law Attorneys

Sharing of Data Leads to Progress on Alzheimer’s Disease–Part 2

The need was for all researchers and experts to come together to work and evolve a standard data set. But how was this possible? It would entail an incredible collaboration as no one company or researcher could manage to do this alone. The project would involve 800 subjects with varying degrees of memory impairment; some normal, some with a little impairment, some with Alzheimer’s and all had to be tested for the biomarkers and then followed up for several years to judge whether the markers heralded the progression of the degenerative disease. It did seem an impossible project and one that was way beyond anybody’s implementation.

But in the car, Dr. Potter had an intuitive flash when he felt that this project due to its seriousness of objective and aim of ending untold suffering may well propel people to work together in a way that had never been attempted before. The concept was to make the National Institutes of Health the go-between or broker between the world of academia and the pharmaceutical industry. Very soon afterward the director of the National Institute on Aging Dr. Richard J. Hodes talked about this to the former scientific director at the National Institute of Mental Health, Dr. Steven M. Paul and the latter agreed to consult the drug companies to find ways of getting funding for the research. Soon it became clear that all these companies were ready to assist as the development of diagnostic methods was a gigantic task that no one could manage on their own. Collaboration was the need of the hour. Congress established the Foundation for the National Institutes of Health to find ways and means to garner private funds for the institutes. Dr. Steven M. Paul was appointed to the board of the foundation.

Ultimately, $ 41 million was given by the National Institute on Aging, $2.4 million was contributed by some other institutes, 2 non-profit associations and 20 organizations together managed $27 million and this became the initial seed money to get the project started and keep it going for the first 6 years. The National Institute of Aging advanced another $24 million last year and on the basis of further federal and private funding the foundation made plans for the project to continue for another 5 years.

In the beginning, the unique parameters of the project had many scientists worried as they wondered whether giving up ownership and sharing valuable data with all and sundry would result in anything positive at all. There could be misinterpretation, misuse and wrong information being disseminated that could do more harm than good. But despite the misgivings, all realized that there was no alternative to this collaborative endeavor. Even the drug companies, who were usually looked upon with suspicion, were roped in and everyone had to overcome this mental block, according to Dr. John Karlawash an Alzheimer’s researcher at the University of Pennsylvania.

Dr. Karlawash stresses the need to combine resources and work together. The need to find these valid biomarkers for Alzheimer’s was urgent and the entire process demanded such huge funding and massive research that it was impossible for any one company or academic institution to even think of embarking on the project. It had to be a collaborative exercise and now all concerned are making use of the data. The huge data set has been downloaded at least 3200 times and the data sets comprising images of brain scans have been downloaded almost a million times.

The positive outcome of the project has delighted Dr. Buckholtz who says that he is quite “pleasantly surprised” by the way it has turned out. No one was sure how this innovative concept of sharing everything in the public domain in a research project would evolve, but they were confident that ultimately there would be some good coming out of the hard work and combined research. That is how it has turned out to be and it has kindled new hope for the conquest of these diseases.

Could someone you love have Alzheimer’s? Do you have a long term plan to deal with the Medicaid issues surrounding this? Call Cohen & Oalican, LLP to draw up a plan.

Protecting Your Spouse/Assets/Annuities

Cohen & Oalican LLP, Boston, Raynham and Andover Present:

The Final Article in the Series "Protecting Your Assets from the Cost of Nursing Home Care"

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 (2010 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.

Protecting Your Spouse/Annuities

One means of protecting assets for the community spouse is through the purchase of an annuity. The purchase of an annuity transforms excess assets that would otherwise make the nursing home spouse ineligible for Medicaid into a non-countable stream of income for the community spouse. In other words, we can typically protect all of a couple’s savings for the at-home spouse and obtain Medicaid eligibility for the nursing home spouse, even at the last minute through the purchase of a Medicaid qualified annuity. However, the annuity does not need to be purchased ahead of time. In fact, the annuity should not be purchased until the spouse enters a nursing home.

Conclusion

The possibility for a spouse or parent to need nursing home care is the greatest financial risk facing most seniors. Given the State’s 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.

Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP, Boston, Raynham and Andover Present Part 3: The Transfer Penalty and the Look-Back



The Transfer Penalty and the Look-Back


If you give away your assets it will make you and your spouse ineligible for Medicaid benefits for up to five years. When you apply for benefits, Medicaid reviews five years of bank statements in order to identify any disqualifying transfers. This is known as the “look-back period.” Any transfers that happened before the five year period are protected and do not have to be reported to Medicaid. However, if you apply for benefits during the look-back period, Medicaid imposes one month of ineligibility for approximately every $8,000 you give away. In addition, the clock does not start “ticking” on the ineligibility period until you are in a nursing and have spent down your assets. The easiest way to explain the transfer rules is by way of an example. Let’s assume Mrs. Smith transfers $24,000 to her grandson on March 15, 2009. On April 15, 2010, Mrs. Smith suffers a stroke and is admitted to a nursing home. Assume she spends down her assets below $2,000 as of August 2010. Because she would be applying during the look-back period, Medicaid would impose three months of ineligibility ($24,000 ÷ $8,000 = 3 months). The transfer penalty would not start until August 1, 2010 and would end in November 2010.

In Part 4 Cohen & Oalican will discuss Protecting Your Spouse/Assets


Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP, Boston, Raynham and Andover PResent Part 2: The Home


The Home

Homes with equity of less than $750,000 are not considered a noncountable asset. However this does not mean that the house is protected. Without proper planning, at death the State will have a lien against your house and at death Medicaid will seek reimbursement for benefits provided. With proper legal planning you can avoid a Medicaid lien and protect your home saving hundreds of thousands of dollars. Many people think the best way to protect their home is to give it outright to their children. Although this may sound like the simplest solution -- it may be the worst choice. Transferring a home outright to children can result in large capital gains taxes. Secondly, things can happen to children that can place the house at risk. What happens if a child gets divorced, is sued or has creditor problems? Seniors have been literally forced out of their own home as a result of ‘gifting’ their house to their children. One strategy our office uses to protect homes from the Medicaid lien is an irrevocable trust. An irrevocable trust can protect your home from a Medicaid lien and avoid the risks of outright gifts.

In Part 3 Cohen & Oalican will discuss The Transfer Penalty and the Look-Back

Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Cohen & Oalican LLP present Part 1 The Asset Rules

PROTECTING YOUR ASSETS FROM THE COST OF NURSING HOME CARE

Nobody wants to think of the possibility of entering a nursing home. But the truth is, if you ignore this issue you are putting your spouse’s financial security, your life savings, your home and your children’s inheritance at risk. Nursing homes in Massachusetts cost approximately $10,000 a month. Most people don’t realize that traditional health insurance policies and Medicare provide little or no long term care coverage, but Medicaid coverage is very different. With proper planning and the right legal guidance, most married middle-class seniors,
who have accumulated savings and a house, could be eligible for Medicaid to help pay some or all of their long term care costs. Unfortunately many seniors, who pay privately for nursing home care, spend their life savings until they have nothing left – and only then do they believe they are eligible for Medicaid (the program is called MassHealth in Massachusetts).

The Medicaid rules are complicated and include many traps for the unwary. An experienced elder law attorney can help you navigate through the Medicaid maze protecting your family’s savings and home.

The Asset Rules

The first basic rule of nursing home Medicaid eligibility is that an applicant, whether single or married, may have no more than $2,000 in "countable" assets in his or her name. "Countable" assets generally include everything you own, except for the applicant's home (if it is located in Massachusetts and it has equity less than $750,000). Everything else,(second homes, retirement savings, life insurance) is counted and may have to be spent down before you can obtain eligibility.

In Part 2 Cohen & Oalican will discuss The Home

Cohen & Oalican provide a full spectrum of services for the elderly, for disabled adults, and for the families.

Elderlaw and reverse mortgages - Cohen & Oalican., LLP

In our last blog we mentioned a New York Times series focusing on retirement. These articles serve to raise awareness and to inform people of the importance of making financial decisions based on their specific needs and Medicaid Planning. The most recent article in the series dealt with reverse mortgages. As many of you may know, a reverse mortgage is a loan with a bank, where the bank pays the homeowner either monthly or in a lump sum, compared with a typical mortgage where the homeowner makes monthly payments to the bank. For some clients a reverse mortgage can be a terrific estate planning tool to make funds available to keep an elder in their home. However, the New York Times points out that reverse mortgages are not appropriate for everyone.

Reverse mortgages have very high closing costs, sometimes as high as eight percent of the loan. Questions consumers should ask to determine if a reverse mortgage is their best option:
How long do you plan to stay in your home? If you plan to stay home for just a couple of years, other kinds of loans might make more sense.
What do you plan to use the money for? If you are using the money for a vacation or plan to invest the funds, do not proceed with a reverse mortgage.

If you have any questions pertaining to Medicaid, guardianship, conservatorship or other elder law issues, please feel free to contact us Cohen & Oalican, LLP

Facing the Realties of Long-Term Care

Cohen & Oalican, LLP; Medicaid, MassHealth and Elderlaw Attorneys in Boston, Andover, Raynham.

On Thursday, October 23, 2008, the New York Times included a Special Section entitled "Retirement" containing a number of interesting and informative articles. Given the present financial crisis and the resulting uncertainties we face, it is more important than ever to be well informed about financial and legal issues which may impact our families and to do some medicaid planning. We encourage you to read these articles as well as other articles which impact seniors at the New York Times website.
"Young Workers Must Face Realties of Long-Term Care" focuses on the the need for baby boomers, many of whom are caring for elderly parents, to consider their own potential need for long-term care in the future. Faced with the rising costs of nursing home residence and the present economic crisis, this article answers basic questions concerning long-term-care insurance: when to buy coverage, where to buy coverage, how much coverage is needed, etc. The full article can be accessed at the following link: Article.


This series, brought to you by Boston Attorneys Cohen & Oalican, LLP, specializing in Guardianship and Conservatorship Attorneys in Boston. Posted by Elder Law Boston Lawyer