With the recent passage of the American Taxpayer Relief Act of 2012, more widely known as the fiscal cliff deal, big changes have come to the estate planning world. As we noted in a recent set of posts on the issue, the law makes the 2010 exemption system permanent, removing the uncertainty that has surrounded the issue for years. Taxpayers will indefinitely be able to plan on a $5 million exemption amount, with yearly adjustments for inflation.
With a new era of certainty entering in, at least with respect to the tax exemption amount, estate planning attorneys may find that they will not have to spend so much energy on tax planning. This will, it is predicted, lead to a refocusing of energies on other areas of concern in estate planning. One of those areas is elderly law.
Elder law, as a field, deals not only with transfers of assets, but also with planning for quality of life in old age. In this area, there are a number of things to consider, but one important area of focus is applying for Medicaid. Because Medicaid has strict rules about asset ownership and transferring, it is important to engage in careful planning so as to optimize one’s chance of receiving aid.
Without Medicaid assistance, many people simply don’t have the means to pay for ongoing nursing home and medical care in old age. Paying for care on their own quickly leads to a depletion of wealth, leaving little to nothing to pass on to the next generation. This is a serious concern, and one well worth taking the proper steps to prevent.
Medicaid planning involves the use of various technique to protect one’s wealth, and it pays to work with an attorney experienced in this area.
Source: Forbes, “Morphing Into The New Age Of Estate Planning,” Deborah L. Jacobs, January 15, 2012