Questions & Answers from Professional Colleagues - Sept 8, 2011

Here are some of the questions and answers we have been asked by our professional colleagues:

  • If my clients have less than $5 million, they don't have to worry about Estate Taxes, right? Wrong! Federal Estate Tax rates and exclusions are only set through the end of 2012. Without action from Congress (no guaranty here!), in 2013 the federal $5 million exclusion will drop down to $1 million with a whopping 55% tax rate. And don't forget, regardless of Federal Estate Taxes, the Massachusetts Estate Tax hits families with a net worth over $1 million (this includes life insurance proceeds) who fail to do the planning necessary to eliminate this tax burden.
  • Probate should always be avoided, right? Wrong! For married couples, a little-known planning technique can shield a decedent's probate estate against MassHealth (and Nursing Home costs) for the sole benefit of the surviving spouse. Imagine the value you can offer your clients when you learn how we can help your clients shield assets for each other.
  • My client is worried that their daughter-in-law will end up with their son's future inheritance - any options here? Yes! Careful planning can shield the inheritance for the benefit of the son (and your client's children) while still ensuring that the daughter-in-law can't access it, even in a divorce!
  • The IRS authorizes gifts of $13k per person per year - but does MassHealth agree? No! Put simply, such gifts in most instances will jeopardize a client's eligibility for MassHealth benefits to pay for nursing home care. For this reason, any gifting must be done very cautiously and only with the guidance of attorneys like us who practice every day in the areas of MassHealth planning and applications.
  • My client just entered a nursing rehab - is it too late for him and his wife to protect their assets? No! The reality is that there are lawful strategies to protect assets even for elders already in a Nursing Home. The key is timing - the sooner we are contacted, the more we can protect. Learn more about the planning options so that you will be able to add further value to your clients - even in a crisis.
  • My client has a Trust already, are they all set? Maybe. Most trusts are revocable and offer no protection against Medicaid (Nursing Home costs). And the estate tax funding formula in many revocable trusts is outdated due to the changes in the law. These out-of-date Trusts can have costly consequences, from increasing Estate Taxes to creating unnecessary cost and stress during a disability. Folks with trusts need to be certain whether their trust offers any asset protection and whether it is compliant with the latest Estate Tax laws.