Archive for the ‘Asset Protection Planning’ Category
Monday, February 21st, 2011 by Moore McLaughlin
On February 17, the House Ways and Means Committee by a vote of 21-15 approved. H.R. 705, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011. Upon passage of H.R. 705, the text of a competing bill (H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011), which was approved by voice vote earlier in the day, was incorporated into H.R. 705. There were no other amendments adopted to H.R.705.
Both bills seek to modify or repeal the new requirements imposed by Sec. 9006 of the Patient Protection and Affordable Care Act (PPACA), which provides that payments for goods and payments made to corporations (that are not tax-exempt) will be subject to information reporting beginning in 2012. H.R. 705 also seeks to repeal Code Sec. 6041(h), which was added by the Small Business Jobs Act of 2010 and which treats recipients of rental income from real estate as engaged in the trade or business of renting property for information reporting purposes beginning in 2011. However, H.R. 705 provides an offset for the estimated $21.9 billion cost of repeal, whereas H.R. 4 does not.
Also on February 17, the Senate by a vote of 92-2 invoked cloture (i.e. voted to cut off debate) on S. 223, the FAA Air Transportation Modernization and Safety Improvement Act, which includes a provision to repeal the Sec. 9006 reporting requirements. Unless time is yielded back, there remains 30 hours of debate on the bill before a vote on final passage of the measure.
Tags: 1099, business tax, Capital gains tax, Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011, corporate tax, FAA Air Transportation Modernization and Safety Improvement Act, Form 1099, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, IRS Form 1099, mclaughlin & quinn, Moore McLaughlin, Patient Protection and Affordable Care Act, Providence, Rhode Island, Small Business Act, Small Business Jobs Act of 2010, tax, Tax planning, Thomas P. Quinn
Posted in Asset Protection Planning, Current Events, IRS and state tax collections, Tax Current Events and News, Tax planning
Thursday, February 3rd, 2011 by Moore McLaughlin
The IRS is putting the finishing touches on a new offshore voluntary disclosure program, according to several agency officials quoted in news reports. The new program will have some similarity to the previous voluntary disclosure program that ended in October 2010, but is expected to offer different terms regarding possible penalties. Many observers foresee the new initiative offering terms less generous than those in the previous program. At an American Bar Association gathering on Janury 21, Steven Miller, IRS deputy commissioner for services and enforcement, put the tax professional community on notice that another initiative was in the works. Other agency officials have since indicated that the details of the program would soon be forthcoming.
Stay tuned to our Blog, or contact Partner Moore McLaughlin, Esq. for more information at mmclaughlin@mclaughlinquinn.com or by phone at 401-421-5115 ext 212.
Tags: asset protection, Asset Protection Planning, Capital gains tax, corporate tax, FBAR, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Offshore Voluntary Disclosure Program, Providence, Rhode Island, tax, Tax planning, Thomas P. Quinn
Posted in Asset Protection Planning, Current Events, Estate Planning, IRS and state tax collections, Tax Current Events and News, Tax planning
Wednesday, February 2nd, 2011 by Moore McLaughlin
Elderlaw Attorney Jill E. Sugarman tells us that assisted living facility residents covered by Medicaid are at risk of being evicted if they leave the facility, even for a temporary hospitalization. The National Senior Citizen’s Law Center (NSCLC) warns of this problems in a recently released White Paper. Ironically, Medicaid officials in most states have the power to prevent these evictions but in most cases are not exercising it.
Most state Medicaid programs pay for services not just in nursing homes but in assisted living facilities, which are meant to provide a home-like alternative to nursing homes. But there is a crucial difference between nursing homes and assisted living facilities. The Nursing Home Reform Law authorizes Medicaid to pay a nursing home to hold a room for a Medicaid recipient who is temporarily absent due to hospitalization and entitles the resident to return to the first-available room.
In contrast, Medicaid does not make similar payments on behalf of residents of assisted living facilities and the facilities are not required to give admission priority to returning residents. This difference in treatment, the NSCLC asserts in its report, “Medicaid Payment for Assisted Living: Residents Have a Right to Return After Hospitalization,” diminishes the value of assisted living facilities as a community-based alternative to nursing home care. If assisted living facilities truly seek to offer “home or community-based” services, says the advocacy group, residents should have the peace of mind of knowing that they won’t be evicted if they are absent for a few days or weeks.
The NSCLC points out that in most cases states could remedy the situation. Most states pay for assisted living care though a Medicaid waiver program. In 2000, the federal Centers for Medicare and Medicaid Services (CMS) advised states that it would authorize the issuance of “retainer payments” to Medicaid waiver home and community based service providers during a Medicaid recipient’s temporary absence, such as for hospitalization. The guidance described the retainer payments as being comparable to room-hold payments for nursing home residents. However, it appears that most of the states either do not understand the federal guidance or have not implemented it. Exceptions include Georgia, Illinois, Montana and Washington, all of which make retainer payments to assisted living facilities on behalf of residents who are temporarily absent.
The NSCLC makes a number of recommendations:
- CMS should clarify that Medicaid-funded retainer payments are available for temporary absences from an assisted living facility;
- State governments should authorize retainer payments up to the federally allowed maximum;
- Federal Medicaid law should be changed to entitle residents of assisted living facilities to room holds, room-hold payments and readmission to the next available room after temporary absences;
- Room holds should apply regardless of the reason for an absence.
To view NSCLC’s White Paper and other materials on the issue, including a News Release and a Policy Brief, click here.
For more information regarding Medicaid planning, contact Jill E. Sugarman, Esq. at jsugarman@mclaughlinquinn.com or by phone at 401-421-5115 ext. 215.
Tags: asset protection, Asset Protection Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, National Senior Citizen's Law Center, seniors, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Sunday, December 19th, 2010 by Moore McLaughlin
Under pre-Act law, the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, other than those made permanent or extended by subsequent legislation, were set to sunset and no longer apply to tax or limitation years beginning after 2010. Beginning in 2011, the EGTRRA sunset would have wiped out a host of favorable tax rules, such as: favorable income tax rate structure for individuals; marriage penalty relief; and liberal education-related deduction rules. Similarly, under Sec. 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, the favorable tax treatment of long-term capital gain and qualified dividends would have ended after 2010.
The alternative minimum tax (AMT) exemption amounts were “temporarily” increased for four years by EGTRRA, and then “temporarily” increased again by a succession of tax laws. The ability of individuals to use most nonrefundable personal credits to offset AMT also is “temporary,” and has been extended over the years by a series of new laws. Under pre-Act law, after 2010, the AMT exemption amounts were to have plummeted to their pre-EGTRRA level, and individuals would not have been able to use most nonrefundable personal credits to offset AMT.
Finally, the American Recovery and Reinvestment Act of 2009 temporarily boosted the credit incentives for higher education (i.e., created the American Opportunity Tax Credit, or AOTC), and liberalized the rules for the refundable child tax credit and the earned income tax credit (EITC). Under pre-Act law, these ARRA incentives would have ended on December 31, 2010.
New law. Under 2010 Tax Relief Act Secs. 101 through 103, the Sec. 901 EGTRRA sunset, the Sec. 303 JGTRRA sunset, and the ARRA sunsets relating to the AOTC, child tax credit, and EITC are extended for two years (one year in case of the adoption rules).
Caution: Unless Congress acts, all of the favorable rules will revert after 2012 to their pre-EGTRRA, pre-EGTRRA, and pre-ARRA rules. For example, the tax rates for individuals in 2013 will be 15%, 28%, 31%, 36%, and 39.6%.
Stay tuned for more posts about this new tax law.
Tags: asset protection, Asset Protection Planning, business tax, Capital gains tax, corporate tax, income tax, internal revenue code, Internal Revenue Service, IRS and state tax collections, Moore McLaughlin, Providence, Rhode Island, Small Business Act, state taxes, tax, Tax planning, Thomas P. Quinn
Posted in 1031 Exchanges, Asset Protection Planning, Current Events, Estate Planning, IRS and state tax collections, Tax Current Events and News, Tax planning, Uncategorized
Sunday, December 19th, 2010 by Moore McLaughlin
At about 3:50 p.m. on Friday, December 17, 2010, President Obama signed into law the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.” This new law is a sweeping tax package that includes, among many other items, an extension of the Bush-era tax cuts for two years, estate tax relief, a two-year “patch” of the alternative minimum tax (AMT), a two-percentage-point cut in employee-paid payroll taxes and in self-employment tax for 2011, new incentives to invest in machinery and equipment, and a host of retroactively resuscitated and extended tax breaks for individuals and businesses. Here’s a look at the key elements of the package:
- The current income tax rates will be retained for two years (2011 and 2012), with a top rate of 35% on ordinary income and 15% on qualified dividends and long-term capital gains.
- Employees and self-employed workers will receive a reduction of two percentage points in Social Security payroll tax in 2011, bringing the rate down from 6.2% to 4.2% for employees, and from 12.4% to 10.4% for the self-employed.
- A two-year AMT “patch” for 2010 and 2011 will keep the AMT exemption near current levels and allow personal credits to offset AMT. Without the patch, an estimated 21 million additional taxpayers would have owed AMT for 2010.
- Key tax credits for working families that were enacted or expanded in the American Recovery and Reinvestment Act of 2009 will be retained. Specifically, the new law extends the $1,000 child tax credit and maintains its expanded refundability for two years, extends rules expanding the earned income credit for larger families and married couples, and extends the higher education tax credit (the American Opportunity tax credit) and its partial refundability for two years.
- Businesses can write off 100% of their equipment and machinery purchases, effective for property placed in service after September 8, 2010 and through December 31, 2011. For property placed in service in 2012, the new law provides for 50% additional first-year depreciation.
- Many of the “traditional” tax extenders are extended for two years, retroactively to 2010 and through the end of 2011. Among many others, the extended provisions include the election to take an itemized deduction for state and local general sales taxes in lieu of the itemized deduction for state and local income taxes; the $250 above-the-line deduction for certain expenses of elementary and secondary school teachers; and the research credit.
- After a one-year hiatus, the estate tax will be reinstated for 2011 and 2012, with a top rate of 35%. The exemption amount will be $5 million per individual in 2011 and will be indexed to inflation in following years. Estates of people who died in 2010 can choose to follow either 2010′s or 2011′s rules.
- Omitted from the new law: Repeal of a controversial expansion of Form 1099 reporting requirements.
- Also not included: Extension of the Build America Bonds program, which permits state and localities to issue federally-subsidized municipal bonds.
Watch for upcoming posts containing more detail on this new law. In the meantime, feel free to contact us with any questions you may have.
Tags: 1031 exchange real estate investment, alternative minimum tax, American Recovery and Reinvestment Act of 2009, AMT, and Job Creation Act of 2010, asset protection, Asset Protection Planning, business tax, Capital gains tax, collection, corporate tax, elderlaw, Estate Planning, income tax, internal revenue code, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, Providence, real estate, Rhode Island, seniors, Social Security payroll tax, Tax planning, tax relief, Thomas P. Quinn, Unemployment Insurance Reauthorization
Posted in 1031 Exchanges, Asset Protection Planning, Bankruptcy, Current Events, Elderlaw/Law For Life, Estate Planning, Financial workout, IRS and state tax collections, Self-directed IRAs, Tax Current Events and News, Tax planning
Friday, November 5th, 2010 by Moore McLaughlin
Some individuals with substantial income in addition to salaries may find that the amount of tax withheld from their salaries is not enough to cover their required estimated tax payments. This may be the result of miscalculation, or forgotten surprises pleasant and unpleasant. A pleasant forgotten surprise might be a windfall on the sale of a capital asset earlier this year. An unpleasant one might be the realization by a taxpayer who claimed a first time homebuyer credit in 2008 that he must begin repaying the credit in 25 installments, beginning with the 2010 tax year. Increased withholding, as well as a couple of creative workarounds, can stave off an estimated tax penalty.
Background. An individual subject to the estimated tax must pay, on each of four installment dates (April 15, June 15, September 15 and January 15 of the following year for a calendar-year taxpayer), 25% of his “required annual payment” for the current year. The required annual payment generally is the lesser of 100% of the tax shown on the taxpayer’s return for the preceding year or 90% of his tax for the current year. However, in figuring 2010 estimated taxes, taxpayers whose 2009 AGI was over $150,000 have to pay the lesser of 110% of the tax shown on the 2009 return or 90% of their 2010 tax liability.
The applicable test is applied separately to each installment. Thus, a taxpayer may be penalized for the underpayment of estimated taxes for any installment for which his estimated tax payments plus taxes withheld from his salary don’t total at least 25% of his required annual payment.
An individual who has underpaid an estimated tax installment can’t avoid the penalty by increasing his estimated tax payment for a later period (although payment in a later period will reduce the period for which the penalty applies).
Increased withholding is one possible solution. Income tax withheld by an employer from an employee’s wages or salary is treated as paid in equal amounts on each of the four installment due dates unless the individual establishes the dates on which the amounts were actually withheld. Thus, if an employee asks his employer to withhold sufficient additional amounts for the rest of the year, the penalty can be retroactively eliminated. This is because the heavy year-end withholding will be treated as paid equally over the four installment due dates.
Illustration: Jennifer expects her 2010 tax liability to be $15,000. Her 2009 return showed a liability of $14,000. Her withholding for 2010 will total only $10,500 and she has made no estimated tax payments. If she makes an additional estimated tax payment of $3,000 on January 15, 2011, she will avoid any underpayment penalty for the last installment ($10,500 plus $3,000 equals $13,500, which is 90% of $15,000) but she may still be penalized for underpaying the first three installments. But if Jennifer instead has her employer withhold an additional $3,000 before the end of 2010, her total withholding ($13,500) will be treated as estimated tax payments of $3,375 on each of the installment due dates. Since $3,375 is 25% of $13,500 (90% of $15,000), the underpayment penalty would be completely avoided for all four installments.
Other amounts may also be treated as retroactive payments of estimated tax. The same rules described above in regard to amounts withheld from wages and salaries also apply to overpayments of Social Security taxes and to income taxes withheld from:
- supplemental unemployment compensation benefits, sick pay, pensions, annuities and other deferred income (e.g., 20% withholding on certain “eligible rollover distributions” from qualified retirement plans and other deferred income arrangements).
- interest and dividends subject to backup withholding.
- gambling winnings.
Recommendation: Another possible option for a taxpayer who has underpaid estimated tax is to take an eligible rollover distribution from a qualified plan before the end of 2010. Income tax will be withheld from the distribution and will be applied toward the taxes owed for 2010. The taxpayer can then timely roll over the gross amount of the distribution, as increased by the amount of withheld tax, to a traditional IRA. No part of the distribution will be includible in income for 2010, but the withheld tax will be applied pro rata over the full tax year to reduce previous underpayments of estimated tax.
Tags: 2010 estimated taxes, asset protection, Asset Protection Planning, business tax, Capital gains tax, estimated tax payments, estimated taxes, first time homebuyer credit, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, tax, Tax planning, Thomas P. Quinn, year-end planning, year-end tax planning
Posted in Asset Protection Planning, IRS and state tax collections, Tax Current Events and News, Tax planning
Monday, November 1st, 2010 by Moore McLaughlin
December 31, 2010 is an important deadline for individuals who inherited an IRA from an IRA owner who died in 2009. Where there are multiple beneficiaries for the IRA, splitting up the account into several accounts no later than December 31, 2010, can yield important tax and other benefits for each beneficiary.
Background. Designating several beneficiaries for an IRA may put the younger one (or ones) at a disadvantage if they want to keep required minimum distributions (RMDs) as small as possible and keep IRA deferrals going for as long as possible. Reason: As a general rule, where there is more than one IRA designated beneficiary, the one with the shortest life expectancy (that is, the oldest one) is treated as the designated beneficiary for determining distributions.
Observation: The oldest-beneficiary rule comes into play for determining RMDs after the IRA owner’s death. Regardless of whether the IRA owner died before or after his required beginning date, if the IRA owner was older than any of the beneficiaries, the remaining IRA balance at the owner’s death is paid out over the remaining life expectancy of the oldest designated beneficiary.
Illustration : Anne designated her son, Seth, and her daughter, Carol, as equal beneficiaries of his IRA. Anne died in 2009 at the age of 74. Seth, age 50 this year, wants to invest the inherited IRA in emerging markets mutual funds. Carol, age 44 this year, wants to invest the inherited IRA in a target-retirement-date mutual fund. If the IRA is left as-is, annual RMDs for both Seth and Carol, which must commence in 2010, are based on Seth’s life expectancy, which is shorter than Carol’s. And they may find it hard to reconcile their differing investment philosophies.
Post-mortem planning solution. The beneficiaries can split up the IRA into separate accounts no later than the end of the year following the year in which the decedent died. Where an IRA is divided into separate accounts (i.e., subaccounts), the RMD rules separately apply to each separate account, effective for years after the year in which the separate accounts were created, or the IRA owner’s date of death, if later.
Thus, in the illustration above, if Seth and Carol direct the IRA trustee to split Anne’s IRA into two separate and equal IRAs no later than December 31, 2010, with each the sole beneficiary of one of the equal IRAs, Seth’s RMD will be based on his table life expectancy, and Carol’s will be based on her life expectancy, which is longer than Seth’s. Seth can invest his half of the inherited IRA in emerging markets mutual funds, and Carol can invest her half in the mutual fund of her choice.
For purposes of the RMD rules, separate accounts in an IRA account are separate portions of the IRA owner’s benefit reflecting the separate interests of the IRA’s beneficiaries as of the date of the IRA owner’s death for which separate accounting is maintained.
For the separate or “subaccount” IRA to be treated as a separate account for RMD purposes, it must be established no later than the last day of the year following the year of the IRA owner’s death. Additionally, a separate accounting must allocate all post-death investment gains and losses for the period before the separate accounts were established on a pro rata basis in a reasonable and consistent manner among the separate accounts. However, once the separate accounts are actually established, separate accounting can provide for separate investments for each separate account under which gains and losses from the investment of the account are only allocated to that account. Alternatively, investment gain or losses can continue to be allocated among the separate accounts on a pro rata basis. A separate accounting must allocate any post-death distribution to the separate account of the beneficiary receiving that distribution.
Tags: asset protection, Asset Protection Planning, Capital gains tax, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, income tax, individual retirement account, internal revenue code, Internal Revenue Service, IRA, IRS, IRS and state tax collections, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, Massachusetts, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, nursing homes, Providence, required minimum distribution, Rhode Island, rmd, seniors, Tax planning
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Self-directed IRAs, Tax Current Events and News, Tax planning
Tuesday, October 26th, 2010 by Moore McLaughlin
Tax relief comes in many forms, whether it means eliminating penalties, settling your debt, or ensuring that the IRS does not seize your bank accounts or garnish your wages. If you owe money on your taxes, your plan for resolving this debt should include addressing all possible angles: Protection from IRS actions, determining ways to reduce the amount owed, and putting a plan into place that will permanently make worrying about taxes a thing of the past. 
McLaughlin & Quinn, LLC has published “9 Secrets to Success When You Owe the IRS” This list has been developed by the attorneys at McLaughlin & Quinn, LLC over the course of dozens of years in private practice and dozens more working for the IRS. Avoiding these landmines will significantly increase the odds of getting one’s tax life in order and moving on. Failure to know these secrets, and use them to your advantage can turn a potentially minor problem into a federal case.
This is the most straight-forward guide you will find anywhere on resolving taxes. In it you will learn:
- 9 Different Ways to Keep the IRS from Taking Action Against You
- How not to be afraid of the IRS
- How to avoid common mistakes
- Simple steps to keep you out of trouble
Downloading this guide is absolutely free.
Click here to download this Free guide.
Tags: 9 Secrets to Success When You Owe the IRS, asset protection, Asset Protection Planning, business tax, Capital gains tax, collection, corporate tax, Estate Planning, income tax, internal revenue code, Internal Revenue Service, IRS, IRS and state tax collections, levy, lien, mclaughlin & quinn, Moore McLaughlin, Owe the IRS, Providence, Rhode Island, sales tax, state taxes, tax, Tax planning, tax relief, Thomas P. Quinn
Posted in Asset Protection Planning, Bankruptcy, Current Events, Elderlaw/Law For Life, Estate Planning, Financial workout, IRS and state tax collections, McLaughlin & Quinn News, Tax Current Events and News, Tax planning
Tuesday, October 26th, 2010 by Moore McLaughlin
This past year has seen a multitude of new cases affecting Massachusetts taxes. Click here for a well written summary of these cases by Scott M. Susko and Richard L. Jones. These cases range from domicile cases in the personal income tax context to sales tax nexus cases to the sales-factor sourcing rules, and others.
McLaughlin & Quinn, LLC Partners Moore McLaughlin and Tom Quinn represent Massachusetts taxpayers, both individuals and businesses, on a regular basis in tax planning matters as well as audits, appeals and in court. Feel free to contact either Moore McLaughlin at 401-421-5115 ext. 212 or by e-mail at mmclaughlin@mclaughlinquinn.com or Tom Quinn at 401-421-5115 ext. 218 or by e-mail at tquinn@mclaughlinquinn.com.
Tags: business tax, domicile, income tax, IRS and state tax collections, LLC, Massachusetts, Massachusetts domicile, Massachusetts personal income tax, Massachusetts sales tax nexus, Massachusetts sales-factor sourcing rules, Massachusetts taxes, mclaughlin & quinn, Moore McLaughlin, personal income tax, sales tax, sales tax nexus, sales-factor sourcing rules, Thomas P. Quinn
Posted in Asset Protection Planning, Estate Planning, IRS and state tax collections, Tax Current Events and News, Tax planning
Sunday, October 24th, 2010 by Moore McLaughlin
While you generally do not have to sell your home in order to qualify for Medicaid coverage of nursing home care, it is possible the state can file a claim against your house after you die. If you get help from Medicaid to pay for the nursing home, the state must attempt to recoup from your estate whatever benefits it paid for your care. This is called “estate recovery,” and given the rules for Medicaid eligibility, the only property of substantial value that a Medicaid recipient is likely to own at death is his or her home. If possible, you should consult with an attorney before entering a nursing home, or as soon as possible afterwards, in order to discuss ways to protect your home.
In those states that have implemented the Deficit Reduction Act of 2005, the home is not counted as an asset for Medicaid eligibility purposes if the equity is less than $500,000 ($750,000 in some states). In all states, you may keep your house with no equity limit if your spouse or another dependent relative lives there.
Transferring a Home
In most states, transferring your house to your children (or someone else) may lead to a Medicaid penalty period, which would make you ineligible for Medicaid for a period of time. There are circumstances in which it is legal to transfer a house, however, so consult an attorney before making any transfers. You may freely transfer your home to the following individuals without incurring a transfer penalty:
- Your spouse
- A child who is under age 21 or who is blind or disabled
- Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
- A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home
- A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.
While you can sell your house for fair market value, it may make you ineligible for Medicaid and you may have to apply the proceeds of the sale to your nursing home bills.
Lien on Home
Except in certain circumstances, Medicaid may put a lien on your house for the amount of money spent on your care. If the property is sold while you are still living, you would have to satisfy the lien by paying back the state. The exceptions to this rule are cases where a spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house is living there.
Estate Recovery
If your spouse, a disabled or blind child, a child under age 21, or a sibling with an equity interest in the house, lives in the house, the state cannot file a claim against the house for reimbursement of Medicaid nursing home expenses. However, once your spouse or dependent relative dies or moves out, the state can try to collect.
But there are some circumstances under which the value of a house can be protected from Medicaid recovery. The state cannot recover if you and your spouse owned the home as tenants by the entireties or if the house is in your spouse’s name and you have relinquished your interest. If the house is in an irrevocable trust, the state cannot recover from it.
In addition, some children or relatives may be able to protect a nursing home resident’s house if they qualify for an undue hardship waiver. For example, if your daughter took care of you before you entered the nursing home and has no other permanent residence, she may be able to avoid a claim against your house after you die. Consult with an attorney to find out if the undue hardship waiver may be applicable.
For more information on Medicaid planning, please contact Elderlaw Attorney Jill E. Sugarman at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: asset protection, Asset Protection Planning, assisted living facilities, Deficit Reduction Act of 2005, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid eligibility, Medicaid penalty period, Medicaid planning, nursing home care, nursing homes, Providence, Rhode Island, seniors, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
On February 17, the House Ways and Means Committee by a vote of 21-15 approved. H.R. 705, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011. Upon passage of H.R. 705, the text of a competing bill (H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011), which was approved by voice vote earlier in the day, was incorporated into H.R. 705. There were no other amendments adopted to H.R.705.