Just a reminder to everyone that our first complimentary seminar in the Altus area will be on Thursday, February 23rd at 6:00 p.m. at the Francis Herron Seminar Room at Southwest Technology Center.
Shamrock Bank will be providing burgers for everyone in attendance. This seminar will be a great way for you to learn the basics of passing property at someone’s death and the most efficient way to complete the transfers by minimalizing taxes and expenses.
RSVP before 6:00 p.m. Wednesday, February 22 by calling Brent S. Howard at 580-318-8829.
Medicaid is the governmental program that pays for long-term care, for those who qualify through three tests: Medical Need Qualification, Income Tests, and Asset Tests. This is different than Medicare, which is available to all seniors once they reach the eligibility age of 65. Medicare will not cover long-term care costs; it is limited to hospital and medical costs that it associates with improvement or rehabilitation, not nursing home or maintenance costs.
For Medicaid qualification in Oklahoma, the rules are a bit complex, but I will try to simplify them as much as possible. The medical need qualification is based on a person’s need for care because he or she is not able to meet his or her own care standards. If someone must go into a nursing home, this is generally met.
The second test is the Income Test. Simply put, if an individual has more than $3,000, then he or she does not qualify, but this can be rearranged with proper planning.
The last test is the Asset Test. If the person is a single individual, then he or she is typically limited to $2,000 in countable assets. If there is a healthy spouse that does not need nursing home care, then there are exemptions for the spouse between $25,000 and $113,640. If the individual tries to shift assets from his or her name, then Medicaid eligibility is delayed one day for every $132.85 transferred within the previous five years.
There is no way that I can give a full detail of the laws that go with Medicaid qualification in a short update, but if you are an individual (or know of an individual) that anticipates long-term care costs to be a major factor in your estate, then I highly recommend you contact a qualified elderlaw attorney, such as myself, to learn how to protect your legacy for your children and grandchildren.
The IRS has released guidance on the election for decedents dying after December 31, 2010, for a surviving spouse to use any unused estate and gift tax exclusion amounts (portability election). See Notice 2011-82. Because many married couples will want to ensure that the unused exemption amount of the first to die is available for the surviving spouse.
The election to move the unused exemption must be made on a timely filed Federal Estate Tax Return (Form 706). Timely filed means within nine months of the date of death, or if an extension is filed, within the following six months. The election essentially does away with the need for an A/B split that is needed in most estate planning to date.
The guidance still does not dictate how the IRS will treat the election after the provisions of the extension sunset in 2013, though. Under the wording of the extension statute, all provisions related to the current estate tax (and arguably this portability option) will expire on December 31, 2012. Given the lack of this necessary guidance, it is still recommended to do the A/B split unless you want to gamble on Congress’s future actions.