Legal Tip of the Week – 3/10/17!

Multi-generational families have diverse estate planning needs. Young parents in the 30s and 40s who need Basic Last Wills and Testament to name Guardians for their minor children and simple Powers of Attorney to designate financial or health care agents in the event of incapacity often find themselves worrying about their own aging parents, typically between the ages of 65 & 90, and whether the parents have taken care of their own estate plans. 

Perhaps the parents are significantly wealthy and there is a need to engage in advanced estate planning to eliminate or reduce the federal or state estate tax burden; or maybe the elderly parents want to ensure that the inheritance passing down to the kids are protected from outside creditors.  On the flip side, some parents may be of modest means so Medicaid planning may be a necessity to ensure long term care.  For such families, a solution to address all of the varied multi-generational issues is to consult with an estate planner who does both high-end estate planning as well as Medicaid planning.  Such a skill-set in the attorney is crucial to understand the nuances of estate planning from both the IRS’ perspective as well as the state Medicaid offices.  For example, individuals hear from their financial advisors that they can gift upto $14k (in 2017) to their children & grandchildren to reduce their estate tax burden at death but are upset when they discover that for Medicaid purposes, the $14k would be treated as an uncompensated transfer triggering a penalty which could in turn delay Medicaid eligibility.  Similarly, a couple that get their Wills drafted by an estate planning attorney not familiar with Medicaid laws, find out the hard way that although their Wills were perfectly suited in case of death, that these Wills were not properly drafted for a Medicaid eligible spouse who may suddenly be deemed ineligible should the well-spouse unexpectedly pass away leaving all of the assets outright to the other.

 Rao Legal Group, LLC is well-versed in both aspects of estate & elder law planning and will be able to help you and your parents navigate through the diverse processes in a way that best fits the entire families’ needs.

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