Compare chart Irrevocable Trust, Revocable Living Trust, Non-Grantor Trust, LLC
Pros & Cons of Irrevocable, Revocable Trust, LLC, Sub-S Corp, Family Limited Partnership
Assets That You Must Spend Down Before You Can Qualify for Nursing Home Assistance:
What is “Fraudulent Conveyance” in Medicaid Estate Planning?
Federal Gift Tax Rules in Medicaid Asset Protection & Estate Planning:
- Gifts that are not more than the annual $12,000 $13,000 exclusion for the calendar year beginning in 2006 (This is called the Annual gift tax exclusion for any 12 month period, see below).
- Tuition or medical expenses you pay directly to a medical or educational institution for someone,
- Gifts to your spouse,
- Gifts to a political organization for its use, and
- Gifts to charities.
- Annual gift tax exclusion. A separate annual gift tax exclusion applies to each person to whom you make a gift. For 2007 2010, the annual gift tax exclusion is $12,000 $13,000. Therefore, you generally can give up to $12,000 $13,000 each to any number of people in 2007 2010 and none of the gifts will be taxable. However, gifts of future interests cannot be excluded under the annual exclusion provisions. A gift of a future interest is a gift that is limited so that its use, possession, or enjoyment will begin at some point in the future. A federal Gift Tax return is filed on form 709 for taxable gifts in excess of the annual exclusion.
Filing a Gift Tax Return:
- You gave gifts to at least one person (other than your spouse) that have a fair “cash” value of more than the annual exclusion of $12,000 $13,000 for the tax year 2007 2010.
- You and your spouse are splitting a gift.
- You gave your spouse an interest in property that will be ended by some future event.
- Your entire interest in property, if no other interest has been transferred for less than adequate consideration (less than its fair “cash” value) or for other than a charitable use; or
- A qualified conservation contribution that is a restriction (granted forever) on the use of real property.
Estate Tax & Senior Medicaid Estate Planning:
What is Your Gross Estate?
- Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs;
- The value of certain annuities payable to your estate or your heirs; and
- The value of certain property you transferred within 3 years before your death.
The following table applies to Gift Taxes and Estate Taxes
(REPEALED in 2010):
|If you die in tax year||Taxable Estate Exemption||Gift Tax Exemption||Estate Tax|
What is Taxable Estate?
- Funeral expenses paid out of your estate,
- Debts you owed at the time of death,
- The marital deduction (generally, the value of the property that passes from your estate to your surviving spouse), and
- The charitable deduction (generally, the value of the property that passes from your estate to the United States, any state, a political subdivision of a state, or to a qualifying charity for exclusively charitable purposes).
Medicaid Asset Protection 60 months Before Qualifying for Nursing Home:
- you don’t qualify for the probate process, and
- you do not have to file an estate tax return,
- because on the date you qualify for the nursing home you do NOT own any assets,
- at the time of your death you do NOT own any assets for the probate process,
- and at the date of your death you do NOT own any assets to report on your estate tax return.
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Work with a team that will stress-test your planning for scenarios that have never happened to make sure you’re secure.
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