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Long-Term Care Insurance
As previously mentioned in a prior blog post I made, the first cost-of-living adjustment since 2008 has recently been made. This adjustment brought a 3.7% increase to many of the planning figures used in an elder law practice every day.
Spousal Impoverishment Standards
Minimum Community Spouse Resource Allowance: $22,728
Maximum Community Spouse Resource Allowance: $113,640
Maximum Monthly Maintenance Needs Allowance: $2,841
Income Cap Limit: $2,094
Minimum Ho ...
An irrevocable trust is an excellent tool when preplanning for Medicaid benefits. Anything that is put into the irrevocable trust is protected from a Medicaid spend-down if five years pass from the date of the transfer.
For example, Alice Smith, a 77-year-old widow, wants to protect her family cottage from potential long-term care nursing home bills and preserve it for the benefit of her four children and their immediate families. To do so she would need to establish an irrev ...
The advantage of purchasing a partnership Long-Term Care Insurance ("LTCI") policy is that if the insured exhausts all of his or her available coverage, he or she can apply for Medicaid benefits and exclude countable resources equal to the amount paid for care by the LTCI coverage. For example, assume that Alice Smith has a partnership LTCI policy which pays out $350,000 in benefits. The partnership LTCI policy is totally used up. If Alice is in a nursing home when the event ...
With the end of the year fast approaching, now is an excellent time to discuss the favorable tax treatment of long-term care insurance ("LTCI") premiums.
The Internal Revenue Code categorizes LTCI contracts as either qualified or non-qualified. In order to be qualified and receive favorable federal income tax treatment of premiums, a LTCI contract must meet the following criteria:
It can only cover qualified long-term care services, such as: diagnostic, preventative, therapeutic, ...
If you have clients with old tax-deferred annuities that have substantial appreciation, the time for those clients to convert is now!
As a result of certain provisions within the Pension Protection Act of 2006, which went into effect this year, clients who convert old tax-deferred annuities into new tax-deferred annuities which contain riders for long-term care benefits can avoid paying income taxes on any of the gains - if the new tax-deferred annuity is used to pay long-term care expenses.& ...
Most of us will live a long life. However, if we live too long, our bodies are likely to wear-out, creating the high probability that long-term care will be needed. When such care is required, the consequences can be devastating to families, especially if it continues for many years. Presently, there is not a government entitlement program - Medicare, Medicaid, and Veterans Administration that will pay all the costs, especially if our intent is to remain at home. In suc ...
When a C Corporation purchases a Tax-Qualified Long-Term Care Insurance Policy ("TQLTCIP") on behalf of any of its employees, or their spouses and dependents, the corporation is entitled to take a 100% deduction as a business expense on the total premium paid. Additionally, the corporation's purchase of a TQLTCIP is not subject to any non-discrimination rules, thus allowing the corporation to be selective in the classification of the employees it selects to cover. A corporate resol ...
After more than 20 years in elder law, I have learned that with the wave of baby boomers approaching retirement, there will be an unprecedented demand for professional long-term care services, including those provided by home health care agencies, assisted living facilities, and nursing homes. With the increased demand, prices for the services are likely to skyrocket, making them unaffordable to most.
Long-term care insurance ("LTCI") provides the financial leverage necessary to overcom ...
Your clients know that long-term care risks exist, but most would rather not think about them. Instead, they falsely believe that the financial problems caused by living too long will not happen to them, but only to others. To illustrate the problem, a recent study completed by the American Academy of Actuaries stated that many baby boomers can expect to have a retirement lasting 30 years. The study also reflected the fact that a 65 year old couple has a 58% chance of one of ...
With November being Long-Term Care Awareness Month, and many elder law attorneys working on their personal year-end tax planning, now is an excellent time to discuss the favorable tax treatment of long-term care insurance ("LTCI") premiums.
The Internal Revenue Code categorizes LTCI contracts as either qualified or non-qualified. In order to be qualified and receive favorable federal income-tax treatment of premiums, a LTCI contract must meet all of the following criteria:
It can ...
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