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LAW OFFICE OF RAYMOND J. CANNON, JR., P.C.
Estate Planning, Elder Law, Medicaid-Long Term Care Planning,
Asset Protection Planning, Tax Planning, Real Estate,
Probate and Estate Administration |
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Our mission is to preserve and protect your assets. | |
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THE NUMBERS
The federal income tax just turned 100. President Wilson signed it into law
on Oct. 3, 1913, a little more than four years after the 16th Amendment
was proposed by Congress and eight months after official ratification by the states.
Some facts about the 1913 tax: The basic income tax rate was only 1%,
with a surtax that ranged from 1% on net income over $20,000 and up to $50,000
to 6% on net income in excess of $500,000. All filers were allowed to deduct interest
on personal debts plus state and local taxes paid. The standard deduction was $3,000
for single filers and $4,000 for married couples. About 1% of households paid tax.
The 1040 form was three pages long, with separate pages for income, deductions
and the calculation of the tax and surtax. The 20 instructions for completing the form
fit on one page. The full set of instructions for filling out 2012's 1040 was 214 pages.
Source: Kiplinger Tax Newsletter, October 11, 2013 |
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LAW OFFICE
OF
RAYMOND J. CANNON, JR., P.C.
Admitted
Massachusetts Bar
United States Tax Court
Federal District Court of MA
United States Supreme Court
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 3 YEAR REVIEWS We encourage you to take advantage of our free one-hour consultation to review your estate plan on your plan's third year anniversary. Please call 978-989-9999 for an appointment.
Please notify us at ray@rjcannonlaw.com
if your contact information has changed since your last visit.
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Please feel free to forward this Newsletter to your family, friends and associates who may be interested in a one-hour free consultation to discuss these topics. |
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JANE CONSIDERS CREATING A LIFE ESTATE
Jane called to tell me that she had heard someone on the radio talking about using a life estate deed to preserve a home in the event of a need for long term care in a nursing home. She asked me to tell her about it and whether it would be appropriate for her.
I explained to Jane that a "life estate" is an estate whose duration is limited to the life of an individual (usually the party holding the life estate), and a legal arrangement whereby the "life tenant" during his or her life retains use (the rights to rents and profits), possession of the property and costs of maintaining the property. The life tenant cannot sell or waste the property without the consent of the "remaindermen".
So, is this the right type of device for Jane? Jane is in her 60's and is in excellent health. She has a garden style condominium and she has no plans to move, even if she becomes partially incapacitated. She indicated that she wants to leave the condo to her son, Mark, but is concerned that if she had to go to a nursing home she would be forced to sell it and it would not be available to Mark.
I told Jane that a legal life estate in real property can be created by conveying the property by a deed to Mark but in which she would retain the right to the use and enjoyment of the property during her lifetime. At her death, the property would immediately vest in Mark.
This type of transfer is a "disqualifying transfer" for Medicaid purposes. If Jane were to need nursing home care during the five year period following the transfer, she would be denied long term care benefits under the Medicaid program. However, in Massachusetts, if she were to remain out of a nursing home during the five year period following the transfer, and if she later needed long term care, the condo would pass to Mark at her death and a Medicaid lien, if any, would be released. The condo would pass to Mark automatically.
LESSON: There are many ads in the media these days advising seniors to try to preserve their assets in the event of a need for long term care. While there are a number of advantages in retaining a life estate there are many disadvantages as well. You should always consult with an elder law attorney before making such a decision.:
If you are new to the Jane Chronicles, you may read past issues by going to our website:
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- It is estimated that as many as 5.1 million Americans may have Alzheimer's disease.
- The incidence of the disease is rising in line with the aging population.
- Although Alzheimer's disease is not a normal part of aging, the risk of developing the illness rises with advanced age. Current research from the National Institute on Aging indicates that the prevalence of Alzheimer's disease doubles every five years beyond age 65.
- As our population ages, the disease impacts a greater percentage of Americans. The number of people age 65 and older will more than double between 2010 and 2050 to 88.5 million or 20 percent of the population; likewise, those 85 and older will rise three-fold, to 19 million, according to the U.S. Census Bureau.
- It is estimated that about a half million Americans younger than age 65 have some form of dementia, including Alzheimer's disease. (This is referred to as young onset or early onset.)
- It is estimated that one to four family members act as caregivers for each individual with Alzheimer's disease.
Source: The Alzheimer's Foundation of America
http://www.alzfdn.org/AboutAlzheimers/statistics.html
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MARY IMMACULATE/HEALTH CARE SERVICES
Mary Immaculate Health/Care Services enjoys the reputation in the Merrimack Valley as a faith-based provider of healthcare and housing for older adults. Our expansive facilities offer a full continuum of care including independent living, adult day health, short term rehabilitation and long term care.
Marguerite's House Assisted Living at Mary Immaculate is one of the best kept secrets in the region. For an average cost of $2000/month, residents can maintain their independence in spacious one bedroom apartments. Services include assistance with personal care, medication management, meals, housekeeping, laundry, transportation and 24 hour on-site emergency response. To learn more, visit www.mihcs.com
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Starting in October 2013, MassHealth and Medicare will
join together with health plans in Massachusetts to offer
One Care: MassHealth plus Medicare. One Care is a new
and easier option for people with disabilities to get the full set of services provided by both MassHealth and
Medicare. With One Care, you have one plan, one card,
and one person to coordinate your care.
To learn more click here. http://1.usa.gov/16RDBth
Source: http://www.mass.gov/eohhs/consumer/insurance/onecare/
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