Everything you need to know about Estate Planning
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In prior years, Medicaid recipients were required to maintain an asset and income limit that simply failed to evolve with our changing economy. Governor Hochul’s new Medicaid overhaul increases these limits, beginning on January 1, 2023. For more information on this life changing upgrade for New Yorkers as we continue to deal with the effects of the COVID-19 pandemic, please see our collection of Blog Posts.
An Irrevocable Trust is capable of shielding our assets, not only from creditors, but from Medicaid scrutiny. In order to properly use this kind of Trust, it is important that the Trustor relinquish control over their assets, and pass that control on to their Trustee. The Trustee will then be in charge of using the Trust for the benefit of the Trustor during their lifetime, and then will distribute the Trust’s assets after the Trustor’s demise. This process is critical for obtaining Medicaid eligibility and, if done properly, can result in free or low-cost medical care at a time when we need it most.
Planning is important for your income taxation during life as well as for any estate tax at death. Even though 2023 is just starting, it’s not too early to think about planning for whatever it may bring your way.
Estate Planning attorneys need to understand multiple issues ranging from taxes to asset protection to create a comprehensive estate plan. Passage of the Corporate Transparency Act adds yet another layer to the already complex world of Estate Planning. Beginning on January 1, 2024, any company that qualifies as a Reporting Company needs to file a report with the Financial Crimes Enforcement Network (FinCEN) regarding its Beneficial Owners and individuals who helped register the Reporting Company. The provisions of the Corporate Transparency Act are designed to help prevent and combat money laundering, terrorist financing, corruption, tax fraud, and other illicit activity.
IRAs have become ubiquitous components of estate plans. The SECURE Act of 2019 altered the landscape for IRAs significantly. Just when advisors began to get comfortable with the new 10-year rule, the United States Treasury Department promulgated proposed Treasury Regulations early in 2022 adding additional complexity to that rule by requiring annual distributions for a non-EDB of a participant who died after their Required Beginning Date. Once again, the SECURE Act includes additional provisions with which every advisor should be familiar.
Trusts have become ubiquitous parts of estate plans. Many Estate Plans use revocable trusts as the foundation for the plan while others include irrevocable trusts. Regardless of the planning reason, every trust needs a trustee. The grantor may name the beneficiary as trustee, or the grantor may name another individual or entity as trustee, creating a natural tension between the beneficiary and trustee. If the tension becomes too great, the beneficiary may seek to have the trustee removed. As expected, the avenues for removal depend upon the trust instrument itself, as well as any statutory remedies available.
Each year the University of Miami sponsors the Heckerling Institute on Estate Planning. The 57th Institute took place in Orlando, Florida in January 2023. The Institute is widely regarded as the premier estate planning program in the country as thousands of attorneys, trust officers, financial planners, and related parties descend upon the Orlando World Center Marriott Resort and Convention Center for a week-long educational conference. As the Associate Director of Education for the American Academy of Estate Planning Attorneys, I attended the conference so that I can share with Academy Members all the great information from the conference.