Bernie Sanders plan to increase federal estate tax

It has been said that no one is safe when the legislature is in session. Bernie Sanders has introduced a bill in Congress called the “For the 99.5% Act.” It would reduce the federal estate tax exemption amount (now $11,700,000) down to 3.5 million dollars. Rates would also be raised to 50%, 55% & 60%. Family Limited Partnership estate plans would be eliminated or at least made much more difficult. These FLP plans have been popular in the last 30 years to reduce federal estate tax and accomplish other estate planning objectives. The Dynasty Trust exemption from generation skipping tax would also be limited to 50 years. Dynasty trust plans are a great way to protect the estate for children, grandchildren and later generations. For more information of dynasty trusts see  https://www.michaelmillonig.com/practice-areas/trusts/#Dynasty

Medicaid Recipients Have a Little More Time to Spend Down Their Stimulus Money

The one-year deadline for nursing home residents on Medicaid to spend down their first round of stimulus checks is here, but they may have a little extra time.

In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act authorized $1,200 stimulus checks to most Americans, including Medicaid recipients. Another round of $600 checks was authorized in December 2020, and $1,400 checks were authorized in February 2021. The stimulus checks are not considered income for Medicaid recipients, and the payments have been excluded from Medicaid’s strict resource limits for 12 months.

While the one-year deadline for spending down the first round of checks is here, another COVID-19 bill gives beneficiaries more time. The Families First Coronavirus Response Act passed in March 2020 provides that if you were enrolled in Medicaid as of March 18, 2020, the state cannot terminate a recipient’s benefits even if there is a change in circumstances that would normally cause the benefits to be stopped. The law states that the recipient’s Medicaid coverage must continue through the end of the month in which the Secretary of Health and Human Services declares that the public health emergency has ended. The public health emergency is set to end April 20, 2021, but it will likely be extended.

While Medicaid recipients may have a little extra time, they shouldn’t delay too long in spending down the money if it has pushed them over the resource limit, which is $2,000 in most states. The following are examples of what a Medicaid recipient may be able to spend the money on without affecting their eligibility:

Make a payment toward paying off debt.
Make small repairs around the house.
Update personal effects. Buy household goods or personal comfort items. Buy a new wardrobe, electronics, or furniture.
Buy needed medical equipment, see a dentist or get eyes checked if those items aren’t covered by insurance.

While Medicaid recipients usually cannot gift money or assets and remain eligible for benefits, recipients in at least some states should be able to make gifts from the stimulus money. If you have questions about how you or a family member in a nursing home can spend the money, contact your elder law attorney. To find an attorney near you, click here.

How the $1.9 Trillion COVID-19 Relief Bill Aids Seniors

President Biden has signed the latest COVID-19 relief bill, which in addition to authorizing stimulus checks, funding vaccine distribution, and extending unemployment benefits, also provides assistance to seniors in a number of ways.

The $1.9 trillion American Rescue Plan Act (ARPA) delivers a broad swath of relief, covering families, employers, health care, education, and housing. The following are the provisions that most directly affect older Americans:

Relief checks. The ARPA provides $1,400 direct payments to individuals earning up to $75,000 in annual income and couples with incomes up to $150,000. The payments phase out for higher earners, and there are no payments for individuals earning more than $80,000 a year or couples making more than $160,000. Eligible dependents, including adult dependents, also receive $1,400. People collecting Social Security, railroad retirement, or VA benefits will automatically receive the payment even if they don’t file a tax return. The checks will not affect eligibility for Medicaid or Supplemental Security Income as long as any amount that pushes recipients above the programs’ asset limits is spent within 12 months.

Medicaid home care. The Act provides more than $12 billion in funding to expand Medicaid home and community-based waivers for one year. This funding will allow states to provide additional home-based long-term care, which could keep people from being forced into a nursing home. The additional money will also allow states to increase caregivers’ pay.

Nursing homes. Nursing homes have been hit hard during the pandemic. The Act supports the deployment of strike teams to help nursing homes that have COVID-19 outbreaks. It also provides funds to improve infection control in nursing homes.

Pensions. Many multi-employer pension plans are on the verge of collapse due to underfunding. The Act creates a system to allow plans that are insolvent to apply for grants in order to keep paying full benefits.

Medical deductions. If you have a large number of medical expenses, you may be able to deduct some of them from your taxes, including long-term care and hospital expenses. The Act permanently lowers the threshold for deducting medical expenses. Taxpayers can deduct unreimbursed medical expenses that exceed 7.5 percent of their income. The threshold was set to increase to 10 percent under the 2017 tax law.

Older Americans Act. The ARPA provides funding to programs authorized under the Older Americans Act, including vaccine outreach, caregiver support, and the long-term care ombudsman program. It also directs funding for the Elder Justice Act and to improve transportation for older Americans and people with disabilities.

What to Do With Your Stimulus Check if You Are in a Nursing Home

As the second (and maybe third) round of stimulus checks go out, it is important to know that nursing home residents are not required to turn their checks over to their nursing home. And Medicaid recipients need to spend the cash within a year if it puts them over Medicaid’s resource limit.

In December 2020, Congress approved $600 stimulus checks for individuals making less than $75,000 a year. And Congress is currently considering whether to approve another round of $1,400 stimulus checks. Those checks should be sent to everyone eligible, including individuals on Medicaid and in a nursing home or assisted living facility.

The Federal Trade Commission (FTC) is reminding nursing home and assisted living residents that their stimulus checks are for them, not their facility. With the first round of stimulus checks, there were reports that facilities were taking the checks without residents’ permission. The FTC says that if nursing homes ask for a resident’s check, the resident should contact the state attorney general and the FTC.

Medicaid recipients who receive a stimulus check that puts them above Medicaid’s resource limit will need to spend down the money within a year or risk losing benefits. The Social Security Administration has said that it will not consider stimulus payments as income, and that the payments will be excluded from a Medicaid recipient’s resources for 12 months. The following are examples of what a Medicaid recipient may be able to spend the money on without affecting their eligibility:

Make a payment toward paying off debt.
Make small repairs around the house.
Update personal effects. Buy household goods or personal comfort objects. Buy a new wardrobe, electronics, or furniture.
Buy needed medical equipment, see a dentist or get eyes checked if those items aren’t covered by insurance.

If you have questions about how you or a family member in a nursing home can spend the money, contact your elder law attorney.

Alzheimer’s – the other Pandemic

The Barron’s weekly February 8, 2021 publication had a comprehensive article on Alzheimer’s disease which they called The Other Pandemic. https://www.barrons.com/articles/the-coming-alzheimers-crisisand-what-to-do-about-it-51612543200?mod=hp_MAG It is a fairly basic article but good for those who are just beginning to struggle with this for a family member. A more advanced and interesting article discusses the new Biogen Alzheimer’s drug, aducanumab, in development. https://www.barrons.com/articles/biogens-big-bet-on-its-alzheimers-drug-what-happens-to-the-biotechs-stock-51612526499?mod=hp_LEAD_4 It has been 18 years since we have had any new approved drugs for treatment of Alzheimer’s disease. This article discusses the status of approval for aducanumab and other drugs.

Our website has very comprehensive information on asset protection planning for families dealing with Alzheimer’s, Medicaid eligibility in Ohio https://www.michaelmillonig.com/ohio-medicaid/ as well as basic estate planning important to be done in the early stages of the disease. In the middle or later stages the Alzheimer’s patient will not be legally competent to sign any legal documents.

What To Do With Your Stimulus Check if You Are in a Nursing Home

As the second round of stimulus checks go out, it is important to know that nursing home residents are not required to turn their checks over to their nursing home. And Medicaid recipients need to spend the cash within a year if it puts them over Medicaid’s resource limit.

In December 2020, Congress approved $600 stimulus checks for individuals making less than $75,000 a year. Those checks should be sent to everyone eligible, including individuals on Medicaid and in a nursing home or assisted living facility.

The Federal Trade Commission (FTC) is reminding nursing home and assisted living residents that their stimulus checks are for them, not their facility. With the first round of stimulus checks, there were reports that facilities were taking the checks without residents’ permission. The FTC says that if nursing homes ask for a resident’s check, the resident should contact the state attorney general and the FTC.

Medicaid recipients who receive a stimulus check that puts them above Medicaid’s resource limit will need to spend down the money within a year or risk losing benefits. The Social Security Administration has said that it will not consider stimulus payments as income, and that the payments will be excluded from a Medicaid recipient’s resources for 12 months. The following are examples of what a Medicaid recipient may be able to spend the money on without affecting their eligibility:

Make a payment toward paying off debt.
Make small repairs around the house.
Update personal effects. Buy household goods or personal comfort objects. Buy a new wardrobe, electronics, or furniture.
Buy needed medical equipment, see a dentist or get eyes checked if those items aren’t covered by insurance.

If you have questions about how you or a family member in a nursing home can spend the money, contact your elder law attorney. To find an attorney near you, click here https://www.elderlawanswers.com/elder-law-attorneys

Ohio Legacy Asset Protection Trusts

There are certain types of trusts that a person can create to protect their estate from lawsuits, bankruptcy, divorce settlements, government expropriation and other creditor claims against their property. Many persons have what is commonly referred to as a revocable living trust. These are usually set up in order to avoid probate. However, this type of trust offers no creditor protection. Traditionally, a person could not set up their own trust for their benefit and at the same time protect their estate from creditors. Trust law prohibited this type of trust. However, this has changed in many states.

Ohio is one of those states that has a special statute permitting a person to create this type of trust. The Ohio Legacy Trust Act was passed effective March 27, 2013 adding new provisions for the creation of an asset protection trust. The Ohio version of a domestic asset protection trust is known as an “Ohio Legacy Trust.” It is one of the best statutes in the country of this type. There are many other details that I can’t cover in this short biog. One important detail to be aware of is that you must plan ahead and create this trust prior to any actual creditor claims or other legal actions against you. The law prohibits any type of transfer of property to this trust if you have a pending creditor claim. As with all other estate planning, it is important to plan ahead.

Can You Visit Nursing Home Residents After They are Vaccinated?

COVID vaccines are starting to roll out to nursing homes across the country, signaling the beginning of the end of the pandemic. Once your loved one has had both doses of the vaccine, you may be able to visit, but precautions are still necessary.

The federal government entered into a partnership with CVS and Walgreens to deliver the vaccines to nursing home residents, who have high priority for being vaccinated, according to the Centers for Disease Control and Prevention (CDC) guidelines. The pharmacy companies began administering vaccines in 12 states in mid-December and will expand to 36 states before year’s end. Both the Pfizer the Moderna vaccines require two shots three or four weeks apart.

Restrictions on nursing home visitors vary from state to state, with some states limiting them and others allowing more visitation. Currently, the CDC recommends that nursing homes allow indoor visitors if the facility has had no COVID cases for 14 days. Once vaccines have been distributed, restrictions may ease further.

According to the New York Times, experts recommend that to be safe, you should wait until two weeks after your loved one gets the second dose of the vaccine before visiting. The safest time to visit would be after all the residents and staff have been vaccinated and you receive the vaccine as well. Even if you and your loved one are vaccinated, you should still wear a mask when visiting. As long as COVID is spreading in the community, mask wearing is still recommended.

Noting that the vast majority of older adults with chronic conditions live at home, long-term care consultant Howard Gleckman asserts that these vulnerable adults along with their caregivers should also be vaccinated as soon as possible. As states ration their limited initial supplies of the vaccines, Gleckman says, “they should remember the millions of people who are at high risk of severe illness or death from the virus, but who are living at home.”

For more information about the vaccine rollout to nursing homes, click here and here.

SEMINARS FOR CPA’S & FINANCIAL PLANNERS

The following seminars are offered for CPA’s, financial planners and insurance agents for continuing education credits. These are not consumer oriented seminars. Registration links are at the bottom of this post.

ASSET PROTECTION PLANNING
FOR NURSING HOME COSTS
Friday, December 11, 2020 @ 8:45 AM – 12:00 PM
via ZOOM online of course

▸ Review of all new changes resulting from Ohio’s conversion to an SSI/1634 State
▸ Review all new resource eligibility rules
▸ Miller Trusts (aka Qualified Income Trusts) now required for many applicants
▸ Problems with clients not using Miller trusts correctly; caseworkers now requiring stricter compliance
▸ New rule for Residence exemption for single persons & our success with exemptions
▸ Medicaid Transfer rule; more changes and problems
▸ Resource exemptions for the community spouse (spouse at home)
▸ Restrictions on Medicaid annuities and planning opportunities
▸ Annuities used for planning & related malpractice of agents
▸ Medicaid Transfer rule; not just 5 years but an ineligibility period beginning after spend down!
▸ Office procedures to avoid malpractice
▸ Long Term Care Insurance for nursing home costs
▸ Additional Medicaid exemptions for persons with Partnership Plan Policies
▸ Assisted Living rules for Medicaid
▸ Many other planning options to protect the estate and qualify for Medicaid
▸ Why your clients should not be giving their assets to their children
▸ Special Needs Trusts under Medicaid law for children with disabilities

OHIO TRUST CODE
(also approved as “The Complete Trust Course”)
Thursday, December 10, 2020 @ 8:45 AM – 12:00 PM

Trusts are usually the centerpiece in estate planning for high net worth individuals. Therefore, it is important to understand some fundamentals about trusts and the specifics of the many types of trusts used in estate planning.

▸ This presentation will cover fundamental legal principles of trust law to help you be able to read a trust document and understand legal terminology.
▸ Comprehensive Review of a Trust Document; this will help you in your discussions with the attorney who drafted the document.
▸ Rights of beneficiaries that apply even if contrary to the trust.
▸ Avoiding probate with a revocable living trust; common mistakes by clients; comparison to TOD, POD accounts and beneficiary designations; disadvantages of the latter.
▸ How to explain trusts to clients; Trust Terminology review
▸ A-B Trusts, Life Insurance Trusts, Incentive Trusts, Spendthrift Trusts, Trusts for second marriages
▸ Estate tax planning under the higher exclusion amount ($11,580,000 for 2020)
▸ A-B Trusts compared to the portability election; pitfalls of portability
▸ Asset Protection Trusts to protect clients from lawsuits
▸ Ohio Legacy Trust Act: an asset protection trust under Ohio law
▸ Foreign Asset Protection Trusts under laws of other countries
▸ Perpetual Dynasty Trusts that continue to provide protection and avoid estate tax for grandchildren and beyond
▸ Many other different types of trusts will be covered

CONTINUING EDUCATION CREDIT

The above seminars have been approved for CE credit by the Ohio Department of Insurance. There is no exam required to obtain CE credit. Michael Millonig LLC is registered with the Accountancy Board of Ohio as a Continuing Education Sponsor. Asset Protection Planning for Nursing Home Costs and The Ohio Trust Code (“The Complete Trust Course”) are each approved for 3 CE Credits.

REFUND POLICY: Cancellations received by 5:00 PM two business days prior to the seminar will be refunded less a $15 office fee. Those not attending will receive the course materials in full consideration of tuition paid.

TUITION: Tuition is $60 per seminar if pre-registered and paid two business days prior to the day of the seminar. Registration on the day before or the day of the seminar is $70.00. There is a discount if you pre-register for two courses (see below).

To register, click below
Asset Protection Planning for Nursing Home Costs:
https://zoom.us/webinar/register/6816063141111/WN_767br6d7QFuNt3gcccjggA

Trust seminar:
https://zoom.us/webinar/register/7316063140479/WN_464eBaU7TsCEinPM-s4L7w

Reservations must be made in advance on online with Zoom. Please check your email for the link for Zoom registration. In addition, you must send payment in advance. Please send a check via U. S. Mail to Michael Millonig LLC, Attn: Agent/CPA CE Seminars, 7929 Washington Woods Drive, Dayton, Ohio 45459-4026.

Thanksgiving during COVID

This is a difficult time for us to continue to balance COVID-19 safety protocols & government restrictions with spending time with our families and loved ones. The CDC has issued some guidelines for celebrating Thanksgiving :
https://m.emailupdates.cdc.gov/rest/head/mirrorPage/@lIie1UBTdMtWe9u7NFnRaoqgvmZv-N5jV6fmPS2nYOQXVIPyuiVz9uULj_TGPOZSg-G–UIZHBdxY-xmVVBRTO7q0jrfS1VkJRnfxjMYMBm5F1d5.html

The National Consumer Voice for Quality Care is an organization that is an advocate for nursing home residents and their families. They have also issued some specific guidance related to nursing home residents:

https://act.theconsumervoice.org/site/MessageViewer?dlv_id=6827&em_id=3465.0

Have a safe and happy Thanksgiving holiday.