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Asset Protection Planning

Qualified Income Trusts

By Asset Protection Planning, Medicaid Planning

Qualified income trusts (QITs) can be used to help a person qualify for Medicaid whose gross income before any deductions is above the limit to qualify for Medicaid long-term care services.  The current income limit for Medicaid long-term care services (in 2015) is $2,199 per month.  This type of trust agreement must be irrevocable and must be approved by the Department of Children and Families’ legal office.  Deposits must be made into your QIT each month you wish to qualify for Medicaid.  After the account holder’s death, the funds remaining in the QIT will be used to pay back Medicaid up to the amount received and used for long term care.

If you have questions about qualifying for Medicaid to help pay for long term care, contact our Florida Board Certified Elder Law Attorney Babette Bach, Esq. at (941) 906-1231.

 

 

March 25, 2015
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Prior Planning for Long Term Care Costs

By Asset Protection Planning, Long-Term Care, Medicaid Planning

Question:    I am interested in doing Medicaid planning for potential future long term care costs, but I don’t know for sure that I’ll even need skilled nursing care or long term care.  Should I start the Medicaid planning process ahead of time or wait until I need the nursing home care to make the plans?

Answer:    Generally anyone who feels they have inadequate assets to pay for skilled nursing care should consider planning in advance.  Skilled care costs average approximately $8,000 a month in Sarasota County.  Because there is a 60-month look back period, there are risks to waiting until a crisis hits to plan for Medicaid.  It is more advantageous to make an appointment with an elder law attorney to evaluate your situation, income, and assets at the outset of a gradual condition that may cause you to eventually need long term care.  Babette Bach is a Florida Board Certified Elder Law Attorney and an expert in public benefits and asset protection planning.  Call Bach & Jacobs today to make an appointment for a consultation with her.

January 10, 2014
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Retirement Provisions in the American Taxpayer Relief Act of 2012

By Asset Protection Planning, Estate Planning, Tax Law

 The American Taxpayer Relief Act of 2012 (ATRA), passed to avoid the fiscal cliff, includes two provisions that are important to many IRA owners and retirement plan participants. The first extends tax-free charitable contributions from IRAs through 2013, and the second eases the rules for 401(k), 403(b), and 457(b) in-plan Roth conversions.

 The Pension Protection Act of 2006 first allowed taxpayers over the age of age 70½ to exclude from gross income otherwise taxable distributions from their IRA (“qualified charitable distributions,” or QCDs), up to $100,000, that were paid directly to a qualified charity. The law was originally scheduled to conclude in 2007, but was extended through 2011. The law has just been extended yet again through 2013 by ATRA.

 If you need legal advice for estate planning, Asset Protection Planning, or Medicaid planning, please contact our office at (941) 906-1231 for an initial consultation.

September 23, 2013
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What is a Thrift Savings Plan?

By Asset Protection Planning, Tax Law

 A thrift savings plan for federal employees and members of the armed services is like a 401K plan, rather than an IRA. It is funded with pre-tax contributions by the participant out of their paycheck.

Participants can borrow against their account balances and the repayments are deducted from their pay checks.

If over age 59.5, participants can withdrawal their balances while in service without penalty. If under age 59.5, withdrawals can only be made for financial hardship.

Upon separation from the service, the participant can roll over the account balance or withdraw the balance in installments or in a lump sum. If under age 59.5, the withdrawals upon separation of service will result in a penalty if not rolled over. Another alternative upon separation of service is to keep the money in the thrift savings plan until age 70.5, at which time the entire account has to be withdrawn or rolled over.

This is all pre-tax money and will be subject to income taxes when the account is liquidated.

For more information on your tax return and charitable donations, visit www.irs.gov. Please contact our office at (941) 906-1231 for an initial consultation if you need legal advice.

August 21, 2013
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