Welcome to our firm's newsletter, a way to keep you up-to-date on the latest developments in Estate Planning, Elder Law, and at our firm and to give you my perspective on the latest developments in our field.
February was a busy month! New Year's Day 2024 has quickly come and gone and we are already well into 2024. This means that the clock is ticking on the federal estate tax exemption cliff in 2025. The federal estate tax exemption (the size of an individual's estate that does not get taxed before taxes kick in) has been growing steadily year over year and is currently at $13.61 million per individual. However, it will revert back to about half what they are now without action from lawmakers on January 1, 2026. This includes all assets in your estate, including real estate, life insurance, all stocks, bank accounts, etc. In my experience, most people underestimate their net worth and can end up paying unnecessary taxes without proper planning.
I celebrated my birthday with my family at the beginning of the month. Birthdays are always a chance to reflect on the prior year and think about what I want in the coming year. Unlike the birthdays I celebrated as a child, as I get older, birthdays are a bittersweet mix of the joy of celebrating with my family and the realization that I am getting older. I am trying not to leave my family prematurely and am prioritizing my health in the coming year and urge all of you to do the same. My focus currently is to build a nest egg and legacy to support my family when I am no longer around (hopefully many years from now) and to make sure that my money is protected and used first and foremost for their care, education and well-being. When my oldest son was born, we updated our plan to include a minor's trust for him and our children. If you have children, especially young children, make sure you have a plan in place that includes appropriate Guardians and have selected the right individuals to manage your money according to your wishes.
Out In The Community
I spent the early evening on February 14th on the Upper West Side and the Apsley Senior Living Community's beautiful Valentine's Day Dinner. What a beautiful event and food to rival the prix fixe dinners of a typical Valentine's Day out! I am always so impressed and inspired by the level of service and compassionate care at the Apsley and many of the assisted living communities where my friends, clients and family live. When thinking about plans for your aging, there are many things to consider. Who is making the decision? Will you be making it alone, with a spouse or children? What can you afford and do you need to find a community that has higher level nursing or memory care? Please have these conversations in advance so you don't need to have them during a crisis. Managing the care of a parent or spouse can be a full time job, both with time and mental energy, so planning for yourself reduces the pressure for your loved ones and is a great gift.
On the 21st and 29th of February, I gave presentations (one to the general public and the other to Presbyterian Senior Services - Circle of Care) on behalf of the Alzheimer's Association titled Managing Money: A Caregiver's Guide to Finances. Needing specialized care is incredibly expensive. One option for financing care is the use of Medicaid. Since 2020, New York State has been considering instituting a "Lookback Period" for those planning to use Medicaid services for care in a home. That means Medicaid will check your financial records for a certain period before applying for Medicaid to see if you have been reducing your wealth just to meet Medicaid's eligibility criteria. New York State will eventually institute a 30-month look back period but has delayed its effective date, which is currently slated for Spring of 2025. If instituted, that would mean examining all of an applicant's financial transactions back to the fall of 2022.
What does that mean for you? If you think you or someone in your family may need home care, it is best to work with an attorney today to plan your asset protection strategy. Otherwise, you may be in a position of having Medicaid institute a "penalty period" before you qualify for Medicaid or having Medicaid go after your assets when you die. By planning early, you might be able to qualify for high-quality care faster while saving money to leave to your loved ones after you are gone. Wishing you a healthy, happy remainder of the winter. Feel free to reach out if you have questions about your estate planning or long-term care planning.
Michael