by Sally M. Wagley, estate planning and elder law attorney
Everything in life changes – especially the law on estate tax.
Since I started practicing as an estate planning lawyer in Maine almost 14 years ago, estate tax laws have changed many times. This last year, 2011, has been particularly eventful:
- The federal estate and gift tax exemption increased from $3.5 million to $5 million dollars (after a very brief period during which the federal estate tax was repealed altogether).
- The Maine estate tax exemption will increase from $1 million to $2 million dollars, effective January 1, 2013.
If you are a Maine resident and have accumulated significant wealth, a simple will may not be enough. You may need an estate plan which aims to reduce or even eliminate estate tax, thus preserving what you’ve saved for the next generation or for charity. Strategies include:
- Trusts for the benefit of spouse, children, grandchildren or other family members;
- Gifts to charity, including gifts to charitable trusts;
- Bequests which skip a generation;
- Annual gifts of up to $13,000 per person to family members;
- Funding college savings plans for grandchildren.
Since the laws on estate tax change so often (and will continue to change), I like to incorporate flexibility into clients’ estate plans, enabling surviving family members to make decisions at the time of your death based on the law in effect at that time, based on the size of your estate and based on th e needs of surviving family members. An example is a will which gives your surviving spouse the ability to “disclaim” his or her inheritance from you, directing assets to one or more tax-saving trusts, if it appears at that time to be beneficial. This is just one of a number of approaches to formulating a tax-oriented estate plan.
The information provided here is for educational purposes only, and should not be construed as legal advice or an answer to a specific legal problem.
Sally M. Wagley practices in the areas of elder law, estate planning and estate administration, with the firm of Levey and Wagley, P.A. in Winthrop, Maine, www.leveyandwagley.com.
By Sally M. Wagley, elder law attorney
As an attorney focusing on elder law, I am carefully watching the Maine Governor Paul LePage’s proposed cuts to MaineCare programs serving the elderly. My last blog post was about the proposed elimination of coverage for residential care (also known as “assisted living” or “boarding home” care).
The Governor’s budget proposal also includes cuts to prescription drug assistance to Maine’s elderly. According the Spectrum Generations, the proposed MaineCare cuts are as follows:
- Prescription Drug and Health Care Assistance for People over 65 and People with Disabilities: Approximately 72,000 Maine elderly and people with disabilities would lose some or all assistance they currently receive to pay for Medicare and/or prescription drug costs. Of the 72,000, over 20,000 (with incomes between 135-185% FPL) will lose all assistance they currently receive through the Medicare Savings Program (MSP) to help pay for Medicare premiums, co-payments and deductibles, prescription drug costs, and coverage through the so-called “donut hole”. The remainder, approximately 52,000 people, will lose some assistance with Medicare and/or prescription drug costs.
- Prescription Drug Assistance for Certain People over 62 and People with Disabilities: Approximately 5,000-6,000 low-income older adults (over age 62) and people with disabilities who do not have Medicare will lose all assistance they currently receive to afford their prescription medications through the Drugs for the Elderly program (DEL). These are individuals with serious health conditions such as diabetes, heart disease and Lou Gehrig’s Disease.
These MaineCare cuts, of course, must have legislative approval in order to go into effect. Hearings are being held at the State House right now. More details will be coming.
by Sally M. Wagley
This week Maine’s governor released his proposal for cuts to the MaineCare (Medicaid) program. A number of the proposed cuts will affect Maine’s elderly.
An area of particular concern is the elimination of MaineCare coverage of expenses faced by elderly and disabled people who live in residential care and assisted living facilities. As an elder law attorney, I have many clients in these facilities who cannot afford to pay the monthly cost of $4000 to $7000, who are on MaineCare or will need to apply for it soon. I also have many clients who are stressed out caregivers who cared for an elderly relative for as long as possible, before reaching the point of exhaustion.
Assisted living and residential care facilities are for elderly people, many of them with Alzheimer’s and other forms of dementia, who need supervision around the clock. In these settings, they are provided with security, reminded when to eat, dress and bathe, are helped with medication, and provided assistance with some activities of daily living.
Where will these people go if they can’t get MaineCare and can’t afford to pay privately? Most will not meet the criteria for nursing home level of care. So they will have to return to live with exhausted spouses and other relatives, many of them also elderly and with health problems). For those without families or homes to go to, or whose families simply cannot take them back, the outcome is not clear.
The governor’s proposal is at this point just that — a proposal, which will need legislative approval before it becomes a reality. Regardless of whether you agree with the governor, it is important to be aware that this change may be coming.