It seems that a lot of elderly New Yorkers are consulting with their New York estate attorney in order to help them with hiding their assets. Why are these New Yorkers so bent on hiding assets? They have multiple reasons.
The first reason is a reason we have mentioned over and over again. Estate tax is something that many elderly New Yorkers fear because they are worried that their heirs will be left with nothing. The New York Times reports that in areas such as New York and California, a lot of estates fall under the estate tax that will most likely go into effect next year. This is because of high home prices which could affect the estates of individuals who assume that they are middle class.
As a result, more individuals are trying to hide assets with a bit of help with their New York estate planning lawyer.
Another reason that many elderly New Yorkers are planning out their assets with a New York estate attorney is because of Medicaid. The New York Post reports that many individuals are divesting their assets to their heirs in order to qualify for Medicaid. For example, a New York estate planning lawyer told Thelma to "go broke" on paper in order to ensure that if she needs to be put into a nursing home, the state of New York will pay for it instead of her heirs.
In order for individuals to qualify for Medicaid, they can't have more than $9,200 for the past five years (which is known as a look back period). It used to be three years, but that has recently changed. More and more people are turning to their New York estate attorney in order to create an irrevocable trust with their homes in their children's names in order to hide valuable assets. Patrick Cucinelli, senior director public policy solutions at the New York Association of Homes and Services for the Aging told the New York Post: "You could have $1 million six years ago, and you put it in a trust for your kids and then it looks like you have nothing."
Any assets that are transferred plus any money in an IRA are not counted in the look back period.
New Yorkers feel that if they contribute to the Medicaid system with their taxes that they should be able to use that system even if they can afford to go without it. This way they can leave their heirs a princely inheritance. However, it does leave New York state in the hole. New York will spend approximately $8 billion on nursing home care this year.
While it legitimately legal to use practices such as the ones that people like Thelma use, it does put a burden on the state system. Patrick Cucinelli said: "Medicaid was intended for indigent people to get healthcare. It was meant to serve elderly people with serious health problems, disabled people and blind people. Now you take someone with significant assets who is taking advantage of a loophole in the law. The program designed to care for indigent people is de facto long term care insurance for financially OK people. It's a serious public policy issue."
While it is noble that many people want to plan for their heirs, it is also important to pick a plan with your New York estate planning lawyer that is conscientiously sound. Calling a New York estate attorney to see what works best for your family is a good way to plan for your own future.