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As we transition into the spring of 2024, significant changes to tax and Medicaid laws are on the horizon, affecting estate planning and long-term care strategies. At The Law Offices of Lawrence Israeloff, we are committed to providing our clients with the most current and comprehensive guidance to navigate these changes effectively. This year brings notable adjustments to estate tax exemptions, gift tax exclusions, and Medicaid asset protection rules that could have profound implications for your financial planning.

Estate Tax Law Changes

The new year marks an increase in exemptions for estate taxes, a crucial development for individuals and families planning their estates. For New York residents, the estate tax exemption rises to $6.94 million, while the Federal estate tax exemption reaches $13.61 million. Additionally, the annual gift tax exclusion increases to $18,000.

For those whose estates exceed or may exceed the New York threshold, it is vital to act promptly to mitigate the impact of New York estate taxes, which begin at over $500,000. Several strategies can help in this regard:

1. Dual Trusts

Establishing separate trusts for each spouse can effectively double the New York exemption, offering a significant shield against estate taxes.

2. Strategic Gifting

Reducing your estate through gifts can lower its value below the New York exemption, especially if done at least three years before the donor’s death.

3. Charitable Donations

Utilizing a “Santa Clause” approach, where amounts above the threshold are donated to charity, can reduce your estate to the exemption amount, providing both tax benefits and philanthropic satisfaction.

Medicaid Law Changes

Medicaid planning has also undergone critical changes, particularly concerning asset protection and eligibility for home care services. A key exemption remains for the primary residence, protected so long as a spouse resides there, with an equity limit of $1,071,000 in 2024. However, with over 80% of nursing home residents lacking a residing spouse, proactive planning with a Medicaid Asset Protection Trust (MAPT) becomes essential.

A MAPT not only safeguards your home from being counted against Medicaid eligibility but also addresses the upcoming two and a half year look-back period for home care services starting April 1, 2024. This shift from the previous no look-back policy emphasizes the importance of early planning to secure home care assistance without jeopardizing asset protection.

For individual assets, Medicaid’s asset limits remain stringent, allowing an individual to retain only $30,182, while a spouse may keep up to $154,140. The implementation of a MAPT can provide a strategic solution to these limitations, ensuring that your assets are protected and that you or your loved ones receive the care needed without undue financial burden.

Contact Us For Strategic Estate Planning

The changes to tax and Medicaid laws in 2024 underscore the importance of informed and proactive estate and long-term care planning. At The Law Offices of Lawrence Israeloff, we are dedicated to helping our clients understand these developments and implement effective strategies to protect their assets and ensure care. Whether through strategic use of trusts, gifting, or Medicaid planning, our expertise can guide you through the complexities of these legal changes.

For personalized advice and to discuss how these changes affect your specific situation, we invite you to contact our office. Together, we can navigate the legal landscape of 2024, ensuring your estate planning and care needs are met with foresight and precision.