Certified New Jersey Elder Law Attorneys

McHugh & Macri
Certified Elder Law Attorneys Serving New Jersey Residents since 1978.
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Estate planning and long-term care

NAELA National Academy of Elder Law Attorneys, Inc. MEMBER

New Jersey is one of several states that has a separate estate tax. Its current $675,000 exclusion is far less than the current federal exclusion of $5.25 million per spouse, and accordingly many estates that have avoided paying federal estate taxes may end up owing taxes to the state. At both levels, the estate tax can cut into a significant chunk of one's wealth, but there are some strategies that individuals can use to both minimize tax liability and preserve assets to pass on to future generations.

Proper estate planning includes an analysis of all of the tax exemptions and credits available under state and federal law. Each spouse is able to take advantage of the federal $5.25 million estate tax exclusion, and the exclusion is portable, so that the surviving spouse can use the exemption of the unused portion of the spouse that died. The federal exclusion is tied to the rate of inflation and is scheduled to increase by $90,000 in 2014.

Another aspect of long-term care planning that individuals should consider is enrollment in an insurance plan that covers long-term care. Private nursing home and assisted living care can be very expensive, and state Medicaid programs may not cover all of the costs and expenses. Eligibility in these programs is based in part on current income and assets, and there are rules dealing with transfers of assets that may delay eligibility for a period of time.

Long-term health care considerations can have a significant effect on asset management and estate planning decisions. An attorney may be able to provide information about various private and public long-term care programs that can influence those decisions.

Source: NJ.com, "Biz Brain: Estate planning strategies and long-term care", Karin Price Mueller, October 21, 2013

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