Deficit Reduction Act
February 9, 2006
The Deficit Reduction Act of 2005 was signed into law by President Bush on February 8, 2006. The new transfer penalty rules for Medicaid eligibility along with other changes are now in effect and apply to all transfers made on or after February 8, 2006.
New York State must now enact enabling legislation. It is not known whether New York will apply the new Medicaid transfer rules retroactively to February 8, 2006, or whether it will only to transfers made on or after the date New York enacts its legislation.
As noted in prior Koldin E-Newsletters, the new transfer rules require a 5 year lookback before your assets are protected from Medicaid. Under this new Law, estate planning in advance of an illness becomes even more critical. If you are already ill, your options are now more limited, but there are steps that still can be taken to protect some of your assets. If you are ill, your options should be reviewed as soon as possible.
Another major change in the law under the Deficit Reduction Act of 2005 is that the exemption on the Family Home is now capped at $500,000 with the option of each State to raise this limit to $750,000. In the past, the Family Home was always protected for the healthy spouse. Now, if the home is worth more than the limit, it will no longer be protected. Now that Congress has eliminated the total exemption on the home, there is always a risk that future budget cuts will lead to a lowering of this $500,000 limit. Protecting your home from any future budget cutting laws is another important reason to plan in advance.
The Koldin Law Center, P.C. is available to help. If you are a client of our office and wish to discuss your file, please call your legal assistant. If you are not a client and want to review your options, please contact our office to schedule an appointment. There is no fee for the initial consultation. This newsletter is not intended to provide legal advice, but is intended to alert you of an important legal development.
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We Appreciate Your Referrals
We have been told by many clients who are in a crisis that they wish they had known about our firm much sooner. We are proud of the many families we have helped in times of crisis.
We are also proud of the many families we helped avoid financial crisis by doing estate planning in advance.
We all share the responsibility for making our family and friends aware of the planning options available to them.
Your referral to the Koldin Law Center could make a major difference in the lives of your family and friends if they are someday faced with a long term illness.
Remember that the Koldin Law Center offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
There is no fee for the initial consultation.