Federal Estate Tax Law Continues to Be Dealt with by Congress on a Temporary Basis

The most recent tax law passed by Congress and signed by President Barach Obama on December 17, 2010 temporarily changed the federal estate  tax laws.  Decedents who die during 2011 and 2012 now have a federal estate tax exemption of $5,000,000, but that figure drops back down to $1,000,000 in 2013, so we can expect more political arguments over the federal estate tax in the near future.

Estates of decedents who died during 2010 will automatically be subject to the 2011 tax laws unless they file an election to be taxed under 2010 laws.  For most estates under $5,000,000, 2011 law will be beneficial because assets includible in the estate will automatically receive a step-up in basis for capital gains tax purposes.  An election can be filed to have the 2010 law apply to the estate, but the Internal Revenue Service still has not finalized the form, instructions, or due date.

At-Home Spouses Should Obtain Legal Advice When Applying for MassHealth to Cover Nursing Home Costs for Their Spouses

In a recent 2010 Massachusetts case, a wife didn’t obtain timely MassHealth approval to cover her husband’s nursing home bills, and ended up being sued by the nursing home.  Even though she had not signed anything at the nursing home that would cause her to be financially responsible for his bills, she still lost the case and had to pay $45,243.24 to the nursing home out of her own pocket.  Why?  Under Massachusetts law, spouses are financially responsible for “necessaries” for their spouses, and this case makes it clear that nursing home bills are considered necessaries under Massachusetts law.  For more information, or to read the case yourself, go to Are You Personally Responsible for Your Spouse’s Nursing Home Bills in Massachusetts?

There is an official way to refuse to cooperate with the MassHealth application process, but unfortunately the wife in this case didn’t handle matters correctly.  In most cases, by making the right moves, the at-home spouse can keep all the assets anyway, so timely cooperation usually makes sense.  For more information about how the at-home spouse can keep all the assets, go to Preserving Assets and Maximum Income for the Healthier Spouse When the Other Spouse Enters a Nursing Home

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