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Client created a basic estate plan including a will, financial power of attorney, medical power of attorney, directive to physicians a/k/a living will, HIPPA authorization and declaration of guardian in the event of later incompetence.  The client gave extra powers to the agent in the financial durable power of attorney including the ability to create or amend revocable trusts and to fund such trusts in addition to the standard powers such as handling real estate transactions. 

The Tax Cuts and Jobs Act is scheduled to sunset at the end of year 2025 which is scheduled to reduce the federal and estate and gift tax exclusion to one-half of the exemption level that exists at that time. As of January 1, 2024, the federal estate gift tax exclusion is $13,610,000.

Applicants for long-term care and Star+ Medicaid must be below an income cap as one of the requirements for eligibility. If the applicant’s income exceeds the income limit of $2,829 (as of January 1, 2024), the eligibility solution for this particular requirement is the creation of a Qualified Income Trust (QIT) formerly known as a Miller Trust. Texas follows the “name on the check” rule in determining income.

Small estates affidavits and affidavits of heirship are often confused as an alternative to a costly court-ordered heirship determination which are often needed when a decedent dies without a will.

As of January 1, 2024, you can give up to $18,000 per year, per person (other than gifts of future interests) without reporting to the IRS and without gift taxation. So, for example, if a married couple with three children wanted to give the maximum to each child, then they could give up to $108,000 ($18,000 x 3 by the husband and $18,000 x 3 by the wife) in year 2024 without reporting to the IRS.

Since long-term care Medicaid (which helps pay for skilled nursing care and medications) is “means-tested” (assets of the applicant are reviewed to determine if there is eligibility for the government to pay), there is a 5-year “look-back” period as there is a presumption resources were purposely reduced so that the government would have to pay. The average cost of care for skilled nursing care in Texas exceeds $7,000 per month. If an uncompensated transfer is made within that look-back period, the applicant is penalized by having to private pay until the transfer penalty expires.