Simply stated, the answer is “No”, “No”, and “No”. There are no instructions to explain how to fill-out the Medicaid Application. Consequently, this results in many hidden traps that could have been avoided. I have a retired attorney friend who believed he could help his family member complete the Medicaid Application–he ended up receiving a “first-look denial” of benefits for that family member. Medicaid workers, at most offices, do not know how to fill-out the application, nor do they have a vested interest in your cause. Remember, it is the function of the Medicaid office to deny you benefits that you are entitled too! It can become very adversarial at times. Medicaid wins when you get frustrated with the system and drop your claim for benefits. The private pay rate for a local nursing home is typically anywhere from $7,000 to $10,000 per month depending upon services needed. Mistakes can be very costly.
If you are facing a long-term care situation in your family, please do not hesitate to contact our office at (888) 829-0894 to disuss your matter–we are here to help.
Before transferring your home to your children, there are several issues that should be considered. Some are tax-related issues and some are non-tax issues that can have grave consequences on your livelihood.
The first thing to keep in mind is that the current federal estate tax exemption is currently over $5 million and thus it is likely that you may not have an estate tax issue anyway. If you are married you and your spouse can double that exemption to over $10 million. So, make sure the federal estate tax is truly an issue for you before proceeding.
Second, if you gift the home to your kids now they will legally become the owners. If they get sued or divorced, a creditor or an ex-in-law may end up with an interest in the house and could evict you. Also, if a child dies before you, that child’s interest may pass to his or her spouse or child who may want the house sold so they can simply get their money.
Third, if you give the kids the house now, their income tax basis will be the same as yours is (the value at which you purchased it) and thus when the house is later sold they may have to pay a significant capital gains tax on the difference. On the other hand if you pass it to them at death, their basis gets stepped-up to the value of the home at your death, which will reduce or eliminate the capital gains tax the children will pay.
Fourth, if you gift the house now you likely will lose some property tax exemptions such as the homestead exemption because that exemption is normally only available for owner-occupied homes.
Fifth, you will still have to report the gift on a gift tax return and the value of the home will reduce your estate tax exemption available at death, though any future appreciation will be removed from your taxable estate.
Given the multitude of tax and practical issues involved, seek counsel before making any transfers of property. We are here to help you–just give us a call at (888) 829-0894.
With only one week remaining until this year’s tax filing deadline, the Senate Special Committee on Aging has announced that the Committee’s fraud hotline is experiencing an increased number of reports of scam artists who call seniors pretending to be IRS officials. Through this scam criminals generally demand immediate payment and threaten retaliation, such as home foreclosure and even arrest, if payment is not made.
The IRS has released several tips to help taxpayers identify suspicious calls that may be part of a scam:
- The IRS will never call a taxpayer to demand immediate payment, nor will the agency call about taxes owed without first having mailed a bill.
- The IRS will never demand that a taxpayer pay taxes without giving him or her the opportunity to question or appeal the amount claimed to be owed.
- The IRS will never ask for a credit or debit card number over the phone.
- The IRS will never threaten to bring in local police or other law enforcement groups to have a taxpayer arrested for not paying.
- The IRS will never require a taxpayer to use a specific payment method for taxes, such as a prepaid debit card
If you are concerned that you, or a loved one, has been a victim of such a call or other related contact, please report the incident to the Aging Committee’s toll-free Senior Fraud Hotline: 1-855-303-9470. These reports enable the Committee to investigate and help put a stop to scams targeted to seniors.
In addition to calling the Aging Committee Fraud Hotline, seniors can report potential instances of scams or fraud to the local division (Detroit) of the FBI or the Michigan Attorney General’s Office.