The answer to this one is simple: have less than $5.49 Million when you die and don’t get there just by giving it away. In Texas, make sure that you also give it all to lineal descendants, kids and grandkids. If you have more than that, then consulting an estate planner is definitely in order.
When thinking about this $5.5 Million number, remember that lots of things that are not part of your Probate estate are still included in your gross estate for tax purposes. The biggest item in this group is typically life insurance. The payout from a life insurance policy increases the amount of taxable estate to the decedent.
If you are ”lucky” enough to be under this limit, then you may have the inverse problem. While estate taxes may not be a direct problem, the implication of having to pay for care that otherwise would be free is functionally the same. You give up your own money so that the government can spend money on something else. You may have enough money to be ineligible for benefits necessary to pay for nursing home care, but not enough to actually pay for the care itself. In that case, it will cost some to gain access to benefits. Fortunately, there is a limit there as well. By the wise use of Trusts, an applicant for nursing home Medicaid can be assured of eligibility if they can put up $296,235.
For those who are not fortunate to have that kind of cash, it is still possible to plan carefully and both assure benefits and preserve an estate for the family.
This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.