Estate Taxes

In Elder Law Estate Planning There’s More Misinformation than Information

Published on: July 16, 2025 | by Ettinger Law Firm

Recently, we came across an article by a syndicated columnist that claimed that if you put your house into an irrevocable trust you lose your exclusion from the capital gains tax on the sale of the primary residence — $500,000 for a couple and $250,000 for a single person. The writer, being a financial planner and not a trust and estates lawyer, and despite claiming to be an “expert”, was apparently unaware that there are many different types of irrevocable trusts. One of the most common irrevocable trusts, the Medicaid Asset Protect Trust (MAPT), is designed to preserve these exclusions. MAPT’s are “grantor trusts” which mean they remain in the grantor’s name for all income and capital gains tax purposes.

This leads into a very common problem. Too often, clients receive advice on trusts from financial advisors, accountants and family lawyers, believing they are getting a professional opinion. We say that what they are actually getting is a personal opinion coming out of a professional’s mouth.

We often make the analogy that if, unfortunately, you have cancer then you want to get advice from an oncologist, not your family doctor. If you have an elder law estate planning problem, you want to talk to an elder law estate planning attorney, not your general lawyer, financial advisor or accountant. Well-meaning professionals often give incorrect information.

The Santa Clause in Estate Planning — 2025

Published on: January 11, 2025 | by Ettinger Law Firm

The current New York estate tax exemption stands at $7.16 million while the Federal exemption is at $13.99 million. While the Federal government only taxes the amount over the Federal exemption, New York takes a different approach. Once you go more than 5% over the exemption amount in New York, they tax the whole estate! You’re “over the cliff”.

New York’s “fiscal cliff”, as it has been termed, leads to the absurd result that you would end up with less after taxes on a seven and a half million dollar estate than on a seven million dollar estate.

The “Santa Clause” is intended to avoid the tax “fiscal cliff” by providing that any amounts that would cause the fiscal cliff to be triggered are to be given to a qualified charity. This lowers the amount of the estate subject to estate tax to no more than the exemption amount.

Tax and Medicaid Law Changes for 2025

Published on: January 10, 2025 | by Ettinger Law Firm

For 2025, the exemptions for estate taxes rise to $7.16 million for New York estate taxes, and to $13.99 million for Federal estate taxes. The annual gift tax exclusion rises to $19,000. If your estate is, or may become, greater than the New York threshold, early intervention can avoid the hefty New York estate taxes, which start at over $600,000. Some of the techniques are (1) setting up two trusts, one for husband and one for wife, and using them to double the New York exemption, (2) gifting out so much of the estate so as to reduce it below the New York exemption, at least three years before the death of the donor, and (3) using the “Santa Clause” providing that the amount over the threshold be donated to a charity or charities of your choosing so as to reduce the estate to no more than the exemption.

For Medicaid, the house is an exempt asset so long as a spouse is residing there, up to $1.1 million of equity for 2025. Seeing as over 80% of nursing home residents do not have a spouse, it is better to plan ahead with a Medicaid Asset Protection Trust (MAPT) to get the five year look-back for nursing facility care. In that case, the house would be protected by the trust rather than the unreliable spousal exemption. Unless your other assets have been protected by the MAPT, an individual may keep about $31,500 and a spouse at home can keep up to about $158,000.

The often-delayed imposition of the new two and a half year look-back for home care, is not on the horizon for 2025. Currently there is no look-back for home-care and you do not have to worry about getting home care until you actually need it. Nevertheless, this may change in the future so the MAPT remains as an important as a tool to qualify you for home care as well as protecting your assets from a nursing home. Assets should be moved into the MAPT years ahead of time if you want to be able to afford to stay in your own home and get home health aides for assistance with the activities of daily living, should the need arise.

Tax and Medicaid Law Changes for 2024

Published on: January 18, 2024 | by Ettinger Law Firm

For 2024, the exemptions for estate taxes rise to 6.94 million for New York estate taxes, and to 13.61 million for Federal estate taxes. The annual gift tax exclusion rises to $18,000. If your estate is, or may become, greater than the New York threshold, early intervention can avoid the hefty New York estate taxes, which start at over $500,000. Some of the techniques are (1) setting up two trusts, one for husband and one for wife, and using them to double the New York exemption, (2) gifting out so much of the estate so as to reduce it below the New York exemption, at least three years before the death of the donor, and (3) using the “Santa Clause” providing that the amount over the threshold be donated to a charity or charities of your choosing so as to reduce the estate to no more than the exemption.

For Medicaid, the house is an exempt asset so long as a spouse is residing there, up to $1,071,000 of equity for 2024. Seeing as over 80% of nursing home residents do not have a spouse, it is better to plan ahead with a Medicaid Asset Protection Trust (MAPT) to get the five year look-back for nursing facility care. In that case, the house would be protected by the trust rather than the unreliable spousal exemption. Unless your other assets have been protected by the MAPT, an individual may keep only $30,182 and a spouse can keep up to $154,140.

The major change to Medicaid is the often-delayed imposition of the new two and a half year look-back for home care, commencing April 1, 2024. Previously, there was no look-back for home care. This resulted in people not having to worry about getting home care until they actually needed it. With the law change, the MAPT now becomes far more important as a tool to qualify you for home care than to simply protect your assets from a nursing home. Assets will have to be moved into the MAPT years ahead of time if you want to be able to afford to stay in your own home and get home health aides for assistance with the activities of daily living, should the need arise.

Capital Gains Tax Tips

Published on: September 22, 2022 | by Ettinger Law Firm

Your “basis” for calculating capital gains taxes is what you paid for the stock or the real estate. For real estate, the basis gets raised by the amount of any capital improvements you make to the property. When you sell your primary residence you may exclude the first $500,000 of gain if you’re a couple or $250,000 if you’re single. The $500,000 exclusion for a couple get extended for a sale occurring up to two years after a spouse dies.

For gifts you receive of appreciated stock or real estate during the donor’s lifetime, no capital gains tax is payable, however the donee receives the donor’s basis. It is generally considered better to wait, if possible, and pass the gift to the donee at death, due to the “stepped-up basis”. The basis of any inherited property is “stepped-up” to date of death value. If the property is sold within six months of the date of death, then the sale price is deemed to be the date of death value.

If the property is going to be held for some time it is helpful to get date of death values to establish the new basis. For real estate, this means getting an appraisal from a licensed real estate appraiser (not a real estate broker!). For stocks, you simply ask the company holding the stocks to provide this information.

The Value of Revising Your Estate Plan

Published on: July 7, 2022 | by Ettinger Law Firm

You should strive to review your estate plans every few years. While it might not seem like it, many events can occur during this period that impacts your estate planning goals. Besides personal changes, the country also experiences national elections every four years which often lead to changes in estate taxes.

Consider Role Appointments

One of the most critical parts of estate planning is appointing who among your friends and family members will act in the role of executor, power of attorney, and other estate planning positions. You should also question whether the parties you nominate to act in such a role remain fit and willing to act in these positions. It’s also important to remember that the suitability of appointments can change. While a person might seem like a good executor, they might not be a suitable executor a decade from now.

Taking Advantage of the Estate Tax Portability Provision

Published on: July 5, 2022 | by Ettinger Law Firm

The estate tax exemption is slated to return to $5 million in 2026. For married individuals, the exemption is considered portable”, which means that the estate of the second spouse to pass away can benefit from the unused amount of the exemption that was available to the first spouse who passed away.

This change in tax law means that wealthy individuals’ estates can be protected from the claw of federal law through a $10 estate tax exemption. The indexed amount is $12.06 million for people who pass away in 2022. Meanwhile, transfers among spouses remain exempt from taxation due to the unlimited marital deduction. Consequently, many people do not need to be concerned about the federal estate tax.

The portability election, which has been titled by legislatures the “deceased spouse unused exemption” (DSUE) is an election utilized by an estate’s executor.

What to Know About New York’s Estate Tax Cliff

Published on: April 18, 2022 | by Ettinger Law Firm

New York’s estate tax cliff can lead to heirs in the state paying estate tax at a rate that surpasses 100%. The existing per-person New York state estate tax exemption is $6.11 million. This is the amount that a person can pass on to heirs at his or her time of death without being obligated to pay New York state estate taxes.

Provided a person’s taxable estate falls into the “Estate tax cliff range”, which occurs between $6.11 million and $6.711 million in 2022, a person falls off the estate tax cliff in New York state, and the amount surpassing the exemption is taxed at a rate greater than 100%. Fortunately, various solutions exist to this challenging situation.

Utilizing Charitable Bequests

A Quick Guide to Reverse Estate Planning

Published on: April 10, 2022 | by Ettinger Law Firm

Estate planning relies on a countless number of assumptions. One assumption is that assets only flow in one direction: from older person to younger person. In reality, this does not always have to be the case. By making the most of some unconventional estate planning techniques, people can realize some tax and estate planning advantages. This is where the concept, of “reverse estate planning” comes in.

Some adult children who have more assets than parents and can help take care of the older generation. In these cases, reverse estate planning can play a valuable role. This is particularly true when parents will not be able to use the entirety of their estate and gift tax exemptions. This is just as true if a parent is in a lower tax bracket than their child.

Tax Advantages through Reverse Estate Planning

Making the Most of Estate Planning in 2022

Published on: April 7, 2022 | by Ettinger Law Firm

Even if you’ve already abandoned your New Years’ resolution, you should still do your best this year to focus on your loved ones and what’s best for your future. One of the best things that any of us can do during times of uneasy political or economic times is to focus on what’s important. Your planning for what lies ahead should understandably address critical issues like what happens if you become incapacitated or unexpectedly pass away. This article reviews some of the basic frameworks that you should start (or revise) your estate plans in 2022.

Critical Questions to Ask About the Status of Your Estate Plans

Some of the important issues that you should ask about the status of your estate as you decide the strength of your estate plan include: