Hartford Estate Planning Attorneys Outline Post-Election Steps to Take for 2017
Each time a new President takes office, U.S. economists try to predict policy and tax changes. The Trump administration in particular has created concern, leaving many people uncertain of how to best protect their hard-earned assets. Instead of worrying about the unknown, a Connecticut estate planning firm suggests people update their estate plans to reflect what is happening right now.
“From an estate planning point of view, base it on a foundation of known facts, not speculation,” suggests Attorney Paul Czepiga, Principal of CzepigaDalyPope. “The New Year is the perfect time to update your estate plan to ensure it aligns with current laws.”
The known facts are:
- Connecticut’s estate taxes are NOT changing so, for those with estates over $2 million, there is still a need to plan.
- Regardless of what might happen to the federal estate tax, income tax issues such as deferring income taxes on large IRA accumulations and planning how to utilize a step-up in basis (for securities or real estate) at death remain.
- Connecticut has a stronger Power of Attorney (POA) law effective October 1, 2016. A revised POA needs to be signed in order to take advantage of all the powers and protections of the new law. If you don’t have a POA, now is the time to get one.
- Even a plan that is only a few years old can be seriously outdated. Changes in your personal circumstances, your health, or your finances could impact the intentions you originally intended in your estate planning documents. They could make your plan obsolete, or worse, create greater burdens for your family.
- There may also be changes in the laws that affect your Wills, asset protection planning for Medicaid and nursing homes, and estate and retirement taxation.
Attorney Czepiga is also a Certified Public Accountant who recently attended a seminar at the New England Tax Institute featuring speakers from Washington D.C.’s largest law firms and other nationally known professionals.
“These respected experts have their fingers on the nation’s economic and tax pulse and even they don’t agree on what might happen,” said Czepiga.
Czepiga notes one theme that was echoed by many of the speakers is that although President Trump has political capital, he will not be able to fulfill all of his campaign promises at once. It is not likely that estate tax reform will be a priority.
Medicaid, on the other hand, may be headed for a complete overhaul that would affect every person’s retirement planning. Currently, Medicaid is an entitlement program, meaning anyone who meets the criteria has the right to be covered. If it becomes a block grant as proposed, states would receive a fixed amount. The states would likely wind up with less funding and they would have to choose how many residents to cover and what benefits to provide.
“Many estate plans are based on the assumption that Medicaid will cover healthcare and long term care costs at some point,” said Attorney Brendan Daly, Principal of CzepigaDalyPope and a Certified Elder Law Attorney. “If that is no longer a certainty, it may be much more difficult to qualify for Medicaid and to protect your home and money if you enter a nursing home. We suggest that you start your planning process much earlier.” For nearly everyone, long-term care costs are prohibitively expensive.
Daly suggests consulting an attorney for the following issues to reduce the risk of running out of money in your golden years:
· Purchasing long term care insurance.
· Making gifts. People often gift too much too early and tap into the wrong accounts—like IRAs—to do so.
· Proper estate planning to help mitigate or eliminate estate taxes when one spouse dies and maximize asset protection for the survivor.
· Be wary of reverse mortgages. Preserve home equity, which can be invaluable in long term care planning.
· Be wary of deferred annuities. They often have hefty surrender fees covering a 10-year period. This is problematic if someone needs long term care.
“An estate plan can help you take reasonable and concrete steps to plan for a comfortable retirement regardless of changes to taxes and laws,” said Czepiga. “Since none of us has a crystal ball, all we can do is stay informed and revise plans as needed.”
CzepigaDalyPope has offices across Connecticut in Hartford, Berlin, Simsbury, South Windsor and New Milford. For more information call (860) 236-7673 or visit: www.ctseniorlaw.com.