The post Year 2019 – July update ALTCS/MSP Guidelines first appeared on Arizona Income-Only Trust.]]>
What is an AB Trust?
An AB Trust is one in which a family trust is divided at the first death into two trusts (the by-pass or credit shelter trust and the survivor’s trust). Many people use this type of trust for one of two reasons. The first and most common reason is to minimize the estate tax that is assessed when the second spouse dies. The second is to separate the assets at the first death to ensure the first to die has an estate that he or she can leave to his/her heirs but while the second spouse is still alive, he/she can use the resources to supplement his/her needs.
- AB Trusts create tax savings for estates large enough to incur estate tax. As of 2019, the federal estate tax exemption is $11.4 million. You read that right, $11.4 million per person. If your estate is greater than that, using a marital AB trust can reduce the federal estate tax due.
- Because the new federal tax exemption is so high, many estates no longer have a need for an AB trust. While both spouses are still alive, it is possible to amend and completely restate your trust to eliminate the need for these sub-trusts and for the splitting of assets into these sub-trusts.
- Some financial advisors suggest that placing a home in the bypass trust is a good idea; however, here are three things to consider before making that decision:
- Some banks will not make loans on property in an irrevocable trust and bypass trusts are irrevocable. If the surviving spouse may need access to the equity in the home either through a conventional or reverse mortgage, placing the home in the survivor’s trust may be a better idea.
- You can exclude up to $250,000 of capital gains from taxation but only if you lived in the home for two of the five years before you sell it. HOWEVER, if the home is placed in the bypass trust, you may not qualify for that exclusion.
- Many people believe that placing the home in the bypass trust will allow your children or other heirs to get the higher tax basis when the home sells at the second spouse’s death. However, the tax basis is based on when the property was placed INTO the bypass trust, not when the children or heirs inherit it (at the second death).
It is always important to understand the different choices and options and to seek both legal and tax counsel before making those decisions.
Our CLDP, Carol Aragon-Montgomery, is not an attorney or tax advisor and cannot give tax or legal advice, but she can provide you with the general factual information you may need to make an informed decision before implementing your estate planning documents.
The post Estate Planning Information about AB Trusts – June 17, 2019 first appeared on Arizona Income-Only Trust.]]>Today’s topic: ALTCS MEDICAL ELIGIBILITY
- ALTCS only needs the following records: the most recent history and physical, physician progress notes for a year, documented list of medical conditions and diagnoses, prescription and over-the-counter (OTC) list, hospital or SNF discharge summaries from the past 6 months, and if residing in assisted living, the most recent monthly or quarterly needs assessment.
- Remember to request records in advance to prevent delays in processing. These can be provided to ALTCS before the actual medical assessment.
- The eligibility is getting tougher. For example, it used to be that a dementia diagnosis in the chart was sufficient. Now, it must be documented by a neurologist. If you have a consumer with dementia, Alzheimer’s disease, or other neurological diseases, make sure you encourage them to schedule and follow through on their visit to a neurologist. This is worth 20 of the 60 points needed to qualify!
- Many of you are providing care to family members. We encourage you to begin journaling the services you are providing (date of service, time started, time ended, what service was performed). This will help show ALTCS how often the care is needed.
- For family or friend caregiving: Consider putting a Caregiver Agreement into place to document the details of the arrangement and create a pattern of documentation to show what is being done, how often, and for how long. We prepare Caregiver Agreements for $200.
- If you are not sure someone will pass the ALTCS medical eligibility, request a Private Request PAS (Pre-Admission Screening). If eligible, this PAS can be used for up to 180 days. If a potential ALTCS applicant is in spend down mode and will run out of funds in about six months, this is a great tool to use to ensure that there can be a successful transition onto ALTCS when the spend down is complete.
Montgomery & Associates, Inc. is an ALTCS planning firm with over 28 years’ experience helping people get approved for ALTCS.
Former ALTCS employees | Former Law Firm ALTCS Paralegal | In business since 2001
480-464-4968
Written by Carol Aragon-Montgomery 05/29/19
We are not affiliated/contracted/employed with: AHCCCS / ALTCS / VA / Medicare (CMS) / Federal Government.
The post Navigating ALTCS: What Consumers Need to Know – ALTCS Medical Eligibility first appeared on Arizona Income-Only Trust.]]>John Doe has 2 incomes. One income is $1,705.00 and one income is $501.00 and John is not married. The income limit for 2017 for a single individual is $2,205.00.
John’s income equals $2,206.00. He is only $1.00 over the current income limit and therefore income ineligible for the ALTCS program.
There is a way John may be able to be income eligible for the ALTCS program. The Income-Only Trust.
There are 3 steps to become income eligible.
- Create a Trust with specific requirements as dictated by Arizona Law.
- Create a bank account titled to the Trust.
- Deposit the income received to the bank account titled to the Trust
Although, this seems very easy; there are a lot of little steps to ensure continuing income eligibility. Which is why we offer three different Income-Only Trust Kits. Check them out, here.