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Hugg & Associates PLLC is a boutique law firm providing client-centered services to individuals and businesses. Our practice focuses on all aspects of elder law, estate planning, asset protection, business succession planning, probate and trust administration. If you are a business owner, in addition to the above services, we are experienced business, real estate, and contract law attorneys.

The Perils of Doing Asset Protection Planning on Your Own

Dealing with asset protection planning along with long term care planning, is a daunting process. Very complicated state and federal Medicaid laws and regulations present many pitfalls for those who try to engage in that process on their own without working with a competent elder law attorney.  A 2015 Medicaid case from New Jersey is an example of a family that tried to go through the process on their own and now have some pretty nasty consequences.  The case is C.W. v. New Jersey Division of Medical Assistance and Health Services, NO. A-02352-13T2 (NJ Sup. Ct. App. Aug. 31, 2015).

“C.W.” was a 90 year old New Jersey resident who moved into a skilled nursing facility in 2007.  The following year, 2008, she transferred her home and $540,000 in assets to her children, which together were worth approximately $864,000.  In 2009, C.W. applied for Medicaid benefits.  Not surprisingly, the state Medicaid authorities imposed a penalty of 10 years and 4 months before they were willing to begin paying her nursing home costs.  At that point, her children tried to fix the problem.  They returned $235,000 to C.W. who then paid that amount to her nursing home.  Then, her children returned the home to her, which was then sold.  Strangely, the sale proceeds were then deposited into an account in the children’s names, not in C.W.’s name, with the children executing a written agreement to transfer the amount of C.W.’s care cost to her each month.  C.W. then reapplied for Medicaid and was again denied as before.

Let’s consider each of the many mistakes made by C.W.’s family and also consider how the results may have been different. Under the Medicaid rules, when a Medicaid penalty period is assessed, it takes the form of a time period before which benefits will be paid. The simple mathematical formula takes the total gifted amount and divides it by the average monthly cost of private-paid skilled nursing home in that state.  Currently in Washington, that divisor amount is now $297.  Dividing $864,000 by $297 would result in a penalty period of roughly 2,909 days, or 97 months.

We can help you with asset protection.  Give us a call.

VA Benefits: Options for a Spouse of a Healthy Veteran

While a spouse of a Veteran may receive VA benefits after the Veteran has passed away, in general, a spouse cannot receive VA pension benefits while the veteran himself or herself is healthy.  While the Veteran is living the claim is technically theirs and based on his or her health.  However, there is a veryContinue Reading

New IRS rule regarding an IRA could save you $20,000

Rolling over an IRA is a financial maneuver fraught with peril. One wrong step and you could be on the hook for a massive tax bill. Miss the 60-day deadline, and you could face a complicated appeals process that could easily cost $20,000 — that is, until now. On Aug. 24 the IRS changed its appeals process forContinue Reading

2017 Estate Tax Exclusion Amount Increasing

The IRS has announced that the basic federal estate tax exclusion amount for the estates of decedents dying during calendar year 2017 will be $5.49 million, up from $5.45 million for calendar year 2016. Also, if the executor chooses to use the special use valuation method for qualified real property, the aggregate decrease in the value ofContinue Reading

Make withdrawals from your retirement plans without penalty

You can make withdrawals from your 401(k) or 403(b) retirement plans without penalty before reaching at 59½.  You will not face the 10% early distribution penalty if you leave your job in or after the year you turn 55, although you will still owe tax on pretax contributions and associated investment gains. For the exemptionContinue Reading

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