Q: How will the proposed House tax reform impact seniors, the disabled, and Medicaid?
If the House of Representatives’ proposed tax reform plan passes, critics claim that the elimination of the medical expense deduction would "deliver a serious financial blow to seniors and individuals with disabilities "– – particularly those without long-term care insurance who must self-pay for long-term care.
Many people don't realize that comprehensive estate planning involves more than a simple Last Will and Testament. Trusts and tax planning, providing for your incapacity, and protecting your assets to secure your family's future are common goals in estate planning.
Medicaid planning attorneys help people shelter assets to protect them from being accessed to pay for long-term care, such as a nursing homes, while still qualifying you for Medicaid benefits. This protects the financial future of your loved ones. Pre-planning is best as it can "get your assets off the table" for purposes of the Medicaid five-year look back period on asset transfers. However, last minute Medicaid "crisis planning” is also an option a skilled attorney can help you with if you failed to plan in advance.
Seniors and disabled individuals may run out of their money faster if the medical expense deduction is eliminated. The deduction is available to those whose eligible medical expenses exceed 10% of their income. These groups, who both generally have income low enough and medical expenses high enough to take advantage of the medical expense deduction have a lot to lose with the proposed tax reform.
In addition, the proposed tax bill would cut corporate tax rates with the expectation that "huge economic growth" and higher tax revenue will follow. But if that doesn't happen and cuts in government spending become necessary, seniors and the disabled could be impacted “through cuts to Medicaid, Medicare, Section 8, Meals on Wheels, and food stamps.”
On the positive side, super-wealthy seniors could benefit from the proposed elimination of the estate tax.
With the right attorney, estate planning is nothing to fear and brings peace of mind and asset protection. If you are in need of an estate plan, or need to modify an existing plan, The Law Office of Thomas J. Hansen can help you. Contact us today for a consultation.
From our offices in Park Ridge, we've been serving the people of Illinois for over 20 years.