Real Estate Tax Appeals, Financial Powers for College Students, Fiscal Cliff - February The Fein Print

 The newest edition of The Fein Print is here!  The highlights:

  • It's real estate tax appeal season.  In the last few years many NJ residents have seen the fair market value of their home decline– often significantly – to the point where it makes good sense to file a real estate tax appeal. Here we give you some pointers.
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  • Financial Planning for College Students.  it’s tough letting go, but as the apron strings get snipped it’s important to know you can still help your children protect their health and finances from uncertainty and risk.
  • The Fiscal Cliff and your Estate Plan.  The showdown is over, but now that the dust has settled, what should be done with your will, trust and estate plan?

What Does the Spouse Live Off Of When the Other Is In a Nursing Home?

So Dad is in nursing home, and has qualified for Medicaid to supplement the cost of care.  What does Mom live off of?

First, while assets are pooled together for Dad to have qualified for Medicaid in the first place, income is no pooled.  So, Mom gets to keep her own income.  But what if her income is small because Dad was the breadwinner and she the homemaker?

Next you look at the Minimum Monthly Maintenance Needs Allowance ( (MMMNA).  [Is that an acronym or what - its easier to say what it stands for than "mmmmmna"]  Mom - the "community spouse" in my example because she is living at home and Dad in the nursing home - is allowed by Medicaid  to keep some or all of Dad's - the nursing home resident’s - income through the Minimum Monthly Maintenance Needs Allowance (MMMNA). Just announced the MMMNA will be $1,938.75 in the continental US (higher in Alaska and Hawaii), effective no later than July 1, 2013. The current amount is $1,891.25.

 $1,938.75 doesn't go really far in New Jersey or metro New York.  In fact, it brings to mind Newark Mayor Corey Booker living off food stamps for a week. In this case Mom can look to keep extra income, known as the Excess Shelter Amount (“ESA”) if certain basic household expenses exceed the MMMNA by more than  more than 30% . Between the MMMNA and the ESA, the community spouse can now be entitled to as keep as much as $2,888 of the married couple’s total income.

And if that's not enough?  Mom can request a fair hearing and attempt to prove the need for more than $2,888 of the married couple’s total income.

$2,888 x 12 = $34,656 of taxable income for the year.

Advanced elder law planning may minimize this situation by creating additional security for the benefit of Mom.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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