How Transfer on Death (TOD) Accounts Help You Avoid Probate
Confused about transfer-on-death (TOD) accounts? This article answers the most common questions about Transfer on Death designations, how they work, and how they can help you avoid probate.
How to Avoid the New York State Estate Tax Cliff
When someone passes away in New York, in 2025, there is a $7.16 million estate tax exclusion amount, which is significantly lower than the $13.9M exemption amount available at the federal level. However, in addition to the lower estate tax exemption amount, there are also two estate tax traps specific to New York that residents need to be aware of when completing their estate plan. Those two tax traps are:
1) The $7.5 million Cliff Rule
2) No Portability between spouses
With proper estate planning, these tax traps can potentially be avoided, allowing residents of New York to side-step a significant state tax liability when passing assets onto their heirs.
How To Protect A Roth IRA from the Medicaid Spenddown Process
Safeguarding a Roth IRA from the Medicaid spenddown process has long been a challenge for individuals preparing for long-term care. Unlike other assets, Roth IRAs cannot be owned by trusts, and their lack of required minimum distributions (RMDs) has historically left them vulnerable under Medicaid rules. However, a groundbreaking strategy recently developed in New York provides new hope for preserving the full value of these important retirement accounts. By voluntarily initiating RMDs on Roth IRAs, individuals can now protect these accounts from being depleted entirely during Medicaid qualification.
Topics Covered in This Article:
Challenges of Protecting Roth IRAs
The Role of Irrevocable Trusts
Understanding the Medicaid Spenddown Process
Voluntary RMDs for Roth IRAs
New York’s Innovative Strategy
Can You Break an Irrevocable Trust?
Irrevocable trusts are powerful tools for long-term care planning and asset protection, but what happens when you need to access those locked-away assets?
Our latest article, Can You Break an Irrevocable Trust?, dives deep into the options available if you find yourself in this situation. Learn about key topics like:
The strict limitations on accessing the trust principal
The grantor's rights to trust income
Pros and cons of adding a gifting provision to your trust
Revoking a trust – Full or partial
Changing the trust investment objective to generate more income for the grantor
Tax trap of realized gains within grantor irrevocable trusts
Whether you’re planning your estate, serving as a trustee, or navigating Medicaid rules, this comprehensive guide is packed with expert insights you shouldn’t miss.
How to Title Your House To Avoid Probate
When we are working with clients on their estate plan, one of the primary objectives is to assist them with titling their assets so they avoid the probate process after they pass away. For anyone that has had to serve as the executor of an estate, you have probably had firsthand experience of how much of a headache the probate processes which is why it's typically a goal of an estate plan to avoid the probate process altogether.
Gifting Your House with a Life Estate vs. Medicaid Trust
I recently published an article called “Don’t Gift Your House To Your Children” which highlighted the pitfalls of gifting your house to your kids versus setting up a Medicaid Trust to own your house, as an asset protection strategy to manage the risk of a long-care care event taking place in the future. That article prompted a few estate attorneys to reach out to me to present a third option which involves gifting your house to your children with a life estate. While the life estate does solve some of the tax issues of gifting the house to your kids with no life estate, there are still issues that persist even with a life estate that can be solved by setting up a Medicaid trust to own your house.
Don’t Gift Your House To Your Children
A common financial mistake that I see people make when attempting to protect their house from a long-term care event is gifting their house to their children. While you may be successful at protecting the house from a Medicaid spend-down situation, you will also inadvertently be handing your children a huge tax liability after you pass away. A tax liability, that with proper planning, could be avoided entirely.
A CFP® Explains: Wills, Health Proxy, Power of Attorney, & Trusts
When we are constructing financial plans for clients, we inevitably get to the estate planning portion of the plan, and ask them “Do you have updated wills, a health proxy, and a power of attorney in place?
