COMPARISON BETWEEN TRANSFERS TO INCOME ONLY TRUSTS AND TRANSFERS TO CHILDREN
by Thomas D. Begley, Jr., CELA The following chart compares the advantages and disadvantages of an outright transfer of assets and putting assets in an Income Only Trust. Trusts v. Transfers Comparison Issue Income Only Trusts Children Look-Back 5 Years 5 Years Control None None Risk Avoidance Yes No Estate…
TAX AND ESTATE RECOVERY ISSUES IN CONNECTION WITH INCOME ONLY TRUSTS
by Thomas D. Begley, Jr., CELA An Income Only Trust can be designed as a grantor trust. The trust assets are unavailable for Medicaid, but there are some potentially significant tax benefits to the grantor. The Internal Revenue Code contains certain requirements for a grantor trust.[1] Income Tax. Income is taxed at the grantor’s individual…
THE PROBLEM WITH INCOME ONLY TRUSTS IN MEDICAID PLANNING
by Thomas D. Begley, Jr., CELA Purpose Income Only Trusts are a means by which seniors transfer assets to a trust rather than to their children. Seniors tend to view transfers to trusts as protection, while they tend to view transfers to children as gifts. Trusts provide them with a sense of dignity and…
DO WE STILL NEED TO WORRY ABOUT MEDICARE SET-ASIDE ARRANGEMENTS?
by Thomas D. Begley, Jr., CELA For many years a debate has raged as to whether Medicare’s interests must be considered with respect to future medical payments in the context of a third party liability settlement (“TPLS”). The issue is simple. If a plaintiff in a TPLS receives money to pay for future medical care,…