As you wake up to this New Year, be advised that you are going to have to work a bit harder to protect your rights if you are a senior. With the passage of the new Trump tax law, the Medicare and Medicaid programs are in the cross hairs and a facing cuts. Additionally, the nursing home industry has succeeded in rolling back senior rights when the Centers for Medicare and Medicaid Services rescinded the ban on nursing homes from pre-emptively requiring residents to submit to arbitration to settle disputes rather than going to court.
Furthermore, the Trump administration is scaling back the use of fines against nursing homes that harm residents or place them at risk. In a nutshell, seniors will have to fight harder to protect themselves and their loved ones. Despite the negative news, there are safeguards that still exist to protect your rights and get the best care possible.
A positive approach to this news is - do not put off for another year your estate and asset protection planning. Start the conversation with your family and elder law attorney. By discussing these sometimes uncomfortable issues, you will become more comfortable with your plans and get your questions answered. You must be the one to take the first step in taking control of your future.
While most of the new tax law - the Tax Cuts and Jobs Act - has to do with reducing the corporate tax rate from 35 percent to 21 percent, some provisions relate to individual taxpayers.
Federal Estate Taxes. If you weren’t worried about federal estate taxes before, you really don’t need to worry now. Under the new Trump tax law, the federal estate tax, sometimes called the “death tax,” allows $11 million to pass tax free to your heirs in property, stock and other assets. That means that $22 million could pass tax free for married couples.
Tax Rates. These are slightly reduced and the brackets adjusted, with the top bracket dropping from 39.6 percent to 37 percent.
Medical Expense Deduction. After much outcry in response to the House version of the tax bill, which would have eliminated the medical expense deduction, it survived. And, in fact, it was enhanced by permitting medical expenses in excess of 7.5 percent of adjusted gross income to be deducted in 2017 and 2018, after which it reverts to the 10 percent under existing law.
529 Plans. These accounts, which permit tax-free accumulation of capital gains and dividends to pay college expenses, can now be used for private school tuition of up to $10,000 a year.
A major concern for seniors is a 2010 law which requires that any legislation that adds to the federal deficit be paid for by spending cuts, increases in revenue or other offsets. Stay tuned, seniors, and be prepared to fight for your rights.
Attorney Daniel O. Tully is a partner in the law firm of Kilbourne & Tully, P.C., members of the National Academy of Elder Law Attorneys Inc., with offices at 120 Laurel St., Bristol (860) 583-1341.