There has been a huge change to the Tax Code in 2010 that has some interesting and important effects on Michigan Medicaid Planning.
There is currently no federal estate tax or generation-skipping tax for decedents dying in 2010 unless Congress passes new estate tax legislation this year. The federal estate tax will return in 2011 with a $1 million exemption ($2 million for married couples with basic planning) and the generation-skipping tax exemption will return at $1 million, indexed for inflation.
As of January 1, 2010, IRC Section 1022 became effective and substantially changed the rules for obtaining a step-up in basis for real property or appreciated assets passed to a beneficiary at the death of the property owner. Section 1022 replaced the prior rule, IRC Section 1014, which expired on December 31, 2009, along with the estate tax.
The changes to the tax code can seem very confusing as it applies to Michigan Medicaid planning. it is also important to remind Michigan seniors and their loved ones of the importance of planning early to protect assets from the rising costs of long-term care. To read more on this topic, continue reading at Michigan Medicaid and 2010 Tax Code Changes.
-Christopher J. Berry, Esq. is a Michigan elder law attorney, a Veterans Administration Accredited attorney, a member of the National Academy of Elder Law Attorneys (NAELA), a member of ElderCounsel, and practices elder law, medicaid planning and Veterans Benefits planning in Bloomfield Hills, Michigan. He can be contacted at (248) 971-1700 or online at www.witzkeberry.com. Visit his Michigan Elder Law Website at: Michigan Veteran and Elder Law Firm.