Trump’s plan seeks to maximize the flexibility of each state to create and deliver long-term care as innovatively as possible. This would discourage states from enrolling as many as possible into their programs and incentivize them to be cost effective.
Westchester County, N.Y. (PRWEB) December 14, 2016
Westchester elder law attorney Anthony J. Enea, managing member of Enea, Scanlan & Sirignano, LLP in White Plains and Somers, N.Y., recently addressed the Trump administration’s anticipated impact on estate taxes and Medicaid benefits for long-term care. While it remains to be seen which specific legislative policies the administration of President-elect Donald J. Trump will pursue in 2017, Enea believes that a repeal of the federal estate tax will be among them.
The federal and estate gift tax credit is currently $5.45 million per person ($10.9 million for a married couple). For estates beyond the credit amount, the federal estate tax rate is 40 percent. In addition, there are 15 states, including New York and the District of Columbia, that assess an estate tax. In these states, it is not unusual for the overall federal and state tax rate to be close to 50 percent.
“For all the attention the federal estate tax receives, it is still a tax that has no impact on more than 99 percent of Americans,” said Anthony Enea. “In 2015, the Tax Policy Center estimated that 10,800 federal estate tax returns were filed with approximately half being for taxable estates. The taxes collected on the aforesaid returns were in excess of $18 billion – a staggering amount considering the relatively small number of estate tax returns filed. The collection of so much from so few estates helps bolster the argument of those seeking its repeal that it is onerous and confiscatory in nature.”
When a total repeal of the federal estate tax is contemplated, one of the anticipated consequences is that the beneficiary (or beneficiaries) of the estate will not receive a step up in the cost basis of the assets received for capital gain tax purposes to the date of death value, but receives the assets he or she inherits at the decedent’s original cost basis (purchase price) plus any capital improvements. Under the Trump plan, however, the tax on capital gains above $10 million would only have to be paid when and if the assets are sold.
“The burden will be placed on the taxpayer to retain accurate records as to the cost basis of the assets in his or her estate,” said Enea. “If Trump’s proposal to eliminate the Medicare surtax of 3.8 percent is also implemented, a capital gains tax at the highest rate of 20 percent would still be imposed on capital gains.”
Critics of the Trump proposal argue that its effect will be to allow the wealthiest families to avoid federal estates taxes and create greater dynastic wealth since, in most cases, the beneficiaries will not need to sell the inherited assets. Families with more modest estates, on the other hand, will need to sell and pay the capital gains tax.
When it comes to the impact of a Trump presidency on Medicaid programs that pay for home care, nursing home care, and other long-term care needs, there is greater uncertainty.
President-elect Trump has proposed turning over control of the Medicaid program to the individual states. Under his proposal, rather than financing the program through a federal match based on enrollment, states would be given a fixed amount of money (known as a “block grant”) and could administer the program as they see fit.
“Trump’s plan seeks to maximize the flexibility of each state to create and deliver long-term care as innovatively as possible,” said Enea. “This would discourage the states from enrolling as many as possible into their programs and thus, incentivize them to make the programs cost effective.”
Enea noted, “Trump vowed throughout his campaign that Medicare and Social Security would remain untouched. Additionally, because the Affordable Care Act and Medicaid are so inexorably intertwined, it is difficult to determine whether Trump’s block grant proposal will be implemented beyond said healthcare programs.”
Named Westchester County’s Leading Elder Care Attorney at the Above the Bar Awards, Anthony Enea has spent three decades protecting the rights of seniors, the disabled and their families. He is president of the Westchester County Bar Foundation and past chair of the New York State Bar Association’s Elder Law Section. His practice areas include elder law; Medicaid asset protection trusts; Medicaid applications (home care and nursing home); special needs planning; guardianships (Article 81 and 17-A); and wills, trusts and estates. Enea was named Best Lawyers’ 2017 Trusts & Estates “Lawyer of the Year” in White Plains and recently received the Honorable Richard J. Daronco Distinguished Service Award from the Columbian Lawyers Association of Westchester County and the Dr. Joseph A. Cimino Community Service Award at ArchCare at Home's 2016 Hope Gala.
Enea, Scanlan & Sirignano, LLP is located at 245 Main Street in White Plains, N.Y. with additional offices in Somers, N.Y. Elder law attorney Anthony J. Enea can be reached at 914-948-1500 or a.enea(at)esslawfirm(dot)com. For the latest news, visit Enea, Scanlan & Sirignano online at http://www.esslawfirm.com.
About Enea, Scanlan & Sirignano, LLP
Enea, Scanlan & Sirignano, LLP is an AV preeminent rated elder law firm with offices in White Plains and Somers, N.Y. The practice concentrates on Elder Law; Medicaid Planning; Nursing Home and Home Care Applications; Wills, Trusts and Estates; Guardianships; Estate Litigation; Supplemental Needs Trusts; and Special Needs Planning. Enea, Scanlan & Sirignano, LLP serves Westchester, Rockland, Putnam, the Bronx, Manhattan, Long Island and Queens and is committed to providing the highest quality legal services to seniors, the disabled and their families. Visit the firm online at http://www.esslawfirm.com and http://www.westchesterseniors.com.