Please answer each question in 1-2 paragraphs. Please make sure to explain your answers and please cite with USA applicable authority for all assertions of law that you make.
Teri is a single widow, age 78, living in the hypothetical American state of New Worcester. Teri purchased a a house in New Worcester in 1967 for $28,000. The current fair market value of the house is $385,000. Teri has four children: Alan, Beth, Cathy and Don. All four are adults and all four have children of their own. However, Don has been having marital troubles and is contemplating divorce. Beth is estranged from one of her adult children, Bertha.
Teri is in relatively good health, but suffers from hypertension and mild heart disease. She is on medication and is being treated for both. Mentally, she is sharp and astute.
Aside from the house, Teri has about $200,000 in cash and securities in savings and a 401(k) account with a current balance of $225,000. She is taking annual minimum required distributions from that account. In addition, she receives $1,800 per month in social security benefits.
She is primarily concerned with Medicaid planning as she doesn't want to lose her assets if forced to go to a nursing home eventually. Your supervising attorney decides to recommend that Teri set up an irrevocable Medicaid planning trust and to transfer some or all of her assets to that trust.
During the course of the meeting and subsequent discussions, the following questions come up:
1) How much of a taxable capital gain would Teri have to report if she sold the house tomorrow for fair market value?
2) If the house is transferred to the Medicaid trust, what should the trust do to ensure the best capital gains tax treatment of the house?
3) What should the trust do to ensure that Bertha and Don's soon-to-be-ex spouse do not have access to the trust funds?
4) Should the 401(k) assets be transferred to the trust? Explain.
5) What kind of rights or powers can or should the trust safely give to Teri?
6) The state of New Worcester has an income limit of $1,000/month to be eligible for Medicaid. Is there anything that can be done to protect the excess social security payments from being subject to spend down requirements?
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Respond to at least two classmates by Day 7. Discuss any of you.docx
Please answer each question in 1-2 paragraphs. Please make sure to e
1. Please answer each question in 1-2 paragraphs. Please make
sure to explain your answers and please cite with USA
applicable authority for all assertions of law that you make.
Teri is a single widow, age 78, living in the hypothetical
American state of New Worcester. Teri purchased a a house
in New Worcester in 1967 for $28,000. The current fair market
value of the house is $385,000. Teri has four children: Alan,
Beth, Cathy and Don. All four are adults and all four have
children of their own. However, Don has been having marital
troubles and is contemplating divorce. Beth is estranged from
one of her adult children, Bertha.
Teri is in relatively good health, but suffers from hypertension
and mild heart disease. She is on medication and is being
treated for both. Mentally, she is sharp and astute.
Aside from the house, Teri has about $200,000 in cash and
securities in savings and a 401(k) account with a current
balance of $225,000. She is taking annual minimum required
distributions from that account. In addition, she receives $1,800
per month in social security benefits.
She is primarily concerned with Medicaid planning as she
doesn't want to lose her assets if forced to go to a nursing home
eventually. Your supervising attorney decides to recommend
that Teri set up an irrevocable Medicaid planning trust and to
transfer some or all of her assets to that trust.
During the course of the meeting and subsequent discussions,
the following questions come up:
2. 1) How much of a taxable capital gain would Teri have to report
if she sold the house tomorrow for fair market value?
2) If the house is transferred to the Medicaid trust, what should
the trust do to ensure the best capital gains tax treatment of the
house?
3) What should the trust do to ensure that Bertha and Don's
soon-to-be-ex spouse do not have access to the trust funds?
4) Should the 401(k) assets be transferred to the trust? Explain.
5) What kind of rights or powers can or should the trust safely
give to Teri?
6) The state of New Worcester has an income limit of
$1,000/month to be eligible for Medicaid. Is there anything that
can be done to protect the excess social security payments from
being subject to spend down requirements?
