July 2025 Newsletter
Different Flavors of Transferring Your Money and Property Outside of Probate
It’s summertime and July is National Ice Cream Month. But what kind to choose? Cone or cup? What flavor are you craving? You are facing what is known as the “ice cream dilemma,” which has become a metaphor for the difficulty of decision-making when there are nearly unlimited options.This dilemma could help explain why only around one in three American adults has an estate plan. Read more to learn about where to start and how to simplify the decision-making process.
Adding Toppings to Your Estate Plan
Estate planning often follows the same path as adding toppings to your ice cream. Most people begin with a “vanilla” plan that covers the essentials. From there, they can add “toppings” such as inheritance timing and conditions or charitable components that turn a basic plan into something customized. Read more to learn about all the different types of options or “toppings” that are available to you.
Do Not Leave Your Loved Ones with a Sticky Mess
We tend to think of ice cream as a simple pleasure, but beneath that sweet surface is actually a complex, carefully structured mixture. If the conditions shift even slightly, it can melt too fast or harden into freezer-burned disappointment. Estate plans are similar in that way. When made right and kept fresh, they deliver exactly what you want. However, when they are neglected or exposed to too much heat, they can turn messy fast. Read more to learn why regular reviews are so essential.
Note from Susana-$19,000 “Exemption” IRS vs MassHealth
It is true that one may take advantage of the Federal annual gift tax exclusion of $19,000, per person, and $38,000 per married couple to give tax free gifts to your loved ones. It is also true that at least once per week, I hear “Oh we can apply for MassHealth and still give away $19,000 per year to our children.”
But the Massachusetts Division of Medical Assistance may view this legitimate transaction as a “transfer of assets” for the purpose of obtaining long-term care assistance (Medicaid (MassHealth)). This means that a gift to your loved ones of $19,000 within the five years prior to your application for MassHealth (long-term care assistance) is likely to disqualify you from receipt for MassHealth benefits just when you need them.
Careful planning and structuring your gifts to “weather” the five-year look-back imposed by our Division of Medical Assistance is an essential building block in anyone’s estate plan.
If you want to gift funds of $19,000 or less, please contact us to learn more about this issue and whether or not it affects you.
Sincerely,
-Susana
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