How Trump’s Election Can Affect Your Estate Planning
With Donald Trump’s election and pending inauguration, many Michigan residents may be wondering about how some of the laws and regulations that Trump wants to put in place may affect your estate plan. What do some of these plans entail? And how can you prepare for these changes? In short, for the wealthy, Trump’s promise to repeal the estate tax may impact tax-related estate-planning measures for the very small percentage of the wealthy for whom the current estate tax has an impact. However, when we consider estate-planning measures concerning nursing home care, and the use of Medicare and Medicaid, many seniors may have reason to be concerned. According to a recent article in Forbes, “the election of Donald Trump, along with continued Republican majorities in the House and Senate, will likely result in major cuts in federal programs that benefit older adults and younger people with disabilities.”
Estate Planning, the Estate Tax, and Middle-Class Americans
As a recent article in the Wall Street Journal explains, Trump’s plan for estate-tax repeal, if it happens, “will give a tax cut to the very wealthiest millionaires and billionaires,” given that the current exemption is $5.45 million per person, or $10.9 million (double the individual exemption) per married couple. Most Michigan residents simply will not be impacted by the estate tax one way or another, and instead are thinking more about how they will be able to afford nursing home care and other medical treatments under the Trump administration.
If Trump’s plans with regard to the estate tax, or taxable gifts, may impact you, it is important to speak with a lawyer about creating a will regardless of how Congress will take action under Trump, and to avoid taxable gifts. But more importantly for a larger number of Americans, what might the Trump administration mean for Medicare, Medicaid, and nursing home costs?
Understanding Federal Funding for America’s Seniors
As a report from MarketWatch explains, one of Trump’s key promises has been to cut federal spending. But who will this impact most? As the report clarifies, “the biggest chunk of the budget, by far, goes to Americans who are over 65 years old.” To be sure, “in fiscal 2017, Social Security and Medicare alone will cost $1.7 billion.” Moreover, “just over a fifth of all Medicaid also goes to the over-65s—for example on nursing home costs for those who have run out of assets.”
In order to be eligible for Medicaid benefits, an elderly person must use up most of their assets in order to qualify. Given that nursing home care is so expensive, it is usually not difficult for many seniors to be eligible for Medicaid benefits for nursing home care costs. According to a fact sheet from Genworth, the median annual cost of care in an assisted-living facility in Grand Rapids is $45,450. For a semi-private room in a nursing home in Grand Rapids, the median annual rate is $93,075. And the cost of a private room in a Grand Rapids nursing home is even higher. To be sure, the fact sheet cites the median annual rate from 2015 as $101,105.
As the Forbes article explains, it is not yet clear whether—and to what extent—the Trump administration will make cuts to Medicare and Medicaid, both programs that help seniors. In the meantime, family members may need to consider financial planning to help pay for care for elderly loved ones. And it is not too late to look into long-term-care insurance options that may be able to help cover costs in the future.
Discuss Your Options with a Grand Rapids Estate Planning Lawyer
If you have questions about how Trump’s election can affect your estate planning, it is important to speak with a Norton Shores estate planning attorney as soon as possible. Contact the Law Offices of David L. Carrier, P.C. to discuss your options.
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