Key Elder Law Numbers for 2017: Our Annual Roundup
Below are figures for 2017 that are frequently used in the elder law practice or are of interest to clients.
Medicaid Spousal Impoverishment Figures for 2017
The new minimum community spouse resource allowance (CSRA) is $24,180 and the maximum CSRA is $120,900.
The maximum monthly maintenance needs allowance is $3,022.50.
The minimum monthly maintenance needs allowance remains $2,002.50.
Medicaid Home Equity Limits
Minimum: $560,000
Maximum: $840,000
Income Cap
The income cap for 2017 applicable in "income cap" states is $2,205 a month.
Gift and estate tax figures
Federal estate tax exemption: $5.49 million for individuals
Lifetime tax exclusion for gifts: $5.49 million
Generation-skipping transfer tax exemption: $5.49 million
The annual gift tax exclusion remains at $14,000.
Long-Term Care Premium Deductibility Limits for 2017
The Internal Revenue Service has announced the 2017 limitations on the deductibility of long-term care insurance premiums from income. Any premium amounts above these limits are not considered to be a medical expense.
Attained age before the close of the taxable year Maximum deduction:
40 or less - $410
More than 40 but not more than 50 - $770
More than 50 but not more than 60 - $1,530
More than 60 but not more than 70 - $4,090
More than 70 - $5,110
Medicare Premiums, Deductibles and Copayments for 2017
Part B premium: $109/month (was $104.90)
Part B premium for beneficiaries not "held harmless": $134/month (was $121.80)
Part B deductible: $183 (was $166)
Part A deductible: $1,316 (was $1,288)
Co-payment for hospital stay days 61-90: $329/day (was $322)
Co-payment for hospital stay days 91 and beyond: $658/day (was $644)
Skilled nursing facility co-payment, days 21-100: $164.50/day (was $161)
Part B premiums for higher-income beneficiaries:
Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 will pay a monthly premium of $187.50 (was $170.50).
Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 will pay a monthly premium of $267.90 (was $243.60).
Individuals with annual incomes between $160,000 and $214,000 and married couples with annual incomes between $320,000 and $428,000 will pay a monthly premium of $348.30 (was $316.70).
Individuals with annual incomes of $214,000 or more and married couples with annual incomes of $428,000 or more will pay a monthly premium of $428.60 (was $389.80).
High-earner premiums differ for beneficiaries who are married but file a separate tax return from their spouse:
Those with incomes between $85,000 and $129,000 will pay a monthly premium of $348.30 (was $316.70).
Those with incomes greater than $129,000 will pay a monthly premium of $428.60 (was $389.80).
Social Security Benefits for 2017
The new monthly federal Supplemental Security Income (SSI) payment standard is $735 for an individual and $1,103 for a couple.
Estimated average monthly Social Security retirement payment: $1,360 a month (was $1,341) for individuals and $2,260 (was $2,212) for couples
Maximum amount of earnings subject to Social Security taxation: $127,200 (was $118,500)
For a complete list of the 2017 Social Security figures, go to: https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf
The Grim Reaper Appears Again
It happened again, just this week. I took a phone call at the office from a lady named Joy. She explained that her mother had recently passed away after a prolonged stay in a nursing home. Her mom’s savings account of approximately $80,000 had been spent down by making payments to the nursing home. Once all the money was gone, her mom’s nursing home bill had been subsidized by TennCare. Following her mom’s death, Joy filed for a TennCare release which was denied. She learned that TennCare had paid the nursing home more than $132,000 for her mom’s care and now, they wanted to be reimbursed through the process known as “estate recovery”. In brief, that means TennCare notified her that they would be placing a lien on her mother’s residential real estate.
When I asked Joy what her mother’s property was worth, she estimated $120,000 to $125,000….less than the lien TennCare would be filing. My heart sank for her because, in effect, TennCare would be taking her mother’s property, leaving her without any inheritance at all. When I told her what “estate recovery” meant, she replied, “But, mama wanted me to have her house… she left it to me in her Will…what can I do?”
Unfortunately, for Joy, there’s little she can do at this point. TennCare has a legal right to be reimbursed from her mom’s probate estate. Thus, the Grim Reaper will take what he is due.
You need to know what Joy and her mom didn’t know. First, a nursing home resident does not have to “spend down” all of their financial assets to receive TennCare. Further, a TennCare recipient’s residential real estate can be insulated from estate recovery. Tennessee law currently provides that TennCare can only pursue estate recovery from the probate estate of a decedent. There are two or three legal ways to insure that residential real estate is titled so that it falls outside of probate when someone dies. Each of these strategies requires some forethought, planning, and the counsel of a competent elder law attorney.
Only 32% of Americans ever get around to executing the most basic estate planning document…a Last Will & Testament. Joy’s mom ran against the herd when she took the time and made the investment in having her Will prepared. Sadly however, she failed to understand that having a Will didn’t ensure that her daughter would receive a legacy consisting of some cash and a piece of real estate. Joy’s mom didn’t take the proactive steps required to protect her nest egg of savings from the ravages of costly nursing home care and her real estate from the long arm of estate recovery.
The good news for you is that now you know about Joy's unfortunate situation, you can make sure that what happened to her never happens to your heirs.