New York Estate Planning & Elder Law blog — January 10, 2025
By 2025, the exemptions from estate tax will rise to $7,16 million for New York estate tax and to $13,99 million for federal estate taxes. The annual gift exclusion increases to $19,000. Early intervention is recommended if your estate will exceed the New York threshold. The New York estate tax starts at $600,000. Some of the techniques are (1) setting up two trusts, one for husband and one for wife, and using them to double the New York exemption, (2) gifting out so much of the estate so as to reduce it below the New York exemption, at least three years before the death of the donor, and (3) using the “Santa Clause” providing that the amount over the threshold be donated to a charity or charities of your choosing so as to reduce the estate to no more than the exemption.
For Medicaid, the house is an exempt asset so long as a spouse is residing there, up to $1.1 million of equity for 2025. Since over 80% nursing home residents don’t have a spouse, a Medicaid Asset Protection Trust can be used to obtain the five-year look-back period for nursing facility care. The trust would protect the house instead of the unreliable spouse exemption. The MAPT will not protect your other assets, so an individual can keep around $31,500, and a spouse living at home may keep up to $158,000. Home-care is not subject to a look-back period and you don’t have to worry until you need it. This may change in future, so the MAPT will remain an important tool to qualify for home care and protect your assets from a Nursing Home. If you want to be able stay at home and receive home health aides to help with daily living activities, it is important to move your assets into the MAPT as early as possible.
