We have everything you need to know right here! With this insightful breakdown by Elder Law Attorney Joan Reed Wilson, understand how the latest estate planning and elder law updates of 2023 will affect you.

For those who enjoy numbers over words, this article is for you. For those who don’t, read slowly!

 

Related Post: Elder Law Attorney Explains 2024 In Numbers

 

Gift Tax Exemption Limits in 2023

Federal Gift Tax Exemption

Federal Estate and Gift Tax Exemption: $12,920,000

By comparison, when I started practicing in 1997, it was $600,000

What does this mean? It’s the amount that you can pass to your loved ones during your lifetime and/or upon your passing without having to pay any estate taxes.

Connecticut Gift Tax Exemption

Connecticut Estate and Gift Tax Exemption: $12,920,000

This is the first year that Connecticut matches the Federal exemption, jumping from $9,100,000 in 2022.

If you do not anticipate having more than $12,000,000 to give over your lifetime, then you probably won’t owe any estate taxes.

But – this law is scheduled to sunset in 2026 and Connecticut’s exemption will go with it.

If Congress does nothing, the exemption will go back down to $5,000,000, adjusted for inflation.

Likely that number won’t go down anywhere near the early days of my career, and still not something many have to worry about.

It’s important to remember that life insurance proceeds are included in that figure and sometimes that can put the value of your estate over the edge.

Gift Tax Exclusions

Gift Tax Exclusion: $17,000

You can gift this amount every year to everyone and anyone (not just family) without having to report it to the Internal Revenue Service or Department of Revenue Service.

This means that if you keep your annual gifts below this amount, they will not reduce your lifetime allowance of $12,920,000

NOTE – It’s important to remember that the gifts are counted against you for Medicaid planning purposes. See – Does The Gift Tax Exclusion Apply To Medicaid?

Important Retirement Changes

If you’re like the majority of the country and don’t have to worry about having TOO much money, here are some numbers for you:

Required Minimum Distribution (RMD) Age for Qualified accounts: 73 years

Increased by Secure Act 2.0 on December 29, 2022, from 72, which was an increase from 70.5 passed by the original Secure Act in 2020.

For those who are not that close to retirement age, Secure Act 2.0 increased the RMD age to 75 in 2033.

Social Security Increase: 8.7% (a healthy raise!)

Medicare Costs In 2023

Standard Medicare Premium

Standard Medicare Premium: $164.90

This is LOWER than last year! WIN-WIN for those on Social Security and Medicare. A rise in income and a reduction in health insurance premiums.

Speaking of Medicare premiums, did you know that the State of Connecticut pays for the Medicare premiums for those whose gross income is below certain levels?

There is no asset test for this benefit program and many who qualify are unaware of it.

Medicare Savings Program (MSP)

There are three categories, and the figures change every March.

• QMB = single $2,390/month; couples $3,220/month (also pays co-pays and prescription costs)
• SLMB = single $2,617/month;  couple: /$3,525/month
• ALIMB = single $2,786/month;  couple $3,754/month

Nursing Home CT

Average Monthly Cost of a Skilled Nursing Home in Connecticut: $14,060

This figure is recalculated every July and is important [if and when] you apply for Medicaid to pay for your nursing home or home care.

 

Related Post: Asset Protection Planning Benefits For Medicaid

 

The reason it is recalculated is that it is the figure used to determine how long you will be penalized from receiving Medicaid benefits if you made any gifts during the look-back period.

Look-Back Periods

• 5 years for Medicaid (Title 19) for a nursing home and for the Connecticut Home Care Program for Elders.
• 2 years for the State-funded home care program – a program that pays for some home care and may allow you to retain more of your assets.

But tread lightly in applying for this program or having someone apply for you by way of a home assessment.

Because if there are any gifts in the 2-year look-back period, the penalty assessed will be MUCH longer under this program.

Sound confusing? That’s because it is. And not something you will be told about by anyone other than someone who is working for your best interests (like an elder law attorney).

Home Care Program

Maximum Gross Income to qualify for the CT Home Care Programs that pay for a companion or custodial care at home: $2,742/month.

PLEASE NOTE, that if your income exceeds this amount, there are ways to qualify by using a Pooled Trust.

We are on the list of approved attorneys to prepare Pooled Trusts if you need to qualify.

Veteran Benefits Administration

Veteran’s Aid & Attendance Benefits:

• Up to $1,432/month for a surviving spouse, and
• Up to $2,046/month for a veteran.

The VA pays a stipend if you meet a three-prong test:

1) You are a veteran or the surviving spouse of a veteran who served during a defined wartime period,

2) Your non-exempt assets (your primary residence is exempt) are less than $150,538, and

3) Your health expenses are nearly as much as your gross income.

We are also accredited with the VA to apply for Aid & Attendance benefits.

If you are not someone who likes numbers and you made it to the end of this article, I applaud you. Even if you are someone who likes numbers, your head may be spinning now.

In the world of estate planning and elder care, numbers and acronyms create a complex web of laws, regulations, sometimes unwritten rules, and pitfalls that can trip you up.

Use your time wisely. Don’t try to figure this out on top of everything else you have on your plate. Keep your day job; spend time with your family and enjoy each other’s company rather than trying to traverse this number jungle.

We are here to help. All these numbers and acronyms pieces of the benefits and estate tax puzzles is our day job, and we LOVE it. Let our Elder Law Attorney help you! Call us today at 860-669-1222.

Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only.

Let Us Know How We Can Help!

Please fill in your contact information and a brief message about what you need help with.