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Year-End Estate Planning Wrap-Up   

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As the year draws to a close, it’s worth taking a step back to assess the legal framework that governs how your assets will be managed during life and transferred at death. Many financial and tax-related decisions, including retirement account contributions, charitable gifts, and certain trust funding activities must be completed by December 31 to maximize potential tax benefits and ensure estate planning documents continue to reflect your goals.

A thoughtfully maintained estate plan is not a “set it and forget it” exercise. It should evolve with life circumstances, family needs, and changes in federal and state law. Periodic reviews every three to five years help ensure your estate plan continues to protect those you love and operates as intended when it matters most.

Review – and Update if Necessary

If you already have an estate plan in place, you are ahead of the curve. However, even a well-crafted plan requires ongoing attention. Unless your documents were prepared or reviewed within the past year, it’s time for a checkup. Laws governing estates, trusts, and taxation evolve, and life rarely remains static. Marriages, divorces, births, deaths, relocations, and even changes in asset composition can all impact how your plan functions.

A comprehensive review should include your last will and testament, any revocable or irrevocable trusts, durable powers of attorney, and healthcare directives. Ask yourself:

  • Do these documents still reflect my current wishes and family situation?
  • Have there been any major life events that warrant revisions?
  • Have I moved to another state where probate, homestead, or tax laws differ?
  • Have I acquired new assets or sold property referenced in my plan?

Working with an experienced estate planning attorney ensures your documents remain compliant with current law and intentions are not just clearly expressed but are also enforceable.

Did Your Trust Cross the Finish Line?

Creating a trust is an important step, but it is only effective once it has been properly funded. If you established a revocable living trust in 2025, have you completed the process of transferring assets into it? Deeds, account registrations, and beneficiary designations must be updated to reflect ownership by the trust.

If you pass away before funding is complete, those unfunded assets may remain subject to probate, precisely what you sought to avoid by creating a trust in the first place. Year-end is an excellent time to verify that bank accounts, brokerage accounts, real property, and business interests are properly titled.

Additionally, review any “pour-over” provisions in your will, which are designed to transfer remaining assets into the trust upon death. These provisions work best when the bulk of your estate is already held or designated for transfer to the trust.

Are Your Powers of Attorney and Healthcare Directives Current?

Equally important are incapacity documents — durable power of attorney and healthcare directives. These instruments authorize trusted individuals to act on your behalf in managing financial affairs and making medical decisions should you become unable to do so.

The designations can become outdated over time. Agents may move out of state, become incapacitated themselves, or simply no longer be the right choice. If your chosen representative has retired to Florida while you reside in Nassau County, for example, they may not be able to assist you effectively in an emergency.

An updated power of attorney and healthcare proxy can spare loved ones significant stress and expense. Without these documents, family members may be forced to petition a court for guardianship to manage your affairs. This is a time-consuming, expensive, and emotionally draining process, easily avoided.

Review who you have named, confirm their willingness to serve, and  be sure they have current copies of your documents.

Review Beneficiary Designations

One of the most common pitfalls in estate planning involves outdated beneficiary designations. The beneficiary designations on life insurance policies, retirement plans, annuities, and certain investment accounts override whatever instructions are contained in your will or trust.

For instance, if an ex-spouse remains listed as the beneficiary of your life insurance policy, that person will receive proceeds upon your death, no matter what’s in your will or how much time has elapsed since you’ve had any contact with them. The insurer is legally bound to honor the most recent signed designation on file. Many people go to court on this issue and do not get the results they hoped for.

Take time before year-end to review all beneficiary forms and ensure they are consistent with your overall estate plan. Confirm not only your primary beneficiaries but also contingent (secondary) beneficiaries in case your first choice predeceases you.

End of Year Financial Considerations

Required Minimum Distributions (RMDs)

If you are age 73 or older, you are required to take annual distributions from traditional IRA and certain retirement accounts. Failure to withdraw the appropriate amount can result in a penalty equal to 25% of the amount that should have been distributed.

Beneficiaries of inherited IRAs must also take distributions under the SECURE Act rules, which generally require the account to be emptied within ten years of the original owner’s death (with certain exceptions for eligible designated beneficiaries). Reviewing your RMD status before year-end ensures compliance and helps manage your taxable income effectively.

Flexible Spending Accounts (FSAs)

If you participate in a Flexible Spending Account through your employer, review your plan’s “use it or lose it” provisions. Some plans allow a short grace period while others permit only a small carryover amount. Any funds left unused beyond the permitted deadline are forfeited. Verify your account rules now so you can plan eligible expenses accordingly.

Tax Planning Opportunities and Year-End Charitable Giving

Year-end is also a time for strategic tax planning. Charitable giving can serve both philanthropic and financial purposes, reducing taxable income and helping causes important to you.

Whether you prefer to make cash contributions, donate appreciated securities, or establish a charitable trust, completing your gifts before December 31 is key to claiming the deduction for the current tax year. Donating highly appreciated stock can be particularly effective — you avoid paying capital gains tax on the appreciation and still receive a charitable deduction for the fair market value of the asset.

Qualified Charitable Distributions (QCDs)

Individuals aged 70½ or older can make Qualified Charitable Distributions of up to $108,000 directly from an IRA to a qualified charity in 2025. A QCD counts toward your Required Minimum Distribution but is excluded from your Adjusted Gross Income. This strategy can help lower overall taxable income and may also reduce the impact of other income-based taxes or Medicare surcharges.

It is essential, however, that the funds be transferred directly from the IRA to the charitable organization. Personal withdrawals do not qualify. Always consult your estate planning attorney to ensure compliance.

Annual Exclusion Gifting

Under current federal law, individuals may gift up to $19,000 per recipient annually ($38,000 for married couples) without incurring gift tax or affecting the lifetime exemption amount. These gifts can be an effective way to reduce the size of your taxable estate while providing meaningful financial support to family members or other beneficiaries.

In addition, direct payments for another person’s tuition or medical expenses made directly to the educational or healthcare provider  do not count toward the annual exclusion or lifetime exemption. These strategies can help transfer wealth efficiently while maintaining flexibility and control.

Estate Planning as a Living Framework

An estate plan is more than a collection of documents — it is a living framework that guides your financial and personal legacy. A properly prepared and maintained plan provides clarity for your loved ones, minimizes administrative burdens, and helps avoid unnecessary court involvement.

At its core, estate planning is an act of care. It ensures that the people you trust have the authority to make decisions on your behalf and that your assets are distributed according to your wishes. It also protects your heirs from confusion, conflict, and unnecessary expense.

If you have yet to formalize your estate plan, there is no better time to start. And if you already have one, take advantage of this year-end season to confirm that your plan remains legally sound, properly funded, and aligned with your current circumstances.

Estate planning is not a one-time task but an ongoing process that, when approached proactively, can provide peace of mind for years to come.

As you wrap up 2025 and prepare for the new year, make estate planning a priority alongside your other year-end financial to-dos. By reviewing your documents, confirming your beneficiaries, funding your trusts, and making strategic gifts, you ensure your estate plan continues to reflect your values and protect those you love.

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What is the Retirement Rule of $1 More?           

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Some limits and deadlines have wiggle room, but IRS rules, especially those regarding retirement rules, aren’t among them.

The “retirement rule of $1 more” refers to the costly situations created when an increase, even by as much as $1, can trigger tax consequences or increase Medicare costs. Want to avoid crossing this expensive line? Here’s how.

Medicare’s Threshold—Meet IRMAA

The complexities of Medicare make it easy to make expensive mistakes. One survey revealed that more than 50% of people queried didn’t know that Medicare Part B – how doctor’s fees are paid – isn’t free. You have to pay monthly premiums for the coverage. What most folks don’t know: high incomes will lead to higher premiums.

If you exceed certain thresholds, expect to receive a welcoming letter from Medicare telling you that you’ve fallen into the IRMAA category. Income Related Monthly Adjustment Amount (IRMA) is based on the Modified Adjusted Gross Income (MAGI) from two years prior. In 2025, the first surcharge starts at $103,000 for singles and $206,000 for married couples filing a joint return.

If you do a Roth Conversion, take RMDs (Required Minimum Distribution) from your retirement accounts or added a new project to a retirement/side hustle, you could end of paying higher health costs for an entire year.

There’s some hope for the IRMAA threshold. If you had a major life change, including a death of a spouse, loss of a job, or income is higher because of a qualifying event, you can try to appeal using SSA-Form 44. It’s worth the effort, but there’s no guarantee of reduced premiums.

Social Security Tax Traps

Depending on how much you earn from other sources, your Social Security benefits might be subject to federal tax – as much as 85%. The SS tax calculation is based on “provisional income,” which means half of your SS benefits plus all other income, including wages, IRA withdrawals and tax-exempt interest.

Cross the $25,000 limit for singles or $32,000 for married joint filers, and the tax hit begins. It’s been decades since the formula has been updated, so every year the number of people hitting and exceeding the threshold increases.

The new tax law doesn’t eliminate federal taxes on SS, but it does give Americans age 65 and older with income under $75,000 (for individuals) and $150,000 for couples a $6,000 boost to their already existing extra standard deduction from 2025 to 2028.

Capital Gains Tax Windows

The tax code gives a 0% long term capital gain rate to many retirees, but this window closes fast. Ordinary income, including withdrawals from IRAs or 401(k) stays below capital gains, but even a modest income increase can move you into a higher tax bracket. Depending on where you land, those gains could be taxed at 15% or 20%.

In 2025, married joint filers can realize up to $96,700 in long term capital gains with zero federal tax if there’s little or no other income. But you may still need to pay state taxes. And go just $1 over ordinary income and your gains may become taxable.

Remember your RMDs from traditional IRAs and 401(k)s? They’re taxed as ordinary income, so every time you receive an RMD, your income tax increases and so can your tax bracket, Medicare premiums and how much of your Social Security benefits are taxed.

But wait—there’s more. Small increases in income can disqualify retirees from a number of other tax breaks and credits, including the Saver’s Credit, deductions for medical and charitable donations.

What Can You Do to Minimize These Threshold Costs?

The best defense against the Retirement Rule of $1 More is planning ahead. Talk with your CPA to discuss your income, strategies and make the necessary adjustments. One method is to use taxable retirement accounts before tapping pre-tax ones to take advantage of lower, 9% capital gains rate. Another is to convert IRAs and 401(k)s to Roths in lower tax years. If you don’t need your RMDs, you could use them for a Qualified Charitable Distribution (QCD), which allows you to donate up to $100,000 to a qualified nonprofit.   

We recommend a conversation with our office to discuss how to structure retirement income with your estate plan. There are a number of opportunities available to minimize your chances of stepping over that expensive threshold.

Resource: Kiplinger July 8, 2025 “The Retirement Rule of $1 More”

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New York State’s Estate Tax Cliff: How to Keep Your Estate on Solid Ground

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New York State residents shouldn’t overlook a crucial and potentially costly component of their estate planning: New York State’s estate tax cliff. If your estate falls within the $7 million to $14 million range, it is imperative to address this issue now—before it results in an unnecessary and substantial tax burden on your heirs.

Understanding the New York Estate Tax Cliff

Unlike the federal estate tax, which imposes a tax on assets only above the exemption threshold, New York State’s estate tax has its own exemption and a unique twist—commonly referred to as the “estate tax cliff.”

As of 2025, the New York State estate tax exemption is approximately $7.16 million. However, if your taxable estate exceeds 105% of this exemption (i.e., roughly $7.518 million), the entire estate becomes subject to taxation, not just the portion that exceeds the exemption.

This means a modest increase in the size of your estate can trigger a disproportionately large tax liability. Depending on the estate’s size, New York’s estate tax rate can range from 3.06% to 16%, which—while lower than federal rates—can still result in the loss of hundreds of thousands or millions of dollars if not planned for properly.

Illustrating the Cliff: A Hypothetical Example

Let’s consider a simplified example (with numbers subject to update based on current tax tables):

  • Taxable estate value: $7,518,000
  • NYS estate tax liability (if no planning): approximately $707,648

However, with appropriate estate planning—specifically the inclusion of a charitable bequest clause—this tax liability can potentially be eliminated.

By making a charitable gift equal to the amount that exceeds the exemption threshold, your estate can effectively reduce its taxable value and avoid falling off the tax cliff. For example:

  • Charitable bequest: $358,000
  • Revised estate tax liability: $0
  • Net savings to heirs: approximately $349,647

(Please note: these figures are illustrative only and must be calculated based on current exemption amounts and your actual estate value.)

What Is a Charitable Savings Clause?

A Charitable Savings Clause—also known as a conditional or formula-based charitable bequest—is a provision in your Last Will and Testament that directs a charitable donation only if your estate exceeds the New York exemption threshold.

This clause typically activates upon the death of the surviving spouse when the estate is fully exposed to estate tax. If the estate’s value places it in danger of crossing the 105% threshold, the charitable bequest effectively “brings it back” within the exempt range—preserving more of the estate for heirs while supporting a cause of your choosing.

We typically draft this provision as a “provisional charitable gift” so it’s only triggered if needed. This flexible approach ensures that your legacy remains intact regardless of minor fluctuations in estate value or exemption thresholds.

Other Ways to Avoid the Cliff

Other techniques can be used to avoid an Estate being taxable in New York when it does not owe tax Federally. Two common techniques are the use of credit shelter trusts for spouses and lifetime gifting.

When you have a married couple, the first spouse to pass away can leave assets in a trust for the surviving spouse in a way that those assets are not part of the surviving spouse’s taxable estate. This allows couples to shield more assets from estate tax and ensures the first spouse makes use of his New York estate tax exemption.

In New York, lifetime gifts are not taxed and do not count towards the estate tax exemption. This is different than Federal estate tax, which combines lifetime taxable gifts with estate value to determine the gross estate for tax purposes. If a person is above the New York estate tax threshold but below the Federal estate tax threshold, lifetime gifting to family members can be a good strategy for avoiding estate tax. And as New York has its Estate Tax Cliff, a taxable estate can cost hundreds of thousands or millions of dollars.

Your Estate Planning Checklist to Avoid the Cliff

Accurately determine your estate’s current value. Include all real estate, investments, retirement accounts, business interests, and life insurance proceeds.

Estimate your New York State estate tax exposure. Work with a qualified estate planning attorney or financial advisor to run projections based on your assets and the current exemption.

Determine the charitable deduction required. Calculate the necessary bequest to reduce your taxable estate below the threshold to see if this is your best option.

Add a Charitable Savings Clause to your Will. This ensures flexibility and effectiveness in case the estate triggers the tax.

There’s more you can do to avoid the New York State estate tax. Proper planning including the use of credit shelter trusts and lifetime gifting can also help avoid the New York estate tax cliff.

Communicate your plan to your executor and heirs.  Clear communication helps avoid confusion and ensures that your wishes are honored.

Annual Review Is Essential

Because New York’s estate tax exemption is adjusted annually for inflation, and because your estate’s value can fluctuate over time, regular reviews of your estate plan are critical. An estate that is exempt this year could become taxable next year, and vice versa. We recommend reviewing your estate plan annually, especially if your estate is near the exemption threshold or if you anticipate major changes in assets, family dynamics, or charitable goals.

Filing Considerations

New York State requires that estate tax returns be filed within nine months of the decedent’s death. A three-month extension may be requested, but the tax itself must still be paid by the original due date to avoid interest and penalties. Advance planning allows your executor to fulfill these obligations in a timely and efficient manner.

New York’s estate tax cliff is a harsh trap that can be avoided with foresight and proper legal drafting. A modest charitable gift can protect your estate from significant tax liability, preserve your family’s inheritance, and support the philanthropic causes you care about.

If your estate is nearing or exceeding the New York estate tax exemption amount, we encourage you to contact our office for a confidential consultation. We will review your current estate plan and ensure that you remain on solid financial—and legal—ground.

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Seniors, What Do You Need to Know About Out of Pocket Health Care Costs?

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Medicare doesn’t pay for everything. One of the big financial challenges of Medicare is the out-of-pocket cost, which can be a surprise if you’re not ready for it.

How much you’ll pay and when depends on the kind of Medicare you have. Traditional Medicare, operated by the government, provides care on a fee-for-service basis. Medicare Advantage is sold and serviced by private insurance companies and works on a managed-care model.

Traditional Medicare doesn’t have an annual out-of-pocket limit for outpatient and hospitalization services. You’ll want to consider purchasing a Medigap or supplemental insurance policy. These policies are marketed and serviced by private insurance companies.

Medicare Advantage plans typically come with their own out-of-pocket limits, which can be high, depending on which one you pick. They range from $5,000 to $9,000. The out-of-pocket protection varies with the plans. If you find yourself with a serious medical condition, the out-of-pocket cost can make it difficult or impossible to afford the care you need.

While the Inflation Reduction Act of 2022 imposes a $2,000 cap on out-of-pocket spending for drugs paid for through Part D Medicare plans, we’re sure this is going to be challenged at some point in the near future. Pharmaceutical lobbyists are a powerful force.

Deciding whether or not to go with traditional Medicare or Medicare Advantage should be based on more than up front costs. While Medicare Advantage offers one-stop shopping and claims to offer extra benefits, they come with serious limitations. You can only use a doctor who is in network, prior authorizations are required, and promised benefits are often limited to those who accept their plans.

Traditional Medicare offers the widest access to health providers, with only a few medical services requiring prior authorization.

There are definitely tradeoffs to consider between Medicare programs and you’ll need to do your homework, regardless of which plan you chose. In the meantime, buying a Medigap policy may be a wise decision to cover your healthcare costs, especially if you, like most seniors, live with a chronic condition of one kind or another.

Medigap premiums vary, but the benefits offered are standardized across insurers and across the country. They all cover hospital coinsurance—the cost you pay after meeting the deductible. Many cover all or part of the hospital deductible for Medicare ($1,676 in 2025). Medigap also covers all or part of the 20% of physician fees once you meet the Medicare Part B deductible, which is $257 this year. Some even cover the cost-sharing in skilled nursing facilities.

The best time to buy a Medigap plan is when you first sign up for Medicare Part B, which covers doctor visits and outpatient care. This is when Medigap is not allowed to reject your application or charge a higher premium for any pre-existing conditions. It’s called “guaranteed issue” and this is available during the six month Medigap Open Enrollment Period. The time starts on the first day of the month in which you are 65 years old or older and enrolled in Medicare Part B.

After this time period ends, most Medigap plans can reject your application or charge higher premiums because of pre-existing conditions except for four states: Maine, Massachusetts, Connecticut and New York.

Deciding whether to go with traditional Medicare or Medicare Advantage can be overwhelming, as there are so many different variables. What kind of out-of-pocket costs do you anticipate? What kind of medications do you take every day? A thorough review of your recent medical needs should be done in tandem with a review of the plans you’re considering.

One thing to consider: people enrolled in traditional Medicare with supplemental Medigap policies are the least likely to report trouble managing their healthcare costs because they have the greatest level of protection.

If you have questions, we invite you to call the office. We often review Medicare decisions with clients as part of their estate plan. We don’t sell insurance, but our experience with these insurance plans allows us to make worthwhile recommendations to clients.

Reference: The New York Times – “Bridging the Medicare Cost Gap: Know Your Options”

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When is the Best Time to Use a Medicaid Asset Protection Trust?

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Long-term care planning is a critical aspect of estate and financial planning, especially for individuals who may require Medicaid in the future. A Medicaid Asset Protection Trust (MAPT) is one of the most effective tools for protecting assets while ensuring Medicaid eligibility. If an individual owns substantial assets, setting up a MAPT early can prevent Medicaid spend-down requirements, ensuring more wealth is preserved for heirs.

But when is the best time to establish a MAPT? The answer depends on multiple legal and financial considerations, including Medicaid’s five-year look-back period, irrevocable trust laws, and estate recovery rules.

Legal Overview of a Medicaid Asset Protection Trust

A Medicaid Asset Protection Trust (MAPT) is a special type of irrevocable trust that lets individuals shield assets from Medicaid’s eligibility calculations while ensuring they qualify for long-term care benefits.

Legal Characteristics of a MAPT

Irrevocability—Once a MAPT is established, the grantor (the person creating the trust) cannot dissolve or modify it in most circumstances. This feature ensures that Medicaid cannot count the trust’s assets as part of the grantor’s resources.

Look-Back Rule – Federal law imposes a five-year look-back period on transfers into a MAPT. Any assets transferred within five years of applying for Medicaid may result in a penalty period during which the applicant must self-pay for long-term care.

Trustee  and Beneficiaries—The grantor cannot serve as the trustee but can designate beneficiaries (e.g., children or heirs) who will inherit the trust assets after their passing. The trust can provide that all income is paid to the grantor, but the trust cannot invade the grantor’s principal. However, the trust can distribute principal to the ultimate beneficiaries of the trust.

Exemption from Medicaid Estate Recovery – One of the leading legal advantages of a MAPT is that it prevents Medicaid estate recovery. This means that after the grantor’s death, Medicaid cannot reclaim funds from the trust to cover nursing home costs paid on the grantor’s behalf.

Best Time to Set Up a Medicaid Asset Protection Trust

From a legal standpoint, the five-year look-back period is the most critical consideration when determining the timing of a MAPT. Under 42 U.S.C. § 1396p(c) of the Social Security Act, Medicaid reviews financial transactions made within 60 months (5 years) before an application to determine if assets were transferred improperly.

  • If assets were transferred into a MAPT less than five years before applying for Medicaid, a penalty period is imposed.
  • The penalty period is calculated based on the total value of transferred assets divided by the average monthly cost of nursing home care in the applicant’s state.

Establishing a MAPT before major health issues arise ensures assets are protected when Medicaid is needed.

While the Grantor is in Good Health (Preventing Medicaid Penalty Exposure)

The best time to create a MAPT is while the grantor is still in good health and does not anticipate an immediate need for long-term care. Waiting until after a serious medical diagnosis (e.g., Alzheimer’s or Parkinson’s disease) could mean:

  • Ineligibility for Medicaid benefits due to the five-year look-back period.
  • Potential loss of assets to nursing home expenses while waiting for the penalty period to end.

Before Significant Asset Accumulation disqualifies you from Medicaid (Medicaid Eligibility Limits & Asset Spend-Down Rules)
Under federal and state Medicaid laws, an applicant’s countable assets must fall below a specific threshold to qualify for benefits. For example:

  • Single applicants – countable assets must be below $32,396 in New York. In most other states, the limit is $2,000.
  • Married applicants – The spouse staying in the community (community spouse) can typically keep part of the couple’s assets, known as the Community Spouse Resource Allowance (CSRA).

To Protect the Family Home from Medicaid Recovery (Legal Strategies for Homeowners)

Under federal law (42 U.S.C. § 1396p(b)), Medicaid can recover costs from a recipient’s estate after death. This means that if a home is still in the individual’s name at the time of death, Medicaid may place a lien on it and force its sale to recover expenses.

A MAPT can prevent this because the trust legally owns the home, not the Medicaid recipient. Medicaid cannot place a lien on an irrevocable trust’s assets, protecting the home for heirs. Homeowners who wish to keep their property in the family should place it into a MAPT well before applying for Medicaid.

What Happens If You Wait Too Long? (Legal Consequences of Late Planning)

If you delay setting up a MAPT and need Medicaid within five years, several legal challenges arise:

  • Medicaid Penalty Period—Transfers within five years lead to a period of ineligibility, which requires private payment for care.
  • Forced Asset Spend-Down – Without a MAPT, applicants may have to liquidate assets (such as selling a home) to qualify.
  • Risk of Medicaid Estate Recovery—Medicaid can claim Assets left outside a MAPT after death.

The best time to establish a Medicaid Asset Protection Trust is at least five years before applying for Medicaid while the grantor is still in good health. This approach ensures:

  •  Full compliance with Medicaid’s five-year look-back rule.
  • Preservation of assets for heirs.
  • Avoidance of Medicaid spend-down requirements
  • Protection of the family home from estate recovery.

Need Help with Medicaid Planning?
If you’re considering a Medicaid Asset Protection Trust, schedule a free consultation with our office to discuss your options. Early planning is the key to protecting your assets and securing Medicaid eligibility when you need it most.

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Washington Abandons Beneficial Ownership Reporting for U.S. Nationals and Companies

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In a dramatic policy reversal, the U.S. Treasury has permanently suspended the Corporate Transparency Act (CTA) beneficial ownership reporting requirements for all U.S. citizens and domestic businesses. This decision significantly shifts corporate compliance regulations, impacting businesses nationwide.

The CTA, enacted to enhance financial transparency and combat illicit finance, required most U.S. entities to report their beneficial ownership to a national registry managed by the Financial Crimes Enforcement Network (FinCEN).

  • New entities (established since January 1, 2024) had to file within weeks of formation.
  • Existing entities were required to submit reports by January 1, 2025.

However, multiple lawsuits challenged the Act on constitutional grounds, leading to legal uncertainty and enforcement delays throughout 2024. In December 2024, a Texas court issued an injunction against the enforcement of the CTA. Several reversals and reinstatements of the reporting provisions followed this. By February 2025, the compliance deadline was pushed to March 21, 2025, while the Treasury signaled a potential reconsideration of the rules.

The U.S. Treasury has permanently stopped enforcing CTA reporting obligations for U.S. entities. This means no penalties or fines will be imposed on domestic businesses or their beneficial owners—not now or in the future. The Treasury plans to revise the rule to focus only on foreign-owned entities. A public consultation will be held before new regulations take effect.

Treasury Secretary Scott Bessent described the decision as supporting American taxpayers and small businesses, ensuring financial regulations remain practical and non-burdensome. He framed the decision as part of President Trump’s broader agenda to eliminate excessive regulatory hurdles for businesses.

The Financial Action Task Force (FATF), which last year deemed the U.S. “largely compliant” with corporate transparency rules due to the CTA, may reassess the country’s standing following this policy reversal.

While the future shape of beneficial ownership regulations remains uncertain, one thing is clear: U.S. businesses will no longer need to comply with the CTA’s reporting requirements. Those preparing for compliance can now put those plans on hold until further guidance emerges.

Stay tuned for updates as the Treasury progresses with its proposed rulemaking process.

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Elder Lawyer Stephen J. Silverberg Speaks on Income-Only Trusts for Medicaid Eligibility

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On Wednesday, December 4, Elder Law attorney Stephen J. Silverberg will speak before an audience of Elder Law and estate planning attorneys for a Continuing Legal Education program on the topic of drafting income-only trusts for Medicaid eligibility. Mr. Silverberg was invited to speak based on his extensive knowledge of Medicaid planning, the use of trusts and tax planning by Strafford, a nationally recognized CLE company,

The 90 minute course, designed for Elder Law attorneys who work with clients in Medicaid planning, will expand on the use of the income-only trust, how to ensure planning occurs without violating any look-back requirements and coordinate with gift tax rules and more.

“Many families find themselves in a terrible spot where they have saved up enough for retirement but not enough for long term care for one or both of the spouses,” observed Mr. Silverberg. “By using an income-only trust, assets can be protected, the family can have access to the income generated by the trust and the well spouse does not have to become impoverished.”

Planning for Medicaid requires careful balancing of meeting the Medicaid requirements and aligning those with tax and estate planning.

Mr. Silverberg and his co-presenter, attorney Esther Zelmanovitz, will provide attorneys with practical information and insights into how income-only trusts can work for their clients.

Attorneys are invited to register here: htthttps://www.straffordpub.com/products/tfkednhcraps://www.sp-04.com/r/products/tfkednhcra

If your family is concerned about applying for Medicaid in the future, we invite you to call the office and make an appointment to discuss your situation.

About Stephen J. Silverberg: Mr. Silverberg is nationally recognized as a leader in the areas of estate planning, estate administration, asset preservation planning, and elder law. He is a past president of the prestigious National Academy of Elder Law Attorneys (NAELA), and a founding member and past president of the New York State chapter of NAELA. Mr. Silverberg was awarded the credential of NAELA Fellow, the highest honor bestowed by NAELA to “attorneys… whose careers concentrate on elder law, and who have distinguished themselves both by making exceptional contributions to meeting the needs of older Americans and by demonstrating a commitment to the Academy.” He is also a founding member of the New York State chapter of NAELA. Mr. Silverberg holds the designation of a Certified Elder Law Attorney (CELA), awarded by the National Elder Law Foundation. There are fewer than 520 CELAs throughout the United States. Learn more at www.sjslawpc.com.

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Why You Must Read This Year’s Annual Notice of Change for Medicare Plans

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Every September, Medicare recipients receive an Annual Notice of Change for their Medicare Plans. That’s because every January, coverage and costs change. Whether you are enrolled in a Medicare Part D prescription drug plan or a Medicare Advantage plan, this letter contains the details on premiums, deductibles, and co-pays from 2024 and what’s coming in 2025.

Be prepared for changes. Health insurance companies’ response to the $2,000 out-of-pocket cap on prescription drugs for 2025 is expected to create more costs for seniors, including higher premiums, higher deductions, and significantly higher co-pays. Certain prescriptions may not be covered at all.

Medicare Advantage plans are feeling the pinch of lowered profits already and if your MA plan includes Part D coverage, be prepared for benefits to be trimmed or eliminated as these companies try to keep the $0 premium intact. Features like gym memberships, vision and dental coverage may evaporate in 2025 also. Some plans may be closing.

If you’re on Medicare Advantage, the Notice of Change will tell you if your doctors and hospitals are still in the plan network.

Note you won’t get any similar letter from Medigap plans, as they don’t usually have any big changes from year to year.

The Annual Notice from your Part D plan will tell you whether or not your prescriptions will be covered and what your costs will be.

What to Do When the Annual Notice Arrives

If you’ve never read these letters in the past because they aren’t written in clear English, you’re not alone. Most recipients find the Annual Notice challenging to understand. But this year, you’ll need to take the time to read the letter and give it the attention it requires. You’ll want to find out if you will need to change your coverage options.

You have an eight-week open enrollment period (October 15 – December 7) when you can make changes with no penalties.

A few tips:

If the premium increase is modest but overall, you’re happy with the plan and it covers your prescriptions, you may not want to rush to make a change.

If your doctors and/or hospital isn’t in the network, you’ll definitely need to make a change. The MA plan has a legal duty to identify other doctors or hospitals to people, but it may take some work on your part to get this done.

In an effort to prevent drastic Part D premium increases, the Centers for Medicare and Medicaid Services decided to provide a special subsidy – a “premium stabilization plan” in an attempt to moderate the possibility of over-the-top premium increases.

Change is always unsettling, and the prospect of increasing healthcare costs is always challenging for retirees. We’re here to help if you have questions.

Reference: Fortune (August 26, 2024) “Why this year’s Medicare Annual Notice of Change will be vital reading for beneficiaries”

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Law Office Of Stephen J. Silverberg, PC

Stephen J. Silverberg, Esq., and Scott B. Silverberg  Named To 2025 Edition of Best Lawyers® In Elder Law

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For the eleventh consecutive year, Stephen J. Silverberg, based on extensive peer review, is listed in the 2025 Edition of The Best Lawyers in America® in the practice area of Elder Law.

Scott B. Silverberg is listed in the 2025 edition of The Best Lawyers in America in the practice areas of Elder Law and Trusts and Estates for the first time.

Over 23 million votes were analyzed for the 2025 edition of The Best Lawyers in America®, which resulted in more than 80,000 leading lawyers included in the milestone 31st edition.

Stephen holds the AV® Preeminent (5 out of 5) rating, the highest possible designation from Martindale-Hubbell, and has been on the Super Lawyer New York metro list since 2007.

Stephen J. Silverberg is a nationally recognized leader in estate and tax planning, estate and trust administration, asset preservation planning, and Elder Law. He has served as the President of the National Academy of Elder Law Attorneys (NAELA). In 2003 he was honored as a NAELA Fellow, the highest honor given by NAELA to attorneys who focus on Elder Law, who have made exceptional contributions to meeting the needs of older Americans and who have demonstrated commitment to the Academy. Silverberg has also served as a founder, president and member of the New York State chapter of NAELA. 

He has been designated as a Certified Elder Law Attorney (CELA) by the National Elder Law Foundation, authorized by the American Bar Association. To receive this designation, applicants must pass a stringent written examination and substantial independent peer review. Since its inception in 1993, fewer than 520 attorneys have earned the CELA designation. Silverberg is a Hartwick College and Brooklyn Law School graduate and has been a member of the New York and Florida Bars for over forty years.

Scott B. Silverberg is the Immediate Past President of the New York Chapter of the National Academy of Elder Law Attorneys (NAELA) and a member of the National Board of Directors of NAELA. He also serves as a member of the Board of Directors of the Elder Law Practicum of national NAELA. As a New York State Bar Association member, Scott serves as Vice-Chair of the Practice Management Committee of the Elder Law and Special Needs Section Executive Committee. Previously, he chaired the Technology Committee.

In 2022, Scott became a member of The Estate Planning Council of Nassau County, a member chapter of the National Association of Estate Planners and Councils (NAEPC).

Scott earned an LLM (Master of Laws) in Elder Law from the Stetson University School of Law, a leader in special needs planning. He is the only attorney in New York who holds this degree. He graduated from Fordham Law School (JD, 2013) and holds a Bachelor of Science from the internationally renowned Cornell University School of Industrial and Labor Relations.

The Law Office of Stephen J. Silverberg, PC, represents clients in estate planning, tax, estate administration, asset preservation planning, Elder Law, and related issues. The Law Office of Stephen J. Silverberg, PC is at 185 Roslyn Road, Roslyn Heights, NY 11577, 516-307-1236 and www.sjslawpc.com.


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What is the Purpose of a Promissory Note in Medicaid Planning?

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Medicaid planning is often a complex process aimed at preserving a person’s assets while qualifying for Medicaid benefits. Finding a way to pay for long-term care costs without depleting all your hard-earned assets is a key part of Medicaid planning.

One strategy for protecting assets and qualifying for Medicaid that has gained attention in recent years is the use of promissory notes. This article will provide an explanation of promissory notes in the context of Medicaid planning, including their purpose, legality, implications, and considerations. Note that not all states allow promissory notes.

What Are Promissory Notes?

A promissory note is a legally binding document that outlines the terms of a loan agreement between two parties: the lender (creditor) and the borrower (debtor). It includes details such as the loan amount, interest rate, repayment schedule, and any other relevant terms and conditions. Promissory notes are commonly used in various financial transactions, including loans between individuals, businesses, and financial institutions.

Promissory Notes in Medicaid Planning

Medicaid is a public assistance program that assists individuals with limited income and resources in obtaining health insurance. It also serves as the primary way for millions of seniors in the United States to pay for long-term care services.

To qualify for Medicaid in most states, you must have no more than $2,000 in so-called “countable” assets to your name. Typically, five years before you apply, you may “spend down” your excess assets to bring them under this $2,000 threshold. Transferring assets within this five-year window of applying for Medicaid can otherwise result in a penalty period during which you may not be able to receive benefits.

Of course, not everyone plans this far ahead, as many people do not expect they will need long-term care. A Medicaid applicant may use a promissory note to transfer assets to other individuals, such as their children, while still complying with Medicaid eligibility requirements. By transferring assets through a promissory note, they can effectively reduce their countable assets, thereby helping them meet Medicaid’s asset limit criteria.

How Do Promissory Notes Work in Medicaid Planning?

A person seeking Medicaid benefits might opt to transfer some of their assets to a family member, typically a child, in exchange for a promissory note. Assets can also be transferred to a trust. The beneficiaries of a person’s trust are often their children.

When the assets are transferred, a legally binding promissory note is created. The promissory note lays out the terms of the loan, including the principal amount, interest rate, repayment schedule, and other relevant information.

The borrower agrees to repay the loan according to the terms outlined in the promissory note, usually through regular installment payments over a specified period.

By transferring assets by way of a loan and creating a promissory note for the loan, the person seeking Medicaid benefits effectively reduces their countable assets, potentially qualifying them for Medicaid coverage.

Legal Considerations

Though promissory notes can be a valuable tool in Medicaid planning, it’s important to ensure compliance with state and federal laws and regulations. As mentioned, Medicaid has strict rules regarding asset transfers and eligibility. Improper use of promissory notes could result in penalties or loss of benefits.

Key legal considerations include the following:

  • Fair Market Value: The terms of the promissory note, including the loan amount and interest rate, should reflect fair market value to avoid scrutiny from Medicaid authorities.
  • Payments: Payments on the loan must be made in equal amounts during the term of the loan with no deferral of payments and no balloon payments. (A balloon payment is a large payment made at the end of a loan’s term, after making much smaller payments along the way.)
  • Term of the Loan: The term (length of time) of the loan must not last longer than the anticipated life of the lender.
  • Debt Cancellation: The debt cannot be cancelled upon the lender’s death.
  • Arm’s Length Transaction: The transaction should be conducted as an “arm’s length” transaction, meaning it should be carried out as if the parties were unrelated and dealing with each other at arm’s length.
  • Look-Back Period: As stated above, Medicaid has a look-back period during which asset transfers are subject to scrutiny. In most states, the look-back period is five years. Any transfers made within this period may affect Medicaid eligibility, so it’s essential to plan accordingly.
  • State-Specific Regulations: Medicaid rules vary from state to state, so it’s crucial to consult with an experienced attorney familiar with Medicaid regulations in your state to ensure compliance.

Benefits of Using Promissory Notes in Medicaid Planning

Promissory notes offer several potential benefits in Medicaid planning, including the following:

  • Asset Preservation: By transferring assets through a promissory note, individuals can preserve their wealth while still qualifying for Medicaid benefits to cover long-term care expenses.
  • Control: The lender retains control over the repayment schedule and can customize the terms of the promissory note to suit their needs.
  • Family Involvement: Promissory notes provide an opportunity for family members to participate in Medicaid planning and contribute to the financial well-being of their loved ones.

Risks of Using Promissory Notes in Medicaid Planning

When considering the benefits of using promissory notes in Medicaid planning you should also consider the risks, which could include the following:

  • Regulatory Scrutiny: Improperly structured promissory notes may attract scrutiny from Medicaid authorities, potentially resulting in penalties or disqualification from benefits.
  • Complexity: Medicaid planning involving promissory notes can be complex and requires careful consideration of legal and financial implications.
  • Tax Implications: Transferring assets through promissory notes may have tax implications for the lender and the borrower, so it’s essential to seek professional tax advice.

Will a Promissory Note Work for Your Medicaid Planning?

Promissory notes can be a valuable tool in your Medicaid planning process. They could allow you to transfer assets while maintaining Medicaid eligibility. However, it’s crucial to navigate this strategy carefully, ensuring compliance with applicable laws and regulations.

Call our office to talk further about gaining acceptance into the Medicaid program. We can help you determine whether including a promissory note in your planning will work for your situation. We can also walk you through other benefits that may be available to you and help you understand how you can qualify for coverage.