New Estate-Planning Law Could Put Parents in the Pokey

THE JOURNAL RECORD, February 3, 1997 | Go to article overview

New Estate-Planning Law Could Put Parents in the Pokey


Quietly, with no fanfare and no discussion, U.S. lawmakers passed a bill late last year that could criminalize a certain type of estate planning. The law, which went into effect Jan. 1, was part of a much larger health reform measure and was aimed at stemming bogus claims for Medicaid -- a government health insurance program for the poor.

But because of the way the law was drafted, it is possible that individuals could run afoul of the rules inadvertently at the worst possible time -- when they're sick and unable to care for themselves.

"Granny could go to jail,' was the dramatic assessment of the Institute of Certified Financial Planners. Attorneys counter that jail sentences are unlikely for practical reasons -- jails are crowded enough without throwing in the ailing and confused individuals who might break this law -- but they note that the law has had a "chilling effect" on a whole segment of the estate- planning industry. "At this point in time, there is no way to tell anything," says Ira S. Wiesner, a Sarasota, Fla.-based lawyer and president of the National Academy of Elder Law Attorneys. The practice of so-called "Medicaid planning" has come to a virtual standstill, he adds, because "you would never know whether what you are doing constitutes an illegal act." Already, there is an effort afoot to repeal the law. But in the meantime, attorneys and financial planners are scrambling to warn their clients that seemingly innocuous estate-planning procedures -- including giving tax-free gifts to your children and grandchildren - - could turn them into criminals. The brouhaha pivots around a few paragraphs in the Health Insurance Portability and Accountability Act, which passed in August 1996.These paragraphs alter federal Medicare laws by imposing criminal penalties for those who transfer assets and later apply for federal health insurance assistance for the poor, commonly known as Medicaid (MediCal in California). Theoretically, the law does not change what's permissible. However, it stipulates that those who violate Medicare rules can be criminally prosecuted, facing up to one year in jail and a $10,000 fine. Although the law went into effect Jan. 1, two events trigger the penalties: a transfer of assets and application for Medicaid benefits. Could you be subject to the criminal sanctions if you transferred assets in years past but applied for Medicaid in 1997 or later? Possibly. "That's the question," says Sally Hurme, attorney with the American Association of Retired Person's legal advocacy group. "Because the law is written so vaguely, it's hard to tell." Why is the law so vague? Partly because it appears to have been slipped into the health care bill at the last minute, without any disclosure or discussion, says Bob Coplan, national director of family law planning at Ernst & Young in Washington, D.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

New Estate-Planning Law Could Put Parents in the Pokey
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.