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UltraTrust Irrevocable Trust: Estate Tax, Medicaid Planning, 5 Year Look-Back Provision

Posted on: July 21, 2021 at 1:52 am, in

What is an Estate, How Irrevocable Trusts Affects Elder Care, and Comparisons of Different Asset Protection Tools

What’s an Estate?

Protect your assets from lawsuits, divorce, Medicaid.
Now I would like to talk to you about what is an estate. An estate is everything that you own on the date of your death. The fair market value of that asset, your stocks, whatever it is worth on the date of your death, or 6 months after, there are some very specific rules that are a little bit complicated, but basically, it is to determine the value, the fair market value, of all of your assets so they become taxable. And the IRS, your lawyers, your accountant, your appraiser, are all haggling with each other about how much everything is worth, so that the government gets a bigger chunk. They’ll say your estate is huge, and you’ll argue that it’s not that much.
The estate tax is a very major item. It’s the only voluntary tax within the IRS code. Without proper estate planning, the tax forces sales at the most inopportune time. You have heard horror stories where people have had to sell their farms in order to pay the IRS their dues. All of this can be avoided with an Ultra Trust. You have no assets on the date of your death; you have repositioned your assets from yourself, in your name, to the Ultra Trust. Again, if you have trouble with ownership, you have ownership issues, you must own things, you must own the land, you must own the building, you must own the car. If you have these kinds of issues and can’t separate yourself from the asset, then the trust is not for you. And somebody has to pay the taxes; somebody has to support all these lawyers, accountants, appraisers and so forth, within the legal system. And again, if you have more assets is different state, each state has the whole process. Estate planning with the Ultra Trust, you can avoid all of these complications.

Elder Care Nursing Home & Medicaid Planning

And now I would like to talk to you about elder care. On June 30 of this year, the government has mandated rules and regulations on restricting the transfer of assets of the elderly. There is now a five year look-back provision if you apply to qualify for the nursing home, the Medicaid nursing home. These restrictive laws are intended to impoverish the healthy spouse. Before you can qualify to receive, or to enter a nursing home, you must spend down your assets. Which means that, if you are of the age where the nursing home may become an issue, in order to protect your wife, or the healthy spouse, you or your wife, whoever is not sick, you must do Medicaid planning 5 years earlier than the date that you went in to the nursing home. If you are the son or daughter of elderly parents, you should become fully aware of these very restrictive rules. Where the government is going to ask you to spend down all of your assets before you can become qualified. So if all of the assets are spent on the sick spouse, the healthy spouse has no place to go, so you, the son and daughter, will have to step in and support your mom or your dad. You can avoid all this with proper estate planning. You can avoid the spend down of the nursing home.

Compare Different Asset Protection Plans

We have provided links to additional information including comparisons between the Ultra Trust™, irrevocable trusts, revocable trusts, the Living Trust, the limited liability company, the family partnership, the corporation and other financial devices, legal devices. A trust is nothing more than a legal device under the law. The law creates the trust. The IRS recognizes all types of trusts; the Ultra Trust™ is one of them. We have designed, specifically, the Ultra Trust. It meets with IRS regulations and is completely tax neutral.
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Medicaid Spend Down Rules

Posted on: February 21, 2017 at 3:44 am, in

Estate Street Partners offers advanced financial advice to ensure maximum asset protection from lawsuits, divorce and Medicaid spend down

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And now I would like to talk to you about elder care. On June 30 of 2009, the government has mandated rules and regulations on restricting the transfer of assets of the elderly. There is now a five year look-back provision if you apply to Medicaid to qualify for the nursing home – the Medicaid nursing home. These restrictive laws are intended to impoverish the healthy spouse.
Before you can qualify to receive, or to enter a nursing home, you must spend down your assets, which means that, if you are of the age where the nursing home may become an issue, in order to protect your wife, or the healthy spouse (i.e. you or your wife, whoever is not sick) you must do Medicaid planning 5 years earlier than the date that you went in to the nursing home. If you are the son or daughter of elderly parents, you should become fully aware of these very restrictive rules where the government is going to ask you to spend down all of your assets before you can become qualified for Medicaid eligibility. So if all of the assets are spent on the sick spouse, the healthy spouse has no place to go, so you, the son and daughter, will have to step in and support your mom or your dad.

You can avoid all the Medicaid spend down rules with proper estate planning. You can avoid the spend down of assets to cover for the costs of the nursing home by implementing the UltraTrust® irrevocable trust at least five years before the sick spouse enters a nursing home and at least five years before the application of Medicaid eligibility. Since you never know when you will need to apply for Medicaid and when your dad or mom or sick spouse will enter a nursing home it’s best to implement the UltraTrust® irrevocable trust for surefire asset protection.
Continue to read part 10 of 11 on the Ultra Trust® benefits as one of the best irrevocable trust plans for asset protection here: What is Ultra Trust® irrevocable trust asset protection?
Rocco Beatrice, CPA, MST, MBA, Managing Director, Estate Street Partners, LLC.
Mr. Beatrice is an asset protection award winning trust and estate planning expert.
To learn more about irrevocable trusts and senior elder care visit:

Medicaid Eligibility Planning

Posted on: February 21, 2017 at 1:10 am, in

Planning for Medicaid is one of the most important things to do as you get older

Medicaid Eligibility Planning

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Seeing as Americans are living longer, it is essential to plan for life after retirement. This includes medical coverage and Medicare or Medicaid. Medicaid planning is an important part of life for older individuals.

Why Plan for Medicaid?

We all know that the cost of nursing homes is very expensive and it is costing more each year. The costs could range anywhere from $3,000 to $10,000 per month! Recent studies have revealed that people spend an average of 30 months in a nursing home. Many people pay for these nursing homes with their own money, often depleting their life savings. This is not always necessary. If you plan properly, Medicaid can help cut these costs, allowing you to leave money to your heirs instead of spending it all on nursing home costs.

Medicare and Medicaid: Nursing Home Care

Medicare Part A refers to hospital insurance which covers up to 100 days in a skilled nursing facility. However, Medicare has a restrictive definition of skilled nursing. Many times, nursing home care will not be covered under Part A. Medicaid is the only option that people have to help pay for the cost of a nursing home. Unlike Medicare, Medicaid is a program that is based on financial needs. You will be required to pass an asset and income test to become eligible for the Medicaid benefits. On the other hand, Medicare is available to anyone over the age of 65 and does not consider income or assets as part of the required qualifications.

Medicaid Eligibility Test

You must pass a three part test to meet Medicaid eligibility requirements. The test is broken into sections which includes your medical necessities, your age and disabilities and your financial situation. You must meet the requirement of all three sections to become eligible for Medicaid.
The medical need portion is based on any medical restrictions the individual may have. These restrictions must limit your ability to perform daily tasks. The requirements are that the individual must need daily care, skilled nursing, continuous observation, the need for a registered nurse and medical needs that are not typically offered by a hospital.
To be eligible, you must be over the age of 65 or have a disability. For example, if you are disabled and are only 60 years old, you will be eligible for Medicaid.
Your income and assets are an important part of eligibility. All individual assets and income will be considered when determining eligibility. The exact amounts will vary per state. Asset tests will vary depending on whether the individual is married or single. The amount of assets allowed will be determined by the marital status. The income cap per month also varies per state.

Medicaid Gap: Problems with Medicaid Qualifying Tests

The income test often presents problems when you are applying for Medicaid. If your monthly income level is over the specified amount, you will not be considered. Many times, that set amount is far less than the cost of monthly nursing home care. This often leaves individuals in a situation where they earn too much to get Medicaid, but not enough to pay for nursing home care. This situation is referred to as the Medicaid Gap.

Need for Medicaid Planning to Pass Eligibility Requirements

Since there are so many factors determining the eligibility for Medicaid, planning is very important. You must consider all factors and try to determine what your medical needs will be later in life. This can be very difficult. The financial aspect is also a difficult situation to deal with. Often times, people are forced to spend their life savings just to become eligible for Medicaid programs so they can receive nursing home care. Proper planning can alleviate some of these stresses.
You have one shot at submitting an application form to Medicaid. Do not submit it until it has been reviewed by an expert – it could cost you tens of thousands of dollars. Contact us for an expert evaluation process.
States typically offer online forms that you may download and print, however no states allow you to currently apply for Medicaid online and submit the form online.

Eldercare: Caregiving, Nursing Home, Medicaid, Living Wills

Posted on: February 7, 2017 at 11:42 pm, in

Eldercare strategies are discussed. Who will provide the eldercare? Does Medicaid pay for eldercare? How do legal documents such as a Will, Living Will, Financial Directive and Medical Directive affect eldercare? What is Durable Power of Attorney in eldercare estate planning?

Elderly care is an event that most children do not wish to think about. No one wants to think about his or her parent growing old. We look to our parents for guidance and support, but there comes a time when the parenting roles reverse.
It is important to discuss future events with your loved ones and develop a long-term plan for their care for when they become unable to care for themselves. Developing an Eldercare checklist is a proactive way to ensure your loved ones whether parents or grandparents receive the level of care they need and services they want, or, in the case of artificial nutrition, they may not want.
There are several key points and strategies you will want to include on your Eldercare checklist:
  1. What level of eldercare is needed, and where will this care be given?
  2. How will you pay for the eldercare? The medical costs of eldercare.
  3. What will be done with your parents’ or grandparents’ assets while they are receiving eldercare?
  4. Are all legal documents including the Will and Living Will current? Have your parents’ or grandparents’ Wills and Living Wills been reviewed recently by an Attorney? What is an Advanced Financial Directive? What is an Advanced Medical Directive in eldercare estate planning?
  5. Have your parents or grandparents designated a Durable Power of Attorney?
Making sure you have answers to these questions for your parents or grandparents eldercare early on will avoid confusion and distress later. Don’t wait until there is a tragedy to make plans that will affect how your loved one spends the rest of their life. For the purposes of this article we will assume “loved one” to mean a parent or grandparent.

1. Caregiving and Eldercare

Where will eldercare be given, and by whom?

Informal Caregiving

There are two types of caregivers: informal and formal. An informal caregiver might be a spouse or child, and these caregivers do not receive direct payment for their services. Usually payment is made through services exchanged such as food or housing at no charge while caring for your parent.

Formal Caregiving

A formal caregiver is usually employed by an agency to provide quality care in the comfort of your home. If the formal caregiver is not associated with an agency, it is important to conduct a thorough check of references to ensure you are hiring a quality professional.
It is important to inform all formal caregivers of the responsibilities associated with your parent’s needs. If your parent needs assistance in and out of a wheelchair, a hired caregiver should be able to perform this task without harm to your parent or to him/herself. To avoid injury to all persons involved, informal and formal caregivers should receive training on proper techniques for lifting and moving, proper use of bedpans, and how to maintain good hygiene for a parent confined to bed.

Location of Eldercare for Your Parents

There are many options for the location of care provided. Most people would agree that living our their remaining years in the comfort of home is more appealing than living in a state facility. If your parent wishes to receive care in their home you can make home modifications, such as a wheelchair ramp or seat in the shower, to accommodate their changing needs. You can also hire a formal caregiver to come and assist your parent with daily activities such as bathing, eating, taking medications, or regular exercise.

Considerations of Assisted Living Houses or Nursing Homes

If it is not possible for your parent to remain at home, you can choose to place them in assisted living houses or a nursing home. Before placing your loved one in a facility, you should thoroughly check both the location and the staff. Make yourself familiar with required paperwork ahead of time to prevent delays when it comes time to move in, and, if possible, make several unannounced visits to oversee daily activities.
You should check if the facility is regulated by the state, and request to see any licenses they have for providing eldercare. Find out how the staff is trained and if they are required to have certification to work there. You should consider the cost of the facility and the living accommodations your parent will be provided.
Additional considerations when choosing a facility might be types of activities offered to residents and the quality and type of food provided. While no place will be perfect, you should choose a facility that makes your parent feel as comfortable as possible away from home.

2. Medical Costs of Eldercare and Medicaid

Not many insurance companies are willing to pay for long-term care. It is important to check the details of your parent’s policy and read the fine print for restrictions. For example, Medicare will not pay for long-term care but it will pay a very short-term benefit. However, Medicaid will pay for long-term care but only if your parent receives care in a Medicaid facility.
If you plan far enough ahead, you can begin setting aside money so you can afford to provide long-term care to your parent at home. You should consult a financial advisor or estate planner to go over your parent’s bank statements and assets to determine how long their current funds will be able to provide medical care, and based on this assessment you can establish a savings plan to make up the difference needed for long-term eldercare. When figuring in additional savings you need, keep in mind that you will also need to continue paying any current bills your parent might have.

3. What to do with Your Parents’ Assets during Eldercare

Before you rush off and put your parent’s house on the market, make sure you have discussed where they want to receive their long-term care. It would be quite devastating for your parent to come home from a hospital stay to discover you had sold the house and moved their belongings into a nursing home.
You should also ask your estate planner or financial advisor which of your parent’s accounts you should withdraw money from to help offset costs. Some accounts, such as annuities, carry penalties for early withdrawal and may require you to pay taxes on income earned through these accounts. Also, once you begin withdrawing money from an annuity you cannot stop payments.

Legal Issues of Eldercare

Hopefully, your parent has written a will and made you aware of its location. A Will should be reassessed by an Attorney every few years to make sure all the people listed as beneficiaries are still alive, and that your parent still wants them to receive a portion of their estate.
Moreover, your parents should have an irrevocable trust as part of their estate planning eldercare needs which will avoid the high expenses of probate, reduce estate taxes and possibly eliminate some earned income and your parents will gain the benefits of asset protection. Speak with a qualified and good estate planner such as Estate Street Partners who can guide you through this complex process.

4. Importance of Living Will, Advanced Financial Directive and Medical Directive in Eldercare Estate Planning

You should also council your parents on drafting a Living Will in the event they are unable to speak for themselves. Learn more about Living Wills and Advanced Financial Directives and Advanced Medical Directives by going to our website. The Advanced Financial Directives and Advanced Medical Directives are extremely important in eldercare estate planning when your parents cannot speak for themselves and will protect their financial and medical wishes.

5. Durable Power of Attorney (DPOA) and Eldercare Estate Planning

You should know ahead of time where these documents are before an emergency arises to ensure that your parent’s wishes are followed. Having a DPOA allows someone your parents trust to act on their behalf and make legal and financial decisions for them, including the transfer of valuable assets, if they become incapacitated.
Read more articles on asset protection with Medicaid, how to hide your assets, Advanced Financial Directive, Advanced Medical Directive, Living Will, Medicaid Estate Planning and Nursing Home Spend Down:

How the Advanced Medical Directive Makes Life-Saving Decisions

Posted on: February 7, 2017 at 11:01 pm, in

How the Advanced Healthcare Directive can control your medical care to consent or refuse any medical treatment, make decisions not to resuscitate, select healthcare providers, apply for Medicaid, appoint an Agent to be guardian and provide for disposition of body.

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An Advanced Medical Directive deals with life’s real issues and combats the problems that arise where most boilerplate healthcare powers of attorney, healthcare proxies, living wills and others fall short. The Terri Schiavo case is a prime example of such a problem where the power to control one’s medical condition becomes a gray realm and ends up in a myriad of appeals, numerous motions, petitions and hearings for many years in litigious battle. The result is much heartache, financial strain and most often unrealized unwanted outcomes.

What is an Advanced Healthcare Directive? Top Ten Factors for Your Medical Care

An Advanced Medical Directive is a legal written instrument signed by you and the individual you identify as your Agent to control your medical care with both signatures supervised before a notary public. Herein are the top ten reasons how an Advanced Healthcare Directive can make legal, life-saving decisions for you when you cannot. Your written instrument should contain:
  1. Legal identity of yourself, mailing address, social security number.
  2. Legal appointment and identity of your Agent’s mailing address and social security number.
  3. Legal identity of an alternative Agent, in case where your primary Agent is unavailable, or unable to make decisions, or unwilling to make decisions.
  4. An articulated written authorization for your Agent:
    1. To consent or refuse consent to any care, treatment, service, or procedure to maintain, diagnose, or otherwise affect a physical or mental condition, including approval or disapproval of diagnostic tests, medical or surgical procedures.
    2. To request, receive, examine, copy, and consent to the disclosure of medical information or any other healthcare information.
    3. To make decisions regarding orders not to resuscitate as well as decisions to provide, withhold, or withdraw artificial nutrition and hydration, and all other forms of healthcare to keep you alive.
    4. To select and discharge health care providers, organizations, institutions and programs and to make and change healthcare choices and options relating to plans, services, and benefits.
    5. To apply for public or private healthcare programs, to include Medicare, Medicaid, and any benefits without your Agent incurring any personal financial liability.
    6. To direct that your healthcare providers and others involved in your care provide, withhold, or withdraw treatment in accordance with the limits of generally accepted healthcare standards.
    7. To decide not to prolong your life if you have an incurable and irreversible condition that will result in your death within a relatively short time, or you become unconscious and, to a reasonable degree of medical certainty, you will not regain consciousness, or the likely risks and burdens of treatment would outweigh the expected benefits.
    8. To direct treatment or withhold treatment to alleviate pain or discomfort even if it hastens your death.
    9. To the extent that your wishes are unknown to your Agent, your Agent may make all healthcare decisions in accordance with your best interest considering your personal values and other factors known by your Agent.
  5. An appointment of your Agent to become your Guardian if there’s a reason for a legal appointment of such a Guardian, together with power for the Alternative Agent to become the Guardian in cases where the primary Agent is unavailable, or unwilling to serve.
  6. A very important paragraph to negate your consent to committing you or to place you in a mental health treatment facility, or to convulsive treatment, or to psychosurgery, sterilization, or abortion.
  7. Participation or non-participation to the donation of your organs and body parts for purposes of transplant, therapy, research, or for other educational purposes.
  8. A severability clause not to void the agreement or any provisions of the agreement considered non-essential to the primary purpose and essential to the principal objective.
  9. A modification clause allowing the agreement to me modified or revoked at any time.
  10. A provision for the final disposition of your body and any funeral arrangements.
In conclusion, a Medical Directive is a morbid action to take, nobody wants to think about dying, but in this case, it could save your life.
Rocco Beatrice, CPA, MST, MBA, CWPP, CMMB, CAPP
Managing Director, Estate Street Partners, LLC
Mr. Beatrice is an asset protection, award-winning trust and estate planning expert.
Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours

Advanced Medical Directive for Terminal Patients – Terri Schiavo Case

Posted on: February 7, 2017 at 10:59 pm, in

Advanced Medical Directives can save a terminal patient life. We briefly examine the Terri Schiavo medical case. Why a living will, healthcare powers of attorney, healthcare proxies are not enough to save your life.

Most Americans die in a hospital, nursing home, or other health care facility. Doctors who are charged with preserving life are generally legally powerless to provide other than minimum care due to their malpractice fears. The less than ideal doctor-patient care is further compounded by the fact the doctors run the risk of caring out actions that may be contrary to their patient’s wishes whilst unconscious. Consequently, the doctors look to family members with the legal authority for instructions and decisions.
Problems arise where spouses, partners, and other family members disagree about what’s the proper course of treatment to take to preserve or terminate life. In the most complicated scenarios where everyone is an emotionally bankrupt, these disagreements wind up in court, where a judge, who usually has little medical knowledge and no familiarity with you is called upon to decide the future of your treatment and possibly the termination of your life. Such legal battles are extremely costly, time-consuming and cause undue pain to those involved. In a worse case scenario, if a medical emergency arises it could cost you your life.

Terri Schiavo Case Runs Through Endless Appeals, Lawsuits and Denials

WITHOUT An Advanced Healthcare Directive, if unmarried, common-law will have no legal authority to make any healthcare decisions for you. Even when you’re married, the parents may have more legal authority than your spouse. In the Florida Theresa Marie “Terri” Schiavo case (December 3,1963 to March 31, 2005) a legal battle between the wishes of her husband and her parents involved 14 appeals, numerous motions, petitions and hearings in the Florida courts, 5 suits in Federal District Court, a Congressional subpoena, state of Florida legislation, and 4 denials of certiorari from the Supreme court of the United States, all of which could been avoided with an Advanced Medical Directive.
Link to the Schiavo case: Wikipedia.org: Terri Schiavo Case
Under the law, you can legally authorize your named Agent, whether spouse or common-law or anyone else, with written instructions through an Advanced Medical Directive applicable to a wide range of health care decisions and not just “end-of-life decisions.”

What If You Already Have a Living Will? Is a Living Will Enough to Save Your Life?

Most boilerplate healthcare powers of attorney, healthcare proxy, living will, etc. generally express sentiments about wanting treatments that serve only to prolong the dying process but absolutely no intervention to prolong life. Hospital proxies generally are written to protect the hospital’s financial interests and to limit their potential liability but not yours. Most standardized living wills fall short, limited to what they can accomplish, lacking capacity about day-to-day care, placement options, treatment options and interventions to implement precise treatments to give you, the patient, any chance of recovery.

How the Advanced Medical Healthcare Directive Is Better Than a Living Will

Healthcare directives can intimately respond to the actual facts and variables known when an actual healthcare decision needs to be made. Your legal decision maker under Advanced Healthcare Directives is also your spokesperson, your analyzer, your interpreter, your advocate with intimate knowledge about you, your wishes, and your values often under the most complicated circumstances fate has placed both you and your partner.
Advanced Healthcare Directives are more precise than most boilerplate instructions. An Advanced Medical Directive should be one of your key estate planning tools, together with a Financial Directive which I discuss in a separate article.

When the Advanced Healthcare Directive is Effective in Medical Care

Advanced Healthcare Directives are legally binding in most of the 50 states, with exclusive power to act in your stead. An Advanced Medical Directive becomes effective when:
  1. You cannot communicate your own wishes for your medical care:
    1. Orally,
    2. In writing, or
    3. Through gestures
  2. You are diagnosed to be close to death from a terminal condition, or to be permanently comatose, and
  3. The medical personnel attending to your care are notified of your written directions.

Medicaid Nursing Home Spend-Down Program: 5-Year Look Back

Posted on: February 7, 2017 at 8:40 am, in

The Medicaid nursing home spend-down program mandated by the government has 5-year look back provisions resulting in financial devastation of senior & elderly couples and the next generation baby boomers.

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Seventy seven million (77,000,000) middle class aging baby boomers are going to rely on Medicare as their default long-term health care policy. The Cato Institute estimates that $60 trillions of Medicare is an unfunded, unaccounted for obligation.1
The Medicare / Medicaid programs are dual eligibilities government programs for the aged, the blind, and disabled, and heavy long term care users for the poor of the poorest. Medicaid is the largest liability in state budgets having topped elementary and secondary education. For 2003, total Medicaid expenditures in most states were $267 billion. Of this, Medicaid financed nursing home care accounted for approximately $51 billion and home care $9.9billion.1

The new Tax Reduction Act of 2005 mandated that seniors spend-down all of their combined assets before the sick spouse can qualify into a nursing home. The act requires a 5-year look back for any transfers by seniors designed to deprive the state of those available resources to pay for the nursing home.

What is the Nursing Home Spend-Down?

The spend-down provision is that “you must self pay” for your nursing home care with the sale of all your personal and real assets to the point of financial devastation of your life’s savings driving you into financial destitution. Nursing home eligibility will be determined by your lack of any available resources designed specifically to punish/impoverish your healthy spouse. This means that if one spouse needs private care, the other spouse needs to spend every dollar they have before the government will help with the costs!

Why is Medicaid Estate Planning Important?

The problem with the 5-year look back provision is that the new Medicare regulations do not consider the healthy spouse. It’s a social punishment of the marriage certificate. It’s a new social discrimination based on health. Eventually seniors will be forced to choose divorce for the sake of retaining their financial dignity.

What’s happening with the Medicaid Health Care System?

The gross mismanagement of the social security system is going to force baby boomers into giving serious thought about their long-term health care. There won’t be any money by the time baby boomers reach retirement age. Health care has been escalating at an alarming pace. Government planners have figured out that they can save $10 billion over the next 5 years by increasing the look back provision from 3 years to 5 years.

What’s the 5-Year Look Back for the Nursing Home Program?

Before you qualify for the government nursing home assistance program, there is a 60 month look back to see if and when you transferred your assets for less than fair cash value or you transferred your assets into a trust system or any system of transferring your wealth for the purpose of becoming eligible for the nursing home program depriving the state of all your available resources for your long-term health care.2

The Social Change at hand on home equity

According to the National Council of the Aging, 81% of America’s 13.2 million households aged 62 and over own their own homes. Seventy-four (74%) of those seniors own their homes free and clear. Altogether seniors own nearly $2trillion worth of home equity.1 You got to hand it to the government to help you figure out how to spend it.
They want you to use the equity in your home to pay for your own long-term health care! They are going to make it super-easy for you to borrow against it or “reverse mortgage” your way to creating a new government sponsored reverse mortgage industry. Based on this perceived wealth, it will not be long before government will mandate look back provisions of 10 years for most asset transfers to 20 years for real estate property.

What’s a Reverse Mortgage?

A Reverse Mortgage (RM) is a special kind of loan which can be obtained if you are at least 62 years of age (if married, the youngest must be at least 62) and own your own home, condo, or co-op. A Reverse Mortgage (RM ) converts a portion of the value (equity) of a home into instant cash. The main feature of this program is that you need not qualify for credit to obtain this loan.
The money borrowed can be in one lump sum, monthly payment, line of credit, or any combination. The Reverse Mortgage is a non-recourse loan. There’s no personal liability to the borrower, their estate, or their heirs. The house is the only collateral and the borrower does not have to make any monthly payments; it’s the reverse, the bank pays you.
What’s wrong, is that the interest charged on the loan accrues and compounds on itself accelerating the amount of equity being removed from the home, not to mention the extravagant forced fees charged when there’s no other alternative. What’s wrong with Reverse Mortgage’s is that the financial dignity of the senior will quickly evaporate, before their very eyes.

What can you do now to avoid the Government mandated confiscation of the Medicaid Nursing Home Spend-Down program?

Good planning is done when the seas are calm; it’s often too late when the seas are stormy. It has become obvious that government has outspent their income and created more money with printing presses. As a boomer myself, I just don’t like it when big brother has plans for my earnings and accumulated wealth.
The more money you throw at them the more they want, it’s a black hole of the universe. If Government wants us to buy our own long-term health care, then why not make it tax deductible. Why on form 1040 heath care costs have to exceed 7.5% of adjusted gross income. Why not make deductions for long term care insurance 100% tax deductible, or better yet why not make it affordable.
1Source: Stephen A. Moses, Cato Institute, Policy Analysis, No. 549, Aging America’s Achilles’ Heel Medicaid Long-Term Care.
2Transferring assets at less than it’s fair cash value i.e. transferring your home to your child for $100.00 is either considered a taxable gift in excess of the allowed $12,000 annual exclusion or it’s considered a “fraudulent conveyance.” See tax form 709 for gift tax consequences, see your lawyer for how to avoid fraudulent conveyance, or call Rocco Beatrice at 888-93ULTRA (888-938-5872) for a completely FREE consultation. No sales pressure, no risk and no obligations when you call.
Call Estate Street Partners toll-free at 888-93ULTRA (888-938-5872) for solid, award-winning advice on how you can plan ahead for surefire and stable Medicaid estate planning and protection.
Rocco Beatrice, CPA, MST, MBA, Managing Director, Estate Street Partners, LLC.
Mr. Beatrice is an asset protection award winning trust and estate planning expert.

Medicaid Estate Planning

Posted on: February 1, 2017 at 11:47 pm, in

Watch the video on 'Medicaid Estate Planning'
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For those of you not familiar with the 2005 Tax Reduction Act, some of the provisions address specific transfers by seniors under the new Medicaid nursing home provisions. Under the new provisions, before seniors qualify for Medicare assistance into a nursing home, they must spend-down their assets. These new restriction have a 5-year look-back. The look-back used to be 3 years.
By a vote of 216-214, the U.S. House of Representatives passed budget legislation that will impose punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. Act of 2005, click on PDF: Deficit Reduction Act 2005. Search for “transfer of assets provision” in the pdf document.

What’s Medicaid?

What’s Medicaid? Medicaid is a government assistance program for people over the age of 65 or who are disabled. Medicaid assistance was designed for those who could not afford medical expenses (for the poor) but Medicaid has become the default for the middle class. The middle class has become the new poor.
Medicaid estate planning and Medicaid rules are complicated. The government is mandating a 5-year look-back on any transfers you may have made to disqualify you from entering the nursing home. Before the 2005 Tax Reduction Act it was 3 years. The transfer of any assets by the elderly has taken a notation of a “fraudulent conveyance” or in government parlance “deprivation of resources.” These new rules are spousal impoverishment programs designed to punish the healthy spouse. If one of the spouses gets sick, all resources have to be spent before you can qualify for government assistance. These new restrictive rules punish the healthy spouse leaving the healthy spouse at the mercy of welfare or her children. It’s very humiliating when seniors have planned their retirement based on their ability to keep their home.

Assets That You Must Spend Down Before You Can Qualify for Nursing Home Assistance:

ANYTHING YOU OWN IN YOUR NAME OR TOGETHER WITH YOUR SPOUSE. Cash, savings, checking, certificate of deposits, U.S. Savings bonds, credit union shares, Individual Retirement Accounts (IRA), nursing home trust funds, annuities, living revocable trust assets, any revocable Medicaid estate planning trust, real property occupied as a home, other real estate you hold as investment property or income producing property, cash surrender value of your life insurance policy, face value of your life insurance policy, household goods and effects, artwork, burial spaces, burial funds, prepaid burial if they can be canceled, motor vehicles, land contracts, life estate in real property, trailer, mobile home, business and business property, ANYTHING IN YOUR NAME OR YOUR POSESSION.

What is “Fraudulent Conveyance” in Medicaid Estate Planning?

What do you mean by “fraudulent conveyance” or “deprivation of resources”? If you give away your assets and you do not receive an equal amount (value) in return, the transfer is a deprivation of resources and you have committed a fraudulent transfer, (you give your house to your children for $100.00 when the fair cash value of your home is i.e. $150,000). If you gave your house to your children for $100 sixty months (5 years) before you entered the nursing home, you “deprived your resources” from the nursing home expenses. Unwittingly, you also incurred a gift tax on the difference between the $100.00 and the $150,000 and in addition you may have cheated the government out of Estate Taxes.

Federal Gift Tax Rules in Medicaid Asset Protection & Estate Planning:

The federal gift tax rules apply to the transfer by gift of any property. You make a gift if you give property (including money), or give the use of property, or give the income from property without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.
The general gift tax rules are that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts:
  • Gifts that are not more than the annual $12,000 $13,000 exclusion for the calendar year beginning in 2006 (This is called the Annual gift tax exclusion for any 12 month period, see below).
  • Tuition or medical expenses you pay directly to a medical or educational institution for someone,
  • Gifts to your spouse,
  • Gifts to a political organization for its use, and
  • Gifts to charities.
  • Annual gift tax exclusion. A separate annual gift tax exclusion applies to each person to whom you make a gift. For 2007 2010, the annual gift tax exclusion is $12,000 $13,000. Therefore, you generally can give up to $12,000 $13,000 each to any number of people in 2007 2010 and none of the gifts will be taxable. However, gifts of future interests cannot be excluded under the annual exclusion provisions. A gift of a future interest is a gift that is limited so that its use, possession, or enjoyment will begin at some point in the future. A federal Gift Tax return is filed on form 709 for taxable gifts in excess of the annual exclusion.

Filing a Gift Tax Return:

Generally, you must file a gift tax return on Form 709 if any of the following apply:
  • You gave gifts to at least one person (other than your spouse) that have a fair “cash” value of more than the annual exclusion of $12,000 $13,000 for the tax year 2007 2010.
  • You and your spouse are splitting a gift.
  • You gave your spouse an interest in property that will be ended by some future event.
  • Your entire interest in property, if no other interest has been transferred for less than adequate consideration (less than its fair “cash” value) or for other than a charitable use; or
  • A qualified conservation contribution that is a restriction (granted forever) on the use of real property.

Estate Tax & Senior Medicaid Estate Planning:

Estate tax may apply to your taxable estate at your death. Your taxable estate is your gross estate less allowable deductions. On the date of your death, everything in your name is taxable. Take inventory of what you own: Cash, Savings and checking accounts, CDs, Stocks, Mutual Funds, Bonds, Treasuries, Exempts, Jewelry, Cars, Stamps, Boats, Paintings, and other collectibles, Real Estate … main home, vacation spot, investment realty, your Business, Interests in other businesses, Limited Partnerships, Partnerships, Mortgages and notes receivable you hold, Retirement plan benefits, IRAs, or any amounts that you expect to inherit from others.
Many people prefer not to think about what will happen on their death, but none of us are immortal and failure to make proper plans can mean that we leave behind is a mess which has to be sorted out by our nearest and dearest, at great expense and inconvenience, at a time when they are emotionally bankrupt.
Your federal death (estate) tax, up to 55%, is based on the “fair cash value” of your property on the date of your death, not what you originally paid. State probate and death taxes are based on the “location” of your property. Thus, if you own property in different states, each state has to be probated and each will want their fair share.
The only real alternative to a will arrangement is to set up a trust structure during lifetime which, with careful planning, can operate to eradicate probate delays, administration costs, and taxes as well as giving a large number of additional benefits. For these reasons the use of trusts has increased dramatically.

What is Your Gross Estate?

Your gross estate includes the value of all property in which you had an interest at the time of death. Your gross estate also will include the following:
  • Life insurance proceeds payable to your estate or, if you owned the policy, to your heirs;
  • The value of certain annuities payable to your estate or your heirs; and
  • The value of certain property you transferred within 3 years before your death.

What is Taxable Estate?

The allowable deductions used in determining your taxable estate include:
  • Funeral expenses paid out of your estate,
  • Debts you owed at the time of death,
  • The marital deduction (generally, the value of the property that passes from your estate to your surviving spouse), and
  • The charitable deduction (generally, the value of the property that passes from your estate to the United States, any state, a political subdivision of a state, or to a qualifying charity for exclusively charitable purposes).

The following table applies to Gift Taxes and Estate Taxes (REPEALED in 2010):

If you die in tax year Taxable Estate Exemption Gift Tax Exemption Estate Tax
2007 $2,000,000 $1,000,000 45%
2008 $2,000,000 $1,000,000 45%
2009 $3,500,000 $1,000,000 45%
2010 $0.00(REPEALED) $0.00(REPEALED) 55%
2011 $5,000,000 $5,000,000 rong>35%
2012 $5,000,000 $5,000,000 35%
2013 $1,000,000 55%
13 times in 32 years, congress has changed the rules. Congress is always tinkering with the “Death Transfer Tax.” For more information on what is included in your gross estate and the allowable deductions, see Form 706.

Medicaid Asset Protection 60 months Before Qualifying for Nursing Home:

You can avoid all of the above unpleasant results and filing requirements with an irrevocable trust implemented 60 months before you plan to qualify for the nursing home. By repositioning your assets (transferring your assets) from you to an irrevocable trust, you will NO longer own the assets:
  • you don’t qualify for the probate process, and
  • you do not have to file an estate tax return,
  • because on the date you qualify for the nursing home you do NOT own any assets,
  • at the time of your death you do NOT own any assets for the probate process,
  • and at the date of your death you do NOT own any assets to report on your estate tax return.
Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours

How the Nursing Home Spend-Down Program Affects You and Your Family

Posted on: February 1, 2017 at 11:39 pm, in

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Your Federal Government has mandated (as of June 30, 2006) that before you qualify for nursing home care, you must spend-down all of your assets. These restrictive new rules are designed to impoverish the healthy spouse. They have mandated a 5 year look-back, that means you better have done something to protect your assets 5 years before you become sick.
Without careful attention your accumulated wealth can disappear before your very eyes, because you were unlucky in your health. If either you or your spouse get sick, before you can ask for any government assistance, you must spend all of your accumulated wealth, leaving your healthy spouse without any resources to keep on living the lifestyle you and your spouse are normally accustomed to.

Good health, although very important and a blessing, cannot be relied upon as we all know no one can predict the future. But you can do something about this now to ensure that your wealth is limited to how much the government can expect from you.
There is a method to insulate your assets from the nursing home mandated spend-down. So what is this secret, you ask? Simple. It’s called an irrevocable trust.
So what is an irrevocable trust? An irrevocable trust can reposition your assets to allow you control and limit the amount that can be demanded of the nursing home spend-down mandate to reduce your hard-earned wealth. Assets that qualify for repositioning are your primary residence, your vacation spot, your CD’s, your stocks, bonds, and other investments.
By “repositioning your assets” (transferring your assets) to an irrevocable trust you legally no longer own the assets, therefore no one can demand or sue you for those assets. Even more important, if you no longer own your assets you don’t qualify for the expensive probate process and you do not have to pay estate taxes.
Moreover, if you have a will, “your will” won’t protect your assets from the nursing home spend-down, it will not avoid probate and it will not avoid taxes on your estate. So, in essence, an irrevocable trust is ideal in many instances.
A solid, personally developed and well-planned irrevocable trust by a team of competent professionals such as accountants, lawyers and financial planners can avoid these more than mere unpleasant events. It can literally save you and your family’s fortunes and life-savings.
Set up a Personalized, Court-Tested Medicaid Trust now in only a few hours

Medallion Trust: Irrevocable Trust Asset Protection

Posted on: January 31, 2017 at 1:03 am, in

Protect your assets from lawsuits, divorce, Medicaid.
“The ancient Egyptians built elaborate fortresses and tunnels and even posted guards at tombs to stop grave robbers. In today’s America, we call that estate planning.”
— Quotation from Committee Chairman Bill Archer, House Ways and Means, during the debate on eliminating “death” taxes.

A simple will, just isn’t enough! Your government wants two-thirds (2/3).
Rocco Beatrice
The Dreaded Phase-In of the 2001 Tax Act has increased your need for Estate and Gift Tax Planning. see table below
A TRUST is nothing more than a private CONTRACT.
The purpose of a TRUST is to create an “Artificial Legal Person” to hold, preserve, and manage your wealth for the benefit of your heirs.

The Medallion Trust®

(Registered Trademark of Estate Street Partners, LLC)
In anticipation of congress making additional changes to the estate tax and gift tax rules, the MEDALLION TRUST® has been financially engineered to take advantage of your “legal exceptions/exemptions loopholes” – by claiming your tax exemptions, now!!! You can give away up to $1,000,000 of your wealth this year ($1,000,000 for the year 2002 to 2009, and back to $675,000 in 2010 (see table below). NOTE: The Dreaded Phase-In of the 2001 Tax Act has increased your need for Estate Tax and Gift Tax Planning.
By “GIFTING” your assets to the MEDALLION TRUST® and by filing IRS Form 709 (United States Gift and Generation-Skipping Transfer Tax Return) you can claim your unified credit against taxes that would normally be paid by your estate. Thus, for the year 2006 you and your spouse each can “GIFT” up to $1,000,000 ($2,000,000 combined) of your wealth without incurring any tax liability. (For the new Tax Act, see below)

Tax Neutral

There’s absolutely no downside risk with the MEDALLION TRUST®. By engineering your assets around “legal exceptions and tax exemptions” you can avoid unwanted taxable results by claiming your loophole, now!
  • ESTATE – The Fair Cash Value of anything (in your name) on the date of your death.
  • ESTATE TAX – Anything in your estate (in your name) is taxable up to 55% with small reductions under the new Tax Act of 2001. Anything NOT in your name, is NOT taxable.
  • PROBATE – Anything in your Trust, avoids probate. Anything NOT in your Trust, goes to probate, with or without a will.
  • WILL – A listing of your wishes to be executed on the date of your death. A will does not avoid probate.
  • TRUST – An “artificial legal person” created by private contract.

Congress: “Death and Taxes”

Various tax proposals were being bandied about, including House Ways and Means Chairman, Bill Archer, who said that he was “pushing” to “g-r-a-d-u-a-l-l-y phaseout” the death tax within the next 10 years. (The word “gradually” has been emphatically stretched out.) “Death by itself should not trigger a tax” said Chairman Archer. The Dreaded Phase-In of the 2001 Tax Act has increased your need for Estate Tax and Gift Tax Planning. (see table below)
The federal government has done all it can to ensure they become your largest “heir” by collecting estate taxes from 37% to 55% on 100% of your wealth. The 2001 Tax Act stretches out a small reduction but not eliminated. Only Japan has a higher rate of estate taxes at 70%. Germany takes a maximum of 40%, while Australia and Canada, take nothing.
“I believe, we all should pay taxes with a smile. I tried, … but they wanted cash.”

-anonymous, The Penguin Dictionary of Humorous Quotations

Add it all up!!! Federal tax, state tax, probate fees, legal fees, accounting fees, appraisal fees, administrative and executor fees, and etc. fees; it could easily cost you 70 to 80% of you hard earned estate. You can avoid these unwanted results.

Some statistics on death & transfer taxes:

  • 13 times in 25 years, congress has changed the rules. Congress is always tinkering with the “Death Transfer Tax.”  They believe, they know better than you, how they should spend your money; before and after your death.
  • 43% federal death tax rate or $2,170,250 owed by a California resident who died with a $5,000,000 estate, plus an additional 10% payable to the state of California. (source: CA-Probate.com)
  • 70% – percentage of Americans who die without a will. (source: Wealthcare.com)
  • 35% – the percentage of widows aware of the 55% federal estate tax.
  • 60% to 85% – the percentage of gross household income that you will need for your retirement to sustain your current lifestyle. (source: Wall Street Journal)
  • $23,500,000,000 – the amount of tax dollars collected from 1998 estate tax returns filed. (source: US Treasury Department)
The MEDALLION TRUST® was meticulously crafted and specifically engineered to take advantage of your “Gift” and “Estate Unified Tax Credit.” This legal exception/exemption (LOOPHOLE) is presented in the table below.
The New 2001 Tax Act:
1999 $625,000 N/A N/A 55%
2000 $675,000 N/A N/A 55%
2001 $675,000 $675,000 $675,000 55%
2002 $700,000 $1,000,000 $1,000,000 50%
2003 $700,000 $1,000,000 $1,000,000 49%
2004 $850,000 $1,500,000 $1,000,000 48%
2005 $950,000 $1,500,000 $1,000,000 47%
2006 $1,000,000 $2,000,000 $1,000,000 46%
2007 $1,000,000 $2,000,000 $1,000,000 45%
2008 $1,000,000 $2,000,000 $1,000,000 45%
2009 $1,000,000 $3,500,000 $1,000,000 45%
2010 $1,000,000 $0 (repealed) $0 (repealed) 55%
After 2010 $1,000,000 $0 (repealed) $0 (repealed) 55%
1 – OLD LAW – this is the old law where the exemption amount that could have been gifted per person and not subject to a gift tax or estate tax.
2 – ESTATE TAX – in effect 2002 and thereafter. This estate tax exemption is the amount that may be exempted if you die in that year.
3 – GIFT TAX – in effect 2002 and thereafter. This gift tax exemption is limited to an individual’s lifetime total of $1 million.
4 – ESTATE TAX MAX – the maximum percentage of estate tax
If you know the year you’re going to die you may be able to maximize your estate and gift taxes.
CONGRESS is always tinkering with the “Death Transfer Tax” by eliminating, reducing your legal exceptions loophole, or who knows? Why take this unnecessary risk? You can avoid these unwanted results. There’s NO downside to implementing your MEDALLION TRUST®. The Dreaded Phase-In of the 2001 Tax Act (presented in the above table) has increased your need for Estate Tax and Gift Tax Planning.
The new Tax Act created two layers:

One for the transfer of your wealth at death;

The other for how much you can give away in your life-time.

Can you trust them?

You can avoid these unwanted results with the MEDALLION TRUST®
The MEDALLION TRUST® is designed to LOCK-IN your LOOPHOLE without any downside risk.
  • If your exclusion goes up you merely add additional assets to your MEDALLION TRUST®
  • If your exclusion is reduced or eliminated, you have LOCKED IN your LOOPHOLE.
Additional benefits of the MEDALLION TRUST®:
  • Income Tax Neutral – absolutely no downside to all “income tax” benefits from underlying asset(s), i.e. you receive deductible real estate tax, mortgage interest on your form 1040.
  • Defers Capital Gains Taxes on Real Estate (under certain conditions). Contact us for more information.
  • Eliminates the expensive, time consuming “Probate Process” that could take years and consume your wealth.
  • Eliminates Estate Taxes and Legal Fees in settlement of your hard earned estate


  1. Your TRUSTEE which could be your best friend, lawyer, accountant, … any individual you select will set up:
    “The —Name— MEDALLION TRUST® under the laws of your state.
  2. You “GIFT” your private residence or any other valuable assets(s) at Fair Market Value, to:
    Note: your Non-Taxable gift(s) are subject to your legal loophole amounts (see above).
  3. You and your spouse each will file a “Gift Tax Return IRS Form 709” for the value of the asset(s) gifted to:
  4. A checking account is established in the name of your trust with power of attorney granted to you or your spouse (as the attorney in fact). All your expenses are paid through your MEDALLION TRUST®

What’s the difference between an UltraTrust® and a Medallion Trust®?

Features/Benefits the ULTRA TRUST® the MEDALLION TRUST®
Purposed Tax Law Changes:

Twelve times in 24 years – the number of tax overhauls. Tightenings for some; headaches for all.

Congress is always tinkering with the idea that they know better than you about where your money should go.


the ULTRA TRUST® was meticulously crafted to hold your primary residence and all your other significant assets with total positive income tax benefits, i.e. real estate tax and mortgage interest deductions on your Federal form 1040.
Under certain conditions it may defer your capital gains taxes.

Assets in your trust, avoid probate.
TAX NEUTRAL (same as UltraTrust)

In addition, the MEDALLION TRUST® was carefully engineered to take advantage of your Estate Gift Tax Unified Tax Credit Exemption LOOPHOLE. Congress is always thinking of amending, reducing, eliminating and who knows what eles? The MEDALLION TRUST® will freeze your legal loophole. If it goes up, you can add to your trust. If it goes down, you are locked in. It’s specifically engineered for this benefit.
How is the trust funded? Assets to the ULTRA TRUST® are “exchanged” at Fair Market Value in return for a Private Annuity Assets are “gifted” at Fair Cash Value to the
Why Transfer your assets in your trust now! If you put assets in your ULTRA TRUST® now! you will escape Probate and you will NOT pay Estate Transfer Taxes.

Your Gross hard-earned estate is taxable up to 55% federal tax, plus your state may also impose a tax.
If you gift your assets to your MEDALLION TRUST® now you will escape Probate and you will NOT pay up to 55% Estate Transfer Taxes.

Of significant tax deferral benefit if you gift assets that will appreciate significantly over time i.e. stocks, bonds, real estate, a business, tetc.
Forms filed with the IRS At initial set-up, none. Thereafter, yearly information return to beneficiaries through K-1 “Information Return” IRS Form 709, “U.S. Gift Tax Return” is filed with the IRS by April 15 after the gift is made. Thereafter, same as ULTRA TRUST®
Dollar Limitations that can be transferred to the Trust UNLIMITED


(specifically engineered for this benefit)
LIMITED to your Estate Gift Tax Unified Tax Credit Exemption LOOPHOLE:

Amount that can be gifted and not subject to a gift tax exemption (per person):

1999 – $625,000

2000 & 2001 – $670,000

2002 to 2009 Congress created two layers. One for Estate Tax, One for Gift Tax. (see table above) The Amount you can give away in your lifetime is capped at $1million. – $1,000,000

2010 and thereafter – $675,000
Assets that can be transferred Personal residence, other real estate, your cash account, your investment account, your automobile, your insurance policy, your sub “S” stock, your Limited Liability Company, General Partnership interest in a Limited Partnership. All your valuable assets. Same as the UltraTrust. However, assets transferred to the MEDALLION TRUST® are subject to the above Gift/Estate Tax Unified Credit dollar limitations.

Note: If the credit goes up, you add to your trust. If the credit goes down or eliminated, you are LOCKED IN.
Asset Protection Wealth Preservation YES

(specifically engineered for this benefit)

(specifically engineered for this benefit)
Eliminates the Probate Process YES

(specifically engineered for this benefit)

(specifically engineered for this benefit)
Eliminates Estate Taxes YES

(specifically engineered for this benefit)

(specifically engineered for this benefit)
Tax Benefits to your Federal Form 1040 YES

(specifically engineered for this benefit)

All tax-deductible attributes of underlying assets transferred to your ULTRA TRUST® ultimately are “passed through” to your Federal Form 1040.

(specifically engineered for this benefit)

All tax-deductible attributes of underlying assets transferred to your ULTRA TRUST® ultimately are “passed through” to your Federal Form 1040.
Cost to implement US$12,500 US$12,500