Illinois Estate Planning & Elder Law Blog

Once someone enters a nursing home, it isn’t always easy to move out again. While some residents may prefer nursing home care to living on their own, others would rather be independent. For residents who want to move out but need some assistance to live on their own, there may be help available. A federal program is trying to help nursing home residents in Illinois regain their independence.

Residents who have been in a nursing home for a long time may have to start all over again when they move out. They may need help finding a place to live, establishing a bank account, making a home accessible and locating home care.

In 2005, Congress established a federal program called Money Follows the Person that is designed to make it easier for nursing home residents to move out. Illinois participates in the program which provides personal and financial support to help eligible nursing home residents live on their own or in group settings. The new health reform law extends federal funding for the program until 2016. The law also reduces the amount of time an individual must reside in a nursing facility to qualify for the program from 180 days to 90 days.

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Congress has passed and President Obama has signed into law the deal extending the Bush tax cuts that he struck with Congressional Republicans. The legislation restores the estate tax for two years at a 35 percent rate, with estates up to $5 million exempt from paying any tax ($10 million for couples). If Congress does not change the law in the interim, in 2013 the estate tax will revert to what it was scheduled to be in 2011 – a 55 percent rate and a $1 million exemption

The new $5 million estate tax exemption and 35 percent rate are retroactive to January 1, 2010. The heirs of those dying in 2010 will have a choice between applying the new rules or electing to be covered under the rules that have applied in 2010 – no estate tax but only a limited step-up in the cost basis of inherited assets. This will benefit the heirs of tens of thousands who dies in 2010 with relatively modest estates and who would have been subject to capital gains tax on inherited assets above a certain threshold.

The law makes the estate tax exemption “portable” between spouses. This means that if the first spouse to die does not use all of his or her $5 million exemption, the estate of the surviving spouse could use it.

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