Your IRA is a Powerful Estate Planning Tool

When we first think of estate planning tools, we tend to think of Wills, trusts and financial directives – but we forget about one very useful tool that’s often just sitting on the back-burner: your Individual Retirement Annuity (IRA).

As a retirement planning tool, IRAs are well-known for their benefits, including IRA assets being compounded on a tax-deferred or even tax-free basis (Roth IRAs). For those of us who are fortunate enough not to require their IRA to fund their retirement, however, it can be used to the benefit of your heirs by changing it into a so-called “stretch IRA”.

How Can I Change My IRA into a Stretch IRA? 

This is simply a matter of naming a beneficiary who will take many years before they qualify for the benefits – a much younger spouse, a child or even a grandchild. For minors, it’s best to speak to your estate planning attorney about developing a trust that allows this strategy, as it gives you more control over the use and distribution of the IRA funds). Your spouse is able to roll the funds over to their own IRA after they inherit, which enables the funds to keep growing (tax-deferred or tax-free) until they decide to utilize them. As a result of the compound growth on these accounts, the longer the benefits are deferred, the more substantial they will become. This could form a significant lump sum for your loved one, allowing them to:

  • Fund their eventual retirement
  • Take a lump sum distribution of the IRA’s balance
  • Withdraw the funds by the end of the year of the 5th anniversary of your death
  • Withdraw the funds over your “remaining” life expectancy as cucullated by the IRS
  • Or hold the funds in an inherited IRA to spread the required monthly distributions over their own life expectancy. (Often the choice that maximizes the benefits of this strategy).

Is this the Right Estate Planning Strategy for You? Speak to Your Estate Planning Attorney in New Jersey 

At Sedita, Campisano and Campisano in New Jersey, estate planning attorney Frank Campisano is ready to assist you with all your estate planning needs – whether you need to make a business succession plan, Last Will and Testament, Power of Attorney, a Living trust or to minimize inheritance tax on your estate.

Contact us today and let us deliver expert estate planning advice to take care of all your wishes – whether your needs are big or small. For more information, please visit our website at

Gifting Your Home to your Child – The Medicaid Implications

Medicaid planning

For many people, the cost of senior care is challenging or even impossible to manage without the assistance of Medicaid. In order to qualify for Medicaid, you need to keep the value of your assets below a certain limit, and one way that people choose to meet this requirement is by gifting assets, including their homes, away to children and loved ones. But what are the pros and cons of this strategy?

“Spend down” Strategies Help You Qualify for Medicaid 

A “spend down” strategy is where you actively reduce your assets to meet Medicaid requirements. It is an effective way to ensure that you qualify for Medicaid when the need arises – essentially, it means reducing your assets to the point where you qualify in a way that ensures you don’t incur penalties.

While gifting your assets is an effective way to spend down, it has to be done the right way or Medicaid will still penalize you or reject your application. The most significant obstacle to this strategy is the 5-year look-back period. If you have gifted away your home or other assets within the last 5 years, you face a transfer penalty where you are ineligible for Medicaid. Even the $14,000 per year tax-free federal gift allowance is included in this calculation and can affect eligibility.

You are only excluded from this look-back period under very special circumstances, including:

  • If your home has been transferred to your spouse.
  • If you have transferred it to your blind or disabled child under 21 years old.
  • If you have transferred it to a caretaker child – that is, your child who has lived with you for 2 or more years in order to care for you.
  • If you have transferred your home to your sibling who has an equity interest in the house and who has lived with you for 1 year or longer.
  • If you have transferred it into a special needs trust to care for a disabled person under 65 years old.

Speak to a Qualified Elder Law Attorney for a Sound Medicaid Planning Strategy 

Medicaid planning is a complex process and one where a reliable, clear strategy is followed step by step. With the right help, you or your loved one can get the care and financial assistance they need.

Frank R. Campisano is highly experienced and compassionate elder law attorney with considerable knowledge of Medicaid issues. In addition to planning ahead financially for Medicaid eligibility, he is also able to assist with applications, appeals and other Medicaid issues. If you or a family member needs assistance with their Medicaid planning or protecting their assets effectively, don’t hesitate to get help today.

In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Healthcare Proxy, Power of Attorney documents and trusts.

For a free consultation and Medicaid assistance, please contact us today and speak to Frank R. Campisano or visit our website at




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