Thursday, April 13, 2006

Estate Tax of The Worst Sort

My friend's mother, who is in her seventies, was recently diagnosed with bone cancer. To this point, she has lived on her own, though with considerable health problems. Both of her children assist her faithfully in the upkeep of her small home and with her expenses. Like many seniors, she is living on a small, fixed income, and she just does not have enough money to meet monthly expenses, especially for her expensive medications. A couple of weeks ago, just after she began her chemotherapy, she called her daughter in tears because she had gotten a very scary and confusing letter from the State telling her that should she have to enter a nursing home, they would recoup the cost from her estate, in this case the small home where she now lives. In tears, she called her daughter and read the letter to her. She said that as much as her children had invested in the home and in helping her stay afloat financially, the one comfort she had was that they would one day be able to recoup some of what they had spent from her estate. Now, she learns, that won't be the case. Her story is not unique.

In Georgia, seniors who have Medicaid as their insurance and enter nursing homes face having their estates, most commonly their homes, seized by the state to recoup the cost paid for their nursing home care. Georgia is required by the federal government to undertake this cost recovery and is one of the last states to do so.

The legislature passed a law that would exempt those currently in nursing homes and raise the ceiling on the estate subject to this law from $25,000 to $100,000. Governor Perdue has not indicated whether he will sign this into law, veto the bill or allow it to become law without his signature. The federal government has not indicated whether they will approve the changes.

The deadline is tomorrow, though, for seniors to decided whether to (1) leave the nursing home; (2) give up their insurance; or (3) face the fact that the state, not their children, will be the beneficiary of their estate.

With the Governor and the feds undecided, seniors and their families are left guessing. This reflects a growing tend in public policy from the IRS to the DMA: recovering the most money possible from the poorest citizens.

Opposed to the Estate Tax? This is the worst sort of Estate Tax! I hope that Governor Perdue has the wisdom and the courage to sign this legislation as an indication of his opposition to this harsh law. If we can't take care of our youngest, our oldest, our sickest and our most vulnerable, then what are we for?

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