Does Life Insurance Cover Long-Term Care?

Does Life Insurance Cover Long-Term Care?

New York residents will now be able to use some of their life insurance policy to cover long-term care expenses, according to a press release.

“By passing this law, we no longer burden taxpayers with the long-term care expenses needed by the growing senior population and we’ve given thousands of seniors a creative and costsaving way to cover their care,” said state senator Jeff Klein.

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Federal Transfer Tax System: Gift Tax Basics

Federal Transfer Tax System: Gift Tax Basics

First instituted by the Revenue Act of 1924, gift taxes are incurred when there is a voluntary transfer (i.e., gift) of cash or other property from one individual to another that is less than fair market value.

The Internal Revenue Service (IRS) defines fair market value as, “… the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” Each individual is allowed to donate up to $13,000 in cash or property per donor annually without facing a tax, a practice commonly referred to as the annual exclusion.

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