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9/02/2005 Bulletin
NC General Assembly Changes
Life Estate Rules
The Technical
Appropriations Act of 2005
(what we’ve been calling the
“Budget Bill”) has made a
number of changes effective
October 1, 2005. There are
a number of ambiguities in
the legislation, and
technical corrections that
the Bar Association,
National Academy of Elder
Law Attorneys, AARP and
others had been scrambling
to obtain have fallen by the
way side.
Nevertheless, my
understanding from
yesterday’s governing
council meeting of the Elder
Law Section of the State
Bar, is that DMA was
attempting to police a
number of abusive techniques
used by some practitioners.
Unfortunately, it may be a
case of the "too aggressive
and the ethically
challenged" provoking a
legislative over-reaction.
Changes to the MA (which
actually seem more modest
than the broad sweep of the
legislation) are in the
pipeline and my
understanding of the changes
are as follows:
EFFECTIVE 10/1/05:
All
life estates other than
a life estate (measured by
the recipient's life)
in the homesite will be
countable. While under a
technical reading of the
statute a purchased
life estate in the homesite
would be countable, it is my
current understanding that
DMA plans to treat all life
estates in the homesite,
whether purchased or
retained, in the same
manner. I have seen some
draft language to MA-2230
that seems to confirm this
understanding.
Transfers of any life estate
after 10/1 will be subject
to transfer penalties.
Values should be rebuttable.
Please
also keep in mind that the
“Change Gremlins” could get
loose and everything I’ve
said could be altered. But
I don’t think by much. My
belief is that a Change
Notice ought to be out in
the next week or so.
I’m
passing this on because a
number of you had expressed
an interest in knowing what
I might have heard on this
topic. I will be trying to
contact all my clients
through some form mailing in
order to alert them and to
attempt to take any
corrective action that might
be appropriate and
available. That doesn't
leave much time, though!
Have a
great weekend.
Bob
Mason
