An asset-protection strategy session

It's understandable if seniors feel threatened because of the nation's deficit. Social Security and Medicare, two federal programs the majority of older people revere, are being scrutinized by Congress. And Medicaid, which is administered by the state, is being subjected to real and proposed cutbacks.

While these budget battles may look like more of the same, many say this time it's different. "What's changed is the political and economic atmosphere and the way seniors are being targeted," says Jennifer Cona, an elder law attorney.

Cona was a critic of Gov. Andrew Cuomo's Medicaid Redesign Team and its scores of recommendations aimed at reducing the state's Medicaid bill. Among the panel's proposals was extending the five-year look-back period on asset transfers to include non-nursing home Medicaid eligibility and "spousal refusal," an option used by many low- and middle-income seniors. Under spousal refusal, a healthy spouse can elect not to contribute to an ill spouse's health-care costs, making it easier for the ill spouse to qualify for Medicaid. Cona says that ending spousal refusal means the healthy spouse may become impoverished because he or she would have to spend down virtually all the couple's assets.

Neither the extended look-back proposal nor spousal refusal was included in the recently passed state budget. "This is as close as we've ever come to those changes," Cona says. She advises seniors to be prepared in case the proposals are revised. If the extended look back or spousal refusal are ultimately passed, Cona believes the law won't be retroactive, meaning estate-planning decisions made this year will not be negated.

As for new rules covering estates, Cona points out that the federal estate-tax exemption of $5 million is scheduled to revert to $1 million at the end of next year. Further, New York only exempts $1 million before it starts to collect taxes. "People tend to think, 'I don't have a million dollars in the bank,'" she says, "but add in your house, your retirement assets, life insurance, and you may be there."

For seniors looking for advice, Cona's law firm is holding a Senior Strategies Conference that will examine the new rules relating to Medicaid, estate taxes and trusts. The free conference is 9:30 a.m.-noon May 17 at the firm's offices in Melville. Reservations are required. Call 631-390-5000, ext. 211, or send an email to RSVP@genserlaw .com. Breakfast will be served. For more information, go to genserlaw.com.