Three Wealth Drains Your Estate Plan Isn't Ready For
Medicaid cuts, IRA tax traps, and other forces are quietly gutting family wealth. Here's what to fix now.
Your estate plan is probably out of date. Most people set it up once, file it away, and never look at it again — but three powerful forces are actively working to shrink what you pass on to your kids. Ignoring them isn't neutral. It's expensive.
First up: Medicaid cuts. Proposed changes to Medicaid funding could force more long-term care costs directly onto families. We're talking nursing home bills that can run $8,000-$10,000 a month. If your plan assumes Medicaid covers it, that assumption may be dead wrong soon. Long-term care insurance or dedicated trust structures deserve a serious look right now.
Then there's the IRA tax trap. The SECURE Act already blew up the stretch IRA strategy for most non-spouse beneficiaries — they now have to drain inherited IRAs within 10 years, which can trigger brutal tax bills during peak earning years. If your estate plan still routes a fat traditional IRA straight to your adult children, you're handing a chunk of it to the IRS. Roth conversions and careful beneficiary designations are your tools here.
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The third force is broader market and inflation pressure eating into real purchasing power of assets you think are "safe." Cash-heavy estates lose ground every year. Your plan needs to account for how assets are held and how they grow, not just how they're distributed.
The bottom line: estate planning isn't a one-and-done task. Tax law changes, healthcare policy shifts, and inflation all move the goalposts. A plan built five years ago could be costing your heirs real money today. Get in front of an estate attorney and a tax advisor — together — before the next policy change makes it worse.
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