During a recent conversation with one of our clients I was asked
whether the legal expenses associated with a guardianship
are tax deductible. For many of our clients, guardianship is
inevitable. Parents of children with special needs experience an
added financial burden and for many, this includes the legal fees
associated with a guardianship. At 18 years old, an individual is
legally emancipated and presumed competent to make decisions.
However, generally speaking, in order for physicians to render
medical treatment, they must have the informed consent of their
patients. This is why, upon turning 18, access to medical care
becomes a primary concern of parents and one of the leading
reasons families inquire about guardianship.
You may deduct expenses incurred for medical care for income
tax purposes. Medical care is defined as costs paid for the
diagnosis, cure, mitigation, treatment or prevention of disease
or for the purpose of affecting any structure of function of
the body. If a guardianship is necessary to gain access to or
consent to medical treatment, then the legal fees associated with
obtaining the guardianship are properly included as a medical
expense.
Although the fees associated with the general management
of the guardianship are not deductible, there are times that
further Court action is required and the legal fees associated
deductible. For example, In Massachusetts, a Court must
approve an incapacitated person’s admission to a nursing
facility, extraordinary surgical procedures, and treatment with
an antipsychotic medication. In the case of treatment with
antipsychotic medication, the Court will review the need for
continued treatment at least annually, further increasing legal
costs. In these situations, Court action is unavoidable under the
law to ensure that medical treatment is a lawfully furnished and
can be characterized as a necessary medical expense.
COMMONLY OVERLOOKED MEDICAL EXPENSES:
Expenses incurred for medical care are deductible for income
tax purposes. You can typically include expenses paid for
yourself, your spouse, and dependents. The definition of
medical care is quite broad, including all costs paid for the
diagnosis, cure, mitigation, treatment or prevention of disease
or for the purpose of affecting any structure of function of the
body. Many of these qualified expenses may go unclaimed. The
following is a list of some, not all, expenses that are commonly
overlooked:
- Braille Books and Magazines: If the cost is more than the
regular printed editions. - Home Modifications/Improvements: Amount for special
equipment in the home, modifications or improvements if
their main purpose is for medical care, limited to the amount
over the increase in value to the property. - Special Modifications to a Vehicle
- Disabled Dependent Care
- Special Home for Intellectually and Developmentally
Disabled: Cost of a specialty home if based on
recommendation of a clinician to help an individual adjust to
community living. - Lead Paint Removal: Removal of lead paint from surfaces to
prevent a child who has or had lead poising from eating the
paint. - Legal Fees: You can deduct legal expenses incurred in
connection with guardianship proceedings if necessary to
gain access to or consent to medical treatment. Some legal
expenses for enforcement of an IEP may also be deductible. - Long-Term Care: Amounts paid for qualified long-term
care services and premiums paid for qualified long-term care
insurance contracts. - Medical Conferences: Amounts paid for transportation and
admission to a conference attended, such as a conference on
a condition suffered by a dependent. The cost of meals and
lodging is not deductible, but the conference itself is. - Special Education: Fees paid for doctor’s recommendations,
child’s tutoring, tuition, meals and lodging for special
education schools. - Television: Cost of television if displays audio for hearingimpaired person.
- Transportation: Amounts paid for transportation primarily
for and essential to medical care, such as transportation
expenses of a parent who must go with a child who need
medical care.
Once all medical expenses are totaled, only the amount over
7.5% of adjusted gross income is deductible. As a result, many
people may not benefit from this deduction. An alternative is to
set-up a health savings account (HSA), which is a tax-exempt
account to reimburse certain out of pocket medical expenses.
