by Thomas D. Begley, Jr., Esquire, CELA

CMS has released the Medicare and Medicaid numbers for 2017. They are as follows:

Medicaid

• Income Cap[1] $2,205
• Maximum Community Spouse Resource Allowance (CSRA)[2] $120,900
• Minimum CSRA[3] $24,180
• Maximum Minimum Monthly Maintenance Needs Allowance (MMMNA)[4] $3,022.50
• MMMNA (July 1, 2016 until June 30, 2017)[5] $2,002.50
• MMMNA (July 1, 2017 until June 30, 2018)[6] $2,030.00
• Excess Shelter Allowance (July 1, 2016 until June 30, 2017)[7] $600.75
• Excess Shelter Allowance (July 1, 2017 until June 30, 2018)[8] $609.00
• Maximum Resource Limit (Individual)[9] $2,000
• Minimum and Maximum Cap on Equity in the Home[10] $560,000 – $840,000

Medicare

Part A

• Medicare Co-Payment – Skilled Nursing Facility (SNF)[11] $164.50
• Hospital Deductible[12] $1,316
• Per day Co-Insurance – Day 61 -90[13] $329
• Per day Co Insurance – Day 91-150[14] $658

Part A Premium (for voluntary enrollees only)

• With 30-39 quarters of Social Security coverage[15] $227
• With 29 or fewer quarters of Social Security coverage[16] $413

Part B

• Medicare Part B Deductible[17]                                                                              $183
• Standard Part B Premium[18]                                                                                                                         $134

Medicare Part B – Single or Married and Filing Joint Return

Part B Income-Related Premium[19]

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at some time during the taxable year are:

Standard Part D Cost-Sharing for 2017[20]

• Annual Deductible Maximum $400
• Member Pays 25% of the Next…                                        $3,300 (25% = $825)
• Initial Benefit Period Maximum                         $3,700 ($400 + $3,300)
• Donut Hole Threshold                                                                         $3,725

(Brand name drugs: 50% + 10% plan “subsidy,” Generic drug: 49% subsidy)

• Catastrophic Coverage             $4,950 ($400 + $825 + $3,725)

• Catastrophic cost-sharing:  Generic           $3.30/$8.25 or 5% (whichever is greater)
• Catastrophic cost-sharing: Brand        $7.40 or 5% (whichever is greater)

[1] 42 U.S.C. §1396a(a)(10)(A)(v); 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[2] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[3] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[4] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[5] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[6] 82 Fed. Reg. 8832 (Jan. 31, 2017).

[7] 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[8] 82 Fed. Reg. 8832 (Jan. 31, 2017).

[9] 20 CFR § 416.1205(c).

[10] 42 U.S.C. §1396p(f); 2017 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[11] 81 Fed. Reg. 80062 (Nov 15, 2016).

[12] 81 Fed. Reg. 80062 (Nov 15, 2016).

[13] 81 Fed. Reg. 80062 (Nov 15, 2016).

[14] 81 Fed. Reg. 80062 (Nov 15, 2016).

[15] 81 Fed. Reg. 80072 (Nov 15, 2016).

[16] 81 Fed. Reg. 80071 (Nov 15, 2016).

[17] 81 Fed. Reg. 80063 (Nov 15, 2016).

[18] 81 Fed. Reg. 80063 (Nov 15, 2016).

[19] 81 Fed. Reg. 80066 (Nov 15, 2016).

[20] http://www.medicareadvocacy.org.

By Thomas D. Begley, Jr., CELA

(Article originally published in the Barrister)  Section 8 of the Federal Housing Act of 1937 provides a rental assistance program for low-income families and individuals. HUD pays rental subsidies so eligible families can afford decent, safe and sanitary housing. The programs are generally administered by Public Housing Agencies (PHAs). Generally, the family pays 30% of its adjusted monthly income for rent. Household income must be within the applicable limit established by HUD. The limits are based on family size and locality. Family members must be U.S. citizens or eligible aliens. There are income limits. Income includes Social Security and Disability benefits, pensions, annuities, alimony, some welfare payments and regular contributions from others. Lump sum acquisitions such as personal injury settlements, are not counted as income. If the personal injury plaintiff receives a settlement and puts the money under the mattress and spends it over time, the expenditures do not count as income and do not affect Section 8 eligibility.  Historically, distributions from trusts, including Special Needs Trusts, have been counted as income, unless they are used for medical purposes or are irregular and sporadic.

In an important decision for Section 8 Housing Voucher recipients, the United State District Court for the 1st Circuit reversed the District Court decision in an important public housing case.(1) In the lower court case,(2) the District Court held that Kimberly DeCambre was receiving distributions from an irrevocable Special Needs Trust funded with the proceeds of a personal injury settlement and disqualified DeCambre from her housing assistance on the grounds that she was no longer income eligible. The Housing Authority held that because the distributions from the Special Needs Trust should be counted as income, the amount of the subsidy provided under Section 8 should be reduced $0 . Over a three year period, the distributions from the trust exceeded $200.000. The Housing Authority and the District Court held the entire amount of the distributions were income and, therefore, DeCambre lost her eligibility for Section 8 assistance. The court stated that if Kimberly DeCambre had put the money under her mattress and spent it over time, there would have been no affect on her Section 8 eligibility. However, the court held that once the personal injury settlement was deposited into the trust, it somehow changed its charac ter and all distributions from the trust were considered distributions of income. These distributions, when added to DeCambre’s other income, reduced her subsidy to $0.

On appeal, an amicus brief was filed by the Special Needs Alliance, the National Academy of Elder Law Attorneys and the National Housing Law Project in support of DeCambre. The Appellate Court noted that lump sum additions to family assets, such as settlement for person or property losses are specifically excluded under HUD Regulations from annual income. DeCambre argued that because all of the funds in her Special Needs Trust derive from a series of lump sum settlement payments for a personal injury. the Housing Authority was required to exclude all of her distributions from her annual income. The lower court agreed up to this point stating that if DeCambre had simply put the money under her mattress and used it in the same manner that the trust had made distributions, there would be no problem because there is no asset test under Section 8. However, the District Court reasoned that by depositing the lump sum payments into the Special Needs Trust, the character of the distributions changed so that each distribution was 100% countable as income.

On appeal the amicus brief contended that the principal deposited into the Special Needs Trust should considered principal and only the income earned by investing the principal should be considered income. The Court of Appeals held that DeCambre’s Special Needs Trust was funded exclusively with the proceeds from a series of tort settlements. Had these settlement proceeds been paid directly to DeCambre, the parties agreed that they would have been treated as a lump sum addition to family assets and, therefore, would have been categorically excluded from annual income upon receipt under HUD’s Regulations. The parties agreed that income derived from investments should be considered income. The only issue was when the trust distributes to or for the benefit of the tenant, some or all of principal originally paid into the trust, how should that distribution be characterized. The Housing Authority maintains that even if DeCambre’s settlement proceeds bad the character of a lump-sum addition to family assets when they entered the Special Needs Trust, they no longer possess that character once they were disbursed from the Special Needs Trust. The Court of Appeals concluded that distributions of principal from the Special Needs Trust remain principal and only the investment income is considered income. The question not before the court was, what is the implication for Third-Party Special Needs Trusts? Should distributions of principal not be considered income, but be considered simply a distribution of principal as with a First-Party Special Needs Trust? The issue was not argued in DeCambre, but logically it would seem that the same result should obtain.

As a matter of procedure in both First-Party and Third-Party Trusts, the Housing Authority should look at the resident’s prior years’ federal and/or state income tax return.

Whether or not the DeCambre decision will be accepted by other PHAs in other districts remains to be seen. The decision may be of limited effect. Section 8 is being amended to provide an asset test of $100, 000.

• DeCambre v. Brookline Housing Authority, Case 15-1458, Document 00117013731 (June 14, 2016 ).
• Brookline Housing Auth. 95 F. Supp. 3d (D. Mass. 2015).

ITINs are tax processing numbers that are issued to foreign nationals and others who do not qualify for Social Security numbers but have federal tax filing or reporting requirements. This includes some non-resident aliens, and dependents or spouses of U.S. resident aliens or non-resident alien visa holders.

ITINs that the taxpayer has not used on a federal tax return in the past three years are no longer valid unless the taxpayer takes action to renew the ITIN. In addition, ITINs issued before 2013 must be renewed, even if such numbers have been used in the past three years.

Taxpayers who need to renew their ITIN but fail to do so before filing a tax return may not be eligible for certain tax credits, such as the American Opportunity Tax Credit and the Child Tax Credit, until the taxpayer renews the ITIN. In addition, failure to renew an expired ITIN may cause a refund delay. ITINs only need to be renewed if the taxpayer has to file a federal tax return.

The changes in ITIN requirements were necessitated by the Protecting Americans from Tax Hikes (PATH) Act, which Congress passed in December, 2015.

The Trump Policy Analysis Group (TPAG)1 has convened to consider probable changes in law that will affect older Americans and those with special needs. Initial TPAG focus is on entitlements, public benefits, tax, special needs planning, and veterans’ benefits.

We used a three-fold analysis:

• Stated policy (declared Trump policies and those of the Republican Congressional Leadership);
• “Realpolitik” (circumstances and factors rather than explicit ideology, often considered “pragmatism”); and
• Educated speculation (based largely on experience and knowledge of TPAG members who have been leaders in these fields for decades).

STATEMENT OF PURPOSE

On January 20, 2017 both the White House and both houses of Congress will be in Republican hands, not seen since 2006. As president Obama said shortly after being elected in 2008, elections have consequences. We acknowledge this reality.

During the long and divisive campaign, differences in priorities and agendas between the major parties, particularly in social and health policy, were greater than in any recent election. In our opinion, the uncertainty and challenges now facing seniors, disabled, and medically needy Americans are unequaled and unsettling.

Our goals are twofold. First, to objectively analyze real and probable changes in government policies that directly impact older Americans and Americans with disabilities. Second, to identify planning and other steps these populations should take to preserve or, ideally, to increase quality of health care and quality of life.

SOCIAL SECURITY AND MEDICARE

President-elect Trump has consistently stated that the Social Security and Medicare programs are to remain intact and (presumably) solvent. How solvency would be achieved in light of impending bankruptcy of both programs (Medicare long before Social Security) remains to be seen.  Government and non-government economists only disagree about when insolvency will occur, not if it will occur. As one of their proposals to counter insolvency, Trump and Congressman Ryan (Speaker of the House) are promoting Social Security and Medicare privatization.

The Affordable Care Act took some steps designed to extend the solvency of Medicare. Trump, as President-elect, announced that he would keep parts of the Affordable Care Act but did not explain how he would pay for it. With so many members of younger generations convinced that Social Security will not be there for them, preservation of the fiscal health of both Social Security and Medicare is one of the main challenges facing this Administration.

MEDICAID

1. Rising Fears of Significant Restrictions

A significant majority of Americans are seriously worried about the cost of health care and long term care, in particular. Restrictions on benefits and legislative changes that restrict or limit access to government programs such as Medicaid can only heighten such fears.

2. The Trump and Ryan Block Grant Proposal

Currently, Medicaid is administered at the federal level by the Center for Medicare and Medicaid Services (CMS). While each state has its own state Medicaid Plan, there are mandates and there are constraints.

Block grants, which were first proposed by then Speaker of the House Newt Gingrich in 1995, presumably mean that each state would receive a certain number of Medicaid dollars. Each state would then decide how to utilize and spend those dollars.  In some states, little would change. In other states, changes could be profound. For individuals who may rely on Medicaid, this is a time of uncertainty and concern.  This means, in turn, that planning needs will vary from state to state.

TPAG is aware of some details and elements of proposed plans. Some are designed to restrict protective planning – to make it much more difficult for older Americans to protect their homes and other assets while qualifying for Medicaid, particularly in a long-term care setting. Planning challenges could therefore become dramatically more difficult. Increasingly, older Americans and their families will need up-to-date information and advice to understand and qualify for needed services. This will be particularly true for the majority of older Americans who will need home care services and who need to reside in skilled nursing facilities.

Americans with special needs and their families face as many worries, including concerns about possible reductions in protections and services.

TPAG believes that planning will increasingly involve multiple generations to enhance quality of life, quality of care, and asset protection.

3. Protection of Family Assets: Focus on Protecting the Family Residence

The vast majority of older homeowners will view protection of the residence as a core value, a legacy for future generations. Appropriate legislation must be preserved. Appropriate planning steps must be taken, particularly in light of possible changes in Medicaid, the only federal program that can subsidize or pay for the cost of skilled nursing care. No specific proposals to threaten existing tax and Medicaid protections for the residents have yet emerged.

TAX PROPOSALS – GIFT, ESTATE, INCOME, AND CAPITAL GAINS

1. Gift and Estate Tax

President-elect Trump calls for the elimination of gift and estate tax, perhaps replaced by a “mark to market” tax of capital gains at death. Perhaps a compromise package will not eliminate the tax but will significantly increase the level of estate and gift tax protection. Note that the current level of federal protection is historically high at $5,450,000 per person. If any estate tax remains, it would likely be reduced from the current 40% tax rate.

2. Capital Gains Tax

Different proposals have been proffered by President-Elect Trump, Speaker Ryan and others regarding limitations on “stepped up basis” upon an individual’s passing. For some families, this could result in net tax increases.

For high-end practitioners, those who focus on avoiding estate tax, the challenges are obvious. The number of individuals requiring such sophisticated planning will, at best, dramatically diminish. For most older Americans, the avoidance of estate taxes will have little or no impact from a tax planning perspective and the focus will shift to income taxation. Further, the impacts on entitlements and family financial security could be profound.

3. Corporate and Individual Income Tax

Corporate and individual tax rates for higher earners, in particular, would be substantially reduced. The long-term impact – beyond the obvious increase in after tax income, is impossible to predict. As with most modeling and forecasting, projected outcomes depend on presumptions.

AMERICANS WITH SPECIAL NEEDS

No proposals have yet been made that would directly affect services for special needs children and adults.  Medicaid block grants could adversely affect special needs residents of states that decide – at the state level – to reallocate or otherwise restrict funding for both governmental and non-governmental providers. The reach of Medicaid block grants could significantly reduce or even eliminate the benefit of special needs trusts which maximize assets for the person with a disability.

Additionally, it is possible that support for expanded charter schools and school choice could expand options. This has become more probable than just possible what with Trump’s appointment of Betsy DeVos, as Secretary of Education, an outspoken advocate for charter schools and the dismantling of publicly funded schools. Many special education advocates fear these expanded options could come at a price of diminishing procedural and substantive protections of the Individual with Disabilities Education Act (IDEA), and even reduce or remove the funding formula that follows eligible individual students with special needs under IDEA).

VETERANS’ BENEFITS

President-elect Trump is presumably supportive of maintaining and perhaps expanding services for veterans. At the same time, proposals that predate the election have been introduced that could restrict access to needed programs, such as Aid and Attendance, which provides financial assistance for veterans and spouses of veterans who need higher levels of home care assistance. While new legislative and perhaps regulatory restrictions could make it more difficult for veterans and their spouses to obtain benefits, proactive planning will be an inevitable need across the nation.

LGBTQ PROTECTIONS

President-elect Trump has said that he accepts the United States Supreme Court decision effectively legalizing gay marriage. (His Vice President, Mike Pence, may have a different viewpoint.) The Supreme Court ruled that the U.S. Constitution guarantees the right for same-sex couples to marry in all 50 states creating uniformity across the nation in recognition of the rights of same-sex couples.

IN TIMES OF UNCERTAINTY, FAMILIES WILL PROTECT THEMSELVES

A core conclusion of TPAG is that families will become more insular, more protective of themselves, their assets, and future generations. They will be more focused on what they can control and truly value – their families – and less on public policies that are difficult to influence. This has myriad implications for attorneys, financial planners, and other professionals who work directly with America’s elders, those with special needs and their families. A premium will be placed on advance planning. Inevitably, this will increase involvement of younger generations.  The demand for multi-generational planning – planning that involves and relies on involvement of children and grandchildren – will expand dramatically.

WHAT SHOULD YOU DO?

TPAG thoroughly understands that most Americans, and older Americans in particular, are fearful at this point in time. Above all, do not panic. The stock market panicked at the end of Election Day but soon resolved and moved higher than ever. TPAG believes that the stock market’s response to the election is a lesson for everyone: Learn, watch, be advised, and protect yourself and your family. The changes in store will take time.

TPAG’s goal and its purpose is to turn fear into hope. This is what good planning does.

TPAG will continue to be a source of balanced, objective information about developments at the national level. TPAG is working hard to track initiatives by President-elect Trump, Republicans and responsive proposals of Democrats.

TPAG will work hard to be “one step ahead.”

**Members of the TPAG group include Michael Gilfix of Palo Alto, California, Vincent J. Russo of Garden City, New York, Harry S. Margolis of Boston, Massachusetts, Frank Johns of Greensboro, North Carolina, and Tim Nay of Portland, Oregon.

Devon Guishard led the identity theft ring. He and Tameek White were charged with felony grand larceny in the September 26, 2015 scam. Patricia Fields and Michael Maurice Grayson were charged with felony identity theft.

Grayson and Fields adopted the identities of a Florida doctor and a retired FBI agent from Ohio in order to obtain financing for the vehicle. They forged their U.S. passport cards and drivers’ licenses. The duo also used the victims’ Social Security numbers and forged their signatures on various applications and purchase papers, including registration and insurance.

According to the Westchester County District Attorney’s Office, White brought a down payment of $9,000 to the car dealership so that the purchase would appear genuine. White updated Guishard about the sale’s progress via cellphone. Guishard arrived at the dealership when the transaction was completed and drove the vehicle away.

The group intended to resell the vehicle in other states. Investigators located the stolen car in Texas. Authorities found the identity theft ring conducted similar luxury car scams elsewhere in New York, as well as Arizona, California, Maryland, New Jersey and Texas.

White was sentenced on August 5 to time served in jail. Fields and Grayson each face between one to three years in prison. Guishard will be sentenced to two to four years in prison.

The new enactments that affect passport rules are the International Megan’s Law (IML), which provides for advance notification of traveling sex offenders to prevent the exploitation of children and other sex crimes, and the Fixing America’s Surface Transportation Act (FAST Act). The Department of State’s new regulation incorporates requirements for the denial and revocation of passports of certain sex offenders under the IML, individuals with a serious tax delinquency as defined by the FAST Act, and certain applicants who fail to submit a valid Social Security number with their passport application.

The Department of State said that the new regulation was being published as a final rule without a notice and comment period because it implements Congressional mandates within the IML and the FAST Act, and public comment would be impractical, unnecessary and contrary to the public interest. For the same reasons, the rule became effective as of the date of publication, which was September 2, 2016.

Rather than depending on pension or Social Security benefits, you should be responsible for your own retirement planning. Here are some measures that you can implement so that you can have more control over your retirement:

• If you are employed by a company that offers matching through a retirement savings plan, then it is to your advantage to participate in such a plan. Many employers currently offer retirement plans consisting of matching contributions in lieu of a pension.
• By starting to save early, you can realize the benefits of compound interest. However, even if you begin saving late in your career, you may still be able to retire comfortably. You may have to compensate for the late start by increasing the rate at which you save, reducing your expenses, or working a few more years than you had anticipated.
• In addition, you may need to change your lifestyle by living below your means, and establishing a budget that permits you to accumulate a savings that is intended for your investment in retirement. Every month, you will have to spend a lesser amount than that which you earn, and invest the difference.

By living below your means, you will realize your objective of applying more funds toward your retirement and choosing a lifestyle that encourages you to live on a reduced budget. This will allow you to realize your retirement goals more quickly.

• Furthermore, it would be advantageous for you to make full use of your tax deferral options for retirement, including IRAs and retirement plans through your employers, such as 401(k)s, 457s, 403(b)s or the Thrift Savings Plan. In some instances, you can use a health savings account to help fund your retirement.

Tax-deferred accounts help you increase your retirement income more rapidly because no taxes are owed on the funds or the growth until such time as when you make withdrawals during your retirement. Moreover, delaying payment of taxes on the dividends, interest and capital gains every year permits your retirement account to grow at a faster rate. While you will likely be able to benefit from Social Security or a public pension plan, it is recommended that you not rely on either choice, but rather, take control of your retirement planning.

It would be helpful for you to consult a financial advisor who can develop a plan that will enable you to meet your retirement objectives. Some fundamental questions that you should consider are:

• the age at which you would like to retire;
• the number of years you wish your retirement income to last;
• the amount of income you anticipate receiving from Social Security, pension, dividends, rental properties, and other sources.

One rule to keep in mind is that people require 70 percent to 100 percent of their income prior to retirement in order to keep the same lifestyle on a yearly basis. However, this is subject to change, depending on such factors as whether you wish to travel and whether your mortgage is paid off. You should also consider the cost of living and unforeseen expenses, such as health care. A financial advisor can assist you in confronting these issues, and establishing a workable retirement plan.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

The NIIT is applicable to net investment income that high income people earn. It is also applicable to trusts and estates to the degree to which their adjusted gross income (AGI) is greater than the low threshold amount of $12,300 in 2015.

Investment income includes the following:

• taxable interest;
• dividends, both qualified and non-qualified;
• capital gains, both short and long-term, with the exception of those used in an active trade or business;
• rental income;
• royalty income;
• non-qualified annuity income;
• income derived from passive business activities;
• income derived from trading financial instruments or commodities.

Investment income does not include the following:

• wages, self-employment income, or income earned from non-passive business activities;
• tax-exempt interest, an example of which is interest on municipal bonds;
• distributions from IRAs or specific qualified retirement plans;
• proceeds from life insurance;
• alimony;
• Social Security benefits;
• Veterans’ benefits;
• gain on the sale of an active interest in a partnership or S corp.;
• nontaxable gain on the sale of a principal residence.

You can lower or remove NIIT by decreasing your modified adjusted gross income (MAGI) below the threshold or by reducing your NII. Here are some of the strategies you can use:

• contributing the maximum amount to IRAs and qualified retirement plans;
• deferring income with the use of an employer’s nonqualified deferred compensation plan;
• transferring investments into tax-exempt municipal bonds;
• transferring investments into growth stocks that pay few dividends or none at all;
• “harvesting” losses through the sale of securities at a loss and the use of them to counterbalance gains;
• Making investments in life insurance (there is an exemption from NIIT for an accumulation of cash, and proceeds are subject to an exclusion from both MAGI and NII

Be mindful of the fact that mutual funds usually make distributions of capital gains on a yearly basis, close to the end of the calendar year or, in some instances, more frequently than once a year. In order to reduce the effect of the NIIT, it is recommended that you avoid buying fund shares a short time before a fund distributes capital gains.

Upon reviewing your estate plan, it is advisable for you to speak with your attorney about how you can lower or remove your NIIT. This will require a consideration of tax, estate and financial matters.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Fortunately, there are limits to how much of your income may be garnished so that you can hopefully keep paying your basic living expenses. The limits are based in part on “disposable income,” which is income remaining after certain deductions, such as income taxes, Social Security and required contributions to retirement plans.

The maximum garnishment for most creditors is the lesser of

• 25 percent of your disposable income, or
• the amount by which your weekly income exceeds 30 times the federal minimum wage ($7.25), or $217.50

In Florida, if your disposable income is less than $217.50, no wages may be garnished at all.

Florida also has a “head of family” exemption. The head of a family’s wages may only be garnished if they exceed $750, and only if they agree in writing to have their wages garnished. This is a very powerful exemption against wage garnishment, but importantly, it does not automatically apply — it must be claimed in an affidavit filed with the court.

If you are facing wage garnishment, contact Osenton Law Office today.

In a later post, we’ll cover special limits on certain types of wage garnishment.

O. Reginald (“Reggie”) Osenton is the Owner and President of Osenton Law Office If you need a Brandon bankruptcy lawyer, attorney, call 813.654.5777 or visit http://www.brandonlawoffice.com.

Many seniors are at risk of falling victim to con artists who prey on them in an effort to gain access to their savings and any assets they have accumulated over the years. An example of such a scam occurs when a fraudulent individual pretending to be an IRS agent telephones the potential victim, stating that the individual owes unpaid back taxes, and makes threats to sue or arrest the senior, or suspend their driver’s license.

Seniors are also susceptible to health care scams in which people call posing as health care or Medicare representatives in an attempt to obtain the senior’s personal and contact information. They will then call the senior back at some future date, stating that they communicated with their son or daughter, who said it was fine to give them their Social Security number. In addition, scammers may offer to help seniors obtain health insurance. The National Council on Aging said that in several cases, they use the personal information to bill Medicare, and keep the funds.

Seniors must also exercise caution when dealing with professionals in whom they have placed their trust, such as financial advisers. It is not unheard of for such advisers to commit fraud and embezzle funds from seniors’ investment accounts. For this reason, it is important to use only established firms as advisers.

Some con artists will even go so far as to pose as a grandchild or great-grandchild in an attempt to secure funds from the senior. In addition, due to the increasing cost of prescription drugs, some seniors search for drugs online. But many of these drugs are counterfeit. Or, upon receipt of funds, the scammers just accept the money without delivering the medications.

Another scam is the obituary scam in which the con artist reads the obituaries, and contacts the family members to inform them that the deceased left an outstanding debt, and is calling to collect on the debt.

Fraudulent behavior has also been committed by people who work at funeral homes. They will advise the senior to purchase the priciest casket, even when a cremation will be performed. They may also add extra charges to the bill for cemetery plots.

Furthermore, tech support scams occur in which a person calls the senior pretending to be a technician from Microsoft or another well-known brand. The person then uses scare tactics to say that there is a virus on the computer and the technician must remotely access the computer in order to install software. Then the scammer requests payment in the form of hundreds of dollars via online or with the use of a credit card, and if the senior resists, the scammer threatens to destroy the computer.

Consumers can report scams to the Federal Trade Commission by calling 1-877-FTC-HELP or visiting ftc.org/complaint.

The goal of the awareness campaign is to help the American public learn how to keep their financial and estate plans up to date.  Financial Literacy Month was officially designated by a Congressional proclamation.  NAEPC is joining with financial professionals, nonprofit organizations and financial services organizations to promote financial literacy. To learn more about the NAEPC Education Foundation and their improving financial awareness campaigns, please visit: http://www.estateplanninganswers.org/national-financial-awareness-campaigns/.

The organizations believe increased awareness is necessary, as evidenced by the following:

• An estimated 120 million Americans lack a proper estate plan, making estate planning a severely overlooked area of financial management.
• Most Americans over 65 depend totally on Social Security, but with increased knowledge and planning, seniors could be more secure.
• Estate planning is important for everyone, not just wealthy people.  Issues such as managing assets and bill payments in the event of a disability or disease can be handled carefully with advance planning.
• Most Americans are unable to adequately plan for retirement.  With proper knowledge and planning, that can change.

If you have delayed creating or updating your estate plan, now is the time to take action.  You will need to gather and organize your financial information, decide on your personal financial goals, and seek out an estate planning attorney to develop your estate plan.  An estate plan should be updated at least every three years or whenever there is a change in your situation such as marriage, divorce, births or deaths, or a substantial change in the size of your estate.

Learn more about our services by visiting www.littmankrooks.com or www.elderlawnewyork.com.

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The SSA considers earnings to consist of the income earned from your job or your net income from self-employment. Earnings also include bonuses, commissions and vacation pay because they are relevant to employment. But pensions, investments and other retirement income are excluded.

If you are employed after you have attained full retirement age, your Social Security benefits can increase. The calculation of your Social Security benefits is based on the 35 years in which you earned the greatest amount of income. If your earnings past full retirement age replaces one of those 35 years, then the SSA will recalculate your benefits, and you could receive increased monthly benefits.

However, if you collect Social Security benefits prior to reaching full retirement age, and you keep working, then your benefits could be lowered. If you are under full retirement age for the whole year, the SSA will reduce your benefit payments by $1 for every $2 you earn in excess of the annual limit. In 2014, that limit was $15,480, and in 2015, it was $15,720.

In the year in which you attain full retirement age, the SSA reduces your benefits by $1 for every $3 you earn in excess of a different limit. In 2014, your earnings were limited to $41,400, but only the earnings prior to the month in which you reached full retirement age were counted. In 2015, your earnings were limited to $41,880.

The attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

The SSA considers earnings to consist of the income earned from your job or your net income from self-employment. Earnings also include bonuses, commissions and vacation pay because they are relevant to employment. But pensions, investments and other retirement income are excluded.

If you are employed after you have attained full retirement age, your Social Security benefits can increase. The calculation of your Social Security benefits is based on the 35 years in which you earned the greatest amount of income. If your earnings past full retirement age replaces one of those 35 years, then the SSA will recalculate your benefits, and you could receive increased monthly benefits.

However, if you collect Social Security benefits prior to reaching full retirement age, and you keep working, then your benefits could be lowered. If you are under full retirement age for the whole year, the SSA will reduce your benefit payments by $1 for every $2 you earn in excess of the annual limit. In 2014, that limit was $15,480, and in 2015, it was $15,720.

In the year in which you attain full retirement age, the SSA reduces your benefits by $1 for every $3 you earn in excess of a different limit. In 2014, your earnings were limited to $41,400, but only the earnings prior to the month in which you reached full retirement age were counted. In 2015, your earnings were limited to $41,880.

The attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Retirement Savings

Worries about your 401(k) and other retirement plans become more immediate when you go through a divorce after retirement.  Be sure that your divorce attorney is familiar with working on QDROs or Qualified Domestic Relations Orders. This separate court order deals with how retirement benefits are split during a divorce.

Be sure to involve your retirement plan administrator so you fully understand the terms of your plan. Learn about tax penalties as well as breaks on these penalties, check on survivor benefits and whether those hold even post divorce, find out if you can take a hardship withdrawal when needed, whether you have entitlements on contributions made post divorce, and get clarity on other specific concerns you might have.  For civilians that had a spouse who served in the military, also find out if the military retirements benefits you had been getting when you were married will continue as part of the Survivor Benefit Plan.

Don’t forget to check if your spouse has loans on the 401(k) that will need to be paid off before the funds can be split.

Social Security

With things like Social Security, the rules are fairly clear cut, with details available on the SSA website. For marriages that are 10 years or over, where the surviving spouse is 60 plus, and the survivor’s own retirement benefits are lower than their spouse’s, they become eligible to receive survivor benefits of 100% against their ex’s Social Security benefit. While both partners are alive, for those aged 62 and up, you are eligible to get as much as 50% of your ex-spouse’s benefit without impacting their benefits.

Your Home

Divvying up proceeds from the sale of the family home or deciding which spouse gets to keep it can play out differently when you’re 50-plus. As you grow older, you get certain tax breaks from the government which could be a game changer. Exclusions from gains when you sell the home, as well as deductions on mortgage interest will also be critical factors when you’re a senior.

You also could potentially earn rental income by letting out your home, if you choose to move into a smaller place or a nursing home. After 62, you become eligible for a reverse mortgage that can get you an additional income stream. For anyone qualifying for receiving public benefits like Medicaid, having a primary residence works in your favor.

Gerald A. Maggio is an experienced Orange County divorce and family law attorney and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

According to experts, approximately 45 percent of people retire sooner than they planned. It is smart to have a contingency plan for early retirement.

It may not be feasible to secure a job that pays well, particularly for those in industries that largely depend on contractors. Even though it is illegal for employers to practice age discrimination, several older workers have difficulty finding work. If you are forced to retire early, your best option may be to find new work, even if it is not in your chosen field, and even if the compensation does not approach the amount you are accustomed to earning. Alternatively, you may find it more reasonable to reduce your expenses. Or you may decide to do both.

Another cost-effective measure is to avoid using your Social Security early, even if that means withdrawing funds from your retirement savings. If you claim social security at age 62, your monthly benefit will be 25 percent less than it would have been if you had delayed your retirement until you attained the full retirement age of 66 or 67. And if you wait to retire until you are age 70, you will receive another 32 percent.

Some options to consider if you must retire early are to accept a position that pays a lower salary, work part-time or become a consultant, reduce expenses, apply for unemployment benefits, seek health insurance on the Affordable Care Act exchange, have your college-age children decrease their expenses and consult a financial adviser.

You may also wish to conduct research of Social Security to make certain that you are collecting the maximum possible amount, continue to network professionally and pursue hobbies that make you happy.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

According to experts, approximately 45 percent of people retire sooner than they planned. It is smart to have a contingency plan for early retirement.

It may not be feasible to secure a job that pays well, particularly for those in industries that largely depend on contractors. Even though it is illegal for employers to practice age discrimination, several older workers have difficulty finding work. If you are forced to retire early, your best option may be to find new work, even if it is not in your chosen field, and even if the compensation does not approach the amount you are accustomed to earning. Alternatively, you may find it more reasonable to reduce your expenses. Or you may decide to do both.

Another cost-effective measure is to avoid using your Social Security early, even if that means withdrawing funds from your retirement savings. If you claim social security at age 62, your monthly benefit will be 25 percent less than it would have been if you had delayed your retirement until you attained the full retirement age of 66 or 67. And if you wait to retire until you are age 70, you will receive another 32 percent.

Some options to consider if you must retire early are to accept a position that pays a lower salary, work part-time or become a consultant, reduce expenses, apply for unemployment benefits, seek health insurance on the Affordable Care Act exchange, have your college-age children decrease their expenses and consult a financial adviser.

You may also wish to conduct research of Social Security to make certain that you are collecting the maximum possible amount, continue to network professionally and pursue hobbies that make you happy.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

by Thomas D. Begley, Jr., CELA

In an important case arising in South Dakota, the parents of Stephany Draper established a Self-Settled Special Needs Trust into which Stephany’s personal injury settlement was to be deposited. Prior to that case, this had been a common procedure used all over the country. However, the Social Security Administration (SSA) contended that Stephany’s parents did not deposit any of their own money into the trust, but simply arranged for Stephany’s personal injury settlement funds to be deposited. Therefore, SSA held that since Stephany’s money was used to fund the trust, then Stephany was the person who established the trust and under federal law an individual is not permitted to establish a Self-Settled Special Needs Trust.

What is the solution to this dilemma? SSA is now taking the position that where a parent establishes a Self-Settled Special Needs Trust for a child, the parent must deposit some of the parent’s money into the trust. This could be a token amount (i.e., $10). The rationale is that the person who “first funds” the trust is the establishor. Some lawyers are simply attaching a $10 bill to the trust and sending a copy of the trust with a copy of the $10 bill to Social Security. Better practice would be for the parent to deposit $10 into a trust bank account before the personal injury settlement proceeds are deposited into the account. Copying a $10 bill does not mean that the $10 was used to actually fund the trust. The parent could take the $10 bill out of their wallet, photocopy it, send it to Social Security, and put the $10 bill back in their wallet. Depositing the money into a trust bank account is evidence that the $10 was actually deposited into the trust.

by Thomas D. Begley, Jr., Esquire, CELA

1. 1. INTRODUCTION

   Statistics show that approximately 70% of the population age 65 or over will require some form of long-term care. Some will be there for relatively short periods of time. These are usually stroke victims who are doing rehabilitation. A significant percentage will remain in a nursing home for an extended period of time. These are usually Alzheimer’s or Parkinson’s patients.

   A statistic widely quoted is that the average stay in a nursing home is 2.9 years. This statistic is somewhat misleading, because the persons receiving rehabilitation are often discharged in one month or less. The long-term patients may stay in the nursing home for many years.

   Unfortunately, as the population ages, the cost of health care is increasing, and government entitlement programs are being cut back. The cost of a nursing home in New Jersey today is approximately $125,000 – $160,000 per year. Some nursing homes are slightly less, and some are significantly more.

   There are five sources for nursing home payment. They are: private pay, long-term care insurance, Medicaid, Medicare, and Veterans Administration.

    

   2. MEDICAID

   2.1.       Administration

   This is a program administered by the states and funded by both federal and state governments. Rules vary from state to state. In New Jersey, Medicaid is administered by the County Welfare Boards. Medicaid pays for nursing home care for eligible individuals.

   2.2.       Eligibility

   2.2.1.    Citizenship and Residency

   Must be a U.S. Citizen or resident alien and a resident of New Jersey.[1] An individual is not allowed to enter New Jersey solely in order to receive Medicaid.[2]

   2.2.2.    Categorical

   Must be 65 years of age or older[3] unless blind or disabled.[4] “Blindness” means visual acuity of 20/200 or less in the better eye with use of a correcting lens.[5] “Disability” is defined as the inability to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment, which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than 12 months.[6]

   2.2.3.    Medical Eligibility

   Must also be eligible from a medical standpoint. This is done by a Medicaid nurse completing a necessary form stating the diagnosis, medication, etc.

   2.2.4.    Income

   2.2.4.1. Cap

   New Jersey is an income cap state. This means that if an individual’s income exceeds $2,199 for 2016 (300% of the SSI individual benefit), the individual is not eligible for Medicaid. The solution is to establish a “Miller Trust.” By utilizing the Miller Trust, excess income is placed into the trust. Essentially, the income in the trust goes to pay for long-term care, but is not counted as income for income cap purposes. This is a legal fiction that makes no logical sense, but it works.

   2.2.4.2. Types

   All types of income are counted includ­ing wages, social security, pensions and annuities, alimony, interest and dividends.[7]

   2.2.4.3. Name on Instrument Rule

   The name on instru­ment rule applies in determining to whom income belongs. If there is a joint “and” account, income is deemed to belong one-half to each. If it is a joint “or” account, Medicaid takes the position that the entire account belongs to the applicant.[8]

    

   2.3.       Minimum Monthly Maintenance Needs Allowance

   Medicaid Regu­lations provide for a Minimum Monthly Maintenance Needs Allowance which is composed of $1,991.25 per month adjusted annually on July 1 of each calendar year, plus the community spouse’s expenses for rent, mortgage, taxes, insurance and certain utilities in excess of $597.38 per month. These figures are for the period July 1, 2015 through June 30, 2016.[9] The maximum MMMNA is currently $2,980.50.[10]

    

   2.4        Resources

   2.4.1.    Cap

   Resources cannot exceed $2,000.[11]

   2.4.2.    Excluded Resources

   2.4.2.1. Home

   The primary residence and lot are excluded if occupied by the institutionalized person or the community spouse. Absence of more than six months creates a presumption that the home no longer serves as the principal residence.[12] However, states may establish a cap on the equity of the home. The minimum cap is $552,000 and the maximum cap is $828,000.[13]

   2.4.2.2. Automobile

   One automobile is exempt.[14]

   2.4.2.3. Personal Effects and Household Goods[15]

   2.4.2.4. Wedding Ring and Engagement Ring[16]

   2.4.2.5. Medical Equipment

   Needed by an institutionalized person or a member of his household.[17]

   2.4.2.6. Burial Fund

   A prepaid funeral is permitted provided the funeral director places the payment in an irrevocable trust for this purpose or, provided that a life insurance policy is irrevocably assigned to the funeral director.[18]

   2.4.2.7. Inaccessible Resources

   Resources which cannot be liquidated are considered inaccessible resources.[19]

   2.4.2.8. Term Life Insurance[20]

   Term life insurance is not countable since it has no cash value.

   2.4.2.9. Whole Life Insurance with a maximum face of $1,500[21]

    

   2.5.       Pooling

   Resources owned individually by the institutionalized spouse and the community spouse or owned jointly by the institutionalized spouse and the community spouse are pooled together to determine Medicaid eligibility. However, this rule does not apply to a spouse who entered a nursing home prior to September 30, 1989.[22] Transfers between such spouses, are permitted without resulting in any period of ineligibility.

    

   2.6.       Transfer of Resources

   2.6.1.    Look-Back Rule

   There is a 5-year look-back for transfers of assets.[23] This means that the disposal of resources, for less than fair market value, in the 5-year period prior to the month of application must be reported at the time of the Medicaid application. Transfers made beyond the look-back period are not penalized. Transfers within the look-back period are penalized.

   2.6.2.    Penalty

   2.6.2.1. Transfer Penalty

   To calculate the penalty, divide the amount of the transfer by the average cost of nursing home care in New Jersey, $10,116.28, or a daily rate of $332.59, in 2015.[24] Under the Deficit Reduction Act, the penalty is calculated in partial months.[25] The penalty is the period for which the institutionalized spouse would be ineligible for Medicaid. Under federal law, the penalty is unlimited.[26]

   2.6.2.2. Beginning Date

   The penalty begins on the later of the date of the transfer for less than fair market value, or the date on which the individual is eligible for medical assistance under the State Plan and would otherwise be receiving institutional-level care based on an approved application for such care but for the application of the penalty period, whichever is later and which does not occur during any other period of ineligibility.[27] Therefore, the penalty begins when a person is actually receiving care, has reduced his or her resources to $2,000, and has no other penalty outstanding.

   2.6.2.3. Transfers by Community Spouse

   Transfers by the community spouse are also subject to the same penalty as transfers by the institutionalized individual.

   2.6.3.    Exemptions from Transfer Penalty

   Exemptions from the transfer penalties period are:[28]

   (1)        Transfer to the community spouse or for the sole benefit of the community spouse.

   (2)        Transfers to a blind or disabled child or for the sole benefit of a blind or disabled child.

   (3)        Transfer of a principal residence to:

   (a)         Community spouse.

   (b)        Child under 21, blind or disabled.

   • Child who is residing in the house for at least two years, and who had provided care for the parent, allowing the parent to stay at home.
   • Sibling who also has an ownership interest in the house, and who is residing in the house for at least one year.

    

   2.7.       Community Spouse Resource Allowance

   This guarantees the community spouse a minimum amount of resources without affecting the institutionalized spouse’s Medicaid eligibility. For 2016, this is the greater of $23,844 or one-half of the couple’s non-exempt resources not to exceed $119,220.[29] These figures are adjusted on January 1 of each calendar year.

    

   2.8.       Snapshot

   The determination of a couple’s resources is made at the time the institutionalized person begins to receive a “nursing home level of care” or at the time of the Medicaid application, whichever first occurs. A nursing home level of care could be care at home or in an assisted living facility or in a nursing home. This determination is used to establish the Community Spouse Resource Allowance.[30]

    

   2.9.       Taxation

   In doing Medicaid planning, income tax, gift tax and estate tax consequences need to be considered, including medical deductions, personal dependent exemptions, carry-over basis, and step-up in basis.

   2.9.1.    Income Tax

   2.9.1.1. Medical Deduction

   The IRS permits an income tax deduction for medical expenses. Medical expenses include qualified long-term care services.[31] Qualified long-term care services are defined in the tax code[32] as “necessary diagnostic, preventive, therapeutic, curing, treating, mitigating and rehabilitative services, and maintenance and personal care services, which: (a) are required by a chronically-ill individual, and (b) are provided pursuant to a plan of care prescribed by licensed health care practitioner.” A chronically-ill individual is a person certified by a licensed health care provider as being unable to perform two activities of daily living for a period of at least 90 days. The activities of daily living are defined to mean “eating, toileting, transferring, bathing, dressing and continence.” The Conference Report notes “It is intended that an individual who is physically able, but has a cognitive impairment such as Alzheimer’s disease, or other form of irreversible loss of mental capacity, be treated similarly to a person who is unable to perform at least two activities of daily living.”

   A taxpayer can claim an itemized deduction for unreimbursed medical expenses to the extent such expenses exceed 10% of adjusted gross income. Qualified long-term care services, insurance premiums and other eligible medical expenses may be aggregated.

   Except for insulin, expenditures for medicine and drugs are deductible only if prescribed by a physician.

   Capital expenditures are deductible if they are medically necessary and represent an unrecoverable sunk cost. To the extent the purchase increases the value of an asset, the expenditure is non-deductible regardless of the degree of medical need. The IRS has published a list of home modifications that are deemed not to add to a home’s value.[33]

   Personal care services are tax deductible, if provided pursuant to a plan of care prescribed by a licensed health care practitioner (i.e., physician, registered nurse, geriatric care manager). Expense must be primarily related to needed assistance with any of the disabilities for which the individual qualified as chronically ill or cognitively impaired. Examples include expenses related to a patient’s dressing, grooming and bathing, if an individual is unable to perform those functions without assistance. There is no deduction for what might be termed “maid” services. These include cooking and general cleaning.

   Payments for qualified long-term care services provided by an individual do not qualify as paid-for medical care if the service is provided by the spouse of the individual or by a relative, unless the service provider is a licensed professional with respect to the service.

    

   2.9.1.2. Personal Dependent

   If a person pays for more than 50% of the support of a relative, and the relative in calendar year 2016 has less than $4,050 of gross income for the year and has not filed a joint return with his or her spouse, then the person paying the support may claim the relative as a dependent on the person’s federal income tax return.[34] For purposes of calculating the 50% requirement, tax-exempt interest income, disability income and Social Security income, of the relative is counted. However, for purposes of calculating the $4,050 of gross income, tax-exempt interest income, disability income and Social Security income are not counted. If a person claims a relative as a personal exemption, the relative must not file a joint return.[35]

   The personal exemption amount for taxable years beginning in 2016 is $4,050.[36]

   2.9.1.3. Medical Deduction – Relative

   Under the Federal tax code[37] a person can claim a medical deduction for medical expenses paid on behalf of a relative, if the person provided over half of the relative’s total support for the calendar year. The person can deduct the medical expense of the relative, even if the person cannot claim the personal dependent exemption because the relative received $4,050 or more of gross income in calendar year 2016.[38]

   A relative is defined[39] as “a child or descendant of a child; stepchild; brother, sister, by whole or half-blood; stepbrother, stepsister; father, mother or ancestor of either (grandparent, great-grandparent, etc.); stepfather, stepmother; nephew, niece; brother or sister of father or mother (uncle, aunt); brother-, sister-, father-, mother-, son-, or daughter-in-law.”

   The taxpayer claiming the exemption must, in combination with other taxpayers (i.e., children), provide more than half of the support of the dependent individual for the calendar year. The taxpayer claiming the dependent must have individually provided more than 10% of the individual’s support. The taxpayer must sign a Multiple Support Agreement Form 2120 if:

   (1)        The taxpayer provided less than half of the dependent’s support for the

   calendar year; but

   (2)        The group provided more than half of the support; and

   (3)        No one person furnished more than half of that support; and

   (4)        The taxpayer contributed more than 10% of the support; and

   (5)        Each person in the group contributed more than 10% signs a

   written declaration (Form 2120 can be used) that he/she won’t

   claim that individual as a dependent for any tax year beginning

   in the calendar year.[40]

   All of the declarations must be attached to the return of the taxpayer claiming the dependency deduction.[41]

   2.9.1.4. Dependent Care Credit

   This is available to a child on behalf of a dependent parent although the parent has more than $4,050 of gross income in calendar year 2016.[42] However, the parent must be physically or mentally incapable of providing self-care (i.e., cannot provide for his or her own hygiene or nutritional needs, or needs the full-time attention of another person for the parent’s safety or the safety of another). The purpose of the credit is to reimburse for care expenses related to the taxpayer leaving home to take employment. Taxpayers are usually better off taking the care expenses as a medical expense deduction.

   2.9.1.5. Carryover Basis

   In determining which assets to transfer and which assets to retain, consideration must be given to the fact that the donee of a gift receives a “carryover basis.”[43] This means that the cost basis of the donee is the same as the cost basis of the donor. Therefore, when the transferred assets are sold, the donee must pay capital gains tax. The best strategy is, usually, to transfer unappreciated assets to the donee, and reserve appreciated assets for the donor. That way, any gain on the sale of the appreciated assets can be offset by deducting the cost of the nursing home from income tax.

   2.9.1.6. Step Up in Basis

   Assets forming a part of the estate of a decedent are included in that person’s estate for federal estate tax purposes. The beneficiary of the estate receives a “step up” in basis with respect to those assets so that the beneficiary’s new basis is the fair market value of the assets as of the date of the death of the decedent.[44] The strategy, therefore, is to not sell the home during your lifetime so that your children receive a step up in basis with respect to that property on your death.

   2.9.1.7. Retirement Plan

   If either spouse has a retirement plan, such as an IRA or savings plan, the withdrawal of funds from that account is a taxable event. If some period of private payment to the nursing home is required, it makes sense to use the money in the retirement plan for this purpose. The medical deduction for the qualified long-term services can be used to offset the taxable income resulting from the withdrawal from the retirement plan.

   2.9.1.8. Deferred Annuity

   If either spouse has a deferred annuity, the withdrawal of funds from the annuity is a partially taxable event. That portion of the payment representing the initial purchase price of the annuity is a return of principal and is non-taxable, but the accrued income is taxable. If some period of private payment in the nursing home is required, it makes sense to use the money in the annuity for this purpose. The medical deduction for the qualified long-term services can be used to offset the taxable income resulting from the withdrawal from the retirement plan.

   2.9.1.9. Interest on Series E, Series EE and Series I Bonds

   At the time Series E, EE or I bonds are redeemed, income tax is due on the accumulated interest.[45] The same is true if the bonds are transferred to another person. Generally, it would be better not to cash in the bonds until such time as the proceeds of sale of the bonds are needed to pay for the nursing home. This is because the medical deduction for the nursing home expense will offset the taxable income from the redemption of the bonds.

   2.9.1.10.            Domestic Help

   Withholding of Social Security and Medicare taxes is required of all employees receiving cash wages of $1,900 or more in calendar year 2016.[46] If the employee receives total cash wages of $1,000 or more in any calendar quarter in 2016, federal unemployment taxes must also be withheld. The first $7,000 of cash wages is subject to federal unemployment (FUTA) in 2016.[47] After an employee reaches $7,000 during the year, the FUTA tax is no longer required. The employer is not required to withhold federal income taxes from the wages paid to household employees unless the employee so requests and the employer agrees. The employee must give the employer a completed W-4, an Employee’s Withholding Allowance Certificate. If there is an agreement for withholding for income taxes, either party may end it by written notice to the other.[48]

   If household help is obtained through an agency, the agency is generally responsible for paying the tax, but this must be verified with the agency.

   2.9.1.11.            Gain on Sale of Home

   2.9.1.11.1.         General

   There is an exclusion[49] from gross income for the sale of a principal residence, if the property was owned and used by the taxpayer as the taxpayer’s principal residence for two of the five years preceding the date of the sale. The amount of the gain excluded is $250,000 for a taxpayer filing individually and $500,000 for taxpayers filing jointly. In the case of married couples, the ownership requirement can be met by either spouse, but both spouses must meet the use requirement, and neither spouse has claimed the exclusion during the two-year period ending on the date of the sale. This provision is applicable to sales on or after May 7, 1997.

   2.9.1.11.2.         Joint Returns

   In the case of joint returns, the exclusion applies if either spouse meets the ownership and use requirements.

   2.9.1.11.3.         Divorce

   If a taxpayer obtains property from a spouse or a former spouse incident to a divorce, the period that the taxpayer owns the property will include the period that the spouse or former spouse owned the property. A taxpayer is treated as using the property as the taxpayer’s principal residence for any period that the taxpayer has an ownership interest in the property and the taxpayers’ spouse or former spouse is granted use of the property under a divorce or separation instrument provided that the spouse or former spouse takes the property as his or her principal residence.

   2.9.1.11.4.         Determination of Use During Periods of Out-of-Residence Care

   A taxpayer who owns property during the five-year period, but who resides in any facility, including a nursing home licensed by a state, counts the time residing in the nursing home as use of the property.

   2.9.1.11.5.         Residences Acquired in Rollovers Under Section 1034

   If a residence is acquired under a Section 1034 rollover, the time periods during which the taxpayer owned and used the former property are counted.

   2.9.1.11.6.         Repeal of Non-Recognition of Gain on Rollover of Principal Residence

   Section 1034 (relating to rollover of gain on sale of principal residence) is repealed.

    

   2.9.2.    Gift Tax

   If transfers are made in excess of $14,000 per person per year, then a Gift Tax Return will have to be filed by April 15th of the calendar year following the date of the gift. There is an annual exclusion for gifts of $14,000 per person per year or less.[50] If a spouse consents, the annual exclusion gift may be increased to $28,000 per person per year. In addition, there is a gift tax exemption of $5,450,000 for an individual and $10,900,000 for a married couple,[51] so no tax will be due for gifts which do not exceed the amount of this gift tax exemption. There is no tax due from the recipient of the gift. The $14,000 annual exclusion gift will be indexed for inflation in the future.

   New Jersey does not have a gift tax. However, New Jersey does have an inheritance tax for assets which are left to persons other than a spouse or lineal ascendants and descendants. If a transfer is made to someone other than a spouse or lineal ascendants and descendants within three years of the date of death, this constitutes a transfer which falls within the scope of the New Jersey Inheritance Tax. In that situation an Inheritance Tax Return must be filed and the appropriate tax paid.[52]

   2.9.3.    Estate Tax

   For persons dying in calendar year 2016, there is a federal estate tax exemption of $5,450,000 for 2016. This is indexed to inflation.[53]

   2.9.4.    New Jersey Estate Tax

   There is a New Jersey estate tax exemption equivalent of $675,000, which means that New Jersey estate tax is not due for estates of $675,000 or less.[54]

   2.10.     Use of Trusts and General Powers of Attorney in Planning for Medicaid Eligibility

   2.10.1   Advantages of Using a Trust over Outright Gifts to Other Individuals

   2.10.1.1.            Control

   The trust allows the grantor to direct, in advance, how the transfer of property is to be managed administered and distributed thereby allowing some control.

   2.10.1.2.            Risk Avoidance

   By transferring assets to trusts as opposed to outright to children, the risk of a child’s creditors attaching the transferred assets or having the assets become involved in a divorce are eliminated. The child would not have declare the transferred assets on a financial aid application, if they are held by a trust.

   2.10.1.3.            Tax Benefits

   Qualification of the trust as a grantor trust allows the grantor to be taxed on the income earned by the trust at the grantor’s marginal income tax rate even if the income is not distributed to the Grantor.

   2.10.1.4.            Step-up in Basis

   If the trust assets are included in the grantor’s estate, the trust principal will be included in the grantor’s estate at death and will receive a step-up in basis at that time.[55]

   2.10.1.5.            Exclusion from Capital Gain on Sale of Principal Residence

   The $250,000 – $500,000 exclusion from capital gain on the sale of a principal residence can be preserved through a properly-structured trust.

   2.10.2. Trust Buster Statute

   The statute provides “Any provision in a contract of insurance, will, trust agreement or other instrument which reduces or excludes coverage or payment for goods and services to an individual because of that individual’s eligibility for or receipt of Medicaid benefits shall be null and void, and no payment shall be made under this act as a result of such provision.” This statute has never been tested in court. This statute appears only to apply to instruments which provide for mandatory distributions which are then cut back when the individual applies for Medicaid. Example: “Upon the beneficiary applying for Medicaid, all income payments to him shall terminate.”[56]

    

   2.11.     Medicaid Transfers by Power of Attorney

   It is necessary to explore the capacity of the client to make transfers. If the client lacks the necessary mental capacity, the transfers may, nevertheless, be accomplished through a Power of Attorney, if the document so authorizes. Under New Jersey law gifts are not permitted by an attorney-in-fact except to the extent that the Power of Attorney expressly and specifically so authorizes.[57]

   The next problem with a Power of Attorney is whether the agent has authority to make gifts to himself. The agent is a fiduciary. If the Principal wants the agent to be able to self-deal when making transfers for Medicaid purposes, the Power of Attorney should explicitly authorize such gifts. However, authorization of an agent to make gifts to himself under a Power of Attorney, might be considered a general power of appointment.[58] The power of appointment would then cause the assets of the principal to be includable in the agent’s gross estate for federal estate tax purposes.[59] One solution would be to have the Power of Attorney name a special agent with authority to make transfers to the regular agent. An alternative might be through obtaining court approval. A third way might be to put conditions in the Power of Attorney as to when the agent might have the right to self-deal.

    

   2.12.     Medicaid Planning by Guardians

   Guardians are authorized to make transfers for the purpose of obtaining Medicaid eligibility. In the case of In the Matter of Mildred Keri,[60] the Supreme Court held that a guardian may make transfers for purposes of obtaining Medicaid eligibility for a ward. The Court imposed a five-point test:

   • The spend down plan must not interrupt or diminish an

   incapacitated person’s care.

   • The plan involves transfers to natural objects of the

   person’s bounty.

   • The plan does not contravene an expressed prior intent

   or interest.

   • The plan clearly provides for the best interests of the

   incapacitated person.

   • The plan satisfies the law’s goal to effectuate decisions

   an incapacitated person would make if he or she were

   able to act.

   It is wise to consider making transfers, which are consistent with the estate planning goals of the client. If inconsistent transfers are made, they may result in litigation from beneficiaries of the estate who consider themselves to be treated unfairly.

    

   2.13.     Strategies

   2.13.1   The Home

   • Transfer home to Community Spouse
   • Transfer home and retain life estate
   • Transfer home and reserve right to use and occupy
   • Family reverse mortgage
   • Transfer home to grantor trust
   • Sale of remainder interest in home
   • Purchase life estate

   2.13.2   Spend Down

   • Pay off debts
   • Pay for services
   • Prepay real estate taxes

   2.13.3   Convert Countable Assets to Non-Countable Assets

   • Buy household goods or personal effects
   • Make home improvements
   • Purchase life estate from children
   • Prepaid funeral
   • Buy more expensive home
   • Purchase Annuity?

   2.13.4   Transfer of Assets

   • Large transfer of assets
   • Care Agreement
   • Income Only Trust
   • Children’s Trust
   • Disability Annuity Trust
   • Disability Annuity Special Needs Trust

   2.13.5   Divorce

   2.13.6   Hardship Waiver

    

   3. LONG-TERM CARE INSURANCE

   Long-term care insurance can be helpful to clients who are healthy enough and affluent enough to afford it. As Elder Law attorneys, we must all be aware that Medicaid and other public assistance programs may not continue to exist in the future as we know them today. It would be a disservice to our clients to advise them to rely on these programs in the future. Clients who can afford long-term care insurance and who may be insurable, should be urged to consider purchasing the insurance. Premiums for nursing home insurance can be controlled to a certain extent by the client. The features which affect the premium cost, which can be selected by the client, are the maximum daily benefit, the elimination period, the benefit length, the inflation rider and the amount of home care covered. There are two factors that the client cannot control, which greatly affect the premium. These are the client’s age at application and health history. For this reason, clients should purchase long-term care insurance at the earliest possible time. Most experts consider that the best time to purchase long-term care insurance is about age fifty.

   Congress provided tax deductions[61] and tax relief for “qualified long-term care insurance contracts.” New Jersey has regulations concerning long-term care insurance contracts.[62]

   It is estimated that only 6% to 8% of the elderly have private long-term care insurance.[63] There are four reasons why people do not buy long-term care insurance:

   • Lack of Awareness – The industry has not done a good job in marketing this product.
   • Denial – 77% of people surveyed by the American Council of Life Insurance believed they would be healthy in retirement.[64]
   • Cost – It is estimated that only 10% to 20% of the elderly can afford such insurance.[65]
   • Insurability – Many people wait until they have a diagnosis before applying for long-term care insurance. At that point, they are no longer insurable. Agents estimate that approximately 25% of persons applying are rejected for health reasons.

    

   3.1.       Nursing Home Insurance Factors

   3.1.1. Coverage

   Policies need to be carefully analyzed to see if there are exclusions for alcohol and drug abuse related services or mental health related services. New Jersey requires that all policies include coverage for Alzheimer’s and other organic brain disorders.

   3.1.2. Premiums

   Premiums for long-term care insurance are high. However, the cost of the premiums is relatively low compared to the cost of payment for a nursing home. Each family must make the premium fit within its family budget.[66] The earlier the policy is purchased, the more affordable the premium.

   Most long-term care insurance policies are guaranteed renewable. This means that coverage cannot be canceled by an insurance company, nor can premiums be raised on an individual basis, because of increasing age or declining health. Premiums can be raised only on a class basis affecting all policyholders with that insurance company in that class, and then only with the approval of the state insurance department. In practice, premiums are seldom, if ever, raised on this basis.

   3.1.3. Daily Coverage

   Persons buying long-term care insurance usually purchase a policy which reimburses their long-term care costs up to a selected maximum amount per day. For example, in this area many people purchase $350 per day of coverage. The actual average cost of a nursing home in New Jersey in 2016 averages close to $400 per day for the basic rate. Ancillary charges such as medications and incontinent care are extra. The difference is made up by the individual’s Social Security, pension or other income.

   Some policies are written as a pool of money. An individual might purchase $638,750 of coverage. This is the equivalent of $350 per day coverage for five years ($350 x 365 days x 5 years = $638,750).

   3.1.4. Gatekeepers

   Companies can sell qualified or non-qualified policies. Qualified policies offer certain safe harbor tax benefits. The primary advantage of a tax-qualified policy is that the benefits paid under the policy are clearly not taxable income. The disadvantage of a tax-qualified policy is that the figures for coverage are more difficult to achieve. Many agents sell only tax-qualified policies.

   For a long-term care insurance policy to be a qualified contract, it must provide for benefit eligibility to be determined by meeting a chronically-ill individual standard. The term “chronically-ill individual” means an individual who has been certified by a licensed health care practitioner as being unable to perform at least two of the activities of daily living (ADLs) and whose disability is anticipated to last for a period of at least 90 days due to a loss of functional capacity; or, requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.[67] There are two triggers under the new law. The ADL Trigger and the Cognitive Impairment Trigger.

   3.1.4.1.             ADL Trigger

   The activities of daily living (ADLs) include eating, toileting, transferring, bathing, dressing and continence. The long-term care insurance policy must take into account at least five of such activities. The inability of the insured person to perform two of the five or two of the six ADLs without substantial assistance triggers eligibility under the policy.[68] The 90-day period is not a waiting period. The 90 days can be prospective and does not affect the elimination period.

   3.1.4.2.             Cognitive Impairment Trigger

   Severe cognitive impairment means a deterioration or loss in intellectual capacity that is measured by clinical evidence and standardized tests which reliably measure impairment in short- or long-term memory; orientation to people, place or time; and deductive or abstract reasoning. The deterioration or loss must place the individual in jeopardy of harming himself or others and, thereby, require substantial supervision by another individual. A person who is physically able but has cognitive impairment such as Alzheimer’s Disease or another form of irreversible loss of mental capacity is treated similarly to an individual who is unable to perform (without substantial assistance) at least two ADLs.

   The IRS defines substantial assistance as “hands-on assistance and stand-by assistance.”[69] “Hands-on assistance” means the physical assistance of another person without which the individual would be unable to perform the ADL. “Stand-by assistance” means the presence of another person within arms’ reach of the individual that is necessary to prevent, by physical intervention, injury to the individual while the individual is performing the ADL (such as being ready to catch the individual, if the individual falls while getting into or out of the bathtub or shower as part of bathing, or being ready to remove food from the individual’s throat, if the individual chokes while eating). An individual is chronically-ill only if a licensed health care practitioner has certified that the individual is unable to perform (without substantial assistance from another individual), at least two ADLs for a period anticipated to last at least 90 days due to loss of functional capacity. A licensed health care practitioner is a physician, registered professional nurse, licensed social worker, or other individual who meets requirements that may be prescribed by the IRS.[70]

   3.1.5. Inflation Provisions

   Nursing home costs in New Jersey increase faster than the general rate of inflation. Some homes increase annually, some more often. A daily benefit of $250 purchased today may be sufficient now, but may be inadequate five years from now when the client enters a nursing home. Therefore, inflation coverage should be considered.

   Some policies have inflation riders which offer increases based on the Consumer Price Index (CPI). Insureds are offered the right to purchase additional coverage at their attained age. Premiums increase when high coverage is elected. Other companies offer policies with an inflation rider which increases coverage automatically at 5% per year, either on a simple or a compounded basis. Automatic inflation riders keep premiums level as benefits increase. Nursing home costs increase on a compounded basis, so an inflation rider, which increases on a compounded basis, is best.

   3.1.6. Pre-Existing Conditions

   New Jersey LTC regulations define a “pre-existing” medical condition as any condition for which the applicant received advice or treatment during the six month period prior to making application. Further, if an applicant is accepted, a company cannot impose a pre-existing medical condition waiting period on the insured person for more than six months from the effective date of coverage. Persons with diagnosed Alzheimer’s or Parkinson’s Diseases will always be denied coverage. However, persons with histories of cancer, heart disease or similar conditions are often able to obtain coverage. The insurance companies generally like to see a period of time during which it is clear that the condition is controlled. In some instances, the coverage is obtained at regular rates. In other instances, the coverage is granted, but the client is rated, which means that the client pays a higher insurance premium or is offered a shorter benefit length or a longer deductible.

   3.1.7. Benefit Length

   The benefit length is the period of time which the insurance company will pay after the client starts receiving benefits for long-term care. Coverage is available for two years, three years, four years, five years, six years or unlimited. The longer the term of coverage selected, the more expensive the premium. Attorneys often advise clients to obtain three or four years of coverage. This enables the client to do public assistance planning and, under current law, all or most of the lookback period is covered by insurance. Because Medicaid, as we know it today, may not be available in the future, it may be well to advise clients to purchase as long a term of coverage as they are able to afford.

   3.1.8. Guaranteed Renewability

   It is important that a policy be guaranteed renewable. If a client purchases a policy when healthy, and is later diagnosed as having a condition such as Alzheimer’s, the client needs to have the assurance that his coverage cannot be canceled or his premium individually raised. Federal law now requires that qualified policies be guaranteed renewable.[71]

   3.1.9. Home Heath Care

   Most companies have comprehensive, “bundled” policies which include home health care. Some companies have home health care riders which can be added to the basic nursing home/assisted living facility coverage. At least one company has a policy which covers only home health care. Clients do not want to spend time in nursing homes. They would much prefer to stay at home. It is important to obtain home health care coverage so that the family can afford to keep the client at home.

   3.1.10. Waiver of Premium

   Some policies waive the payment of premiums when benefits are being received or have been received for a given period of time, typically 90 days. Premiums normally resume once benefits stop being paid.

   3.1.11. Case Management

   Some long-term care insurance policies offer a benefit option referred to as “case management.” Under case management a professional oversees the care and the services the insured would receive. The case manager may be an insurance company employee. This is managed care for long-term care insurance, and should be carefully analyzed. Other policies allow the client to choose his own case manager.

   3.1.12. Adult Day Care and Respite Care

   Most LTC policies provide benefits for adult day care services and respite care. Respite benefits allow for immediate coverage while an informal caregiver (wife, daughter, etc.) gets a break.

   3.1.13. Quality of the Insurance Company

   The quality of the insurance company is important. After paying premiums for a number of years, the client expects the insurance company to pay the claim when made. Because of the experience of Executive Life, Mutual Benefit Life and other insurance carriers which have experienced financial difficulties, it is wise for the attorney to counsel the client to look at the ratings of the insurance companies. Ratings services include the following:

   1. Moody’s Investors Service

   99 Church Street

   New York, New York 10007

   Telephone: (212) 553-1658

   Fax: (212) 553-4062

   Website: www.moodys.com

    

   2. Standard and Poor’s

   25 Broadway

   New York, New York 10004

   Telephone: 212-208-1527

   Fax: 212-208-8571

    

   3. Duff and Phelps

   55 East Monroe Street

   Suite 3500

   Chicago, Illinois 60603

   Telephone: 312-368-3157

    

   4. A.M. Best

   Ambest Road

   Oldwick, New Jersey 08858

   Telephone: 908-439-2200

   Fax: 908-439-3296

    

   5. Weiss Ratings

   4176 Burns Road

   Palm Beach Gardens, Florida 33410

   Telephone: 561-627-3300 or 1-800-289-9222

   Fax: 561-625-6685

    

   3.2.       Policy Features

   The features of the policy which determine cost are:

   3.2.1. Daily Benefit

   The daily benefit is the maximum amount of money which the insurance company will pay to the insured for each day of long-term care services.

   3.2.2. Elimination Period

   The elimination period is like a deductible. It is the number of days which the client is willing to pay privately before the insurance begins. Insurance is available which will pay from the first day of care. Other options are a twenty-day elimination period up to a 100-day elimination period or even 365-day elimination period. The longer the elimination period, the lower the premium. A 100-day elimination period usually makes sense. It can reduce the premium substantially at older ages, and Medicare and Medi-Gap Insurance may cover the 100 days, if the patient meets the Medicare requirements for a skilled nursing facility. If not, the client self-insures.

   3.2.3. Benefit Length

   The benefit length is the number of years the insurance company will pay the nursing home. The term begins after the client enters the nursing home.

   3.2.4. Inflation Rider

   A 5% compounded inflation rider is the most expensive, but affords the best coverage because the increases in nursing home rates are compounded.

    

   3.3.       Taxation

   3.3.1. Income Tax Deduction

   Under HIPAA, qualified long-term care insurance premiums are deductible from federal income tax as a medical expense up to certain limits.[72]

   While payment for medical services provided by relatives does not ordinarily qualify for a medical expense deduction under I.R.C. §105(b), reimbursements through insurance to a relative for such care do qualify.[73] For example, if Dad, who has Alzheimer’s, hires his daughter, a licensed practical nurse, to care for him, payments from father to daughter are not tax deductible. However, if the insurance company pays the daughter, the payments are not counted as income to the father.

   Eligible long-term care insurance premiums for a qualified long-term care insurance contract up to the following dollar limits for 2016 qualify as tax deductible medical expenses.[74]

   Attained Age by Yr. End              Annual Limit on Prem. Ded.[75]

   40 or less                                   $390

   41-50                                        $730

   51-60                                        $1,460

   61-70                                        $3,900

   Over 70                                     $4,870

    

   Unfortunately, this deduction is largely illusory, because it is subject to the overall 10% floor of adjusted gross income on deduction of medical expenses. Most people who are healthy enough to purchase long-term care insurance do not have enough other medical expenses to deduct so that they can hit the 10% threshold. It is likely that the tax deduction will be attained only if one spouse is ill and the other spouse has the insurance.

   3.3.2. Exclusion From Taxation of Benefits Under Qualified Contracts

   Amounts received as benefit payments under a qualified long-term care insurance contract are treated as amounts received for personal injury or sickness, and as reimbursement for expenses actually incurred for medical care and are, therefore, excluded from income for tax purposes.[76] On flat indemnity policies, there is a limitation of $340 per day for 2016.[77] Amounts greater than this are tax-free to the extent they cover actual costs. The $340 figure will be increased to reflect inflation. It is not clear whether benefit payments made under non-qualified contracts are excludable from gross income.

    

   4. MEDICARE[78]

   4.1.       Requirements

   Medicare will pay for nursing home care provided two requirements are met:

   • Hospital. The patient must spend three days in the hospital and must be admitted to a

   nursing home within 30 days after discharge from the hospital.

   • Skilled Care. The patient must be admitted to the nursing home for skilled care on a daily

   basis. Skilled care is defined as services that are so inherently complex that they can only be

   provided effectively by skilled individuals or under the supervisor of skilled personnel.[79]

    

   4.2.       Coverage

   Medicare will pay for up to 100 days. However, there is co-insurance from the 21^st to 100^th day. For 2016, the co-insurance rate is $161 per day[80], which must be paid by either the patient or a Medi-gap policy. The 100 days of coverage are not guaranteed. This is a maximum, not a minimum. If the patient is receiving rehabilitation and hits a plateau, Medicare will be stopped.

    

   5. VETERANS BENEFITS

   5.1.       Federal

   A Veteran with a service-connected disability of 70% or more is entitled to free lifetime nursing coverage regardless of means. Veterans who do not have a service-connected disability are means-tested as to payment. The VA does contract with public and private nursing home facilities, in addition to using VA facilities.[81]

    

   5.2.       State

   5.2.1. General

   New Jersey Veterans Administration operates three Old Soldiers’ Homes for New Jersey Veterans and their families. They are located in Paramus, Edison and Vineland. Veterans, spouses of Veterans, surviving spouses, and certain parents may be eligible.[82]

   5.2.2. Fee

   The Adjutant General determines an “Established Rate” each year. The individual pays a portion of the cost of care based on their monthly income and ability to pay.[83] The VA monthly nursing home fee is 80% of the resident’s net income, not to exceed the Established Rate. In addition, 12% of the remaining 20% of the resident’s net income (maximum $20 per month) is set aside in a Welfare fund at the institution, and the remaining balance is placed in a personal needs account for the resident. Net income is calculated after the deductions discussed below. Income includes all income except for service-connected disability compensation. If a resident sells his home and a portion or all of the proceeds from the sale are not reinvested in a primary residence, any income earned from the investment of any or all of the proceeds will be counted as income.[84]

   Certain deductions are permitted to the community spouse. For example, the community spouse receives a flat $700 exemption for food, transportation, clothing, telephone and home maintenance.[85] In addition, deductions requiring verification are permitted for rent, first mortgage payments, real estate taxes and insurance, heat and electric, water and sewer, life insurance for burial accounts, and other extraordinary expenses.

   5.2.3. Guardianship or Advanced Directive

   A Guardianship or Advanced Directive is required for admission.

   5.2.4. Resources

   The resource limit for a single person is $24,000, and for a married couple is $110,000.[86]

   5.2.5. Look-Back

   The Veterans look-back period is effectively 36 months.[87]

    

   6. CONCLUSION

   Financing nursing home care in New Jersey is a complex enterprise. The rules change quickly and are not always written. Medicaid case workers often feel they have an obligation to protect the public purse, rather than to assist the applicant by suggesting various strategies. Case workers are sometimes poorly trained and do not know various planning techniques. Planning for Medicaid financing of nursing home care offers an excellent opportunity for elder law attorneys to be of assistance to their clients.

    

   Rev. 1-5-16

   [1]N.J.A.C. 10:71-3.2.

   [2]N.J.A.C. 10:71-3.4.

   [3]N.J.A.C. 10:71-3.9.

   [4]N.J.A.C. 10:71-3.10.

   [5]N.J.A.C. 10:71-3.12(c).

   [6]N.J.A.C. 10:71-3.12(a).

   [7]N.J.A.C. 10:71-5.1.

   [8]N.J.A.C. 10:71-4.1(d)2.

   [9]N.J.A.C. 10:71-5.7(c); 80 Fed. Reg. 3236 (Jan. 22, 2015).

   [10]2016 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

   [11]N.J.A.C. 10:71-4.5(c).

   [12]N.J.A.C. 10:71-4.4(b)1i.

   [13]42 U.S.C. §1396p(f); 2016 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

   [14]N.J.A.C. 10:71-4.4.

   [15]N.J.A.C. 10:71-4.4(3).

   [16]N.J.A.C. 10:71-4.4(b)3ii.

   [17]N.J.A.C. 10:71-4.4(b)3iii.

   [18]N.J.A.C. 10:71-4.4(9).

   [19]N.J.A.C. 10:71-4.4(b)6.

   [20]N.J.A.C. 10:71-4.4(b)4.

   [21]Id.

   [22]N.J.A.C. 10:71-4.6.

   [23]42 U.S.C. §1396p(c)(1).

   [24]N.J.A.C. 10:71-4.10(m)1; Medicaid Communication No.12-16 (Dec. 10, 2012).

   [25]Id.

   [26]HCFA Transmittal No. 64 §3258.4.

   [27] 42 U.S.C. §1396p(c)(1)(D).

   [28]N.J.A.C. 10:71-4.10(d).

   [29] 2016 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

   [30]N.J.A.C. 10:71-4.8(a).

   [31]I.R.C. §213.

   [32]I.R.C. §7702B

   [33]Rev. Rul. 87-106, 1987-2 C.B. 67.

   [34]I.R.C. §151; Rev. Proc. 2015-53(3)(.24).

   [35]I.R.C. §151; Rev. Proc. 2015-53(3)(.24).

   [36]I.R.C. §151; Rev. Proc. 2015-53(3)(.24).

   [37]I.R.C. §152(c) and I.R.S. Publication 502.

   [38]I.R.C. §151; Rev. Proc. 2015-53(3)(.24).

   [39]I.R.C. §152(a), (b)1 and Treas. Reg. §1.151-3(a).

   [40]I.R.C. §152(c).

   [41]Treas. Reg. §1.152-3(c).

   [42]I.R.C. §151; Rev. Proc. 2015-53(3)(.24).

   [43]I.R.C. §1015.

   [44]I.R.C. §1014(b)(9).

   [45]I.R.C. §454(c).

   [46]78 Fed. Reg. 66413 (Nov. 5, 2013).

   [47] I.R.C. §3306(b)(1).

   [48]I.R.S. Publication 926 (Jan. 2008).

   [49]I.R.C. §121.

   [50]I.R.C. §2503. (b); Rev. Proc. 2015-53(3)(.35)(1).

   [51]I.R.C. §2010; Rev. Proc. 2015-53(3)(.35)(1).

   [52]N.J.A.C. 18:26-5.7.

   [53] I.R.C. §2010; Rev. Proc. 2015-53(3)(.33).

   [54]N.J.S.A. 54:38-1.

   [55]I.R.C. §1014(b)(9).

   [56]N.J.S.A. 30:4D-6F

   [57]N.J.S.A. 46:2B-8.13a.

   [58]I.R.C. §2041(b).

   [59]I.R.C. §2041(a)(2).

   [60]In the Matter of Mildred Keri, 181 N.J. 50 (2004).

   [61]The Health Insurance Portability and Accountability Act of 1996 (HIPAA).

   [62]N.J.A.C. 11:4-34.1 to 34.13.

   [63]J. M. Wiener, L. H. Illston & R. J. Hanley, Sharing the Burden: Strategies for Public and Private Long-Term Care Insurance, 6 (Brookings Institutions, 1994).

   [64]Longevity and Retirement Survey Fact Sheet, American Council of Life Insurance. Survey conducted between August 12 and September 10, 1997.

   [65]J. M. Wiener, L. H. Illston & R. J. Hanley, Sharing the Burden: Strategies for Public and Private Long-Term Care Insurance, 14 (Brookings Institutions, 1994).

   [66]Health Insurance Association of America LTC Market Survey, 1996.

   [67]I.R.C. §7702B.

   [68]I.R.C. §7702B(c)(2).

   [69]I.R.S. Notice 97-31.

   [70]I.R.C. §7702B(c)(4).

   [71]I.R.C. §7702B(b)1(C).

   [72]I.R.C. §213(d)(1)(D).

   [73]I.R.C. §213(d)(11).

   [74]I.R.C. §213(d)(1)(D).

   [75]I.R.C. §213(d)(10); Rev. Proc.2015-53(3)(.25).

   [76]I.R.C. §7702B(a)(2).

   [77]Rev. Proc.2015-53(3)(.44).

   [78]42 U.S.C. 1395 through 1395xx; 42 C.F.R. Pts. 405 through 489.

   [79]42 U.S.C. 1395 through 1395xx; 42 C.F.R. Pts. 405 through 489.

   [80]2016Medicare Parts A & B Premiums and Deductible Announced, www.cms.gov.

   [81]42 C.F.R. 409.31(b)(3), 409.33(b), 409.35.

   [82]N.J.A.C. 5A:5.1 et seq.

   [83]N.J.A.C. 5A:5-5.2 and 5A:5-5.3.

   [84]N.J.A.C. 5A:5-2.1.

   [85]N.J.A.C. 5A:5-5.3.

   [86]N.J.A.C. 5A:5-2.2(c); Application for Admission (2014).

   [87]N.J.A.C. 5A:5-3.1(a)1iv(3).

Currently, to be eligible for VA Benefits or Aid and Attendance a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there are no penalties if an applicant divests him- or herself of assets before applying.

The proposed regulations will set an asset limit of $119,220, which is the current amount (in 2015 and 2016) that a Medicaid applicant’s spouse is allowed to retain. But in the case of the VA, this number will include both the applicant’s assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house will not count as an asset, but there is a two-acre limit on the lot size that can be excluded.

The regulations also establish a three-year look-back provision. Applicants who transfer assets within three years of applying for benefits will be subject to a penalty period that can last as long as 10 years. To avoid the penalty, applicants will have to present clear and convincing evidence that the transfer was not made in order to qualify for Aid and Attendance benefits.

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred by the applicable maximum annual pension rate (MAPR). The MAPR for surviving spouses is a little more than half the MAPR for veterans, which means the penalty period for a surviving spouse would be almost twice as long as a veteran’s penalty period would be for the same transferred asset.

It isn’t clear yet when the new regulations will take affect, but they could be in place as early as January 1, 2016, and some VA offices are reportedly already processing applications under the new rules. If you are considering applying for Aid and Attendance benefits, you should start the process immediately. Contact your elder law attorney for help.

For more information about veterans’ benefits, click here.

The post VA Benefits for Long-Term Care Will Be More Difficult to Qualify for in 2016 appeared first on The Elder Care Firm.

Currently, to be eligible for VA Benefits or Aid and Attendance a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there are no penalties if an applicant divests him- or herself of assets before applying.

The proposed regulations will set an asset limit of $119,220, which is the current amount (in 2015 and 2016) that a Medicaid applicant’s spouse is allowed to retain. But in the case of the VA, this number will include both the applicant’s assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house will not count as an asset, but there is a two-acre limit on the lot size that can be excluded.

The regulations also establish a three-year look-back provision. Applicants who transfer assets within three years of applying for benefits will be subject to a penalty period that can last as long as 10 years. To avoid the penalty, applicants will have to present clear and convincing evidence that the transfer was not made in order to qualify for Aid and Attendance benefits.

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred by the applicable maximum annual pension rate (MAPR). The MAPR for surviving spouses is a little more than half the MAPR for veterans, which means the penalty period for a surviving spouse would be almost twice as long as a veteran’s penalty period would be for the same transferred asset.

It isn’t clear yet when the new regulations will take affect, but they could be in place as early as January 1, 2016, and some VA offices are reportedly already processing applications under the new rules. If you are considering applying for Aid and Attendance benefits, you should start the process immediately. Contact your elder law attorney for help.

For more information about veterans’ benefits, click here.

The post VA Benefits for Long-Term Care Will Be More Difficult to Qualify for in 2016 appeared first on The Elder Care Firm.

Fifty years ago, Medicare and Medicaid became the latest and greatest entitlement signed into law. Lyndon B. Johnson did the honors July 30, 1965, with past Democrat president Harry S Truman sitting next to him.

The new law was part of Johnson’s “Great Society” plan, which was a continuation of Franklin Roosevelt’s “New Deal.” It was meant to be another safety net for seniors and other Americans who would need medical care later in life.

It is a significant milestone to have a government program remain operational 50 years later. But with such longevity, the question is then begged, as times have changed:

What will become of this program over the next 50 years?

That discussion has been a hot topic among conservatives and Republicans in regards to saving not only Medicare and Medicaid, but also to Social Security. While those programs were signed into law by Democrat presidents, Republicans have seemed to be the ones fighting to see that the government “upholds its promises to the nation’s seniors.”

With all the talk over the last several years, backed up by various studies and analyses about the programs, there have been suggestions that Medicare and Medicaid may be completely broke as early as 2025 if nothing is done to reform the structure of the system. But there are others who say that sustainability has already been addressed with the Affordable Care Act – though it reportedly took $700 billion from Medicare to pay for the bill.

In some ways, it is serendipitous that these programs have managed to be around for 50 years in the first place. But can the government continue to fulfill promises moving forward as the population ages and there are fewer workers paying into the system but more former workers taking out of the system?

What should be done, if anything has been a source of much debate? And the New York Times, in “celebrating” 50 years of Medicare, opened up its debate and opinion pages to several perspectives about Medicare and its future. While it seems there is general agreement that Medicare will look different in the next 50 years than it was in the last 50 years, there is strong debate as to how the program will change. From discussions about structural reform or developing a single-payer healthcare system (“Medicaid for all,” as it has been deemed), to cutting benefits, raising taxes and having benefits means-tested – there are plenty of options and plenty of areas of discussion and disagreement.

Whichever way you come down, there is one thing that is certain – you can’t be certain about it, so you need to be prepared for alternatives. Before you are near the age of being qualified for Medicare or Medicaid, it would be a good idea to include this topic in your discussion about estate planning with a local certified elder law attorney. He or she can sit down with you and discuss not only your general estate plan to get all your affairs in order, but can also help you understand Medicaid, its uncertain figure and how you can create some certainty for yourself and your family.

When you don’t know how much longer you’ll live, you can’t count on something unreliable. You need a rock to lean on, and your estate plan can be that rock – whether it includes Medicare or not.

The post The Future of Medicare and Medicaid 50 Years from Now appeared first on The Elder Care Firm.

Fifty years ago, Medicare and Medicaid became the latest and greatest entitlement signed into law. Lyndon B. Johnson did the honors July 30, 1965, with past Democrat president Harry S Truman sitting next to him.

The new law was part of Johnson’s “Great Society” plan, which was a continuation of Franklin Roosevelt’s “New Deal.” It was meant to be another safety net for seniors and other Americans who would need medical care later in life.

It is a significant milestone to have a government program remain operational 50 years later. But with such longevity, the question is then begged, as times have changed:

What will become of this program over the next 50 years?

That discussion has been a hot topic among conservatives and Republicans in regards to saving not only Medicare and Medicaid, but also to Social Security. While those programs were signed into law by Democrat presidents, Republicans have seemed to be the ones fighting to see that the government “upholds its promises to the nation’s seniors.”

With all the talk over the last several years, backed up by various studies and analyses about the programs, there have been suggestions that Medicare and Medicaid may be completely broke as early as 2025 if nothing is done to reform the structure of the system. But there are others who say that sustainability has already been addressed with the Affordable Care Act – though it reportedly took $700 billion from Medicare to pay for the bill.

In some ways, it is serendipitous that these programs have managed to be around for 50 years in the first place. But can the government continue to fulfill promises moving forward as the population ages and there are fewer workers paying into the system but more former workers taking out of the system?

What should be done, if anything has been a source of much debate? And the New York Times, in “celebrating” 50 years of Medicare, opened up its debate and opinion pages to several perspectives about Medicare and its future. While it seems there is general agreement that Medicare will look different in the next 50 years than it was in the last 50 years, there is strong debate as to how the program will change. From discussions about structural reform or developing a single-payer healthcare system (“Medicaid for all,” as it has been deemed), to cutting benefits, raising taxes and having benefits means-tested – there are plenty of options and plenty of areas of discussion and disagreement.

Whichever way you come down, there is one thing that is certain – you can’t be certain about it, so you need to be prepared for alternatives. Before you are near the age of being qualified for Medicare or Medicaid, it would be a good idea to include this topic in your discussion about estate planning with a local certified elder law attorney. He or she can sit down with you and discuss not only your general estate plan to get all your affairs in order, but can also help you understand Medicaid, its uncertain figure and how you can create some certainty for yourself and your family.

When you don’t know how much longer you’ll live, you can’t count on something unreliable. You need a rock to lean on, and your estate plan can be that rock – whether it includes Medicare or not.

The post The Future of Medicare and Medicaid 50 Years from Now appeared first on The Elder Care Firm.

Of course, it takes more than just discipline, such as making monthly contributions every month into the company 401(k), or setting aside savings to accomplish future goals: college, vacations and emergency funds. What’s needed is a step-by-step ‘blueprint’ highlighting the important considerations as we advance through the years.

Your employer’s 401(k).

For some time now, employers have shifted their retirement offerings away from the traditional pension (defined benefit) plan to a defined contribution option, the 401(k). Such plans are usually sponsored by an employer who relies on a plan administrator, such as a Vanguard or Fidelity, to offer employees a select number of mutual funds.

Today, in keeping with defined contribution programs, the offering of ‘target-date’ mutual funds is becoming an appealing option for investors, as noted on the Investopedia website. Commonly referred to as ‘hybrid’ funds, this class of mutual funds…

“…automatically resets the asset mix of stocks, bonds and cash equivalents in its portfolio according to a selected time frame that is appropriate for a particular investor.”

With a 401(k) plan employees are always in control of their funds, and in some cases the employer will even match contributions on a percentage basis. Aside from the obvious tax benefit to employees that derive from reducing taxable income, companies receive a major tax break as well.

When it comes to matching funds, an example might be a 3% match by the employer: if you’re making $50,000 a year, the ‘match’ would total $1,500, which is money from the employer’s pocket direct into your 401(k).

Investing through the ‘ages.’

Young investors should start money away for retirement in their 20’s, so by the time they’re in their 50’s, their portfolio has more opportunity for growth.

In later years, it’s highly recommend to purchase a long-term care (LTC) insurance policy; this, to protect the assets in place from the costs of in-home care, or even the expense of a nursing home. In some instances, a blend of insurance along with the LTC policy is a smart choice.

Ideally, too, your retirement funds should receive a boost once you’ve whittled down, or eliminated, any outstanding debts. This could be car payments, credit cards and, of course, mortgage payments.

How do you plan to live in your ‘60s and beyond?

Remember that the backbone of your retirement funding will, for the most part, come from your Social Security benefits. Or, in other cases from federal or corporate pensions.

Obviously, the best mileage from your income streams at this point will depend on when you decide to start receiving your Social Security, and/or pension benefits; the former benefits increase by 8% a year until you begin drawing on it—-better than an annuity or CD’s, for sure!

A key resource during these years is an experienced financial advisor to help guide you in your investment decisions, and who can also help you with a withdrawal strategy to optimize your retirement savings

Most of all, and since the ’80’s are now referred to as the “new ’60s,” it is paramount that our health is given as much attention as our financial situation.

How will you ‘spend’ your retirement?

Today’s shift among retirees is not so much on how they “should spend their hard-earned money in retirement, but how they should spend their time.”

As such, the author of “The One Minute Manager,” Ken Blanchard, re-packages the traditional notion of retiring: “Refire! Don’t Retire,” and concentrate on the inner aspects of one’s psyche, such as developing new boundaries that test the “intellectual, physical and spiritual” vein during those later years.

Learn more about the importance of developing an estate plan, one that will help maximize your tax savings while protecting your financial assets. Contact us to start the conversation today.

The post Retirement plans should provide a ‘blueprint’ for investing throughout the Golden Years. appeared first on The Elder Care Firm.

Of course, it takes more than just discipline, such as making monthly contributions every month into the company 401(k), or setting aside savings to accomplish future goals: college, vacations and emergency funds. What’s needed is a step-by-step ‘blueprint’ highlighting the important considerations as we advance through the years.

Your employer’s 401(k).

For some time now, employers have shifted their retirement offerings away from the traditional pension (defined benefit) plan to a defined contribution option, the 401(k). Such plans are usually sponsored by an employer who relies on a plan administrator, such as a Vanguard or Fidelity, to offer employees a select number of mutual funds.

Today, in keeping with defined contribution programs, the offering of ‘target-date’ mutual funds is becoming an appealing option for investors, as noted on the Investopedia website. Commonly referred to as ‘hybrid’ funds, this class of mutual funds…

“…automatically resets the asset mix of stocks, bonds and cash equivalents in its portfolio according to a selected time frame that is appropriate for a particular investor.”

With a 401(k) plan employees are always in control of their funds, and in some cases the employer will even match contributions on a percentage basis. Aside from the obvious tax benefit to employees that derive from reducing taxable income, companies receive a major tax break as well.

When it comes to matching funds, an example might be a 3% match by the employer: if you’re making $50,000 a year, the ‘match’ would total $1,500, which is money from the employer’s pocket direct into your 401(k).

Investing through the ‘ages.’

Young investors should start money away for retirement in their 20’s, so by the time they’re in their 50’s, their portfolio has more opportunity for growth.

In later years, it’s highly recommend to purchase a long-term care (LTC) insurance policy; this, to protect the assets in place from the costs of in-home care, or even the expense of a nursing home. In some instances, a blend of insurance along with the LTC policy is a smart choice.

Ideally, too, your retirement funds should receive a boost once you’ve whittled down, or eliminated, any outstanding debts. This could be car payments, credit cards and, of course, mortgage payments.

How do you plan to live in your ‘60s and beyond?

Remember that the backbone of your retirement funding will, for the most part, come from your Social Security benefits. Or, in other cases from federal or corporate pensions.

Obviously, the best mileage from your income streams at this point will depend on when you decide to start receiving your Social Security, and/or pension benefits; the former benefits increase by 8% a year until you begin drawing on it—-better than an annuity or CD’s, for sure!

A key resource during these years is an experienced financial advisor to help guide you in your investment decisions, and who can also help you with a withdrawal strategy to optimize your retirement savings

Most of all, and since the ’80’s are now referred to as the “new ’60s,” it is paramount that our health is given as much attention as our financial situation.

How will you ‘spend’ your retirement?

Today’s shift among retirees is not so much on how they “should spend their hard-earned money in retirement, but how they should spend their time.”

As such, the author of “The One Minute Manager,” Ken Blanchard, re-packages the traditional notion of retiring: “Refire! Don’t Retire,” and concentrate on the inner aspects of one’s psyche, such as developing new boundaries that test the “intellectual, physical and spiritual” vein during those later years.

Learn more about the importance of developing an estate plan, one that will help maximize your tax savings while protecting your financial assets. Contact us to start the conversation today.

The post Retirement plans should provide a ‘blueprint’ for investing throughout the Golden Years. appeared first on The Elder Care Firm.

Mature man reading old book surrounded by heaps of books

SO WHAT IS ELDER LAW?

As you can see on the banner and even in the URL address for this website, we are all about elder law. But perhaps after reading some of this you might be asking, what is elder law anyway?

It sounds like it should be pretty specialized, right?

Well it is, to a point. The specialty is the clientele – those who are older and thus will likely be involved in matters of estate planning, Medicare and Medicaid, Social Security and the like.

No, it is not the legal doctrine of TV lawyer/radio personality Larry Elder.

There are all kinds of attorneys who dabble in various categories of elder law, including those that actually have clientele of varying ages. But there are very few elder law “specialists,” those who at least know a lot about every area of elder law. Elder law can cover the gamut, from estate planning to probate to long-term care to insurance to wills and powers of attorney to nursing home neglect/abuse to Social Security to Medicare and Medicaid.

There are about 13 categories under the umbrella of elder law, and it will be important if you are looking for an elder-law attorney, to understand the right questions to ask to find the attorney who will be the right fit for you. Often it is personality that plays a role, but also it is more about the expertise of that attorney in the particular area of concern that you may have.

What Does an Elder Law Attorney Do?

An elder law attorney can serve as a very important adviser for a senior citizen and/or his or her family in legal and financial matters pertaining to elderly people. Whether it’s planning the estate to setting up long-term care options to powers of attorney, wills and trust – even end-of-life and real-estate issues – an elder law attorney can navigate you and your family through the various issues that will arise at some point.

There are many attorneys who at least dabble in some aspects of elder law, but there are certified elder law attorneys (with the CELA designation) who have a broader and deeper knowledge of the various areas of elder law.

Some people do hire a financial planner and an elder-law attorney for financial and legal matters, respectively, and the two professionals can often work together in consultation. However, if you can only afford to hire one, an elder-law attorney might be the wiser move since many financial issues do have legal guidelines and regulations that an attorney can help interpret – and the attorney would know enough about financial details to be a sound adviser in getting your affairs in order.

If you are in the market for an elder law attorney, try to ask these questions to find the right fit for your particular need:

• How long have you been practicing law (in general)?
• What percentage of time do you dedicate to elder law matters?
• Do you have a specialty within elder law?
• What would I need for our first meeting?
• What is your fee schedule?

No matter what specific need you might have within elder law, a certified elder law attorney can help you with any topic. As many elder law situations involve differing state laws and regulations, it is best to hire an elder law attorney who practices in the state where your elderly family member lives so as to not create confusion and legal troubles later.

Having an elder law attorney, at least on a retainer basis, can be a very sound investment for you and your family for when the inevitable happens, and the transfer of the estate goes on harmoniously and with little to no hassles.

The post What is Elder Law and Elder Law Attorney appeared first on The Elder Care Firm.

Mature man reading old book surrounded by heaps of books

SO WHAT IS ELDER LAW?

As you can see on the banner and even in the URL address for this website, we are all about elder law. But perhaps after reading some of this you might be asking, what is elder law anyway?

It sounds like it should be pretty specialized, right?

Well it is, to a point. The specialty is the clientele – those who are older and thus will likely be involved in matters of estate planning, Medicare and Medicaid, Social Security and the like.

No, it is not the legal doctrine of TV lawyer/radio personality Larry Elder.

There are all kinds of attorneys who dabble in various categories of elder law, including those that actually have clientele of varying ages. But there are very few elder law “specialists,” those who at least know a lot about every area of elder law. Elder law can cover the gamut, from estate planning to probate to long-term care to insurance to wills and powers of attorney to nursing home neglect/abuse to Social Security to Medicare and Medicaid.

There are about 13 categories under the umbrella of elder law, and it will be important if you are looking for an elder-law attorney, to understand the right questions to ask to find the attorney who will be the right fit for you. Often it is personality that plays a role, but also it is more about the expertise of that attorney in the particular area of concern that you may have.

What Does an Elder Law Attorney Do?

An elder law attorney can serve as a very important adviser for a senior citizen and/or his or her family in legal and financial matters pertaining to elderly people. Whether it’s planning the estate to setting up long-term care options to powers of attorney, wills and trust – even end-of-life and real-estate issues – an elder law attorney can navigate you and your family through the various issues that will arise at some point.

There are many attorneys who at least dabble in some aspects of elder law, but there are certified elder law attorneys (with the CELA designation) who have a broader and deeper knowledge of the various areas of elder law.

Some people do hire a financial planner and an elder-law attorney for financial and legal matters, respectively, and the two professionals can often work together in consultation. However, if you can only afford to hire one, an elder-law attorney might be the wiser move since many financial issues do have legal guidelines and regulations that an attorney can help interpret – and the attorney would know enough about financial details to be a sound adviser in getting your affairs in order.

If you are in the market for an elder law attorney, try to ask these questions to find the right fit for your particular need:

• How long have you been practicing law (in general)?
• What percentage of time do you dedicate to elder law matters?
• Do you have a specialty within elder law?
• What would I need for our first meeting?
• What is your fee schedule?

No matter what specific need you might have within elder law, a certified elder law attorney can help you with any topic. As many elder law situations involve differing state laws and regulations, it is best to hire an elder law attorney who practices in the state where your elderly family member lives so as to not create confusion and legal troubles later.

Having an elder law attorney, at least on a retainer basis, can be a very sound investment for you and your family for when the inevitable happens, and the transfer of the estate goes on harmoniously and with little to no hassles.

The post What is Elder Law and Elder Law Attorney appeared first on The Elder Care Firm.

The single biggest problem Millennials face when it comes to saving for retirement is not saving — or not saving enough. Only six in 10 workers who are ages 25 to 34 contribute to their 401(k), compared to 74 percent of workers ages 55 to 64, according to a recent Vanguard report.

Those who do put money aside often do not save enough. Workers ages 25 to 34 put an average of 5.5 percent of their income into their 401(k), compared to 8.7 percent for those ages 55 to 64 — and the optimal rate to save may be higher than either of those numbers. As it stands, many Millennials do not save enough to receive their employer match, which means they miss out on “free” money.

These issues are particularly troubling because saving for retirement early has the biggest positive impact on retirement saving. It is much more difficult to make up for lost time in one’s 40s and 50s than it is to save an optimal amount during one’s 20s and 30s.

The good news is that, while Millennials as a whole are not on track to be prepared for retirement, individual young people still have time to make the necessary adjustments to get on track — and those changes will reap greater benefits than for an older person putting the same amount of money away.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Current federal law requires some veterans who do not receive VA health services to carry paperwork as proof of military service to employers or private businesses for discounts. The document, known as the DD-214, contains Social Security numbers and other personal information that could make veterans vulnerable to identity theft.

“At a time when many vets are struggling to reintegrate to society, we should be providing them with solutions, not paperwork. This bill will allow veterans to immediately prove their service to employers, thereby expanding their access to jobs and a number of other benefits,” said Dan Benishek, chairman of the Veterans Subcommittee on Health and Northern Michigan’s U.S. representative, who has co-sponsored the bill.

The VA currently issues ID cards to veterans who receive its benefits, mainly for health care. The new ID cards would not replace the cards already issued to veterans, nor can they be used as proof of eligibility for obtaining federal benefits. No time frame has been determined for when the first ID cards might be given out.

Veterans requesting the ID cards would have to pay a small fee, the amount to be decided by VA officials. The payments would fund the program. In Michigan, like in many other states, veterans already have the option to declare their veteran status on state driver’s licenses or IDs with no extra cost.

Legal Help for Veterans, PLLC fights for veterans rights. We fight to make sure you get the benefits you deserve from the Department of Veterans Affairs. To learn more or contact a veterans attorney, visit http://www.legalhelpforveterans.com or call 800.693.4800

Current federal law requires some veterans who do not receive VA health services to carry paperwork as proof of military service to employers or private businesses for discounts. The document, known as the DD-214, contains Social Security numbers and other personal information that could make veterans vulnerable to identity theft.

“At a time when many vets are struggling to reintegrate to society, we should be providing them with solutions, not paperwork. This bill will allow veterans to immediately prove their service to employers, thereby expanding their access to jobs and a number of other benefits,” said Dan Benishek, chairman of the Veterans Subcommittee on Health and Northern Michigan’s U.S. representative, who has co-sponsored the bill.

The VA currently issues ID cards to veterans who receive its benefits, mainly for health care. The new ID cards would not replace the cards already issued to veterans, nor can they be used as proof of eligibility for obtaining federal benefits. No time frame has been determined for when the first ID cards might be given out.

Veterans requesting the ID cards would have to pay a small fee, the amount to be decided by VA officials. The payments would fund the program. In Michigan, like in many other states, veterans already have the option to declare their veteran status on state driver’s licenses or IDs with no extra cost.

Legal Help for Veterans, PLLC fights for veterans rights. We fight to make sure you get the benefits you deserve from the Department of Veterans Affairs. To learn more or contact a veterans attorney, visit http://www.legalhelpforveterans.com/ or call 800.693.4800

Without careful planning, many individuals are at risk of outliving their retirement funds, especially in the current low-growth, low-interest environment. Developing a careful investment strategy is the best way to make sure that retirement savings last.

The first step is to contribute as much as possible to Roth accounts and other retirement plans, especially during peak earning years. These accounts often have good returns and are tax-favored.

Traditionally, investing in bonds was recommended for generating income for five to 10 years. However, bonds do not currently have strong returns. Some types of bonds may still be an option for some retirees, but in many cases shifting away from bonds is best.

Cash-buildup life insurance and annuities can be a strong choice for many people, because those assets grow tax-deferred. They can also provide income to spouses after a person passes away.

For many people, a diversified portfolio that focuses as heavily as possible on retirement accounts is the best option. However, personal finance decisions are highly individual choices. Hook Law Center Financial Services can provide you with individualized investment advice.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Couples who are getting divorced should collect information about all of their retirement accounts, including IRAs, 401(k)s and pensions. Retirement account assets may be awarded to one party, or they may be divided between the divorcing spouses.

Pension plans are handled differently. The spouse who holds the pension has the option of either buying out the other spouse or giving a share of the benefits. To buy out the other spouse, the pension must be valued by actuarial analysis. A court order may order the pension to be split 50/50 or by some other ratio, depending on whether the couple were married for the entire duration of the pension.

If the couple was married for at least 10 years, and one spouse does not have work credits worth at least half of the other spouse’s, then that spouse can receive Social Security benefits. After one spouse’s death, the other spouse can claim the entire amount of the former spouse’s Social Security benefits.

In addition to overhauling one’s retirement plans, a divorced individual should review all estate planning documents to ensure that they reflect the individual’s current wishes.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Divorce and remarriage
can have can have an impact on a person’s Social Security benefits.
Once a person reaches retirement age, he or she has the right to
claim Social Security benefits based on their own earnings record or
half of the former spouse’s benefit, whichever is higher, even if
they have divorced.

Once a person
remarries, they typically lose any rights to their former spouse’s
Social Security benefits, unless the new marriage ends by divorce or
death. However, a divorced person may still be able to collect
benefits on a former spouse’s record even if the former spouse has
remarried. To qualify for this benefit, the marriage must have lasted
at least 10 consecutive years.

In certain
circumstances, divorced people can even qualify for survivor benefits
after their former spouse dies. To qualify for survivors benefits,
the marriage must have lasted at least 10 years, or the recipient
must be caring for a child under 16, and the recipient must not have
remarried before age 60.

To contact an estate planning lawyer at Hook Law Center, call 757-399-7506.

People that have been married for 10 years or more in California have the potential right of being paid alimony payments and spousal support for as long as he or she needs it, if they are in a weaker financial position than their ex. It is also important to note that this payment continues for as long as the other spouses are able to pay.

The situation is going to play an important part in the benefits of spousal support that you receive after having had a marriage of more than 10 years. The best case scenario is often for both parties to mutually decide that the spousal support shall  be paid over a particular time period and then terminated, if it makes sense to the party receiving such support. It is also an option for one party to be waive their right to spousal support and adjust it and the rate at which it needs to be paid at a later date.  It is very important to understand your legal rights and obligations concerning spousal support and highly advisable to seek legal advice and counsel on this issue before ever making any decision.

Also, although generally the issue of Social Security benefits is not one handled in divorce cases, it is important to at least understand that the Social Security administration also takes longer duration marriages into account regarding benefits.  In addition, depending on the earnings that your former spouse makes, you will be eligible to receive the Social Security benefits once you reach your age of retirement.  Another advantage that you may receive is derivative benefits based on what will be able to collect because these are based on his/her earnings over the course of their career.

Gerald A. Maggio is an experienced Orange County divorce and family law attorney and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

To start, a care plan must be signed off on by a doctor, and the home health agency you’ve selected must be Medicare-credited. In addition, the doctor must certify that you or your loved one is “homebound.”

If you work for a large corporation, chances are the health care part of your retirement package looks a heck-of-a-lot better than a lot of workers employed by a small to-medium size business. Those fortunate enough to have a health package may enjoy a range of bennies, from low medical premiums and extras like dental, hearing aids as well as coverage for eyewear.

To get an idea of just how those employer insurance programs or retiree insurance benefits have withstood the test of uncertain economic times, about 66 percent of retirees were receiving those nice health-care packages back in 1988, compared to only 25% today.

Medical costs will continue its upward trend in retirement.

It’s a depressing fact, but a gloomy forecast looms over the retiree’s Social Security income. In fact, such costs are sure to devour the “majority of retirees Social Security income.”

Are you 66 and planning to retire this year? You might be well served to either work longer or take a part-time job to help pay for health care costs. Surprisingly, notes a new report in the Wall Street Journal, those anticipated medical costs might very well eat up about 67% of a retiree’s benefit in those Golden Years.

If you’re ten years younger and looking to retire ten-years-from-now, count on your medical costs to take away about 90% of your Social Security income in your lifetime.

A simple reason…

Retirees on Social Security grapple with the ever-rising costs of Medicare premiums and skyrocketing medical costs, keeping them on a treadmill of never reaching parity with these costs. But it’s not surprising, given the fact that Social Security’s annual increases are averaging a meager 2%—that’s the current rate of inflation.

But according to Healthview founder, Ron Mastrogiovanni, medical costs are seeing increases from 5% to 7% annually. Unfortunately, those increases did not factor in that Elephant in the Room: long-term care.

Medicare will cover some home health services.

Family caregivers are not only providing for loved ones in time of need, but, ironically, their ‘service’ helps subsidize the Medicare system to the tune of $375 billion annually, according to an Indiana University report,

If you are over 50 years of age and care for a loved one, you are among the 10 million who do. Amazingly, this number has “tripled over the past 15 years,” as noted by a study that included the National Alliance for Caregiving.

“What can Medicare do for my loved one who needs home care?”

But the Medicare program does pick up the following home care costs, including, but not limited to…

— Intermittent skilled nursing care

— Physical therapy, including speech-language pathology services.

— Continued occupational services

Medicare does not pay for…

— 24-hour care at home

— Meals delivered to the home

— On-site homemaker services

— Personal care

What you need for determination…

For starters, a care plan must be signed off on by a doctor, and the home health agency you’ve selected must be Medicare-credited. In addition, the doctor must certify that you or your loved one is “homebound.”

Home health services include other choices.

Depending on where you live, other services can provide for this care, such as medical social services, part-time/intermittent home health aide services. What’s more, the cost of in-home medical supplies and durable medical equipment (walker, wheelchair) and injectable osteoporosis drugs.

Proper estate planning with an experienced elder care attorney, like Christopher J. Berry, can help you better understand the importance of setting aside funds for a long-term care policy; establishing a trust to provide continuity of your assets; creating a power-of-attorney for use if you are incapable of making your own financial and health decisions.

Contact us to learn more.

The post Medicare does pick up some home care costs; best bet is a long-term care policy. appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

Hiding all the facts

According to an article by desmoinesregister.com, the first step when estate planning for a second or third marriage is to open up the lines of communication. Experts say money is a major cause of stress as well as divorce. Start a marriage off right with full disclosure about estate planning, assets and your intentions.

Failing to update a will

A common mistake people make when remarrying is to not update the will. You should know if you are marrying a person who doesn’t have a will. Before you get married, consult with an elder law attorney. After you marry, go together with your spouse to update legal papers and beneficiaries as it relates to your assets.

Neglecting to ask questions

Another mistake people make when they remarry is assuming they understand a spouse’s will. Because legal language is often complicated, don’t be afraid to ask your elder law about language that seems ambiguous. If you have a blended family, you need to stipulate whether money will be left to your children, your step children, step children from a previous marriage or a combination.

Letting your spouse decide

Instead of letting one spouse make all the estate planning decisions, work as a team. One option to consider is a qualified terminable interest property trust which will allow your new spouse to live off your assets and stay in your house while still leaving an inheritance in tact for the children from a prior marriage. According to the desmoinesregister.com, a QTIP trust provides for your children from a previous marriage because it preserves the principal for the children. What’s more, the assets that go to a QTIP trust qualify for marital deduction so it reduces the estate taxes at your death.

Ignoring the wealth disparity

An elder law attorney in Michigan can also help you when one spouse is wealthier than the other spouse. When you even things out, it’s likely you can take advantage of important tax savings if the less wealthy spouse passes away first. Talking about estate planning is a sensitive topic for many couples, but it’s imperative to prepare.

If you decide you want a prenuptial before marriage or a post-nuptial agreement after marriage, talk to your elder law attorney. It’s important to understand the rights and responsibilities of marriage and what will happen if you divorce. Elder law attorney Christopher J. Berry and the Elder Care Team will work hard to review and adjust your beneficiaries to ensure your assets go to the heirs you want. You need a retirement plan trust that recognizes your special needs as a blended family. Christopher J. Berry will protect you with a Michigan Retirement Plan Trust that considers income tax and required minimum distributions ramifications. For more tips on estate planning for a second marriage, please contact us.

The post Estate Planning Mistakes to Avoid When Remarrying appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

The Six Ways to Pay for Long-term Care

1) Private pay.  Pay out of your own assets for long-term care.
2) Kids pay.  Typically the children don’t pay financially, but the they pay in term of their time.
3) Medicare.  Medicare only pays short term rehab and hospice, not long-term care costs.
4) Long-Term Care Insurance.  Long-term care insurance is a tool that can help pay long-term care costs, but it is certainly not a magic wand or the only answer.
5) VA Benefits.  We’ll talk more about this more…
6) Medicaid.  Medicaid pays for nursing home level care only, with harsh asset qualification penalties.

Michigan VA Benefits For Long-term Care

If a veteran needs long-term care, either home care, assisted living or nursing home care, there is a little known resource called the non-service connected VA Benefit that can help pay that cost of care.

VA Benefits for Home Care in Michigan

Home care in Michigan can easily run over $3,000 per month when you’re buying a couple hours per day a couple times per week.  The VA Benefit can easily come in and help off-set some of that cost of care.

Qualification for Michigan VA Benefits

There are five requirements to qualify for the Aid and Attendance Veterans Benefit.

1. The Veteran must have served 90 days active duty.
2. One of those days must have been during a period of conflict.
3. Cannot be dishonorably discharged.
4. Long-term Care Costs must exceed Social Security and Pension.
5. Asset Test

The benefit is really that straight forward.  If you’re able to overcome each of the requirements then you can bring in up to $2,120 per month tax free.

If you would like a free easy action plan to secure your VA Benefits, then contact our office for the VA Benefits Action Plan.

The post Michigan VA Benefits for Long-Term Care Costs appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

Planning for retirement can be complicated. Many retirees rely on a combination of Social Security retirement benefits and retirement savings accounts such as IRAs. Knowing when it is in one’s best interest to start taking benefits or withdrawals is crucial: not too early and not too late. 

When it is “too early” to take benefits or withdrawals may be a matter of opinion. After all, if a retiree…

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by Thomas D. Begley, Jr., CELA

Nothing is likely to have greater impact on public policy and programs for the elderly than the aging of the Baby Boomers (“Boomers”). Boomers represent 76 million persons in the United States born between 1946 and 1964 – 31% of the total population. Boomers are divided into two waves. The first wave was born between 1946 and 1954 and is currently between 61 and 69 years of age. The second wave was born between 1955 and 1964 and is currently between 51 and 60 years of age. By the year 2030, all surviving members of this generation will be between the ages of 66 and 84 and 90% will be retired by the year 2030.[1] By 2020, close to one-third of the population will be over age 55. Despite the conventional wisdom that Boomers are ready to “work forever” and significantly extend their formal working career, many of the oldest Boomers are already well into the retirement phase. Many more expect to retire upon becoming eligible for full Social Security Retirement benefits.

• Forty-five percent of 65-year old Boomers are now fully retired with another 14% reporting that they are retired but working part-time or seasonally.

• Of those who have not yet retired, 61% plan to retire when they reach 68.5 and are eligible for full Social Security Retirement.

• Forty-five percent of Boomers who retired earlier than planned cited health-related reasons for doing so. Sixteen percent cited loss of a job or job opportunities. Those who retired later than they had planned mentioned needing a salary to pay for day-to-day expenses.

• Sixty-three percent of Boomers have started receiving Social Security benefits prior to reaching full retirement age.

• Seventy percent of retirees report liking retirement “a lot.”

• Twenty-five percent of Boomers received an inheritance from their parents with an average value, before taxes, of $110,000.

As Boomers age, it is useful to study a profile of the average Boomer. MetLife performed such a study.[2] The study showed that the average 62-year old in 2007 was married to the same spouse, who was 60-years old, had 2.4 children over the age of 18 who were not living at home, has two grandchildren also not living in their home, and has no living parents. These individuals tend to have very good health, have some college education, and worked full time. They feel they have done a good job earning income, but a poor job saving for their own future, investing for their children’s future, and ensuring coverage for their long-term care costs. They are politically conservative. They have decided to take Social Security benefits earlier than the normal retirement age. A sizeable portion applies for benefits at age 62 and plan to be fully retired by age 66-years 4 months.

Changes in the global economy have caused a decline in the number of manufacturing jobs in the United States and a move toward service jobs, requiring higher level of skill and education. Fifty-six percent of Boomers will rely on Social Security for over one-half of their income and estimates are that Boomers will save only one-third of the amount required to provide them with a secure retirement at age 65.[3] Further, Boomers have high consumer debt, including education loans, and are borrowing, or will soon need to borrow, to finance their own children’s educations. The National Association of Area Agencies on Aging predicts that, “Baby boomers will have better health in their late 60s and 70s due to better personal care, more healthful work environments, and better health practices throughout their adult lives.”

The retirement of Boomers will put a tremendous stress on the Social Security and Medicare systems. Policymakers, particularly those on the right, will be tempted to reduce benefits to maintain the solvency of both the Social Security and Medicare systems. Such a change would cause serious issues for many Boomers who have retired with no pension, little retirement savings through 401ks, little equity in their homes, and high consumer debt. All of these reasons, and particularly a lack of pensions, makes Social Security even more important to Boomers who are retiring.

The General Accounting Office (GAO) found that an annual drawdown of savings at an annual rate of 4%, coupled with a delay in Social Security, was a good strategy for Boomers to employ for retirement. The longer Social Security is delayed, the higher the monthly payment. Therefore, drawing down on savings first will ultimately lead to a higher monthly check from the Social Security Administration.

There is a dramatic difference between the first wave of Boomers and the second wave. The older wave is better educated and is more likely to be married. The most important source of income for Boomers is earnings from employment, and singled boomers generally earn less than married ones. Also, 71% of first-wave Boomers own their own homes, while only 57% of those in the second wave own homes. As a result, poverty rates in 1990 were one-third higher for those in the second wave of Boomers than for those in the first wave. [4]

According to the National Association of Area Agencies on Aging, large numbers will face economic risk and deprivation, because of a history of low earnings, intermittent employment, poor education, discrimination, and an inability to adjust to changing employer requirements. The most influential variables for a Boomer’s retirement are marital status and level of education.[5]

One of the factors making retirement for many Boomers is the lack of income from pensions. Public sector employees generally receive pensions. Private sector employees generally receive benefits from defined contribution plans, such as 401ks, and 401ks tend to be much less generously funded and pay out much smaller benefits.

[1] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

[2] Highlights of the MetLife Study of Boomers: Ready to Launch, MetLife Mature Market Institute, www.metlife.com (Nov. 2007).

[3] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

[4] Transitioning into Retirement, The MetLife Study of Baby Boomers at 65 (April 2012).

[5] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

Most people approaching retirement age are aware that the decision of when to start taking Social Security retirement benefits affects the amount of the payments. Retirees can start accepting benefits at age 62, at age 70, or somewhere in between. The longer the delay, the greater the monthly payments will be. For each year a person waits after full retirement age, the lifetime payout increases by about eight percent.

“File and suspend,” in the context of a married couple, is used to allow a spouse to claim a spousal benefit while the main beneficiary delays collecting benefits. The main beneficiary files for benefits at full retirement age but immediately suspends receipt of the benefits; the spouse can then begin receiving a spousal benefit based on the main beneficiary’s monthly benefits at the time of filing. However, the main beneficiary’s monthly benefit continues to grow due to delayed retirement credits.

The file and suspend strategy also has a benefit for single retirees. A single person may choose to file for retirement benefits upon reaching full retirement age, but immediately suspend receipt. Having done this, the retiree then has the option, anytime before age 70, of receiving those benefits retroactively in a lump sum. While this would result in the retiree losing the delayed retirement credits, it is an option that many people may wish to have available.

Learn more about our legal services at www.littmankrooks.com or www.elderlawnewyork.com.

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Most people approaching retirement age are aware that the decision of when to start taking Social Security retirement benefits affects the amount of the payments. Retirees can start accepting benefits at age 62, at age 70, or somewhere in between. The longer the delay, the greater the monthly payments will be. For each year a person waits after full retirement age, the lifetime payout increases by about eight percent.

“File and suspend,” in the context of a married couple, is used to allow a spouse to claim a spousal benefit while the main beneficiary delays collecting benefits. The main beneficiary files for benefits at full retirement age but immediately suspends receipt of the benefits; the spouse can then begin receiving a spousal benefit based on the main beneficiary’s monthly benefits at the time of filing. However, the main beneficiary’s monthly benefit continues to grow due to delayed retirement credits.

The file and suspend strategy also has a benefit for single retirees. A single person may choose to file for retirement benefits upon reaching full retirement age, but immediately suspend receipt. Having done this, the retiree then has the option, anytime before age 70, of receiving those benefits retroactively in a lump sum. While this would result in the retiree losing the delayed retirement credits, it is an option that many people may wish to have available.

Learn more about our legal services at www.littmankrooks.com or www.elderlawnewyork.com.

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If an employer does not offer a 401(k), there are other investment options, including the traditional IRA and the Roth IRA

Today, when it comes to providing a retirement plan for their employees, businesses large and small, have opted for a defined-contribution plan with choices that include a 401(k), IRAs and Roth IRAs; this, versus a ‘defined benefit,’ program, or more commonly referred to as a pension plan.

According to an interview on CNBC with the CEO of a major investment firm, the era of pension plans represented an almost “paternalistic” approach of making sure their workers would have a financially secure retirement.

But with the introduction of the 401(k) retirement plans back in 1980, employees have been able to squirrel away pre-tax dollars, as well as any employer contributions, in a number of funds through the sponsoring investment firm of the employer’s choosing.

Consequently, this retirement alternative has allowed employers to avoid the risks long associated with years of funding the traditional pension plan, a risk derived from the fact that Americans are simply living longer.

As investors scramble to improve their portfolios since the 2008 economic debacle, their investment decisions are impacted by their increased longevity. Not only are 6,000 of us turning 65 every day, but 13 percent are over the age of 65. What’s more, the average life expectancy for men is 78, and 80 for women.

Does the ‘law’ require employers to provide workers with a 401(k) ?

Employers are not legally bound to provide a sponsored 401(k). For workers fortunate enough to have this choice, they’ve come to realize that their plan was never meant to be the single source of income in their retirement years. Indeed, this self-funded retirement program is meant to complement the retiree’s Social Security and personal savings.

Just how much can they put into their plan? For 2015 an investor’s contribution limit is $18,000; that’s up from $17,500 in 2013 and 2014.

What are the ‘risks’ for employees?

Because the 401(k) is a voluntary program offered by employers, business owners have also managed to detach themselves from being accountable when it comes to fund management, or even educating employees about the basics of investing.

Alternatives to the 401(k).

If an employer does not offer this tax-deferred retirement option, the IRS says it’s okay to put money aside in other investment vehicles, including the traditional IRA and the Roth IRA.

IRA:  Workers can turn to the individual retirement account (IRA) for tax-deferred investing; again, like the 401(k), the investments are not taxed until they are withdrawn, but contribution limits are more restrictive than with the 401(k): $5,500 with a $1000 ‘catch up’ if you’re over 50.

Like the 401(k), investors are allowed to take an upfront deduction, thereby reducing the amount of their wages that are subject to taxation.

Roth IRA:  No upfront-deductions are allowed like they are with the 401(k) and IRA, but the distributions are tax-free. Also, although there are certain income restrictions before the plan can be allowed by the IRS, the contribution amounts are the same as the IRA.

Both the IRA and Roth IRA require investors to establish their plans through an investment firm, like a Vanguard or Fidelity, for example, who act as the legal custodian of the funds.

American Society of Pension Professionals and Actuaries: “The system is not perfect.”

“Nothing in the history of this country has promoted more savings by average Americans than the 401(k) plan, with total assets in excess of $4 trillion (plus over $5 trillion in IRAs, much of which is from 401(k) rollovers). Three-quarters of American families became investors first through their workplace retirement plan. It is hard to imagine where we would be without our nation’s private retirement system. The system is not perfect…” Forbes 4/24/2013

Contact us to discuss your estate planning needs, including your options for long-term care, power-of-attorney as well as guidance with veteran’s benefits.

The post The law does not require employers to provide workers with a 401(k), a defined-contribution retirement plan. appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

A record 2.2 million people age 60 and older now hold student loan debt — three times as many as in 2005. Collectively, older adults owed $43 billion in student debt at the time of the report.

Retirees may have student loan debt from a number of different sources. Some carry debt from their own educations, especially those who went back to school later in life. Others took out student loans to help pay for their children’s or grandchildren’s tuition. Either way, skyrocketing tuition rates make the burden high for those over sixty.

Additionally, a larger portion of older adults who have student loan debt are now having difficulty paying. Nearly 10 percent of older adult borrowers are at least 90 days behind on payments (as compared to about 6 percent in 2005).

Student loan debt can have devastating effects for seniors, as the government has the right to withhold a portion of a person’s Social Security payments to cover student loans. As of September 2014, 119,000 older adults were having their Social Security checks garnished.

Some older adults find themselves working long past their intended retirement age, sometimes on a part-time basis, to manage the educational loans.

Student loans are one of the longest-lasting forms of debt. Most student loans cannot be discharged during bankruptcy, although some lawmakers are pushing for reform.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Warren Buffett would be proud…

Sure, we all know that by working longer, we can really rack up the Social Security payments by a factor 8%…per every years we delay claiming our benefits. That means if you can hold off taking Social Security until you’re 70, you nailed a 76 percent increase in your monthly benefit—even Warren Buffet would give you a nod on that investment choice.

In a sense, yes, those fixed income streams coming from Uncle Sam the result of a clear understanding on how the Social Security law can work in your favor.

A crucial decision when we’re in our 50’s and 60’s.

“To continue working, or not to work.”  That is the question of our age, and has remained so the 1980s when we were starting to work longer. Make no mistake, if you want to slide across the retirement threshold with your portfolio anchored to hefty Social Security payments, then continue to work-on.

A few of the ‘disrupters’ affecting the average retirement age.

It’s a fact that older men, after WWII, were exiting the workforce because Social Security offered them a good reason to; this, plus the abundance of the defined benefit plan (pensions) back then made the decision a credible choice.

What’s more, when Medicare was introduced in 1965, along with a dramatic increase in Social Security benefits in 1972, that signaled “the final leg of the decline in workforce activity of older men.”

Furthermore, because Social Security benefits were made available at age 62, that was another factor for men 55-64 to exit the labor force.

The ‘perfect storm’ for increasing one’s working years…

Of course, the mechanics behind our retirement plans changed immensely with the shift to the defined contribution plans and their and their many choices: 401(k), 403(b), SIMPLE IRA and ROTH IRAs, to name a few.

On average, studies have shown that those of us harboring 401(k) plans end up retiring a year or two later “on average than similarly situated workers” blessed with receiving a pension.

In addition, Social Security made huge changes to challenge us to work…just a little bit longer. Such delays, as mentioned earlier, translate to mega bucks between the official Retirement Age (62) and the age of 70.

Better health = more demands on our financial resources.

Thanks to the advances in medicine, we simply are living longer. Since 1980, the life expectancy of a 65 year old male has gone up by about 4 years.  Another factor, for some, is the fact they’re enjoying a “higher socioeconomic status,”

What’s more, and because the workforce has moved away from manufacturing—less physical jobs—the there is, frankly, “less strain on older bodies.”

Pinpointing that elusive Average Retirement age number…

Drilling-down on the big data about the labor force, the Center for Retirement Research, Boston College, offers it’s take what the average retirement age is in the U.S.

First, the define that age as the point where the “labor force participation” careens below 50 percent. So, that means in 2013 (drum roll) the average retirement age came in at 64 for men…62 for women.

In the latter case, coming up with an average age for women is complicated; this, because their time in the workforce can be affected by a number of events and choices.

The closer you get to setting your retirement date, it’s important to get the advice and guidance from experienced elder law professionals. Contact us to begin your conversation about

The post Boston College research: average retirement age affected by a perfect storm of events. appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

by Thomas D. Begley, Jr., CELA

Nothing is likely to have greater impact on public policy and programs for the elderly than the aging of the Baby Boomers (“Boomers”). Boomers represent 76 million persons in the United States born between 1946 and 1964 – 31% of the total population. Boomers are divided into two waves. The first wave was born between 1946 and 1954 and is currently between 61 and 69 years of age. The second wave was born between 1955 and 1964 and is currently between 51 and 60 years of age. By the year 2030, all surviving members of this generation will be between the ages of 66 and 84 and 90% will be retired by the year 2030.[1] By 2020, close to one-third of the population will be over age 55. Despite the conventional wisdom that Boomers are ready to “work forever” and significantly extend their formal working career, many of the oldest Boomers are already well into the retirement phase. Many more expect to retire upon becoming eligible for full Social Security Retirement benefits.

• Forty-five percent of 65-year old Boomers are now fully retired with another 14% reporting that they are retired but working part-time or seasonally.

• Of those who have not yet retired, 61% plan to retire when they reach 68.5 and are eligible for full Social Security Retirement.

• Forty-five percent of Boomers who retired earlier than planned cited health-related reasons for doing so. Sixteen percent cited loss of a job or job opportunities. Those who retired later than they had planned mentioned needing a salary to pay for day-to-day expenses.

• Sixty-three percent of Boomers have started receiving Social Security benefits prior to reaching full retirement age.

• Seventy percent of retirees report liking retirement “a lot.”

• Twenty-five percent of Boomers received an inheritance from their parents with an average value, before taxes, of $110,000.

The General Accounting Office (GAO) found that an annual drawdown of savings at an annual rate of 4%, coupled with a delay in Social Security, was a good strategy for Boomers to employ for retirement. The longer Social Security is delayed, the higher the monthly payment. Therefore, drawing down on savings first will ultimately lead to a higher monthly check from the Social Security Administration.

[1] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

In 2015, Social Security recipients will see a 1.7 percent
cost-of-living increase in benefits. This small increase comes on the
heels of several years of other small to non-existent increases: in
2014, Social Security recipients received a 1.5 percent increase, and
no increase at all was given in 2010 or 2011.

Although
any increase is better than nothing, such a small change won’t go
far for most Social Security recipients. The average Social Security
recipient collects about $1,300 each month, so a 1.7 percent increase
is about $22.00 more each month.

Every
year, the Bureau of Labor Statistics adjusts Social Security benefits
to match any cost-of-living increase measured by the Consumer Price
Index.

Some
seniors will see their Medicare Part D premiums go up; for those who
do see premium increases, the Social Security raise may offset the
increase.

To contact an estate planning lawyer at Hook Law Center, call 757-399-7506.

Worried about setting up your retirement future? Unsure if after you reach retirement that you won’t have enough money to live comfortably? Then continue reading.

In this post, we’ll provide you with 10 tips to prepare for retirement.

1. Save, save, save! If you have already started saving, then don’t stop! Your savings is your first line of defense against a sinking retirement ship. The more money you pack away, the more secure your future is. Consider establishing a concrete plan to squirrel away extra money as soon as possible.

2. Contribute to your 401(k). If your current job offers a 401(k), then it behooves you to add to it. A 401(k) allows you to contribute pre-tax money, meaning it is untouched; a significant advantage because it’s dollar for dollar.

3. Set a retirement goal. Much like our first tip, planning ahead is key. Many retirement specialists agree that you will need around 70-90% of your pre-retirement income as a nest egg once you hit the age to retire. Otherwise, you will not be living at your current standard, and will have to make many sacrifices that you will likely not want to.

4. Match your employer. It really is that simple. If your employer matches your 401(k), do not hesitate to take full advantage of the match. Look at it as free money, an incentive for you to contribute, and sign on immediately. Unsure if they do? Ask!

5. Consider an IRA. Much like a 401(k), an IRA brings with it huge tax breaks, but it’s important to pay attention to which plan is which. A traditional IRA gives a tax-deferred growth, with a smattering of benefits for withdrawal, and some deductions for your taxes. While a Roth IRA doesn’t offer deductible contributions, but lets the saver enjoy tax-free growth — meaning you pay nothing for withdrawals. Speak to a specialist to help you decide which is best for you.

6. Consider a catch-up contribution. Those who are 50 or older have a wonderful option available for their retirement. Called a catch-up contribution, it allows for those who didn’t have the ability to save like they would have liked, to boost their retirement savings. Ask your retirement planner about how to take advantage of this kind of retirement.

7. Long-term growth stocks. Don’t think of like you are playing the stock market, that’s a different kind of future. Instead, consider it like investing in the long-term. Stocks, after all, have the best return over long periods. So if you get a good stock tip, or know a solid broker, play your cards right, and invest in your retirement through stocks.

8. Bonds only work sometimes. Bonds used to have great staying power, prompting many individuals from yesteryear to invest heavily into them. Now, after 15 or so years, inflation begins to erode bonds, erasing the paying power they once had. So if bonds are an option, do your research beforehand.

9. Research what your Social Security benefits will be. Most American work their entire lives, contributing to Social Security with every paycheck. When you retire, Social Security contributes around 40% of what you would have made each month. Don’t hesitate to add this to your total when you are retirement planning.

10. Delay Social Security for max return. Many people accept Social Security as soon as they are eligible; no harm in that. However, for every year you delay it, once you are able to collect, you earn that much more when you aren’t able to work any longer, a boost that adds up very fast. So if you plan accordingly, and can work longer, delaying Social Security brings with it many benefits.

It’s never too soon to begin planning for retirement. Once you recognize that its time, that’s when you should take the next step. Don’t let starting too late end up as a regret in later in life, take action now.

For more information on how we can help you with your retirement, please contact us any time. We protect the people you love and the assets you love through thoughtful planning.

The post 10 Things to Help You with Retirement, and How to Boost Your Savings appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

by Thomas D. Begley, Jr., CELA

As the population of the United States tend to age and Baby Boomers begin retiring in large numbers, there are a number of problems that will affect the elderly that need to be addressed.

• Retirement Income. In 2012, people age 65 and older had an average income of $31,742, but the median income was less than $19, 604. About 30% of older Americans receive pensions. The median was $12,000. Only 46.5% of older Americans reported income from personal savings, but half receive $255 or less per year. The mean was $3,233 per year. Only 20% of older Americans had dividend income with the median amount being $1,200.[1] Social Security is the only source of income for 25% of older adults in New Jersey.[2] It is generally estimated that for a comfortable retirement a person must have an income equal to 70% of salary in the year just before retirement. Most experts advise saving 10% per year of one’s annual income beginning at age 25. Social Security plays a vital role in reducing poverty. Almost 90% of people age 65 or older receive some of their family income from Social Security. The Social Security Retirement System is expected to be able to pay full benefits through 2033. Thereafter, only 75% of benefits will be funded. The Disability Insurance Trust Fund paying disability benefits to disabled workers is expected to be solvent through only 2016, at which point only 81% of benefits can be funded. This problem has been discussed nationally for over 20 years, and Congress has always managed to dodge the hard decisions. The replacement of pensions with 401k plans has been disastrous for low-income workers. Workers in the top fifth in income account for 72% of total savings in retirement accounts.

• Health Care. Health care spending has increased significantly. While this spending has declined over the last three years, the Brookings Institute believes that health care will continue to grow 1.2% faster than GDP over the next 20 years and will consume close to 25% of GDP. Health care costs will continue to grow at GDP plus 1.2% for the foreseeable future.[3] A couple, both age 65 in 2012, living an average life expectancy, could need as much as $220,000 to cover premiums for health insurance coverage and out-of-pocket expenses during retirement. It is estimated that these households should expect medical bills to consume 61% of their Social Security payments by 2027.[4]

Medicare. Medicare covers only about one-half of retiree health expenses. Medicare has three components: Hospital Insurance (HI) or Medicare Part A; Supplemental Medical Insurance (SMI) consisting of Medicare Part B and Part D. The SMI program is not threatened with insolvency, because premiums are reset on an annual basis based on actual expenditures. The Trustees of the Federal Hospital Insurance Fund estimate that the HI Program can remain solvent until 2030. Again, this is a problem that has been discussed nationally for over 20 years and Congress has refused to m

[1] Sources of Income for Older Americans 2012, Ke Bin Wu, AARP Public Policy Institute, www.aarp.org.

[2] The Elder Economic Security Standard Index for New Jersey.

[3] Brookings Papers on Economic Activity, www.brookings.edu.

[4] Fidelity Estimates Couples Retiring in 2013 Will Need $220,000 to Pay Medical Expenses Throughout Retirement, www.fidelity.com.

by Thomas D. Begley, Jr., CELA

New Jersey is an income cap state for purposes of nursing home level of long-term care services. Nursing home level of services includes nursing homes, assisted living and most home care. The income cap is 300% of the Federal Benefit Rate (FBR). For 2015, 300% of the FBR is $2,199. This figure is indexed for inflation. This means that if an individual’s income exceeds $2,199 in 2015, they would not be eligible for Medicaid long-term care services. Historically, individuals with income in excess of the income cap were eligible for Medicaid in a nursing home setting, because New Jersey had a “Medically Needy” program. This enabled individuals to spend down income to obtain Medicaid eligibility. The Medically Needy program applied only to nursing home care and not to assisted living or home care.

New Jersey has obtained a waiver from the federal government to abolish the Medically Needy program. In place of the Medically Needy program, New Jersey will not permit Miller Trusts. Under a Miller Trust, monies in excess of the income cap are deposited into a trust known as a Miller Trust or Qualified Income Trust (QIT). Any income deposited into the Miller Trust is non-countable. A problem typically arises when an individuals has both Social Security and a pension. Let’s suppose an individual has Social Security income of $2,000 per month and pension income of $1,500 per month. That would place that individual over the income cap of $2,199 per month. Under the New Jersey regulation, 100% of either source must be placed into the Miller Trust. In our example, either 100% of the individual’s Social Security or 100% of the individual’s pension could be deposited into the Miller Trust and bring the applicant’s income down below the income cap.

The Miller Trust must meet certain conditions:

• it must contain only income of the individual;
• it must not contain resources, such as income from the sale of real or personal property or money from a savings account;
• it must be irrevocable;
• it must have a trustee to manage administration of the trust and expenditures from the trust as set forth in federal and state law;
• New Jersey must be first beneficiary of all remaining funds up to the amount paid for Medicaid benefits upon the death of the Medicaid recipient; and
• income deposited in the QIT can only be used for specific post-eligibility treatment of income and to pay for costs of care.

From the Miller Trust only certain expenses are permitted. These include the following:

• $20 maximum bank fee;
• trustee’s fees;
• medical expenses;
• Personal Needs Allowance (PNA);
• Minimum Monthly Maintenance Needs Allowance (MMMNA); and
• any balances paid to the care provider.

The PNA is $35 per month for a nursing home resident, $107 per month for an assisted living resident; and $2,199 per month for an individual receiving home care. The MMMNA is $1,966.25 per month for the community spouse increased by a certain calculation for an excess shelter allowance and reduced by any other income being received by the community spouse. The trustee is almost always going to be an individual who is unfamiliar with trusts, so, in the author’s opinion, it is simpler to pay only the bank fees and the provider out of the trust and pay all of the other expenses listed above out of the funds not deposited into the trust.

The trust can be established by the individual trust beneficiary, someone holding a power of attorney on behalf of the individual, or the trust beneficiary’s guardian.

The trustee can be the spouse, child, someone holding a power of attorney on behalf of the beneficiary, or a guardian for the beneficiary, but cannot be the trust beneficiary. Whether a facility can serve as trustee is an open question. The trustee does not have to post bond. Statutory trustee’s fees are 6% of income; however, Division of Medical Assistance and Health Services (DMAHS) has not indicated what constitutes income. If all monies deposited into the trust are income, the trustee will receive a fee, if only monies remaining in the trust after payment of all disbursements are considered income, there will, in effect, be no trustee’s commissions. The state has published a template for a Miller Trust. It makes sense to use this template, because Medicaid workers will be familiar with it. If the lawyer drafts his or her own trust document, it will undoubtedly have to be sent to Trenton for review, and the application process will be significantly delayed. If a trustee resigns, the resigning trustee must provide an accounting. A successor trustee should be named in the document, and that trustee will take over responsibility for trust administration. If there is a trustee resignation, notice must be given to the remainder beneficiaries, to DMAHS, and to the County Board of Social Services (CBSS).

While the trust is being administered, there must be annual accountings to CBSS. The accounting must list all checks, including the date, the check number, the amount, and the payee. Receipts for all trust expenditures must also be provided. The accounting must also include the balance in the trust, copies of bank statements, and any change in the beneficiary’s income or resources. The accounting is given at the time of redetermination.

The trust will terminate if Medicaid medical assistance is no longer being provided or if the beneficiary is no longer over the income cap. This might occur if the individual is receiving annuity income for a term of years and the term of years expires. Upon termination, there must be notification to DMAHS and a payback. Theoretically, remainder beneficiaries can be named to receive any monies in the trust in excess of the payback, but no one will take a trip around the world on this money.

The trust must contain a spendthrift provision. The assets in the trust must be non-assignable. The trust must contain payback provisions. Anyone currently on the Medically Needy program will be grandfathered. It is likely that individuals will be grandfathered even upon redetermination. However, if a situation arises where an individual is on Medicaid pending the sale of a home and the home is then sold rendering the individual no longer eligible for Medicaid, upon reapplication will that individual be grandfathered? Likely, the answer is no, but DMAHS has not yet clarified this issue. Under Medically Needy the resource limit was $4,000 for an individual and $6,000 for a married couple. That resource limit is now reduced to $2,000 for an individual and $3,000 for a couple. The trust must be approved by CBSS and reviewed annually by DMAHS.

The latest Gallup Poll shows that 60 percent of Americans are dissatisfied with immigration levels in this country. That figure is up six percentage points from 2014, but lower than the high-water mark of 72 percent, which was set in 2008.

The timing of the record dissatisfaction level is telling. In 2008, the nation sank into its worst recession since the Great Depression, with unemployment swelling, businesses failing and a swooning stock market battering retirement savings. As a result, advocates for reduced immigration frequently repeat that immigrants (supposedly) flood a weak labor market and thus make it harder for Americans to find work. They also claim that immigration booms depress wages, and that immigrants lean heavily on social services such as welfare.

There may be a limited truth to effects on the labor market and social services, but the impact is decidedly short-term. The longer-term impact of cutting immigration levels would be much greater — and overwhelmingly negative. According to the White House, the U.S. economy would lose $80 billion in economic output, the nation’s deficits would grow by $40 billion over the next 10 years, and the Social Security Trust Fund would be shortchanged $50 billion if the estimated 11 million undocumented immigrants are not granted a path to citizenship.

By contrast, a 2013 Center for American Progress study concluded that providing legal status to undocumented immigrants living in the United States would increase the gross domestic product by $832 billion over 10 years. In addition, researchers predicted that the total personal income of all Americans would increase by $470 billion during the same period.

Especially now that the U.S. economy has revived, with unemployment levels dropping to pre-recession levels, the increasing demand for labor has not always been satisfied. The agricultural sector, with its heavy reliance on immigrant farm workers, and the technology sector, with its demand for highly skilled foreign-born workers, are two notably hard-hit industries.

But perhaps the biggest argument for immigration concerns the long-term need to keep the nation’s entitlement programs financially sound. A shrinking labor pool is bad enough, but one that is aging at the same time is even worse. The U.S. population itself is aging, but the nation has been very good at attracting young immigrants to help balance the labor market, to increase payments to entitlement programs such as Social Security and to keep retirement ages from being raised even more than they already have been.

A. Banerjee is a Houston immigration lawyer in Texas. Before selecting an attorney, contact the Law Offices of Annie Banerjee by visiting their information filled web site at http://www.visatous.com.

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There is no reduction in Social Security benefits for those who continue to work, as long as they have reached full retirement age. For some, Social Security benefits may actually increase, because benefits are calculated using the highest 35 years of earning.

For people born between 1943 and 1955, full retirement age is 66 years old. For those born in 1960 or later, full retirement age is 67 years old.

Taking Social Security benefits before reaching full retirement age and continuing to work can lead to a reduction in benefits. For those under retirement age for a full year, the Social Security Administration deducts $1 in benefits for every $2 earned above the annual limit of $15,720. For the year in which the individual reaches full retirement age, $1 is deducted for every $3 earned above an income limit of $41,880 in the months before the individual reaches full retirement age.

Learn more about our services by visiting www.littmankrooks.com.

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CMS has released the Medicare and Medicaid numbers for 2015. They are as follows:

Medicaid

• Income Cap[1] $2,199
• Maximum Community Spouse Resource Allowance (CSRA)[2] $119,220
• Minimum CSRA[3] $23,844
• Maximum Minimum Monthly Maintenance Needs Allowance (MMMNA)[4] $2,980.50
• MMMNA (July 1, 2014 until June 30, 2015)[5] $1,966.25
• Excess Shelter Allowance (July 1, 2014 until June 30,   2015)[6] $589.88
• Maximum Resource Limit (Individual)[7] $2,000
• Minimum and Maximum Cap on Equity in the Home[8] $552,000 –  $828,000

Medicare

Part A

• Medicare Co-Payment – Skilled Nursing Facility (SNF)[9] $157.50
• Hospital Deductible[10] $1,260
• Per day Co-Insurance – Day 61 -90[11] $315
• Per day Co Insurance – Day 91-150[12] $630

Part A Premium (for voluntary enrollees only)

• With 30-39 quarters of Social Security coverage[13] $234
• With 29 or fewer quarters of Social Security coverage[14] $407

Part B

• Medicare Part B Deductible[15]                                                          $147
• Standard Part B Premium[16]                                                                                 $104.90

Medicare Part B – Single or Married and Filing Separate Return

Part B Income-Related Premium[17]

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at some time during the taxable year are:

Standard Part D Cost-Sharing for 2013[18]

• Annual Deductible Maximum $320
• Member Pays 25% of the Next $2,640                  25% = $660
• Initial Benefit Period Maximum                             $2,960   ($320 + $2,640)

• Donut Hole Threshold                                              $3,720
• Catastrophic Coverage                                           $4,700  ($320 + $660 + $3,720)

• Catastrophic cost-sharing:  Generic        $2.65 or 5% (whichever is greater)
• Catastrophic cost-sharing: Brand        $6.60 or 5% (whichever is greater)

[1] 42 U.S.C. §1396a(a)(10)(A)(v); 2015 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[2] 2015 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[3] 2015 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[4] 2015 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[5] 79 Fed. Reg. 3593 (Jan. 22, 2014).

[6] 79 Fed. Reg. 3593 (Jan. 22, 2014).

[7] 20 CFR § 416.1205(c).

[8] 42 U.S.C. §1396p(f); 2015 SSI and Spousal Impoverishment Standards, www.medicaid.gov.

[9]Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[10] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[11] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[12] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[13] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[14] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[15] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[16] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[17] Medicare 2014 & 2015 Costs at a Glance, www.medicare.gov.

[18] http://www.medicareadvocacy.org.

Social Security and the Internal Revenue Service (IRS) have released cost-of-living numbers for 2015. They are as follows:

Social Security

• For 2015 there is a 1.7% COLA increase for Social Security benefits.[1]
• The Maximum Social Security benefit for a single individual retiring at full retirement age[2]   $2,663

• Supplemental Security Income (SSI) – Single[3] $733
• Supplemental Security Income (SSI) – Couple[4]$ 1,100
• Supplemental Security Income (SSI) – Essential Person[5] $367
• Maximum Annual SSI benefit – Single[6] $8,796
• Maximum Annual SSI benefit – Couple[7] $13,200
• Substantial Gainful Activity (SGA) – Disabled[8] $1,090
• SGA – Blind[9] $1,820
• Tax Rate Employer and Employee calculated separately[10] 65%

(includes OASDI and Medicare)

Add an additional .09% for individuals earning more than $200,000 or married couples earning more than $250,000

• Tax Rate Self Employed[11] 30%
• Trial Work Period[12] $780
• Maximum Social Security Wage Base[13] $118,500
• Quarter of Coverage[14] $1,220

IRS

• Annual Gift Tax Exclusion^[15] $14,000
• Gifts to Non-Citizen Spouse^[16] $147,000
• Income Level/Maximum Tax Estates and Trust^[17] $12,300
• Income Level/Maximum Single Individual Income Tax^[18] $413,200
• Federal Estate Tax Exemption^[19] $5,430,000
• Personal Exemption^[20] $4,000
• FICA Wage Threshold^[21] Domestic Workers $1,900
• FUTA Wage Base^[22] $7,000
• Maximum IRA Contribution^[23] $5,500
• “Catchup” IRA Contribution^[24] $1,000
• Applicable Allowable AGI Limit Roth IRA Single Taxpayer^[25] $116,000 – $131,000

• Applicable Allowable AGI Limit Roth IRA Married Taxpayer Filing Jointly^[26]   $183,000 – $193,000

• Medicare Tax on Earned Incomes over $200,000 – Single; over $250,000 – Married^[27]                                                                                          0.9%

• Medicare Tax on Unearned Incomes over $200,000 – Single; over $250,000 – Married^[28]   3.8%

[1] 79 Fed. Reg. 64455 (Oct. 29, 2014).

[2] 2015 Social Security Changes, www.socialsecurity.gov.

[3] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[4] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[5] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[6] 79 Fed. Reg. 64457 (Oct. 29, 2014).

[7] 79 Fed. Reg. 64457 (Oct. 29, 2014).

[8] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[9] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[10] 2015 Social Security Changes, www.socialsecurity.gov.

[11] 2015 Social Security Changes, www.socialsecurity.gov.

[12] 79 Fed. Reg. 64460 (Oct. 29, 2014).

[13] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[14] 79 Fed. Reg. 64456 (Oct. 29, 2014).

[15] I.R.C. §2503; Rev. Proc. 2014-61(3)(.35)(1).

[16] I.R.C. §2523; Rev. Proc. 2014-61(3)(.35)(2).

[17] I.R.C. §1(e); Rev. Proc. 2014-61(3)(.01) Table 5 Section 1(e).

[18] I.R.C. §1(c); Rev. Proc. 2014-61(3)(.01) Table 3 Section 1(c).

[19] I.R.C. §2010; Rev. Proc. 2014-61(3)(.33).

[20] I.R.C. §151; Rev. Proc. 2014-61(3)(.24).

[21] 78 Fed. Reg. 66413 (Nov. 5, 2013).

[22] IRC § 3306(b)(1).

[23] IRC § 219(b)(5)(A);IR-2013-86 (Oct. 31, 2013).

[24] IRC § 219(b)(5)(B); IR-2013-86 (Oct. 31, 2013).

[25] IR-2014-99 (Oct. 23, 2014).

[26] IR-2014-99 (Oct. 23, 2014).

[27] IRC § 3101(b).

[28] IRC § 1411.

This blog is going to focus on disabled and noncustodial parents and what sort of impact social security benefits will have on child support obligations. When someone is suffering from a disability, he or she receives social security disability benefits, and if that person is a parent, there is often another derivative benefit paid for any minor children that they have.

Did you know? Over 2 billion dollars each month are distributed as derivative minor benefit to disabled parents with minor children who number around 4 million.

The Case Of Disabled Parent Who Isn’t The Custodial Parents And Is Obliged To Pay Child Support

Social security benefits are considered as income for child support and thus the disabled parent may have an obligation to pay the child support to the other parent who has custody. The less time the disabled parent has with the child, the more the amount of child support. Such an amount can create a financial difficulty for the parent.

There is good news though, derivative social security benefits can sometimes be paid by the Social Security Administration to the custodial parent directly. This does have a proper process that the disabled parent has to follow. To get this solution, the disabled parent has to notify the custodial parent that he or she receives social security benefits. Then the custodial parent will apply for the derivative social security benefits directly through the Social Security department.

What happens through this is that the amount for Social Security benefits is then credited towards the child support to some extent relieving the disabled parent of that financial burden.

The Case Of A Disabled Parent When The Custodial Parent Refuses To Apply For Derivative Social Security Benefit

It seems unimaginable how someone can refuse to receive something that they are entitled to and yet there are several cases where this is commonly seen. Whether it is because of California divorce or some prevailing bitterness between the parents, sometimes parents with high emotions can see the derivative socials security benefit as an advantage to the non custodial parent and thus refuse to do anything that helps the other.

Orange County family law has anticipated such a problem and has given us a solution to it.  Family Code 4504(a) states that the custodial parent must contact the Social Security administration within 30 days of receiving a notification from the non-custodial parent. The act is meant to reduce illogical fights and excuses of non-cooperation from the custodial parent.

Gerald A. Maggio is an experienced Orange County divorce and family law attorney and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

If the marriage did not last 10 years, then no, the Social Security Administration will not pay benefits to one spouse on the record of another.  If this is an issue, mediation can help spouses find and draw up alternative spousal support agreements that work for both parties.

Divorcing couples nearing or at retirement age should proceed carefully.  There are some rules about when divorced spouses can apply for benefits based on the record of a higher-earning spouse.  In addition, there are some complications if one spouse would like to retire early.

For more information on the issue of divorce and Social Security benefits, go to http://www.ssa.gov/retire2/divspouse.htm.

Gerald A. Maggio is an experienced Orange County divorce and family law lawyer and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

Let’s call my son Johnny. He has a neurological impairment and is ambulatory and impressively articulate. These are my views and perceptions as his mother. I hope the points that I will highlight will resonate with readers. I also hope that some of you will be motivated and proactive in not only making a transition plan but making that plan a reality that is sustainable and seek guardianship, before your child reaches the age of majority if appropriate.

My Story

We live in a great school district in Westchester County.   My son had had a number of medical interventions and we had a relatively sound understanding of our challenges.   Yes, we all know that each child is different and has different needs. My son moved up in grades, followed the Regents track, though he was always in special education classes.

In high school, it all came crashing down and it became apparent to everyone that a Regents diploma was not going to become a reality (for him).

Despite the fact that he had a transition plan and even a transition coordinator set in place in our district, Johnny was no longer interested. As of 11^th grade, my son did not want to go to school anymore, thinking it was a huge waste of his time. His CSE agreed that if he didn’t want to attend school there was no way to force him. At that juncture and to my dismay, he was over 18, guardian- less, and therefore emancipated and able legally to make his own decisions about life. Legally, I learned that few options exist for parents to exercise control and supervision over a child after he or she turns 18, whether a child is in school or not.   Johnny had not, in the true legal sense of the word, transitioned out of school nor had he transitioned into anything else.

He became more and more out of sync with so many and so much. I watched him, helplessly, as he sat around, slept, played video games, watched TV and frequented CVS to buy candy. This went on for over two years.

I tried many different courses of action: I called adult protective services, the police, the pediatrician, and the neurologist. I cried to friends and family members. I even called Mental Health Association (MHA), who told me in writing that if Johnny wasn’t a threat to himself or to others, they could not do a thing to help me.

What was my problem? My child, a young adult now, was sinking: disengaged, with challenges no meaningful pursuits and no high school degree. My other children, Johnny’s siblings, were progressing.   We all felt aggrieved, irritated, frustrated and distressed.

I could find no one, nowhere, no how to help me and Johnny!

There were a number of contributing factors to our rough patch:

1. In as much as he was motivated, he always felt as if he had been pulled down. He was never fully accepting of his own challenges albeit he was extremely knowledgeable of his interventions.

2. I (his mother), had not fully understood that money cannot buy a young adult with a disability services.

3. All of the professionals who had worked with my son had always seen my son as ‘on the fence’; he straddled two worlds; mainstream but not, non-mainstream yet so articulate and able.

Finally, it was made clear to me that the only one who could help my son…was me. I asked myself over and over, “What is appropriate for my son?”

The convergence of these factors made the later years of high school and post-high school a living disaster. I realized that the only way to access county, state and federal services was for him to be in the system and that was a scary thought for me to grasp.

I made one and only one resolution that year: I was going to move my son to a ‘better place’. I didn’t have an idea what exactly that meant nor did I know what that would look like but I committed to knowing for a fact that the status quo absolutely was not working: not for him, me, or the rest of the family.

Since no agency could help, it had to be me. I had the power because Johnny lived in my house with me – otherwise, I realized, I would have had no legal authority over him.

Johnny already had his OPWDD eligibility. I visited Social Security, ACCES VR, and interviewed Medicaid service coordinators (MSC).   For the record: if you are NOT happy with your MSC you can and SHOULD change them. There is absolutely no reason for you to stay with someone who is not helping you/ your child.

8 months later… Everything is in place!

Johnny has a new Medicaid service coordinator, who has visited my son numerous times (over the course of just six weeks)! I rented an apartment less than one mile from my house for one year. Johnny is set up there. I buy his groceries; he comes with me, is engaged and helpful. He even washes his sheets – I couldn’t get him to ‘allow’ me to clean his sheets when he lived at home, but now, we are learning how to do laundry and have washed his new sheets. Life is good. Johnny is 1000% more engaged in his life, I am happier, his siblings experience calmness in their home, ACCESS VR is helping Johnny find a job and our MSC is on the case!

What to learn from my experiences:

1. You can ask 100 people their opinion regarding your child but only you can change the status quo.
2. Don’t be afraid — Change is good!
3. We need to organize our kids’ lives so that when we are not around their life can continue and flourish!

If I could impart one piece of advice based on this experience and my knowledge: Sort out a transition plan for your child before he or she reaches the age of majority and seek guardianship, if appropriate. The age of majority is legally 18 in New York; regardless of whether your child has a disability or not.Take these steps before he/she exits high school. Contrary to popular belief, these two moments in time are not necessarily the same as your child may be entitled to exit high school at 21 years of age.

Learn more about our transition planning services by visiting www.specialneedsnewyork.com.

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The COLA for 2015 is 1.7%, which means the VA Benefit for 2015 will increase from 2014.

Michigan VA Benefit 2015 award numbers.

 VA Benefit for a Married Veteran for 2015 is $2,120

The VA Benefit for a married veteran in 2015 will be $2,120.  That mean that if a veteran is married and needs home care, assist living or nursing home care in Michigan, then that married veteran can receive up to $2,120 per month to help pay that cost of care.  To qualify as a married veteran, the veteran needs to have served 90 days active duty, one day during a period of conflict, and cannot be dishonorably discharged.  If those requirements are met, then the married veteran needs to be paying more long-term care costs then income coming in from social security or pension.  If you have a family member who is a married veteran that meets those requirements, call our law office, regardless of assets, to see if we can get you qualified for the Michigan veterans benefits for a married veteran.

VA Benefit for a Single Veteran for 2015 $1,789

The VA benefit for a veteran in 2015 will be $1,789 per month, tax free.  The same requirements hold.  That is, the veteran needs to have served 90 days active duty, one day during a period of war, and cannot be dishonorably discharged.  Then the same VA income test applies, more long-term care costs than income from social security or pension.  There’s also an asset test, just like if you were a married veteran, but that’s where we, as a Michigan VA Accredited attorney, come in to walk you through the process necessary to get qualified for your Michigan Veterans benefits.

VA Benefit for a Surviving Spouse of a Veteran in 2015 is $1,149

If you are a surviving spouse of a veteran living in Michigan in 2015, then you can receive up to $1,149 per month to help pay your long-term care costs.  To qualify, the veteran the surviving spouse was married to needs to have served 90 days active duty, one day during a period of conflict and cannot be dishonorably discharged.  If the veteran meets those requirements, then the surviving spouse also needs to have long-term care costs that meet or exceed her income.  If all those requirements are met, then the surviving spouse of a veteran may receive up to $1,149 per month, tax free to pay her long-term care costs.

Do You Need Help With Your Michigan VA Benefits?  Call our Michigan VA Accredited Attorney

Do you need help qualifying for the Michigan VA Benefit?  Give our office a call or submit your information in the contact form on this page and we’ll follow up with you.

The post Michigan VA Benefits for 2015 appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

[This article was originally printed in the Straight Word, a publication of the Burlington County Bar Association.]

In administering a special needs trust, it is crucial that the trustee not advance cash to the beneficiary. Historically, beneficiaries have sent their bills to the trustee for payment. An easier way to accomplish this objective is to obtain a credit card for the trust beneficiary. If the beneficiary has good credit, the card can be obtained in the beneficiary’s name. If the beneficiary does not have good credit or is a minor or is incapacitated, a credit card could be obtained in the name of a family member. The process of determining distributions from a special needs trust should begin by a trustee and beneficiary and/or beneficiary’s family developing a budget. The budget would be broken into three main categories.

One would be shelter expenses. The second would be transportation, and the third would be personal items. Generally, trustees should avoid paying for in-kind support and maintenance (ISM). ISM is defined as food and shelter. There are ten items of shelter expense that constitute ISM. Other categories of shelter expense do not count as ISM. The ten items that do constitute ISM are: mortgage payments, property insurance (if required by the mortgage holder), rent, gas, electricity, heating fuel, water, sewer, garbage collection service and real estate taxes. Frequently, the trustee must pay these expenses because the beneficiary simply does not have sufficient income to do it. Payment of these expenses results in a reduction of the SSI payment of one-third or one-third plus $20, depending on living arrangements. Transportation expenses include the purchase of a vehicle and maintenance including gasoline. It is easier for the beneficiary to get a credit card and pay for gas by a credit card than it is to pay cash. There are a whole host of personal items that can be more easily paid for by credit card than by cash or by sending bills to the trustee for payment.

During the last year, the POMS were changed to permit a special needs trust to reimbursement a third party for goods or services purchased on behalf of the trust beneficiary. This makes it easy for a parent to use a credit card to buy items for the beneficiary and have the credit card bills sent to the trustee for payment. However, there are certain rules that must be strictly followed. If it is impossible for the beneficiary or a family member to obtain a credit card due to bad credit, a secured credit card should be considered. Under a secured credit card, a deposit is made with the credit card issuer and an agreement signed so that if the credit card is not paid, the issuer can obtain payment through the funds on deposit to secure the card. The agreement must be carefully drafted to insure that under no circumstances will the beneficiary ever receive the funds on deposit with the credit card issuer. Rather, those funds would be returned to the trustee.

Credit Cards

In appropriate cases, the trust beneficiary, if an adult and competent, should obtain a credit card. The credit card should have a low limit so that it is not abused. Credit cards are loans, and loans are not considered income for SSI purposes.[1] The POMS state, “If a trust pays a credit card bill for the trust beneficiary, whether the individual receives income depends on what was on the bill. If the trust pays for food or shelter items on the bill, the individual generally will be charged with in-kind support and maintenance (ISM) up to the Presumed Maximum Value (PMV). If the bill includes non-food, non-shelter items, the individual usually does not receive income as a result of payment, unless the item would not be a totally or partially excluded non-liquid resource the following month.”[2] The trustee must examine each credit card bill to determine a number of factors:

• Did the beneficiary obtain cash from the credit card? If so, the cash would be income in the month received.

• Did the beneficiary charge any items that constituted ISM?

• Did the beneficiary charge any items that were for the benefit of a third party, rather than the trust beneficiary? If so, there would be a violation of the sole benefit rule and there may be a transfer of asset penalty.

The trustee may refuse to pay an inappropriate credit card bill or the inappropriate portion of a credit card bill.

In some situations, the beneficiary of a trust utilizes a credit card for items that violate the sole benefit rule. The trust may refuse to pay the bill. For certain beneficiaries, the trustee may want to negotiate a payment plan so that the beneficiary can make payments from his or her Social Security income. If negotiations fail, the trustee should petition the court prior to paying for a debt incurred for purchases made in violation of the sole benefit rule. Additionally, the credit card should not be used to pay for items that would be ISM, if this can be avoided.

If there is a third-party special needs trust, distributions for payment of credit card balances where the beneficiary has purchased items for the benefit of others do not violate the sole benefit rule. The trustee may want to seek reimbursement for such charges in appropriate cases.

Gift Cards/Gift Certificates

Trustees love to give trust beneficiaries gift cards or gift certificates. However, gift cards and gift certificates are considered cash equivalents. If a gift card/certificate can be used to buy food or shelter (e.g., restaurant, grocery store or VISA gift card), it is unearned income in the month of receipt. Any unspent balance on the gift card/certificate is a resource beginning the month after the month of receipt. If the store does not sell food or shelter items (e.g., book store or electronic store), but the card does not have a legally enforceable prohibition on the individual selling the card for cash, then it is still unearned income.[3] Best practice dictates the use of credit cards for beneficiaries of special needs trusts rather than gift cards.

[1] 20 C.F.R. 416.1103(f); POMS SI 01120.201 I 1 d.

[2] POMS SI 01120.201.I.1.d.

[3] POMS SI 01120.201 I 1 e.

But reform is stalled for more reasons than politicians mention or protests denounce. Some we can guess, based on each party’s philosophy. Other reasons, however, have more to do with cost analysis than compassion.

A recent report authored by Robert Rector and Jason Richwine of the Heritage Foundation took an in-depth look at the economic ramifications of immigration reform. Their key argument points to a damaging effect on U.S. taxpayers.

Government benefits are distributed lopsidedly, they say. Rector and Richwine suggest that each year, undocumented immigrants collect government benefits to the tune of $54.5 billion.

The report claims that the average American household receives $31,584 yearly in benefits between local, state and federal resources.

Heads of households who have a college education receive, on average, $24,839 in benefits, and they pay $54,089 in taxes. The government nets $29,250.

Heads of households who have less than a high school education, however, receive $46,582 in benefits, and they pay only $11,469 in taxes. The net “deficit” to the government is $35,113. All American taxpayers are footing that deficit. Not many are even aware of how large the gap is.

The large economic gap that education levels create is important to the immigration debate, as nearly 50 percent of illegal immigrants have less than a high school education. Only about 25 percent have completed study equivalent to high school or hold a diploma. Though they may contribute to the economy in other ways, many under-educated, undocumented workers simultaneously drain it.

Philosophical and political differences aside, the nation is already united in supporting under-educated, illegal immigrants though heavy tax imbalances. And if the number of immigrants with less education who are allowed to enter the country increases (whether through immigration reform or another route), the economic gap will escalate.

If undocumented immigrants become legalized residents of the United States, they will eventually have access to all government benefits. Unfortunately, because of the average balance of benefits to tax in many of these households, national benefit costs for the (then) documented immigrants would rise to approximately $106 billion yearly. Upon retirement with access to Medicare and Social Security, benefits would hit $160 billion.

Compassion for this first generation of illegal aliens has the potential to generate $6.3 trillion in lifetime government costs in benefits.

Compassionate immigration reform, based on the Heritage Foundation report numbers, should not be free. Policymakers must find a way to reach out to those crossing its borders without harming its current citizens.

Rifkin & Fox-Isicoff, PA is immigration law firm in Orlando and Miami Florida. To learn more, visit http://www.rifkinfox.com/.

1. It is estimated that over 120,000,000 Americans do not have an up-to-date estate plan to protect themselves, and their families, making estate planning one of the most overlooked areas of personal financial management? Financial and estate planning is not just for the wealthy and is an important process for everyone. With advance planning, issues such as guardianship of children, managing bill paying and assets in the event of sickness or disability, care of a special needs child or parent, long-term care needs, and distribution of retirement assets can all be handled with sensitivity, care, and at a reasonable cost.

2. The majority of Americans lack the ability to adequately plan for their retirement as most Americans over 65 are totally dependent on Social Security. With proper knowledge and planning, future generations will certainly have a more secure future.

3. Most people mistakenly believe that concepts like financial awareness, financial planning , retirement planning, planning for major expenditures, investment planning, tax planning, insurance planning, and estate planning, are just for the wealthy. When, in fact, few people today can really attain and maintain their financial security without forethought and a strategy to protect themselves and their families. This attitude can be financially harmful and can be avoided with proactive action. Managing personal finances today is more complicated and more important than ever. We’re living longer, but saving proportionately less. Scores of us feel less secure in our jobs and homes than we did in the past. We see our money being drained by the high cost of housing, taxes, education, and health care while dealing with the uncertainty of investments and our economy. We worry about the future, or unfortunately in many cases, simply try not to think about it.

Click here to read the Six Steps Toward Successful Estate Planning. To learn more about The Financial Awareness Foundation and National Estate Planning Awareness Week, click here.

Learn more about the process of estate planning from Littman Krooks by visiting our website or contacting one of our attorneys.

The legislation, already passed unanimously by the Senate, now heads to President Obama’s desk for his signature.

Veterans will see a boost in their payments starting on December 1, so that the cost-of-living increase will match the rate of Social Security benefits. Approximately 4.5 million veterans rely on disability benefits, and many of those individuals could have seen a cut to their benefits had Congress not acted.

The veterans whose disability payments are their only source of income are especially breathing a sigh of relief.

In a news cycle that has been dominated by partisanship, especially with the mid-term elections, this story is a refreshing reminder that when it comes to those who have served our country, our representatives can shed their partisan coats and come together for the greater good.

Read more on The Hill’s website:
http://thehill.com/blogs/floor-action/house/217975-house-clears-increase-in-veterans-disability-payments

Legal Help for Veterans, PLLC fights for veterans rights. We fight to make sure you get the benefits you deserve from the Department of Veterans Affairs. To learn more or contact a veterans lawyer, visit http://www.legalhelpforveterans.com/ or call 800.693.4800

The Social Security Administration should have reason to celebrate. After all, August 14, 2014, marked the 79th anniversary of the day when President Franklin Roosevelt signed the Social Security Act, which ushered in the landmark entitlement program. However, the agency’s birthday was a less than cheerful one, coming on the heels an audit that criticized the SSA for deciding to cut staffing and reduce its service hours as well as the news that its new multimillion-dollar computer system may very well have turned out to be an expensive failure.

According to the audit that was produced by the SSA’s own inspector general’s office, “overall service has suffered” because of the agency’s decision in 2011 to trim its staff by nearly 11,000 employees and reduce its weekly field office hours from 35 to 27. The audit found that the end result of the agency’s cutbacks was felt as soon as fiscal year 2013, when “the public waited longer for a decision on their disability claim, to talk to a representative on the National 800-Number, and to schedule an appointment” at a field office. (1)

The process of applying for Social Security disability benefits is already an exercise that can take a significant amount of time and become rather complex. The inspector general’s findings are not welcome news for disabled Americans who need a speedy resolution of their claims. In addition to the critical assessment from the inspector general’s office, an internal report recently concluded that the SSA’s new $300 million computer system that was designed to handle its disability claims does not work. The agency laid the groundwork for the new system six years ago, when its aging computers were being swamped by disability claims, but the report found that delays and mismanagement have plagued the new system. And SSA officials have not been able to provide an answer for when the new system will be up and running. (2)

The Social Security Administration may have thought that its new computer system could make up for its decision to cut back service, but that assumption would have been dependent on the system actually working. Instead, already long wait times for the processing of disability claims will get even longer. Also, SSA has attempted to thwart phone applications by not advertising such are available and at times tell claimant’s the only two avenues to apply are on the computer or a personal appearance at the local SSA office. It is clear the phone application is the easiest for the public, but the “consumer” being right has fallen on deaf ears in most SSA offices.

www.FloridaSocialSecurity.com

David W. Magann, P.A.

813-657-9175

Sources: (1) The Washington Post 2014, (2) The Associated Press 2014

A study from Vanguard, a leading provider of Individual Retirement Accounts (IRAs) and 401(k)s, concluded that even retirees with significant retirement savings rely more on Social Security and traditional pensions than on tax-deferred retirement accounts for their retirement income.

Researchers studied the wealth and income of 2,600 older households with $100,000 or more in retirement savings. Even for those households with significant assets, Social Security, the bedrock of American retirement, accounted for the largest portion of income: a median of $22,000 per year. Perhaps surprisingly, traditional pensions were the next highest source of annual income, with a median of $20,000. Tax-deferred retirement accounts provided a median $13,000 per year in retirement income.

What does the future hold? Researchers say the portion of private-sector workers with traditional pensions has dropped from 88 percent in 1975 to about 33 percent today. That means that tax-deferred retirement accounts and other private savings will become an even more important supplement to Social Security retirement benefits in the future.

Talk to a New York estate planning attorney at Littman Krooks to learn more.

When to Consider Stepparent Adoption

Some scenarios where stepparent adoption may be the best choice include cases where the other biological parent has died; cases where the other parent is uninvolved in the child’s life, due to imprisonment or abandonment; and cases where the other parent voluntarily relinquishes his or her rights. It is not appropriate in situations where the other parent still plays a role in the child’s life.

Stepparent adoption is ideal in cases where the stepparent already plays a parental role in the child’s life, and the adoption serves as a formalization of that bond.  In such cases, the legal benefits of stepparent adoption can be significant. For example, the adoptive parent gains the right to make legal decisions on behalf of the child as the biological parent would. Adoption also ensures that the stepchild is eligible for Social Security and life insurance benefits if the stepparent dies.

It is important to understand that the stepparent adoption is a permanent process that cannot be revoked later on. If the stepparent and biological parent divorce later, the adoption remains valid and the stepparent will retain their legal rights and responsibilities to the child.

Terminating the Other Parent’s Legal Rights

Stepparent adoption cannot occur without terminating the legal rights of the other biological parent. Filing a petition for freedom from parental custody is the first step in the process. If the other parent is still living but absent, every effort must be made to contact them so that they have the opportunity to contest the proposed adoption.

In some cases, the family may draft a post-adoption contract that allows the biological parent to continue to see the child on a limited basis after the adoption.

The Adoption Process

If the child is over the age of 12, the child’s preferences and consent are important to the process. In such cases, the child will must sign a consent form to allow the adoption to proceed.

Other aspects of the adoption process are designed to ensure the safety and wellbeing of the child. For example, the family will work with Social Services and home visits may be required. The family may also need to appear in court in some cases.

If your family is interested in stepparent adoption, the first step is to schedule a consultation with a family law attorney who has experience in stepparent adoptions.

Gerald A. Maggio is an experienced Orange County divorce attorney and family law attorney located in Irvine, California, serving the Orange County and Riverside areas. Mr. Maggio assists clients with legal issues including divorce, legal separation, divorce mediation, child custody, prenuptial agreements, stepparent adoptions, and other family law issues. Mr. Maggio has practiced law in California since 1999, and founded The Maggio Law Firm in 2005, focusing exclusively on divorce and family law matters.

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People approaching retirement age have a choice to make regarding Social Security retirement benefits. Many people choose to start receiving retirement benefits early, which is possible starting at age 62. However, the earlier a person begins receiving benefits, the less he or she gets — up to 30 percent less than the amount the person would receive if he or she waited until full retirement age (66 for current retirees). Then, the longer someone delays retirement up to age 70, the more of a benefit bonus that person gets.

Generally, if a person is in good health and financially secure, postponing benefits as long as possible makes the most economic sense. Some experts say that, all other factors being equal, retirees should think of age 70 as their actual retirement age.

However, there are a number of personal factors that may influence the decision to begin taking benefits. Some may not have the option of waiting due to financial or health concerns, and others argue that taking benefits early allows people to invest their savings wisely, rather than having to use them for living expenses. Ultimately, the decision is the choice of each individual.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

First, if you are receiving Social Security benefits already, then you will be enrolled in Medicare Part A (hospital insurance) and Part B (medical insurance) automatically. You should receive information about enrollment three months prior to your 65th birthday. You will become eligible beginning the first day of the month you turn 65. If you turn 65 on the first day of the month, then you will be enrolled beginning on the first day of the prior month.

Most people not already receiving Social Security benefits will have to enroll in Medicare through the Social Security Administration. You can enroll anytime during a seven-month period that starts three months prior to your 65th birthday. You also have the option of choosing a Medicare Advantage (Part C) private insurance plan as an alternative to Part A and Part B. If you choose a Medicare Advantage plan, it may include prescription drug coverage; otherwise, you will have to join a Medicare Prescription Drug Plan (Part D).

Finally, be sure to consider the timing and interaction of any health insurance you receive through your employer. If you are retiring at age 65 and moving into Medicare, be sure to coordinate the dates of your coverage. If you will keep working past age 65, then you will need to understand how your employer’s group health plan interacts with Medicare; it may still be necessary for you to enroll in Medicare.

The attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

No government agencies track data on theft of Social Security numbers from Medicare cards, but it is clearly a problem. The Department of Health and Human Services recently announced the recovery of $4.3 billion from attempted federal health insurance fraud schemes in a single fiscal year – a record high.

In 2007, the George W. Bush administration ordered all federal agencies to cease any unnecessary use of Social Security numbers. And the Centers for Medicare & Medicaid Services (CMS) acknowledges the need to remove SSNs from Medicare cards. But doing so would cost between $255 and $317 million, according to a Government Accountability Office report – funds that are hard to secure.

In the meantime, the AARP recommends seniors do not carry the cards, saying it is usually unnecessary to do so. An AARP representative told Reuters her recommendation for seniors who are uncomfortable being without the card is to make a photocopy of it with the first five digits of their Social Security number masked out. Then you can have proof of Medicare enrollment with you, just in case, while protecting yourself from identity theft.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

Kristina Derro, Esq.

Veterans Disability Lawyer

The government has launched a new process to expedite Social Security disability claims for a special category of veterans, the Social Security Administration announced Tuesday, March 18.

Under the new process, Social Security claims from veterans with a Veterans Affairs Department disability compensation rating of 100 percent Permanent and Total will be treated as high priority, and qualifying veterans will receive expedited decisions.

However, the VA rating does not guarantee an approval for Social Security benefits; it only ensures the process will be expedited for those veterans. The veterans still must meet the strict eligibility requirements for a disability allowance.

Carolyn Colvin, acting Social Security commissioner, said the new process is similar to the way the agency currently handles disability claims from wounded warriors.

“We have reached another milestone for those who have sacrificed so much for our country and this process ensures they will get the benefits they need quickly,” Colvin said in a news release. “While we can never fully repay them for their sacrifices, we can be sure we provide them with the quality of service that they deserve. This initiative is truly a lifeline for those who need it most.”

To receive the expedited service, veterans must tell Social Security they have a VA disability compensation rating of 100 percent Permanent and Total and must show proof of their disability rating with their VA notification letter.

Congressman John Sarbanes (D-Md.), who introduced legislation in Congress to promote the initiative, praised the change.

“No one wants to put America’s veterans through a bureaucratic runaround,” he said in the release. “As the baby boomer generation ages and more veterans of the wars inIraqandAfghanistanneed care, this common sense change will help reduce backlogs and cut through unnecessary red tape so that our most disabled veterans receive the benefits they’ve earned.”

To read further on this issue, check out the Stars & Stripes article: http://www.stripes.com/news/some-veterans-will-now-have-their-social-security-disability-benefits-expedited-1.273397

In planning for retirement, many people focus on how much money they will need to save in order to live comfortably. However, in order to get to that number, one should calculate a personal life expectancy, as many people tend to underestimate the number of years of retirement for which they need to save.

As Janet Novack points out in an excellent Forbes column, there are a number of retirement calculators available to help one run the numbers. These range from simple tools to calculate how Social Security benefits will be affected by taking early retirement to sophisticated evaluations of investment strategies.

Perhaps most interesting are the personal life expectancy calculators. These tools take details, such as gender and personal medical statistics (such as blood pressure, exercise and use of alcohol and tobacco), to produce a prediction of personal life expectancy. The Living to 100 Life Expectancy Calculator is detailed and personalized, but a user must provide an email address. Be sure to read the privacy policy. The MetLife Life Expectancy Calculator is simpler and anonymous.

Learn more from an estate planning lawyer at Littman Krooks by visiting http://www.elderlawnewyork.com/.

The Social Security Administration (SSA) recently announced an expansion to its list of Compassionate Allowances conditions.

The Compassionate Allowances program affects those applying for Social Security Disability Insurance who have certain very serious illnesses or disabilities. Benefit determinations for those applicants are expedited, and the SSA typically renders its decisions in days (instead of months or even years).

The SSA announced 25 new additions to the list, including 12 cancers, bringing the total number of its conditions to 225.

In a statement, Acting Commissioner of Social Security Carolyn W. Colvin said, “Social Security disability benefits are a vital lifeline for individuals who are facing severe diseases, and we must ensure that they receive the benefits they rightly deserve.”

The SSA has held public outreach hearings in order to get feedback on the determination of the conditions best suited to the Compassionate Allowances program. To date, the program has helped nearly 200,000 severely disabled people get quick approval for disability benefits.

Contact a Virginia elder law attorney at Hook Law Center by visiting http://www.hooklawcenter.com/.

The Social Security Administration (SSA) recently announced an expansion to its list of Compassionate Allowances conditions.

The Compassionate Allowances program affects those applying for Social Security Disability Insurance who have certain very serious illnesses or disabilities. Benefit determinations for those applicants are expedited, and the SSA typically renders its decisions in days (instead of months or even years).

The SSA announced 25 new additions to the list, including 12 cancers, bringing the total number of its conditions to 225.

In a statement, Acting Commissioner of Social Security Carolyn W. Colvin said, “Social Security disability benefits are a vital lifeline for individuals who are facing severe diseases, and we must ensure that they receive the benefits they rightly deserve.”

The SSA has held public outreach hearings in order to get feedback on the determination of the conditions best suited to the Compassionate Allowances program. To date, the program has helped nearly 200,000 severely disabled people get quick approval for disability benefits.

Michigan Veterans Benefits For Seniors

Many Michigan families do not realize that there are Veterans Benefits available to pay for home care, care contracts and assistance in the home for seniors.  As one of the few Certified Elder Law Attorneys in Michigan, my practice is devoted to helping seniors, veterans and their families navigate the long-term care legal maze.

A common mistake I see families make is that they wait to long to try to secure their Aid & Attendance veterans benefits.  It’s unfortunate because many times if they would have come into our Bloomfield Hills law office years ago, we could have had their VA Benefit turned on this whole time.

This means that families could literally be leaving thousands of dollars on the table.

For example, let’s say Joe is a senior veteran living in Troy, Michigan.  He’s living on his own, however his daughter helps him with some activities of daily living a few times a week for a couple hours a day.  Plus, he receives a couple hours of private duty home care from a commercial Oakland County home care company.

Let’s assume Joe receives $1500 per month in Social Security and has $300k in savings and a house.  He is paying the commercial home care company $1000 per month.

If Joe or his family were to go to a local veterans service organization, chances are they would tell him that he will not qualify for the full benefit (or any benefit) because he does not meet the income or asset tests.

However, if he were to come to our office, as a VA accredited attorney, I would counsel the family in setting up a Veterans Asset Protection Trust, Care Contract and submit the VA application on his behalf.  In the end I would be able to turn on a $1,700+ monthly tax free benefit.

It’s unfair that it is all in who you talk to and where you get advice from.  That is why you should seek advice from VA Accredited Certified Elder Law Attorneys.  There aren’t many of us in the state.

I.          2014 FIGURES

            A.         Medicaid

$2,163             Income Cap[1]

$117,240         Maximum Community Spouse Resource Allowance (CSRA)[2]

$23,448           Minimum CSRA[3]

$2,931             Maximum Minimum Monthly Maintenance Needs Allowance[4]

(MMMNA)

$1,966.25        MMMNA (July 1, 2014 until June 30, 2015)[5]

$589.87           Excess Shelter Allowance (July 1, 2014 until June 30, 2015)[6]

$2,000             Maximum Resource Limit (individual)[7]

            B.        Social Security

1.5%                For 2014 there has been a 1.5% increase for Social Security Benefits[8]

$2,642             The Maximum Social Security benefit for a single individual for 2014[9]

$721                Supplemental Security Income (SSI) – Single[10]

$1,082             Supplemental Security Income (SSI) – Couple[11]

$361                Supplemental Security Income (SSI) – Essential Person[12]

$8,657.26        Maximum Annual SSI benefit – Single[13]

$12,984.44      Maximum Annual SSI benefit – Couple[14]

$1,070             Substantial Gainful Activity (SGA) – Disabled[15]

$1,800             SGA – Blind[16]

7.65%              Tax Rate Employee[17]

15.30%            Tax Rate Self Employed[18]

$770                Trial Work Period[19]

$117,000         Maximum Social Security Wage Base[20]

$1,200             Quarter of Coverage[21]

            C.        Medicare

1.         Part A

$152    Medicare Co-Payment – Skilled Nursing Facility (SNF)[22]

$1,216 Hospital Deductible[23]

$304    Per day/Co-Insurance Day 61 -90[24]

$608    Per day/Co Insurance Day 91-150[25]

Part A Premium (for voluntary enrollees only)

$234    With 30-39 quarters of Social Security coverage[26]

$426    With 29 or fewer quarters of Social Security coverage[27]

2.         Part B

$147                Medicare Part B Deductible[28]

$104.90           Standard Part B Premium[29]

Medicare Part B – Single or Married and Filing Separate Return

Part B Income-Related Premium[30]

In addition, the monthly premium rates to be paid by beneficiaries who are married, but file a separate return from their spouse and lived with their spouse at some time during the taxable year are:

Standard Part D Cost-Sharing for 2012[31]

$310                Deductible

$2,850             Initial Benefit Period

$4,550             Donut Hole Threshold

$2.55               Catastrophic cost-sharing:  Generic

$6.35               Catastrophic cost-sharing:  Brand

            D.        Tax

$14,000           Annual Gift Tax Exclusion[32]

$145,000         Gifts to Non-Citizen Spouse[33]

$12,150           Income Level/Maximum Tax Estates and Trust[34]

$406,750         Income Level/Maximum Single Individual Income Tax[35]

$5,340,000      Federal Estate Tax Exemption[36]

$3,950             Personal Exemption[37]

$1,900             FICA Wage Threshold[38] Domestic Workers

$7,000             FUTA Wage Base[39]

$5,500            Maximum IRA Contribution[40]

$1,000             “Catchup” IRA Contribution[41]

$114,000 –

$129,000         Applicable Allowable Limit Roth IRA Single Taxpayer[42]

$181,000 –

$191,000         Applicable Allowable Limit Roth IRA Married Taxpayer Filing

Jointly[43]

0.9%                Medicare Tax on Earned Income over $200,000 – Single, over $250,000 – Married[44]

3.8%                Medicare Tax on Unearned Income over $200,000 – Single, over $250,000 – Married[45]

            E.         Long-Term Care Insurance

$330                Exclusion from income taxation of daily LTC insurance benefits[46]

Tax Deduction of LTC Premium[47]

$370                40 years old or less

$700                41 to 50 years old

$1,400             51 to 60 years old

$3,720             61 to 70 years old

$4,660             more than 70 years old

            F.         Standard and Poor’s 500 Index

2.12% average S&P dividend yield January 14, 2013.[48]

            G.        Veterans Aid and Attendance/House-Bound Benefits[49]

1.         Aid and Attendance 

$1,759 per month       Veteran with no dependents

$2,085 per month       Veteran with one dependent

$1,130 per month       Spouse of deceased Veteran with no dependent

            2.         House-Bound Benefits

$1,289 per month       Housebound Veteran, no dependents

$1,615 per month       Housebound Veteran, one dependent

$864 per month          Housebound spouse of deceased Veteran, no dependent

II.        EXPLANATION OF TERMS

            A.        Medicaid

1.         Income Cap.  Many states use an income cap to determine eligibility for some or all Medicaid Programs.  These are known as income cap states.  Generally the income cap is calculated at 300% of the maximum federal SSI benefit rate for a single individual.[50]

2.         CSRA.  The Medicaid Catastrophic Coverage Act (MCCA)[51] was designed to avoid impoverishing a community spouse where one spouse is institutionalized.  Some states permit the community spouse to retain all countable resources up to the maximum CSRA.  Other states permit the community spouse to retain one half of the countable resources not to exceed to maximum CSRA and to retain all countable resources up to the minimum CSRA.[52]

3.         MMMNA.   Under MCCA, the Community Spouse is entitled to a Minimum Monthly Maintenance Needs Allowance.[53]  If the income of the Community Spouse falls below the MMMNA, the Community Spouse can retain income from the Institutionalized Spouse to bring the Community spouse up to the MMMNA. Some states permit the Community Spouse to keep all of the income up to the Maximum MMMNA.  In other states, the MMMNA is made up to two components, the basic allowance and the excess shelter allowance.

4.         Excess Shelter Allowance.  Excess Shelter Allowance is calculated by totaling the Shelter Expenses of the Community Spouse.  These expenses are limited to rent, a mortgage (including principal and interest), taxes and insurance, utility expenses, and maintenance charges for condominium or co-op.   Some states use a flat amount or amounts for the utility allowance.

5.         Maximum Resource Allowance.  Medicaid has a maximum resource allowance for single individuals of approximately $2,000.  SSI states follow SSI rules.  The SSI resource limit is $2,000 for an individual and $3,000 for a married couple when both apply for benefits.[54]

            B.        Social Security

1.         Cost of Living.  Social Security benefits are indexed to inflation and are adjusted annually to reflect increases in the cost of living.

2.         Maximum Social Security Benefit.  Social Security Benefits fall into three categories: Social Security Retirement, Social Security Disability Income (SSDI) and Supplemental Security Income (SSI).  Social Security Retirement and Social Security Disability Income (SSDI) are based on payments made into the Social Security System by wage earners during their working careers.  SSI is a welfare program.  There is a maximum Social Security Benefit for any single individual.  This is also adjusted annually.

3.         SSI Benefit.  There is a maximum federal benefit for SSI for single persons and a separate maximum for married couples.  Some states provide a state supplement to the federal benefit.  There is also a maximum annual SSI benefit.

4.         Substantial Gainful Activity.  To be eligible for either SSDI or SSI, the applicant must be disabled as defined in the Social Security Act.[55]  The statute references the applicant’s inability to perform “substantial gainful activity.”  Substantial gainful activity is the ability to earn more than a certain amount published by the Social Security Administration (SSA) on an annual basis.  There are two income levels to determine substantial gainful activity.  One is for the general population and one is for blind.

5.         Trial Work Period.  During a trial work period, a Social Security beneficiary receiving disability benefits may test his or her ability to work and still be considered disabled.  Social Security does not consider services performed during the trial work period as showing that the disability has ended until services have been performed in at least 9 months (not necessary consecutive months) in a rolling 60 month period.  Any month in which earnings exceed the trial work period amount is considered a month of service for the individuals trial work period.  The trial work period amount is adjusted annually.

6.         Social Security Wage Base.  There is a Social Security tax imposed on income up to the maximum Social Security Wage Base.  Income in excess of the wage base is not subject to the Social Security tax.[56]

7.         Insured Status.  To be eligible for Social Security Retirement Benefits or Disability Benefits, a worker must have insured status.  This means the wage earner must accumulate a certain number of quarters of coverage.  The wage earner is “fully insured” for life if he or she has 40 quarters of coverage.  The wage earner is currently insured if he or she has 6 quarters of coverage during a 13 quarter period ending with the quarter in which the person became entitled to benefits.  The amount of earnings required for a quarter of coverage is adjusted annually.

            C.        Medicare

1.         Medicare Part A.   Medicare is a medical insurance program that pays for a broad range of medical services.  Generally, Medicare Part A covers hospitalization and certain limited coverage in skilled nursing facilities as well as the first 100 days of home care and hospice benefits for the terminally ill.  There are premiums, co-payments, deductibles and maximums per spell of illness.[57]

2.         Medicare Co-Payment – Skilled Nursing Facility.  If a person is eligible for Medicare in a skilled nursing facility, Medicare pays the first 20 days in full but days 21 to 100, the Medicare recipient pays a co-payment and Medicare pays the balance.[58]

3.         Deductible.  Under Medicare Part A, Hospital coverage is limited to 90 days per spell of illness.[59] For 60 days there is a deductible which is adjusted annually.

4.         Co-Insurance.  For the next 30 days of hospitalization, the patient pays co-insurance of 25% of the deductible.[60]  For days 91 to 150 for spell of illness, utilizing “lifetime reserve days,” there is a co-payment of one half of the deductible.[61]

5.         Medicare Part B.   Medicare Part B covers physicians, diagnostic tests, medical equipment, ambulance services, outpatient physical and speech therapist, certain home care and prostheses.[62] Medicare Part B is available to persons over 65 years of age or eligible for Part A and who are receiving SSDI after two years.

6.         Medicare Part B Deductions.  There is a deduction for services covered by Medicare Part B.  The amount of the deduction is adjusted annually.

7.         Premiums.  Under Medicare Prescription Drug Improvement and Modernization Act of 2003 (Medicare Act of 2003), beneficiaries pay premiums depending on their income.  Premiums are adjusted annually.[63]

8.         Medicare Part D.  The Medicare Act of 2003[64] provides a prescription drug benefit known as Medicare Part D. To be eligible, individuals must be eligible for either Part A or Part B of Medicare. Individuals may obtain the prescription coverage either through a standalone prescription drug plan (PDP) or through a Medicare Advantage Plan (MA-PD).

            D.        Tax

1.         Annual Gift Tax Exclusion.  Tax payers are permitted to make gifts up to a certain amount each year without any gift tax consequences.  This is known as the annual gift tax exclusion.  The exclusion is indexed to inflation.[65]

2.         Gifts to Non-Citizen Spouse.  The estate and gift tax marital deduction is not allowed for transfers to a spouse or a surviving spouse who is not a U.S. Citizen.[66]  The concern is that the non-citizen spouse will leave the country and avoid federal estate tax.  For federal gift tax purposes, the maximum that a spouse can give to a non-citizen spouse is adjusted annually.

3.         Income Level/Maximum Tax, Estates and Trust/Single Individual Income Tax.  Generally, it is advantageous to distribute income from estates and trusts to individuals rather than pay the tax at the estate or trust tax level. Under the federal Internal Revenue Code, income is taxed on a graduated basis.  The maximum income tax rate is 35%.  The maximum income tax rate for an estate or trust is achieved at a much lower level of income than the maximum tax rate for an individual.[67]

4.         Federal Estate Tax Exemption.  There is an exemption from the federal estate tax for each taxpayer’s estate.  This is sometimes known as the unified credit.[68]

5.         Personal Exemption.  Each taxpayer is entitled to a personal exemption which is adjusted annually.  If a person pays more than 50% of support of a relative and a relative had gross income for the year less than the personal exemption amount and has not filed a joint return with his or her spouse and the person paying the support may claim the relative as a dependant on the person’s federal income tax return.[69]

6.         Federal Insurance Contributions Act (FICA) Wage Base.  Social Security and Medicare Part A taxes are imposed on all employers and employees on cash wages in excess of the threshold in any calendar year.[70]  Social Security Old Age, Survivors, and Disability Insurance (OASDI) taxes are limited to the Social Security wage base.[71]  There is no limit for the imposition of the tax for Medicare Part A.

7.         Federal Unemployment Tax Act ( FUTA) Wage Base.  If an employee receives total cash wages in excess of the FUTA Wage Base in any calendar quarter, Federal Unemployment Taxes must be withheld.[72]

8.         Deductible Contribution Traditional IRA.  Taxpayers are permitted to take a tax deduction for contributions to a traditional IRA.  The deductible amount is $5,000 for 2012.  In addition, taxpayers 50 years and over are entitled to a “catch up” contribution of $1,000 per year.[73]  In calendar year 2012, a maximum deductible contribution is indexed to inflation in increases in multiples of $500.[74]

9.         Applicable Dollar Limit Roth IRA.  Generally a Roth IRA is treated in the same manner as a Traditional IRA.  However, no deduction is allowed for contributions.  Contribution limits are the same as for Traditional IRAs.  To be eligible to contribute to a Roth IRA, the bona fide adjusted gross income cannot exceed the applicable dollar amount.[75]

            E.         Eligible Long-Term Care Insurance

1.         Exclusion from Taxable Income.  A person who is insured under a qualified long-term care insurance policy is entitled to an exclusion from taxable income a daily amount of long term care insurance benefit.  This is adjusted annually for inflation.

2.         Premium Deduction.  A portion of the premium for long-term care insurance is deductible as a medical expense.  The amount of the allowable deduction depends on the age of the policy holder and is adjusted annually.[76]

            F.         Standard and Poor’s 500 Index

The Standard and Poor’s 500 Index (S&P 500) is an index consisting of 500 stocks chosen for market size, liquidity and industry grouping, among other factors.  The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe.  Companies are selected by a team of analysts and economists at Standard and Poor’s.  The S&P 500 is a market-value weighted index – each stock’s weight in the index is proportionate to its market value.  The front-end yield is the average dividend yield for the entire group of stocks.[77]

            G.        Veterans Aid and Attendance/House-Bound Benefits

1.         Aid and Attendance.  A Veteran or the spouse of a deceased Veteran may qualify for Veterans Aid and Attendance benefits.  Essentially, the claimant must be so helpless as to require the aid of another person to perform the functions required by everyday living.  The need for A&A need not be permanent.  Aid and Attendance is a monthly check from the Veterans Administration to the Veteran.  It may be used to pay for a health companion, friend or relative who is caring for an elderly Veteran or the Veteran’s spouse.  It is particularly useful for eligible Veterans in assisted living facilities, because these funds can be used to offset the cost of the assisted living facility.

2.         House-Bound Benefit.  House-bound benefits are available to Veterans who are totally and permanently disabled.  The Veteran must be permanently house-bound.  If a Veteran is 65 or older, he is presumed to be disabled.  No disability rating is required, but the VA will require a physician’s affidavit regarding the claimant’s condition.  The Veteran is entitled to HB benefits, if he or she has a disability rated at 100% disabling under the VA rating schedule and the Veteran is substantially confined to home.[78]  If the Veteran has a 100% disability with an additional disability independently ratable at 60% or more, house-bound is not a factor.[79]

In most divorce cases in most states, you cannot charge estate plans, life insurance beneficiaries, etc., until after your divorce case has been resolved and your divorce judgment has been entered by the court.  However, once your divorce is final, you need to take immediate financial and legal steps to reflect your new reality.  The following is a checklist of the actions that you need to take:

1. Change your name on all of your financial documents, bank accounts, etc.
2. Close and/or change the names on all joint accounts.
3. Make sure that all credit card bills and loans are paid promptly and closed by you (or your spouse if such bills or loans were designed as their responsibility in the divorce).
4. Open a checking and savings account in your name.
5. Open a credit card in your name to establish your own credit history.
6. Set up and start depositing money into an emergency bank account to cover 6 months of living expenses and don’t ever dip into it.
7. Check all of your investment accounts to make sure that the stated ownership of stocks, bonds, mutual funds, annuities, and retirement accounts are correctly listed.
8. Change your name with the Social Security department.
9. Change your name on your driver’s license.
10. Change the title on your automobile(s) into your name if necessary.
11. Change your automobile insurance coverage into your name alone.
12. Have your spouse’s name take off of the mortgage (or lease).  This may be difficult to do without a refinance of the mortgage.
13. Make sure that you transfer ownership of all deeds for your real estate and record with your county recorder’s office if not accomplished in the divorce case.
14. Change your beneficiaries on all life insurance policies.
15. Change beneficiaries on all retirement and pension plans.
16. Revise your health insurance coverage, dependent on the terms of your divorce judgment.
17. Make sure any Qualified Domestic Relations Orders that need to be done to divide retirement benefits per your divorce judgment get done.
18. Contact an estate planning attorney and have a new estate plan done.  Be sure to update your medical and financial powers of attorney.
19. Speak with a financial advisor if you did not do so prior to concluding your divorce case and determine a financial roadmap for you post-divorce.
20. Review your tax withholding allowances and taxes with your CPA, particularly if you are receiving or paying spousal support (alimony), and make any necessary adjustments with your payroll department.

For more information or to schedule a consultation, please contact the Orange County family law firm of The Maggio Law Firm at (949) 553-0304 or at www.maggiolawfirm.com.

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The AARP recently reported a surge in scams targeting seniors in New York City. The actual increase in fraud may be even higher than the AARP suggests, as it is estimated that one third of elderly scam victims do not report the crime.

Scammers often target elders because they are more likely to be home during the day and to have good credit or home equity. Moreover, they are perceived as more trusting and less willing to hang up on a telemarketer. Scams targeting the elderly range from telephone calls attempting to obtain personal information (requesting Social Security numbers on a Medicare-related pretext, for example) to more elaborate scams involving phone reverse mortgages.

Officials say that a legitimate home equity conversion mortgage is insured by the Federal Housing Authority. Seniors may be used as straw buyers in property-flipping scams or drawn into phony reverse mortgages.

Due to the increase in fraud activity, seniors should be vigilant against any unknown person trying to obtain their personal information.

Learn more by contacting New York Guardianship Lawyer, Bernard A. Krooks.

Older Americans are often the victims of fraud, whether through fake sweepstakes offers, phony investments or Social Security fraud. Scammers may target older people because they are perceived to be more trusting, or because they are more likely to be available for telephone calls during the day. Alzheimer’s patients are particularly vulnerable, as they may become confused easily. Boredom and loneliness also play a large role in increasing seniors’ vulnerability.

There is no easy antidote to fraud, but if one has elderly parents, it is important to make sure that they are aware of the danger and know the warning signs of common scams. Shaming and blaming seniors is not constructive or effective, while providing practical information can make a real difference. And, now there is one more tool available: a federal fraud hotline.

The hotline was established by the Senate Special Committee on Aging and is available between 9 a.m. and 5 p.m. Eastern time at 1-855-303-9470. Investigators will take information from callers reporting fraud and funnel those complaints to the proper state and federal authorities.

Investigators can also be contacted through the website of the committee, located at www.aging.senate.gov/fraud-hotline.

The post Senate Special Committee on Aging Launches New Hotline to Tackle Fraud, Elder Abuse first appeared on SEONewsWire.net.]]> http://www.seonewswire.net/2013/12/stateside-veterans-face-prospect-of-identity-theft-and-onerous-loans/ Tue, 31 Dec 2013 11:05:06 +0000 http://www.seonewswire.net/2013/12/stateside-veterans-face-prospect-of-identity-theft-and-onerous-loans/ The exploitation of veterans surely has to rank as one of the more vile manifestations of human behavior, particularly in a nation that consistently holds its military members in high regard. Sadly, recent reports have brought to light unsavory practices,…

The Social Security Administration recently announced a cost-of-living adjustment (COLA) for 2014. Social Security and Supplemental Security Income benefits for some 63 million Americans will increase by 1.5 percent.

The ceiling on earnings subject to Social Security taxes will also increase — from $113,700 to $117,000. This will affect approximately 10 million of the estimated 165 million Americans who will pay into the Social Security system in 2014.

COLA is designed to prevent inflation from eroding the purchasing power of benefits. It is based on the change in a price index known as the CPI-W from the third quarter of last year to the third quarter of the current year. If prices, as measured by the index, do not rise, no COLA is implemented.

Cost-of-living adjustments were enacted as part of the 1972 Social Security Amendments. Prior to that, benefits only increased when Congress passed legislation for that specific purpose.

Learn more or contact an estate planning lawyer at Hooklawcenter.com.

However, nothing is guaranteed. It is may be in your best interest to diversify your post-retirement income and your savings in as safe as manner as possible. Even the best pension should not be considered your entire safety net. If you or your spouse is a local or state government worker, Social Security benefits at retirement will likely not apply to you.

You may wish to explore contributing to a 403(b) or 457(b) supplemental retirement plan or your own IRA. Speak with an estate planning attorney to determine how you can contribute to your pension fund and an individual retirement account to best secure your future.

Christopher J. Berry is a Michigan estate planning attorney and Medicaid planning lawyer dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.theeldercarefirm.com/ or call 248.481.4000

In comparison, those with defined-benefit plans – pensions – tend to feel a lot more secure about their post-retirement income, and with good reason: pensions are reliable. Private pensions are insured by the Pension Benefit Guaranty Corporation, an independent government agency, and government pensions are considered rock-solid.

The city of Detroit’s recent bankruptcy filing, however, might give those government pensioners and future pensioners pause. Pensions represent a huge and growing share of the city’s expenses that contributes significantly to its dire financial straits. If Detroit’s bankruptcy is allowed to continue – it is currently held up in court – it may very well mean that pension promises are broken and retirees’ benefits will be cut.

When planning for retirement, it is important to diversify your savings and your post-retirement income. No matter how large and reliable your pension, it should not constitute the entirety of your nest egg. Remember, many state and local government workers are not covered by Social Security.

If you have an option to contribute to a supplemental retirement plan, such as a 403(b) or 457(b) account, do so. If not, set up your own IRA, even if your contributions will not be tax-deductible. Consult with an estate planning attorney to decide on the right mix of contributions to pension funds and individual retirement accounts.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

The number of people caring for an elderly parent or other relative is growing fast. A recent Pew Research Center study found that almost 40 percent of Americans are caring for another person with a serious health condition, a rise from 30 percent in 2010.

Providing care for a loved one may be necessary, but it is important to understand the impact that it has on the caregiver’s financial situation and even his or her own health. Studies have shown that caregivers are more likely to report issues with their own health. Focusing on caring for another can take time away from caring for oneself.

Providing care can also have a significant financial impact. Many people take unpaid leave from work to care for an older family member. In addition to the obvious loss of wages, this can also affect the caregiver’s own Social Security retirement benefits.

Careful planning can make these impacts much more manageable. Too many people are taken by surprise by circumstances, and in the rush to provide necessary care, may make choices regarding work, home and care that are not well thought out. Thinking about what may be necessary in certain possible future situations and planning ahead can help you make the right decisions when they need to be made.

Learn more at http://www.elderlawnewyork.com/estate-planning/

The week of October 21-27, 2013, is the fifth annual National Estate Planning Awareness Week, established to help the American public learn how to establish an estate plan and keep it up to date.

Managing one’s finances properly is more important than ever, but most Americans do not have an up-to-date estate plan in place to protect their financial future. Many people assume that because they are not wealthy they do not need an estate plan, but that is not the case. An estate and retirement plan can ensure that one does not have to rely on Social Security retirement benefits alone. Proper advance planning can make issues such as long-term care or paying bills in the event of an illness or disability much easier. Estate planning tools such as trusts can provide tax advantages and ensure that you leave the best possible legacy to your heirs.

To learn more about our estate planning services, visit http://www.elderlawnewyork.com/estate-planning/.

Social Security Disability Insurance (SSDI) is another story altogether. That program draws from a separate trust fund – one that is forecast to be depleted in 2016. If that happened, benefits could only be paid to the extent they were covered by incoming payroll tax revenue. That would mean an immediate benefit cut of some 20 percent to each and every disabled beneficiary.

One temporary solution is actually quite simple. A small portion of revenues from payroll taxes could be reallocated from the retirement program to disability. Reallocations are nothing new – Congress has enacted them at least six times already, most recently in 1994. According to Social Security Administration chief actuary Stephen Goss, shifting just one tenth of 1 percent of revenues would bring the forecast depletion date of both trust funds in line with each other.

To be clear, this would accelerate the depletion of the retirement program’s trust fund, and thus it is not necessarily a politically simple fix despite being logistically simple. But the reallocation itself would not result in any workers having to pay more in taxes, nor any beneficiaries – retired or disabled – suffering a cut in benefits. This should spare the measure from significant controversy, as past reallocations have been.

The SSDI program has recently faced intense scrutiny and criticism because of its rapidly swelling roll of beneficiaries. There is a sense among some that fraud is rampant in the program and that unemployed baby boomers who do not yet qualify for retirement benefits are freeloading despite being physically capable of work. This makes disabled Americans pawns in games of political brinksmanship as Congress argues over fiscal policies and debt ceilings.

The reality is that while examples of fraud may be found in the SSDI program, its growth was predicted by simple demographics. Baby boomers are nearing retirement age. The rate of physical disability among those age 40 is half that of 50-year-olds, which itself is half that of 60-year-olds. Moreover, women’s increased participation in the labor force over the last several decades means they are increasingly eligible for disability benefits.

Millions of Americans depend on disability benefits to make ends meet, and many more depend on retirement benefits for the same. Reforming both these programs in order to make them solvent long into the future may be a lengthy political process. In the meantime, reallocating funds to SSDI is the right thing to do to protect the livelihood of those who depend on it.

Alston & Baker, an Affiliation of Professional Associations: The Law Office of Robert C. Alston, Esq., P.A. and The Law Office of Marcie L. Baker, Esq., P.A. To contact a social security attorney call 1.888.500.5245 or visit http://www.alstonbakerlaw.com.

If an elderly parent becomes unable to manage his or her finances, you may have to step in, and the process will be a lot easier if you have taken certain steps and made sure that certain information is available ahead of time. Here are a few things that you should keep in mind.

First, if your parent has not already done so, then you should speak to an experienced elder law attorney about executing a durable power of attorney. This will give you the authority to manage your parent’s finances in the event he or she becomes incapacitated.

Next, you will need to know where your parent’s financial records are kept, their bank account numbers, what their monthly bills are and how they usually pay them. If you take the time to collect this information before you think you need it, you will thank yourself later.

Finally, you should be aware of what your parent’s income and savings are and whether he or she receives Social Security and is eligible for Medicaid or Medicare.

For more information about our elder law services, visit www.elderlawnewyork.com.

One type of scam takes advantage of the public’s confusion over changes in health insurance. Someone perpetrating this type of fraud may call a senior and say that new Medicare cards are being issued and they just need to verify some personal information. A similar trick is for callers to say they are IRS agents. The goal is to obtain personal details such as Social Security numbers, which can be used to set up credit cards or loans in victims’ names, or claim their income tax refunds.

Seniors may be targeted in part because they are more likely to answer the phone, because they may have retirement savings or because they are perceived as more trusting. However, scammers will defraud anyone they can. The federal government reported that almost 83,000 complaints of this type of imposter scam were received in 2012, an increase of 12 percent from 2011.

Other criminals target electronic Social Security benefits payments. More than $28 million in benefits was stolen from October 2011 to June 2013. The thieves begin by obtaining a victim’s personal information, such as Social Security number and bank account information, which is often done through the same type of fraudulent telephone call, with the scammers posing as government officials. The fraudsters then contact the Social Security Administration or the victim’s bank pretending to be the victim and have the electronic benefits payments transferred to an account that they control.

The U.S. Senate Special Committee on Aging recently convened a panel of advocates and victims to learn what action can be taken to prevent this type of crime. Once the benefits have been stolen, getting them repaid can be difficult if not impossible.

On an individual level, seniors and others should take care to avoid being taken advantage of. First of all, never give out personal information such as a Social Security number to an unsolicited caller over the phone. Official communication from government agencies is by letter delivered by the U.S. Postal Service. Never wire money to an unknown person or agree to accept debit or credit cards in another person’s name. If you receive a call from a person pretending to be a Social Security official, call the Social Security Fraud Hotline at 1-800-269-0271.

The Hale Law Firm believe the right solution to your estate planning, elder law, or probate needs can be identified in a free initial consultation with one of our attorneys and counselors at law. To learn more or to contact a Dallas estate planning attorney, visit http://www.thehalelawfirm.com/ or call 972.351.0000

On June 26, 2013, the Supreme Court invalidated Section 3 of DOMA, which denied federal benefits to legally married same-sex couples. On August 9, 2013, the SSA issued a statement from Carolyn W. Colvin, acting commissioner, announcing the administration “is now processing some retirement spouse claims for same-sex couples and paying benefits where they are due.” The statement encouraged all individuals who believe they may be eligible to apply for Social Security benefits.

Most same-sex couples who are married reside either in the state in which they married or another state that recognizes their marriage. Others relocated after marrying to states that do not recognize their marriage. For now, it is only certain that the former group will be eligible for federal benefits. It remains to be seen whether those in non-recognizing states will receive equal treatment by the federal government.

President Obama weighed in following the Supreme Court ruling, saying, “It’s my personal belief – but I’m speaking now as a president as opposed to as a lawyer – that if you’ve been married in Massachusetts and you move someplace else, you’re still married, and that under federal law you should be able to obtain the benefits of any lawfully married couple.”

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit http://www.hooklawcenter.com/ or call 757-399-7506.

The Social Security Administration started online account access last year. You can apply for benefits online, get your Social Security statements, look at estimates of what amount of benefits you will get it you retire at age 62 versus 67 versus 70. You are also able to see the benefits amount you will get if you become disabled, and see the amount of survivor benefits that will go to your loved ones if you die.

If you already receive benefits, you can start an online account to obtain a benefit verification letter, which will help you apply for a home mortgage or another type of loan or other types of benefits. Go online to update your address, your contact information and to get your benefit checks direct deposited into your bank account.

If you would like an online Social Security account, you must be 18 years of age, have a valid email address, a Social Security number, and a valid U.S. mailing address.

Go to http://www.socialsecurity.gov/myaccount for more information.

Christopher J. Berry is an elder law attorney Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.theeldercarefirm.com/ or call 248.481.4000

The following is a glossary of common terms related to federal benefits such as Medicare, Medicaid and Social Security:

• Cost of Living Adjustment (COLA): An annual adjustment that may be made to Social Security benefits to keep pace with inflation.

• Lifetime Earnings: A history of the amount of money you earned during your working lifetime.

• Lump Sum Death Payment: A $255 one-time payment paid upon death to a widow, widower or children under the age of 18, in addition to any monthly survivors benefits due.

• Medicaid: A joint federal and state program that helps with medical costs for people with limited resources.

• Medicare: The federal health insurance program for people age 65 or older, people with disabilities, and people with end-stage renal disease.

• Old Age Survivors and Disability Insurance (OASDI): The Social Security program that provides monthly benefits to workers or their dependents upon retirement, death, or becoming disabled.

• Representative Payee: A person such as a relative or friend appointed to handle your Social Security benefits if you are unable to handle your own financial affairs.

• Retirement Age: The minimum retirement age is 62 for workers and 60 for widows/widowers. You may choose to take reduced benefits at this age. Full retirement age was formerly 65; it began increasing gradually in 2000 and will reach age 67 in 2022.

• Social Security: The name for the overall system that workers pay taxes into, and from which benefits are paid upon retirement, death or disability.

• Supplemental Security Income (SSI): A supplemental income program for blind and disabled people with limited resources, funded from general tax revenue and not from Social Security taxes.

For additional terms, visit the Social Security Administration Website.

For more information about our estate planning services, visit www.littmankrooks.com.

According to a new study, billions in federal revenue could be added in addition to thousands of jobs if the exclusion of Social Security benefits from taxable income is scrapped.

The Tax Foundation, a free-market oriented group, claimed in findings that eliminating that tax break as part of a tax reform effort, and taxing all Social Security benefits, may add $19.5 billion to government coffers and create close to 12,000 full-time jobs.

(Related: Will You Lose Medicare or Medicaid If You Leave the Nursing Home to Visit Family?)

The economy could grow by $30 billion and add close to 180,000 jobs if the funds acquired from eliminating that tax expenditure were funneled into lower overall tax rates by 1.9 percent.

“Social Security benefits are currently taxed in a very odd manner,” said Tax Foundation Senior Fellow Stephen J. Entin. “The economy would be stronger without the tax, or if it were levied in a less destructive way.”

(Related: Medicaid Expansion Will Save the State Money, Snyder Says)

With that said, scholars for the group added that eliminating that break would result in higher taxes on the elderly in addition to a new tax on retirement savings that should be exempted from taxation.

Source: The Hill

Christopher J. Berry is an elder law attorney Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.theeldercarefirm.com/ or call 248.481.4000

A new study indicates that grandparents and grandchildren have real, measurable effects on each other’s psychological well-being long into grandchildren’s adulthood.

“We found that an emotionally close grandparent-adult grandchild relationship was associated with fewer symptoms of depression for both generations,” said Sara M. Moorman, an assistant professor in the Department of Sociology and the Institute on Aging at Boston College.

(Related: Obamacare and Long-Term Care Insurance)

Moorman will present the study at the 108th Annual Meeting of the American Sociological Association. “The greater emotional support grandparents and adult grandchildren received from one another, the better their psychological health.”

Furthermore, the study revealed that giving tangible support to or receiving it from their grandchildren affected the psychological well-being of grandparents but not grandchildren. Also called functional solidarity or instrumental support, tangible support includes everything from a ride to the doctor to a helping hand with household chores and advice. In comparison, the researchers discovered that grandparents who both gave and received tangible support experienced the fewest symptoms of depression over time.

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“Therefore, encouraging more grandparents and adult grandchildren to engage in this type of exchange may be a fruitful way to reduce depression in older adults,” said Moorman. Also indicated in the study was that helping older adults remain functionally independent could aid their psychological well-being, says Moorman.

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 “Most of us have been raised to believe that the way to show respect to older family members is to be solicitous and to take care of their every need,” Moorman said. “But all people benefit from feeling needed, worthwhile, and independent. In other words, let granddad write you a check on your birthday, even if he’s on Social Security and you’ve held a real job for years now.”

Source: EurekAlert

Christopher J. Berry is an elder law attorney Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.theeldercarefirm.com/ or call 248.481.4000

Many clients who are unfamiliar with the Social Security representation paperwork are confused because the law firms often have an attorney and then a non-attorney sign the documents for the Florida law firm. Don’t be confused! Never ever let a non-attorney sign any documents. Always ask to see your representatives Florida Bar Card. If he or she does not have one find a lawyer who does immediately.  Especially ask the person to show you their Florida Bar Card at your hearing! If that person does not have a Florida Bar Card or can not give you his or her Florida Bar number, DEMAND and assert your rights at the Hearing for an actual attorney.   The Judge must grant you time to obtain an actual attorney.

Many clients who are unfamiliar with the Social Security representation paperwork are confused because the law firms often have an attorney and then a non-attorney sign the documents for the Florida law firm. Don’t be confused! Never ever let a non-attorney sign any documents. Always ask to see your representatives Florida Bar Card. If he or she does not have one find a lawyer who does immediately.  Especially ask the person to show you their Florida Bar Card at your hearing! If that person does not have a Florida Bar Card or can not give you his or her Florida Bar number, DEMAND and assert your rights at the Hearing for an actual attorney.   The Judge must grant you time to obtain an actual attorney.

A Connecticut trial court has ruled that attorney Jan Marcus, who admitted his mother to a nursing home, signed the admissions agreement, and then transferred money to himself but failed to provide information for her Medicaid application is liable to the nursing home for his mother’s unpaid debt up to the amount of income that was in his control.

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The admissions agreement stated that the responsible party did not personally guarantee payment, however, it did require the responsible party to provide all the information needed to apply for Medicaid and to pay for the care with the resident’s funds. Marcus failed to turn over his mother’s Social Security payments to the nursing home and proceeded to transfer his mother’s funds to himself.  On behalf of his mother he applied for Medicaid, but the application was denied because he provided insufficient information.

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Following his mother’s death, the nursing home sued him for breach of contract. It sought $47,444 in costs, contending that Marcus should be responsible for the full cost of his mother’s care. The Connecticut Superior Court ruled in the nursing home’s favor in the amount of $15,778. The ruling said that while Marcus may be liable for his mother’s income and assets that were in his control and not transferred to the nursing home, but because the admissions agreement plainly states that the responsible party does not guarantee payment of debt, Marcus is not liable for the remaining balance of his mother’s debt.

For the full text of this decision, click here.

Christopher J. Berry is a Michigan elder law attorney Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.theeldercarefirm.com/ or call 248.481.4000

Victims of identity theft can spend years repairing damage done to their finances and credit by predatory criminals. But increasingly, these criminals are turning to an even more troubling tactic: using the identities of the recently deceased.

According to a study by ID Analytics, a consumer risk management company, the identities of as many as 2.5 million deceased Americans are stolen each year. Because government agencies can take up to six months to register death records, thieves have plenty of time to rack up charges. They first look through obituaries to find the victims’ names and birth dates. Using that, they are able to find their targets’ Social Security numbers through the “Death Master File,” a list of deceased Americans maintained by the Social Security Administration.

Fortunately, proper estate planning can help prevent identity theft after death. Keep information on all of your financial and credit accounts with your estate plan. Grant a financial power of attorney to your estate planning attorney or another person you trust so that they can monitor your information. And make sure loved ones know to notify the proper government authorities promptly of your death, and do the same for them.

With a comprehensive estate plan, including organized records with your wishes clearly expressed in writing, your loved ones will have the information and authority they need to protect your legacy and themselves from the hardships of identity theft.

Getting ready for retirement involves careful preparation, including a proper estate plan, but much of your financial security depends on making the right decisions at crucial points.

One of the most important decisions is made long before retirement: the decision to start saving. Because of the value of compound interest, the earlier you start saving, the better. Saving half as much per year beginning in your mid-20s is better than starting to save at age 40.

Proper management of your retirement account is as important as saving. An employer contribution to your 401(k) is an important benefit, and if you have it, you should save at least as much as you need to to have your savings matched. If at all possible, avoid cashing out your 401(k) until you are ready to retire. And if you have a traditional retirement account, remember that you are required to take withdrawals beginning at age 70-and-a-half or face a stiff tax burden.

Timing your retirement properly is also essential. If you can delay retirement by a few years, or take a less-demanding part-time job, your savings will last longer. Likewise, you have a choice of when to begin collecting Social Security. You may start payments as early as age 62, but the amount will be discounted. If you delay claiming the benefits until age 70, your checks will be larger.

The more careful planning you do early on, the more you will have the opportunity to enjoy your retirement.

To learn more about our estate planning services, visit www.littmankrooks.com or visit www.elderlawnewyork.com for more information about legal services for seniors.