Question of the Day on ElderCareMatters.com: "My forty-three year old daughter and her three children moved in with me right before Christmas in my two bedroom apartment. She lost her job and they needed a place to live. She is planning on taking college classes to get a degree, so she can get a good job. I feel sorry for her and can’t put them out on the street, but I’m over seventy years old and this is creating a lot of stress for me. What do you suggest?"

Answer:  One of the biggest stresses I’m hearing now from clients is the stress caused by some of their adult children. Usually it is in the form of “financial aid” to pay the mortgage or something, but your case is about as extreme as I have heard.  I don’t know how you can cope with this situation. 

I don’t have a simple plan to solve your problem because family dynamics are involved that can complicate rational decision making. I usually suggest that the parent get a “business plan” from the child outlining how and when he/she is planning to solve the problem. The “plan” would include dates so progress can be measured. I don’t think just waiting for the economy to recover is the answer. Stress could kill you by then. 

In your daughter’s case, if she is taking three or four years to get a degree, I assume accumulating a lot of debt along the way, hoping to land a wonderful job once she has a degree in hand, I think her “business plan” has a very low chance of being successful. First of all I don’t think you deserve to put up with all of them for four years.  Second, what she needs is an income stream right now, not in four years, maybe.  If she absolutely needs more skills, I suggest a vocational schooling that can have her up and ready to work in a matter of months, not years. And, I suggest she take this training while working whatever job she can find.

To locate elder care experts who are near YOU and can help you with elder care financial matters, go to: www.ElderCareMatters.com – A FREE online source to find elder care experts plus information & answers about a wide range of elder care matters.

Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia  30328
770-671-8228
Member of the ElderCare Matters Alliance, Georgia chapter


Question of the Day on ElderCareMatters.com: "How much money / income do I need to have in order to retire? I am a 62 years old married man, own my home, and want to start enjoying my life a little before I get too old."

Answer:  The key to retirement is “cash flow.”  If at all possible, you want enough monthly “cash flow” to exceed your monthly “cash outlays.”  So I would suggest you first write down all your sources of retirement income.  This is passive income that you can count on for the rest of your life…not wages or earnings.  Then take an hour or two and estimate what your expenses are going to be during retirement.  You can probably use the last three months spending to help give you some guidelines.  

If you are comfortable that your monthly “cash flow” is greater that your monthly “cash outlays,” then you can probably think seriously about retirement.  

Be sure to factor in the cost of health care into your calculations.  Medicare is available for most people at age 65.  You will be required to pay for the Part B and Part D coverage, which will be withheld from your social security check.  The total of Parts B and D will probably be in the $125-150 per month range.  Most people also like to purchase a Medicare Supplement insurance policy, which will probably cost in the $125-150 per month range.  

Remember; when you elect to take social security at age 62, you will receive 30% less in benefits, than if you wait for “full retirement age,” which is age sixty-six.  And, this 30% discount lasts for the remainder of your life.  

Two more big items are inflation and death.  If your retirement “cash flow” does not increase with inflation and your “cash outlays” do, this can result in some lean late-in-life years, if you have no “extra” today.  And, be sure to consider how much of your “cash flow” will disappear upon the death of you or your wife. 

Good luck with your retirement planning.  You might consider an in-between retirement, where you semi-retire and continue “working” doing something you really enjoy.  Work doesn’t have to be a four-letter word.

To locate experts in your state who can help you with these elder care financial matters, go to: www.ElderCareMatters.com – A FREE online source to find elder care experts plus information & answers about a wide range of elder care matters.

Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia  30328
770-671-8228
Member of the ElderCare Matters Alliance, Georgia chapter


Question of the Day on ElderCareMatters.com: "The article you wrote for ElderCare Matters Library says I should own stocks for my retirement income. Twice in the last decade I have watched my 401(k) lose almost one-half of its value. That doesn’t sound like a good retirement plan to me. Am I looking at this wrong?"

Answer:  Unfortunately, in most 401(k) plans, your account balance is dependent almost solely on the overall market level. After you retire, you will be able to roll the balance into a self-directed IRA in which you can own individual stocks, especially stocks that pay dividends. In many cases the dividends a company pays are far more stable than the share price of the company’s stock.  

Think of owning a rental property that pays you $1,000 per month in rents. If the market value of that property drops in half, it doesn’t mean your rent drops also. The key is the stability of the rental income, not the market value of the property. Focus your retirement income planning on creating a monthly cash flow and try to put account values in perspective.

To locate experts in your state who can help you with these elder care financial matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia  30328
770-671-8228
Member of the national ElderCare Matters Alliance, Georgia chapter


Question of the Day on ElderCareMatters.com: "I’m in my forties and am just getting started in building up retirement assets outside of my 401(k) at work. I don’t have enough to hire an investment manager, but I like the idea of owning dividend paying stocks. Do you have any advice for us beginners?"

Answer:  Many of the companies that you want to own have Dividend Reinvestment Plans (DRIPs) in which you can accumulate shares with monthly purchases. You can find these by going to the company’s website, usually under “Investor Services.” 

You can set the plan up where you add the same amount each month and the company buys shares for you. It is a great way to accumulate wealth because it is on autopilot. I suggest if you can, that you consider doing this with at least five different companies in five different industries. 

To locate experts in your state who can help you with these elder care financial matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia  30328
770-671-8228
Member of the national ElderCare Matters Alliance, Georgia chapter


Question of the Day on ElderCareMatters.com: "I’m fifty-seven years old and behind on my retirement planning. I’m watching my parents in their older years have to watch every penny and I don’t want to have to live like that. What do I do?"

Answer:  I guess you are at least aware. Now you need to develop a plan and take action. Your retirement lifestyle is dependent primarily on two things…your required spending and your monthly income or cash flow.  

Look at your current spending patterns and spend a little effort projecting those patterns into your retirement years. Then list what retirement income you will have.  

Obviously, if the spending is far greater than the income, you have serious work to do. If that is the case, don’t wait until retirement to “fix” the shortfall, start today. Work on lowering your “fixed” monthly costs and save more to increase your retirement cash flow. If you are not comfortable doing this on your own, you may need the help of an accountant or a Certified Financial Planner in your area. But, do take action or you will likely follow your parent’s pattern.

To locate experts in your state who can help you with these elder care matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia  30328
770-671-8228
Member of the national ElderCare Matters Alliance, Georgia chapter


Question of the Day on ElderCareMatters.com: "My parents have a net worth of $1.5 Million. Is it unrealistic for them to gift most of their assets to their children if they did not buy long term care insurance? They will keep an ample amount just to live on."

Answer:  Whether giving away assets is a good strategy for your parents will depend on a number of factors including their age, health, how they feel about giving up control over their assets, and how they feel about having less flexibility regarding where care can be provided.  

Oftentimes assets are given directly to a child with the thought that the child will use the funds for the parents later when the need arises.  But a true and complete gift does not come with strings, once given to the child there is no legal obligation on the part of the child to help mom and dad later.  What if the child does have good intentions to help mom and dad, but divorces, is sued, is influenced by a spouse, or is just not good with money?  Mom and dad’s hard earned assets may be taken away forever. 

Giving assets away can be tricky.  If after giving assets away mom or dad needs care prematurely i.e., within 5 years of the gift, a penalty period or period of ineligibility for Medicaid will result.  This period will not begin to run until mom or dad applies for Medicaid. 

You don’t indicate your parents age or health status, but purchasing a long-term care insurance policy to cover a period of 5 years could be a good investment.  There are policies available that include a return of premium feature, meaning that if the policy is not used the premiums are given back.  There are also life insurance policies that have long-term care riders.  With this type of policy if long-term care is needed the policy is tapped and if not it continues as a regular life policy paying a benefit on death. 

It will be worthwhile to consult with an elder care attorney to learn about all the options for long-term care planning available.  The guidance of a professional will save the family time, money and stress in the long run.

To locate experts in your state who can help you with these elder care matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Heather R. Chubb, Life Transitions Lawyer
The Chubb Law Firm
Gold River, California  95670
916-635-6800
Member of the national ElderCare Matters Alliance, California chapter


Question of the Day on ElderCareMatters.com: "My elderly parents may be eligible to receive the VA’s A&A pension benefit. Who do you recommend we contact to help us with the application process and to help us navigate all the Veterans Administration paperwork?"

Answer:  The VA’s Aid & Attendance (A&A) benefit is available to war-time veterans who need assistance with activities of daily living, such as bathing, feeding, dressing, or protection from the hazards of the daily environment.  The assistance can be provided in the veteran’s own home, in a board and care home (also referred to as a group home or RCFE (Retirement Care Facility for the Elderly)) or in an assisted living facility.  This pension provides a married veteran $1,949/month, single veteran $1,644/month, or veteran’s surviving spouse $1,056/month tax-free income to help pay for care. 

In addition to being a wartime veteran and needing assistance there are also income and asset limitations to qualifying for the program. 

The claims process can be very frustrating if you have not been trained and do not understand the law.  You may be denied outright or your claim may take many more months to complete because of information requests and exchanges between you and the VA.  I strongly recommend that you use the services of a VA accredited individual or organization, which includes state and county veterans service agencies. 

The VA recognizes three groups to assist veterans in the preparation, presentation and filing of claims.  VA accredited attorneys, accredited Veterans Service Officers (VSO) and claims agents.  You can find a list of these groups by city and state at the VA’s Office of General Counsel’s Accreditation website.  It is against the law to charge for services to help prepare and file the claim. 

Whomever you seek out for advice should understand not only the VA laws and rules, but also those for Medicaid (Medi-Cal in CA) and tax laws.  These programs are very different and what may be acceptable under one program may have adverse consequences under the other programs.  The right professional will help you develop the most appropriate planning to meet your specific needs.

To locate experts in your state who can help you with these elder care matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Heather R. Chubb, Life Transitions Lawyer
The Chubb Law Firm
Gold River, California  95670
916-635-6800
Member of the national ElderCare Matters Alliance, California chapter


Question of the Day on ElderCareMatters.com: "My elderly but healthy parents own some collectables valued at approximately $100,000. They also jointly own their house with a value of $135,000. They have about $150,000 in cash and retirement accounts worth $125,000. What planning can be done now so that these assets may be retained by the family if my parents need to go into a nursing home in the future?"

Answer:  First, let me say that it is nice to see a family discussing planning in advance of the need for long-term skilled nursing care.  By planning now a greater variety of options are available to meet your goals.  I am going to presume that you are concerned about preserving assets if your parents need to rely on Medicaid to pay the nursing home bills.  The Medicaid rules vary somewhat for each state, but as a general principal to get the most preservation you will need to plan at least 5 years in advance of the need for care. 

Any planning that is done must consider not only the rules for Medicaid eligibility but also the recovery (or payback) rules.  For example, the home is an exempt asset for eligibility purposes and it could remain in your parents’ name, but upon the death of the remaining spouse the state will want to be paid back for the care it provided to the ill spouse, which could result in the forced sale of the home. 

Asset preservation will fall into 2 categories – converting assets from non-exempt to exempt and getting assets out of your parents’ names, i.e., giving them away.  Some examples of conversions include using funds to make repairs or improvements to the home, buying mom and dad a new car, purchasing a Medicaid compliant annuity or entering into a personal care contract. 

Because giving assets away means a loss of control over the asset, your parents need to be part of the plan.  If they are “young” healthy elderly they may not be ready to give up control.  Flexibility in the plan will be important as will giving assets away in the right way.  

Oftentimes assets are given directly to a child with the thought that the child will use the funds for the parents later when the need arises.  But what if the child divorces, is sued or is just not good with money?  Mom and dad’s hard earned assets may be taken away forever.  Included in the definition of “giving away” is adding a child’s name to the house deed or bank accounts.  Therefore giving assets away in the right way is critical.  Special irrevocable trusts work nicely to provide the protections your parents need.  

A final word of warning when giving assets away, if mom or dad needs care prematurely i.e., within 5 years of the gift, a penalty period or period of ineligibility for Medicaid will result.  This period will not begin to run until mom or dad applies for Medicaid. 

When it comes to Medicaid and asset protection planning timing and knowledge are everything and it is not a do-it-yourself project.  An elder law attorney in your state will be able to guide and educate your parents about the Medicaid rules applicable in your state and which preservation techniques will suit them best.

To locate experts in your state who can help you with these elder care matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Heather R. Chubb, Life Transitions Lawyer
The Chubb Law Firm
Gold River, California  95670
916-635-6800
Member of the national ElderCare Matters Alliance, California chapter


Question of the Day on ElderCareMatters.com: "My sisters and I worry about our elderly parents and a handicapped sister who all live in the same house in Georgia. We have heard that if one or both of our parents have to move to a nursing home the state can take their home to help pay for the cost. Is this true? Should we talk with them about signing the home over to us while they are both in fairly good health?"

Answer:  The truth is that, the Medicaid department is not authorized to send anyone over to actually take possession of the house.  However, after the death of the second parent the state wants to be paid back and may seek “recovery” from assets owned by the survivor at the time of the survivor’s death.  However, the state may only be paid back up to the amount that they actually paid out, but this still may result in the forced sale of your parents’ home. 

However, in your case there is an exception to the recovery rules because your parents have a disabled child.  When there is a surviving disabled child a recovery claim is prohibited by federal and state laws.  The surviving disabled child will need to provide documentation of disability or blindness, such as a Social Security or SSI award letter and a birth certificate showing they are the child of the deceased. If the surviving child does not have documentation of disability from the Social Security Administration, he/she can still file for a disability determination with the Medicaid department.  It is important to note that the surviving child does not have to live in the home (or even in the State, for that matter) in order for recovery to be barred. 

Signing over the home now may sound like a good idea, but it carries some big risks.  First, when your parents sign over the house they lose control and that can mean that the kids can kick them out at anytime.  In addition, if a child’s marriage ends in divorce or the child is sued the house can be taken away.  Finally, if your parents sign over the house and then need Medicaid within 5 years of the transfer a penalty and ineligibility for Medicaid for a period of time will result with the ineligibility period starting at the time they apply for Medicaid. 

As you can see Medicaid planning is filled with traps for the unwary.  I encourage you to seek the advice of a qualified elder law attorney in your state who will help guide you through the process.

To locate experts in your state who can help you with these elder care matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Heather R. Chubb, Life Transitions Lawyer
The Chubb Law Firm
Gold River, California  95670
916-635-6800
Member of the national ElderCare Matters Alliance, California chapter


Question of the Day on ElderCareMatters.com : "My 80 year old mom, who is in relatively good health, just filled out an Advance Healthcare Directive at her doctor’s office and named me as her agent. Now what do I do?"

Answer:  I’m pleased to hear that your mother’s doctor is being proactive and discussing the importance of an Advance Directive with her.  If your mom’s health continues to be good you may not need to do anything except keep in communication with her and stay on top of her medical needs.  It may be valuable to both you and your mother if you accompany her to her doctor’s appointments in order that you can develop a deeper understanding of your mom’s medical conditions and needs.

An Advance Healthcare Directive (AHCD) is a legal document in which the creator, in this case your mom, hand selects a trusted person to make medical decisions for her and speak for her if she is incapacitated or otherwise unable to speak for herself.  These decisions cover a wide variety of actions from making doctor’s appointments to making end of life decisions (i.e., “pulling the plug”).

However, just having this document is not enough and all AHCDs are not created equal.  It is essential that as the decision-maker (aka “agent” in legal terms) you understand your rights under this document, as well as your mom’s rights and healthcare wishes.  Most of those rights are described right in the document so you and your mom need to really read and understand it, so that you understand the importance of leaving instructions and information to carry out your wishes should something happen to you.

Because it is impossible to include instructions for every situation within the AHCD, you need to have discussions with your mom about her healthcare wishes.  And, this is not a one-time discussion.  Over the last few decades advances in medical technology have created an environment where people can be kept “alive” much longer.  But there is a big difference between being “alive” and having a quality life.  Discuss with your mom what quality of life means to her.

To locate experts in your state who can help you with these elder care matters, go to: www.ElderCareMatters.com – America’s online source for elder care experts plus information & answers about a wide range of elder care matters.

Heather R. Chubb, Life Transitions Lawyer
The Chubb Law Firm
Gold River, California  95670
916-635-6800
Member of the national ElderCare Matters Alliance, California chapter


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