This Week’s Elder Care / Senior Care Article

TITLE: The Perils and Pitfalls of Doing Asset Protection Planning on Your Own

Written by:
Asset Protection Planning
Robert M. Slutsky, Esq.
Robert Slutsky Associates
Plymouth Meeting, Pennsylvania
An ElderCare Matters Partner

Dealing with long term care planning, and especially asset protection planning, is a daunting process. Very complicated state and federal Medicaid laws and regulations present many pitfalls for those who try to engage in that process on their own without working with a competent elder law attorney. A recent Medicaid case from New Jersey is an example of a family that tried to go through the process on their own and are now dealing with some pretty nasty consequences. See C.W. v. New Jersey Division of Medical Assistance and Health Services, NO. A-02352-13T2 (NJ Sup. Ct. App. Aug. 31, 2015).

The facts are as follows: “C.W.” was a 90 year old New Jersey resident who moved into a skilled nursing facility in 2007. The following year, she transferred her home and $540,000 in assets to her children, which together were worth approximately $864,000. The following year C.W. applied for Medicaid benefits. Not surprisingly, the state Medicaid authorities imposed a penalty of 10 years and 4 months before they were willing to begin paying her nursing home costs. At that point, her children tried to fix the problem. They returned $235,000 to C.W. who in turn paid that amount to her nursing home. Then, her children returned the home to her, which was then sold. Oddly enough, the sale proceeds were then deposited into an account in the children’s names, not in C.W.’s name, with the children executing a written agreement to transfer the amount of C.W.’s care cost to her each month. C.W. then reapplied for Medicaid and was again denied as before.

Let’s consider each of the many mistakes made by C.W.’s family and also consider how the results may have been different. Under the Medicaid rules, when a Medicaid penalty period is assessed, it takes the form of a time period before which benefits will be paid. The simple mathematical formula takes the total gifted amount and divides it by the average monthly cost of private-paid skilled nursing home in that state. As of July 1, 2015 in Pennsylvania, that divisor amount is now $8916.65. Dividing $864,000 by $8916.65 would result in a penalty period of roughly 97 months.

What were some of C.W’s mistakes?

The first mistake was in not understanding the rules of Medicaid’s 60 month look back period. When you apply for Medicaid, the administrative authorities are allowed to do a complete financial audit of the Medicaid applicant’s financial activities over the previous 60 months. Whatever was done earlier than 60 months before the application is never considered and has no effect whatsoever on Medicaid eligibility.

There are situations where someone is fairly healthy when they engage in asset protection planning but then suffers unanticipated health issues that force a move to a nursing home much sooner than they ever thought they might need it. That is clearly not the case for C.W. as she was already in a nursing home when she started gifting away her assets. In C.W.’s case, applying for Medicaid in 2008, she would have had no problems if she did the exact same gifting of assets in 2003 or earlier. Alternatively, the family could have considered delaying the Medicaid application for a few years and instead, privately paying the nursing home from the gifted funds until the 60 month look back period elapsed.

The second mistake was in transferring C.W.’s home out of her name. When a single individual applies for Medicaid, their home may be considered an exempt asset if they have a reasonable expectation of returning to the home within a relatively short period of time (at least initially, but the rule might require the home to be sold later on depending on circumstances). As soon as C.W. transferred the home, it ceased to be an exempt asset for purposes of her eligibility. Then, after her children conveyed the house back to her, it was sold. Once the equity in the home is converted to cash, it ceases to be exempt. At that point we might also question why the sales proceeds were put into the children’s’ bank account, rather than staying in C.W.’s account, because she therefore ultimately re-gifted that amount back to the kids.

Also, it is important to note that for income tax purposes, once C.W. transferred the house to her children, the opportunity to claim an exemption from capital gains tax on the sale of the home could have been lost. If the house had been sold by the children instead of being transferred back to C.W. first, and assuming that the house sold for $324,000, and further assuming for our purposes that C.W. had paid approximately $150,000 for the house, then capital gain of $174,000 would have to recognized by the children upon the sale of the home. At a probable 15% capital gains tax rate, there would be $26,100 in capital gains tax due to the IRS because of the sale.

Clearly, good advice from a qualified elder law attorney could have made a big difference in the costs ultimately borne by C.W. and her family for her long-term care needs.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this elder care matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
  17. FindProbateAttorneys.net
  18. FindSeniorLivingCommunities.net
  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net

#dementia, #alzheimers, #geriatriccare, #longtermcare, #eldercare, #seniorcare, #eldercarematters, #seniorcarematters, #eldercarearticles, #seniorcarearticles


This Week’s Elder Care Article is about enjoying the Holidays with a Memory Impaired Loved One

Written by:

Dementia
Lauren Spiglanin
Family Connect Care
Rancho Palos Verdes, California
An ElderCare Matters Partner

Dashing through Dementia, Enjoying the Holidays with a Memory Impaired Loved One

If you have a loved one with Dementia who will be attending events that you are planning to host this holiday season for your family and friends, here are some tips to remember:

1) Be honest with family members and friends about your loved one’s disease.  Let them know what to expect before they visit.

2) Plan visits for early in the day. Being respectful of your loved one’s routine during the holidays.  This may prevent symptoms of sundowning or fatigue.

3) Adjust your expectations. You don’t have to decorate like the Griswold’s from the movie Christmas Vacation.

4) Take time for you. Attend that holiday party. Drink eggnog and enjoy yourself.

5) Have time alone. Stop what you are doing and close your eyes for one minute. Take a few deep breaths in and exhale slowly, picture a place or an event where you were most happy. When you open your eyes you will feel much more relaxed.

6) Reminisce about holidays past. Looking at old photos, watching the holiday classic movies, listening to songs are a good way to share and create new memories.

7) Go ahead and cry. It is okay to feel sad during the holidays. Finding a friend or joining a support group is a good way to meet other caregivers in your community who understands how you feel can be a huge support to you.

8) Don’t have your loved one with dementia just watch you prepare for the holidays. Instead, have them participate as much as possible. Decorating the house, wrapping gifts, or making cookies are activities that will help your loved one feel useful. These are great sensory activities too!

Whether you’re hosting or attending a holiday party, help your loved one with dementia feel safe and comfortable by having a trusted friend or family member stay beside him or her to field questions from others as needed.

  • Encourage people to say their name and maintain eye contact when conversing with the person who has dementia. 
  • Make sure your loved one can come and go from the party as needed.  Create a quiet space where he or she can rest — or appoint a caring person to drive your loved one home when he/she tires of the festivities. 
  • Have a family photo album or a favorite magazine for them to look at. 
  • Choose background music that is familiar to them, music from their era played in a style they resonate with, such as Bing Crosby’s, White Christmas. 
  • If your loved one needs their food pureed or finely chopped, bring it to the party.  
  • When talking to your loved one, don’t correct or contradict them. If they’re time confused, don’t try to pull them into the current reality. Simply listen carefully and let them talk. Remember; never argue with someone who has a memory impairment. You will never win!

Appreciate your loved one for the person they are right now. You will have a much happier holiday season.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this elder care matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
  17. FindProbateAttorneys.net
  18. FindSeniorLivingCommunities.net
  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net

#dementia, #alzheimers, #geriatriccare, #longtermcare, #eldercare, #seniorcare, #eldercarematters, #seniorcarematters, #eldercarearticles, #seniorcarearticles


2015 Year-End Tax Planning Tips for Individuals

2015 Year-End Tax Planning Tips for Individuals

Written by:

Tax Planning
Michael E. Scott, CPA
Scott & Scott CPAs, LLC
Lander, Wyoming
An ElderCare Matters Partner

Year End tax planning strategies for individuals this year include postponing income and accelerating deductions, as well as careful consideration of timing related investments, charitable gifts, and retirement planning.

General tax planning strategies that taxpayers might consider, include the following:

  • Sell any investments on which you have a gain or loss this year. For more on this, see Investment Gains and Losses, below.
  • If you anticipate an increase in taxable income in 2016 and are expecting a bonus at year-end, try to get it before December 31. Keep in mind, however, that contractual bonuses are different, in that they are typically not paid out until the first quarter of the following year. Therefore, any taxes owed on a contractual bonus would not be due until you file a tax return for tax year 2016.
  • Prepay deductible expenses such as charitable contributions and medical expenses this year using a credit card. This strategy works because deductions may be taken based on when the expense was charged on the credit card, not when the bill was paid.For example, if you charge a medical expense in December but pay the bill in January, assuming it’s an eligible medical expense, it can be taken as a deduction on your 2015 tax return.
  • If your company grants stock options, you may want to exercise the option or sell stock acquired by exercise of an option this year if you think your tax bracket will be higher in 2016. Exercise of the option is often but not always a taxable event; sale of the stock is almost always a taxable event.
  • If you’re self-employed, send invoices or bills to clients or customers this year to be paid in full by the end of December.

Caution: Keep an eye on the estimated tax requirements.

Accelerating Income and Deductions

Accelerating income into 2015 is an especially good idea for taxpayers who anticipate being in a higher tax bracket next year or whose earnings are close to threshold amounts ($200,000 for single filers and $250,000 for married filing jointly) that make them liable for additional Medicare Tax or Net Investment Income Tax (see below).

In cases where tax benefits are phased out over a certain adjusted gross income (AGI) amount, a strategy of accelerating income and deductions might allow you to claim larger deductions, credits, and other tax breaks for 2015, depending on your situation.

The latter benefits include Roth IRA contributions, conversions of regular IRAs to Roth IRAs, child credits, higher education tax credits and deductions for student loan interest.

Caution: Taxpayers close to threshold amounts for the Net Investment Income Tax (3.8 percent of net investment income) should pay close attention to “one-time” income spikes such as those associated with Roth conversions, sale of a home or other large assets that may be subject to tax.

Tip: If you know you have a set amount of income coming in this year that is not covered by withholding taxes, increasing your withholding before year-end can avoid or reduce any estimated tax penalty that might otherwise be due.

Tip: On the other hand, the penalty could be avoided by covering the extra tax in your final estimated tax payment and computing the penalty using the annualized income method.

Here are several examples of what a taxpayer might do to accelerate deductions:

  • Pay a state estimated tax installment in December instead of at the January due date. However, make sure the payment is based on a reasonable estimate of your state tax.
  • Pay your entire property tax bill, including installments due in year 2016, by year-end. This does not apply to mortgage escrow accounts.
  • It may be beneficial to pay 2016 tuition in 2015 to take full advantage of the American Opportunity Tax Credit, an above the line deduction worth up to $2,500 per student to cover the cost of tuition, fees and course materials paid during the taxable year. Forty percent of the credit (up to $1,000) is refundable, which means you can get it even if you owe no tax.
  • Try to bunch “threshold” expenses, such as medical and dental expenses–10 percent of AGI (adjusted gross income) starting in 2013–and miscellaneous itemized deductions. For example, you might pay medical bills and dues and subscriptions in whichever year they would do you the most tax good.

    Note: There is a temporary exemption of 7.5 percent through December 31, 2016 for individuals age 65 and older and their spouses.

    Threshold expenses are deductible only to the extent they exceed a certain percentage of adjusted gross income (AGI). By bunching these expenses into one year, rather than spreading them out over two years, you have a better chance of exceeding the thresholds, thereby maximizing your deduction.

Health Care Law

If you haven’t signed up for health insurance this year, do so now and avoid or reduce any penalty you might be subject to. Depending on your income, you may be able to claim the premium tax credit that reduces your premium payment or reduce your tax obligations, as long as you meet certain requirements. You can choose to get the credit immediately or receive it as a refund when you file your taxes next spring. Please contact the office if you need assistance with this.

Additional Medicare Tax

Taxpayers whose income exceeds certain threshold amounts ($200,000 single filers and $250,000 married filing jointly) are liable for an additional Medicare tax of 0.9 percent on their tax returns, but may request that their employers withhold additional income tax from their pay to be applied against their tax liability when filing their 2015 tax return next April.

High net worth individuals should consider contributing to Roth IRAs and 401(k) because distributions are not subject to the Medicare Tax.

If you’re a taxpayer close to the threshold for the Medicare Tax, it might make sense to switch Roth retirement contributions to a traditional IRA plan, thereby avoiding the 3.8 percent Net Investment Income Tax as well (more about the NIIT below).

Alternate Minimum Tax

The Alternative Minimum Tax (AMT) exemption “patch” was made permanent by the American Taxpayer Relief Act (ATRA) of 2012 and is indexed for inflation. It’s important not to overlook the effect of any year-end planning moves on the AMT for 2015 and 2016.

Items that may affect AMT include deductions for state property taxes and state income taxes, miscellaneous itemized deductions, and personal exemptions. Please call if you’re not sure whether AMT applies to you.

Note: AMT exemption amounts for 2015 are as follows:

  • $53,600 for single and head of household filers,
  • $83,400 for married people filing jointly and for qualifying widows or widowers,
  • $41,700 for married people filing separately.

Residential Energy Tax Credits

Non-Business Energy Credits

ATRA extended the nonbusiness energy credit, which expired in 2011, through 2014 (retroactive to 2012); however, it has not been reauthorized by Congress. For years prior to 2015, taxpayers could claim a credit of 10 percent of the cost of certain energy-saving property that was added to their main home.

Residential Energy Efficient Property Credits

The Residential Energy Efficient Property Credit is available through the end of 2016 to individual taxpayers to help pay for qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and residential wind turbines. In addition, taxpayers are allowed to take the credit against the alternative minimum tax (AMT), subject to certain limitations.

Qualifying equipment must have been installed on or in connection with your home located in the United States.

Geothermal pumps, solar energy systems, and residential wind turbines can be installed in both principal residences and second homes (existing homes and new construction), but not rentals. Fuel cell property qualifies for the tax credit only when it is installed in your principal residence (new construction or existing home). Rentals and second homes do not qualify.

The tax credit is 30 percent of the cost of the qualified property, with no cap on the amount of credit available, except for fuel cell property.

Generally, labor costs can be included when figuring the credit. Any unused portions of this credit can be carried forward. Not all energy-efficient improvements qualify so be sure you have the manufacturer’s tax credit certification statement, which can usually be found on the manufacturer’s website or with the product packaging.

What’s included in this tax credit?

  • Geothermal Heat Pumps. Must meet the requirements of the ENERGY STAR program that are in effect at the time of the expenditure.
  • Small Residential Wind Turbines. Must have a nameplate capacity of no more than 100 kilowatts (kW).
  • Solar Water Heaters. At least half of the energy generated by the “qualifying property” must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. Photovoltaic systems must provide electricity for the residence and must meet applicable fire and electrical code requirement.
  • Solar Panels (Photovoltaic Systems). Photovoltaic systems must provide electricity for the residence and must meet applicable fire and electrical code requirement.
  • Fuel Cell (Residential Fuel Cell and Microturbine System.) Efficiency of at least 30 percent and must have a capacity of at least 0.5 kW.

Charitable Contributions

Property, as well as money, can be donated to a charity. You can generally take a deduction for the fair market value of the property; however, for certain property, the deduction is limited to your cost basis. While you can also donate your services to charity, you may not deduct the value of these services. You may also be able to deduct charity-related travel expenses and some out-of-pocket expenses, however.

Keep in mind that a written record of your charitable contributions–including travel expenses such as mileage–is required in order to qualify for a deduction. A donor may not claim a deduction for any contribution of cash, a check or other monetary gift unless the donor maintains a record of the contribution in the form of either a bank record (such as a cancelled check) or written communication from the charity (such as a receipt or a letter) showing the name of the charity, the date of the contribution, and the amount of the contribution.

Tip: Contributions of appreciated property (i.e. stock) provide an additional benefit because you avoid paying capital gains on any profit.

Investment Gains and Losses

This year, and in the coming years, investment decisions are likely to be more about managing capital gains than about minimizing taxes per se. For example, taxpayers below threshold amounts in 2015 might want to take gains; whereas taxpayers above threshold amounts might want to take losses.

Caution: In recent years, extreme fluctuations in the stock market have been commonplace. Don’t assume that a down market means investment losses. Your cost basis may be low if you’ve held the stock for a long time.

If your tax bracket is either 10 or 15 percent (married couples making less than $74,900 or single filers making less than $37,450), then you might want to take advantage of the zero percent tax rate on qualified dividends and long-term capital gains. If you fall into the highest tax bracket (39.6 percent), the maximum tax rate on long-term capital gains is capped at 20 percent for tax years 2013 and beyond.

Minimize taxes on investments by judicious matching of gains and losses. Where appropriate, try to avoid short-term capital gains, which are usually taxed at a much higher tax rate than long-term gains–up to 39.6 percent in 2015 for high-income earners ($413,200 single filers, $464,850 married filing jointly).

Where feasible, reduce all capital gains and generate short-term capital losses up to $3,000.

Tip: As a general rule, if you have a large capital gain this year, consider selling an investment on which you have an accumulated loss. Capital losses up to the amount of your capital gains plus $3,000 per year ($1,500 if married filing separately) can be claimed as a deduction against income.

Tip: After selling a securities investment to generate a capital loss, you can repurchase it after 30 days. This is known as the “Wash Rule Sale.” If you buy it back within 30 days, the loss will be disallowed. Or you can immediately repurchase a similar (but not the same) investment, e.g., and ETF or another mutual fund with the same objectives as the one you sold.

Tip: If you have losses, you might consider selling securities at a gain and then immediately repurchasing them, since the 30-day rule does not apply to gains. That way, your gain will be tax-free; your original investment is restored, and you have a higher cost basis for your new investment (i.e., any future gain will be lower).

Net Investment Income Tax (NIIT)

The Net Investment Income Tax, which went into effect in 2013, is a 3.8 percent tax that is applied to investment income such as long-term capital gains for earners above certain threshold amounts ($200,000 for single filers and $250,000 for married taxpayers filing jointly). Short-term capital gains are subject to ordinary income tax rates as well as the 3.8 percent NIIT. This information is something to think about as you plan your long-term investments. Business income is not considered subject to the NIIT provided the individual business owner materially participates in the business.

Please call if you need assistance with any of your long term tax planning goals.

Mutual Fund Investments

Before investing in a mutual fund, ask whether a dividend is paid at the end of the year or whether a dividend will be paid early in the next year but be deemed paid this year. The year-end dividend could make a substantial difference in the tax you pay.

Example: You invest $20,000 in a mutual fund at the end of 2015. You opt for automatic reinvestment of dividends. In late December of 2015, the fund pays a $1,000 dividend on the shares you bought. The $1,000 is automatically reinvested.

Result: You must pay tax on the $1,000 dividend. You will have to take funds from another source to pay that tax because of the automatic reinvestment feature. The mutual fund’s long-term capital gains pass through to you as capital gains dividends taxed at long-term rates, however long or short your holding period.

The mutual fund’s distributions to you of dividends it receives generally qualify for the same tax relief as long-term capital gains. If the mutual fund passes through its short-term capital gains, these will be reported to you as “ordinary dividends” that don’t qualify for relief.

Depending on your financial circumstances, it may or may not be a good idea to buy shares right before the fund goes ex-dividend. For instance, the distribution could be relatively small, with only minor tax consequences. Or the market could be moving up, with share prices expected to be higher after the ex-dividend date.

Tip: To find out a fund’s ex-dividend date, call the fund directly.

Please call if you’d like more information on how dividends paid out by mutual funds affect your taxes this year and next.

Year-End Giving To Reduce Your Potential Estate Tax

The federal gift and estate tax exemption, which is currently set at $5.43 million is projected to increase to $5.45 million in 2016. ATRA set the maximum estate tax rate set at 40 percent.

Gift Tax. For many, sound estate planning begins with lifetime gifts to family members. In other words, gifts that reduce the donor’s assets subject to future estate tax. Such gifts are often made at year-end, during the holiday season, in ways that qualify for exemption from federal gift tax.

Gifts to a donee are exempt from the gift tax for amounts up to $14,000 a year per donee.

Caution: An unused annual exemption doesn’t carry over to later years. To make use of the exemption for 2015, you must make your gift by December 31.

Husband-wife joint gifts to any third person are exempt from gift tax for amounts up to $28,000 ($14,000 each). Though what’s given may come from either you or your spouse or both of you, both of you must consent to such “split gifts.”

Gifts of “future interests”, assets that the donee can only enjoy at some future time such as certain gifts in trust, generally don’t qualify for exemption; however, gifts for the benefit of a minor child can be made to qualify.

Tip: If you’re considering adopting a plan of lifetime giving to reduce future estate tax, don’t hesitate to call the office for assistance.

Cash or publicly traded securities raise the fewest problems. You may choose to give property you expect to increase substantially in value later. Shifting future appreciation to your heirs keeps that value out of your estate. But this can trigger IRS questions about the gift’s true value when given.

You may choose to give property that has already appreciated. The idea here is that the donee, not you, will realize and pay income tax on future earnings and built-in gain on sale.

Gift tax returns for 2015 are due the same date as your income tax return. Returns are required for gifts over $14,000 (including husband-wife split gifts totaling more than $14,000) and gifts of future interests. Though you are not required to file if your gifts do not exceed $14,000, you might consider filing anyway as a tactical move to block a future IRS challenge about gifts not “adequately disclosed.”

Tip: Call if you’re considering making a gift of property whose value isn’t unquestionably less than $14,000.

Income earned on investments you give to children or other family members are generally taxed to them, not to you. In the case of dividends paid on stock given to your children, they may qualify for the reduced child tax rate, generally 10 percent, where the first $1,050 in investment income is exempt from tax and the next $1,050 is subject to a child’s tax rate of 10 percent (0 percent tax rate on long-term capital gains and qualified dividends).

Caution: In 2015, investment income for a child (under age 18 at the end of the tax year or a full-time student under age 24) that is in excess of $2,100 is taxed at the parent’s tax rate.

Other Year-End Moves

Retirement Plan Contributions. Maximize your retirement plan contributions. If you own an incorporated or unincorporated business, consider setting up a retirement plan if you don’t already have one. It doesn’t actually need to be funded until you pay your taxes, but allowable contributions will be deductible on this year’s return.

If you are an employee and your employer has a 401(k), contribute the maximum amount ($18,000 for 2015), plus an additional catch-up contribution of $6,000 if age 50 or over, assuming the plan allows this and income restrictions don’t apply.

If you are employed or self-employed with no retirement plan, you can make a deductible contribution of up to $5,500 a year to a traditional IRA (deduction is sometimes allowed even if you have a plan). Further, there is also an additional catch-up contribution of $1,000 if age 50 or over.

Health Savings Accounts. Consider setting up a health savings account (HSA). You can deduct contributions to the account, investment earnings are tax-deferred until withdrawn, and amounts you withdraw are tax-free when used to pay medical bills.

In effect, medical expenses paid from the account are deductible from the first dollar (unlike the usual rule limiting such deductions to the excess over 10 percent of AGI). For amounts withdrawn at age 65 or later, and not used for medical bills, the HSA functions much like an IRA.

To be eligible, you must have a high-deductible health plan (HDHP), and only such insurance, subject to numerous exceptions, and must not be enrolled in Medicare. For 2015, to qualify for the HSA, your minimum deductible in your HDHP must be at least $1,250 for single coverage or $2,500 for a family.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this elder care matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
  17. FindProbateAttorneys.net
  18. FindSeniorLivingCommunities.net
  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net

#taxplanning, #ElderCare, #WyomingElderCare, #RetirementPlanning, #IncomeandDeductions, #ElderCareMatters, #HealthCareLaw, #MedicareTax, #AlternativeMinimumTax, #ResidentialEnergyTaxCredits, #CharitableContributions, #InvestmentGainsandLosses, #NetInvestmentIncomeTax, #MutualFundInvestments, #EstateTax, #GiftTax, #HealthSavingsAccounts

 


Lawmakers in Washington have made major changes to Social Security

Changes to Social Security will take away some key planning strategies that couples used to boost their total benefits

As part of recent negotiations between Congress and the White House over the budget, major changes to Social Security took away some key strategies that couples could use to boost their total benefits.

File and Suspend

Social Security BenefitsUnder this strategy, a higher earner at full retirement age (currently 66) would claim his benefit, enabling his lower-earning spouse to claim a spousal benefit (generally half of the higher earner’s benefit). He then immediately would suspend  his benefit so that he could earn 8% a year in delayed retirement credits until he reapplied up until age 70. In the meantime, his lower-earning spouse would collect monthly spousal benefits.

This new legislation will change the rules so that if someone suspends benefits, no one can collect based on his earnings record. That puts the kibosh on the spouse’s benefit.

That means that people who are getting benefits now under the strategy will continue to receive them, and those who want to try to maximize lifetime family benefits using this strategy will be able to for a while longer. You must be at least age 66 to use this tactic, and the window will probably close around May 1, 2016.

Another useful benefit of the file-and-suspend strategy is that it can greatly enhance the opportunity to collect benefits retroactively. Generally, Social Security will not pay more than six months’ of benefits retroactively. But, for those who file and suspend at age 66, any benefits due from that point on can be collected retroactively. Let’s say you file and suspend at 66 to earn delayed retirement credits, but become ill at 69. In that case, you could collect three full years worth of benefits retroactively if you were willing to forfeit the delayed retirement credits. This change in Social Security wipes out this option.

Restricting an Application

Under the current rules, if a beneficiary applies for benefits between ages 62 and full retirement age, that beneficiary will be paid the highest benefit he is entitled to — whether that is his own benefit or a spousal benefit. By waiting to full retirement age to claim, a beneficiary has had the opportunity to “restrict an application to spousal benefits only.” The reward: You could collect the spousal benefit while allowing your own benefit to grow thanks to 8%-a-year delayed retirement credits.

The new law will eliminate this option for most future beneficiaries.

There’s a caveat: Anyone age 62 or older at the end of 2015 is spared this clampdown. They will continue to have the option, at age 66, to restrict an application to spousal benefits only.

Since the file-and-suspend strategy is disappearing, this will work only if one spouse is actually receiving benefits. In that case, the other spouse could file a restricted application and collect spousal benefits at the same time he or she continues to rack up delayed retirement credits.

Couples in this situation will have to carefully weigh whether the lower earner should trigger his benefit in order for his spouse to claim a spousal benefit. Equal earner couples who both want to delay their own benefits may want to forgo bringing in income through a spousal benefit so that they can both boost their benefits. Couples who have unequal benefit amounts could find it advantageous to have the lower earner claim his benefit and have the higher earner file a restricted application for a spousal benefit.

The Good News

While these claiming strategies will disappear, some key Social Security rules that allow beneficiaries to boost benefits will remain. Beneficiaries will still be able to earn delayed retirement credits of 8% a year up to age 70 if they wait past full retirement age to claim benefits.

Also, a beneficiary will still be able to voluntarily suspend his or her own retirement benefit at age 66 or later, as a beneficiary can do now. That’s good news for someone who claims a reduced benefit early, but later wishes he hadn’t. Once he reaches full retirement age, he can choose to suspend his benefit to earn delayed retirement credits up to age 70 to erase most of the reduction from claiming early.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this elder care matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
  17. FindProbateAttorneys.net
  18. FindSeniorLivingCommunities.net
  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net

Social Security
Robert M. Slutsky, Esq.
Robert Slutsky Associates
Plymouth Meeting, Pennslyvania
An ElderCare Matters Partner

#SocialSecurity, #ElderLaw, #ElderCare, #PennsylvaniaElderLaw, #RetirementPlanning, #RetirementBenefits, #ElderCareMatters


Selecting the Right Nursing Home for a Loved One

Selecting the Right Nursing Home for a Loved One

Written by:
Selecting the Right Nursing Home for a Loved One
George P. Guertin, Esq.
Guertin and Guertin, LLC
North Haven, Connecticut
An ElderCare Matters Partner

Selecting a nursing home for a loved one is one of the most important and difficult decisions that you may be asked to make. This decision is usually made during a time of crisis, frequently when a family member is ready to leave the hospital after a serious illness or operation. It would be easier on everyone if this decision could be planned for. However this is usually not the case. Just remember, be nice to your kids… they are going to pick out your nursing home.

The first issue to decide is whether or not you really need a nursing home (often referred to as Skilled Nursing Facilities or SNFs). Would some type of home services be adequate? This issue should be discussed with your physician, as well as other healthcare providers. There are many types of services available for people who choose to remain at home, such as home health care, adult day care centers, respite care (where another person can provide the caregiver some relief to allow for shopping, errands, or just a little “down time”) and hospice in-home care.

An option for those individuals who do not need the level of care that nursing homes provide is an Assisted Living Community. These communities provide many of the benefits of a skilled nursing facility but in a more home-like setting. They do not provide skilled nursing care, but will assist the resident in various activities such as dispensing medication, cleaning their room or apartment, providing meals, as well as various activities. Often the monthly cost of these communities is considerably less expensive than skilled nursing facilities, and may have special programs and special living arrangements for folks with cognitive impairments like dementia. We have visited many of these communities and some are quite beautiful. Some are like five star hotels with lovely dining rooms, individual mini-apartments, beautiful grounds, and other amenities you would want for your loved ones.

Once it has been determined that an individual needs care in a nursing home you should allow that person, if they are able, to be a part of the process of selecting a facility. Ask professionals in the field, friends or acquaintances who have been in a similar situation for information. The Connecticut State Agency on Aging has an Ombudsman program that can provide information on particular nursing homes, however you should also visit different homes to see what they are like. Talk to staff members, other residents and their families. You should visit each home more than once and at different times of the day. Ask if they have activities for the residents. Ask to see menus for daily meals. Also, ask what the costs are at each home. Another thing you may want to do is to just walk around the home and observe the condition of the facility and the residents.

Nursing homes have their own doctors. You should find out about the doctors, their credentials, how often they visit and if they are willing to meet with the family to discuss plans for treatment.

Federal law requires that residents have the right to be free from restraints administered for the purpose of discipline or convenience and not required to treat medical conditions. If you see residents in restraints, you should question the facilities staff about the nursing home’s policy on restraints.

Be sure to visit more than one nursing home before you decide. You can be on a waiting list at many homes and then choose the home you want. A little advanced planning can save you from having to make a quick decision when you are forced to find a nursing home in an emergency.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this elder care matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
  17. FindProbateAttorneys.net
  18. FindSeniorLivingCommunities.net
  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net


Medicaid Planning

The Perils of Do it Yourself Medicaid Planning

Written by:

Medicaid Planning
Henry C. Weatherby, Esq., CLU, ChFC, CEBS
Weatherby & Associates, PC
Bloomfield, Connecticut
An ElderCare Matters Partner

As we stress often to families in our practice, planning for and dealing with the significant challenges and difficulties of long-term care is a daunting process.  The complexities of very complicated state and federal Medicaid laws and regulations present many pitfalls for those who try to engage in that process on their own without working with a competent elder law attorney.  A recent Medicaid case from New Jersey is an example of a family that tried to go through the process on their own and are now dealing with some pretty nasty consequences.  See C.W. v. New Jersey Division of Medical Assistance and Health Services, NO. A-02352-13T2 (NJ Sup. Ct. App. Aug. 31, 2015).

The facts are as follows: “C.W.” was a 90 year old New Jersey resident who moved into a skilled nursing facility in 2007.  The following year, she transferred her home and $540,000 in assets to her children, which together were worth approximately $864,000.  The following year C.W. applied for Medicaid benefits.  Not surprisingly, the state Medicaid authorities imposed a penalty of 10 years and 4 months before they were willing to begin paying her nursing home costs.  At that point, her children tried to fix the problem.  They returned $235,000 to C.W. who in turn paid that amount to her nursing home.  Then, her children returned the home to her, which was then sold.  Oddly enough, the sale proceeds were then deposited into an account in the children’s names, not in C.W.’s name, with the children executing a written agreement to transfer the amount of C.W.’s care cost to her each month.  C.W. then reapplied for Medicaid and was again denied as before.

Let’s consider each of the many mistakes made by C.W.’s family and also consider how the results would have been a little different if C.W. had lived in Connecticut.  Under the Medicaid rules, when a Medicaid penalty period is assessed, it takes the form of a time period before which benefits will be paid.  The simple mathematical formula takes the total gifted amount and divides it by the average monthly cost of private-paid skilled nursing home in that state.  As of July 1, 2015 in Connecticut, that divisor amount is now $12,170.  Dividing $864,000 by $12,170 would result in a penalty period of 71 months.  Note: for C.W.’s actual case, New Jersey’s monthly divisor happens to be quite a bit lower than Connecticut’s and her application was submitted 7 years ago so costs have risen since that time.  That is why her actual penalty period was considerably different than our hypothetical for a Connecticut 2015 Medicaid application.

What were some of C.W’s mistakes?  The first mistake was in not understanding the rules of Medicaid’s 60 month look back period.  When you apply for Medicaid, the administrative authorities are allowed to do a complete financial audit of the Medicaid applicant’s financial activities over the previous 60 months.  Whatever was done earlier than 60 months before the application is never considered and has no effect whatsoever on Medicaid eligibility.

There are situations where someone is fairly healthy when they engage in asset protection planning but then suffers unanticipated health issues that force a move to a nursing home much sooner than they ever thought they might need it.  That is clearly not the case for C.W. as she was already in a nursing home when she started gifting away her assets.  In C.W.’s case, applying for Medicaid in 2008, she would have had no problems if she did the exact same gifting of assets in 2003 or earlier.  Alternatively, the family could have considered delaying the Medicaid application for a few years and instead, privately paying the nursing home from the gifted funds until the 60 month look back period elapsed.

The second mistake was in transferring C.W.’s home out of her name.  When a single individual applies for Medicaid, their home may be considered an exempt asset if they have a reasonable expectation of returning to the home within a relatively short period of time (at least initially, but the rule might require the home to be sold later on depending on circumstances).  As soon as C.W. transferred the home, it ceased to be an exempt asset for purposes of her eligibility.  Then, after her children conveyed the house back to her, it was sold.  Once the equity in the home is converted to cash, it ceases to be exempt.  At that point we might also question why the sales proceeds were put into the children’s’ bank account, rather than staying in C.W.’s account, because she therefore ultimately re-gifted that amount back to the kids.

Also, it is important to note that for income tax purposes, once C.W. transferred the house to her children, the opportunity to claim an exemption from capital gains tax on the sale of the home could have been lost.  If the house had been sold by the children instead of being transferred back to C.W. first, and assuming that the house sold for $324,000, and further assuming for our purposes that C.W. had paid approximately $150,000 for the house, then capital gain of $174,000 would have to recognized by the children upon the sale of the home.  At a probable 15% capital gains tax rate, there would be $26,100 in capital gains tax due to the IRS because of the sale.  In Connecticut there would also be tax owed to the state of about 6% for another $10,440, for total tax costs of $36,540. Since C.W. sold the house herself, however, she could have qualified for the “primary residence” exemption for sale of the home, and paid no income tax. There was one thing that it appears C.W. and the children did right from an income tax standpoint, which was transferring the house back to C.W. before selling it.

Lastly, in Connecticut, C.W.’s children could have been held personally liable for C.W.’s nursing home costs under a relatively new statute which allows nursing homes to sue the recipients of gifts that cause a penalty period for Medicaid coverage.  Under Connecticut General Statutes Section 17b-261q, if a person applying for Medicaid transferred assets within two years of the time that they apply for Medicaid, and they incur a penalty period due to that transfer, then the person who received the asset can be sued by the nursing home for nonpayment of their fees.

Clearly, good advice from a qualified elder law attorney could have made a big difference in the costs ultimately borne by C.W. and her family for her long-term care needs.  Please call us if you have any questions about the issues presented above or if you care to discuss any other planning issues with us.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
  17. FindProbateAttorneys.net
  18. FindSeniorLivingCommunities.net
  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net


This week’s article is about your Last Will and Testament

Your Last Will and Testament

Written by:

Last Will and Testament
James C. Siebert, Esq.
The Law Office of James C. Siebert & Associates
Arlington Heights, Illinois
847-253-7500
An ElderCare Matters Partner

A Last Will and Testament is the legal document where you set out how your assets will be distributed and how your dependents will be cared for after you die. A Last Will and Testament is frequently the centerpiece of an Estate Plan.

A person who dies with a will is said to have died testate. A person who dies without a will dies intestate. It is always preferable to have a will. A will states your preference as to the disposition of your estate. A will can and should be changed as your circumstances and preferences change. Even if you take measures to avoid probate, you should have a will as a back-up. A will should always be drawn up by a qualified attorney who is familiar with your financial circumstances, family situation and your wishes for your estate.

Having a will provides a person with control over how and to whom his or her property shall be distributed after death. In a will, the decedent names an executor to collect, administer and distribute the estate. The executor may be a relative, friend or even a trust company or a bank. The executor selects a lawyer to assist in probating the will.

A will is also important not just to convey property as you desire, but for other matters. For example, you can indicate your preference for the guardianship of minor children. A will can also incorporate various tax planning techniques.

You can use your will to:

    • Identify who will inherit your estate. You decide who is to get your assets and who will not get your assets. Be aware that your surviving spouse has a legal right to inherit a portion of your property. Normally, you cannot do away with this right in your will.
    • Specific Bequests. You can give certain items of sentimental value to certain individuals.
    • Name guardians for your minor children. You will need to appoint a guardian to care for children who are younger than 18, in case both legal guardians are deceased. You also should appoint a guardian for any children who will be unable to care for themselves in adulthood. A guardian will raise your children until they reach maturity. If your children are young, consider naming alternate guardians who can step in if your primary guardian dies or becomes disabled.
    • Create a trust if any minors will be inheriting your assets. This trust specifies the age at which the child will receive his or her inheritance. It also appoints a trustee to manage that inheritance until the child takes possession. These Trusts are particularly useful for Trusts for children and grandchildren.
    • Choose an “executor.” The executor will manage and settle your probate estate according to your instructions. Make certain the person you choose as your executor is both willing and able to serve. It is sometimes wise to designate two executors who can work together to settle your affairs. One executor could be an individual, like a family member or close friend. The other could be a bank or an attorney with legal and financial expertise.

Since it is not possible to see into the future, it is virtually impossible to prepare a will that provides for every possibility. You should review and update your will whenever significant changes happen in your life, or in the lives of those you have named in your will. The following life changes suggest you should review your will to see if you need to make corrections:

  • Changes in persons you want to receive your property: Someone you have named in your will may die, or a new member may be added to your family through birth, adoption or marriage.
  • Changes in where you live: If you move to a different state, you should have your will reviewed by a lawyer in your new state. Although laws are similar from state to state, there can be important differences in how wills should be written or will be interpreted by the courts.
  • Changes in your finances: If you have a significant change in your financial circumstances, you may want to change to whom you give property or how much they should receive.
  • Changes in your marital status: If you get married, divorced or become widowed, you probably need to revise your will.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
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  20. FindSpecialNeedsAttorneys.net
  21. FindVAAccreditedAttorneys.net


This Week’s Article on ElderCareMatters.com

Understanding Tenancy: The Different Ways to Co-Own Property

Written By: Henry C. Weatherby, Esq., CLU, ChFC, CEBS
Partner & Connecticut State Coordinator
The National ElderCare Matters Alliance
The National ElderCare Matters Alliance

When two or more individuals own property — whether it’s a condo, a home, or a piece of land — the relationship between the owners is very important. The form of ownership of the property affects how property is transferred to someone else. It is important to make sure you have the right form of ownership for your property.

Tenancy in common allows an owner the greatest flexibility to transfer the property as he or she wants. Each co-tenant in a tenancy in common has an interest in the property and is free to transfer this interest during life or through a will. The co-tenants can have different ownership interests; for example, three owners could own 5 percent, 35 percent and 60 percent of the property, respectively, as tenants in common. Each tenant can sever their relationship with the other tenants by conveying their interest to another party. This third party then becomes a tenant in common with the other owners.

Joint tenants, on the other hand, must have equal ownership interests in the property. So, three owners would each have a one-third interest in the property. If one of the joint tenants dies, his or her interest immediately ceases to exist and the remaining joint tenants own the entire property. The advantage to joint tenancy is that it avoids having an owner’s interest probated upon his death.

A disadvantage to both joint tenancy and tenancy in common, however, is that creditors can attach the tenant’s property to satisfy a debt. So, for example, if a co-tenant defaults on debts, his creditors can sue in a “partition proceeding” to have the property interests divided and the property sold, even over the other owners’ objections.

A third form of tenancy that is allowed in several states, tenancy by the entirety, avoids this problem, but it is available only to married or, where applicable, civilly united couples. Tenancy by the entirety is based on the societal value of protecting the family. One tenant cannot convey her interest on her own, unlike with the other tenancies. Upon the death of one spouse, his interest automatically passes to the other spouse, as with joint tenancy, and the creditors of one spouse cannot attach the property or force its sale to recover debts unless both spouses consent.

Creditors may place a lien on property held in tenancy by the entirety, but they are out of luck if the debtor dies before the other spouse, who will take ownership of the property free and clear of the debt. This is why both husband and wife are required to sign the mortgage on their property for the mortgage to be valid. Unmarried couples who buy property and subsequently marry each other should re-title the deed as tenants by the entirety to avail themselves of the greater protections this form of tenancy offers.

In most states, if the form of tenancy that the tenants intended is ambiguous, the tenancy will be assumed to be a tenancy in common.

Contact us today to find out which form of ownership is the right one for your circumstances.

21 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 21Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the National ElderCare Matters Alliance, an organization of thousands of America’s TOP Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

  1. ElderCareMatters.com
  2. ElderCareMattersBlog.com
  3. ElderCareWebsites.com
  4. ElderCareAnswers.us
  5. ElderCareArticles.us
  6. ElderCareProfessionals.us
  7. ElderLawAttorneys.us
  8. EstatePlanningAttorneys.us
  9. FindDailyMoneyManagers.net
  10. FindElderCareMediators.net
  11. FindElderLawAttorneys.net
  12. FindEstatePlanningAttorneys.net
  13. FindGeriatricCareManagers.net
  14. FindHomeCareProviders.net
  15. FindLongTermCareInsurance.net
  16. FindMedicaidAttorneys.net
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  19. FindSeniorMoveManagers.net
  20. FindSpecialNeedsAttorneys.net
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Article about Alzheimer’s

Alzheimer’s – A Fate Worse than Death?

Written By:

 Elder Law Attorney
Debra K. Schuster, M.H.A., J.D.
Debra K. Schuster, P.C.
St. Louis, Missouri
An ElderCare Matters Partner

In a recent column in the New York Times, physician-author Danielle Ofri described an incident in which she and another doctor were examining a patient with Alzheimer’s. “A fate worse than death,” the other doctor murmured. Dr. Ofri, too, felt uncomfortable.

She felt that there was something almost shameful in bearing witness to a fellow human being’s loss of self and the indignities that accompany that.

The patient had been a prestigious artist and intellectual and to see him with only a sliver of his former intellectual capacities was, Dr. Ofri wrote, “beyond heartrending.”

It’s also heartrending, however, to be in the presence of a person dying painfully from cancer or of a person who has had a severe stroke that leaves the person immobilized. These diseases, too, are accompanied by indignities, for instance, the inability to take care of one’s own personal hygiene and basic bodily functions. These other diseases, however, do not create “shame”. Alzheimer’s does. Why?

Dr. Ofri writes;
“I was embarrassed for him, for how embarrassed he would likely be, if his former self could see his current self. That his current self lacked the capacity to be aware of his state offered little comfort.”

Closing in on her 80th birthday, my mother began to show obvious signs of dementia. It started as a test of patience, hearing the same stories over and over again. By the time she turned 85, she had late stage Alzheimer’s. She had a colostomy, wore diapers and only on rare occasions did she know I was her daughter.

Dr. Ofri mentions, as the disease progresses, Alzheimer’s patients become incapable of feeling embarrassed. So it’s entirely possible that at no point in the course of the disease will the person feel embarrassment.

My mother did not have the capacity to be embarrassed by her disease. I was not embarrassed for her. However on many occasions, we experienced the pitiful looks and sometimes offensive comments of those who obviously were.

My mother was silly and happy in her Alzheimer’s world. She was always happy to have company even though she didn’t know who we were. She loved having parties so we made up occasions and included anyone who wanted to join us. She stayed sarcastic until she drew her last breath. She loved her stuffed dog who in her mind, was very much alive. Alzheimer’s transformed my mother into a person who she would have never wanted to become but she was still a person none the less. She still found joy in life and she was still dearly loved.

Perhaps Alzheimer’s is not a fate worse than death.

What would happen if we began to realize that when we get embarrassed or feel ashamed in the presence of a person with dementia we instead consider the fact that they are living with a disease as well as their affected brain will let them? It’s quite possible that the embarrassment one feels should be turned inward.

We all may be better served if we would stop having such high expectations of one another and allow ourselves to relate more naturally to another person’s cognitive impairment without judgment and without anticipating what that person may be feeling.

Appreciating merely being able to be present with them and the quiet joy and calm of being together without necessarily needing to “do” anything with them can give us greater peace. It can also give us the ability to accept our loved ones with dementia and ourselves as they and we are.

15 “Mobile Friendly” Elder Care / Senior Care Directories

If you need help with this legal matter or with any Elder Care / Senior Care issue, you can find the help you need in one of the following 15 “Mobile Friendly” Elder Care / Senior Care Directories. These Elder Care / Senior Care – specific Directories are sponsored by the ElderCare Matters Alliance, a national organization of thousands of Elder Care / Senior Care Professsionals who help families plan for and deal with a wide range of Elder Care Matters.

1. www.ElderCareMatters.com
2. www.ElderCareWebsites.com
3. www.FindDailyMoneyManagers.net
4. www.FindElderCareMediators.net
5. www.FindElderLawAttorneys.net
6. www.FindEstatePlanningAttorneys.net
7. www.FindGeriatricCareManagers.net
8. www.FindHomeCareProviders.net
9. www.FindLongTermCareInsurance.net
10. www.FindMedicaidAttorneys.net
11. www.FindProbateAttorneys.net
12. www.FindSeniorLivingCommunities.net
13. www.FindSeniorMoveManagers.net
14. www.FindSpecialNeedsAttorneys.net
15. www.FindVAAccreditedAttorneys.net

In our Elder Care / Senior Care Directories you will also find Answers and Articles about a wide range of Elder Care Matters, information that is provided by our ElderCare Matters Partners – some of America’s TOP Elder Care / Senior Care Professionals who are members of the national ElderCare Matters Alliance and have years of experience in helping families with Elder Care Matters.


Elder Care Article about Changes to Powers of Attorney in Pennsylvania

Changes to Pennsylvania’s Power of Attorney Law

Written By:
Elder Care / Senior Care Article
James J. Ruggiero, Jr., Esq.
Ruggiero Law Offices, LLC
Paoli, Pennsylvania
An ElderCare Matters Partner

This Elder Care / Senior Care article summarizes the recent changes made to Powers of Attorney in Pennsylvania, specifically focusing on Pennsylvania’s House Bill 1429, which was signed by Governor Corbett on July 2, 2014, and became Act 95 of 2014.  This law contains provisions which include changes to the form and acceptance of powers of attorney in Pennsylvania. Some of those provisions – namely those relating to the acceptance of powers of attorney by third parties and third party liability – were effective immediately upon the Bill’s signature into law. Other provisions of the Act become effective beginning January 1, 2015. This article will detail the changes made by the new law, and how they effect existing powers of attorney as well as powers of attorney drafted after the start of the new year.

Execution of Powers of Attorney

Previously, there was no blanket requirement that a power of attorney be witnessed or notarized. Under the old statute, powers of attorney were only required to be witnessed in the circumstance where the power of attorney was executed by the principal by mark or by another individual at the direction of the principal. Notarization was only required when the power of attorney was to be recorded. Under Pennsylvania’s new power of attorney law, effective January 1, 2015, all powers of attorney executed after that date must be notarized and signed by two witnesses. The agent cannot be the notary, and the witnesses cannot be the notary or the agent. Some attorneys, like this office, already regularly have powers of attorney executed containing these formalities as part of their standard practice. However, powers of attorney executed prior to January 1, 2015, are and will remain valid without witnesses and without notarization.

Notice and Agent Acknowledgement

Under the previous law governing the form and execution of powers of attorney, all powers of attorney were required to contain a “Notice” provision at the front; the terms of the Notice provision were dictated by statute. Act 95 changes the form of the Notice provision to contain two new statements. Those statements generally pertain to the agent’s duty to act in accordance with the principal’s reasonable expectations and in the principal’s best interest; and put the principal on notice as to the broad powers a power of attorney may convey to an agent. The “Agent Acknowledgement” (a signed statement by the agent acknowledging his or her duties under the power of attorney) was also required under the previous power of attorney statute, and Act 95 makes parallel changes to the Agent Acknowledgement provisions. The Act now requires the agent to acknowledge that he or she will act in accordance with the principal’s reasonable expectations and bestinterest, in good faith, and only within the scope of the powers granted by the principal in the power of attorney.

These changes, like the changes to the execution, are also effective January 1, 2015, and pertain only to power of attorney documents executed on or after that date. All previously executed powers of attorney that were validly executed under the laws in effect at the time of their execution will remain effective.

Agent’s Duties

The above-mentioned changes deal with the form and execution of the power of attorney documents. Act 95 also made changes to the statutory provisions regarding the agent’s duties and powers, as well as the duties and liability of third parties as to the acceptance of powers of attorney. The statute requires that at a minimum, an agent has the duty to act in accordance with the principal’s reasonable expectations and in the principal’s best interest, act in good faith, and act only within the scope of powers granted to the agent under the power of attorney. These duties are enumerated in the statue (20 Pa. C.S. 5601.3), and are set out verbatim in the new agent acknowledgement provisions. These duties are a mandatory minimum and cannot be waived by the principal in the power of attorney.

The Act also sets limits on the agent’s liability as long as the agent acts in good faith. The statute permits the possibility that the agent may benefit from a transaction entered into on behalf of the principal, and does not automatically impose liability as long as the agent acts with care, competence and diligence in the best interest of the principal.

Finally, with respect to an agent’s duties, the Act places a clear limitation on those who have standing to compel an accounting of an agent’s actions under the power of attorney. Effective January 1, 2015, the agent is not required to provide an accounting of his or her actions as agent unless a court so orders, or unless requested by the principal, a guardian, conservator, other fiduciary acting for the principal, governmental agency with the authority to protect the welfare of the principal, or personal representative of the principal’s estate upon the principal’s death. Note that this new language does not include a spouse, parent, descendant, presumptive heir, or beneficiary.

Powers of an Agent

The new statutory provisions specify which powers must be enumerated specifically and expressly in the power of attorney in order to be granted to the agent. These powers include the power to create, amend, or terminate an inter vivos trust; make a gift; change, create, or waive rights of survivorship; delegate the agent’s authority; and disclaim property (20 Pa. C.S. 5601.4). The gifting powers of an agent contained in the statute have been modified; the agent may make limited gifts under the statute which are not restricted, subject to the agent’s duties set forth above.

The new statute also limits an agent’s ability to do any estate planning on behalf of the principal. Section 5601.4(b) prohibits the agent from exercising his or her powers under the power of attorney for the agent’s benefit unless the agent is a lineal ascendant (parent, grandparent, etc.), lineal descendant (child, grandchild, etc.) or spouse of the principal and the power of attorney contains express language that permits the agent to exercise powers for his or her own benefit.

Third Party Liability

One of the wheels that set the passage of this new law into motion was the 2010 Pennsylvania Supreme Court decision in the case of Vine v. Comm. of Pa. State Employees’ Retirement Board (607 Pa. 648, 9 A.3d 1150 (2010)). Essentially, in this case, the Court held a third party (the State Employees’ Retirement Board) liable for relying on and permitting an agent to act under a power of attorney that on its face was valid but which later was determined to be void due to the principal’s incapacity at the time of execution. Basically, even though the power of attorney was properly executed, it was not revoked, and the third party acted in good faith in accepting the power of attorney and permitting the agent to act, a Court still held that third party responsible for the actions of the agent taken under the power of attorney because the Court determined that the principal lacked the capacity to execute the document at the time it was signed and therefore the document was invalid, even though there would be no way for the third party to tell on the face of the document that the document was void.

This decision has made many third parties reluctant to accept powers of attorney presented to them for obvious reasons, and it has been a real practical challenge to have agents act under valid, existing, and properly executed powers of attorney. Some third party agencies began to require that a principal execute a proprietary form, and refuse to accept powers of attorney that do not conform to such third party’s specific guidelines despite the fact that the prior power of attorney statute prohibits such acts.

The new power of attorney law contains provisions that were effective immediately upon the passage of the law that are a clear reversal of the Vine Court’s holding. The new statute specifically provides immunity to third parties for good faith reliance upon a power of attorney even if the power of attorney is later found to be void, invalid, or revoked, as long as the third party does not actually know that the power of attorney is in some way void, ineffective, or revoked. The new statute also provides some tools for third parties to use in determining whether to accept a power of attorney. A third party may now, prior to acceptance of a power of attorney, request an agent’s certification under penalty of perjury, an English translation of the document (if it is in another language), or an attorney’s opinion as to whether the agent is acting within the scope of authority granted by the document. The statute places some timelines on these requests – the third party has 7 business days to decide whether the power of attorney is acceptable or whether they would like to request one of the permissible forms of additional information. If the third party decides to request additional information, they then have 5 business days after the receipt of such information to decide whether they will accept the power of attorney or whether they will make an additional request; although the third party is required to have a substantial basis for making such an additional request.

The new statue also explicitly states that a third party cannot require different or additional forms of power of attorney (20 Pa. C.S. 5608(3)). The statue sets forth acceptable reasons for refusal to accept a power of attorney; but if a third party refuses to accept a power of attorney and does not have a proper basis to do so under the statute, the third party may be subject to civil liability or a court order mandating the acceptance of the power of attorney. While the new statutory provisions seem to pull away some of the barriers to third parties’ acceptance of powers of attorney, it remains to be seen as to whether this holds true in practice.

Conclusion

Act 95 of 2014 made some important changes to the Pennsylvania law governing the form, execution, scope, and acceptance of powers of attorney. Some of those changes were effective immediately, and some did not come into effect until January 1, 2015. Although changes regarding the execution of powers of attorney are not effective as to powers of attorney executed prior to that date, it is a prudent idea to have your existing powers of attorney reviewed by your attorney to ensure that they conform to the law and that they are effective in granting all of the necessary and appropriate powers to your agent. An update may be advisable, as the new statute changes the scope of an agent’s powers that may be given by reference and those powers that must be given explicitly. Without careful review, you may not discover that your power of attorney does not function in the manner necessary for your agent to act in your best interest until it is too late.

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