Massachusetts Estate Planning & Asset Protection Blog

Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM

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Underestimating the Risk of Long Term Disability: The Importance of Being Prepared I Massachusetts Elder Law Attorney

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, Mar 11, 2016

Underestimating the Risk of Long Term Disability:
The Importance of Being Prepared

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Most Individuals Will Face At Least a Temporary Disability
Study after study confirms that nearly everyone will face at least a temporary disability sometime during their lifetime. More specifically, one in three Americans will face at least a 90-day disability before reaching age 65 and, according to the definitive study in this area, depending upon their ages, up to 44% of Americans will face a disability of up to 4.7 years. On the whole, Americans are up to 3.5 times more likely to become disabled than die in any given year.

Many People Will Face a Long Term Disability
For many Americans, the disability will not be short-lived. According to the 2007 National Home and Hospice Care Survey, conducted by the Centers for Disease Control's National Center for Health Statistics, over 1.46 million Americans received long term home health care services at any given time in 2007 (the most recent year this information is available). Three-fourths of these patients received skilled care, the highest level of in-home care, and 51% needed help with at least one "activity of daily living" (such as eating, bathing, getting dressed, or the kind of care needed for a severe cognitive impairment like Alzheimer's disease).

Long Term Care Costs Can Be Staggering
Not only will many individuals and families face prolonged long term care, in-home care and nursing home costs continue to rise. According to the Genworth 2015 Cost of Care Survey, the Median Annual Cost for a Private Room in Massachusetts during 2015 was $114,026.

Perhaps most importantly, despite overwhelming and compelling statistics; most Americans grossly underestimate the risk of disability to themselves and to their loved ones. According to the Council on Disability Awareness 2010 survey:

  • 64% of wage earners believe they have a 2% or less chance of being disabled for 3 months or more during their working career; the actual odds for a worker entering the workforce today are closer to 25%.
  • Most working Americans estimate that their own chances of experiencing a long term disability are substantially lower than the average worker’s.

Given the high costs of care, this underestimation often leaves Americans ill prepared to pay for the costs of long term care.

All Planning Should Thoroughly Address Disability
When a person becomes disabled; he or she is often unable to make personal and/or financial decisions. If the disabled person cannot make these decisions, someone must have the legal authority to do so. Otherwise, the family must apply to the court for appointment of a guardian over the person or property, or both. Those who are old enough to remember the public guardianship proceedings for Groucho Marx recognize the need to avoid a guardianship proceeding if at all possible.

At a minimum, seniors need broad powers of attorney that will allow agents to handle all of their property upon disability as well as the appointment of a decision-maker for health care. We recommend that our clients have both a Health Care Proxy and a HIPPAA to make this transition smoothly. Alternatively, a fully funded revocable trust can ensure that the senior's person and property will be cared for as desired, pursuant to the highest duty under the law - that of a trustee.

Click here to view our Free Consumer Report on "The Plain Truth About Alzheimer's."

At the Estate Planning & Asset Protection Law Center, we even provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life savings, and legacy for their loved ones. Attend a free workshop to discover where opportunities exist to eliminate problems now as you implement plans for a protected future.

You may register now for a free educational workshop - call 800-964-4295 or click the button below, to register and learn more about what youcan do to protect your spouse, your home, and your life savings.Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: long term care, HIPAA, elder care, Estate Planning Recommendations, health, medical

Elder Law Perspective on Taking Early Social Security Payments

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, Jun 12, 2012

Much has been written recently about the pros and cons of taking Social Security early at age 62 vs. waiting till full retirement age (which gradually increases till it reaches age 67 for those born in 1959 and later).  One article discussed why it could be a huge mistake to take Social Security early.  What wasn’t included in the discussion turns out to be a big blind spot.  There is no mention of how long-term care costs might impact the decision.

Elder Law, Social Security, Long-Term Care, MassHealth, expenseAdvocates of waiting till full retirement age point out that the payment, after adjusting for inflation, can be as much as 75% more than the payout at age 62.  In the case of a married couple, if the spouse with the higher earnings waits till full retirement age to collect and dies first, the surviving spouse will receive the greater of the two payouts.  So a decision to take benefits early could impact the spouse as well.

Of course, no one knows how long either spouse will live and the idea of taking Social Security 5 years early is appealing.  “Give me some money now since I don’t know if the whole Social Security system will go bankrupt.  It will also take approximately 6 to 8 years at the higher payout before the decision to wait becomes the better result in terms of total dollars received and who knows if I’ll live that long.”

Both considerations are valid ones.  However, in the whole analysis, what’s missing is any discussion as to how your Social Security benefit impacts long-term care.  And that can be a huge mistake.  Many retirees are – and will continue to – rely heavily on Social Security benefits as a large part of their retirement plan.  Getting a few hundred extra dollars a month could have a significant impact on their lifestyle.

But, it is so common for people to look at retirement without any consideration at all of how they would pay for a large long-term care expense.  Many Americans will not be able to afford to privately pay for very long and may need to qualify for government needs based benefits, the MassHealth program.

Many of MassHealth’s programs have a strict income cap, $2,094 per month in 2012.  Social Security and pension are typically the income that is looked at to determine eligibility.  These amounts can’t be changed.  Once you lock into a number, that’s it, except for cost of living adjustments (but MassHealth’s income cap is tied to the same Cost Of Living Adjustment).

We have so often had clients whose income exceeds the income cap by only a few dollars.  As a result they are ineligible for many of Medicaid’s community programs that might allow them to stay at home and get government assistance with their long term care needs.  So, in considering whether to wait and take a higher Social Security payout, one might want to consider whether that will make a whole lot of government programs completely out of reach for me.  That may or may not change anyone’s mind but it is certainly information we’d all like to know all the consequences before making such an important and irreversible decision.

At the Estate Planning & Asset Protection Law Center we help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones.  We provide our clients with a unique educational and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.  We invite you to join us for a free educational workshop hosted by our team of estate planning and elder law professionals.  By attending a workshop you will learn more about how you and your family can take advantage of community programs that can soften the financial impact of caring for a loved one.  To register please visit www.MASeniorWorkshop.com or call (800) 964-4295 (24/7).

Tags: long term care, Medicare, Medicaid, MassHealth, life-care plan, Baby Boomers, Elder Law, assisted living, elder care journey, seniors, elder care, family, social security, social security, veterans benefits

Discuss These Estate Plan Topics With Your Children

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Jun 07, 2012

LINK: http://www.yoursmartmoneymoves.com/2012/05/31/what-four-estate-planning-things-parents-should-tell-their-children/

From Your Smart Money Moves (May 31, 2012) “What Four Estate Planning Things Parents Should Tell Their Children”

1. Who is the executor of the estate?  If you have a will set up, it’s important to tell which child or children are the executors of your estate.  Inevitably, they should know where is your will is stored.  It is in a safe deposit box?  It is somewhere at the house?  Or, what’s the name of the attorney that has the will on file?  As the executors of the estate, they’re the ones that are going to be responsible for the orderly administration of all of your assets.  So it’s important to at least let them know that they are the executors. Sometimes, kids don’t want this responsibility. This doesn’t mean you need to talk about how much money you have, but you should be able to let them know that they will be the ones that will be helping to administer the estate down the road.

Estate Planning, Family, Loved One, Asset Protection, Long-Term Care2. What’s the game plan for long term care?  This is one that parents will avoid all day long due to the challenging nature of the question.  Many parents that hit the age of 60, 65, or 70, may or may not have nursing home insurance.  If they don’t have long term care insurance, one of the questions they should be discussing with you is who might be available to help in the future.  Sometimes, the kids want to pay for long term care insurance if in fact the parents cannot afford it themselves.  You may think it’s your middle daughter or you may think it’s going to be your youngest son that will take care of you.  The kids may have thoughts themselves about who’s going to do what or worse yet they may have not talked at all.  So it’s important to have some discussion that if something happens your children have some idea of how the chain of command and responsibilities will roll down at that time.  I had an uncle of mine that unfortunately went into a nursing home and wiped out their entire financial situation.  This is a quality discussion to have as a family.

3. Advanced Medical Directive / Living Will?  You should talk to your kids about whether you have a living will or an advanced medical directive as part of your overall estate planning.  Letting your children know these types of things and if you are an organ donor can at least prepare your children for your wishes somewhere down the road.  You may be uncertain about your wishes if you had some tragic situation that actually put you on some sort of thing that’s keeping your life going.  And if you’ve already pre-made decisions about what’s going to happen, that would be an important thing to share with them.

4. Where Is Everything Located?  I’ve yet to see someone pass away without the family having to deal with some level of mystery on where documents, collectibles, or bank accounts are located.  With today’s technology, getting your finances organized in an electronic account aggregation type software or at least collecting all of your documents in one place with instructions on where everything is located will be important for your children.   Often, families can have a major struggle over personal possessions especially if one member of the family has more knowledge than another including brothers and sisters as well as children.  The goal of doing this isn’t to share your financial picture, but merely give your family a go to person or a location so things can be sorted out easily in the event of a premature death.

As a parent you don’t have to discuss money, your net worth, or what’s happening with your overall budget.  Many parents don’t want to be a burden on their children or they don’t want their children counting on a future inheritance.   Make sure to discuss with your kids these important points so at least they can take the opportunity to discuss and plan their own lives to best support you and your overall estate plan.

For more information on estate planning, asset protection, and elder law we invite you to attend one of our free Trust, Estate, and Asset Protection Workshops.  Register online at www.MASeniorWorkshop.com or by calling (800) 964-4295 (24/7).  At the Estate Planning & Asset Protection Law Center we help families protect what matters most: their spouse, home, and life savings, from the rising cost of medical and nursing home care.  Did you know that resaerch shows that 86% of estate plans DO NOT WORK.  Research conducted by a colleague with more than 30,000 clients demonstrated the need to review plans.  To help people evaluate the areas in which an existing plan meets a family’s goals and objectives and where significant problems may exist we have developed the 19-Point Trust, Estate & Asset Protection Guide

 

Tags: asset protection, long term care, Estate Planning, Estate Planning, probate, elder care, gift tax, estate tax, estate tax savings, family, power of attorney, executor, disinherit, Beneficiary, Estate Planning Tip, estate, gifts

Massachusetts Senate Acts to Reform End of Life Care

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Jun 06, 2012

LINK: http://www.forbes.com/sites/howardgleckman/2012/05/25/mass-moves-to-require-end-of-life-talks/

From Forbes (May 25, 2012) “Mass. Moves to Require End-of-Life Talks”

WBUR radio and Kaiser Health News are reporting that the Massachusetts Senate has quietly approved a measure requiring doctors and nurses to discuss end of life options with patients who have a terminal illness. Health Care, Elder Law, Loved One, Family Member, Elder Care, aging, reform, The Palliative Care Awareness bill was included as part of a sweeping health reform measure and, remarkably, was not controversial. It was supported by both Republicans and Democrats and by a wide range of advocacy groups, including leading right-to-life organizations.

So far, at least, the fate of the Massachusetts bill is a far cry from what happened when Congress tried to include similar end-of-life discussions in the 2010 Affordable Care Act. There, a measure to pay doctors for having these conversations with all their Medicare patients was killed after Sarah Palin and other GOP critics blasted the law as a back-door way to create “death panels.” Later, the Obama Administration started but abandoned an effort to take a similar step administratively.

Few states have moved to require end of life discussions, although New York has a similar counseling law. However, many states have adopted MOLST (medical orders for life sustaining treatment) or POLST (physician orders for life sustaining treatment) forms that provide a mechanism for patients, their families, and their physicians to write down a patient’s choice of end of life care. In some states, providers such as nursing homes are required to complete such forms for their residents.

While the Massachusetts proposal is a good one, the 2010 health reform version may have benefited seniors more because it would have encouraged doctors to initiate these important discussions at a patient’s first Medicare check-up. An early conversation, long before a patient has a serious medical crisis, is key first step that helps the patient think about these issues in a non-threatening environment. And while a patient can always amend her wishes as she ages or becomes ill, that initial discussion is an important tool for a doctor to understand her patient’s point of view.

It is not clear if the Massachusetts measure will be included in a House version of the bill, which is expected in about a month. Despite its shortcoming, this is an important initiative. 

For more information on how the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates can help you and your family as loved ones progress on the Elder Care Journey we invite you to join us for a FREE educational workshop hosted in Wellesley, MA.  To register for a workshop please visit www.MASeniorWorkshop.com or call (800) 964-4295 (24/7).  We also encourage you to look into our free guides and reports available on our website www.Dsullivan.com

We look forward to seeing you in our next workshop

Tags: Alzheimer's Disease, asset protection, Medicaid, MassHealth, life-care plan, Elder Law, assisted living, elder care journey, Health Care, elder care

Does My Family Member Need to Be Evaluated? Where?

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Tue, May 22, 2012

When a loved one's forgetfulness or confusion becomes obvious, it's time for a complete examination by a physician. This is the best way to determine whether the symptoms are temporary - perhaps caused by depression, poor nutrition, drug intoxication or interaction, alcohol, or organ dysfunction - or if they're permanent, and caused by dementia or Alzheimer's.

We're talking about a complete work-up here - physical exAsset Protection, Nursing Home, Alzheimer's, dementia, elder care, family am, medical history, neurological testing, lab tests, brain imaging, and function tests.

If your loved one has never been evaluated, it's best to see a neurologist or geriatrician. If, on the other hand, he's already been diagnosed with Alzheimer's, you should see a geriatric psychiatrist, who can look for signs of depression, agitation, or behavioral issues.

If you don't know where to look for a doctor, check a physicians' referral service. And if you participate in caregiver support meetings, ask the other participants.

A word of warning - Don't Settle! If you're not comfortable with a physician...find a new one! You'll be working closely with this person the rest of your loved one's life. And you need someone you trust...someone with whom you feel comfortable!

Once you have a diagnosis, make sure the primary physician is kept in the loop; after all, she's still the one you'll be seeing for general check-ups and regular health issues.

The best doctors in this field are the ones who realize that Alzheimer's is a family illness...and that the caregiver must be carefully monitored, as well, for signs of stress or depression.

This is a very stressful time for the entire family. And, for many families, a very confusing time. But you don't have to go through this process alone. Help is available.

At Dennis Sullivan & Associates, we are Estate Planning & Elder Law professionals. We've helped several Greater Boston families along the Elder Care Journey, by providing comprehensive estate planning, wills, trusts, powers of attorney, asset protection planning, long-term care planning, planning to qualifiying for MassHealth or for Veteran’s Benefits and by answering Alzheimer's/dementia questions.  

For more information and answers to Alzheimer’s/dementia questions please visit www.BostonMemoryLawyer.com where you can access the Complete Alzheimer’s Resource Kit absolutely free.  We also encourage you to attend one of our free educational workshops by registering at www.MASeniorWorkshop.com   

You don't have to make the Elder Care Journey alone. We're just a phone call away.

Tags: Alzheimer's Disease, asset protection, Protective Trusts, Estate Planning, Elder Law, elder care journey, elder care, family, veterans benefits

The Real Cost of At-Home Care

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, May 17, 2012

LINK: http://www.npr.org/2012/05/01/151472617/discovering-the-true-cost-of-at-home-caregiving?sc=fb&cc=fp

 

From NPR (May 17, 2012) “ Discovering the True Cost of At Home Caregiving”

 

Few people want to turn over a loved one to institutional care, no matter how good the nursing home.  It may seem cold and impersonal, and very expensive, but making the choice to provide care yourself is fraught with financial risks and personal sacrifices.

 Nursing Home, Caregiver, Community MassHealth, Elder Law, Elder Law Attorney

Those who become full-time caregivers often look back and wish they had taken the time to better understand the financial position they would be getting themselves into.  Caregiver advocacy groups say Congress needs to be doing more with tax credits and Social Security benefits to help financially support those who choose to care for the elderly.

The Cost Of Elder Care

Adults have been providing an increasing percentage of financial assistance to their parents in recent years. Below are the national average annual costs and daily rates paid for various types of adult care.

 

Type

Average

Annual

Nursing home: semi-private room

$214/day

$78,110

Nursing home: private room

$239/day

$87,235

Assisted living

$3,477/month

$41,724

Home care: home health aide

$21/hour

$21,840

Home care: homemaker

$19/hour

$19,760

Adult day services

$70/day

$18,200

A state-by-state comparison

Source: MetLife 2011 Market Survey of Long-Term Care Costs

 

The demands for such assistance may grow louder, given the demographic changes coming in our aging society.  Nearly 10 million people over the age of 50 are caring for their aging parents, according to a study conducted by the MetLife Mature Market Institute, in conjunction with the National Alliance for Caregiving and the New York Medical College. The number of caregivers has more than tripled over the past 15 years.

That increase reflects medical advances and the resulting increase in human longevity. As the average age of death has moved from 68 in 1950 to nearly 79 currently, the ranks of the elderly have grown. Today, about 6 million U.S. residents are over 85.

 

As a result, the personal cost of caring for the elderly at home is rising — in terms of lost wages and diminished pension and Social Security benefits.  Studies estimate that 2 out of 3 informal caregivers are women, many of whom are middle-aged mothers with children or adult children living in their households.

The cost of putting a parent into professional assisted-living care can be daunting.  MetLife says that kind of care averages about $42,000 a year. A private room in a nursing home averages more than $140,000. But the cost of keeping a relative at home can be very high as well.

 

MetLife’s report found that for the typical woman, the lost wages due to dropping out of the labor force because of adult caregiving responsibilities averages nearly $143,000. That figure reflects the wages lost while not working — typically for about five years — as well as lower wages after returning to the workforce with rusty skills. When foregone pension and Social Security benefits are counted, the out-of-pocket losses roughly double.

 

"Family caregivers are themselves aging and yet are providing care at a time when they also need to plan and save for their own retirement," MetLife said. The people who drop out of the workforce "can jeopardize their future financial security," the study concluded.

 

To learn more about how the team of estate planning & elder law professionals at Dennis Sullivan & Associates can help you and your family take advantage of community programs that can soften the financial impact of caring for a loved one please visit www.MASeniorWorkshop.com and register for one of our free informational workshops.  You can also register by call (800) 964-4295 (24/7). 

 

We look forward to helping you and your loved one.

 

Tags: Nursing Home Costs, MassHealth, Elder Law, assisted living, elder care journey, elder care, family

7 Major Errors In Estate Planning

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, May 16, 2012

As estate planning and asset protection professional we often times help people and their family by reviewing existing planning.   As discussed in a recent Forbes article, the following is a list of major estate omissions and poor choices we see on a consistent basis.  Estate Planning, Asset Protection, Tax Changes, Estate Tax, Gift TaxIt is crucial to have your planning reviewed and updated consistently.  As a result of changes in the law, in health and in personal circumstance an old estate plan may not be working to accomplish your goals.  To learn more about how the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates can help you and your family visit www.MASeniorWorkshop.com or call (800) 964-4295 (24/7). 

1. Not having a plan

In a sense, everyone does have an estate plan; state law makes this point a certainty.  It simply may not be the plan that you had in mind, or that your family would have preferred.  Not having a will means that at your death the distribution of your assets will be dictated by the inheritance laws of the state where you were domiciled when you died.  These “intestacy laws” vary from state to state but, typically, leave percentages of your assets to various family members.  There is always a remote chance that these laws will accomplish what you would have intended – but not likely. It is highly improbable that, by chance, your dispositive intentions as to who gets what, when and in what form will be fulfilled.  This is true even if your estate is below the tax threshold.  Your will applies to the disposition of your “probate assets” – those assets NOT otherwise following a beneficiary designation or the titling of the asset. Non-probate assets will pass by operation of law or contract. For example, whoever the beneficiary designation may have been when you originally began your 401(k) or IRA at the start of your work life will override either your will or the laws of intestacy.  Even a simple plan that is well thought out and results from the identification of your personal objectives will be much more successful than nothing at all.

2. Online or DIY rather than professionals

There has been a noticeable uptick in the number of people who will look to the Internet to prepare their own wills and trusts. There are dozens upon dozens of websites that will profess to offer you just the right discounted estate planning documents.  Even wealthy clients who stand to benefit the most from expert planning advice have been impacted. Unfortunately, relying on web-based, do it yourself solutions is a recipe for disaster.  Estate planning documents should represent the culmination of a well thought out financial and estate plan. An amalgam of stand-alone documents does not a plan make.  Furthermore, those pesky nuanced requirements (i.e. the “formalities”) for a validly written and executed document will vary from state to state.  Internet sites can provide you with documents but no actual advice that fits you in the context of your specific financial and personal life.  What happens when the laws change? Does the document create an unnecessary tax if the state and federal tax laws diverge substantially?  Also, use an experienced estate attorney.  All wills are perfect documents while they are in your desk drawer.  Only when examined post-mortem are the inadequacies revealed.

3. Failure to Review Beneficiary Designations and Titling of Assets

One of the most basic and most overlooked items on every estate-planning checklist is the review of beneficiary designations and the proper titling of accounts. Unwittingly, many people will often let beneficiary designations and asset titling determine their estate plans for them, contrary to their intentions. Why? Regardless of what your well developed wills and trusts say, your beneficiary designations and the title of your assets will control the ultimate distribution of those assets. Most investment accounts allow for the designation of a beneficiary (IRAs, 401(k)s, company plans, etc.).  More recently, many states have enacted legislation to convert even otherwise ordinary brokerage accounts into accounts with beneficiary designations via Payable/Transfer Upon Death Registrations. All of these beneficiary designations absolutely control who gets the asset at your death.  The titling of assets is a property law concept with estate implications. An account that is held jointly with right of survivorship will pass automatically to the survivor of the joint owners.  Why does this matter?  Assets can flow to the wrong people due to old, wrong and/or out-of-date designations, often with unintended estate and income tax implications.

4. Failure to Consider the Estate and Gift Tax Consequences of Life Insurance

Life insurance proceeds are included in the estate when owned by the insured at death. However, the insured may choose to transfer all incidence of ownership during his/her lifetime thereby avoiding any potential estate tax inclusion. Notwithstanding this accessible planning fix (usually via trust), relinquishing ownership and control is not necessarily an automatic decision. In some instances, large sums of available, tax-advantaged and asset-protected cash has accumulated in permanent life insurance policies (i.e. whole life).  Accordingly, the decision as to how an insurance policy should be owned and, as importantly, controlled, can be complex and is highly individualized. In the right fact patterns, especially when tax is not the only important consideration, credible arguments can be made for both trust ownership and direct ownership. As in most estate planning, it is very much dependent on individual circumstances: family dynamics, net worth, financial / liquidity position, personal preferences and, even, your philosophy on the transfer of assets to future generations.

5. Maximizing annual gifts

Gifting is, probably, the oldest and best way to minimize future estate taxes. The entire universe of exemptions and deductions available for the reduction of estate taxes consist of:  the lifetime exemption ($5.12 million in 2012), the marital deduction (for gifts to citizen spouses during life or at death), the gift and estate tax charitable deduction, annual exclusion gifts ($13,000 in 2012) and direct transfers (not to be treated as gifts) for education (tuition) and medical care (both theoretically unlimited). For the wealthy, maximizing all of these is smart planning. Making annual exclusion gifts every year to as many family members (this includes anyone close to you) as is financially prudent (given your financial situation) is good planning. Over the long run, you can transfer significant sums of money out of your estate along with any appreciation, thereby reducing the tax. Even better planning would be to use your annual exclusion gifts, strategically,  so that each annual gift can be leveraged into larger sums being transferred out of your estate. Strategies such as sales/gifts to defective grantor trusts, the use of LLCs/FLPs in the case of hard to value assets and life insurance are just a few ways to leverage the annual exclusion gifts. In the case of gifting, leverage is a very good thing and strategies that allow you to leverage this scarce resource – tax-free gifts – are crucial to successful estate planning.

6. Failure to Take Advantage of the Estate Tax Exemption in 2012

As every estate and financial planning practitioner will tell you (and probably already has told you), making lifetime gifts is a simple and effective estate tax minimization strategy.  Simply giving away assets at no gift tax cost will allow both the corpus and its appreciation to escape the Federal estate tax on the passing of the donor.  Using the exemption equivalent amount during your life is better than leaving it for use at death.  The urgency is to act now to take advantage of the current estate tax regime that it is set to expire at the end of 2012.  Above and beyond the annual exclusion gift limit of $13,000, the federal applicable exemption amount for transfers during life (gifts) and death (estates) has increased (by indexing) to $5,120,000 per person for 2012 — by far the highest it has ever been since the establishment of the estate tax. Wealthy individuals who have both the means and desire to do so, should plan on making these gifts during 2012.

7. Leaving assets outright to Adult Children

In recent years, there has been a growing opinion among advisors for wealthy families that assets should remain in trust, even for adult children, for as long as possible for the asset protection and other benefits that a trust can offer. For a wealthy couple with adult children, the question may no longer be a one of legal capacity or maturity (although those issues may still remain). The bigger questions may, more accurately, become: who should really benefit from the fruits of my labor and how do I protect those assets from creditors, potential creditors and ex-spouses.  Depending on your perspective, dictating from the grave may or may not be a pejorative expression. For as long as trusts have been in existence (800+ years), the idea of controlling assets for as long as allowed with a set of instructions has been considered acceptable and often sought after planning.  In fact, centuries ago, keeping assets in trust forever was, more likely than not, the goal; hence the genesis of the “rule against perpetuities.” This rule was law in all 50 states to prevent perpetual or “dynasty” trusts. Over the last several years, many states have been modifying this rule to allow for longer trusts or have outright abolished the rule. Whether or not to leave assets in trust for adult children depends on many factors; not the least of which is personal preference. However, in our litigious society of high divorce rates, leaving some assets in trust with fairly liberal access is certainly worth consideration.

For more information on how you can avoid major errors in your estate planning register to attend an educational workshop hosted by our team of estate planning professionals by going to www.MASeniorWorkshop.com or by calling (800) 964-4295 (24/7).  You can also access several free guides and reports on our website by clicking HERE

We look forward to helping you and your family.

 

Tags: asset protection, Estate Planning, Estate Planning, GST tax, gift tax, estate tax, estate tax savings, Massacusetts Estate Tax, 401(k), Massachusetts estate tax, Estate Planning Tip, estate, gifts

Checklist for Families With Loved Ones Who Need Nursing Home Care

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, May 11, 2012

If you have a loved one with Alzheimer’s, he or she may eventually need nursing home care. The challenge is in finding the right facility not only for your loved one, but also for the family.

Below is a sample checklist that has been developed to help you and family members make these important decisions. Make copies, and compare different homes. Don’t expect every facility to score well on every question; simply consider which items are most important to you. But, don’t rely only on a number. Ask to speak to family members of other residents. Also, contact the local or state ombudsman, and get a copy of the state inspection report.

Sample Nursing Home Evaluation Form
Name of Nursing Home: ________________________________________
Date Visited: __________________________

  • First impression? 1 2 3 4 5

  • Exterior: paint, gutters and trim? 1 2 3 4 5

  • Are the grounds pleasant and well kept? 1 2 3 4 5

  • Views from residents’ rooms and other windows? 1 2 3 4 5

  • Alzheimer’s Special Care Unit? 1 2 3 4 5

  • Secure outdoor area? 1 2 3 4 5

  • Secure area with walking paths? 1 2 3 4 5

  • Appropriate areas for physical and occupational therapy? 1 2 3 4 5

  • Are barber or beauty salon services available? 1 2 3 4 5

  • A well-ventilated room for smokers? 1 2 3 4 5

  • General cleanliness? 1 2 3 4 5

  • Clean smell? 1 2 3 4 5

  • Enough space for residents? 1 2 3 4 5

  • How noisy are hallways and common areas? 1 2 3 4 5

  • Is the dining area clean and pleasant? 1 2 3 4 5

  • Is there room at tables for both residents and aides, if necessary? 1 2 3 4 5

  • Are residents using common areas? 1 2 3 4 5

  • Can residents bring furniture and personal items for their rooms? 1 2 3 4 5

  • Does the administrator know residents by name, and speak to them in a pleasant manner? 1 2 3 4 5

  • Does staff speak to residents with cheerful, respectful attitudes? 1 2 3 4 5

  • Do staff and administrators work well together? 1 2 3 4 5

  • What special training has the staff received for Alzheimer’s residents? May I observe a training session? 1 2 3 4 5

  • Do nursing assistants participate in the resident’s care process? 1 2 3 4 5

  • Employee retention? 1 2 3 4 5

  • Does a state ombudsman visit regularly? 1 2 3 4 5

  • How likely is an increase in private pay rates? 1 2 3 4 5

  • Any additional charges not included in the daily or monthly rate? 1 2 3 4 5

  • How are roommates selected? 1 2 3 4 5

  • Describe a typical day? 1 2 3 4 5

  • Can residents choose when to go to bed and wake up? 1 2 3 4 5

  • Are meaningful activities available for Alzheimer’s patients? 1 2 3 4 5

  • If activities are in progress, what’s the level of resident participation? 1 2 3 4 5

  • Can Alzheimer’s patients continue to participate in interests like gardening or contact with pets? 1 2 3 4 5

  • Is there safe, well-lighted parking? 1 2 3 4 5

  • Are hotels/motels nearby for out-of-town family members? 1 2 3 4 5

  • Area restaurants suitable for taking residents out with family members? 1 2 3 4 5

  • How convenient will care planning conferences be for family members? 1 2 3 4 5

  • Is an effective family council in place? 1 2 3 4 5

  • Can meetings be scheduled to discuss any problems? 1 2 3 4 5

Putting your loved one in a nursing home can be a very traumatic process. But it doesn’t have to be. We can help.Nursing Home, Alzheimer's, dementia, family guide, long term care

At The Estate Planning & Asset Protection Law Center, we’re Elder Law attorneys. We have walked families through this process successfully before. In fact, we have helped several families with estate planning, wills, trusts, powers of attorney, long-term care planning, asset protection, isses qualifying for Veteran’s Benefits and MassHealth.

To learn more about how the Estate Planning & Asset Protection Law Center can help you register online to attend one of our upcoming Trust, Estate, and Asset Protection Workshops or register by calling (800) 964-4295 (24/7).  You will discover why traditional estate planning may not work and the Life Care Planning steps you should be taking instead so you will not outlive your savings, the asset protection language that most people don't have in their power of attorney documents which can help protect their life savings, how to qualify for the hidden Veteran's benefits that most people know nothing about, and How Medicaid works...and the steps you need to take now to protect yourself and your family under the new rules. 

 

Tags: Alzheimer's Disease, Nursing Home Guide, Nursing Homes, Estate Planning, Estate Planning, Elder Law, assisted living, elder care journey, durable power of attorney, Health Care, health care proxy, elder care, family, veterans benefits

Loved One in a Nusing Home? Be Your Family Member's Care Adovcate

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, May 11, 2012

Once your loved one is admitted to a nursing home, the most important thing you can do is ensure they receive good care.  The best way to do that is to be involved and be your loved one’s care advocate. Your role is to actively participate in planning your loved one’s care, and maintain frequent contact with nursing home staff.

This process begins with a baseline assessment, generally done within two weeks after the Family Member in a Nursing Home?new resident moves in. A team – possibly a doctor, nurse, social worker, dietitian, and physical, occupational, or recreational therapist – assesses information from both resident and family. This assessment then becomes the baseline against which progress is measured.  As part of the assessment family members are asked about the resident’s medical, psychological, spiritual, and social needs. You can also tell them about their preferences and routines.  It is advisable for the family to make their own list of needs, and to give it to the assessment team. For example, you may have noticed signs of depression, along with symptoms of Alzheimer’s. This information is important to help your loved one get the care they need.  Important information to consider includes your loves one’s medical needs, psychological needs, spiritual needs, and social needs as well as their preferences and routines.

The assessment team then develops an individualized care plan, specifying the care required, and the strategies to address it. You should know that family members and the resident are allowed to participate in any planning meeting.

Federal law requires that nursing home care result in improvement in the resident’s condition, if possible. If improvement isn’t possible, the care must maintain abilities or slow the loss of function. If your loved one has Alzheimer’s or dementia the purpose of care should be to maintain mental and physical abilities for as long as possible. For example, if your mother still has the ability to communicate clearly, the care plan should encourage her use of language.

**PLEASE NOTE: The care plan may be part of the nursing home contract. According to federal law, nursing homes must review a plan every three months, or whenever the resident’s condition changes. There must also be an annual reassessment. At these times additional meetings are held to update the plan.

It’s your job to monitor your loved one’s care and ensure adherence to the plan. If you want your loved one to get the most personal attention possible be a forceful advocate.

At The Estate Planning & Asset Protection Law Center, we’re Elder Law attorneys. We have walked families through this process successfully before. In fact, we have helped several families with estate planning, wills, trusts, powers of attorney, long-term care planning, asset protection, qualifying for Veteran’s Benefits and issues with MassHealth.

To learn more about how the Estate Planning & Asset Protection Law Center can help you register online to attend one of our upcoming Trust, Estate, and Asset Protection Workshops or register by calling (800) 964-4295 (24/7).  You will discover why traditional estate planning may not work and the Life Care Planning steps you should be taking instead so you will not outlive your savings, the asset protection language that most people don't have in their power of attorney documents which can help protect their life savings, how to qualify for the hidden Veteran's benefits that most people know nothing about, and How Medicaid works...and the steps you need to take now to protect yourself and your family under the new rules. 

Tags: Nursing Home Costs, MassHealth, Nursing Home Guide, Estate Planning, Elder Law, elder care journey, durable power of attorney, Health Care, seniors, elder care, family

Common Myths of Medicaid Qualification

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Fri, May 11, 2012

Is it true you can give $10,000 to each child without penalty? Can't you just put your kids' names on your accounts? Is it true there's an annuity that allows you to "flip the switch" and solve all your payment problems?

The answers? NO! NO! NO! The $10,000 is now $13,000... and it's an IRS rule, not a Medicaid rule. Putting your children's names on your accounts protects none of the money. Annuities? The laws have changed - and there is no magic switch.

Medicaid Qualification, Massachusetts, MA Estate Planning

Often, out of sheer frustration, retirees tell us they're going to solve the problem of qualifying for MassHealth by just giving it all to their kids. But that opens up the possibility of your kids' problems - with their spouses, for example - impacting your money.  In addition, most retirees have no idea about the tax implications. For instance, transferring a house to a child changes the property tax classification to non-owner-occupied - and property taxes will go up.

To qualify for MassHealth, you do have to “spend down” your assets. Each state has different rules; but, generally, you're allowed to keep around $2,000 if you are single and $113,640 if you are married.

The only exempt assets are:

  • Home equity up to $750,000

  • Personal belongings, household goods

  • One car or truck

  • Burial spaces and certain related items for applicant and spouse

  • Irrevocable pre-paid funeral contract

  • Up to $1,500 of face value life insurance; if the face value exceeds $1,500, the cash value is considered a means of payment

All other assets are generally non-exempt - any item that can be turned into cash is a countable asset.  Non-exempt items would include:

  • Cash, savings and checking accounts

  • Credit union share and draft accounts

  • Certificates of deposit

  • U.S. Savings Bonds

  • IRAs, 401(k)s, Keogh plans, 403(b) and all other defined compensation plans

  • Pre-paid funeral contracts that can be canceled

  • Trusts (depending on the terms and conditions of the trust)

  • Real Estate (other than primary residence)

  • More than one car

  • Boat or recreational vehicles

  • Stocks, bonds and mutual funds

  • Land contracts or mortgages held on real estate sold

Sound confusing? It is!  The Elder Law Journey can be very complex and no one should try to navigate this road alone. It's too easy to crash and burn. The Estate Planning & Asset Protection Law Center can help. We practice Elder Law, and we've walked a number of families through the Elder Care Journey by providing them with comprehensive estate planning, wills, trusts, powers of attorney, long-term care planning, asset protection programs, and assistance acquiring Veteran’s Benefits.

To learn more about how the Estate Planning & Asset Protection Law Center can help you register online to attend one of our upcoming Trust, Estate, and Asset Protection Workshops or register by calling (800) 964-4295 (24/7).  You will discover why traditional estate planning may not work and the life-care planning steps you should be taking instead so you will not outlive your savings, the asset protection language that most people don't have in their power of attorney documents which can help protect their life savings, how to qualify for the hidden Veteran's benefits that most people know nothing about, and How Medicaid works...and the steps you need to take now to protect yourself and your family under the new rules.

Tags: Alzheimer's Disease, Medicare, Medicaid, MassHealth, Estate Planning, Estate Planning, Elder Law, HIPAA, elder care journey, health care proxy, elder care, family, power of attorney, 401(k)

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