Massachusetts Estate Planning & Asset Protection Blog

Understanding Long Term Care Planning

Posted by Dennis Sullivan & Associates on Fri, Jan 19, 2018

Facing the enormity of long term care, whether it is the financial, healthcare, emotional or psychological issues, it is so overwhelming. 

It's needs a team effort!  With the help of family, friends and our team here at Dennis Sullivan and Associates you can make the enormity of long term care manageable 

 

What exactly is "Long Term Care Planning" ? 

Here's one way to look at long term care planning: 

In today’s world, the question is no longer only, “What happens when I die?, but now we need to plan for “What happens if I live?” An estate plan covers the scenario of, What happens when I die.  But long term care covers a large variety of other factors and scenarios that sometime families forget to consider such as what happens if I live but am not healthy and have increased health-care costs and need to rely on others for assistance, either temporarily or on a permanent basis. The estate plan does not address this need. An estate plan can help you answer the first question, but a long-term care plan can help you answer both the first and second questions. Let’s put it another way. An estate plan insures that if you have assets when you die they will be passed in the manner you wish. The key word is “if.” The plan will not, however, guarantee that there will be anything left at that time to pass. Your assets could be mostly or entirely wiped out by a lengthy illness, hospital, and/or nursing home stay, leaving your spouse and other heirs with nothing.

 long Term Care and Medicaid:

I had a conversation last week with a married couple for whom we are preparing a Medicaid application. John is in a nursing home, and Mary is healthy and living at home. I explained to them that Mary can keep half of their countable assets, in their case $75,000, but that they must spend down to below that dollar amount by the last day of the month directly preceding the month we want to qualify John for Medicaid. I have had this conversation numerous times with clients in John and Mary’s situation, and know all too well that this simple instruction is not always followed. The largest part of most spend downs typically goes to the nursing home. But, as most people do, myself included, we wait until we get a bill before we pay it. If I owe you money, I’m not going to chase after you for a bill. Whenever you get around to it and invoice me, then I’ll pay it. The longer the money stays in my bank account, the happier I am. However, this can get you into big trouble and cost you tens of thousands of dollars if you wait for the nursing home bill. If we want John to be eligible for Medicaid next month and we know that he owes the nursing home $20,000 for the past two months of care, but the nursing home hasn’t yet presented Mary with a bill, it does not matter that Mary and John legitimately owe the facility the money. If that $20,000 is still sitting in their bank account next month, causing their account balance to exceed $75,000, John cannot qualify for Medicaid. Even worse than that, he can’t even qualify for next month. He has to wait until the following month, which means they will owe the facility another $10,000, leaving Mary with $65,000 to live on.


So Much to Discuss

For more information on Long Term Care Planning we encourage you attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy. January sessions are filling up fast call or register on line to reserve your seat today.  

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future. 


Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Dennis Sullivan, Elder Law, Estate Planning, Estate Planning Recommendations, Estate Planning Tip, Financial Planning, Retirement, coverage, senior, Attorney, Baby Boomers, Capital Gains Tax, GST tax, Massachusetts, New estate tax law, IRS, Massacusetts Estate Tax, Tax Savings, federal, new regulations, tax, tax reform, tax deductions, taxes, tax liability, tax exemption, New Tax Bill, Tax Bill, 2018 Tax Bill

New Tax Bill: What you need to know

Posted by Dennis Sullivan & Associates on Fri, Jan 05, 2018

How does the new tax bill affect you and your family now and in the future?

The new tax bill has officially been passed by Congress and signed by President Trump, what does this mean for us?  The answer to this depends on many variables discussed here. 

 

First of all, these changes don’t apply until you file your 2018 taxes, meaning that you won’t have to worry about the new law when filing your 2017 income tax returns this spring.  That being said, still we will be experiencing the greatest overhaul of the tax laws in more than 30 years.  The last major changes having been made under President Reagan in 1986. 

One change you can expect to see is that both corporate tax rates and personal income tax rates will drop.  There are also other changes which limit or eliminate personal deductions.   The changes that affect corporate tax rates are permanent, and the changes that affect individual tax rates and deductions are not.

Also in the new tax bill you will find a “sunset” provision, meaning that the new law – as it applies to individuals – will expire on December 31, 2025.   That is, unless Congress agrees to extend the law.  That, of course, will depend on the political and economic climate 8 years from now, including whether the economy responds the way Republicans say it will

       Now let’s take a look at the changes that are likely to affect the average senior.  Good news, the tax rates have been lowered a bit.  There are still 7 tax brackets but the rates have changed with the top rate lowered from 39.6% to 37% and the threshold at which each rate is reached has been altered. (The corporate rate reduction is much greater, from 37% to 21%).

       Some of the most significant changes relate to deductions.  The standard deduction has been doubled to $12,000 for a single person and $24,000 for married couples but personal exemptions have been eliminated.  The deduction for state and local taxes will be capped at $10,000, something that could hurt many Massachusetts residents and especially homeowners because we have high real estate and state income taxes.  


So Much to Discuss:

For the first time in decades major overhauls to the tax system are happening! This is an enormous change that can affect your estate planning and asset protection as well. Be sure to stay tuned as we will discuss more about this new tax bill in our next blog post!    

For more information we encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy. January sessions are filling up fast call or register on line to reserve your seat today.  

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future. 


Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Dennis Sullivan, Elder Law, Estate Planning, Estate Planning Recommendations, Estate Planning Tip, Financial Planning, Retirement, coverage, senior, Attorney, Baby Boomers, Capital Gains Tax, GST tax, Massachusetts, New estate tax law, IRS, Massacusetts Estate Tax, Tax Savings, federal, new regulations, tax, tax reform, tax deductions, taxes, tax liability, tax exemption, New Tax Bill, Tax Bill, 2018 Tax Bill

Is your Planning Stuck in Limbo? (part 2)

Posted by Dennis Sullivan & Associates on Tue, Aug 01, 2017

How does the debate over health care reform affect you and your estate plan?

35274856603_c2af85ca10_b.jpg In our last post we discussed the importance of keeping up with the constant changes happening in health care reform. We will continue to examine how the on-going deliberations in Washington may affect you, your future health care and your estate.  We at Dennis Sullivan & Associates are keeping up to date on all the changes, and making sure you stay informed on all the important details.  For more information on the current law of the land, you can download our Report: Senior & Boomers Guide to Health Care Reform.   

The Senate has dealt a devastating setback to Republican efforts to repeal and replace Obamacare, defeating a GOP "skinny repeal" bill early Friday morning. With the "skinny repeal" bill off the table, lawmakers are unsure of where the health care debate is headed. 

Senate Majority Leader McConnell and his staff are trying to find a balance between conservative Republicans, who want a full repeal of ObamaCare and a replacement that has lower health care costs, and more moderate Republicans who want to preserve its more popular benefits.

The deal-making process is in full swing, with the additions of opioid funding and allowing health savings accounts to be used to pay for insurance premiums. Some Senators are for potentially leaving in some taxes to pay for more generous benefits, after weeks of being criticized by Democrats for offering “tax cuts for the rich and Medicaid cuts for the poor.” Conservatives want to cut more from the regulations and many from Medicaid expansion states are uneasy about future cuts to Medicaid.

Senator Ted Cruz of Texas has offered an amendment called the “Consumer Freedom Option” that would allow insurance companies to sell any health coverage plan they wish as long as they provide one plan that satisfies the “essential benefits” mandates of Obamacare. While the Cruz amendment appeals to conservatives who want to provide consumers with lower cost options, moderates are concerned it could negatively impact those with pre-existing conditions. Supporters have suggested that federal subsidies could help ensure that premiums don’t increase for those who are seriously ill. The CBO is currently scoring this amendment.  

President Trump, along with Senator Rand Paul of Kentucky and Senator Ben Sasse of Nebraska, has even offered to repeal ObamaCare for now and replace it later.

Of course, no one is going to get everything they want so there must be compromises. Majority Leader McConnell has said that if the Senate is not able to pass a bill soon, Congress will have to pass a bipartisan measure to shore up the imploding health insurance markets.

And so, the Civics lesson continues. The process is at work.  As we see here the process can be long, unstable and worrisome.  Luckily for you your estate planning doesn’t have be. We at Dennis Sullivan and Associates make your estate planning and asset protection worry and stress free.  Once you have a plan in place you will feel confident knowing it will protect you, your family and your life savings.  You can enjoy life to the fullest knowing you and your family are protected no matter what unknowns lay ahead. 

 

At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Affordable Health Care, Affordable Health Care Act, Announcements, Elder Law, Estate Planning, Financial Planning, Health Care, Health Care Ruling, Medicaid, Medicare, Obamacare, Retirement, applying for medicare, Medicaid penalties, care costs, care, coverage, coverages, disenrollment, elder care, enrollment, elder care journey, federal, health, health Care act, life-care plan, long term care, medicaid qualification, medical expenses, proposed changes, senior, unreimbured medical expenses, seniors

Is your Planning Stuck in Limbo?

Posted by Dennis Sullivan & Associates on Thu, Jul 27, 2017

How does the debate over Health Care Reform affect you and your estate plan?

Everyone is talking about health care reform: whether it’s the House bill, Repeal & Replace, Skinny Repeal, it can make your head spin.  One question on everyone’s mind is how changes to health care will affect them.  We at Dennis Sullivan & Associates are keeping up to date on all the changes, and will cover the process through a series of blogs to explain where health care reform is now, how it affects you and what the future may hold.  For more information on the current law of the land, you can download our Report: Senior & Boomers Guide to Health Care Reform

 


Senate pic-1.jpg

Eventually, both the House and Senate must vote on the same bill.

The battle continues in Washington over the repeal or replacement of the Affordable Care Act (ObamaCare) and as we are witnessing; this can be a messy process. 

Why Republicans are trying so hard to repeal and replace ObamaCare and how they are going about it:

ObamaCare, you may remember, was passed by the Democrats in 2010 with no Republican support. Ever since, Republicans have campaigned on repealing the program, which was unpopular with many Americans. “Repeal and Replace” was their rallying cry to voters to help them win back control of the House in 2012, then the Senate in 2014, and finally the Presidency in 2016. If the Republicans are not able to fulfill this major promise, some may be in danger of losing their seats in the next election, as they would likely be blamed for the problems with ObamaCare if they don’t fix them. These are the political reasons.

Democrats admit that ObamaCare has problems and needs a major fix to survive. But they are not on board with repeal and replace of such a signature piece of legislation, while Republicans try to find a way to pass new legislation.

The Legislative process:

The normal legislative process is that a bill begins in the House, where it is written, discussed and approved by a committee before the House votes on it. If it passes the House, it is then sent to the Senate. The Senate can vote on the same bill, make amendments to the House bill, or create its own bill. Eventually, both the House and Senate must vote on the same bill, so if there are differences, members of both the House and Senate meet in committee to resolve them. Once a bill passes both the House and Senate, it is then sent to the President who can sign it into law or veto it.

Right now, there is a House bill on health care that has passed the House, and a Senate bill that has not passed the Senate. Discussions and amendments are still occurring with the Senate bill in hopes it will pass soon. The public posture is that this messy legislative process is making the bill better.

Further complicating this process is that while the Republicans have a majority in both the House and the Senate, they only have 52 Republican Senators. 60 votes are required to overcome the filibusters and pass new legislation, so they are attempting to pass health care legislation through the Budget Reconciliation process. It only requires 51 votes, but it limits the legislation to budget-related items only. They would not be able to include provisions some Republicans want in a full repeal and replace bill—for example, letting insurance companies sell across state lines to increase competition, lower prices and create better plans; and allowing the government to negotiate lower drug prices. Issues like these would have to be voted on later.

For the Senate bill to pass in Reconciliation, 50 Republicans must vote for the bill, since no Democrat or Independent is expected to vote for the bill. Vice-President Pence would break the tie if needed.

So far:

The Senate rejected a proposal from Republican lawmakers to repeal Obamacare on Wednesday July 26, 2017, marking a significant milestone in the Republican Party's years-long political crusade to gut former President Barack Obama's legacy health care law.

 

What does the future hold?

We aren’t sure what the future American Health Care Act is going to look like, not sure anyone does, but luckily protecting yourself and your loved ones from expensive long term care doesn’t have to be so uncertain.  With asset based long term care products, there are ways to insure your control over your future long term care and insure you have something left over for your spouse, children and loved ones. Don’t let your long term care plan sit in limbo. Stay tuned we will discuss more about what the future looks like in our next blog post.

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At the Estate Planning & Asset Protection Law Center, we help people and their families protect their home, spouse, life-savings, and legacy for their loved ones.  We provide clients with a unique educational and counseling so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

If you would like more information on Medicaid, the Affordable Care, or the impact of new health care laws on your planning, request your free preview of our guide, the Senior & Boomers’ Guide to Health Care Reform & Avoiding Nursing Home Poverty. 

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: Affordable Health Care Act, Announcements, Dennis Sullivan, Elder Law, Estate Planning, Estate Planning Recommendations, Estate Planning Tip, Financial Planning, Health Care, Health Care Ruling, Medicaid, Medicaid penalties, Medicare, Obama, Obamacare, Retirement, care costs, coverage, unreimbured medical expenses, surviving spouse, senior, coverages, applying for medicare, elder care

Massachusetts Estate Planning Attorney | Naming the Right Beneficiary of Your Retirement Plan

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Feb 13, 2013

IRA, Retirment, Estate PlanningIRAs and other tax-deferred retirement accounts allow your savings to grow tax-free until you retire. At that point, typically the year after you become age 70 ½, you must begin taking required minimum distributions, on which you pay ordinary income taxes. The rest of the money in your account continues to grow tax-free until it is distributed to you. If you die before depleting your account, the balance of your account will go to the beneficiary you have named.

Naming the right beneficiary is critical. Most people want to continue the tax-deferred growth for as long as possible, paying the least amount in income taxes. This is called “stretching out” the account. Distributions after you die will be based on the new beneficiary’s age and life expectancy, so the younger the beneficiary (like a child or grandchild), the longer the stretch out potential.

However, naming a beneficiary outright has several disadvantages:

  • If the beneficiary is a minor, distributions will need to be paid to a guardian; if no guardian exists, one will have to be appointed by the court.

  • An older beneficiary can do whatever he/she wants with this money, including taking larger distributions or even cashing out the entire account and destroying your carefully made plans for long-term, tax-deferred growth

  • This money could be lost to the beneficiary’s creditors, spouse and ex-spouse(s).

  • There is the risk of court interference if your beneficiary becomes incapacitated.

  • Outright distributions could cause a beneficiary with special needs to lose valuable government benefits.

  • If your beneficiary is your spouse, he/she will be able to name a new beneficiary and is under no obligation to follow your wishes. This may not be what you want, especially if you have children from a previous marriage or you feel that your spouse may be too easily influenced by others after you are gone.

    •  Substantial amount of income taxes that would be due on a lump sum distribution.

Increased Control & Protection

Naming a trust as beneficiary will give you more control over, and protection for, these tax-deferred accounts. It should be a separate trust designed specifically for this purpose; because of the rules governing naming trusts as a beneficiary it should not be part of your revocable living trust or other trust. For this reason, these trusts are often called “stand-alone retirement trusts.”

Instead of required minimum distributions being paid directly to your beneficiary, they will be paid into the trust for the benefit of your beneficiary. The trust can either be mandated to pay these distributions directly to the beneficiary (called a conduit trust) or it can accumulate these distributions (called an accumulation trust) and pay out trust assets according to your instructions (for example, for higher education expenses, down payment on a home, etc.)

Specific benefits include:

  • No guardian is needed for minor children and there is no risk of court interference at the beneficiary’s incapacity. That’s because a trust, not the individual, is the named beneficiary.

  • Your beneficiary is prevented from cashing out or taking larger distributions, assuring the continuation of tax-deferred growth.

  • The account itself is protected from creditors and predators, even from divorce claims. However, if a conduit trust is used and distributions are required to be paid to the beneficiary, those distributions would be at risk. For maximum creditor protection, an accumulation trust is preferable.

  • You can name successor beneficiaries in the trust document and keep control over who will receive the proceeds if your initial beneficiary should die before the account is fully paid out.

  • An accumulation trust is typically used to provide for a beneficiary with special needs. Instead of the beneficiary receiving the required distributions as income (which could affect his/her ability to receive government benefits), the trustee can use discretion and provide for certain needs of the beneficiary as they arise, without jeopardizing their benefits.

In order to be accepted by the IRS, the trust must meet very specific requirements, and should be designed and written by an attorney who has experience in this area.

You’ve worked years to accumulate your tax-deferred plans. Naming the right beneficiary can preserve and continue the tax-deferred growth long after you’re gone, protect the assets from creditors and the courts, and provide for your loved ones the way you want.  

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 clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your family and legacy.

Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: retirement plans, IRA, Estate Planning, Retirement, 401(k), 529 plans, family

Massachusetts Elder Law Attorney | Want to Save Money on Long-Term Care? Get It Now!

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Feb 06, 2013

Whenever a client tells us they'll look into long-term care insurance "some day," ask yourself these questions: Am I a betting man (or woman)? And, if so...do I always bet against the odds?"describe the image

What we mean, is that by putting off long term care insurance, you are betting that medical costs won't go up and that long-term care insurance will be easier to get as you get older?  You are also betting that "some day" will arrive before you get sick.

A recent report revealed that the closer people get to retirement, the more frightened they become about meeting long-term care costs.  These fears impact women even more than men. And there's good reason for that. Women generally have greater long-term care needs, as they live longer, and are less likely to have a partner to care for them.  In fact, Genworth Financial, the largest long-term insurer in America, is talking about raising rates for women.

There are a few possibilities to address some long-term care costs, among them Medicare and hybrid plans, which might have riders with life insurance or annuities.

But there's only one way to get the best price: GET IT NOW!  Can you name even one item for which you pay less now than you did a few years ago?  As a general insurance principal, the older you get, the higher the premium. So, if you can pull it off now, you'll thank yourself later.

If you're betting that "someday" will come before you get sick...are you willing to bet every cent you've ever earned on it, because no insurance company will accept you after you're sick!  

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 clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your family and legacy.

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Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: long term care, Retirement, Elder Law, Attorney, insurance, Massachusettes, medical

Massachusetts Elder Law Lawyer | Considering Retirement or Retired?

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Wed, Jan 30, 2013

Now Is the Time to Review Your Investments

In conducting research for our upcoming book, the Senior & Boomer’s Guide to Health Care Reform & Avoiding Nursing Home Poverty we learned that many people who are still working are giving retirement a second thought.

This is because they have to make big decisions about things such as Social Security and taxes - in advance. The world as we knew it has been turned upside-down in recent years, and this decision will affect the rest of your life.  Many are not sure they are ready - emotionally and financially - to retire.

If you're considering making the break, ask yourself these questions:

AM I REALLY READY?

Because of the loss of our financial security-blankets in recent years, people are working longer. If you enjoy your job, maybe you should keep working.

Working will allow you more time to build up your savings for the day when you really do want to play golf instead of office politics, and more time to pay down your mortgage. Keep in mind, once you retire, it can be difficult to un-retire.

CAN I REALLY LIVE ON A SMALLER BUDGET?

If you think it was hard staying on a budget during your working life, you ain't seen nuthin' yet! In fact, it often gets more expensive to live after you retire. You've got less coming in. But you'll probably be spending money on things you never had the time to spend it on before.

You'll probably be traveling more. Seeing more movies or ballgames. Playing more golf. Going out with friends more. And perhaps buying more "toys."

The Web can be a resource.  Retirement and financial planning websites like Mint.com can help you figure out expenses that may end with retirement, and those that may begin.

Some experts encourage a trial run, by living on a projected "retirement budget" while you're still working. It's not a totally accurate method. But it might give you time to develop coping strategies.

CAN I PUT OFF TAKING SOCIAL SECURITY?

There's a natural instinct to sign up when you turn 62. But "full-retirement age" isn't until 66...and, if you start early, your benefits will be reduced. So, if you've got a bit of a nest egg, consider waiting a while. And if you can wait until 70, your benefits will be even higher.

For those eligible at age 66, waiting just one year will result in monthly benefits equaling 108% of the previous amount. And waiting until 70 would generate 132% of the regular monthly benefit!  In fact, you can nearly double the amount you'll get at 62 if you can wait until 70.

HAVE YOU SPOKEN WITH YOUR ACCOUNTANT?

Most of us speak with our accountant just once a year - at tax time. But don't consider retirement without discussing your finances with your accountant or asking us about how we can help you with retirement and tax planning.

Consider a financial planner, too. A big chunk of your IRA is going to Uncle Sam when you withdraw it.  Together, we can help you develop a strategy for your taxable and tax-sheltered accounts. And we can help you decide whether to convert to a Roth IRA, where withdrawals are tax-free, but conversions are not.

ARE YOUR INVESTMENTS SAFE AND PRODUCTIVE?

Many people especially those considering retirement or in retirement should review their portfolio with an eye towards age and risk tolerance, making sure they are in line with one and other.  Many people are sick of banks not only dropping their CD rates but their money market rates as well.  Many professionals are concerned that interest rates may be at a turning point and with the debt ceiling conversation being revisited, now may be a good time to review your investment options.  If you would like some information on safe investing for seniors, please let us know.

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 clients with a unique education and counseling approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops. Call 800-964-4295 to learn more about what you can do to enhance the security of your family and legacy.

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Click Here to Register For Our Trust, Estate & Asset  Protection Workshop

Tags: retirement plans, Estate Planning, Elder Law, roth conversions, Retirement, Baby Boomers, 401(k), Attorney, senior, income

Massachusetts Elder Law Attorney | Confusion Over Medicare

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Oct 25, 2012

Confusion Over Medicare Provides Opportunities for Financial Advisers to Help Boomers and Seniors

With so many people now working past 65, clients often ask their financial advisers when they should sign up for Medicare.

As is often the case with complicated government programs, the answer is: It depends.

Generally, anyone who has paid into Social Security and qualifies for Medicare should sign up for Medicare part A at ssa.gov when they turn 65, Part A covers hospitalization costs and is free.Medicare, elder law, attorney

But for those who are still working, deciding whether to sign up for part B, which covers doctor’s visits and outpatient services, is more complicated and involves lifelong penalties if crucial deadlines are missed.

Most beneficiaries are paying about $100 a month for Medicare part B premiums this year, and premiums are likely to increase slightly this year. Affluent retirees – those with annual income of $85,000 or more and married couples with annual income of $170,000 and up - pay even more.

Costs Add Up

Plus there is the added cost of a Medicare supplemental mental-insurance plan to cover the gaps in traditional Medicare, such as deductibles and co-payments, and Medicare Part D prescription drug coverage, which also has a surcharge for high-income earners. All those medical costs can add up.

“If you’re not taking into account future health care costs, you are doing your clients a disservice,” said Jay Fettig, president of BATTLE System, an insurance management software firm. “If you don’t offer Medicare as part of a financial plan, you risk losing clients to someone who does.”

Mr. Fettig’s company, whose name is derived from Business Acceleration Technology Through Lead Enrichment, offers a free Medicare Genie service to help individuals and their advisors choose the right Medicare plan for their needs. The tool, available at mynewmedicare.com, matches users with appropriate plans, based on their answers to a few questions, and lists the costs of all providers in their area.

Gather the Facts

Should your client, who is still working, elect to use Medicare or stick with his or her employer’s group health plan?

“There is no quick answer to that,” said Arlie Mann, a Medicare specialist with BATTLE System. “I tell them to gather the facts about their insurance premiums and coverage, and we’ll compare it Medicare,” she said.

For those 65 or older who work for a company with 20 or more employees, the group plan is the primary user, and Medicare is secondary. As long as employees have group coverage from their current employer – or from their spouse’s current employer – they are exempt from the delayed-enrollment penalty that permanently raises their Medicare Part B premium by 10% for every 12-month period that they were eligible for Medicare but didn’t enroll.

An employee with good, affordable group health insurance may want to delay paying for Medicare Part B as long as he or she – or his or her spouse – continues to work.

Cheaper Option

For those with a high-deductible group plan, switching to Medicare may be cheaper, Ms. Mann said. B

But once an individual’s employment ends, he or she has just eight months to sign up for Medicare Part B without a penalty.

This period will run whether or not employees choose to continue to participate in their employer’s health insurance plan through the Consolidated Omnibus Budget Reconciliation Act of 1985 for up to 10 months. Those who choose COBRA shouldn’t wait until their COBRA eligibility ends to sign up.

If individuals don’t enroll in Part B during the initial eight months after they stop working, they may have to pay  penalty for the rest of their lives.

The rules are different for people who work for companies with 19 or fewer employees, said Kathryn Votava, president of Goodcare.com, a health care consulting firm that works with individuals and advisers.

Because Medicare is the primary insurer in this case, those who miss the initial enrollment deadline for Medicare Part B, which begins three months afterward, will be hit with the delayed-enrollment penalty. Plus, they may have to wait up to 15 months to sign up for Medicare during the general-enrollment period, which runs from January through March each year.

In the meantime, the employer’s insurance plan, as the secondary insurer, is on the hook for just 20% of the medical costs of individuals, who must cover the remaining 80%.

Ellen Breslow, managing partner at EAB HealthWorks, a health consulting service that works with advisers and business owners, said advisers have a responsibility to lean how to help clients with Medicare issues.

“Although health care would seem outside the scope of an adviser’s area of expertise, the ability to incorporate it into an income management plan can influence an individual’s financial future,” she said.

More information and a questionnaire are available by clicking on the“wealth managers” tab at EABhealthworks.com.

(the above article can be seen in the Investment News newsletter from October 8-12)

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 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 encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.

We would also like to encourage those concerned about changes as a result of new health care reform as well as incresing long term care costs to read our newest guide, the Seniors' Guide to Health Care Reform and Avoiding Nursing Home Poverty.  You will discover how the Affordable Care Act will impact your health care and the secrets millions of smart families are using to Avoid Nursing Home Poverty!

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(the above article can be seen in the Investment News newsletter from October 8-12)

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Tags: Medicare, social security, Retirement, Beneficiary, Massachusetts, Elder Law, insurance, financial, advisers

Long Term Care and College Debt | Boston Elder Law Attorney

Posted by Massachusetts Estate Planning & Elder Law Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Aug 16, 2012

There are many dangers associated with grandparents paying for a grandchild’s college education if they haven’t planned for long term care first.  That payment may not be subject to gift tax laws but will be subject to a Medicaid transfer penalty. senior, student

However, there is another disturbing trend that is hitting seniors hard and it is a growing problem. As the cost of college education continues to soar so does the amount of student loan debt, now totaling over $1 trillion.  Almost 90% of that is from federal student loans and the federal government is getting more aggressive in pursuing repayment.  Changes in the laws have given the government more ability to collect from defaulting borrowers.  Student loans are not dischargeable in bankruptcy, unlike credit card debt, for example.


The government, under a 1996 law, has the ability to collect the debt from Social Security retirement and disability checks and it is doing just that with increasing frequency.  In the year 2000 there were 6 cases in which Social Security recipients checks were reduced to cover college loans on which they were delinquent.  In 2007 that number was 60,000 and in the first 7 months of 2012 that number was up to 115,000.


For many seniors on fixed incomes reducing their Social Security checks, which in many cases are already meager, will have a devastating impact.  In many cases parents and grandparents have cosigned loans for their children and grandchildren.  If the primary borrower defaults on the loan, the lender can collect from the cosigner.


With statistics showing that many baby boomers are not saving enough for retirement and the cost of long term care continuing to climb, adding college debt to the equation just adds to the complexity of the problem.  This is yet another example of why you can’t wait until a medical crisis hits to figure out how you will pay for long term care - Your physical and financial well being depend on it.

Gain instant free online access to “Seniors’ Guide to Health Care Reform & Avoiding Nursing Home Poverty”, which contains information on how Massachusetts Seniors will be impacted by the Affordable Care Act.

Click Here to Download the Senior & Boomers Guide to Health Care Reform & Avoiding  Nursing Home Poverty

At the Estate Planning & Asset Protection Law Center of Dennis Sullivan & Associates, we help people and their families concerned with losing their homes and life savings to increasing medical and nursing home costs, taxes and the costs and time delays of probate. We also protect clients from losing control of their own health and financial decisions.

We encourage you to attend one of our free educational workshops to learn more about our process and what you can do to enhance the security of your spouse, home, life savings and legacy. To register for a seat at an upcoming workshop call (800) 964-4295 (24/7) or register online at www.SeniorWorkshop.com

Tags: long term care, Baby Boomers, gift tax, social security, Medicaid, Retirement, health Care act, student loans

What the Debt Ceiling Means for Massachusetts Seniors and Massachusetts Medicaid

Posted by Wellesley Estate Planning Attorney, Dennis B. Sullivan, Esq., CPA, LLM on Thu, Aug 11, 2011

Since the signing of the Budget Control Act of 2011, the Act which includes the increase in the national debt ceiling, senior advocates have been working to determine its effect on programs including Medicare, Social Security and Medicaid.

Brief Background

Congress has voted to raise the debt ceiling 10 times since 2001.  The ceiling was raised in 2002, 2003, 2004, 2006, 2007 and twice in 2008.  Why all the debate this time around?  One side was insisting on reducing spending by cutting federal assitance to programs like Medicare, Medicaid, and Social Security to decrease the defecit, while the other was insiting on an increase in revenue (read taxes) while maintaining those programs.  Many questions remain on whether funding for senior programs will continue or in what amounts.describe the image

The Act's Impact on the Future

There are still many questions left unasnwered regarding what impact the Budget Control Act will have moving forward.  The Act consists of three steps:

STEP ONE:

The national debt ceiling is going to be raised $400 billion initially.  The President also has the option to institute an additional increase of $500 billion moving forward.  Congress is slated to reduce spending by $917 billion over the next 10 years.  In 2012, $21 billion is to be cut from federal spending.  Many people do not seem overly concerned with the scheduled reduction for 2012 because budget reduction occurs frequently and legislation is often amended.

STEP TWO:

A Joint Select Committee on Defecit Reduction is to be put together of 6 Democrats and 6 Republicans.  The Committee must come up with debt reduction legislation on or before November 23 of this year.  Their goal is to cut $1.5 trillion dollars of debt over the next 10 years, with a required reduction of at least $1.2 trillion.  Any proposal the Committee creates will be voted on by Congress before the end of 2011, and many speculate will include cuts to Medicare, Medicaid and Social Security spending.

STEP THREE:

If no plan is put in place to reduce at least $1.2 trillion over 10 years, whether Committe member do not agree or Congress refuses to pass their proposal, there would be sweeping federal spending reduction.  The reducution would equal the full amount, up to $1.2 trillion, that can not be agreed upon by the Reduction Committe and Congress.  Medicaid, Medicare, and Social Security as well as veterans's benefits are all protected from large spending reduction if the process reaches this stage. 

What Can You Do Today ?

No on knows how these reduction will effect senior programs such as Medicaid, Medicare, and Social Security.  One thing is clear, the future is alot less certain.  To take steps to protect your spouse, home and life savings today register online to attend a free educational workshop hosted by Dennis B. Sullivan, Esq, CPA, LLM or by calling 800-964-4295 (24 hours a day).  You can also check out Free Elder Law Guides developed by the team of professional at Dennis Sullivan & Associates.  By planning now you can save you and your family the stress of having to worry about the future. 

Tags: Estate Planning, Medicare, Retirement, Medicaid, Health Care, legacy, social security, tax liability, veterans benefits, Debt Ceiling

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