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The average annual expense for a semi-private nursing home room is more than $80,000, according to a recent survey—a 4% hike from last year. This means the cost of nursing home care is growing at more than double the rate of overall inflation. Insurance premiums are lowest when you’re younger, and if you ever do need it, most policy owners will face premium increases, which have more than doubled from 2007 to 2014. This is why many let the policy lapse—and then they have no coverage and no compensation for money spent on the premiums. It’s not a product people want to buy because it’s too complicated and too expensive. Lifetime coverage isn’t offered anymore, and, unlike basic health insurance, you can be rejected for a policy if you have a pre-existing illness or condition. About 45% of applicants age 70 or older were denied coverage in 2014. Because these policies are complex and often have “waiting” or “elimination” periods—when benefits aren’t paid but reduce cost—they’re difficult to analyze. In addition, there are estate planning considerations: you may want to leave something to your family and not let your assets be eaten up by long-term care expenses in your final years. There are some newer products called hybrids, which add on long-term care benefits to life insurance and annuities that may work for you, but they add even more layers of cost and complexity. For those in such situations, experts advise consulting an elder law attorney to see if this product makes sense for you. Reference: New York Times (December 18, 2015) “Long-Term Care Insurance Can Baffle, With Complex Policies and Costs” #HoustonLaw #HoustonMedicaidPlanning #LongTermCarePlanning #PayingforaNursingHome

According to the article “Nursing home chain not protected from prosecution” in The (Middletown NY) Times-Herald-Record, the agreement came after a multi-year investigation by the attorney general’s office and other state agencies that accuse Elant of numerous illegal activities, including submitting false claims to the state’s Medicare and Medicaid programs. The investigation showed that the nursing home staff openly discussed via email their plans to delay discharges so they could keep the daily resident count for each home, known as “census,” as high as possible. The attorney general’s office shared excerpts from the emails. One of these emails from a former executive to another read, “We need to slow discharges across the system. I will send the message to Goshen but please let the other buildings know.” Another from a senior executive was sent with the subject line “Census” and said, “As can be seen from this morning’s census report, we are down across the system. Please manage your census this week and whatever discharges can be avoided, please do so. Residents and families can be very obstinate.” The state charged—and Elant admitted—that it developed a practice of delaying the discharge of patients who were clinically ready to leave. This was frequently against the patients’ wishes and without their informed consent. This meant the nursing home provided service to patients that they didn’t need, and then billed the state. Elant also acknowledged scheming to move long-term patients to one of its financially troubled nursing homes to improve its financial condition. As part of the settlement, Elant has agreed to aggressive oversight, which usually includes the appointment of a compliance committee or a compliance officer, written procedures, and comprehensive employee training. Reference: The (Middletown NY) Times-Herald-Record (December 18, 2015) “Nursing home chain not protected from prosecution” #MedicaidPlanning #HoustonElderLaw #HoustonMedicare #MedicaidPlanningLawyer #ElderAbuse #NursingHome

Although combining a conversation about Alzheimer’s with a family visit over the holidays may not seem like a great idea, the timing could be right. Alzheimer’s impacts entire families because of the need for caregiving, the potential for its significant expense, as well as the risk that someone will take financial advantage of an Alzheimer’s sufferer. The likelihood of Alzheimer’s affecting a loved one grows greater as they get older. The time to talk is while everyone can share in a forthright but rational conversation resulting in an agreement on putting protections in place. A good first step is to speak with an elder law attorney to examine your loved one’s will and financial affairs. He or she will offer suggestions for protecting your loved one in the event he or she needs dementia care. Also, before disease strikes, it’s time to consider Medicaid planning. Smart Medicaid management can prevent families from having to spend all of the assets in order to keep a family member in a nursing home. Medicaid “look-back rules” on the transfer of financial assets can be complex, and understanding them in time to react can be particularly important for moderate-income families. It’s also a good idea to put an alert system in place so that your loved one’s long-term care policy doesn’t lapse. All of this may seem like a painful conversation to have over a holiday meal, but do it now while you can. Reference: Bankrate (November 24, 2015) “Talking turkey about Alzheimer’s” #PayingforaNursingHome #MedicaidPlanning #HoustonEstatePlanning #HoustonElderLaw #MedicaidPlanningLawyer #MedicaidNursingHomePlanning #RetirementPlanning #LongTermCarePlanning

Children don’t have the right to inherit, and a father has every right to leave his kid or kids out of his will, says the article, “Your parent left you out of their will: What now?” from New Jersey 101.5. If the father is competent and not being unduly influenced by his current wife, he can decide to leave out the child from his first marriage. A husband frequently leaves everything to a spouse, even if it’s a second marriage. In some instances, a father may feel he’s being fair by leaving a child out of his will. It could be that the child from his first marriage is significantly older than the children from his second marriage. Perhaps he paid for the education of that older child or even put a down payment on the first home of that child. In light of this, the father may believe he must leave the rest of his estate to his other younger children in order to put them in the same position as his first child. Or maybe the father feels comfortable that his oldest child is successful in life and that his half-siblings are more needy. Another scenario might be that the father provided for the child from his first marriage in some other manner, such as by naming him as a beneficiary of a life insurance policy, IRA, or other payable on death account that does not pass under the will. Otherwise, if the father is competent, there is little a disinherited child can do. Upon the father’s death, a child could contest the will, claiming undue influence by his new wife. Reference: New Jersey 101.5 (November 19, 2015) “Your parent left you out of their will: What now?“ #EstatePlanningLawyer #HoustonEstatePlanning #WillChanges #HoustonWills #ProbateCourt #Inheritance #HoustonProbate #HoustonTrustsandEstates

Dawn, who was just three years old when tragedy struck, claims her aunts’ recent accusation that her dad was responsible for the unsolved murder was intentionally hurtful and has no bearing on their fight over the estate. An article from DNA Info entitled, “Keep My Mother’s Murder out of Our Family Court Battle, Daughter Says,” explains that Dawn and her two aunts are fighting over the will of her grandmother and their mother, Marcia. The aunts claim that Dawn and her dad and lawyer Mitchell Lapidus stole at least $10 million in the last years of Marcia’s life, when she was mentally incapacitated. The aunts believe that Franklin Mark hired a hit man to kill his wife, Gail, in 1982. The two brought up the murder in the court case because they want to depose Lapidus, who helped draft Marcia’s final will. The will leaves $8 million to the United States Holocaust Memorial Museum and the remainder of her estate to Dawn, according to court records. Whether the tactics will work in challenging the will remain to be seen, but the New York Police Department re-opened an investigation into the murder after the website’s story. Reference: DNA Info (November 19, 2015) “Keep My Mother’s Murder Out of Our Family Court Battle, Daughter Says” #EstatePlanningLawyer #ProbateAttorney #HoustonEstatePlanning #WillChanges #HoustonWills #ProbateCourt #Inheritance #HoustonProbate

Smart Business reports that there are many money-saving opportunities for businesses and individuals—via IRA conversions or Health Savings Accounts (HSA)—but it’s important to do so within the law and banking regulations to avoid hefty fines that can eliminate any savings. The article, “Money-saving financial tips for individuals and companies,” says that the unique feature of a Roth IRA retirement savings vehicle for individuals is that, unlike a traditional IRA, it lets you withdraw all of the funds in the account tax-free. However, be sure to read the fine print. If you earn $193,000 or more, you can’t contribute to a Roth IRA, but you can make contributions to a nondeductible IRA, which has no income limit. The bad thing is that the income accumulated is taxed at ordinary income rates when withdrawn. However, there’s a work-around: you can make contributions to a nondeductible IRA, and then convert it to a Roth IRA. Beware that if you convert a nondeductible IRA to a Roth, any IRA you have is considered converted on a pro rata basis, which could create ordinary income. Speak with an experienced attorney before moving forward. Likewise, an HSA can work like an IRA. Contributions go into the HSA on a tax deductible basis and can then grow tax-free, but it can only be used for medical expenses. However, if you can afford to pay for your health care expenses out of pocket, the HSA builds up tax-free and will accumulate indefinitely. You can use it to fund your health care through retirement or leave it to beneficiaries and they can use it for medical expenses. You can actually increase money saved for retirement or beneficiaries, just like an IRA. Reference: Smart Business (December 2, 2015) “Money-saving financial tips for individuals and companies” #IRAs #HoustonEstatePlanning #RothConversions #RothIRA #HSA

You may have heard of using a reverse mortgage to tap into home equity and using that money to stay in a longtime home. However, US News tells us in “How to Buy a Retirement Home with a Reverse Mortgage“ that you can also use a reverse mortgage to buy a home. This is nice for folks who want to relocate and can’t afford mortgage payments in retirement or are unable to qualify for a conventional mortgage. In addition, it can be a financial tool to delay taking Social Security benefits or to preserve cash. In a reverse mortgage, the bank pays you a predetermined percentage of your home value. This money can be a lump sum, monthly payments, or a line of credit. To qualify, you have to be 62 or older, and the home you’re buying must be your principal residence. The advantage to a reverse mortgage is you don’t have to make payments. It lets you retain some cash. You can’t buy a home with a reverse mortgage unless you have enough money to make a sizable down payment (typically about 50% of the purchase price). If you get a Home Equity Conversion Mortgage—backed by the FHA—the maximum home value you can borrow against is $625,000. A line of credit may be a better option than a lump sum for most people using a reverse mortgage because people make bad decisions when they get all the money at once and then have nothing for later. When you die or leave the home, the mortgage will be due, and your heirs will get any equity that hasn’t been eaten up by interest and fees. If you live a long time, there won’t be any value left, and the home will go to the bank. In addition to this, the other downside of reverse mortgages is the high fees. Lenders can charge as much as $6,000 in origination fees. That’s negotiable, but you also pay all the fees you would with a traditional mortgage, like appraisal fees and title insurance. There’s also a mortgage insurance premium upfront and every year thereafter, not to mention fees to servicers. All of these are added to the mortgage balance. Shop around and get a good deal. Some of the fees are negotiable, as are interest rates. Get two or three estimates and compare. Evaluate the decision to use a reverse mortgage as part of a total financial plan. Reference: US News (November 30, 2015) “How to Buy a Retirement Home with a Reverse Mortgage” #HoustonAssetProtection #HoustonEstatePlanningLawyer #PlanningfortheFuture #ReverseMortgage

A recent article in Money reminds us that the holidays make for a great opportunity to start a simple, direct conversation. The article, entitled “Draft Brett Favre to Talk About End-of-Life Plans,” says that recent research shows that talking down to seniors actually might contribute to cognitive decline. It’s labeled “elderspeak.” Don’t do it: the elderly aren’t babies. One idea to broach the subject is through football. For example, on Thanksgiving at the Packers-Bears game at Lambeau Field, Favre’s now-retired #4 Packers jersey was officially unveiled. That type of event can generate conversation. Packer fans still recall how Favre’s dad died unexpectedly the day before one of the greatest games of his career. Maybe that can be used as your opener: “Did Irvin Favre have a will? Did Brett or someone else know where it was?” The article says that the answers to those questions must be yes. Brett couldn’t have thrown for 399 yards and four touchdown passes the day after his dad’s death while thinking, ‘Where’s the will?’ Whether or not you’re a Packers fan, you should have information about several important things. Ask your parents if they have a health care power of attorney, a will, a financial power of attorney (or a durable power of attorney), and an advanced health care directive (or a living will). In addition, make sure these important documents are all in one place where you can find them in an emergency. Remember, the objective of “the talk” is to open the subject for discussion, to see whether your loved one has given this adequate thought, to save headaches if you need the documents in a hurry and to enable you to carry out your loved one’s wishes. Reference: Money (November 25, 2015) “Draft Brett Favre to Talk About End-of-Life Plans” #AdvancedHealthCareDirective #FinancialPowerofAttorney #DurablePowerofAttorney #HoustonWills #Inheritance #PowerofAttorney #HoustonEstatePlanningLawyer

The Des Moines Register’s article, “How to assist your aging parents with their finances,” points out another aspect of care giving: helping parents manage their finances. If that’s the case, then be sure to do the following: Understand your parents’ overall goals. When assisting your parents with their finances, helping them to reach their goals should be your main objective. Talk to them and see whether they have financial goals above just covering their day-to-day expenses. It’s important to understand what they want their money to do. Have this conversation more than once. That’s a biggie! The “getting-to-know-your-goals” talk shouldn’t be a “set it and forget it” one-time conversation. Speak to your parents frequently about their goals. Their plans may change over time, especially after important life events, like the birth of a grandchild or the death of a loved one. Know the sources of their income. If your parents have a regular income which is enough to pay their bills, then managing their assets may be just keeping track of what they already have and using the regular income to pay their monthly expenses. But if your parents don’t have this regular income, then managing their assets will become more challenging. Find all of the important legal documents. Before your parents can legally let you handle their financial matters, you need to be listed as their power of attorney. Without it, you may be in store for a lengthy court proceeding before being given permission to manage your parents’ assets in the event they become incapacitated. If your parents want you to also handle their medical decisions if they become incapacitated, make sure they have health care directives in place as well. Managing your parents’ or any relative’s finances can be extremely challenging. Talk with your estate planning attorney. He or she can help you make sure you have all the tools to do the job right. Reference: Des Moines Register (November 24, 2015) “How to assist your aging parents with their finances” #HealthCareDirective #HoustonAssetProtection #EstatePlanningLawyer #CaringforParents #ProbateAttorney #ParentsFinances #PlanningfortheFuture #PowerofAttorney #ElderLaw

In order to protect your loved ones and ensure that your intentions are clear and carried out, you must do some more planning now, and you’ll need to share your thoughts with your family. The Arkansas City Traveler’s article, “Planning your estate,” includes some very worthwhile moves to consider: Make a list of your assets and debts. Your family needs to have an accurate accounting of your assets and debts. Share this information with them. Sign a durable power of attorney. Entrust a good friend or family member with the authority of durable power of attorney so that he or she can pay your bills and make financial choices on your behalf if you are incapacitated. Designate an executor. The executor is the individual that you select to carry out your wishes in your will. Keep your will up-to-date. Events in your life may have changed, so examine your will with your estate planning attorney to ensure it reflects your current situation and wishes. Consider a living trust. A will may not cover all of your estate-planning needs. You might want to look at a living trust. A trust can give you flexibility in distributing your assets and can help you avoid probate. In order to create a trust or other estate-planning documents, work with a qualified and experienced estate planning attorney. Review your beneficiary designations. These designations on your financial accounts, like your 401(k), IRA, retirement plan, and insurance policies will trump the directions you put in your will, so keep them updated. Share where your legal documents are located. Your family needs to know where you keep documents. These include your birth certificate, will, and living trust. Communication. You need to tell your family and heirs about your final wishes. Communication about these sensitive topics is not always easy, but doing so will help your family after you have passed. Work with an estate planning attorney to make sure all of the bases are covered. Reference: Arkansas City Traveler (November 14, 2015) “Planning your estate” #AssetProtection #ProbateAttorney #TrustsandEstates #HoustonEstatePlanning #WillChanges #Probate #ProbateCourt #Inheritance #PowerofAttorney #Wills #Trusts

A study published last month by the National Bureau of Economic Research revealed that the share of parents with wills that give unequal amounts to their children grew significantly between 1995 and 2010—from 16% to 35%. One important element of this increase is the growing number of “complex” families, or blended households with stepchildren and biological children, as well as families where a parent doesn’t have any contact with one or more biological children (e.g., children from a previous relationship). Among parents who had created a will, 61% of those with stepchildren and biological children planned to divide their assets unequally, compared with 27% of parents with just biological children. Among parents who were divorced at the time they were surveyed, the difference was even greater: 75% compared to 29%. However, researchers noted that living with a stepparent for at least 7 to 10 years eliminated the stepchild “penalty.” The study concentrated primarily on complex families, but there are other scenarios in which parents might choose to pass on their wealth unequally. Parents may have given more to one child in the past and decide to leave more to their other children. Or, they may want to split assets unevenly to try to put their kids on more equal footing. Parents may have the best of intentions in making these decisions, but they should speak to their children to prevent hurt feelings. An estate planning attorney can provide valuable guidance. Reference: The Boston Globe (November 16, 2015) “An unequal sharing of the wealth” #Stepchildren #TrustsandEstates #HoustonEstatePlanning #Probate #Inheritance #BlendedFamilies #Wills #HoustonProbateAttorney

For instance, a couple, or in many instances, a surviving spouse, may have more than he or she needs in an IRA. This is money that was saved, but the person has enough for retirement with other income and pensions. A simple swap strategy will let you use an IRA to provide a gift for charity, rather than your other already tax-free funds, and also to reduce the children’s or grandchildren’s estate taxes. The Naples Florida Weekly poses the question, why give it to the government, when this strategy is available, in the article “IRAs can benefit charity while reducing taxes for heirs.” This switch is accomplished by making the beneficiary of an IRA a charitable bequest. The charity gets more of a donation tax-free than they otherwise would have if they received all of their inheritance from the IRA after the fact. Those who itemize their tax returns and are older than 70 may also be able to start giving now out of an IRA fund to yield greater tax savings strategies while helping charities. This is called a charitable rollover. This gift through an IRA doesn’t appear on your income tax return as income, and the IRS has approved of this strategy for many years, although it’s not a permanent possibility. Congress decides yes or no during the last weeks of the year. Philanthropy through IRAs is often an overlooked strategy. With children and charity to consider, money is left to one at the expense of another, so you always want to try to balance things out. Especially in this case, estate planning for your charitable bequests through an IRA needs to be done by an experienced estate planning attorney. Your attorney can help with a spousal waiver, for instance, since an IRA typically benefits the surviving spouse. Also, you have many ways that IRA funds can be divided up, such as donating it in full to a single charity, benefiting a private family foundation, a religious organization, or animal welfare. If you want to donate to charity and have no heirs, using the IRA is a no-brainer. It’s the most efficient way to get dollars to a charity. Reference: Naples Florida Weekly (November 12, 2015) “IRAs can benefit charity while reducing taxes for heirs” #HoustonAssetProtection #CharitableRollover #HoustonEstatePlanning #Inheritance #HoustonProbateAttorney