When Do You Have The Talk About Money?

When do you have the talk? No, not that talk!

When do you have the talk with your parents about their estate plan?
Answer: Now.



When my husband and I created our estate plan a decade ago, our attorney recommended we review our plan once every five years. After the markets declined, who has any money left that needs a plan?
Start now, while your parents are able to make decisions. The sooner you start talking about these uncomfortable topics, the easier it will be to set up these plans before they are unable to make decisions. Plus, the discomfort you’ll feel now will be mild compared to the pressure you’ll endure as you rush to make a (potentially rash) decision.
When I began caring full time for my father, I couldn’t understand why he didn’t have a plan.

At age 85, he insisted he would live to 100 and didn’t want to commit because, “What if I change my mind?”

 

“That’s okay,” I’d reply. “Just get a plan in place and it will be easier to change than to create a new plan.”

 

Months later, he named me his Power of Attorney (POA) and as we flew from his Wisconsin home of 45 years to California, where he would live with us, I wondered if that POA were enough. It wasn’t.

We had to clear out 45 years of possessions in his Wisconsin home then sell it. We searched through piles of paperwork, and located a number of accounts he held. We even found U.S. Savings Bonds used as bookmarks, in between pages of newspapers stacked 18 inches high, and six-figures worth of bonds in between two books in a living room bookcase.
Despite earning $5 on average per hour as a machinist, my father saved enough money, thanks also to my late mother’s frugal ways, to be cared for until he died.

We found six-figures worth of bonds
in between two books in a living room bookcase.

Still, he did not want to put together a plan until he was living with my husband and me. While Alzheimer’s claimed his brain and my siblings and I were not talking, I didn’t want to deal with any litigation after he passed. Given his state of mind at the time, I sought a voluntary conservatorship with the help of a CPA and elder law attorney.

Had my father make a decision sooner, I would NOT have had to jump over unnecessary hurdles to put together his estate plan.

In “Planning for Incapacity,” Elder Law Attorney, Christine Brown writes about the different legal documents we should have in place such as a Trust, Durable Power of Attorney, Will, Advance Directive for Health Care, and Beneficiary Designations.

Dementia Signage for the Home

Weekly Planner (Bright Pink) Memo Pad

$30.95

Weekly To Do List Notepad (White)

$30.95

EZ-C Bold Yellow Weekly To Do List Notepad

Red Dry Erase Board

Dementia Signage for the Home

$22.75 - Financial Records Organizer Vinyl Binder

$22.75 - EZ-C Bright Green 3 Ring Binder

 

Spending Down to Medicaid Doesn’t Have to Impoverish Both Spouses

One of the biggest worries of a married couple where one spouse needs to go into a nursing home is that the spouse who is still at home will become impoverished in order to pay their partner’s bills.

While it is true that the nursing home spouse may not have more than $2,000 in countable assets in order to receive Medicaid benefits, federal law permits the so-called “Community Spouse” to retain up to $115,920 in countable assets (cash, stocks, bonds, real estate in addition to the home, etc.). (Discover which Assets You Can Have to Still Qualify for Medicaid.)

 

In most states the Community Spouse may only protect 50 percent of the total countable assets of both spouses, up to $115,920. In other words, all countable assets—no matter whether titled in the husband’s name, wife’s name, or jointly—are totaled up and then divided by two.

 

The Community Spouse is then permitted to keep one-half of the total, up to $115,920. The other half—minus the $2,000 exemption allowed the nursing home spouse—must be “spent down” or otherwise disposed of, or converted to something that is non-countable.

 

The ’50 percent rule’in action

For example, consider a couple with a house, car, personal property in and around the house, jewelry, cash in the bank, and maybe an IRA or 401(k).

 

First of all, the house will be exempt no matter its value, as long as the Community Spouse is living there. One car of any value is also exempt, as is all personal property and jewelry. However, the cash and retirement accounts are countable (although there are a few states that exempt an individual’s retirement accounts once they are paying out the minimum amount required under federal tax laws). If that cash and the retirement assets total, say, $200,000, then the Community Spouse can protect only $100,000 (50 percent). If it totaled $300,000, though, the Community Spouse can protect the full $115,920, even though that is less than 50 percent of $300,000.

 

Exceptions to the rule

For couples who have very few assets, the “50 percent rule” will allow the Community Spouse to protect the first $23,184, even if that’s more than 50 percent of the couple’s total assets.

 

Some states do not follow the above “50 percent rule.” These states simply allow the Community Spouse to retain the first $115,920, even if that is more than half of the total assets of the couple.

Currently, these states are AK, CA, CO, FL, GA, HI, IL, LA, ME, MA, MI, VT, and WY (SC reduces the maximum to $66,480).

 

Once the protected amount is determined, the real work begins: how can you protect the extra assets so they are not merely spent down on the monthly nursing home bill?

 

This is what is known today as “Medicaid planning,” and it can get quite complicated. There are many options to protect the excess assets, such as investing in exempt real estate, purchasing a “Medicaid annuity,” using Medicaid's "Cash and Counseling" program to hire a family member for caregiver services, transferring money to a disabled child, using specialized trusts, etc.

 

Be aware that spending down to Medicaid is tricky. You cannot simply give excess assets to a child (unless they are considered disabled under federal law) or another family member without incurring a penalty period of disqualification from Medicaid coverage: the greater the gift, the longer the penalty period. The exact calculation varies from state to state, but all gifts made within the five-year period before the date you apply for Medicaid will count against you.

Dementia Signage for the Home

 Get $10 OFF Orders of $30 or More!

Enter CHEATWALLETS at Checkout

Ends Friday

Product Catalog


Gift Shop

Medication Refill Reminder Notepad - Light Blue

Medication Reminder Notes Notepads

Certificate of Health Notepad (Canary Yellow)

Certify of Professional Care Notepad (Sky Blue)

Manual Prescription Pads (Light Blue) Note Pads

Manual Prescription Pad (Large - Blue) Memo Notepad

Privacy Patient Sign In Slips Notepad (Purple)

Patient Excuse Form Notepad (White)

Manual Prescription Pad (Large - White) Note Pads

Medication Log Notepad (Pink)

Managing Your Aging Parents' Finances

Stepping in to help your aging parent(s) manage their finances can feel like a really odd role, especially if your parents have always been on the ball financially. Here are a few tips to get you through the transition:

• Be observant and listen. Try to recognize subtle changes.
• Encourage your mother and father to use professional advisors for taxes and investments, especially if you don't live nearby.
• Know who they talk to or see. Friends, relatives and caregivers can be abusive both physically and financially.
• Put your elderly parents on the No-call lists for telemarketers (visit the National Do Not Call registry at http://www.donotcall.gov/)
• Make yourself available. If you don't manage your own money well, you might avoid the issue otherwise.
• Offer to take care of home repairs or major purchases so they don't get scammed.
• See if mail gets opened or piles up or if they send out responses to contests.
• Watch for inappropriate purchases – like beauty and health products, subscriptions or 21 sets of sheets!
• But remember, it's still their money and they have the right to choose, make mistakes, and retain their independence as long as possible.

The National Council on Aging suggests that planning for this situation should begin in your parent's early 60s with a family council meeting. But for many, that time has passed without that meeting and it is up to family caregivers to provide the best safety net we can.

_____________________________

Dementia Signage

     


     


     



Gift Shop

     

Managing Daily Financial Affairs

In the early stages of Alzheimer's  Disease, your parent(s) may need help managing their daily financial affairs. Here area few suggestions:

• Be observant and listen. Try to recognize subtle changes.
• Encourage your mother and father to use professional advisors for taxes and investments, especially if you don’t live nearby.
• Know who they talk to or see. Friends, relatives and caregivers can be abusive both physically and financially.
• Put your elderly parents on the No-call lists for telemarketers (visit the National Do Not Call registry at http://www.donotcall.gov/)
• Make yourself available. If you don’t manage your own money well, you might avoid the issue otherwise.
• Offer to take care of home repairs or major purchases so they don’t get scammed.
• See if mail gets opened or piles up or if they send out responses to contests.
• Watch for inappropriate purchases – like beauty and health products, subscriptions or 21 sets of sheets!
• Remember, it’s still their money and they have the right to choose, make mistakes, and retain their independence as long as possible.
• Encourage your parents to stay organized by keeping important financial documents, such as their will, in one location so it can be easily located if need be.