A report from The Consumer Financial Protection Bureau, detailed in a CFPB press release, “Consumer Financial Protection Bureau Report Finds Hundreds Of Counties Nationwide Fighting Elder Financial Abuse With Community Efforts,” finds that hundreds of counties around the nation are creating community-based protection partnerships between social service agencies, financial institutions that serve seniors and law enforcement. When their efforts are coordinated, these partnerships can be effective in preventing, detecting and responding to elder financial abuse.
Should Your Aging Parent Live with You?
It usually starts when one spouse dies and an aging parent suddenly seems alone and vulnerable. The parent may bring it up first, referencing a long ago conversation when the adult children said they’d never put their parent into a nursing home or similar facility. As described in Forbes’ “Aging Parents and The Rise of the Multi-Generation Household,” this promise is usually made when the parents are well and the natural response—“Of course not!”—is an easy answer. But situations change and the answer isn’t always so simple.
The idea of “being put in a home” is based on the largely outdated and Dickensian ideas of poorhouses and debtors’ prisons. While perhaps a bit overly dramatic, it may not be that far off for Depression-era kids who saw the treatment of seniors before Medicare and Medicaid provided some ongoing care. While some nursing homes are still found to violate government regulations, most are decent, well-managed and comfortable places to care for seniors who need a lot of attention for a multitude of medical needs. Licensed board and care homes may be another option for long-term care, usually at a lower cost than nursing homes. They don’t offer skilled nursing, but they do have a more intimate environment with a less institutional atmosphere.
How Aging Parents and Adult Children Can Get on the Same Page
A national study conducted by Fidelity Investments has some good news for aging parents paired with some simple advice. The adult children in the survey are willing to help support and care for their parents, but what form that help will take and what kind of responsibilities the kids are taking on needs to be made clear for the changing relationship to work for everyone.
Fidelity’s most recent Family & Finance report surveyed two members of each family—one parent and one adult child—on things such as retirement income, eldercare and estate planning. The results found that about 40% disagree on the roles children should play as parents age.
Social Security’s Less Known Customer Services
Dealing with large government bureaucracies is rarely fun, especially Social Security. That makes this information provided by AARP’s article, “Discover Little-Known Social Security Benefits,” especially welcome.
Some years ago, Social Security officials saw that the long waiting time for decisions on disability applications resulted in severe hardship for the seriously ill. As a consequence, the agency established the Compassionate Allowances List.
This program’s goal is to swiftly grant disability status to those who suffer from any of the 225 serious medical conditions on the list. They include rare diseases, cancers, traumatic brain injury, stroke, early onset Alzheimer’s disease and related dementias, schizophrenia, cardiovascular disease, multiple organ transplants and autoimmune diseases. The Social Security Administration says those who can show they suffer from any of these afflictions will receive approval in weeks (rather than months or years).
The Role of an Elder Law Attorney
When a sudden need for nursing home care occurs, couples are often faced with a dizzying array of things they have to do, rapidly mounting costs and fear. Options are limited and the first thought is to sell the family home and use the proceeds to pay the nursing home. Instead, the couple or the spouse who is not disabled needs to sit down with an elder law attorney to find out what can be done.
In its recent article, “Seniors have more options than selling their home,” The Boston Globe says that an experienced elder law attorney can be the key to protecting your family’s health and financial well-being. This includes such assets as the family home. An elder law attorney can show the senior couple that they have options—in most cases, they don’t have to sell their home to pay for emergency long-term care.
Fearing Loss of Control is One Reason People Try to Hide Alzheimer’s
It was at least three years after his diagnosis that comedic actor Gene Wilder revealed he was suffering from Alzheimer’s disease. This isn’t unusual, according to experts discussing his situation in the Investment News article, “Hiding Alzheimer’s, like Gene Wilder did, is natural, so prepare for it with all clients.” Wilder, star of Blazing Saddles, Willy Wonka and the Chocolate Factory and many other classic comedies, died at age 83 from complications of Alzheimer’s disease. He wanted to leave his audiences laughing, rather than being sad that he was suffering from this dreaded disease.
Elder Law: What is it?
The month of May is Elder Abuse Awareness Month, and in honor of that, we’ll be focusing our posts on elder law. What does elder law include? Well, it’s not just elder abuse. More often, elder law covers protecting the home and other assets from nursing home expenses, long-term care planning concerns and other issues that arise as people age. Mostly, elder law concerns making sure people get the care they need as they age and that both they and their assets are protected.
Estate and Financial Planning is a Team Sport, Too!
Consider this: imagine a classical orchestra with each musician given different sheet music. No matter how good the musicians are, you’ll end up with a cacophony. The same holds true for your team of financial and estate planning professionals. If there is no communication between the professionals you work with, you could wind up with a financial mess. This is highlighted in a recent article written by the staff of WealthCounsel, an estate planning networking, education and legal software company that helps estate planning attorneys practice excellence.
Many of us don’t consider ourselves to have a team of professionals. But think about those you’ve worked with in the past: insurance agents, CPAs, financial advisors and estate planning (or other) attorneys. For those owning a business, you might also have business managers or other professionals you work with regularly. Without communication between all these advisors, you could end up with a financial mess now and a disaster later for any heirs.
Think about what could happen if your estate planning attorney isn’t aware of a life insurance policy. If so, you may have designated your spouse as primary beneficiary of the policy with any children as contingent beneficiaries. While that’s pretty standard, what happens if you and your spouse pass away at a young age and before your children are grown?
Legally speaking, the insurance company is required to distribute the proceeds of the policy according to your beneficiary designation form, giving your young children the death benefit. While you would want your children to have access to any money they might need, you might also want a more experienced adult to assist them. Trust planning would allow for a trustee to come alongside them and manage the money for them until they come of age, or even thereafter.
What about financial planning? There may be assets with complex rules when it comes to inheritance, such as IRAs and other retirement accounts. With collaboration between your estate planning attorney and your financial advisor, you can ensure those assets take advantage of tax planning techniques and pass to your heirs in an efficient manner. If both these professionals are in communication with your insurance agent or accountant as well, they may notice other, more advanced planning opportunities, such as creating an Irrevocable Life Insurance Trust (ILIT) or charitable remainder trust. No communication could mean missed opportunities.
This is one of the reasons why we at Family Estate Planning Law Group strongly encourage our clients to hold a Family Care Meeting. This meeting gets the whole team together: your financial professionals, as well as those you’ve asked to become trustees or take on other fiduciary roles in your estate plan. It also introduces your financial and estate planning team to one another—giving them the opportunity to collaborate on your behalf and find new planning opportunities—but without any need to discuss assets or inheritances with heirs.
When we hold a Family Care Meeting, we highlight the basics of the plan, the advantages of the planning you’ve done and outline the roles and responsibilities of the fiduciaries. It’s far easier for your loved ones to hear about the plan now, before there’s a medical emergency or a death. Studies have also shown that heirs often tear assets out of trusts or away from financial professionals if they’ve never met the professional before. Often, that can lead to detrimental financial transactions or even exposing assets to creditors or divorce proceedings, if assets are torn out of a trust.
Giving heirs the opportunity to hear about how you’ve created a plan to take care of them after you’re gone can be one of the most important ways you care for them. And allowing for collaboration between your financial and estate planning professionals can mean an even more effective estate plan for you! For more information about the Family Care Meeting and the importance of collaboration between your financial professionals, explore our website and contact us to schedule your consultation today!
Reference: WealthManagement.com (March 24, 2017) “Planning is a Team Sport”
Financial Planning for the Death of a Spouse
For many couples, one spouse manages the majority (if not all) their financial affairs. That might entail managing assets, bank and investment accounts, credit cards, or dealing with a financial planner, accountant or estate planner. When both spouses are alive and well, this works well, but what happens if the spouse managing financial matters passes away? We’ll take a look at some of the issues that arise in such situations, as well as some ways to prevent them.
RMDs for Retirement Accounts: What You Need to Know
You might still have plenty of time to take your required minimum distributions (RMDs) from traditional IRAs and 401(k)s, according to Kiplinger’s “FAQs About Required Minimum Distributions for Retirement Account,” but you’ll want to do it sooner rather than later. If you’re older than 70 ½, you must take them by December 31st and delays could mean lost opportunities. Remember that you aren’t the only one making this transaction if you wait till the end of the year, and you’re hardly alone if you wait until the last minute. It’s best to start planning now to make the most of your options.
Here’s some additional information to help you meet your deadline for IRA withdrawals and some special rules for 401(k)s.