Redkey Gordon P.C.

Medicaid Eligibility for In-Home Care Improves for New Jersey

The newest amendment to  New Jersey's Medicaid program will allow those who earn too much to qualify for full assistance — but who can't afford the cost of the care they need — to receive help through the creation of a trust account at a bank.

A recent Medicaid change for New Jersey comes about in response to advocates who believed the state’s old Medicaid rules made seniors move to nursing homes prematurely because the state gave them no help with home health aides, adult day care programs, or assisted living residences.

The Bergen Record recently published an article, titled "N.J. to allow Medicaid to cover in-home elder care," reminding us that any income above the Medicaid eligibility limit of $2,163 a month that a senior or disabled individual receives can be placed into an irrevocable trust accounts. Withdrawals are then permitted for qualified living expenses and some of their care that they can afford. After that, Medicaid pays the rest, whether it's in a nursing home or in their own home.

"With these trusts, the individual who wants to live at home and age in place will have the capability of being able to live at home or remain in their communities while getting the long-term services and support they need," a state official said in original article.

New Jersey has earmarked three-quarters of the $125 million in its long-term-care budget for these new Medicaid enrollees.

Medicaid officials in New Jersey think that the changes may bring about additional Medicaid enrollees, but will save money long-term by postponing the nursing home. Medicaid funds these stays for roughly $205 a day. Still, some advocates and elder care attorneys worry that these trust arrangements could be too confusing and complex for the elderly and their caregivers, creating a potential "nightmare” for people trying to do this on their own.

Qualifying for Medicaid is already a time-consuming and laborious task. Seniors have to organize their bank and financial records for the past five years to show that they didn’t give any money to adult children or others to avoid spending inheritances on long-term care. The senior’s trustee is tasked with ensuring that all pension checks are deposited, the qualified living expenses are paid, and remaining funds are then paid to the care facility or back to Medicaid. These all have to happen within the same month to stay eligible.

If you have questions or want to discuss trusts and retirement planning, speak with an experienced estate planning. For issues related to Medi-Cal Qualification in California, contact Robert A. Gordon at Redkey Gordon Law Corp, an experienced elder law attorney.

Reference: The (Bergen) Record (November 30, 2014) "N.J. to allow Medicaid to cover in-home elder care"

Living Longer Can Affect One's Inheritance

Adult children have historically expected to inherit from their parents while in their 40s or 50s, yet now many aren’t doing so until their 70s or even 80s, as their parents live into their 90s or beyond.

When should you expect to receive your inheritance?

According to the Social Security Administration, a 65-year-old man now has a life expectancy of 84, and a 65-year-old woman about 87. These increases in longevity have created changes in financial planning—like retirement calculations and long-term care insurance costs. However, as a Barron's article titled "When Longevity Upends Trusts" notes, these numbers are just beginning to affect trusts and estates.

If you don’t think about this, it could create a lot of issues, the original article cautions. For example, there are some children who are still waiting for their inheritance at age 80! The conflict is between this generation’s expectation of inheritance and the older one’s financial needs later in life. Trusts created years ago in many instances didn’t plan for a 90-plus lifespan or the medical costs associated with it. In addition, another wrinkle (sorry!) are divorces and remarriages. These can result in a second spouse and children of the first spouse being close to the same age, and perhaps at odds over inheritances that may take even longer to pass to the children’s generation.

The original article also mentions a case in which the parent had an accident and the adult child, who was a beneficiary of his trust, called for paramedics, probably saving the parent’s life. The trust eventually terminated before the parent’s death, and several million dollars went into his estate and to the widow (who wasn’t the beneficiary’s mother!), creating some real hard feelings for him, as he had really developed an entitlement to the assets.

One way to address these longer life spans in creating a trust is to just give more outright while you’re alive, instead of gumming everything up in trusts for after you pass. With the annual gift exclusion at $14,000 per beneficiary, per spouse, a couple with three kids and five grandkids could give up to $224,000 a year tax-free.

Another approach suggested in the original article is to provide for staggered payout dates, since some trusts permit partial payouts when beneficiaries reach certain ages or other milestones. A nice thing about trusts is that they can be written to permit some flexibility.

Find out more about trusts by speaking with Robert A. Gordon, an experienced California estate planning attorney.

Reference: Barron's (November 29, 2014) "When Longevity Upends Trusts"

Living Longer Can Affect One's Inheritance

Adult children have historically expected to inherit from their parents while in their 40s or 50s, yet now many aren’t doing so until their 70s or even 80s, as their parents live into their 90s or beyond.

When should you expect to receive your inheritance?

According to the Social Security Administration, a 65-year-old man now has a life expectancy of 84, and a 65-year-old woman about 87. These increases in longevity have created changes in financial planning—like retirement calculations and long-term care insurance costs. However, as a Barron's article titled "When Longevity Upends Trusts" notes, these numbers are just beginning to affect trusts and estates.

If you don’t think about this, it could create a lot of issues, the original article cautions. For example, there are some children who are still waiting for their inheritance at age 80! The conflict is between this generation’s expectation of inheritance and the older one’s financial needs later in life. Trusts created years ago in many instances didn’t plan for a 90-plus lifespan or the medical costs associated with it. In addition, another wrinkle (sorry!) are divorces and remarriages. These can result in a second spouse and children of the first spouse being close to the same age, and perhaps at odds over inheritances that may take even longer to pass to the children’s generation.

The original article also mentions a case in which the parent had an accident and the adult child, who was a beneficiary of his trust, called for paramedics, probably saving the parent’s life. The trust eventually terminated before the parent’s death, and several million dollars went into his estate and to the widow (who wasn’t the beneficiary’s mother!), creating some real hard feelings for him, as he had really developed an entitlement to the assets.

One way to address these longer life spans in creating a trust is to just give more outright while you’re alive, instead of gumming everything up in trusts for after you pass. With the annual gift exclusion at $14,000 per beneficiary, per spouse, a couple with three kids and five grandkids could give up to $224,000 a year tax-free.

Another approach suggested in the original article is to provide for staggered payout dates, since some trusts permit partial payouts when beneficiaries reach certain ages or other milestones. A nice thing about trusts is that they can be written to permit some flexibility.

Find out more about trusts by speaking with Robert A. Gordon, an experienced California estate planning attorney.

Reference: Barron's (November 29, 2014) "When Longevity Upends Trusts"

Caregiving for Loved Ones, Without Family Feuds

Although nobody can be forced to participate as a caregiver, there are ways to approach the situation that are more likely to have a positive result.

Families encounter many issues when planning care for a loved one. A common issue is the unwillingness of siblings to “step up to the plate” and make a contribution to the caregiving tasks.

The (Carlisle, PA) Sentinel’s recent article, titled "Elder Care: Keeping family conflict to minimum," explains that even though no one can be forced to participate as a caregiver, there are some ways to approach the situation that may yield more positive results.

First, you should make sure that the whole family has a solid understanding about the care needs of the individual, as some seniors may tell a different story, depending on which relative they have spoken to last. The original suggests soliciting objective information from third parties, like a physician, close friend, or a neighbor, in order to have more information to show the need for care.

Get everyone involved and let them take some ownership in the issue: allow all of the family members to offer ideas on care needs and carefully consider each suggestion. Maybe your brother’s suggestion isn’t exactly how the primary caregiver would handle that particular need, but if it’s sound and safe alternative—and your brother is willing to participate—it’s worth a try.

In addition, it’s important to think about each member’s relationship with the one who needs care, as well as with each other. If your sister has historically been more distant to your mother than the others, asking her to spend one-on-one time with mom or perform intimate personal tasks is probably not a great idea. Maybe they can help with something a little less hands on, like helping with finances or grocery shopping.

One of the best ways to try to get some help from other family members is to make detailed requests for assistance. So rather than asking if someone can stay with the senior “once in a while,” you should ask that person to set aside a specific day and time for a regular visit. This will make the expectations clearer for everyone and reduce frustration and misunderstandings.

One final thought when enlisting the aid of others who are reticent to participate in caregiving: start small. The original article recommends finding something that allows for a positive result without a major commitment or effort. And remember to say thank you.

Reference: The (Carlisle, PA) Sentinel (November 28, 2014) "Elder Care: Keeping family conflict to minimum"

The Time for Giving Is upon Us! How to Get Involved

The end of the year is a great time to consider making a contribution to a cause that is meaningful to you. Along with potential tax benefits, there is the enjoyment that comes from making a positive difference and helping the organization of your choice.

Is the holiday spirit prompting you to give back to charity?

Like many charities, the SPCA of Northern Nevada depends to a great extent on year-end giving in order to raise funds for its ongoing operations. The SPCA wants all of its animals to find homes during the holidays: the cost of caring for each animal is on average more than $350. It really adds up, given the thousands of animals the charity rescues every year.

The Reno Gazette-Journal explains that there are a wide variety of ways to give. The article, titled "Animal Files: End-of-year giving can be worthwhile," says that donations of cash can be made directly to qualified 501(c)3 tax-exempt organizations. This typically creates a tax deduction for the donor. Calculating the amount of your donation at the end of the year allows you to maximize your potential deduction and make the most of it.

In addition, to cash, financial assets—like stocks, bonds, and art—can also be donated to your favorite charity. The original article notes that giving to donor advised funds can make for great charitable gifts over a long period with tax advantages. There are also charitable trusts and annuities. Speak with your estate planning attorney to explore these and other options you have to give.

The Gazette-Journal also reminds us that your time is also a generous gift during this time of the year. Help out at a charity with daily operations or join a committee. Some families even make a yearly tradition to volunteer at your favorite local charity.

Finally, the original article reminds us that many charitable organizations welcome your gently used items to resell and help defray the costs of their operations. Donating cars, furniture, clothing, or household goods can really make an impact and typically get you a tax benefit. Clear out some things that are no longer used to donate to your favorite charity.

Charitable giving will make you feel good, too. Talk to your Sacramento estate planning attorney at Redkey Gordon P.C.  for other ideas and strategies.

Reference:  Reno Gazette-Journal (November 28, 2014) "Animal Files: End-of-year giving can be worthwhile"

Happy New Year? Not So Fast, Be Sure to Get Your Finances in Order First!

Taken all together, these steps might seem overwhelming. But if you do one task each day, you can really change your financial life by year-end.

Is it too late in the year to get your finances ironed out?

Fortunately, a recent article from kjrh.com, titled “7 financial steps to take before New Year's Eve,” will help.

Here are a few of those key steps to consider:

Wait! Didn’t 2014 just start?

Nope. It's true, the year is just about over. But you can still make a big impact on your financial future before ringing in the New Year.

Make a plan to get out of debt. Ok, you probably can’t get out of debt between now and New Year’s. However, you can get set up to be debt-free very soon. The original article says that the first step is to watch your spending over the holidays, but don’t overdo it. It only makes it more difficult. Next, create a system to eliminate debt by first consolidating and refinancing to the lowest possible interest rate. Once you do that, “bust a move” to pay off the highest cost debt and make minimum payments towards your other credit card balances.

Track your spending. Even if you aren’t in debt, it’s very important to figure where and how much you spend on a monthly basis. Once you know this, you can see if you’re spending wisely or if you need to make some course corrections. The neat thing about tracking your spending before New Year’s is that you get into the routine of your system—plus if you are using a spreadsheet or accounting software, you’ll also simplify your tax reporting, especially if you do your own taxes.

Review your estate plan. Typically things slow down at work during the holidays, which allows you a little time to get to items you may have been putting off, like estate planning. It’s a favorite of procrastinators! Find an experienced Gold Country estate planning attorney at Redkey Gordon P.C. and get started.

Don’t take chances. Read the original article and learn more about these steps and others. Just don’t wait until “after the holidays”!

Reference: kjrh.com (December 2, 2014) “7 financial steps to take before New Year's Eve”