What If Only One Parent Is Willing to Plan?

Making matters much worse for one family, is the fact that while the mother is willing to speak with an estate planning attorney and make a plan for the future, the father won’t even discuss it. What should this family do, asks the article from nwi.com titled “Estate Planning: Can one spouse plan?”

Planning for your eventual demise and distribution of your worldly goods isn’t as much fun as planning a vacation or buying a new car. For some people, it’s too painful, even when they know that it needs to be done. There’s nothing pleasant about the idea that one day you won’t be with your loved ones.

Although contemplating the reality is unpleasant, this is a task that creates all kinds of problems for those who are left behind, if it is not done.

Unfortunately, it is not unusual for one parent to recognize the importance of having an estate plan and the other parent does not consider it to be an important task or simply refuses. In that case, the estate planning attorney can work with the spouse who is willing to go forward.

Some attorneys prefer to represent only one of the spouses, especially in a case like this. Spouses’ interests aren’t always identical, and there are situations where conflicts can arise. When a couple goes to the estate planning attorney’s office and wishes the attorney to represent both of them, sometimes the lawyer will ask for an acknowledgment that the lawyer is representing both of them as a couple. In the event that a disagreement arises or if their interests are very different, some attorneys will withdraw their representation. This is not common, but it does happen.

The estate planning lawyer usually prefers, however, to represent both spouses. Married couple’s estates tend to be intertwined, with real property jointly owned as husband and wife, or husband and husband or wife and wife. Spouses are usually named beneficiaries of life insurance and retirement accounts. Even in blended family situations, this holds true.

If the father in the situation above won’t budge, the mother should meet with the attorney and create an estate plan. The problem is, she may not be able to plan effectively for the two most common and usually the most valuable assets: their jointly owned home and retirement accounts.

If the home is owned by the spouses as “entireties property,” that is, by the couple, she can’t make changes to the title, without her spouse’s consent. One spouse cannot sever entireties property, without both spouses agreeing. Some retirement plans are also subject to the federal law ERISA, which requires a spouse’s consent to change beneficiaries to someone other than the spouse.

Even with these issues, having a plan for one spouse is better than not having any plan at all.

The only last argument that may be made to the father, is that if he does not make a plan, the laws of the state will be used, and few people actually like the idea of the state taking care of their estate.

Reference: nwi.com (Nov. 17, 2019) “Estate Planning: Can one spouse plan?”

When are You Done with Estate Planning?

A family has set up their estate plan. Two sons are already in the farming business and are thriving. Their daughter will receive the proceeds from a second-to-die life insurance policy and their considerable savings. The amounts are not equal in amount, but they are an equitable inheritance, and it seems like the couple has done its homework.

However, asks an article in The Courier, “The will is done, you’re sitting pretty—but are you?”

Estate planning is a lot like putting together a jigsaw puzzle. Like farming, it gets put together over time, piece by piece. Each piece represents something that needs to be done. For instance, a key part of the puzzle is having a last will and testament. That functions like building the outside frame of the puzzle, for those who start their puzzles by building the perimeter first. It frames the rest of your estate plan.

Other pieces are included within the will, like naming a personal representative, or executor. This is the person who is in charge of distributing your assets and making sure that the directions in your will are followed, when you pass away.

Do you have a plan for what happens when you die? For instance, if a husband dies, is there a plan for the wife to maintain the farm, or will she sell machinery and other transitory assets?

For the couple mentioned above who has the will, a transition spelled out in the will and a second-to-die policy in place to supplement the daughter’s inheritance, congratulations: they have many pieces of the puzzle in place. However, that’s not everything.

The other parts of the puzzle have to do with issues while the couple is still living. What happens if one or both are injured, or become ill? Who should take over the farming in the short or long term? Who will care for the spouse or spouses? Will they depend on each other for caretaking, or their daughter?

The number one worry for seniors is whether they have enough money to last until they die. However, by taking a portion of their savings and investing in a long-term care insurance policy, they can rest assured that they or their spouse will get the care they need—in a nursing home or at home—without burning through the family’s savings.

This piece of the estate planning puzzle—preparing for illness or disability—is often missing, and it can turn the rest of the estate plan into a pile of unattached pieces.

Speak with an estate planning attorney today to make sure your estate plan does not have any missing pieces. If you have not recently reviewed your estate plan in the last three or four years, schedule a review. Changes in the law and changes in your own life may make your old estate plan out of date and may no longer achieve the goals you had in mind.

Reference: The Courier (Sep. 4, 2019) “The will is done, you’re sitting pretty—but are you?”

American Life Expectancy Has Gone Down

The good news is, people might not need to save quite as much money for retirement as before. The bad news is the reason for that statement. The life expectancy for the US is in a decline. In fact, American life expectancy has gone down for the last three years in a row.

This undesired streak marks the first time in 100 years that the life expectancy in the U.S. has declined for three or more consecutive years. American life expectancy declined for four years in a row from 1915 to 1918. To appreciate those circumstances and put our current decline into perspective, both the worldwide epidemic of Spanish Flu and World War I occurred during those four years.

The Numbers

Life expectancy is a curious beast. You will have one life expectancy at birth and a significantly different likelihood, if you live to age 25. Surviving to age 25 increases your life expectancy, and making it to middle age extends the projections even farther.

For example, a baby born in 2016 had a life expectancy of 76 years for a male and 81 for a female. Once that baby turns 25, the estimates are 89.5 years for a female and just under 87 years for a male. People who were middle-aged in 2016 had a good chance of living beyond these years. The projections in 2016 saw a decrease of six months, compared to 2015. The lowered life expectancy projections for our country are continuing.

Factors Driving the Decline in Life Expectancy

The Centers for Disease Control (CDC) suggests that, while many elements go into the calculation of life expectancy, these three issues might be responsible for some of the downward slide of the American life expectancy:

  • Increased suicide rates. Suicide in the United States has skyrocketed during the last 20 years. The suicide rate is 33 percent higher now than it was in 1999. You might attribute the increase to the Great Recession, but the most dramatic surge in numbers was in 2017, with a 3.7 percent jump. On a side note, worldwide suicide rates went down by almost 30 percent during the same time.
  • Drug overdoses. The epidemic of drug overdoses is now so massive that it is affecting national life expectancy. Within the last ten years, fatal drug overdoses increased by 72 percent. These numbers include deaths from street drugs and prescription drugs. More than 70,000 people in the U.S. died from drug overdoses in 2017. Over 47,000 of those deaths involved opioids, like heroin and prescription painkillers. Doctors today prescribe three times as many opioids as they did in 1999.
  • Liver disease. Deaths from cirrhosis and other chronic liver diseases have gone through the roof during the last decade. Genetics and the heavy consumption of alcohol get much of the blame for this phenomenon.

Many other factors contribute to life expectancy. Lifestyle choices, like nutrition and activity, can help a person live a longer, healthier life. We spend more on healthcare per person than any other country. While the life expectancy in our country has decreased, the projected lifespan is still increasing in France, Sweden, the Netherlands, and Germany, albeit at a much slower rate than before.

References:

CNBC. “US Life Expectancy has been declining. Here’s why.” (accessed November 14, 2019) https://www.cnbc.com/2019/07/09/us-life-expectancy-has-been-declining-heres-why.html

Financial Advisor. “U.S. Life Expectancy Now 6 Months Shorter.” (accessed November 14, 2019) https://www.fa-mag.com/news/u-s–life-expectancy-now-6-months-shorter-29781.html

The Dark Side of Dementia Care

You might expect the federal government to oversee and regulate assisted living facilities. However, since Medicare and Medicaid usually do not pay for stays at these facilities, there is no federal protection for the residents. When you consider how many assisted living centers now claim to offer dementia and memory care, you can see the brewing of a perfect storm. Highly vulnerable people are at the mercy of unregulated facilities. If you have a loved one in an assisted living center, you need to know about the dark side of dementia care.

People who live in nursing homes have some protections through federal legislation. The government imposes strict rules on nursing homes that receive funding from Medicare or Medicaid. Most assisted living centers are private pay, so the federal government cannot regulate them.

Some states have regulations designed to protect people in long-term care facilities. These states are discovering appalling conditions at many assisted living centers that advertise dementia care. Let’s be clear – there are wonderful facilities that provide fantastic dementia care. The problem is, a great number of for-profit facilities have sprung up quickly, without enough focus on the best interests of the residents.

The Reasons for Unacceptable Conditions at Dementia Care Facilities

The number of Americans with Alzheimer’s disease and other forms of dementia has risen dramatically over the last 20 years. Businesses all over the nation have seized on this opportunity to make a profit, by providing specialized care services. The problem is, many of these facilities do not deliver the promised level of care and security for these residents.

Long-term care can cost $5,000 to $7,000 a month or more. Most of the facility employees get paid low wages, particularly the workers who provide the lion’s share of the hands-on care of residents. To increase profits, the corporations that own and run these facilities often have high patient-to-staff ratios. In short, the centers are understaffed, and the workers are underpaid. Neither of those factors is conducive to the safe, attentive, nurturing environment that a person with dementia needs.

A Climate of Not Caring

Even when a state has regulations for assisted living centers, the punishments show little value for the well-being and lives of the elderly. For example, a 90-year-old lady with dementia lived in an assisted living facility in South Carolina. When she wandered away from the center one night, her absence went unnoticed for seven hours. By the time someone finally realized she was missing, she had already met a gory death.

An alligator in the pond next to the center killed and partially ate her. Her granddaughter was one of the first people to find the remains of the body. A year later, the state cited the facility for more than 10 violations involving patient safety, including not maintaining adequate numbers of staff and failing to perform nightly checks of residents. The state imposed a fine of $6,400.

Long-term care ombudsmen across the U.S. say that many facilities use psychotropic drugs as chemical restraints, instead of providing the quality care the residents need and for which they are paying thousands of dollars every month. The staff members often do not have training in dementia care, but even in states with a training requirement, industry experts say the regulations get ignored.

Every state makes its own regulations. Be sure to talk with an elder law attorney near you to find out how your state might differ from the general law of this article.

References:

Huffpost. “Dementia Care Is A Lucrative Business. Its Breakneck Growth Is Costing Patients’ Safety.” (accessed November 8, 2019) https://www.huffpost.com/entry/assisted-living-dementia-injuries_b_5c1d6f88e4b04aa0a171b895

How Can I Upgrade My Estate Plan?

Forbes’ recent article, “4 Ways To Improve Your Estate Plan,” suggests that since most people want to plan for a good life and a good retirement, why not plan for a good end of life, too? Here are four ways you can refine your estate plan, protect your assets and create a degree of control and certainty for your family.

  1. Beneficiary Designations. Many types of accounts go directly to heirs, without going through the probate process. This includes life insurance contracts, 401(k)s and IRAs. These accounts can be transferred through beneficiary designations. You should update and review these forms and designations every few years, especially after major life events like divorce, marriage or the birth or adoption of children or grandchildren.
  2. Life Insurance. A main objective of life insurance is to protect against the loss of income, in the event of an individual’s untimely death. The most important time to have life insurance is while you’re working and supporting a family with your income. Life insurance can provide much needed cash flow and liquidity for estates that might be subject to estate taxes or that have lots of illiquid assets, like family businesses, farms, artwork or collectibles.
  3. Consider a Trust. In some situations, creating a trust to shelter or control assets is a good idea. There are two main types of trusts: revocable and irrevocable. You can fund revocable trusts with assets and still use the assets now, without changing their income tax nature. This can be an effective way to pass on assets outside of probate and allow a trustee to manage assets for their beneficiaries. An irrevocable trust can be a way to provide protection from creditors, separate assets from the annual tax liability of the original owner and even help reduce estate taxes in some situations.
  4. Charitable Giving. With charitable giving as part of an estate plan, you can make outright gifts to charities or set up a charitable remainder annuity trust (CRAT) to provide income to a surviving spouse, with the remainder going to the charity.

Your attorney will tell you that your estate plan is unique to your situation. A big part of an estate plan is about protecting your family, making sure assets pass smoothly to your designated heirs and eliminating stress for your loved ones.

Reference: Forbes (November 6, 2019) “4 Ways To Improve Your Estate Plan”

Are You Ready for Retirement?

While retirement planning may seem daunting, it’s critical to be certain that you have enough savings set aside for your golden years.

According to the Federal Reserve, 26% of non-retirees say they have nothing saved for retirement. Zero.

CNBC’s recent article, “Make these 6 moves now to be financially prepared for retirement,” provides the steps you should take right away to start building your retirement savings.

  1. Put on your thinking cap. Picture as accurately as you can what your ideal retirement will look like—and what it will cost. Use an online retirement savings calculator to help you see if you’re on the right spending and savings path.
  2. Get a checkup. Get educated about Medicare and weigh the alternatives for long-term care, such as long-term care insurance.
  3. Be sure your estate plan is up to date. See your attorney and be sure that all your estate documents work with the laws of the state where you’re retiring. Look at any possible concerns about estate taxes. Keep beneficiary designations up to date because, regardless of what’s said in your will, beneficiaries listed on specific accounts, such as IRAs, will inherit those funds.
  4. Think of charities now. With more time on your hands, consider selecting a cause or two. You can lend a hand or make a donation.
  5. Review your portfolio. You may have your money primarily deposited in a target-date fund that keeps your investment mix of stocks, bonds, cash, and other assets appropriate for your retirement time horizon. However, it’s a good idea to make certain that your asset allocation is where you want it. Remember that portfolio growth and market shifts can change your allocation at any time, and the closer you get to actual retirement—or if you’re already there—the more conservative an allocation you’ll want to have. You should also monitor the account fees you’re paying in funds and consider lower-cost alternatives.
  6. Get professional advice. If you’re not already working with a money and tax expert, consider it.

Reference: CNBC (November 11, 2019) “Make these 6 moves now to be financially prepared for retirement”

Rethinking Nutrition Guidelines for Older Americans

The nutritional guidelines you may or may not have followed throughout your life could become obsolete as you get older. Those rules are for children, who have different needs than aging adults.  There are also myths we should bust about seniors and nutrition. Let’s start rethinking nutritional guidelines for older Americans.

It seems as if every few years, the food pyramid and other “rules of thumb” get questioned or turned upside down. If you do not want to feel as if you are riding on a yoyo and you want to feed your body what it needs, you can simplify the process and follow these general rules for older adults:

  • You should consume about a pound of protein for every pound you weigh. In other words, if you weigh 150 pounds, you should take in around 150 grams of protein every day. Seniors seldom get the protein they need. This can make them weaker and more susceptible to falls and fractures. You can eat protein bars, drink shakes, eat meat or dairy, or consume plant-based protein.
  • Fruit will give you energy and the same nutrients found in many vegetables. Eat fruit two or three times a day. Work it into other foods, like throwing berries on your bowl of cereal.
  • Speaking of cereal and related items like bread – go for the whole grains rather than highly processed white flour. You should not feel deprived, so give yourself permission for a decadent treat now and then, even if it does contain less-than-optimal ingredients.
  • You need at least 1,200 mg of calcium every day. Take care of those bones and feed your muscles. A strong person is less likely to get injured and more likely to bounce back from illness. Calcium can come from dairy products like milk, cheese, yogurt and kefir. If you prefer non-dairy options, you can drink calcium-enriched orange juice or other calcium-fortified products. Seafood, beans, tofu, leafy greens and dried fruit can provide calcium. Almonds, chia and poppy seeds, whey protein powder, rhubarb and figs are additional options for getting your calcium.
  • Leafy greens high in antioxidants are your friend. Shoot for two to three cups a day – that is the raw amount. When they cook down, the volume is much less. You hate kale? No problem. Find greens you enjoy. Experiment with different cooking methods. You could throw raw greens into the blender with fruit and protein powder for a yummy shake that ticks off several boxes.

Myths About Seniors and Nutrition

There is a great deal of misinformation about the nutritional needs of older adults. For example, while you might need fewer calories than you did when you were chasing toddlers around the house, you need more of some nutrients, like calcium and vitamins D and B12.

Nutrition is still important, even as you age. You should not skip meals, even if you do not have a hearty appetite. You should make sure that you drink plenty of water throughout the day. Dehydration is common among aging adults, and it can be extremely dangerous.

You might think that in your golden years, you have earned the right to eat whatever you want, but doing so can give you a lower quality of life in those precious years. Your diet will affect your physical and mental health. Popping a multivitamin will not do the trick by itself. If you want to stay healthy, alert and active, continue to make healthy eating a priority.

References:

Huffpost. “Debunked! 7 Common Senior Nutrition Myths.” (accessed November 8, 2019) https://www.huffpost.com/entry/common-senior-nutrition-myths_b_12392370

Healthline. “Top 15 Calcium-Rich Foods (Many Are Non-Dairy.” (accessed November 14, 2019) https://www.healthline.com/nutrition/15-calcium-rich-foods

For more information and other tips for seniors, click here.

 

What Worries Retirees the Most?

Retirees don’t want to run out of money. However, homeowners over 62 who have considerable equity in their homes may want to look at a strategy that can minimize their money anxiety. A reverse mortgage will let them tap into home equity, by providing funds to keep them financially stable. Could the reverse mortgage payments take a bite out of their Social Security or Medicare benefits?

Motley Fool’s recent article asks, “Can a Reverse Mortgage Impact Your Social Security or Medicare Benefits?” The article explains that reverse mortgages, also called home equity conversion mortgages (HECM), were created in 1980 to help seniors stay solvent, while remaining in their homes.

You know that in a regular mortgage, you pay the bank monthly installments. However, with a reverse mortgage, the bank pays you. You take out money against the equity in your home, and the loan doesn’t come due until you sell the home, move out of it, or die. The amount you can get is based on a formula that takes into account your age, the equity in your home, its market value and the interest rate you’ll be paying. You can get your reverse mortgage funds as a lump sum, a monthly payment, or a line of credit.

There are some drawbacks to a reverse mortgage. This type of loan can have big fees, including origination fees, closing costs (similar to a regular mortgage) and mortgage insurance premiums.  These fees can usually be rolled into the loan. It will, however, increase the amount the bank is entitled to receive once the loan ends.

A reverse mortgage isn’t for you, if you want to leave your home to your family. Perhaps they can pay off the balance of your HECM once you die or move out, but that could be costly. If you want to sell it (perhaps to simplify the splitting up of that inheritance), the share your heirs will receive from the proceeds may not be as much as you’d anticipated. If you’re having a hard time keeping up with the day-to-day costs of running the house, a reverse mortgage may not be the best option. However, if you’re just looking to add to your retirement income for peace of mind, it’s a decent financial planning tool to consider.

The good news is that it has no impact on your Social Security benefits, because the program is not means-tested. Therefore, the amount of income you have won’t affect your monthly benefit when you file. As a result, you don’t need to take Social Security into account when you’re thinking about this type of loan.

Likewise, Medicare is a non-means-tested program. However, a reverse mortgage can have an impact on Medicaid and Supplemental Security Income (SSI) benefits, because those are based on your current financial assets. If you’re receiving either of those, talk to an elder law attorney or estate planning attorney to discuss how a reverse mortgage might have an effect on your specific circumstances.

Reference: Motley Fool (November 1, 2019) “Can a Reverse Mortgage Impact Your Social Security or Medicare Benefits?”

How Does Traveling While on Medicare Work?

CNBC’s recent article, “Planning to travel while on Medicare? Make sure you have coverage at your destination” explains that basic Medicare—which includes Part A (hospital coverage) and Part B (outpatient care)—typically doesn’t cover any medical costs outside of the U.S. and its territories. There are a few Medicare Advantage Plans that cover emergency services overseas, as well as some Medigap plans that also offer protection.

If you’re on Medicare, your coverage away from home depends partly on your destination and if you’re on basic Medicare or receive your benefits through an Advantage Plan. This also can depend on whether the health care you get is routine or due to an emergency.

Travel medical insurance can be the solution to gaps in coverage, but it’s good to first determine whether you need it. Remember that original Medicare consists of Part A and Part B. Retirees who opt to stay with just this coverage—instead of going with an Advantage Plan—typically pair their coverage with a stand-alone prescription-drug plan (Part D). If you fit in this situation, your coverage while traveling in the U.S. and its territories is fairly simple. You can go to any physician or hospital that accepts Medicare, regardless of the type of visit.

However, when you journey beyond U.S. borders, things get more complex.

Generally, Medicare doesn’t provide any coverage when you’re not in the U.S, with a couple of exceptions. These include if you’re on a ship within the territorial waters adjoining the country within six hours of a U.S. port or you’re traveling from state to state but the closest hospital to treat you is in a foreign country. As an example, think a trip to Alaska via Canada from the 48 contiguous states.

Roughly a third of retirees on original Medicare also buy supplemental coverage through a Medigap policy (but you can’t pair Medigap with an Advantage Plan). Those policies, which are standardized in every state, vary in price and offer coverage for the cost-sharing parts of Medicare, like copays and co-insurance. There are some Medigap policies—Plans C, D, F, G, M and N—that offer coverage for travel. You pay a $250 annual deductible and then 20% of costs up to a lifetime maximum of $50,000. However, that may not go very far, depending on the type of medical services you need.

There’s also no overseas coverage through a Part D prescription drug plan, and Medigap policies don’t cover any costs related to Part D, whether you’re in the U.S. or not. For seniors who get their Medicare benefits—Parts A, B and typically D—through an Advantage Plan, it’s a good idea to review your coverage, even if you’re not leaving the U.S. any time soon. These plans must cover your emergency care anywhere in the U.S., but you may have to pay for routine care outside of their service area or you’ll pay more.

Some Advantage Plans may also have coverage for emergencies overseas, so review your policy. Whether you have an Advantage Plan or original Medicare, travel medical insurance might be a good move if you think your existing coverage isn’t enough. The options are priced based on your age, the length of the coverage and the amount. In addition to providing coverage for necessary health services, a policy usually includes coverage for non-medical required evacuation, lost luggage and dental care required due to an injury.

There’s coverage for a single trip of a couple weeks or several months, or you can buy a multi-trip policy, which could cover a longer time period.

It’s also important to know if your policy covers pre-existing conditions, since some don’t. You should also be aware that some Advantage Plans might disenroll you, if you stay outside of their service area for a certain time, usually six months. In that situation, you’d be switched to original Medicare. If you are disenrolled, you’d have to wait for a special enrollment period to get another Advantage Plan.

Reference: CNBC (July 14, 2019) “Planning to travel while on Medicare? Make sure you have coverage at your destination”

What’s Better, A Living Trust or a Will?

Everyone knows what a last will and testament is. However, a will is not always the best way to distribute your assets, explains the Times Herald-Record in the article “Living trusts are better choice than wills.” Most people think that by having a will alone, they will make it clear who they want to receive their assets when they die. However, wills are used by the court in a proceeding called “probate,” if the only estate plan you have is a will. The court proceeding is to establish that the will is valid. Depending upon where you live, probate can take a year before assets are distributed to beneficiaries.

Certain family members must receive notifications, when a will is submitted to probate. Some people will receive notices, even if they are not mentioned in the will. This can lead to all kinds of awkward situations, especially from estranged or unknown relatives. The person who is the executor of the will is required to locate these relatives, and until they are found and notified, the probate process comes to a standstill.

There are instances where a judge will allow a legal notice to be published in a local newspaper, after valid attempts to find relatives aren’t successful. If there is a disabled beneficiary, a minor beneficiary, a relative or beneficiary who can’t be located, or a relative who has been incarcerated, the judge often appoints lawyers to represent these parties’ interests and the estate pays for the attorney’s fees.

Depending on the situation, the executor may be required to furnish a family tree, or a friend of the decedent must sign an affidavit attesting that the person never had any children.

Thinking of disinheriting a child? Anyone who is disinherited in a will, receives a notice about that and is legally permitted to contest the will. That can lead to years of expensive litigation, including discovery demands, depositions, motions and possibly a trial. Like most litigation, will contests usually end in a settlement. The disinherited relative often gets a share of the inheritance, even when the decedent didn’t want them to get anything.

For many families, a living trust is a better alternative. They also serve as disability planning, naming people who will manage the assets of the trust, in case of incapacity. They are private documents, so their information does not become public knowledge, like the details of a will.

A qualified estate planning attorney will help you determine what estate planning tools will work best to achieve your goals, while maintaining your privacy and ensuring that assets pass to heirs in a discrete manner.

Reference: Times Herald-Record (Oct. 26, 2019) “Living trusts are better choice than wills”