John Lane Law

Make a Plan to Make a Plan for Retirement - John M. Lane Law, PLLC

“You thought you’d planned for everything, but these things might still sneak up on you in retirement.”

Everyone’s busy with families, careers, home-buying, and then one day, college for the kids. It shouldn’t be too surprising that retirement planning takes a back seat, says The Washington Post in a recent article, “It takes a lot of work to be ready to retire. Don’t forget these things.”

While there are some who don’t begin considering retirement until they reach their 50s, it’s not too late to get started on your retirement planning. But a late start may mean you may have to face some unfortunate realities.

Retirement can be overwhelming. Let’s look at those things some forget to plan or didn’t even realize they needed to plan. First, some people aren’t prepared emotionally to retire. You need to determine how you will spend your time and what it might cost.

Medicare. You must enroll in Medicare at 65, but if you delay until 66, you’ll have to take the initiative because it’s not automatic. If you’re late, there’s a 10% penalty for every 12 months you snooze. If you wait 24 months, there’s a 20% permanent penalty because you forgot to re-enroll. Enrollment is three months before to three months after your 65^th birthday. If you delay taking Social Security, you’ll have to enroll in Medicare on your own.

Health-Care Costs. Studies show that health care will cost about $250,000 for a couple in retirement, or about $5,000 per year per person. People frequently underestimate health-care costs in retirement—they forget prescription drug and long-term care costs—which can use up a lot of money. The same is true of dental expenses, and Medicare doesn’t cover dental.

Major Purchases and Repairs. Some fail to account for major purchases, such as home repair and upkeep. Many retirees are caught short on the occasional large purchase, so examine your budget annually to be sure you consider things that come up quarterly or semiannually. Remember that life events like weddings, graduations, and spoiling the grandkids can be major unanticipated costs.

Planning for a Long Life. This is very important because if you will live to age 90, will your money last? There are many things to consider when you think about 25 years in retirement, like long-term care.

Estate Planning. Estate plans aren’t just for the wealthy, and if you’re not pro-active, all those decisions will be made for you by the state. Create a will, be certain that your beneficiaries are correct and up to date, and make sure you have a power of attorney and health-care directive.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The Washington Post (October 15, 2016) “It takes a lot of work to be ready to retire. Don’t forget these things.”

Before You Panic and Sell the Family Home, Talk with an Elder Law Attorney - John M. Lane Law, PLLC

“Studies show that 55 percent of Americans die without a will or an estate plan, according to the American Bar Association.”

Let’s look at a difficult but very common scenario where a husband or wife has an immediate need for nursing home care. Unfortunately, the couple is financially unprepared and clueless regarding their options on long-term care. Many times a couple in this situation will think they have no choice but to sell their home to pay for that care. But before they do this, they should consult with an elder law attorney.

The Boston Globe, in its recent article, “Seniors have more options than selling their home,” 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.

A couple’s money is often tied up in their house, so to fund the long-term care, they go ahead and sell it. When they sell it to qualify for Medicaid, which will cover the cost of long-term care, they exhaust the proceeds of the sale—in addition to the rest of their money. This leaves the healthy spouse—who can still live independently—with little in the way of financial security. This outlook can potentially compromise that individual’s health as well.

Before taking any action, talk with an elder law attorney and explore the options that would best meet the family’s needs. It’s critical to plan ahead. An elder law attorney will help you plan for the future to ensure your wishes on housing and health care can be satisfied.

For example, think of a couple in their late 80s with the husband needing nursing home care right away. They own a home and have about $210,000 in the bank. An elder law attorney can help the wife stay in the family home and preserve most of the remaining assets to keep her comfortable, while helping the husband receive Medicaid benefits. An experienced elder law attorney can offer assistance at any stage of a person’s life.

Don’t panic and sell your family home—speak with an elder attorney first to save it.  Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Boston Globe (August 19, 2016) “Seniors have more options than selling their home”

Help with Complex Medicaid Planning

Estate planning frequently addresses property transfers in contemplation of death while elder law considers retirement income issues. While it is easy to consider the two issues in isolation, this is frequently a mistake. This comment briefly provides an incomplete educational overview of some common legal issues that are relevant in both the estate planning and elder law context. Consult experienced professionals in specific situations. For the ordinary person, government benefit programs are an important retirement income consideration. In broad overview, governmental programs may be divided into "means-tested" and "non-means-tested." Supplemental Security Income (SSI) and Medicaid are examples of federal means-tested programs that consider an individual's resources and income. In contrast, a number of Social Security administered programs and Medicare benefits are non-means-tested.

Recently, the Huffington Post published an article titled “Some Legal Issues at the Intersection of Elder Law and Estate Planning.” The article discusses some ethical and legal issues that are very important.

One is whether to dispose of assets through pre-need planning to qualify for means-tested government programs such as Medicaid that might pay, for example, the cost of long term nursing home care. This is very complicated, and you should work with a qualified elder law attorney.

If you want to maximize eligibility for means-tested governmental benefits, a common income reduction technique is to create a Qualified Income Trust (QIT), often called a “Miller Trust.” There are also other types of "special needs trusts" that can be created without reducing government benefits. Again, this is a highly complex area that requires help from an elder law attorney.

Remember the five-year look-back on transfers. Medicaid eligibility usually examines the transfer of assets (like gifts) to third parties that happen in the 60 months prior to the Medicaid application. To avoid this issue, you may be able to create irrevocable college saving plans and also make transfers to your spouse without penalty. A child who lived in the parent's home and cared for the parent—and delaying institutional care in a physician's opinion—may be able to get assets as a gift without a Medicaid penalty under the "two-year caretaker rule." This is also extremely complex and requires consultation with an experienced elder law attorney.

For your family and yourself, do as much elder law and estate planning as far in advance as possible.  Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Huffington Post (September 22, 2015) “Some Legal Issues at the Intersection of Elder Law and Estate Planning”

Advice for Long-Term Healthcare and Dementia Care

With its views of the Rincon Mountains and nine large, adobe-style homes, the Villas at Houghton looks more like an upscale gated neighborhood than a community of frail and cognitively impaired seniors. Each 6,100-square-foot home houses 10 people and two caregivers, all in private rooms with private bathrooms, a chef preparing daily meals and a menu of daily activities. The cost for staying in what owners from for-profit Tucson-based Innovative Senior Living call a “memory care neighborhood” starts at $52,750 per year. The Villas at Houghton is not the most expensive facility of its kind. In Tucson, high-level, long-term care for people with Alzheimer’s disease and other forms of dementia can run more than $100,000 per year. The costs are a surprise to many families who incorrectly assume that Medicare will cover the expense of out-of-home care. And while some low-income, disabled seniors will qualify to have their expenses covered by the Arizona Long Term Care System (ALTCS), many facilities, including the Villas at Houghton, don’t accept it.

The Arizona Daily Star’s article “Costs pile up fast for dementia care” points out several important items when it comes to long-term care.

Don’t count on Medicare. The median annual cost for a private room in a skilled nursing facility in Tucson last year was more than $90,896. Assisted living costs about $45,000. In a 2015 annual Cost of Care survey, results showed that Americans paid approximately $16,060 more per year in 2015 for a nursing home than they paid in 2010.

Remember that Medicare doesn’t pay for long-term care, including home care, aside from 100 days of skilled services or rehabilitative care. After that, it’s up to the family to figure out how to pay. The options include long-term care insurance, public assistance through Medicaid programs for people over 65, Veterans Aid, or private pay. On average, an American turning 65 today will incur $138,000 in future long-term services. This cost could be financed by setting aside $70,000 today.

A loved one with dementia will increase the costs for round-the-clock care and a secure place to live, with the disease lasting up to 20 years. Caregiver costs, including hospitalizations, skilled nursing facilities, home-health services, day-care services for adults and assisted living add up, and the cost is enormous. One way to ease the emotional cost is to create a plan and provide relief to your family.

When it comes to paying for care, many people incorrectly assume they have too much money to qualify for Medicaid. Talk with an elder law attorney and see whether you or your loved one qualifies because Medicaid can help pay for both in-home and out-of-home care. The individual must be medically eligible—cognitively impaired or unable to perform at least two activities of daily living on their own (like bathing and eating). Single applicants are not allowed to have resources of more than $2,000. Applicants who do have more than $2,000 should talk to an attorney about creating a burial fund, or buying a house or car, as these are all exempt.

Although the gross monthly income limit is $2,199 for an individual, sometime those with a higher income can set up a “Miller Trust” for the money above that limit. For married couples where only one partner is applying, the income limit is either $2,199 for the applicant, or an average of the two spouses, whichever is more favorable to the applicant.

It’s important to remember that Congress set a five-year look-back period on gifts. So someone who gives money and other assets to children and other family members in order to be eligible has to do this five years before they apply. An elder law attorney can help a single person with too many assets to qualify to spend down those resources on long-term care or on any legitimate expense that benefits either the applicant or the spouse, and then apply.

Long-Term Insurance. People whose incomes are too high to qualify can consider long-term insurance or self-pay. With long-term insurance, typically the buyer defines a monthly amount they’d like to get for a set number of years. For example, a couple could each choose a $2,000 benefit for five years, and they’d have access to a maximum $125,000. However, buyers may have to supplement with their own money.

The best time to buy long-term care insurance is when buyers are in their mid-50s to early 60s. If you wait, you might have a medical condition arise and fail the underwriting. For example, a policy might guarantee $5,000 per month for five years if the individual needs it. Expect the premiums to go up every five years, and note that they are not fixed like level term life. Some folks are surprised by big premium hikes and cancel the coverage. If you buy long-term care, read the policy carefully.

The good news is there are experts available to help you navigate these oftentimes difficult decisions. Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Arizona Daily Star (September 26, 2015) “Costs pile up fast for dementia care”

The Little-Known VA Long-Term Care Benefit

Here's a frightening statistic from the just-released United States of Aging survey:  Only 3% of professionals supporting people 60 and older say they are very confident older Americans will be able to afford their health care costs as they age. The survey was conducted by the National Association of Area Agencies on Aging, National Council on Aging and UnitedHealthcare.

Forbes reports in its recent article, "The VA Program That Pays for Long-Term Care for Vets," that one reason for the 3% confidence rate is the high and increasing cost of long-term care. It easy to see why that is, with the median price of a private room in a nursing home now about $91,000. That's an increase of 4% from last year.

About half of us will someday use nursing home care, and many others will need long-term care in assisted living facilities or at home.

But here's a little good news… there's a little-known Veterans Administration (VA) program that pays for some long-term care costs for vets and their families. It's called the Aid and Attendance Benefit. This benefit has been around for over 60 years and covers some expenses for in-home care, nursing homes and assisted living facilities. This benefit is available to honorably-discharged wartime veterans over age 65 and their widowed spouses who are eligible for a VA pension and require the "aid and attendance" of another person or are housebound. The VA calls this "additional pension benefits for care assistance in the home or in an assisted living community."

Aid and Attendance pays up to: $1,788 per month to a single veteran, $1,149 to a surviving spouse, $2,120 to a married veteran and $2,837 to a veteran couple. The benefit is tax-free. To qualify, the applicant must either:

• Require assistance with Activities of Daily Living (ADLs) like dressing, bathing,  and eating;
• Be bedridden;
• Be a nursing home patient due to mental or physical incapacity; or
• Have eyesight limited to a corrected 5/200 visual acuity or less in both eyes or concentric contraction of the visual field to five degrees or less

Of course there's the catch: applying for and receiving the money is a real pain in the bottom. The VA estimates it can take on average about five months for an Aid and Attendance claim to be processed after a veteran applies to a VA regional office. Even so, some applicants have been crushed with red tape and much longer waits.

The article tells the story of Frank Fassnacht, an 84-year-old former Disney projectionist now living in a Motion Picture & Television Fund home. He applied for the benefit three years ago, and still no luck. Because of the VA's high turnover rate, it's hard to find a consistent person to help you.

One other thing to note: a veteran may be turned down for the Aid and Attendance benefit if his or her assets are too great. The VA doesn't have a strict rule on how much assets one can have, but it's typically no more than $80,000 (not including your home), depending on age.

The article advises you to seek the assistance of an Elder Law attorney to apply. The rules and paperwork can be a super difficult, so a qualified attorney can really be a help. He or she can also assist you in preserving assets. Also, you should be ready to document your long-term care expenses and provide all the application materials.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Forbes (July 10, 2015) "The VA Program That Pays For Long-Term Care for Vets."

Living Longer Means Better Estate Planning - Texas Estate Planning

Living longer changes the dynamics of financial planning. Old age can be very expensive. Everyone is different and there is no way to predict the future. That is the challenge of planning for later years. Challenging to predict your future lifestyle, including where you will live, and challenging to estimate the cost of growing old. The ultimate trade-off of financial planning is whether to spend now or save for a rainy day. How do you really know what is best since the future is unknown?

It’s very useful to look forward and understand the types of medical issues that could happen down the road. Medical issues associated with aging are most apt to be the reason life gets expensive during your later years. That’s the advice from a recent article in the Oakville (ONT) Beaver titled “Living in your later years can be expensive – plan ahead.” Americans, just like our friends to the north, need to better understand how to plan for the future. This article gave some interesting perspectives on the aging process. Here are some facts:

• People are living longer and many live into their 90s.
• More than 25% of seniors living at home receive help with day-to-day living activities.
• More than 10% of seniors older than age of 80 live in a long-term care facility.
• One of the leading causes of injury to seniors is a result of a fall.

Also, the article points out that as we live longer, dementia can become a real medical reality. Research shows that dementia issues are low at age 65 but increase steadily until age 90 where they affect half of seniors. With adult children living far from their parents with both husband and wife working, there is less time available to be devoted to caring for an elderly family member.

Initially, care can be received from the healthier spouse, but that takes a toll. Also, some seniors are single, so this isn’t an option. Thus, aging seniors will be increasingly dependent on others.

An experienced estate planning and elder law attorney can help devise your financial strategy to ensure there are enough financial resources in the event you have increased medical and living expenses in your later years.

Aging is expensive. Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Oakville (ONT) Beaver (April 23, 2015) “Living in your later years can be expensive – plan ahead”

Common Senior Mistakes in Retirement Planning - Texas Estate Planning

While there is nothing that can guarantee that you will have sufficient money to cover all potential costs in retirement, there are certainly some common mistakes that you want to steer clear from to help protect your assets.

Physician’s Money Digest lists some of the most common mistakes that the authors have seen seniors make in a recent article titled “Top Mistakes Seniors Make”:

1.  Misinformation about Medicare.  Some seniors believe that once they qualify for Medicare, they are 100% covered without any gaps. Unfortunately, there may be issues, such as nursing homes and assisted living for long-term care. These are not covered under Medicare.

2.  Failing to consider mental incapacity. Many seniors don’t address how they want health care and property decisions handled in the event they are incapacitated. Remember, a will doesn’t take this scenario into account.

3.  Drawing from retirement accounts too soon. Withdrawing money from your retirement accounts too soon or too late can really affect your savings. Speak with an estate planning attorney about the retirement account rules to get the most from your assets.

4.  Mis-timing life insurance decisions. You should assess your life insurance needs and current premiums to determine what is appropriate in your circumstances.

5.  Relying on annuities. Whether an annuity is the right choice depends primarily on your specific financial situation. Conduct an in-depth assessment of the product and your overall financial plan with an estate planning attorney.

As you can see, there are many issues that need to be addressed when it comes to retirement planning. Do not go it alone. Get appropriate professional counsel.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Physician’s Money Digest (April 8, 2015) “Top Mistakes Seniors Make”

"Will you still need me? Will you still feed me? When I'm 64?"

The Beatles first released these quaint, clarinet-fueled lyrics in 1967 when the loving answer to these questions was a resounding, "Yes!" Traditional marriage vows echo this sentiment in that they presuppose a relationship span that encompasses young and old age, wellness and serious illness, wealth and poverty. However, as modern aging has come to be defined by living longer with chronic care needs, and providing long-term care has shifted to the public sector, with two thirds of long term care services paid for by Medicaid, loving spouses may be forced to answer, "No," to these questions. The future of elder care may depend on divorce.

In case you haven’t heard, long-term care needs are expensive. In 2014 the average annual cost of a semi-private room in a skilled nursing facility was $83,114! The majority (70%) of people over 65 need some level of long-term care at some point—whether that will be provided in a home, an assisted living center, or a nursing care facility, according to The Huffington Post in a recent article titled “Is Divorce the Best Option for Older Americans?”

To find a way to pay for these services, many Americans look to the Medicaid Long-Term Care benefit. This program can pay for the room and board or home health services of qualifying individuals over age 21. To be eligible, an individual must meet the age and medical necessity criteria, as well as financial criteria concerning income determined by the federal government. Medicaid will look at an individual’s assets—like their banking accounts, real property, investments, household belongings, life insurance, and one car. However, all income and assets are subject to a five-year look back period: you can’t just give away stuff to avoid it being counted as an asset for eligibility. However, if a person has financial excess, Medicaid allows him or her to "spend down" their income and assets in order to be poor enough to qualify. Doesn’t that sound a little tricky?

The original article explains that for married couples Medicaid has what are called "spousal impoverishment" rules. These rules cap the assets for a couple living together, although the rules are totally different if one spouse resides in an institution. The spouse living in the community typically is allowed to retain a larger portion of income for his or her living expenses. Medicaid will not try to recoup the costs for the long-term care from the estate of the deceased recipient until the community spouse passes away.

While all of these rules enable elderly and chronically ill individuals to access needed long-term care services, the original article argues that these rules also tacitly encourage divorce. "Medicaid Divorce" isn’t a new phenomenon. It’s been considered a legal option for avoiding the five-year look-back period for Medicaid eligibility and for avoiding the estate recovery process. Legal experts emphasize that asset protection is super-complicated, and it may be different in another state. All that said, the solution of divorce is still a hot topic, as these rules discourage couples from living together and looking after each other. A couple's combined assets are only protected if the Medicaid recipient doesn’t live with his or her spouse, so by divorcing, a couple can cohabitate and still protect the income and assets of the spouse not receiving Medicaid home health benefits.

According to the original article, a divorce could also protect the primary residence from the Medicaid Estate Recovery program: the surviving spouse is given the right to use and enjoy it even though it’s owned by someone else. The surviving spouse lives there until his or her death, then the state is able to recoup the costs of care from the estate. That means that the next generation pays for the care of their loved ones by losing a potential inheritance. A divorce could keep the real property in the name of the community spouse and protect it from recovery for Medicaid care expenses.

Aging and care are already expensive and stressful, and even the young Beatles in 1967 wondered if love now would translate into care in old age. It should.

 Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: The Huffington Post (March 16, 2015) “Is Divorce the Best Option for Older Americans?”

Elder Law Explained - Texas Estate Planning

Caring for an aging parent or helping an older adult with different tasks can raise concerns about their health, well-being and the potential legal problems that specifically impact an elder's life. Elder law refers to any legal factors that impact the lives of older men and women. "In America" discusses elder law and the way that legal standards and details are changing over time.

Elder law is a general term that describes the laws and regulations that affect older men and women. This term can relate to the proper care and guardianship of an older person who requires medical attention and can no longer function without assistance. The recent Insurance News Net article, titled “Elder Law is discussed with host James Earl Jones on "In America,” notes that the range of topics elder law addresses includes divorce among adults over 65 years old and law regarding elder abuse.

Elder law attorneys for individuals, or for their loved ones, advocate for their clients’ rights and personal goals. They handle details related to estate planning, retirement, government programs like Social Security and Medicaid, and guardianship when a senior is unable to deal with his or her own personal affairs. This also includes long-term care, nursing home issues, and end-of-life planning.

Because this is such a broad category of laws and the effects of those laws differ based on the circumstances, elder law attorneys provide services that focus on the specific goals and concerns of older men and women. The options that are available to an individual or their family will depend on the situation and the person's health. This is why it’s a good idea to speak to an experienced elder law attorney to discuss your particular situation and your objectives.

You can find information about elder law on "In America" with host James Earl Jones. This is a good introduction and can get the discussion going. However, to get concrete answers for your or your loved one’s situation, seek the help of an experienced elder law attorney.

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: Insurance News Net (March 16, 2015) “Elder Law is discussed with host James Earl Jones on "In America"'

Medicaid Changes May Mean More for Spouses

Allowing the spouse of a person in a nursing home to keep enough money to live on independently is, in many ways, a moral issue. But in a tight budget year in Connecticut, it's a fiscal issue. A proposal that would increase the minimum assets that a spouse living in the community can keep -- from $23,844 to $50,000 -- in order for his or her partner to be eligible for Medicaid nursing-home care is being backed by elder advocates, who say the increase would help seniors, especially women, remain able to live independently. But the move is being opposed by the Department of Social Services on the grounds it will shift millions in costs to the state-funded Medicaid program.

The CT Post report, in an article titled “Legislature asked to raise asset level for Medicaid spouses,”says that the bill would affect couples with assets of about $24,000 to $100,000. Right now, when a person tries to qualify for Medicaid, couples will split their assets evenly, and the nursing-home-bound spouse must spend down his or her portion to $1,600. This means if a couple has $60,000, each spouse is attributed $30,000, and the one heading to the care facility must get his or her share down to $1,600. [Note: These numbers can and do vary state by state.] This is typically accomplished by paying for initial nursing home care. Under the state’s new proposal, the community spouse would be able to keep $50,000 in assets.

If this legislation succeeds in reducing the amount of money assigned to the institutionalized spouse, he or she would become eligible for Medicaid assistance more quickly. The original article says that advocates believe that in allowing the community spouse to keep $50,000, it might help him or her stay out of poverty, off government programs, and in the couple's home.

Raising the allowance for spouses could save money in the long run: it could keep the spouses off public assistance longer by giving them some money for health or other emergencies that could impoverish them.

In all states, federal Medicaid law provides special protections for the spouses of Medicaid applicants. However, it’s the states that determine the amount of money the non-institutionalized spouse may keep (within a range). Connecticut's allowance of $23,844 is the lowest in the country. States like Massachusetts, Vermont, Maine and Illinois are much higher. The highest is reported to be $119,200.

Medicaid nursing home costs average an estimated $6,000 a month in the state, so it can be quite an expense. See how your state is handling the Medicaid spend-down, and if there are any changes on the horizon. 

Contact John M. Lane Law, PLLC to discover the Simplified Solution to your estate planning needs. Everyone has an estate, no matter how large or small, complex or simple.  For more information about how we can help you, visit our website at www.JohnLaneLaw.com.

Reference: CT Post (March 10, 2015) “Legislature asked to raise asset level for Medicaid spouses”