Are you Covered?

Here is an excerpt from our monthly newsletter from Robin G Smith Consulting. Insurance Advice and Advocacy for Seniors.

Call her at 888-363-3914 Or Email robin.g.smith@att.net.

You can contact our office as well to determine whether you could benefit from Robin’s services, or if you want to discuss similar or other elder law issues. 401-841-5700
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Many people will continue to work well past 65, or will have an illness where day to day expenses will not be cov­ered. Critical illness insurance pays a lump sum when you get sick with one of the covered illnesses, and can be pur­chased to age 69 (and kept as long as you pay the pre­mium). This insurance has become very popular as boom­ers know people who have strokes, heart attacks, or who are diagnosed with cancer, and the expenses that ensue.

One of the frustrations of clients trying to get long term care coverage, (i.e., chronic care not covered by Medicare) is that they are deemed too old and/or too sick to qualify. I now offer a Home Care Plan that pays for home care ser­vices and can be purchased at any age. It’s a membership plan, rather than insurance, and a good deal for clients who believe they or a loved one will need home care services in the near future.

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The Law Offices of Jeremy W. Howe, LTD. are ElderLaw attorneys in Rhode Island who specialize in wills and trusts, estate planning, guardianship, probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for family law issues such as divorce, child custody and visitation, support, and military family law. 

Call them today at 401-841-5700 or visit them on the web at http://www.CounselFirst.com.

TAX DEDUCTION FOR FAMILY CAREGIVER SERVICES

TAX DEDUCTION FOR FAMILY CAREGIVER SERVICES

The following Article was written by: Kim Boyer, CELA, BOYER LAW GROUP, www.elderlawnv.com and provided to our office via the Veterans Advocates Group of America monthly e-newsletter called VAGA News.
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Many times family members or friends provide care to a loved one for a fee. These family members or friends are typically unlicensed caregivers. Can the person paying for the care deduct the payments as a medical expense on their income tax return?

Medical expenses, not compensated for by insurance or otherwise, may be allowed as a deduction to the extent that the expenses exceed 7.5% of the taxpayer's adjusted gross income. Medical care can include amounts paid for "qualified long-term care services" as defined herein. The taxpayer must be certified as "chronically ill" by a licensed health care professional. The services must be provided pursuant to a plan of care prescribed by a licensed health care professional.

The U.S. Tax Court recently ruled on the issue of whether payments to unlicensed care providers were deductible. Estate of Lillian Baral v. Commissioner of Internal Revenue (July 5, 2011).

The tax court examined whether payments totaling $49,580 made by Lillian to Ms. Pzevorski and Ms. Jakubowski were deductible. Neither of them were licensed healthcare providers. Thus, the payments were not deductible as medical expenses. However, the court found that payments to them could be deducted if their services qualified as "long-term care services" as defined under the tax code.

After analyzing the tax code, the Court found that the care provided constituted "maintenance or personal care services" for a "chronically ill individual" provided pursuant to a "plan of care prescribed by a licensed health care professional." Thus, Lillian could deduct $43,273 of the payments made to the care providers (the amount paid which exceeded 7.5% of her adjusted gross income).

For Medicaid purposes the payments will be considered gratuitous when provided by a family member, unless there is a written contract. It is advisable that there be a written contract providing for reasonable compensation and specifying the nature of services to be provided.

**This article/newsletter is not intended as a substitute for VA, legal, or other professional advice. Every effort has been made to make the content of this newsletter accurate; however, neither VAGA, nor any of its founders, assume any responsibility for errors in content or damages that may occur as the result of using the information contained within this newsletter or from any associated website or e-mail links.
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The Law Offices of Jeremy W. Howe, LTD. are Elder Law Attorneys in Newport, Rhode Island who specialize in Wills and Trusts, Estate Planning, Guardianship, Probate, and Veterans Aid and Attendance Benefits.

They also are Newport Rhode Island Divorce Lawyers, Attorneys, Mediators, and Arbitrators providing services for Family Law issues such as divorce, child custody and visitation, support, and Military Family Law.

Call them today at 401-841-5700 or visit them on the web at http://www.counselfirst.com