Are You or a Senior You Know Eligible For Benefits?

This article was published in our monthly Elderlaw News E-Newsletter, but thought it was so important it was worth pointing out again! this information could be useful to our clients and their families.  

"How to Track Down Financial Assistance Programs for Seniors," was posted on NBC's Savvy Senior page  

http://www.savvysenior.org/article_20120430.htm?type=quicklink.

The article suggests ways you can take advantage of over $20 billion in aid that millions of seniors are missing out on "simply because they aren't aware or savvy in navigating these helpful assistance programs." The first step this article suggests in identifying possible benefit programs available to you is to complete a free and confidential easy, 15-minute, on-line benefits check questionnaire at benefitscheckup.org. This on-line questionnaire will ask about your basic information, expenses, income, and assets. After completion, the service will provide you with a detailed report advising you of programs you may be eligible for from over 2,000 federal, state, and private benefit programs nation-wide and details on how to apply for each individual program. These programs could financially assist you in prescription drug costs, health care, utilities, and other basic needs. Visit the article for more information.

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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.

Forbes Notes the 7 Major Errors in Estate Planning

 Errors in Estate Planning

This article from our monthly Elderlaw News E-Newsletter about errors in Estate Planning talked about the "7 Major Errors in Estate Planning." The article was posted by Forbes and can be accessed at http://forbes.com/sites/robclarfeld/2012/04/25/7-major-errors-in-estate-planning/?typ. We like to know that other planners experience the same issues, and sometimes to hear it from someone else helps you to "hear" it!

This article addresses the benefits in having an estate plan, the risks associated with not having an estate plan, and common errors within those plans. The article also stresses the importance that "Estate Planning is not a Do It Yourself (DIY) task" and "relying on discounted, on-line estate planning documents is not only going to leave you uninformed and unadvised, but you also take the risk for inadequancies to be discovered in those documents when examined post-mortem."

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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.

Obamacare Contains Several New Taxes That Could Affect You

We would like to pass along this article found in a monthly e-newsletter we receive. The newsletter is published by Kahn, Litwin,Renza & Co., Ltd. (KLR). Their firm of certified public accountants is located locally at 97 John Clarke Road,Middletown, RI 02842 and can be reached at 888-KLR-8557.

KLR is one of New England’s premier accounting and business consulting firms. With 165 team members and offices in Boston, Newport, Providence and Waltham, KLR provides a wide range of services to both individuals and businesses.

Obamacare Contains Several New Taxes That Could AffectYou

byWilliam Morgan, J.D., LL.M.

July 23, 2012

Afterthe Supreme Court ruled to uphold the Patient Protection and Affordable CareAct of 2010 (“ACA”) as constitutional, the focus now turns to what that meansfor everyone. This article summarizes the effects of ACA’s tax provisions onindividuals and businesses in the near future. The ACA tax changes, coupled withthe expiration of the Bush-era tax rates at the end of 2012, increase rates forupper-income individuals in 2013 and beyond. Here is a summary of the ACA’s taxchanges that will be implemented, now that the Supreme Court ruled the ACA isconstitutional.

For Individuals: Starting in 2013

For2013, the ACA introduces two (2) different Medicare taxes that increase taxesfor higher-income individuals.

• New 0.9% Medicare Surtax - First, for joint filers with wages above $250,000 and single filers whose wages exceed $200,000 there will be an additional Medicare tax of 0.9% on the excess wages exceeding $250,000 joint/$200,000 single filer thresholds. The levy also applies to individuals with self-employment income above the thresholds.
• New 3.8% Medicare Surtax- Second, and for the first time ever, a Medicare surtax of 3.8% will apply to investment income. This 3.8% tax will apply to either (i) unearned income, or (ii) the amount by which adjusted gross income exceeds the $250,000 (joint filer)/$200,000 (single filer) thresholds, whichever is less. What is unearned income? The ACA defines it as interest, dividends, capital gains, annuities, royalties and passive income from rents and businesses where you don’t actively participate. Unearned income does not include tax-exempt interest, withdrawals from retirement plans, life-insurance proceeds payable at death, veterans’ benefits and income from businesses where you do actively participate, such as S corporations or partnerships. The 3.8% tax doesn’t affect someone without investment income. If your entire income is from investments, it doesn’t apply either, as long as your total investment income is under the $250,000/$200,000 thresholds.
• Flexible Spending Account Contributions Capped at $2,500 - Beginning in 2013, the ACA limits the amount you can set aside pre-tax to pay for medical expenses to $2,500. So for those who have been setting aside more than $2,500 for medical expenses, you must reduce that to $2,500. This results in more of your income being subject to income taxes.
• Raised Threshold to Deduct Unreimbursed Medical Expenses- In 2013 the threshold to deduct unreimbursed medical expenses will raise from 7.5% to 10% of adjusted gross income. So if your adjusted gross income is $100,000, you will only be able to deduct medical expenses over $10,000, where before you could deduct expenses over $7,500.

For Businesses: Starting in 2013

• Tax Credits for Small Businesses - The ACA also has a small businesses tax credit, which is effective immediately. This credit is targeted to help small businesses that employ 25 people or less with average incomes of $50,000 or less. For tax years 2010 to 2013, the maximum credit is 35%, as long as the employer contributes at least 50% of the total health insurance premium or 50% of a benchmark premium. Starting in 2014, a maximum credit of 50% is available for two years to employers who buy health insurance coverage through a state exchange and contribute at least 50% of the total premium.
• Medicare Part D Deduction- Starting in 2013, the ACA eliminates, in coordination with Medicare Part D, the tax deduction for employer-provided prescription drug coverage.
• Medical Device Excise Tax - Beginning in 2013, the ACA imposes a 2.5% tax on the sale of certain medical devices, payable by the device’s manufacturer, producer or importer.

ForIndividuals: Starting in 2014 and Beyond

• Individual Mandate- Effective in 2014, most U.S. citizens and legal residents failing to maintain minimum health coverage on themselves and their dependents will face a tax penalty. The basic penalty for an individual is $95 in 2014, $325 in 2015, and $695 in 2016 and later years, with some exceptions for the poor and certain others.

ForBusinesses: Starting in 2014 and Beyond

• Employer Mandate- The ACA imposes tax penalties on certain employers that don’t provide their employees health coverage starting in 2014. Employers with 50 or more full-time-equivalent workers who do not offer coverage and have at least one full-time employee who receives a premium tax credit are subject to an annual fee of $2,000 per full time employee (not including the first 30 FTEs).
• Tax on “Cadillac” Plans- Starting in 2018, there will be a 40% nonrefundable excise tax on ‘Cadillac’ plans, levied on plans with annual premiums in excess of $10,200 for individual coverage and $27,500 for family coverage (excluding stand-alone dental and vision plans). The thresholds are higher ($11,850 and $30,950, respectively) for retirees and employees in certain high-risk professions.

KLR’s tax professionals have specialized training and experience in the Boston market place in all matters of Federal, State and Local Tax Issues. They have expertise in tax strategies for individuals and families, estate gift & trust services, voluntarydisclosure issues, transfer pricing, M&A assistance, cost segregationstudies and research & development tax credits.

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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.

Medicaid Protection of Assets by Funeral Preplanning

Medicaid Protection of Assets by Funeral Preplanning

It is common knowledge that one acceptable use of funds by a person seeking to qualify for Medicaid benefits is to prepay funeral expenses. In many cases, elders go to their funeral director and pay for the expenses with cash assets or they assign life insurance to the extent necessary.

Another more flexible method is to fund an irrevocable “funeral trust”. Rhode Island and Massachusetts law allow each person to fund an irrevocable “funeral trust,” with up to $15,000. (CT law only allows $5900). Funding for this can be from the cash value of an existing life policy (a 1035 tax free exchange), or in cash.

The advantage of a funeral trust over a pre-paid funeral is the flexibility of using any funeral home or burial service in any state, with the safety of the funds being in a guaranteed life insurance policy.

The fund is exempt from Medicaid and Supplemental Security Income (SSI) “spend down” requirements as soon as it is funded. Clearly, the trust funds can be used for all usual expenses of a funeral and other events relating to the funeral. It can also be used for additional expenses such as a permanent cemetery monument, travel expenses for family members, outstanding debts or obligations, various medical and professional fees and a post-funeral gathering. There is no “extra” cost for utilizing a financial adviser to assist you in setting up the irrevocable funeral trust. The adviser will be compensated by the company holding the trust.

One of the important aspects of the trust is that it is irrevocable which means that no person (even the grantor) can revoke the trust and gain access to the funds. Often we see situations where a person plans their estate plan but it is undone due to use of a Durable Power of Attorney or by the trustees of a revocable trust. This form of funeral planning secures the wishes of the grantor.

Special thanks to Robin of ROBIN G. SMITH CONSULTING for her contribution to this article.
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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.

A Medicare Trap

A Medicare Trap

My associate attorney Kristy Garside and I presented material on Social Security, dividing pensions, Social Security Disability, Medicaid and Medicare at a Rhode Island Bar Association seminar last week. The seminar was delivered to about 50 attorneys and was titled “When Your Older Clients Divorce.” The Medicare portion of our presentation utilized written material by Robin G. Smith of Robin G. Smith Consulting, an elder-advice professional. We emphasized a “Medicare Trap” from her material.

Medicare Part B covers doctor visits, lab tests, diagnostic imaging, and outpatient procedures, and can be thought of simply as a classic 80/20 health insurance plan. Neither Part A or part B covers prescription drugs. Having BOTH Parts A and B is necessary to get either Supplemental insurance (Medigap), or to enroll in a Medicare Advantage plan (Part C). The problem “trap” is regarding those over 65 who are still working and covered by their employers insurance (and their spouses): The worker and spouse can elect to decline Part B (thus avoiding paying the premium) without incurring a late sign-up penalty. However, if the employee retires or otherwise loses employer coverage, he and his over 65 year old spouse MUST sign up for Medicare Part B within 63 days of leaving the job, even if the employer had offered COBRA benefits. Failure to do so will incur a Medicare penalty for late sign-up that is both financially onerous and permanent. Medicare counts the time from the day the employee left the job, and does not take COBRA payments into account at all. In addition, the spouse might not be able to sign up at all until long after the date the coverage ended. When a couple divorces, the divorce settlement often requires coverage until the non- working ex-spouse reaches age 65. The ex- spouse must sign up for Part B to avoid a Medicare penalty. If the divorcing parties are over 65, and have been covered by the other’s employer’s insurance, the spouse must sign up for Part B upon the divorce.

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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.

Surviving Spouse May Be Responsible for Nursing Home Bills

Mass. Court Rules Wife Is Responsible For Husband's Nursing Home Care

Spouses need to be very careful or they could end up legally responsible for the cost of their husband’s of wife's nursing home care, as a recent Massachusetts court decision demonstrates.

When Milfranciu Jode entered a nursing home, his wife applied for Medicaid on his behalf.  Mr. Jode was rejected three times due to the failure to provide backup documentation, and he died leaving the nursing home unpaid.

After Mr. Jode's death, the nursing home sued Mrs. Jode, arguing that she was legally responsible for the cost of her husband's care under something called the "doctrine of necessaries." This means that a spouse is responsible for debts incurred by the other spouse for "necessaries." The law doesn't define what constitutes a "necessary," but in the Jode case the Massachusetts Superior Court ruled that the definition of necessaries included the care provided by the nursing home.  Emerson Village, LLC. v. Jode (Mass. Sup. Ct., Middlesex, No. 12-CV-1736-F, Dec. 15, 2012)

Many other states have similar laws to the one in Massachusetts making one spouse responsible for the care of the other spouse. If your spouse is in a nursing home, contact your elder law attorney right away to find out the best course of action to prevent any surprises when it comes to the bill.

Read more HERE

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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.

When Is Bankruptcy Better Than Paying Off Your Debts?

Bankruptcy May Be the Better Choice for Debt-Laden Seniors

The conventional wisdom is that you should always pay off your debts, but that may not always make the most financial sense for seniors. In some cases, filing for bankruptcy may be the better choice.

Many seniors are struggling with large credit card bills and monthly debt that exceeds their income. Bankruptcy may make sense for these individuals – especially if they have already paid off their mortgages – because they will be less affected by poor credit ratings. Filing for bankruptcy can also eliminate a senior's existing medical bills. Another benefit is that most retirement accounts are exempt, which means the funds do not have to be sold during bankruptcy proceedings.

There are two types of bankruptcy for individuals: Chapter 7 and Chapter 13. With Chapter 7 bankruptcy, you can discharge all of your debts, but you must sell some of your property to pay your creditors. However, many assets (like the equity in your house) are protected from bankruptcy, so in reality you may not have to surrender any property. In order to file Chapter 7 bankruptcy, you need to pass a means test, and if your income is too high, you may not qualify (Social Security benefits do not count toward income). Chapter 13 bankruptcy requires you to pay back your debt over time, but you are not required to sell any property. To qualify, you need to be able to show that you have the ability to slowly discharge your debt.

Bankruptcy is not the right choice for everyone, however, and seniors should consult their attorney before making any decisions. For example, while bankruptcy gets rid of existing medical debt, it doesn't do anything about ongoing debt. Many people feel morally obligated to pay off debt, and walking away from debt means higher fees and interest rates for others, so the decision to file for bankruptcy should not be taken lightly.

Read more HERE


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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.