Moving an aging parent or loved one into a nursing home can be a difficult and stressful time. You’re likely anxious to get mom or dad finally settled. Before you get ready to sign those admissions papers, though, watch out for mandatory nursing home arbitration clauses hidden within all the fine print. Otherwise, you may not even realize it’s there and sign away your right to take the nursing home to court in the event something tragic happens. [Read more…]
How to Choose the Best Medicare Part D Drug Plan
Choosing the best drug plan under Medicare Part D isn’t always easy. Some people just pick the plan with the lowest premium, but that Medicare Part D plan might not be the best value for you, depending on your needs.
The real cost of a Medicare Part D plan depends not only on the premium, but also on the availability of the drugs you need, your additional out-of-pocket costs, and how convenient it is to obtain your medications. [Read more…]
5 Things to Discuss Before Retirement
You may have a vision for your retirement, but does your spouse share that vision?
A recent study by Fidelity Investments found that many couples are not in accord about retirement. For example, one-third of couples approaching retirement disagree about or don’t know where they are going to live after they retire, and 62 percent don’t agree on their expected retirement ages. [Read more…]
Choose Your Medicare Doctor Carefully
If you have original Medicare, then choosing which doctor you visit can make a big difference in how much you have to pay.
Under Medicare Part B, which pays for doctor visits, once your annual deductible is met, Medicare pays 80 percent of what it considers a “reasonable charge” for the item or service. You’re responsible for the other 20 percent. [Read more…]
What to do before signing a nursing home agreement
A nursing home agreement is a binding contract that typically involves a large amount of money. Just as with a real estate contract, it’s wise to have an attorney review the agreement before you sign it, so you can understand exactly what your rights and responsibilities will be. [Read more…]
4 Steps to Get Your Online Accounts in Order
Have you given any thought as to what would happen to your internet presence after you pass away? With a vast majority of adults now using online services such as email and social networking sites on a regular basis, digital estate planning is becoming increasingly important. Without a plan in place, your family may not be aware of the extent of your digital assets and may not be able to access your online accounts after you’re gone.
What is a Digital Asset?
Usually when we discuss assets, we think of things that exist in solid form and have tangible value. However, in this digital age, that definition isn’t broad enough. Our digital assets can include things like digital music and books we’ve purchased, as well as artwork we might have created online. Also, any account you create on a content-sharing site like Facebook or Picasa can be considered an asset, itself.
Unfortunately, the law in this area has yet to catch up with the modern digital age. Currently, only five states have laws regulating access to a deceased person’s online accounts. Though Massachusetts is working on legislation, it has yet to enact a law.
Because of privacy concerns, online companies like Facebook and Twitter refuse to grant surviving family members access to their members’ accounts. However, some companies are trying to address this growing issue. For example, Google created the “Inactive Account Manager,” which allows users to choose what will happen to their Gmail messages or other data if their accounts become inactive.
With the state of the law uncertain, it is important to revise your estate plan to ensure that your digital assets are disposed of according to your wishes. The government now recommends that people create a social media will.
Here are some steps you can take to get your digital affairs in order.
- Inventory your digital assets: determine what digital content exists and where it is located
- Decide what should happen to each digital asset or account after you’re gone
- Designate a digital personal representative to dispose of your online assets and accounts according to your wishes
- Create a separate document containing information on how to access online accounts, including usernames and passwords (since a will is a public document, it is best not to write this information in your will)
There are also a number of websites that have sprung up recently that can help you keep track of your online data and release it to those you designate after you pass away. Some include Legacylocker.com, Assetlock.net, and Deathswitch.com.
If you have not yet made provisions for what will happen to your online presence after you’re gone, contact Attorney Kristina Vickstrom at 508-757-3800. We will review your digital assets and help you incorporate them into a comprehensive estate plan.
Retirement Home Fees and Tax Deductions
Here’s some good news for people who live in – or are thinking of entering – a “continuing care retirement community.” These are communities for older people that provide an entire continuum of care, from independent living to nursing home, so that residents can “age in place” and not have to move elsewhere if their faculties start to diminish. These communities are an appealing option, but they can be very expensive. The good news is that there is a tax deduction available that could help defray the costs.
The tax break stems from the fact that if your medical expenses are more than 7.5 percent of your adjusted gross income (or 10 percent if you’re under age 65), you may be able to make a tax deduction for some health care costs.
Because continuing-care communities provide a full range of health services, when you enter a long-term contract with one, the IRS considers that part of your fee is a prepayment of future health care expenses. Therefore, it’s possible that you can make a tax deduction of at least part of your entrance fee and your monthly fees.
The key is that it doesn’t matter how much health care you actually receive in a given year. The percentage of your fees that is considered a prepayment of health care expenses depends on the overall, aggregate percentage of the community’s expenses that goes toward health care. This percentage varies from community to community, but is often in the 30 to 40 percent range. (Your community should be able to provide you with its exact figure.)
The deduction generally works with regard to the entrance fee only if the fee is non-refundable. However, if the entrance fee is only partially non-refundable, you might be able to take a deduction based on the non-refundable portion.
You should also know that if children or other family members help a resident to pay the entrance fee or monthly expenses, they might also be eligible for the tax break.
When you’re ready to discuss your next step in elder residence, contact Attorney Kristina Vickstrom at 508-757-3800.
Maximize Social Security Benefits
Applying for Social Security can seem easy, but there are actually a great many options and choices which one works best for you requires a lot of strategizing.
For instance, the longer you wait to apply for Social Security, the higher the monthly benefit you’ll receive.
Depending on what year you were born, Social Security calculates what it considers your “full” retirement age. If you claim benefits be- fore that age, Social Security penalizes you by reducing your benefit. If you claim benefits after that age, Social Security rewards you with “delayed retirement credits” and a significantly larger benefit.
So you’ll need to decide if it makes sense to apply sooner, and receive a smaller monthly check for the rest of your life, or wait and apply later, when you’ll be eligible for a larger amount.
If you’re married, things get much more complicated. That’s be- cause spouses can choose to receive benefits based on their own work history or based on their spouse’s work history, or both at different times. Plus, spouses usually are of slightly different ages, so they reach “full” retirement age at different points.
Here are two popular strategies that spouses sometimes use to maximize their payments:
1. Social Security Option: Free spousal benefits.
If you’ve been married for at least 10 years, you’ve reached full retirement age, and your spouse has applied for benefits, you’re entitled to collect a “free spousal” benefit equal to 50% of the amount your spouse receives. You can collect this amount without applying for your own benefit, which means that you can build up “delayed retirement credits.” At some point, you can switch from the free spousal benefit to your own benefit, at which time your monthly amount will be considerably larger than it would have been if you’d applied for your own benefit earlier.
Example: Bob and Mary have both reached their full retirement age of 66. Bob files for his monthly benefit of $2,000. Mary could file for her own monthly benefit of $900. Instead, she claims “free spousal” benefits of $1,000/month (half of Bob’s benefit). She builds up delayed retirement credits, and when she finally applies for her own ben- efit at age 70, she could receive hundreds of dollars extra per month for the rest of her life.
2. Social Security Option: File and suspend
You’re eligible for free spousal benefits only if your spouse has applied for his or her own benefits. But what if your spouse doesn’t want to apply for benefits now – because he or she wants to keep working and building up his or her own delayed retirement credits?
The solution is called “file and suspend.” Your spouse files for benefits now, but “suspends” them until some point in the future. The result is that your spouse continues to build up delayed retirement credits, but he or she has “filed,” which means that you can now receive free spousal benefits.
Example: Bill and Sue have both reached their full retirement age of 66. If they applied for benefits now, Sue would get $2,200/month, and Bill would get $800. Sue wants to keep working. So Sue applies for benefits now and immediately suspends them. Bill can then receive free spousal benefits of $1,100/month, and both spouses can build up delayed retirement credits until they eventually apply for their own benefits.
While it may sound complicated to file for one spouse’s benefits, apply for free spousal benefits for the other spouse, and then suspend the first spouse’s benefits, it can be done in one visit to your Social Security office.
Here’s a wrinkle, though: If you apply for free spousal benefits before you reach your own full retirement age, Social Security will give you those benefits or benefits based on your own work record, whichever is more. And if you receive benefits based on your own work record, you can’t continue to build up delayed retirement credits.
So this strategy works best if (1) you wait until full retirement age, or (2) your free spousal benefits are larger than those based on your own work history.
As you can see, choosing the best way to apply for Social Security can be very complicated. That’s why it’s smart to talk to an attorney who can advise you on the best possible strategy for your situation. Contact Attorney Kristina Vickstrom at 508-757-3800 to set up a consultation.
Five Things to Discuss With Your Spouse to Develop a Retirement Plan
You may have a vision for your retirement plan, but does your spouse share that vision?
A recent study by Fidelity Investments shows that many couples are not in accord about their retirement plan. For example, one-third of couples approaching retirement disagree about or don’t know where they are going to live after they retire, and 62 percent don’t agree on their expected retirement ages.
Here are some important things to discuss with your spouse as you get ready retire and develop a retirement plan:
1. When to stop working. Many factors go into a decision about when to retire, including job enjoyment and financial needs. But you’ll also want to include in your retirement plan how to maximize your Social Security benefits. There are a number of different strategies for when each spouse should file for various types of benefits, and couples who do it wrong can leave a lot of money on the table.
2. Finances. Both spouses need to understand their financial situation to develop a retirement plan. The survey found that very often, one spouse is much less involved in planning retirement finances than the other, and might not be ready to manage financial affairs should the need arise.
3. Lifestyle. Do you want to travel? Volunteer? Or relax on a beach somewhere? It’s important to have a conversation about your hopes and dreams for retirement. You can start by creating individual wish lists and then comparing them when developing your retirement plan.
4. Health care. Make sure you and your spouse have adequate health care coverage, either from Medicare or an employer-based plan. You’ll also need to understand the rules regarding Medicare coverage and when to sign up for it.
5. Long-term care. Unfortunately, one or both spouses will likely need some type of long-term care at some point. There are things you can do to make it easier on yourself if the need arises. Talk to your elder law attorney about putting a plan together – doing it early will save lots of headaches and expense later.
Hopefully your respective visions for your post-career life are similar. When you’ve taken these steps, it’s now time to put your dream plans in motion. To ensure that your long-term care plans for retirement are met, it’s vital that you speak with a qualified elder law and estate planning attorney so your wishes are always met.
Contact us when you are ready to make your retirement plan a reality.