BULLETIN: Senate Health Care Proposal Means Big Medicaid Cuts

By now just about everyone has heard at least some of the details of the Senate’s version of the American Health Care Act – the law that Republicans have been crafting in order to fulfill an eight-year-old promise to their voters to repeal and replace the Affordable Care Act, better known as Obamacare. After the house passed their version of the AHCA in May, all eyes turned to the Senate to see what legislators would craft behind closed doors. The final proposed bill, released to the public on June 22nd, looks a lot like the House version, but with some proposed differences.

Now the debate will begin in earnest. But no matter what eventually happens to this legislation, the big news to us here at AgingOptions is the impact of the AHCA on Medicaid, the federal and state program which pays for all or part of the medical needs of more than 73 million Americans, most of them the low income elderly.   This is a major story to watch, because for many of our clients, radio listeners and seminar guests, Medicaid will play a significant role in their eventual long-term care. If you have a small to medium sized estate, understanding the issues surrounding Medicaid has never been more urgent.

Since the Senate released its version of the bill, there has been a blizzard of news reports and analyses trying to make sense of its provisions and changes. This article just published on the website of The Atlantic does a good job of describing the proposed new health care law from a more liberal point of view, as indicated by its title: “The Senate Puts Medicaid on the Chopping Block.”  The bottom line, says the article, is that the Senate’s version of the AHCA “restricts and slashes Medicaid funding deeply over the next decade” – and, we would add, well beyond that time if the law passes unchanged.

We should, of course, point out the obvious: we live in politically turbulent times. It’s entirely possible that the Democrats may return to power in the House in 2018 or the Senate (or even the White House) in 2020, and if they do they would likely attempt to roll back the GOP’s changes to Obamacare. But whether or not that happens, anyone regardless of political persuasion can see that we are entering a time of great instability and unpredictability in national health care policy, and if you (like millions of other retirees and those facing retirement) are counting on Medicaid to be there for you, you may need to think again. Don’t base your future security on a dangerous illusion!

There are far too many details in this proposed law for us to discuss here, but the changes to Medicaid rules in both the Senate bill and the House bill are what really caught our attention. Some of the particulars involve the GOP’s aim to roll back the expansion of Medicaid to many who formerly had been ineligible, a provision of Obamacare that a large number of Republicans have long disliked. Many of those now covered by Medicaid are part of the group often called “the working poor,” people who are employed but unable to afford health insurance in the marketplace. The Senate bill would phase out Medicaid expansion funds more slowly than the House version, which makes the Senate version sound less harsh.  But the new law, if passed, would have immediate unintended consequences. “Seven states,” says The Atlantic, “have ‘trigger laws’ that would immediately void their Medicaid expansions with any change in federal support,” which could suddenly add millions to the ranks of the uninsured.

We are also especially concerned about the proposal in the new law that changes what is now open-ended Medicaid funding into a “block grant” to the states. This change, says The Atlantic analysis, turns Medicaid into “a per-capita cap scheme, where states receive a capped amount of funding each year per enrollee.” This shift, say analysts, “would underfund Medicaid over time, leading to a growing gap between the number of patients who would be eligible under current guidelines, and the funds available to pay for their care.” The eventual outcome would be “large-scale shortfalls in every state, which would need to be closed by reducing enrollment or benefits, and cutting capacity to respond to disasters and public-health crises.” The ones who would suffer the most would be children, seniors and the disabled.

Critics of the new proposed law call it “a massive constriction of the safety net. It will have a substantial impact on both wealth and health, shifting the benefits of public policy away from the poor and the sick, and toward the healthy and the affluent.” Whether or not you agree, as we said before, it has never been more urgent that you become well informed about the need to protect your assets and cover the costs of your future health care needs with a Safe Harbor Trust or other well-planned financial and legal tool.

The best way to begin getting the answers you need right now is to attend a free AgingOptions LifePlanning Seminar. We offer these at locations throughout the area, and because of the recent spate of headlines we expect our currently-scheduled seminars to fill up rapidly. Click here for details and online registration, or call us for assistance. Don’t let the changes in the health care law catch you off guard! We’ll see you soon at an AgingOptions LifePlanning Seminar in your area.

(originally reported at www.theatlantic.com)

High Profile Legal Battle Reveals Growing Crisis in Estate Planning

Here’s an update on a story we brought you just one year ago. It’s another sad example of how even those with vast personal wealth sometimes fail to plan carefully for their declining years. No matter how rich and powerful they are, the result of this planning failure is often a disaster, with vicious courtroom battles, accusations of manipulation, and an endless supply of headlines for the news websites and tabloids. But don’t miss the important lesson for us all: if we don’t plan properly today – and if we don’t make certain those who are looking after us in our declining years thoroughly understand and support our wishes – we could be setting our own families up for a similar fate a decade or two from now. Even fights over modest-sized estates can quickly become bitter, stretching family bonds past the breaking point. Is that how you want to be remembered?

In 2014 the news was filled with stories of the decline and eventual death of music legend Casey Kasem. Sadly, what really attracted the attention of most of us wasn’t the account of Kasem’s influential career in pop music, but the ugly fight over his care and his estate as the former radio star suffered from deteriorating mental and physical capacity. The battle over Kasem’s custody, and his money, made for a real-life tabloid soap opera.

Now, as we first wrote in 2016, it’s happening again – only this time the stakes are even higher. The key player in this most recent headline-grabbing drama is Sumner Redstone, the billionaire media mogul whose company controls both CBS and Viacom. Redstone has a personal fortune estimated at $5 billion, and his media empire is worth eight times that much. However, the 93-year-old Redstone also suffers from what some claim is advanced dementia, and his diminished capacity has triggered a battle royal between children, grandchildren, business partners, former mistresses – and, of course, armies of attorneys.

There has been a barrage of media coverage of the Redstone Affair. Click here for an excellent analysis we read last year about this sad saga in the New York Times. Lest you think this battle over money has been settled, think again: just a few days ago another lawsuit was filed by a former companion of Sumner Redstone, which you can read about by clicking here.

The details of the war over CBS, Viacom and Redstone’s personal fortune would fill several pages, and we won’t attempt to review them here. But what really caught our attention was this statement at the start of the New York Times article: “With a fortune estimated at over $5 billion, Sumner M. Redstone could afford the best estate planning that money could buy,” said the Times. “What he ended up with is a mess.”

The whole saga of the death of the rich and famous can be sad, even pathetic. Pop star Prince died without a will. Casey Kasem died in a reduced mental state with those supposedly closest to him fighting it out in court and in the media. Now Sumner Redstone, a wealthy and influential tycoon just a few years ago, has become a humiliated figure while an unseemly war rages around him. Here at Aging Options, we pass these stories along to you, not out of a voyeuristic desire to gloat over the misfortunes of the powerful, but as a warning: you don’t have to be rich and famous to need a carefully designed estate plan.

As people age, many will begin to lose the capacity to make sound decisions about their affairs, leaving them open to undue influence by caregivers and others. The New York Times quotes Chicago estate planning specialist Kerry Peck who says that “the Redstone pattern is happening in epidemic proportions.” He adds that sometimes older men are influenced by younger women who meet them in “places you’d consider safe, like senior centers, churches and synagogues. They start as caregivers and then become romantic suitors. We’re seeing these scenarios with stunning frequency.” When this happens, the wishes of children, grandchildren, and other loved ones can literally be tossed out the window. The Times calls this “a huge issue nationally,” even for people of modest wealth.

There is a long section in the New York Times article detailing possible solutions to this problem including the creation of a trust that determines who can make decisions for you in the event of incapacity. (Ironically Sumner Redstone has such a trust in place, but because it does not adequately define the term “incapacity,” no one can agree if he is of sound mind or not, and the courts are trying to step in to untangle the resulting legal mess.) Another expert quoted in the Times piece said, “In drafting a trust like this, you need very clear standards and protocols for determining [mental] capacity.”  Sadly, the Times concludes in considering Redstone’s short-sightedness, “no amount of legal advice can save people from an unwillingness to face their own mortality and cede control while still in full control of [their] faculties.”

As Rajiv Nagaich also emphasizes, lack of planning alone is seldom the entire problem. Too often our fiduciaries – those we select to manage our affairs – either fail to understand their duties or are unwilling to carry them out, either through ignorance or self-interest. “Death and disability create a highly emotional environment,” says Rajiv, “even for estates that do not have significant value. The more resources you add, the more you magnify the problem.” The missing piece, says Rajiv, is “having a well-managed family meeting conducted by a someone really skillful who is not part of the immediate family.” The professionals at AgingOptions can assist you with this critical planning tool if you’ll contact our office.

Few of us will ever have the resources of a Casey Kasem or Sumner Redstone. But all of us want to protect our assets as we age, avoid becoming a burden to our loved ones, and escape the trap of unplanned institutional care.  “Without a good, thorough family meeting,” Rajiv emphasizes, “it is highly unlikely that these goals will come true – no matter how well your legal documents are written and how much money you have in the bank.”

Yes, these are touchy issues. But here at Aging Options we want to offer our services as your guide through the maze of retirement and estate planning. It doesn’t have to be overly complex! When it comes to retirement, our comprehensive approach takes all aspects of your retirement plan, or LifePlan, into account: legal affairs, financial plans, health care requirements, housing choices and family ties. With a LifePlan in place, you can face the future with confidence and peace of mind. To get started, why not join us for a free LifePlanning Seminar? You’ll find all the information including online registration by clicking this link to our Upcoming Events tab.  We’re confident you’ll thoroughly enjoy this information-packed session.

Remember, even the wealthy like Sumner Redstone or Casey Kasem can fail to plan adequately. With our help, that won’t happen to you! We’ll look forward to meeting you soon.

(originally reported at www.nytimes.com and www.mynewsla.com)

 

 

CMS Shifts Gears: Nursing Homes Can Still Require Binding Arbitration

One of the final elder care policy moves of the Obama Administration will not be implemented after all, thanks to a ruling just announced by the Center for Medicare and Medicaid Services (also called CMS). The new regulation means that nursing homes can continue requiring residents to sign binding arbitration agreements as a condition of admission.

The change in regulation, which potentially affects thousands of nursing home residents, is described in this article on the website of Modern Health Care. Under President Obama, the CMS had been poised to change the law by making it illegal for nursing homes to insist on binding arbitration agreements, which make it impossible for residents and their families to take nursing home operators to court to resolve disputes. The Obama-era law had been part of a comprehensive overhaul in long term care regulations which was to have begun taking effect last November. Instead, while some of the law’s provisions remain intact, the rule which would have outlawed binding arbitration has been tossed.

As the Modern Health Care article explains, “Arbitration agreements prevent families who believe their loved ones received bad care at nursing homes from suing.” The article goes on to state that families often feel “pressured” to sign the contracts, and they don’t always understand precisely what they’re agreeing to. “The nursing home industry prefers arbitration,” says Modern Health Care, “since it offers a less costly alternative to lawsuits.” Nursing home operators say they fear the financial impact of expensive lawsuits.  “The cost of prolonged cases, along with falling reimbursement rates, could force some nursing homes to close, industry stakeholders say.”

It’s no wonder that the industry prefers binding arbitration. Not only do these agreements eliminate much of the risk of hyper-expensive lawsuits, they also limit liability even when the nursing home loses.  “(Residents) only find out later that awards through arbitration in nursing home cases are usually lower than those reached in court,” says the Modern Health Care piece.

As recently as last fall, the picture looked quite different – in fact, the industry was bracing for precisely the opposite outcome.  We found an article on Senior Housing News written in late September 2016 that the practice of requiring binding arbitration agreements was about to be outlawed. The ruling was going to apply to Medicare- and Medicaid-certified providers, along with assisted living providers and even private-pay providers whose practice was to insist their residents agree to arbitration and forego their right to sue. But the surprise of the November election and the resulting change of administration triggered a reversal of the rule with an outcome much more favorable to the nursing home industry.

According to the Modern Health News article, not all of the Obama-era rules changes are being rescinded. “The 700-page proposal contained several other revisions to long-term care provider regulations, many of which the Trump administration will preserve,” says the article. Nursing homes are required to fully explain the arbitration requirements both to the resident and to family members or other representative. Nothing in the agreement can prohibit or discourage the resident communicating with federal, state or local officials.  Also any arbitration agreement must be written in plain language, not legal jargon, and must be posted for residents and visitors to see.

Naturally the CMS put a positive consumer-friendly spin on this new rule change. In their statement the agency said, “We believe this revised approach is consistent with the elimination of unnecessary and excessive costs to providers while enabling residents to make informed choices about important aspects of his or her healthcare.” But here at AgingOptions we take a different view. Any ruling that restricts patient rights for the sole purpose of preserving industry profits fills us with concern. Frivolous lawsuits don’t help anybody, but requiring aggrieved residents and their families to submit to binding arbitration where the deck may be stacked against them and where any settlement is bound to be lower strikes us as a one-sided solution to the problem. It may be business-friendly, but it isn’t resident-friendly.

A better solution in our view is to avoid the problem altogether. By carefully planning your retirement well in advance using our powerful approach called a LifePlan, you’ll be able to keep from becoming a burden to your loved ones while you avoid being forced to move into a nursing home against your wishes. We’ll show you how to link your financial, medical and legal plans in such a way that you can protect your assets, so that you’ll have the resources you need to allow you to live where you want with the care that you require. If this sounds like the answer to your retirement needs, it is. Maybe it’s time to find out more about this planning breakthrough.

It’s easy to do: simply invest a few hours and attend a free LifePlanning Seminar near you. Bring your loved ones and get your retirement questions answered by Rajiv Nagaich, the Northwests’s premier elder care attorney and retirement planning expert. Click here for dates, times and online registration at an upcoming seminar, or contact us during the week and we’ll be happy to assist you.

(originally reported at www.modernhealthcare.com)

The Critical Conversation No One Wants, but Everyone Needs

If you’ve listened to our AgingOptions radio programs or attended our AgingOptions events, you know the great emphasis we place on family communication when it comes to retirement. So many problems can be avoided in retirement if aging parents and their adult children can get on the same page about planning for the future! Yet because issues of aging can be a delicate topic, too many adult kids won’t bring it up, and too many parents choose to avoid it altogether. The resulting conspiracy of silence dooms all too many families to a future of strife, dissension and even courtroom battles when parents start to decline or have passed away.

It seems that every few months there’s another round of headlines describing adult children battling with spouses and former spouses over the money left behind by some recently-deceased celebrity, or by someone famous who has declined into dementia. One of the best known recent cases was that of Casey Kasem, whose deteriorating mental health and eventual death in 2014 triggered a battle royal that was played out in the press. Despite being worth more than $80 million, this sad celebrity was denied the privilege of spending his declining years in his own home, something that could easily have been achieved with the right planning and preparation ahead of time. That’s what frustrates us here at AgingOptions: these family wars can almost always be avoided!

With that in mind, we call your attention to this very interesting article that just appeared on the financial website Motley Fool. The title says it all: “So Awkward, So Necessary: Important Discussions to Have With Your Aging Parents.” The author, financial writer Mary Crawley, writes, “Talking with your parents about estate planning is probably one of the last things you’re interested in doing. But not having that discussion is far worse, as avoiding it can leave you in the dark about your parents’ plans, assuming they have them in the first place.”

Author Crawley lists “five things in particular everyone should talk with their aging parents about.” Her list as reported in the article includes legal documents, the location of important papers, long-term care plans, your parents’ living situation, and what she calls “the real reason you’re asking them such personal questions.” While this basic list is a good place to start, we feel there are important questions missing. But before we cover our recommendations, here are a few highlights from hers.

  • Legal Papers: Gallup reports that only 44 percent of Americans have prepared a will. The Motley Fool article suggests you should make sure your parents have not only a will but also a trust, some form of health care proxy, a living will outlining their end of life wishes, and a durable power of attorney so your parents’ affairs can be managed if they are incapacitated.
  • Other Important Documents: “Do you have any idea where your parents keep their important paperwork,” asks Crawley – real estate deeds, car titles, bank records and so on? Our guess is that when the time comes that you need these critical papers your parents might not be in any condition to help you find them. The article lists several key documents you should ask your parents to gather, and then store them together in a safe place to which you have access. “You don’t want to end up searching through their home for paperwork while you are grieving or stressed,” writes Crawley.
  • Long Term Care Planning and Living Arrangements: The Family Caregiver Alliance reports that more than two-thirds of seniors who are 65-plus will develop some form of disability and more than one-third will enter a nursing home. The time to think about both the financial and the emotional burden of long-term care is now, not when you’re in a crisis. You also need to have a realistic conversation about Mom and Dad’s future housing desires: is staying at home realistic? Would they want to downsize, or move to be closer to other family members? Are they considering a retirement residence? This is where the services of a well-informed third party such as our partner company Better Care Management can prove invaluable as you evaluate options for your aging parents.

We disagree with the Motley Fool article in one key area: the article implies that you can successfully have this type of critical family conversation on your own. In our view, that’s a mistake. Not only will you need a professional to guide the discussion, but you also need to make certain that person is well organized and thorough so that you cover all the important bases without getting trapped in an emotional minefield. When we at AgingOptions conduct a family conference, we explore a broad range of issues. We ask about the parents’ housing aspirations and desires as they age. We talk openly about the role the seniors want their family to play in their future care. We go over the estate planning documents, not necessarily in detail, but in a general way so the family knows what legal framework has been established. We talk about everything from who the executor of the estate will eventually be to how a parent wants his or her remains handled after death. As Rajiv Nagaich says, “These are not easy discussions to have on your own. But unlike a family member, a professional can open a very awkward door and the rest is much easier.”

Finally, and most important, you want Mom and Dad know you’re not bringing these matters up in order to hasten their demise or collect your inheritance, but because you love them and you care about honoring their wishes. “Families delay having these conversations because, let’s face it, it’s hard to talk about the fact that someday our parents will die,” says the Motley Fool article. Your goal is to honor their wishes and choices for their future by discussing them now while they are able-minded and healthy. Above all, don’t procrastinate. Because you love your parents and care about their well-being, you need to have this difficult conversation now. We hope you’ll call our office and schedule a family meeting very soon. We’d be honored to serve you.

Our advice to anyone who wants both input and control over their retirement is to seek out the services of a professional guide, one who knows the terrain and who can help you achieve your goals and dreams. That’s what we do here at AgingOptions, with the power of a planning process we call LifePlanning. In just a few hours at a free LifePlanning seminar, we’ll show you how financial, legal, housing, medical and family planning all work together, allowing you to enjoy a secure and fulfilling future as you age. We invite you to come to a free AgingOptions LifePlanning Seminar soon! Click here for details and online registration, or call us during the week. And as we said above, don’t procrastinate – you have nothing to lose except your fears for the future. Age on!

(originally reported at www.fool.com)

Financial Abuse of Elders Growing More Common, More Costly

Elder financial abuse is even more widespread and more costly than experts had believed – and the incidence of abuse appears to be rising fast. That’s the conclusion from a surprising and disturbing study we read about late last year on the financial website of Time magazine. You can click here to read this important article – and if you’re a senior, or if there’s a senior friend or loved one in your life, you definitely should. This information, while a few months old, is still very timely, and we consider it vital for you and your loved ones to know.

In 2014, Allianz Life surveyed caregivers and estimated then that about 20% of senior adults had experienced financial abuse, including various forms of fraud, scams, and identity theft. That statistic was bad enough. However, when the company repeated the survey in 2016, the number of victims had skyrocketed to 37% of all senior adults, or about three of every eight seniors. To make matters worse, many if not most seniors don’t want to talk about their financial victimization, silenced by guilt, shame and fear. “Most people think it will never happen to them,” says AARP’s Debra Whitman quoted by the Time article. “But it does. And it does on a daily, hourly basis.”

The average loss for those victims of elder financial abuse is a staggering $36,000, with some data showing even larger losses. Sadly, the dollar loss – from which few seniors will ever recover – is only part of the trauma of financial fraud. Even smaller financial losses, says AARP’s Whitman, “can have cascading impacts on financial security and stability and even their health.” Many scam victims suffer emotional and mental trauma from their experience, and for some the fraud and accompanying sense of stress, sadness and shame trigger early mortality. Financial abuse of older Americans truly can be a life or death issue.

The Time article points out that the rise in frequency of Alzheimer’s disease and other forms of dementia is part of the problem of financial fraud. Alzheimer’s disease now affects nearly 5.5 million Americans, a number which is expected to double by 2050, and even those in the earliest stages of the illness can lack the ability to manage finances well. But Time goes on to say that, “even without dementia, the aging brain may have trouble making sound financial decisions.” According to geriatrics expert Mark Lachs of Weill Cornell Medical College, “Many older Americans suffer a pattern of imprudent financial decision making known as ‘age-associated financial vulnerability.’” Lachs calls this a “defined pattern” of making unwise decisions when it comes to money, decisions with lasting negative consequences.

Since the Time article appeared, this article on the same topic was published on the website of Forbes magazine. It listed four warning signs, or risk factors, that increase the likelihood you or someone you love may be a potential victim of financial abuse. The first is poor physical health which may tend to cause a senior to be less diligent about their finances. The second, as we mentioned above, is the increasing prevalence of cognitive impairment. The third warning sign is difficulty with the activities of daily living, and the fourth is social isolation. Put these four together and you have a senior who is frail, confused, vulnerable and alone, a combination that greatly increases the odds of financial victimization.

Unfortunately, with so many scam artists and criminals trying to separate seniors from their money, there are few simple answers to the escalating problem of elder financial abuse. Some of the common-sense basic methods of protection are more important than ever these days, and if you’re a child, caregiver or friend of a senior, you may have to be the one to help implement these safeguards. For example:

  • Don’t answer the phone, especially if you don’t recognize the number on caller ID.
  • Even if caller ID seems innocent enough, screen your calls before saying hello.
  • Never give out personal information over the phone – hang up.
  • If the caller claims to be from a known company, you can always call the customer service number on your bill or statement, and verify that the call is legitimate.
  • The same precautions also hold true for emails.

What about giving a trusted family member access to your accounts as a way to guard against fraud? This might be a good option, but you still need to be cautious, since financial abuse of elders can often take place at the hands of those closest to you. We recommend you contact us here at AgingOptions and let us review your situation and suggest some solid precautions. It’s possible, for instance, to allow a trusted person to have “view-only” access to your accounts so they can see unusual activity and alert the bank without having direct access to your funds. No matter what, it’s essential that we all begin to take financial abuse of elders even more seriously. The financial security, even the very life of someone you love may depend on it.

Are you starting to take the challenge of retirement planning more seriously? We hope so. Heading into your retirement years without a solid plan is a recipe for disaster. At AgingOptions we offer a type of retirement planning that is unlike anything else we know of – a comprehensive plan called a LifePlan that encompasses far more than mere financial planning. With your LifePlan in place, not only will your financial security be assured, but all other aspects of retirement living will be included in one comprehensive plan: legal protection, housing choices, medical coverage and family communication. LifePlanning is the key to a secure and fruitful retirement future!

Find out more about this breakthrough approach to retirement planning by attending one of our free LifePlanning Seminars. We offer these throughout the Puget Sound region, so click here for dates, times, locations and online registration . If you prefer, you can contact us during the week and register by phone. If you’re a senior, bring your spouse and adult children – this information is important for everyone. We’ll look forward to assisting you as you plan for a retirement that is fruitful, rewarding and secure.

(originally reported at http://time.com/money)

Wall Street Journal Says Get Ready! Congress is Coming After Your 401(k)

The members of Congress enjoy one of the best retirement plans in America. But that doesn’t stop them from coming after yours! So says this recent article from the pages of the Wall Street Journal.

Writing in the Journal, financial columnist Jason Zweig warns that, as part of its tax reform deliberations, Congressional negotiators have cast their hungry eyes on the 401(k) accounts that form a vital part of the retirement plans for a vast number of working Americans. Ironically, says Zweig, our elected representatives aren’t even considering changes to their own retirement plans which are not only extremely generous but remarkably safe. “The lucky participants in one of the best retirement plans around are coming after yours with a meat cleaver,” Zweig writes – so it might be time for us working Americans to grab our pitchforks and defend our retirement savings.

Here’s the problem. As Congress and the Trump administration debate the fine points of tax reform, they’re looking for revenue wherever they can reasonably find it. Right now, as most of us know, the contributions we make to an employee-sponsored 401(k) plan (or a similar 403(b) if you work for a non-profit organization) are taken out of your paycheck pre-tax, giving you a healthy incentive to set aside retirement savings in an account that is tax-deferred. You won’t pay taxes on the contributions you make or on the interest earned until you begin making withdrawals, usually when you retire. (This assumes you are not saving money in a Roth IRA in which contributions have already been taxed and the withdrawals can be made tax-free.)

So what’s the danger? Here’s how the Wall Street Journal’s Jason Zweig describes it. “At a meeting with members of the Senate Banking Committee earlier (in April),” says Zweig, “Gary Cohn, the director of the White House National Economic Council, discussed ideas that would remove pre-tax benefits from retirement accounts including 401(k)s and shift them to after-tax benefits, according to people familiar with the discussions. It wasn’t clear how seriously the administration is evaluating any specific proposal, these people said.”

Apparently Congress is tired of waiting for you and me to pay income taxes on our retirement savings. For that reason they want to tax us before those funds go into our retirement accounts. And here’s the real eye-opener: “Taxing retirement-plan contributions Roth-style,” Zweig writes, “would generate roughly $1.5 trillion over the next decade the way the government reckons the numbers…So giant a pot of honey may be hard for Congress not to raid.”

Besides giving Uncle Sam a windfall at our expense, the great danger in this plan is that it removes one of the real incentives for most of us to save for retirement. “It’s hard for most people to save for a goal that glimmers faintly decades in the future,” says the Wall Street Journal. “Take away the tax incentive, and many savers might no longer see the point of even trying.”

One of the financial experts quoted in the article describes a solid financial plan for retirement as a four-legged stool, comprised of a pension, a 401(k), Social Security and supplemental savings. But only a relatively tiny fraction of workers today earn a pension. (By the way, that’s something else Congress doesn’t have to worry about: in 2015 the average pension earned by a retired member of Congress was over $41,000, and a Senator or representative with 30 years of service qualifies for well over $105,000 in annual pension.) If you remove the incentive for people to save in a tax-deferred account, fewer and fewer will approach retirement with anywhere near enough money set aside. The retirement crisis is only going to get worse.

So what’s the answer, according to the Wall Street Journal analysis? Mandatory savings is one idea that has been floated, requiring people to save for their future. Leaving the present system alone is another option. But “at a bare minimum,” says Jason Zweig, “if Congress is going to hack away some of the tax advantages of private retirement plans, it should make matching cuts to the cushy federal system.” It only seems fair, after all. And if you are the protesting kind, Zweig has this advice: “If you have a pitchfork in your garage, keep it handy. Your 401(k) might need defending.”

As interesting as this article is, we here at AgingOptions believe it makes a mistake common to many stories about retirement: it focuses entirely on finances. There’s no doubt that having a good financial plan in place is essential to your retirement security, but it is only one piece of a much larger puzzle. Protecting your assets is all well and good, but have you considered how to cover yourself against medical emergencies, both in the short term and long term? Few things will drain your bank account more quickly that a long term care crisis. What about housing? Simply assuming you’ll be able to stay put in your home indefinitely is extremely naïve, even dangerous. There are also legal safeguards you’ll want to put in place to protect your assets and to make sure you won’t become a burden to your loved ones. And speaking of your loved ones, you need to make certain your family knows your wishes as you age, and will support the choices you make.

All these elements – financial security, medical coverage, housing choices, legal protection and family communication – together make up an AgingOptions LifePlan, the most comprehensive retirement plan we know of. If this sounds like a unique and powerful approach to planning for your retirement future, it is. Why not take just a few hours and find out more, without any obligation? Plan now to attend a free LifePlanning Seminar at a location that’s convenient for you. We assure you, you’ll be very glad you did.

For dates, times and online registration, click here – or, if you prefer, call our office for assistance during the week. Discover how to enjoy a secure and rewarding retirement with an AgingOptions LifePlan.

(originally reported at https://blogs.wsj.com)

 

 

If You Die in Debt, Will Your Heirs Have to Pay Up? Probably.

Several months ago we discovered this insightful article on the website US News. It answered a question we have heard frequently in our client meetings, on our call-in radio programs and at our seminars: “If I die with debts, will my heirs have to pay them off?” Because this question (and the worry behind it) is so common, we felt it was timely to re-address this issue.

So here’s the bottom line: If you die leaving debt behind, most of the time – if you have any assets at all – the answer is yes, your heirs will be saddled with that debt. The article explains several possible scenarios where those debts you incur in life will burden those who inherit your estate.

Debt is an especially tough problem for seniors, a group whose debt burden is definitely increasing. “With seniors’ debt burden rising, many are likely to die with debts still unpaid,” says US News. “While not all that debt will pass to their heirs,” the article goes on to say, “much of it will come out of any inheritance they expect to leave behind.”

How bad is the senior debt problem? The article states that in 1989 about 44 percent of senior households in the U.S. were carrying some debt. In 2013 that percentage had risen to just over 61 percent. But the figure that caught our attention was the amount of that debt: for households headed by adults age 60 or older, the average debt burden had skyrocketed from about $9,000 in 1989 to nearly $41,000 in 2013. One particular surprise that we’ve recently written about on our AgingOptions Blog (click here for the story) is that many seniors are loaded down with student debt incurred by their kids and grandkids, because of education loans for which the parent or grandparent co-signed. For seniors already strapped for money after the recent recession, debt can be a crushing burden now and a headache in the future when your children have to deal with it.

US News states that, if you have any assets at all, your creditors will likely get “first dibs” during the probate process. “That means,” the article reports, “that your children or other heirs effectively will pay your debts because they will be subtracted before any inheritance is transferred.” This will force your kids to pay off your debts with the cash you had hoped to pass on to them. It may even mean selling off assets such as a home to pay off your creditors after you’re gone. Depending on the state you live in, some spouses become liable for the debts incurred by their spouse (Washington is one of those states, referred to as a “community property” state). The debt you leave behind may place a severe burden on your surviving spouse. In other words, according to one financial advisor quoted in the US News article, “Debt is the last thing you want to have when you die.”

The article lists six things you need to do if someone you love dies with debt. (Again, click here to link to the US News piece and read all six.) Some of these steps are obvious, such as the immediate notification of creditors, especially credit card companies: you want to make sure no one can open a fraudulent account in your loved one’s name, and you also want to put an immediate halt to any additional fees and surcharges. A few other important things on the checklist involve filing tax returns and filing for those assets that do not go through probate, such as life insurance payouts and retirement accounts.

But the first thing on the US News “to do” list is to consult with an attorney. Here at AgingOptions, where retirement planning and elder law are our specialties, we would welcome the chance to sit down with you and go over the situation in which you find yourself following the death of your loved one. In fact, a call to our office should be one of the first ones you make, so that we can begin advising you of all the necessary steps you’ll need to take to satisfy creditors and protect your own family’s interests.

An even better idea for dealing intelligently with debt and finances is for retirees to start now to put a LifePlan in place – a comprehensive retirement plan that covers all aspects of your retirement and your estate. We can advise you on how to protect your assets and how to avoid burdening your loved ones both while you live and after you’re gone. All your legal and financial plans become part of your LifePlan, as do your housing preferences, family instructions and medical coverage needs. It truly is a “Life Plan.”

The very best way to start the LifePlanning process is by attending one of our free LifePlanning Seminars. You’ll come away with valuable knowledge that will help you face your retirement years with a new sense of confidence, knowing you’re prepared. Don’t leave your heirs with a burden of debt – or even worse, with the burden of caring for you and making decisions against your wishes. You’ll find a complete list of upcoming dates and locations right here on our website, along with simple online registration. We encourage you to register today because many of our LifePlanning Seminars are filled to capacity. And as always, if we can assist you by phone, please call our office during the week. We’ll look forward to seeing you soon.

(originally reported at http://money.usnews.com)

Caring for Elders While Holding a Job: the Prescription for Stress

Some months ago we read a report on the blog of the AARP that revealed a problem too often overlooked, but one that will sound familiar to a significant number of Americans. The problem is the growing number of people, estimated at nearly 24 million workers, who are holding down paying jobs while at the same time serving as family caregivers. That’s a sure prescription for stress, fatigue and uncertainty, not only for employees but also for employers. “For employers big and small,” says AARP, “the need to support workers who also provide unpaid care for a family member is a growing reality.”

You can read the AARP article by clicking here. Even though the article first appeared in mid-2016, the information – and the predicament of working caregivers that it describes – are all too relevant today.

These days, says AARP, serving as a caregiver to an adult relative (especially an aging parent) is growing more and more complex than it may have been in the past. Caregivers today often have to navigate a fiendishly complicated health care delivery system while performing more intense and complex care in the home, all while coping with the demands of work. Research suggests that employed caregivers feel a growing sense of stress and performance anxiety at work, with more and more pressure and less and less job security. Research also reveals that parents who are caring for young children at home often enjoy far more workplace flexibility than workers who are caring for older family members. Some caregivers even suggest they have experienced workplace discrimination, which according to an AARP research report from 2012, is not prohibited by most federal and state employment laws.

According to a study entitled Caregiving in the United States 2015, cited by AARP, about 60 percent of family caregivers are also employed outside the home, and most of these “working caregivers” (nearly two-thirds) are caring for a relative 65 years old or older. As if this weren’t enough of a recipe for stress, the caregivers are also aging: half of these employed caregivers are themselves 50 years old or older, which means they are already experiencing the challenges of being an older worker in today’s high-stress, increasingly insecure workplace.

There are two chief take-aways from these articles. The first, in the words of the AARP blog: “As the U.S. population rapidly ages, the need to support workers with family caregiving responsibilities will grow.” In other words, AARP favors more generous family leave and paid sick day policies, along with greater work flexibility for caregivers. The organization advocates legislation to give caregivers increased measures of employment security and, when necessary, paid time off. Above all, we need a “culture of understanding about eldercare needs” especially as they affect those in the workplace.

The second point is more concerning: as the population ages, “we’re facing a caregiving cliff,” said Dr. Susan Reinhard, AARP Public Policy expert. “By mid-century, there will only be three caregivers available for each person requiring care.” As today’s baby boomers age, there may not be enough people able to care for them. “That means,” says AARP’s Reinhard, “we need to provide support for existing caregivers who are underserved” by current services. In other words, we had better be planning now for the caregiving needs of the not-too-distant future.

Planning for the future is the centerpiece of our activities here at AgingOptions, and that includes planning for your future care needs. This will most probably involve your family members, because aging is a family affair. Have you sat down and talked with your adult children about your expectations and wishes for the future? Have you and your family members had an honest conversation about the fears and concerns each of you is experiencing as you contemplate your aging years? Far too many families leave these issues unaddressed and unresolved until it’s too late. Here at AgingOptions, we frequently conduct family conferences in which all these issues are laid out on the table for open, constructive discussion. We would be glad to do that for you. Through planning and preparation, you can successfully avoid becoming a burden to your loved ones as you age, and also avoid being forced into unplanned institutional care.

The key is to have your own personalized AgingOptions LifePlan – our name for a fully-developed, individualized retirement plan that takes all your needs into account: financial plans, legal protection, medical coverage, housing options and family communication. If you’re ready to start creating your own LifePlan, we can help. The best way to start is to attend one of our free LifePlanning Seminars – popular, information-packed sessions held in various locations throughout the area. These seminars fill up fast, however, so we encourage you not to wait. Instead you can click here for dates, and free online registration. It will be a pleasure working with you as together we plan your ideal future.

(originally reported at http://blog.aarp.org)

There’s a “Family Disconnect” When It Comes to Discussing the Future

Have you and your adult children had a frank and detailed conversation about your estate and your wishes for the future? Do they know about your will and about your desire for leaving a legacy?

If we were to ask those questions to an average group of parents, according to this insightful article just published on the website Insurance News Net, 70 percent would answer yes – those important conversations with adult children have taken place. But if we posed the same questions to the adult kids, fewer than half would agree. The rest, more than half of adult children, claim they’ve never talked about estate planning or other related future topics with their parents. This is a significant – and potentially costly – disconnect.

This gap in perception between adults and children was revealed in recent findings from the Family and Finance Study produced by Fidelity Investments.  The study showed that, while fully 90 percent of parents and children say that it’s important to have frank conversations about estate plans and wills, in too many cases those conversations aren’t happening. “How prepared are American families when it comes to leaving a legacy and discussing estate plans with their loved ones,” asks the Insurance News article? “Perhaps less than they may think.”

Here at AgingOptions we see evidence of this lack of communication almost every day, and we hear about it from radio listeners and guests at our seminars. Mom and Dad may think they have made their future wishes clear to their adult children, but the kids remain in the dark. Then when one or both of the parents passes away, family friction and sibling fights can quickly erupt. “Even in the simplest of family situations,” says Insurance News Net, “conversations that do not occur frequently and in detail may result in fairly substantial family disagreements and disconnects.”

Another statistic caught our eye from this article: the Fidelity study found that in about 70 percent of cases adult children had major misconceptions about the value of the parent’s estate. “On average, children underestimated that value by $278,000,” the study showed.  It seems to us that a misunderstanding of that magnitude will only increase the chances for conflicts and disagreements when it comes time to divide the estate.

Here’s one more important question raised by the Insurance News Net article: do your adult children know where to find your important documents such as wills, powers of attorney and healthcare proxies? When Fidelity asked parents that question, 80 percent said yes – but among the sample of adult kids the number who agreed was significantly less, closer to 65 percent. That’s not bad, but it still indicates that you and your adult children may not be communicating as well as you think you are.

We do take some issue with the Insurance News Net article, not because the information is incorrect, but because it seems incomplete. We concur with the basic premise of the Insurance News Net article: aging adults often fail to communicate adequately with their kids about their estate plans. But as is all too common, the article focuses almost entirely on finances, emphasizing the importance of passing along your assets to your heirs with minimal impediments and tax consequences. A solid financial plan is definitely essential, but it is only part of your retirement plan, and if all you do with your adult children is tell them how you want your money disbursed when you pass away, you are doing them a serious disservice.

Aging, as we always say, is a family affair, and that means your family needs to know – and support – all of your wishes as you grow older. Beyond finances, this includes housing, deciding how and where you want to live. It includes your legal documents, which means much more than your last will and testament. Your estate plan will be meaningless if it doesn’t take your medical needs into account, because few things will derail your plans like a medical crisis for which you have not prepared. Is there a type of retirement plan that includes all of these facets? Fortunately there is.

At AgingOptions we proudly offer a unique and comprehensive approach to retirement planning called a LifePlan. Once you have prepared your LifePlan, often including a series of family conferences to make certain everyone close to you is on the same page, you’ll be prepared for a fruitful and secure retirement. You’ll be able to protect your assets while ensuring that you won’t become a burden to those you love. It’s easy to find out more – and there’s no obligation whatsoever: simply plan now to attend one of our free LifePlanning Seminars. Invest just a few hours, and bring your questions – and your adult children if they’ll attend with you. It will open your eyes to the power of this unique, powerful planning strategy.

For a list of upcoming seminars, including online registration, click here, or call us during the week and we’ll be happy to assist you.  Additionally, if you feel it’s time for a family conference to review your estate plans with your loved ones, we can definitely guide you. We’ll look forward to meeting you soon.

(originally reported at https://www.insurancenewsnet.com)

 

 

UPDATE: Death of Superstar Prince Means Windfall for the IRS

Last May we wrote about the death of rock superstar Prince. At the time we pointed out that whenever a celebrity dies, there’s always a ripple effect. The death of Casey Kasem prompted increased interest in issues of health care directives, guardianship and end of life planning. The death of Michael Jackson shed new light on the abuse of prescription drugs. And just a few weeks after the death of the rock star Prince, who died in April of 2016 without a will, people began showing a surge of interest in wills and estate planning. (Click here to connect to the original Reuters article about this interesting phenomenon.)

Well, now we have a truly eye-opening follow-up report, which we found in this insightful article on an unlikely website called Movie TV Tech Geeks!  We confess, this isn’t one of our typical sources of retirement news, but in this case the writer, Television Editor Shanka Cheryl, really got it right. The article is entitled, “Prince shows why wills really matter as IRS getting half his estate.” We suspect many readers of this website might be on the younger side, but this article should be a loud wake-up call to everyone, especially seniors.

Prince died on April 21, 2016, leaving behind an estate valued at more than $200 million.  Apparently the international celebrity never got around to drafting a will or establishing an estate plan. Prince was not a particularly young man (he was 57 at time of death) but like many aging boomers he may have had a distorted sense of his own immortality. He was hardly alone: research from LexisNexis reveals that at least 55 percent of all American adults do not have a will or other estate plan in place.

Now, Shanka Cheryl’s article explains, “Prince’s estate has until Saturday (January 20th) to file an estate tax payment for the late rock superstar, and the taxes are expected to ultimately swallow nearly half the estate’s estimated $200 million value.” That means “a likely windfall of roughly $100 million for the government.” Estate law experts say Prince could have prevented that relatively easily, but he failed to act in time.

Not only did Prince leave no known will when he died in April of an accidental painkiller overdose, but he apparently did nothing to shelter his assets from the taxman. Federal and state taxes will claim about half the estate and his six siblings will divide the rest, say local tax experts studying the case. “Experts say Prince could have set up an estate plan with trusts to benefit any relatives and charities he chose – while leaving little if anything to be taxed.” The website article quotes Los Angeles attorney Robert Strauss who stated that there are basically only three options for distributing estate funds: “There’s family and friends, there’s charity, and there’s Uncle Sam. And most clients would rather that Uncle Sam got less.” In Prince’s case, by failing to plan, he made sure Uncle Sam received a generous payday.

As the Reuters article reported last spring, following the death of Prince, “many Americans moved ‘draft a will’ – arguably one of life’s most unpleasant tasks – to the top of their to-do lists.”  In some ways, as we reported, that’s good news. However, as professional retirement planners, we here at Aging Options fear that some of these newly-inspired people may be going about the process the wrong way, relying on free or low-cost will-writing software and websites that provide only bare-bones services, hardly adequate for most estate plans.  If you content yourself with simply seeking out the least expensive “quickie will kit” available online you will be doing yourself and your family a disservice. This is one area where it’s essential not to scrimp!  The cheapest and quickest route is almost always the wrong one.

We also remind you, as we tell our radio listeners and seminar guests, that merely writing a will is not enough. The process of putting your legal affairs in order is only one aspect of a fully-developed retirement plan, which we call a LifePlan. A LifePlan takes the key facets of your future planning into account: legal affairs, financial security, medical care, housing choices and family communication. This is the kind of comprehensive plan that brings true security as you age. It’s also the kind of well-developed plan that you can never get from an online will kit!

Want to find out more? Here’s the best way: attend one of our free LifePlanning Seminars, held throughout the area. There’s absolutely no obligation – and we’re fully confident that you’ll come away armed with a fresh new approach to retirement. These free information-packed sessions fill up quickly, so click here for a listing of upcoming LifePlanning Seminars, select the seminar of your choice, and register online – or call our office during the week and well gladly assist you.

Making a will is important. But having a LifePlan in place will be of far greater benefit. If only Prince had known that, his family could have been spared even more grief, dissension and loss.

(originally reported at www.reuters.com and https://movietvtechgeeks.com)