Medicare Nursing Home Grading System Altered
March 25, 2015
The U.S. government has revamped its grading system for nursing homes, and the new way will make it tougher for homes to get higher grades.
Currently, about one-third of homes are below standard. With the new grading system, the top homes, which make up about one-third of all homes, lose one star.
The objective is to get the homes to provide better services.The new standard for assessing home changes the entire criteria. For example, the new rating system will evaluate the quality of anti-psychotic drugs given to patients.
The nursing home industry does not like the change, saying it is annoying for them to comply with, according to a story on frontlinedesk.com.
Why People Avoid Estate Planning
March 18, 2015
There are several reasons why people put off estate planning.
A story on huffingtonpost.com listed a few of them. They include:
- People think they don’t have the time. The author says this is just an excuse.
- Nobody wants to think about dying. This may be the most common reason, the story says. Yes, it is uncomfortable, but necessary.
- People don’t understand it. This may be the most valid reason of all. So the author recommends engaging an estate planning attorney to help you understand what it is all about.
- They don’t think they have enough of an estate to worry about. But you have an estate if all you own is a car. If you start planning now, it will be less complicated later.
Basic Things To Know About Estate Planning
March 11, 2015
Here are three simple but key things you need to know about estate planning.
- The estate tax exemption
In 2015 you can leave gifts to others upon your death up to $5.43 million free of federal estate taxes. If married, both you and your spouse have this exemption, totaling $10.86 million.
An article in the Wall Street Journal also identifies two other figures to know:
- The gift tax exemption
You can also give away a cumulative total of $5.43 million to family or friends during your life without paying any federal gift tax. If married, both spouses get the $5.43 million exemption.
Gifts made under the $14,000 annual gift tax exclusion rule will not trigger any federal gift taxes nor will they reduce your federal gift tax or estate tax exemptions. Gifts in excess of the $14,000 “freebie” will reduce both exemptions dollar for dollar.
- The $14,000 yearly exclusion
Gifts made up to this amount each year reduce your taxable estate.
Smoothing Things Out For Your Heirs
March 4, 2015
There are several things you can do to ease the legal distress that your loved ones may suffer after your death.
First, you can do is understand the legal terminology. Know what these terms mean: will, trust, health care directive, power of attorney, beneficiary forms, estate taxes, and probate.
After you understand them, you will have a better idea of what to do so that it is easier for your heirs once you are gone.
One thing you may want to do is leave your home to your heirs, says an article on benzinga.com. This an be done in a number of ways, including putting your home in a trust.
You can look all these terms up on line, but a consultation with an estate planning attorney is probably the best way to go to understand what it is you need to know in planning for after you are gone.
Telling Your Kids How Much You Are Worth
February 25, 2015
Should your kids know how much money you make or how much you are worth?
A story in the New York Times says, yes, sort of.
It says you can begin to initiate them into your financial world as early as age 5 or 6. Build it slowly, and give them fuller answers to their questions by the time they are teens. It can be a valuable lesson, the story says.
Money is a mystery to kids. They wonder why their house isn’t as big as their cousin’s. Or they may want to know why teachers don’t make much money?
“None of your business” is the wrong answer. They should know about money. Then they can understand how much college costs. And why they should be saving. It will help them later when they have to earn a living and support a family.
No, you don’t have to let them see your tax returns, but you can answer their questions with some degree of truth. Don’t forget, they can find out a lot of stuff on line. For example, they can go on Zillow and see what your house is worth – and how much their friends’ houses are worth.
Telling them something about your net worth can also help them to learn values, the story says. Maybe you want to share with them how much you give to charity.
There are no hard and fast rules, but keeping the kids totally in the dark is probably not the best way to go about it.
Facebook Now Offers ‘Living Will’
February 18, 2015
Facebook users can now control their pages after they pass away.
The social media company has created a new tool that lets users determine what happens to their accounts after they die – a sort of “living will” for their pages.
New settings now allow users to have their profiles deleted or have a “legacy contact” or executor to manage their accounts after death.
Until this change, the status of Facebook accounts after death was cloudy. Families could ask the company to take down their pages but conflicts between family members sometimes arose, according to a story in the Boston Globe.
Now, the user’s legacy contact can update a memorial page including a prepared-in-advance message from the deceased.
The action comes after legislators in some states have been pushing for laws to allow family members access to a person’s digital files. Facebook and other digital media sites have opposed such legislation.
‘Step Up’ To Step Down?
February 11, 2015
President Obama, in his State of the Union address, outlined some proposed tax changes, including ending the “step up” provision in the capital gains tax.
While Congress is unlikely to go along, it could mean big changes in the taxing of inheritances.
Obama’s plan would eliminate a big tax benefit in the treatment of inheritances. It would tax capital gains on the decedent’s basis — what the stock or other asset cost when he or she bought it — compared to the current system that allows for a step-up in basis for assets when passed on to heirs.
Making the change would make it harder to shield assets from taxes and would require more planning, according to a story on wealthmanagement.com.
The president says it would close a “trust-fund loophole” and ensure that the wealthiest pay their fair share on inherited assets.
However, it would result in taking money out of the pockets of beneficiaries. And it would require a lot of effort. For example, heirs would need to determine the original cost basis for all of the assets they inherit. Tracking every stock, piece of property and valuable to find out their original costs isn’t easy.
The plan would allow married couples to bequeath investment assets with capital gains up to $200,000 tax free, however. And a couple can bequeath a home to a child and $500,000 in capital gains wouldn’t be taxed. As a result, many heirs won’t be hurt by the changes.
However, for those who would be affected, the plan likely would require the establishment of new trusts to protect assets from the new taxes.
When Nursing Homes Control Residents’ Assets
February 7, 2015
A recent NY Times article focused on how some nursing homes seek control of a resident’s assets and income to insure payment of their monthly bills. While the nursing home is entitled to be paid for services rendered, and we should not expect to get it for free, there are sometimes disputes as to the cost and quality of care. The daily rates in Rochester, NY are currently between $400 and $650 per day. The faint of heart should not get a calculator but the family is looking at a monthly cost in excess of $12,000.00, and as much as $19,000 for unique care needs. New York State charges an assessment collected by the nursing home equal to 6.8% of the monthly cost. For most families, they will soon be in the poor house.
The issue in the NY Times article is about the nursing home taking charge of the resident’s assets and income to insure timely payment. In that scenario, there was a dispute about the co-pay due from the family on the bill which had reached an impasse. To break the impasse, the nursing home brought a guardianship proceeding to allow it to take charge of the resident’s income and assets. While I agree that parties should find amicable ways to resolve their financial disputes, here, it appears that the facility tried to resolve it by putting themselves in charge of the resident’s money. If successful, who represents the interests of the resident? Wouldn’t it seem that if the facility were in charge of the resident’s income and assets that the dispute would then be resolved by the facility simply paying itself what it believes it is owed? Is that the way the facility should resolve a financial dispute?
Read the article for yourself and share your opinion.
Overseeing The Investments Of Aging Parents
February 4, 2015
Plenty of attention has been paid lately to baby boomers and whether they are prepared for retirement.
But boomers face another problem: their parents’ finances.
Many financial advisors and attorneys are seeing a similar pattern — elderly clients who no longer have the mental capacity to handle their finances, according to a story on dailyfinance.com.
A common scenario is where the husband has been handling everything and all of the sudden can’t do it any more – and the wife is clueless.
Often, the situation allows for the elderly person or couple to be victimized by fraud.
Adult children of these people may see signs that their parents are becoming less able to handle money. They may seem less familiar with financial concepts than before or may simply be less able to handle math problems.
If an adult child notices something, it may be time for a conversation. It is best to have the talk on neutral ground, the article says. You may want a third party to bring the matter up – a financial advisor or attorney.
The article suggests parents share their financial documents with their children. There are online portals that allow for this.
It may not be easy to get the parents to agree to this, but it is essential, the article says.
Downton Abbey’s Financial Lessons
January 28, 2015
The British television series Downton Abbey might not seem the likely place to get financial advice, but there are some lessons to be learned from the program.
An article on CNN says there are five financial lessons to be learned from the show.
- Don’t put all your eggs into one basket. The family patriarch, the Earl of Grantham, learned that lesson when he loses the entire family fortune by betting on a Canadian railroad company that goes bankrupt.
- Ask for a raise. Daisy, who starts out as a kitchen maid, staged a campaign for better pay. She got it.
- Make a will – and revisit it. The show begins with a crisis over finding a new heir. The man who was to inherit the estate died on the Titanic. None of his three daughters is allowed to take over his fortune.
- Learn about supply and demand. A devious resident decides to make a killing on the black market after the war. He buys some goods from a man at a bar at an incredibly good price, but the food is junk and no one will buy it from him.
- Watch out for gold diggers. Several characters marry for money. You can never be sure.