Protecting Your Partner When You Choose Not to Marry
April 4, 2013
According to the U.S. Census Bureau the number of senior couples choosing to cohabitate instead of marry (or remarry) has risen significantly. There are quite a few reasons why senior couples might choose not to tie the knot:
* Tax disincentives
* Loss of military and pension benefits
* Keeping medical expenses separate
* Keeping any current debt separate
* Asset protection for the benefit of children or grandchildren
If you decide against marriage, you will need to take extra steps to protect your partner and preserve spousal privileges that you would like your partner to have. For example, in case of accident or emergency, do you want your partner to have the same access to medical information that a spouse would have? Do you want your partner to a voice in making medical decisions if you are unable to do so?
Seniors will also want to consider the subject of real property and living arrangements. If something were to happen to you or your partner, would your surviving partner be able to remain in the home? Would he or she at least have time to find another living situation? Most people would like to think that relatives who inherit shared property will be compassionate toward their surviving partner, but this is not always the case.
Fortunately, there are ways for seniors who choose to cohabitate without marrying to arrange their affairs in such a way that they preserve the benefits of staying legally single, but provide their partner with some spousal benefits. The best way to do this is by creating an estate plan that recognizes your partner as your agent and/or beneficiary. Whether your partner is opposite sex or same sex, creating appropriate estate planning documents is the way to go.
When Mom and Dad Re-Marry: Caregiving Then Involves Extended Families
January 12, 2013
Our firm works frequently to help divorced or remarrying couples update their estate plans to protect their new blended families, so we know just how significantly the stress of divorce, family upheaval, and tighter finances can impact a family, and how those effects can last years into the future. We have seen firsthand how the effects divorce can continue to make waves 20 or even 30 years down the road—not just on the divorced couple, but on their grown children now acting as caregivers.
Adult children of divorced parents often find themselves caring not only for mom and dad when they get older, but also for stepmom, stepdad and sometimes even another stepparent from yet a third or current marriage. Dividing time (and often finances) between so many parents with new and special needs can quickly take its toll, as can the family politics that come with adult siblings, half siblings, and step siblings.
With all of this complexity and intermingling family ties, it is more important than ever to have conversations about estate planning and long-term care with parents and siblings before mom and dad (and stepmom and stepdad) get to an age where they need in-home or around the clock nursing care. This article in a recent issue of the CSA Journal (from the Society of Certified Senior Advisors) gives tips on how to conduct a meeting of blended families to discuss the care of parents and stepparents.
While open communication between blended family members is key, a good estate plan can also go a long way towards eliminating potential fighting and confusion by clearly defining who will be making financial decisions and who should be making health care decisions when mom or dad become incapacitated. A caregiver agreement can also provide clarity, as well as financial assistance to the one sibling who inevitably ends up shouldering most of the care giving burden.
If you are a part of a blended family talk to your parents and siblings now about any challenges the future may bring—and how to meet those challenges together.
Preserving Emotional Well-Being When Choosing a Long-Term Care Living Situation for Your Loved One
January 5, 2013
Choosing a long-term care living arrangement is one of the most difficult challenges faced by aging adults and their loved ones. Most families try to avoid the nursing home option to the very end, believing that assisted living or small residential care homes provide a better quality of life. But this may not necessarily be the case.
New research suggests that the type of living situation itself makes little difference in a resident’s emotional well-being. Instead, the happiness and contentment of the resident depends more on the characteristics of the specific environment they’re in, and of course in no small part on their own personal characteristics — how healthy they feel they are, their age, and even their marital status.
Logically enough, a resident of a long-term care facility of any kind is more likely to report satisfaction and comfort if they had a hand in choosing their living situation, if they were part of the decision making process. In fact, studies show that the process of finding and choosing a living situation—researching options, visiting facilities, considering current and future social and physical needs and how they will be met—plays a very important role in the beginning of acclimatization.
Whatever your choice, you’ll need to talk to your family and plan how to finance whichever choice is made for long-term care living. Medicare.gov has published a helpful chart summarizing and comparing the various options for long-term care financing. Remember: There may be ways that you can conserve savings and the home while still qualifying for government benefits. Many families are actually surprised to learn this. If nursing home care may be in the future, the best option is to plan now. See our “Consumer’s Guide to Medi-Cal Planning” available as a free download.
News Flash! California Approves Medi-Cal for Same-Sex Couples and Registered Domestic Partners
December 15, 2012
In what may be the first state in the nation to do so, California has just approved Medi-Cal benefits for same-sex couples and Registered Domestic Partners ( “RDP’s”). Acting at the invitation of the federal Centers for Medicare and Medicaid Services (“CMS”) and pursuant to state Assembly Bill 641 (Feuer), the California Department Healthcare Services just released a directive to all California County Medi-Cal Directors, requiring that an applicant in a same-sex couple or RDP relationship be, for most purposes, treated as a spouse. The order is retroactive to January 1, 2012. This directive will now extend much-needed Medi-Cal benefits to the elderly and disabled who would otherwise be obliged to impoverish themselves or their partner in order to qualify. The directive is contained in All-County Welfare Directors Letter 12-36 issued December 10, 2012.
Prepare to Care for Aging Parents & Loved Ones
November 23, 2012
If you are the child of parents who are currently over the age of 65 you’ve probably given a little bit of thought to the day when one (or both) of your parents may need Long Term Care. Understandably, most adult children prefer not to think about the day when their parents may not be able to care for themselves, but in some cases it simply cannot be avoided, especially if your parent is already showing early signs of Alzheimer’s or dementia. If you are concerned about your parent’s future, there are steps you can take now to make the transition to giving and receiving care later easier on both you and your parents:
1. Talk to your parents. Find out if your parents have already thought about the topic, if they’ve made provisions for it, or if they have any specific wishes. Furthermore, opening the lines of communication lays the groundwork for trust and cooperation in the future.
2. Encourage your parents to create an Estate Plan if they don’t have one already. An Estate Plan will be important in expressing your parents’ wishes on necessary issues such as preferred agents in case of incapacity, financial power of attorney, and health care decisions. These essential documents will not only let you and others know their wishes, it will also prevent many expensive delays and frustrating red tape in the future.
3. Make sure that long-term care planning is a part of their estate plan. When most persons prepare an estate plan, they usually think only about passing assets to loved ones upon death, avoiding probate and taxes. Often overlooked is long term care planning. Such planning should consider the need for a Medi-Cal subsidy should either parent ever need care in a nursing facility. Many middle income individuals are surprised to learn that they may qualify for a Medi-Cal subsidy in the event of need. However, this ability to qualify may depend upon whether proper planning documents are in place ahead of time.
4. Talk to trusted advisors about how to prepare for the financial burden of Long Term Care—because there will be a financial burden. Our firm can help you consider options for Medi-Cal and Long Term Care Insurance, as well as some lesser known options such as a Dependent Care Account or a Care Contract with a care-giver child.
As you think and talk about these issues with your parents, siblings, and other trusted advisors, remember that you don’t have to go through this alone. Elder Law and Long Term Care are intricate and convoluted subjects, but there are caring professionals out there whose business it is to guide you through the intricacies of Elder Care. Let us help you look into the future with confidence and clear eyes.
Personal Care Contracts: The Hidden Solution to the Elder Care Dilemma
November 19, 2012
Caring for an aging relative is difficult—and often underappreciated—work. Many people who serve as caregivers often feel as if they have two jobs—their full-time day job at the office and the part-to-full-time job of caregiver at home. As their parents age and decline, most of these caregivers end up not only giving up more and more of their time, but also, eventually, their own opportunity for more income. Caregivers need to know that it doesn’t have to be this way; that if their elderly loved one (and perhaps the rest of the family) agree, the caregiver can be compensated according to mutually agreed upon terms of a Caregiver Agreement, also known as a Personal-Care Contract.
Elder law attorneys have known about Caregiver Agreements for a long time, but very few caregivers themselves are aware of this useful contract. A Caregiver (or Employment) Agreement serves to document a caregiver’s responsibilities and hours, and to set a rate of pay that’s in line with local practices and incomes. The contract would then be signed by both the caregiver and care recipient, and eventually shared with the rest of the family.
An agreement of this sort can be useful not only for the care-giver and the one cared-for; it also comes in handy if you think you may need to rely on Medi-Cal to cover nursing home costs sometime in the future. Payments voluntarily made to a family care-giver without a written contract would likely be viewed as gifts, potentially disqualifying the parent from a later Medi-Cal subsidy should he or she later need care in a nursing home. However, if payments to relatives are made under the terms of a written employment agreement which complies with Medi-Cal rules, the risk of disqualification from a later Medi-Cal subsidy is reduced dramatically.
Caregiver Agreements are also useful in Veterans Pension planning: qualifying payments made pursuant to a legitimate care contract may count as an Unreimbursed Medical Expense, potentially qualifying the Veteran for a monthly pension to help pay for care expenses.
It is important to remember, however, that in order for government programs to recognize an employment agreement between family members the contract must already be in place before services are rendered.
This is why it is so important to have such an agreement prepared by an Elder Law attorney knowledgeable regarding Medi-Cal rules and Veterans Pension Planning before any money changes hands. If you believe that a Personal Care Contract may be a useful tool to provide for the care of your loved one, we invite you to contact us to arrange a consultation.
With $5 Million Gift Tax Exclusion About to Expire, Is Now the Time to Give To Your Children or Grandchildren?
October 6, 2012
When legislation in 2010 raised the lifetime gift tax exclusion amount from $1 million to $5 million many wealthy families rejoiced, expecting that they would now be able to give large gifts to children or grandchildren and be able to save millions in taxes at the same time. But for all the rejoicing, the unsteady economy has made many people cautious, and has parents and grandparents thinking twice before giving away wealth that they may need themselves in later years.
According to this article in Bloomberg Business Week, however, the time has come for families to take a careful look at their finances and decide if they want to take advantage of the $5 Million gift tax exclusion before it expires. “Legislation enacted in 2010, which raised the lifetime gift-tax exclusion to $5 million from $1 million for each person starting last year, is set to expire. For 2012, the inflation- adjusted figure is $5.12 million for each person. It will drop to $1 million on Jan. 1 unless Congress acts.”
Parents who want to take advantage of the gift tax exclusion, but who worry that their children may not yet be ready to handle such a large financial gift, do have options. As the article points out, “Many [families] are setting up irrevocable trusts for children or grandchildren and transferring assets such as second homes that have the potential to appreciate.” This not only allows the assets to appreciate, but also allows parents and grandparents to breathe easy while young children or grandchildren have time to mature before receiving a gift or inheritance.
If you think your family may benefit from taking advantage of the gift tax exclusion before the end of the year, the time to act is now.
New Medi-Cal Protections For Same Sex Couples & RDP’s Coming
August 27, 2012
California has moved one step closer in treating same-sex couples and Registered Domestic Partners (“RDP’s”) the same as married couples in the context of Medi-Cal eligibility. The Medi-Cal Eligibility Division recently released a draft of instructions to California counties on how to implement legislation signed last year by Gov. Brown (AB 641, Feuer). This legislation proposes new rules allowing same-sex couples and RDP’s to retain assets and incomes similar to that allowed opposite sex spouses when one of them enters a long-term care facility and applies for Medi-Cal. The instruction is presently in draft form, but we anticipate that it will soon be finalized and disseminated to county welfare directors for implementation. The authorizing legislation was written to take effect retroactively back to January 1, 2012, subject to confirmation from the federal government that it will provide federal matching funds. We will post more information when the same is available. Thanks to California Advocates for Nursing Home Reform for bringing this ot our attention.