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Estate Planning, Uncategorized

Living Trusts Have Many Benefits for Seniors

SchulzeLawGroup

It’s an unfortunate fact that seniors are prime targets for financial abuse and scams. Sadly, the elderly are often taken advantage of by strangers — and sometimes even their own family members. That’s why it’s important that planning is in place to help seniors protect themselves and their assets.

As we age, it can become increasingly difficult to manage our assets. Most of us will, at some point, need assistance with these details to help ensure that our financial and other assets aren’t depleted. If you or an aging loved one are looking for ways to safeguard assets, a Living Trust is often the best way to do so. Living Trusts allow seniors to rest assured that their finances and assets are managed by a trusted person.

What is a Living Trust?

Living Trusts help protect and manage the assets of those who cannot do so themselves due to age, illness, or disability. Many seniors assume that a will is the only protection they need. However, trusts are designed to safeguard the assets of the living, while wills only outline what happens to a person’s assets when the pass away. Furthermore, wills must go before a probate court and taxes must be paid on inheritances, while Living Trusts allow beneficiaries to avoid probate after their loved one’s passing.

To establish a Living Trust the owner, or grantor, places assets within the trust. The grantor then appoints a trustee to manage it and names beneficiaries to receive the assets of the trust when the time comes.

There are different types of Living Trusts. Let’s take a look at each and the ways these trusts can benefit seniors.

Testamentary Trust

A Testamentary Trust protects an elderly person’s assets when a spouse dies. Assets of the deceased are transferred into a trust — enabling the appointed trustee to make all financial decisions regarding those assets. This helps a surviving spouse by protecting him or her from fraud or mismanagement of assets. Trustees can help the surviving senior generate income from remaining assets via sales or investments and take advantage of tax benefits.

Revocable Living Trusts

A Revocable Living Trust safeguards seniors by making it more difficult for non-trustee family members to mismanage money or assets. The grantor (senior) can amend or revoke the trust at his or her own discretion without the consent of the beneficiary. This type of trust allows the grantor to stay in control of assets by either serving as a trustee or appointing one. In this case, the grantor, serving as trustee and beneficiary of the trust, appoints a successor in the event he or she becomes incapacitated or dies. This appointed person is then responsible for the disposal of the trust’s assets.

Irrevocable Living Trusts

An Irrevocable Living Trust is one that cannot be changed or revoked by the trustmaker. This means that the grantor/trustmaker gives up his or her rights to the assets once they are transferred. Seniors over 65 who are eligible for Medicaid often choose to transfer assets into an Irrevocable Living Trust to avoid having to dispose of assets in order to remain eligible for Medicaid coverage or long-term care benefits.  Once assets are in an irrevocable trust, they cannot be counted for Medicaid eligibility purposes, but there could be a penalty for transferring assets to an irrevocable trust.

An elder law attorney can assist in determining the best way to set up this type of trust and how to best transfer assets based on Medicaid stipulations. An Irrevocable Living Trust can provide income for seniors and their spouses. It also protects their property and other assets from being seized to pay for medical costs, without impacting Medicaid eligibility. This type of trust can also remain in place for a surviving spouse after the grantor’s death.

The sooner assets are placed in an Irrevocable Living Trust the better, as a penalty will be assessed by Medicaid during the first 5 years the trust is in existence (if Medicaid is required during that time).

Ultimately, Living Trusts give seniors more control over their assets than a will, allowing them to set parameters and stipulations and appoint a trusted advisor to help them make decisions. If you or your loved one would like more information about setting up a Living Trust, we can help. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

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Discussion Points for You and Your Aging Parents

SchulzeLawGroup

Your parents are getting older, but you don’t have a clear idea if they have a plan in place for their care.  It is a difficult topic to broach; no one wants to talk about death and the financial realities that come with aging.  Instead of having a proactive conversation early in a parent’s aging process most families have a reactive discussion under high levels of stress and emotions while their parent is experiencing an adverse health event.  The Public Broadcasting Service (PBS) has reported that 85 percent of time long-term care decisions are made during a medical crisis. The message is clear, be proactive and start discussing the important financial questions with your parent.

Prepare Yourself

Your parent will be feel more comfortable and at ease if you have processed your feelings before talking to them.  Conduct research so that you are knowledgeable enough to present a clear and concise set of options for your parent.  Having options allows your parent and family to make decisions and feel in control of the process.  You are seeking progress, not perfection. It may not all become settled in one conversation, but the price of silence about your parent’s plan may be very costly to you.

Review Documents

Two of the most critical personal legal documents are a durable power of attorney (DPOA) and a healthcare proxy. All older adults should have these documents as it gives legal authority to a designated representative to make financial, legal, and health care decisions on your parent’s behalf. If your parent does not have a DPOA and becomes incapacitated, you will have to go to court to get appointed as your parent’s guardian which can be a complicated legal process at a time when your energy is better spent in the care and decision making for your parent. If they do not have a DPOA and health care proxy in place make arrangements for them to meet with a trusted elder law attorney to properly draft the legal documents.

Often a parent will have a will, retirement account information and insurance policies that have not been revisited or updated in years, sometimes decades. When was the last time your parent reviewed beneficiary designations? Family circumstances change, and the birth of a child, death or divorce can affect how your parent may want beneficiaries designated. It is best to review financial and insurance data annually with your parent and make adjustments if necessary. For example, if the parent’s children are grown it might be best to cut back on the amount of life insurance they carry to save money on annual premiums.

Long Term Care Plan

Address the issue of long-term care. According to the PBS, a full 70 percent of all seniors will need some long-term care as they age. Even if your parent is healthy today odds are they will require long-term care and the costs are staggering. Some life insurance companies will add a long-term care rider to an existing policy. Medicaid also can cover some long-term care costs, but neither standard health insurance nor Medicare will cover your parent’s long-term care expenses.

Meet the Team

Ask your parent about their financial advisors and request a brief introduction to them.  Find out who they are and how you might contact them in the event your parent is unable to do so. This information will allow you to keep an eye on your parent’s accounts and be confident the advisors are trusted, objective and well versed in elder financial issues. Oversight by you in a slightly detached way provides your parent privacy and independence about their finances but allows you to protect them from unscrupulous advisors. 

Understand Filing System

The last thing you need to discuss is where this vital information is filed so that before a crisis hits you know where to find the important documents, online passwords, and forms of ID you will need to facilitate your parents well being. While you do not have to see all the specific contents of the information, particularly the financials, knowing where they keep the data is critical in a crisis. Remember that as your parent ages they may start to change the location of the information. Check with them a couple of times a year to ensure the information is still in the same place and physically look to be sure it is.

Discussing your parent’s strategy is best begun while they are healthy.  Proactive planning is the best way to help your family as your parents age.  Contact our office today and schedule an appointment to discuss how we can help you and your family.Please contact our Reno office by calling us at (775) 853-5700.

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2018 VA Mission Act

SchulzeLawGroup

It has been no secret that the Department of Veterans Affairs (VA) has faced criticism in the past for its treatment of wounded veterans and their caregivers. On June 6, 2018, President Donald Trump sought to remedy this by signing the VA Maintaining Systems and Strengthening Integrated Outside Networks Act, or VA Mission Act. The Act was primarily designed to provide options and aid to expand private health care options through the VA. The Act also will eliminate, in stages, the previous limitation for caregivers of veterans who were wounded before 9/11 to receive government training and stipends.

Before the Act was passed by an overwhelming majority in both the House and the Senate, Representative Phil Roe, (R-TN) chairman of the House Veterans Affairs Committee, warned Congress to ensure that the VA has the resources to implement such an expansion. In a statement published by the American Legion, Roe said, “There has been miscommunication, confusion, and frustration from veterans, caregivers, and VA employees alike concerning practically every aspect of this program — from eligibility determinations to clinical appeals to revocations and more,” he continued, saying, “no veteran and no caregiver from any generation is well-served by having access in name only to a program that has the deficits this one does and is as ill-prepared as this one is to accept a sudden influx of new beneficiaries with complex, widely different caregiving needs from those veterans the program is currently serving.”

Roe’s foresight proved to be true as the VA and Congress have both struggled to provide direction and funding to move the program forward. The Senate estimates the cost of the Act will be around $55 billion over the next five years. However, Congress and the White House are locked in disputes over how to fund the program. As for the caregiver support portion of the Act, the cost is expected to be about $3 billion per year and increase from 21,000 veterans served to over 150,000 veterans and their families.

When the Act was signed, $5.2 billion in funding was provided to keep the current Veterans Choice program running through May 2019. Where funding will come from beyond that point continues to be unclear. Part of the reason for the funding crisis is that when Congress passed the VA Mission Act, it moved funding from mandatory appropriations to a discretionary program which must fit into overall domestic discretionary caps. However, the discretionary budget cap for 2019 and the projected caps for 2020 and 2021 do not include the increased costs necessary for implementing the Act, thus possibly leaving Congress with the inability to fund the program.

Eligibility for caregivers to receive training and financial assistance continues to plague veterans and their families. Congress still struggles to define exactly which veterans and caregivers are able to receive assistance. Currently, only post-9/11 veterans and those who suffered “severe, service-connected wounds or injuries” before May 1975 are eligible for benefits.

We will continue to post updates as Congress and the White House work out ways to pay for the VA Mission Act to take care of our veterans who have already done so much to take care of the citizens of this country. Please do not hesitate to reach out to our office if you have any questions. Please contact our Reno office by calling us at (775) 853-5700.

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Millennials Financial Planning

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A large part of millennials’ formative years was influenced by the US sub-prime mortgage crisis beginning in 2007, shortly followed by an international banking crisis, which led to what became known as the Great Recession. Millennials include fiscally conservative, savings oriented, and future planners seeking financial freedom as core attributes. The millennial generation would have ranged from ages 11 – 26 years of age when this economic downturn began. Living through this economic volatility, not seen since the Great Depression, gave rise to the fiscally conservative millennial mindset. The other socio-economic force that continues to shape the millennial fiscal mindset is the student loan crisis. Cbinsights.com finds 41 percent of millennials carry student loan debt for which there is no personal bankruptcy relief. This debt crisis places unique financial pressures on nearly half of a generation, and many are seeking new ways to manage their income, debt, and future savings. 

This conservative mindset has underpinnings of investment optimism about achieving financial goals according to reporting by the Union Bank of Switzerland Investor Watch report (UBS), and millennial goals are different from generations before them. The definitions of what being successful include a focus on personal success rather than maxing out returns on investments. This personal success is a balance of financial, relationship, and experiential factors, prioritizing long-term financial considerations like retirement or caregiving aging parents. Millennials understand their number one goal is to attain financial freedom, with a conscience. The UBS report goes on to say that 78 percent of millennials are more likely than other generations to believe income is a critical success factor and feel that income should be about 220,000 dollars to be considered a success. Millennials are also more apt to think money can buy happiness because their pursuit of money is geared toward financial freedom rather than excessive accumulation.

UBS Investor Watch Report

According to Forbes, many mid-life millennials (late 20’s and 30’s) are changing the order of, or opting out of traditional family and financial milestones of their predecessor generations. Some will have children before marriage; others will resolve all debt (think student loans) before entering into homeownership, and most will invest with sustainability and environmental concerns at the forefront of decision making. As the oldest millennials turn age 40 in 2020, many are conducting personal financial checkups, taking stock of their assets, liabilities, and insurance needs. Re-evaluation of and adjustments to financial plans help to ensure financial goals can be met.

Though most millennials do not yet have a professional financial advisor, ten self-directed steps can help to evaluate your current financial plans and make any necessary adjustments.

  • Specifically, relist your financial goals and work backward from them to see what financial processes you need to put in place to achieve those goals. Embrace learning and be patient as you track your spending, pay yourself first, and break long term goals into short achievable steps.
  • Think about life insurance. What will happen to your family or loved ones in the event your family has to survive without you and the income you provide? A death benefit will provide financial stability and help them to survive.
  • If you have not already done so, make a will and include medical directives, and consider a durable power of attorney should you become incapacitated.
  • Revisit the parameters of your current budget, and if you are willing, get outside professional input as most people’s expenses are higher than they think. There is a human tendency to overlook some existing expenditures and not be aggressive enough when it is time to make cuts in spending.
  • Assess and update your investment choices. Particularly pay attention to your 401(k) plan and other retirement savings vehicles like IRAs. Confirm they are aligned to your risk tolerance and perhaps reduce the number of high-risk equities into slower, high-dividend stocks. Look at the advantages of adding an annuity into your 401(k) plan and other changes that the SECURE Act of 2020 brings to retirement planning. Understand that the old model of 60 – 40 equities to bond ratio is no longer deemed advisable.
  • If you have excessive credit card debt, address it now. Pay down the highest interest balance(s) first if you are servicing debt as opposed to attacking a principal payment.
  • Do you have student loans? Again, pay down the highest-interest loans first by monthly auto-deducting it from your checking account. Explore the possibility of consolidating multiple student loans into one payment and negotiate a lower rate and longer time to pay lower monthly payments.
  • Weigh the costs of homeownership. Some millennials, particularly those without children, may prefer not to be anchored to home real estate, maintaining the flexibility of movement for job opportunities. Those who want a home must assess financial responsibilities beyond the costs of a mortgage and real estate tax, considering the workload and cost of home upkeep.
  • Review your health insurance, and be sure it is adequate to cover your family’s needs. Children especially are subject to many doctor visits and requirements for attending school with proper vaccinations. If you are fortunate enough to have health insurance through your employer, check that the deductible and co-insurance options make the most sense for your situation.
  • Finally, take a good look at your health situation. While this doesn’t sound related to finances in the long run, it is. Is your diet unhealthy, and are you overweight? These factors potentially set you up for the likelihood of diabetes two and future joint and mobility problems. Are your cholesterol and blood pressure numbers in a healthy range? Do you need to reduce alcohol intake? Do you work out consistently in the three formats you need, which are weight training (strength building), aerobic exercise, and a stretching routine like yoga? Being as physically healthy as possible reduces overall health costs.

Millennials are at the cusp of their middle age planning stage of life and realizing that life’s priorities are a moving target.  While the above pertains to millennials, the importance of planning – both legal and financial – is critical at any age.

We help families of all ages plan for what is important to them, and to make sure their plans and wishes and properly documented. If you’d like to discuss your particular situation, please give us a call. We’d be honored to help. Please contact our Reno office by calling us at (775) 853-5700.

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Ten Military Benefits you May Not Know About

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The US Department of Veterans, through Tricare and the GI Bill, offers numerous education and basic health care benefits to veterans. Even with these programs that help veterans and their families, other little-known services can improve their lives and ease the financial burden of medical care and other expenses. Check your veteran status to see if you qualify for the following ten benefits:

Long-term Care

It is well documented that long-term care is expensive, but it is often necessary to provide aging relatives. Through the Aid and Attendance program, many veterans can receive money that covers the cost of assisted living programs, nursing homes, and other long-term care facility options. Currently, couples can receive up to $25,020 annually, which can defray a significant portion of the costs associated with long-term care. A veteran’s surviving spouse is also eligible to receive up to $13,560 annually to cover their long-term care costs.

Caregiver Support

Suppose you decide to provide care for your ailing veteran at home, then check into the Veterans Affairs Caregiver Support program. While the program does not offer monetary support, it does give the caregivers a no-cost support line and a caregiver support coordinator who can provide invaluable information when navigating military benefits and learning stress-reducing techniques while caregiving.

Death Benefits

Burial benefits for veterans provide a family with a way to open and close the gravesite of their loved one in any of the 148 national cemeteries with available space and provide perpetual gravesite care at no cost. Additionally, the program provides a government headstone or marker, a burial flag, and a Presidential Memorial Certificate.

Non-College Degree Certificates and Programs

Many veterans are looking for jobs to increase their income or boost their retirement savings.  The GI bill can provide training certification courses and vocational training programs for emergency medical training, barber/beautician school, truck driving, HVAC repair, etc. The VET TEC program offers other non-college degree programs with accelerated learning in coding boot camps and other associated information science programs and software training. There are also free certification programs in information technology for qualifying veterans.

Free Tax Preparation Services

Veterans and their families can use the free tax preparation services available on military bases through the Volunteer Income Tax Assistance offices. The tax preparers in these offices have expertise working with the complex nature of military-related tax issues.

GI Bill Credits Transfers

As a veteran, if you have unused credits through the GI Bill, you may transfer them to your spouse or dependents. If you qualify for the service limits, then you can transfer the benefits.

Life Insurance

Traditional life insurance can be difficult for a veteran to get; this is particularly true in sustaining an injury during their time of service. The Servicemembers’ and Veterans’ Group, Life Insurance Program, can provide up to $400,000 in life insurance and offer competitive premium rates. To learn more, visit the VA’s Group Life Insurance website for servicemembers and veterans.

Delinquent Mortgage Help

Repayment assistance is available for veterans having trouble making their mortgage payments. Some of the options available include special repayment plans, loan modification, and loan forbearance programs. There are also benefits for veterans with VA loans as well as for homeless veterans.

VA Foreclosures

Veterans can search the list of VA acquired properties and purchase these homes at a discount. The VA maintains this list of homes that are serviced through VA Home Loans and are in foreclosure. Although you do not have to be a veteran to search the property list, all qualify for VA financing.

American Corporate Partners

Veterans can connect their skill sets to job opportunities in top companies through American Corporate Partners. This service also provides one-on-one mentoring, interview coaching, resume assistance, and more. If you are looking to start a second career, this service can help you identify the best move for you.

Benefit opportunities for a veteran can make a big difference in lifestyle for themselves and their family members. Understanding the process of veteran qualification/eligibility and properly submitting paperwork for approval can be difficult to navigate. Identify the programs that can help your veteran and then contact an elder law attorney specializing in veterans’ benefits, like us. We’d be honored to help. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

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Power of attorney after 18 years old

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When your child turns 18 (in most states), it might be hard to imagine that your little kid once needed you for everything. Now your child is free to vote, marry, apply for a credit card, make medical and financial decisions, sign contracts, and live independently. No wonder the law calls this coming of age “emancipation.”

But if your adult child is hurt in an accident and needs somebody to make critical medical decisions, you cannot be the one to do that without your child having named you as power of attorney, even if you’re still paying for your child’s health insurance. If that child is so injured that a guardian is needed, you would not automatically be that person. Court proceedings would be required and those are expensive and time-consuming. A health care power of attorney would avoid that headache and would give you the standing you need, in one efficient document.

In money matters, you will not be permitted access to your adult child’s bank accounts unless your child has made you agent in a financial power of attorney.

Even if you’re paying for your child’s education, schools are not permitted to release educational records without a signed “FERPA” disclosure statement when your child reaches majority. See:

https://www2.ed.gov/policy/gen/guid/fpco/ferpa/safeschools/modelform2.html

Becoming an adult is a major milestone. Your child’s 18th birthday would be a good time to explain about paying bills, getting a copy of the child’s social security card and birth certificate, living independently, registering to vote, and signing contracts to rent apartments, for example, or make major purchases like a car.

Remember to include the powers of attorney in that discussion. They are invaluable when your adult child needs you, at a stressful time when you do not want to hear any “no’s.” Powers of attorney could save you and your child delay, heartache, and expense.

We would be happy to help you or your child with the proper powers of attorney, as well as other planning needs that become more urgent as we grow older. If you’d like to discuss your particular situation in a confidential setting, please schedule time with us to do so.

If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

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Aging Veterans and VA Benefits

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More than 18.2 million veterans live in the United States, and 38 percent of them are 65 and older according to the US Census Bureau. Additionally, the Census Bureau reports that more than 9 million veterans receive services from the Department of Veteran’s Affairs (VA) annually. If you are a veteran or have a loved one who is, it is important to understand all the VA resources and aid that is available. Beyond education programs, home loans, and job search and training resources, the VA also provides a host of other resources to assist you as you transition to your retirement years.

Wartime Veterans Supplemental Income (Veterans Pension)

Supplemental income is available for wartime veterans through the VA pension benefit. If you served at least 90 days of active duty before September 7, 1980, or 24 months after that date, or served the full period for which you were summoned or ordered to active duty with at least one day of wartime, you may qualify.  You must have also been discharged under conditions other than dishonorable. There are strict income and asset requirements attached to this benefit as well as the survivors pension and the housebound or aid and attendance allowance discussed below.

Survivors pension

If your late parent or spouse served during wartime, you might qualify for the survivor’s pension. This tax-free program provides relief for unmarried children or a widow or widower who has low income. The deceased military veteran must have served a minimum of 90 days active service with a minimum of one day served during a period of wartime before September 7, 1980, and been dishonorably discharged. After that September date, the deceased veteran must have served a minimum of 24 months or the full period summoned or ordered to serve active duty. Pensions are based on annual family income and under a designated amount set by Congress. More details regarding military pension eligibility are found on the VA website.

Housebound Allowance and Aid & Attendance Benefit

If you are eligible for or are already receiving a veterans’ pension, you may qualify for additional monetary benefits. If you are permanently disabled and must remain in your current home, the Housebound Allowance will increase your monthly pension. Aid & Attendance (A&A) will compensate a veteran who is either residing in a nursing home, bedridden, requires assistance for activities in their day to day life, or whose eyesight problems meet specific thresholds of degradation. More details for Housebound Allowance and A&A eligibility can be found on the VA website.

Veterans Life Insurance Options

There is a wide variety of life insurance offerings through the Veterans Administration. Servicemembers’ Group Life Insurance (SGLI, VA form SGLV8286) is a group term life insurance that is low cost and is automatic for most active-duty service members. It is also available for those veterans who serve at least 12 periods of inactive training per year with the Ready Reserve or the National Guard. Other automatic qualifiers include belonging to the Commissioned Corps of the National Oceanic and Atmospheric Administration or the Public Health Service, and for midshipmen and cadets of the US military academies and ROTC members. You can extend the coverage up to two years if you are fully disabled at separation. Veterans’ Group Life Insurance (VGLI, VA form SGLV 8286A) allows you to convert your SGLI to a civilian program of lifetime renewable term coverage after leaving military service.

Family Servicemembers’ Group Life Insurance

If you qualify for SGLI, your spouse and children are qualified for Family Servicemembers’ Group Life Insurance (FSGLI, VA form SGLV 8286A). This insurance covers your dependent children free of charge, although the coverage for your spouse cannot surpass your amount of coverage.

Servicemembers’ Group Life Insurance Traumatic Injury Protection

If you sustain a traumatic injury during your service that leads to amputation, blindness, or paraplegia, you qualify for benefit payments made through Servicemembers’ Group Life Insurance Traumatic Injury Protection (TSGLI, VA form SGLV8600).

Service-Disabled Veterans’ Life Insurance

The Service-Disabled Veterans’ Life Insurance(S-DVI, VA Form 29-4364) coverage is provided to veterans who have been given a VA rating for what is called a new service-connected disability within the past two years. Coverage is free for eligible veterans who are fully disabled, and you can purchase additional life insurance.

Veterans’ Mortgage Life Insurance

As a veteran, if you are disabled and approved for a VA Specially Adapted Housing (SAH) grant, you may receive mortgage life insurance coverage through the Veterans’ Mortgage Life Insurance (VMLI, VA Form 29-8636).

This link takes you to an overview of these VA insurance benefits. You can click on the insurance program by name and be automatically redirected to the appropriate VA web page for that benefit.

Disability Compensation

Tax-free Dependency and Indemnity Compensation(DIC, VA Form 21-534EZ) is available to veterans who sustain or aggravate an injury or disease during their active service. The disability may include physical and mental health issues and secondary or related items diagnosed after your discharge. Your child may be eligible for DIC if they are not included in the spouse’s DIC, and there is an income-based DIC for parents. A disability can also qualify you for a higher, tax-free Special Monthly Compensation if you are housebound and need special assistance or have trouble performing daily living activities. Additionally, housing and insurance benefits through the VA, like Veterans’ Mortgage Life Insurance, Service-Disabled Veterans’ Insurance, and Adapted Housing Grants may be available.

Geriatrics and Extended Care Services

The Geriatrics and Extended Care Services (GEC) provides help to veterans with life-limiting illnesses, multiple chronic conditions, or disabilities associated with aging, injury, or chronic disease. The GEC will assist a veteran living at home or in a nursing home, assisted living, or other residential community care facilities. GEC services include home health aide care, daily care, telehealth care, palliative care, respite care, hospice care, and even veteran-directed care.

Military Burial

Veteran burial benefits include a gravesite in a national veteran’s cemetery, a government marker or headstone, the opening and closing of that grave and its perpetual care, and a Presidential Memorial Certificate. The marker, headstone, burial flag and certificate are provided at no cost the veteran. Additionally, dependents and spouses buried in a national veteran’s cemetery may also qualify for some benefits such as burial with the veteran, inscription on their headstone, and perpetual care. For a complete description of your veteran benefits, check this VA website link.

Percentages of veterans receiving benefits:

  • 25-34 years 24.7 percent
  • 36-44 years 21.5 percent
  • 45-54 years 25.8 percent
  • 55-64 years 19.8 percent
  • 65-74 years 5.0 percent
  • 75+ years 1.3 percent

If you are a veteran or have a loved one who is, it is crucial to understand that veteran resources go far beyond career and end-of-life issues. Many veterans are not taking full advantage of VA offerings. Many VA age-related programs can benefit a veteran’s life beyond simply planning their future care. Become acquainted with the many options available and determine which programs you qualify for and best serve your interests. With so many benefits available through the VA, you can improve your living situation during your retirement.

The overview is just a summary of what may be available to a wartime veteran or a veteran who is disabled as a result of their prior service. If you or a loved one would like to explore whether you are eligible for benefits, please don’t hesitate to reach out. Please contact our Reno office by calling us at (775) 853-5700 with any questions.

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Why Veterans Benefits Planning is Vital for Aging Veterans

SchulzeLawGroup

The COVID-19 virus is not going away as many had hoped. And studies have shown it is deadlier for those over the age of 65. Individuals living in senior living communities, such as independent living, assisted living, memory care, and nursing homes have the highest risk of becoming infected and possibly dying from the virus or a secondary illness, such as pneumonia, after being weakened from the virus. For many families, providing long term care for a loved one in the home has become an even bigger priority than normal. In-home care can be costly, which makes the Aid and Attendance Benefit provided by the Department of Veteran’s Affairs of critical importance to help pay for such care.

Veteran Aid and Attendance Benefit

The Aid and Attendance Benefit, technically called the Improved Pension Benefit, is a cash benefit paid to wartime veterans that are over the age of 65 and require another person to assist them with activities of daily living, such as bathing, dressing, feeding, and assistance with incontinence, or requires a protective environment due to mental decline. The Aid and Attendance Benefit is also available to similarly disabled spouses of deceased wartime veterans that are over the age of 65. It is this need for assistance with care or a protective environment that has the family looking into long term care facilities for their loved one.

The Aid and Attendance eligibility rules also require the person receiving the benefit to have limited income. Simply put, all income of the applicant and the applicant’s spouse must be offset by the medical expenses of the applicant and the applicant’s spouse. Any income not offset by medical expenses reduces the amount of the benefit. Under the Aid and Attendance rules, when the wartime veteran or surviving spouse requires assistance with activities of daily living or a protective environment, paying an in-home caregiver to provide that care is a medical expense. It does not matter whether the caregiver is a child or hired through an agency.

Current Veteran Benefits

For 2020, the maximum benefit paid to a married wartime veteran is $2,266 per month. The maximum benefit paid to a single wartime veteran is $1,911. The maximum benefit paid to a surviving spouse of a wartime veteran is $1,228. Working carefully through the math, if a married wartime veteran needs long term care and has a household income of $4,000 per month, he or she will need to spend $4,000 per month on medical expenses to receive $2,266 per month. That veteran likely already has medical expenses in the form of two Medicare and two Medicare supplement premiums, as well as possibly two Medicare prescription supplements. The remaining income needs to be spent on additional medical expenses, specifically an in-home caregiver.

The family must now decide the best way to navigate paying the in-home caregiver. If the couple has children, perhaps the remainder of the household income can be paid to a child, or split among the children, as payment for caregiver services. In many cases, using a child or children as a caregiver allows for flexibility in the amount a caregiver is paid. The income calculation can be manipulated to net out at exactly zero, instead of going into the negative. This allows the veteran to use the $2,266 per month benefit to pay for the couple’s non-medical living expenses.

Other Veteran Benefits for Caregiving

The other option is to hire a caregiver from an agency. This option is more expensive than using a child as a caregiver, but it comes with the added benefit of ensuring taxes are withheld and workers’ compensation insurance is provided in case of an accident. If the family wants the income calculation to net out at exactly zero, the veteran typically will not get as many hours of service from the caregiver hired through an agency compared to hiring a child since an agency typically charges a higher per hour rate. This would work well for a veteran that does not need a lot of care, or that has a wife and/or children that can cover the additional hours of care for free. Otherwise, the agency will need to be paid to provide the additional hours of service, which means the $2,266 benefit paid by the Department of Veterans Affairs will also be used to pay for the care and the couple will have to use assets to pay for the couple’s non-medical living expenses.

The Aid and Attendance Benefit also has an asset limit the applicant must meet, along with a penalty for giving assets away and a 3-year period to look back at the applicant’s assets to see if any gifts were made. These rules should not dissuade a wartime veteran or surviving spouse from seeking this benefit. The need for long term care will only increase. The cost of care will only increase. And now the COVID-19 virus makes it critical that everything possible is done to protect this vulnerable community.

If you have questions or would like to discuss whether you or a loved one may qualify for Veterans Benefits, please don’t hesitate to reach out. Please contact our Reno office by calling us at (775) 853-5700 to learn more about your VA planning options.

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How to Plan Ahead for You or a Loved Ones Inheritances and Medicaid

SchulzeLawGroup

How to Plan Ahead for You or a Loved Ones Inheritances and Medicaid

Mistakes can be made when it comes to inheritances and Medicaid. Those mistakes can be costly.

When a person is drawing Medicaid benefits and inherits money or property, that inheritance jeopardizes the benefits. The inheritance must be handled carefully to minimize expensive penalties. What “careful” means, though, can be misunderstood without the necessary expertise.

The Right Steps for Handling Inheritance

The first and best idea is to call experienced elder law attorneys like us. (An even better idea is to call us well before any inheritance becomes a “problem.” The sooner you call us, the more money we can likely protect for you.)

An Ohio attorney was recently suspended partly because he mishandled this Medicaid-inheritance issue. The mistaken advice was that to protect the benefits, the person who stood to inherit should “disclaim” or “renounce” the inheritance – in other words, give it away to someone else.

Medicaid Rules and Inheritance Context

That advice would have been OK in the tax context. It was not OK in the Medicaid context. The Medicaid rules count inheritances regardless whether the recipient keeps them or passes them on to someone else. The bad result, in such cases, is that the person receiving Medicaid would be charged just as if he or she had taken the money, even if he or she gave it away, and the person’s benefits would be docked accordingly. This can be a very expensive misstep.

The better result would be to consult us immediately. We can advise you on necessary  techniques to split the inheritance between the recipient and somebody else, like a child. If the right strategies are used, Medicaid would count the inheritance to an extent, but not as much as it would have if the recipient had simply given away the whole sum.

An even better result would be if the person leaving the inheritance had consulted us first. We know how to structure that person’s financial arrangements, to protect the people to whom the person wants to leave his or her legacy.

Elder law is a law unto itself. We know that complicated area of the law well and we have helped many people successfully meet the challenges it poses. Please contact our Reno office by calling us at (775) 853-5700 to learn more about your planning options.

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Social Security Disability Income and Qualifications 101

SchulzeLawGroup

Temporary or permanent disability can happen to anyone at any time. Do you understand the role social security can play? Some projections are estimating that Americans in their 20s today have an approximate 30 percent chance of experiencing a disability profound enough to cause them to miss three or more months of work before retiring. Despite the risks, most Americans do not carry short or long-term disability insurance. Close to half of all mortgage foreclosures are due to owners being struck with a disability, and fewer than 15 percent of people who purchase life insurance opt for disability insurance. The Social Security Administration (SSA) was tasked in 1956 to address disability and work income by creating a disability insurance program. Throughout its long history, additional rules have contributed to its complex regulations and eligibility requirements that make applying for disability benefits difficult.

What Are the Disability Benefits and Eligibility?

The disability benefits are in the form of monthly payments to provide a safety net for qualified individuals who have become too disabled to work. The benefits are paid through the Social Security Disability Insurance (SSDI) or the Supplemental Security Income (SSI) Programs. Both of the programs are intended for disabled workers, but they have different benefits and qualifying requirements as well as different funding sources.

To become eligible for the SSDI program, you will have worked a required number of years in a job where you paid into the social security taxes (FICA, Federal Insurance Contributions Act). You have to have accrued a certain number of work credits. You can earn up to 4 work credits per year. Workers that do not have the required number of work years and who also have low income and minimal assets can apply for SSI. In both programs, you are not eligible to be engaged in a substantial gainful activity (SGA), earning a certain amount of income from some other work.

The number of work credits required as a qualification for SSDI benefits depends on the age at which you became disabled. Generally, it is possible to qualify if you have earned at least 20 credits in the ten years before being disabled and if you have earned credits that total 40 or more. If you do not have enough work credits to qualify, there is a chance you can become qualified based on a spouse or parent’s work record. There are many regulations governing eligibility for SSDI, and each individual has a varied work history. To understand how to qualify and how much you should be able to receive, it is best to contact a legal professional for help.

Maintaining Disability Qualifications and Benefits

Once you qualify from a work history perspective for SSDI, then you must prove you meet medical eligibility requirements. SSDI benefits are available to those workers who have a severe, long-term, or total disability. A severe disability is a condition that interferes with general work-related actions. Long-term disability means you are unable to perform “substantial gainful activity” (SGA) for a minimum of one year. Total disability is a person’s inability to work in their own or any other occupation for which they are suited by training, experience, or education due to a sickness or injury.

SSI medical qualifications are similar to medical terms used in SSDI qualifications; however, these individuals must also have limited resources and a low income. The benefits from the SSI program are funded through general tax revenue and not dependent on your work history or having paid into the social security taxes known as FICA.

For either program, it can be challenging to qualify for the SSA’s definition of disabled. To be considered disabled by the SSA, your condition has to last a year or be expected to last a year. Or your condition should be expected to result in your death. Your condition must also significantly limit your abilities to do necessary work activities like walking, sitting, standing, or retaining and remembering information. Additionally, your condition must be listed in the SSA’s “Listing of Impairments” (Blue Book) or have medical equivalency to listed conditions. Finally, your condition must prevent you from doing any work for which you qualify before your disability.  

The Approval Process for Social Security Disability

Becoming approved for benefits is a lengthy and often frustrating process as many people are denied on their first application. A myriad of forms, doctors’ recommendations, personal medical history, work, and tax documentation all contribute to becoming accepted into either program. You can apply online or at your local social security office. It is best to contact the office to schedule an appointment to submit your application for benefits. Regarding financial qualification, be prepared with your work history and current earnings, household assets and income, your bank, and financial institution information. Also required is your current and past employers and up to five jobs you have held in the past 15 years, any other benefits you may be receiving, your status of citizenship, and, if applicable, any paperwork from a military discharge.  Pay stubs, proof of citizenship, W-2s or 1099s, information about your disability, and detailed medical records are all pertinent data to bring.

An initial application that is denied has multiple stages of appeal. You can enter a request for reconsideration or even go up as high as an appeal to a federal court. If your condition has made you very sick and you are experiencing a severe medical condition, there is a streamlined process known as the SSA’s Compassionate Allowance List. This list primarily includes adult brain disorders, certain cancers, and several rare disorders that affect children. If and when you are approved for disability income through SSDI or SSI, there is a waiting period. Benefits will not be made available to you until you have been disabled for a full five months, and, likely, you will not be approved for six months to a year, including the likelihood for at least one level of appeal. Be prepared from the outset for a lengthy process and improve your chances for approval with a well thought out, legally reviewed application for disability income. If you have questions or would like to discuss your situation with us, please do not hesitate to contact our Reno office by calling us at (775) 853-5700.