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Is It Too Late To Start My Retirement Planning Over?

By Rick Law,  Estate, Asset & Retirement Tax Attorney at Law ElderLaw in Western Chicagoland.

It’s a statement I used to hear all too regularly at the height of the recession.  Clients coming into my office would lament,  “We have lost so much in our mutual funds that I should just sell EVERYTHING and start over.”  I would ask, “How do you know that you have a taxable loss?”  Typically, the answer was something along the lines of, “Everybody knows that the whole market is down by at least 40%! That’s how I know.”

The markets are arguably in a better place than even a couple years ago, but still, many people are panicking and making the same big mistakes in dealing with investment losses.  The two main errors made are:

  • Thinking that perceived investment losses are the same as tax losses; and
  • Failing to understand that any withdrawal from an IRA, 401(k), or 403(b) will always be treated as ordinary income.

The loss our client feels is what I call the “the quarterly statement loss,” but it is not usually the same as a taxable loss. If you ignore Mr. Taxman’s rules, you could wind up compounding your losses.  The way to compute a taxable loss is to look up what you originally paid for an asset and compare that purchase price to the current sale price.  Let’s say that your rental property would sell today for $200,000, but in 2015, it would have sold for $300,000. What kind of a loss have you suffered?  Does the tax-man think that you have a loss?  The answer is, no!

If you bought your investment real estate at $300,000 in 2014, and in 2016 you sell at $200,000, then Mr. Taxman will agree that you have a long-term capital loss of $100,000 (please assume that we are ignoring depreciation and other adjustments).

But, if you are like most of my clients, you may have purchased the asset a long time ago at a price that is lower than today’s sale price.  If you sell today, you may have a significant tax bill, even though you feel like you have ‘suffered’ a loss of value.

For example, if you bought the rental property in 1975 for $50,000, the actual gain or loss will be computed from the original sales price (less any depreciation that you took as a deduction on an annual basis) compared to the current sales price.  So, if you sell that property now, you will be looking at a significant taxable gain.

It’s critical that you remember that money in your IRA represents deferred wages.  No matter when or how the money comes out of your IRA, it will be treated as if you are now receiving those wages.  You pay the income tax rate to the federal and state government.  The government never allows you to treat IRA withdrawals as a tax loss.

If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now.

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!

 


A Multi Generation Law Firm

 By  Attorney Rick Law of the Estate, Asset and Retirement Tax law firm of Law ElderLaw, home of the Estate Planning Center at Law ElderLaw in Aurora, IL.

As a prospective client, it’s completely reasonable for you ask your attorney about their own succession plans.

I was born in 1950 and my life expectancy is about 14 more years.  When I was on vacation a few years back, one of my attorney acquaintances died suddenly of a heart attack. He was 61 and a sole practitioner… kind of leaves you to wonder;  was he ready for the unexpected? What’s happening with his client’s files?  Thankfully, Law ElderLaw is a multigeneration firm filled with talented and personable lawyers, not the least of which is my Daughter, Diana.

Whatever attorney you choose, they should take no offense if you ask, “How old are you?”; “How will you keep track of my secure files in the future?”; and “What is your succession plan if something happens to you?”  Every client deserves to know the answers to those questions.

Here at Law ElderLaw one of our goals is to run our law practice with modern, business-style systems designed to care for our clients every step of the way.  Our systems begin with sending our message to prospective clients and ends with our final information and electronic file storage.  But most importantly, at Law ElderLaw we provide services to our clients as a team.  Running a law practice today requires management of much more than just the legal work, and we take that seriously—for ourselves and for our clients.

Let me leave you with a story;

Lola finished signing her estate plan documents and looked up at me and sighed, “That is such a relief!  Every time we drive in bad weather, I worry about dying before we have provided for our granddaughters.”

She has a lovely Spanish accent, so those words were definitely music to this attorney’s ears.

But then with a note of concern, she looked directly at my face and asked, “How old are you?”  Her worry had just changed from completing her estate plan to worrying about whether or not I would outlive her.

She wanted to feel confident that I would be around to help provide guidance for her granddaughter’s trust. And rightfully so! “ I am 65,” I responded, “and the good news is that Law ElderLaw has a second generation built-in. I am the oldest at our firm, but we have many young, capable people here to hold your hand if something happens to me.”

Too many families needlessly lose everything they have.  Don’t let that be you.  If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100.  Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now, because when you’re out of money, you’re out of options!

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!


Evaluating a Personal Care Agreement

By Elder Care Attorney Rick Law.  Founding Partner at the Estate, Asset and Retirement Tax Lawyers at Law ElderLaw in Aurora, IL.  Just off of the I-88 tollway.

So, what is considered “Fair Market Value” in regards to a personal care agreement? The first thing a hearing officer or judge usually checks when evaluating a personal-care agreement is whether caregivers are being paid fair market value for their services. This is especially the case when the services are being performed by a family member.

While services performed by relatives are often presumed to be gratuitous, the State Medicaid Manual states that “relatives and family members legitimately can be paid for care they provide.

The State Medicaid Manual further explains that the Medicaid applicant is required to show that the funds transferred to the related caregiver and the services received were exchanged for fair market value.

“Fair market value” is defined by the State Medicaid Manual as “an estimate of the value of an asset, if sold at the prevailing price at the time it was actually transferred.” While that may sound simple enough, determining the prevailing price of eldercare services is not as easy as it sounds.

Just about everyone in the legal field, including hearing officers and judges, will have a different opinion as to how to determine the prevailing price for caregivers.  There is no legal formula as to how to determine a fair market hourly wage, or even who should make that determination.  AARP provides an estimate of how much home-health aides are paid in each state. In some states, this estimate might be sufficient to show that the transfers in question were made for fair market value.

However, some state Medicaid agencies pay their personal-care attendants a much lower hourly wage than private caregivers, and that may skew fair market value. Lawyers should create an evidentiary record as to how they determined a fair rate to be incorporated into the contract.

After establishing the fair market rate, your lawyer still may face questions about what services are included and, in the case of Alzheimer’s disease, how wages would change with intensified care responsibilities as the disease progresses. Another issue to consider when calculating the fair market rate is any formal training that the caregiver may have. For example, a child who is acting as her mother’s caregiver and who just happens to be a nurse may have a higher fair market rate than her sister, who is a lawyer.

Unfortunately, there is a great deal of uncertainty when it comes to determining fair market value.

Too many families needlessly lose everything they have.  Don’t let that be you.  If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100.  Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now, because when you’re out of money, you’re out of options!

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!

 


Could Medicaid Help Pay for Your In-Home Care? Part 1

By estate planning attorney Rick Law.  Rick is founder of the Estate Planning Center at Law ElderLaw in West Suburban Aurora, IL.  LEL is a multi-generation law firm.

Most people want to remain at home for as long as possible as they age.

Some seniors living at home need help with activities of daily living. The problem is, the cost of hiring in-home help can add up quickly, and a nursing home or assisted living facility becomes the only option.

Few people know about a special benefit within Medicaid law that allows some seniors to stay at home longer, qualify for assistance with Adult Day care, and even keep more money – all while still qualifying for benefits to pay for care!  This benefit is called the Medicaid Community Care Program.

Most people think that Medicaid will only pay if the senior is in a nursing home and is already impoverished.  At Law ElderLaw, we strive to give our clients the best possible outcome – and that includes helping them qualify for special programs like this.

We work to ensure our clients are not left exceedingly impoverished, and receive the best care for their specific situation.

The Illinois Department on Aging’s Community Care Program helps seniors who might otherwise need nursing home care to remain at home by providing help that the senior may need.  This includes help within the home, as well as in the community.

This program allows qualifying seniors to keep their independence, while providing cost-effective alternatives to a nursing home.

In the next installment of my blog, you’ll learn about some of the powerful tools we use to protect Illinois families.

Too many families needlessly lose everything they have.  Don’t let that be you.  If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100.  Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now, because when you’re out of money, you’re out of options!

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!


Employment Taxes for Caregivers

by Estate Planning and Elder Law Attorney Rick Law, senior advocate and elder care attorney at the multi-generational law firm of Law ElderLaw in Aurora, IL.

The Internal Revenue Service has special rules that apply specifically to workers (caregivers) who perform in-home services for elderly or disabled individuals.

Because caregivers generally work in the homes of the elderly or disabled individuals and these individuals have the right to tell the caregivers what needs to be done, caregivers are usually treated as employees of the individual for whom they provide services.

If the caregiver employee is a family member, the employer may not be responsible for employment taxes. (Warning: Reread the first sentence of this paragraph! It does not say that employee is exempt from paying income taxes. Rather, it states in a much more limited way that the affected loved one is not responsible for their portion of employment taxes.) However, the employer still needs to report the caregiver’s compensation on a W-2.

If it is determined that caregivers are not employees, the caregiver is still required to report compensation as income on Form 1040.

Depending on the facts and circumstances, the non-employee caregiver may have to pay self-employment tax. Under a personal-care agreement, family caregivers do not owe self-employment tax on the payment for a family member unless they are in the business of providing care to others.

The determination of whether a family member caregiver is an employee is a fact-specific and complicated manner. If drafting a personal-care agreement in which the caregiver and the person receiving the care are related, Consult your trusted Estate Planning attorney who is familiar with the state’s laws on employment.

If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now.

Sincerely,   

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick has been named the #1 Illinois elder law estate planning attorney for the past 8 years in a row by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!


Financial Exploitation and Emotional Abuse

 by Rick Law, Law ElderLaw founder and managing partner.  Law ElderLaw provides wills and trusts, probate, guardianship, senior estate planning and much more for seniors and their families in DuPage, Kane, Kendall, Will and other counties in Illinois.

One example of financial exploitation and emotional abuse that stands out is when adult children who have drug or alcohol problems move into their parent’s home. The children often end up living off of the parent and then they become verbally abusive to obtain money for the purchase of drugs or alcohol.

In some cases, they will get their parent to sign documents giving them power of attorney, thus providing easy access to money for drugs and alcohol.

Charles Golbert, deputy public Guardian and supervisor of the Adult Guardian Subdivision with the Cook County (Illinois) Public Guardian’s Office, agrees that powers of attorney documents can be problematic.

“They’re just too easy to fill in and forge or have somebody who doesn’t have capacity to sign,” he says. “People are entitled to rely on the documents as long as there is nothing facially problematic about them. They’re very dangerous for that reason as well. In fact, I tell people powers of attorney are kind of the scariest documents that I know. I’d say they’re the single most abused document we see in our financial exploitation practice.”

It is very important to have a doctor examine a dementia patient if there might be any issue with capacity.  One of the challenges with some forms of dementia is that it is very hard for a layperson to determine capacity, and even giving a Mini Mental Status Exam (MMSE) can still lead to a false conclusion that people have capacity but, in reality, don’t understand the consequences of their acts.

I’ve seen it many times before… the lawyer is asked, “Why did you go ahead with this power of attorney paperwork when we have documentation that shows that the individual had dementia?” The lawyer will always respond, “Well, they appeared to be absolutely fine when I sat down and met with them.”

If your loved one has memory problems and you’re afraid of the consequences that may bring, give our office a call today at 800-310-3100.  Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now.

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!


Avoiding Asset Spend Down

By Attorney Rick Law, managing partner at the Estate Planning Center at Law ElderLaw. Providing estate planning, wills trusts, probate, guardianship, and elder law services to the western Chicago suburb of Aurora in Kane County, Illinois.

Let’s say a couple has a house that is valued at approximately $300,000 and two vehicles.  One spouse needs nursing home care and applies for Medicaid assistance. In Illinois, if one spouse stays at home (the “community” spouse), the home is considered “exempt”.  The community spouse can have one vehicle of any value and the institutionalized spouse can have a vehicle as long as the value is not more than $4,500 (unless it is a special vehicle for transportation due to medical needs—i.e., a wheelchair van). So, in this instance, their house and cars are exempt.

In addition to the house and the cars, let’s say they have a joint annuity of $100,000, a couple of CDs of $20,000 each, a brokerage account of $50,000, and a checking and savings account of about $15,000 total.

In Illinois, the community spouse can keep $109,560 and the institutionalized spouse can have a maximum amount of assets of $2,000, for a total of $111,560. Anything over the $111,560, regardless of the type of asset (even IRAs), must be spent down on care before the in prior to qualifying for Medicaid for the institutionalized spouse.

If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100. Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now.

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.  Call 800-310-3100 for your free consultation now!


And They Lived Happily Ever After!

By Rick Law of Law ElderLaw in Chicago, IL

Keith and Diane came in for planning. They both had just turned 62 and they had been married to each other for 40 years. Diane stayed home until their two children were both in school. She took a part-time job so she could still be available to be the room mother, to be home when the children got home from school, and to attend all her sons’ after-school sporting events and other extracurricular activities. Keith had a good job at a local factory and had worked his way up from the tool room to management.

Diane eventually went to work full-time when the boys were in junior high, so down the road there would be more money for things like college tuition and weddings. The children are grown and doing well. College tuition and weddings are behind them, and they even have a couple granddaughters. It was time for Keith and Diane to think about their retirement ride.

They hoped to cruise through retirement and enjoy this time of their lives traveling, taking the grandchildren to Disney, and comfortably growing old together. They were smart enough to know that they needed help.  They wanted to make sure that they had a plan in place that would provide for their future and leave an inheritance for their children and grandchildren.

They came to us for guidance. We created estate plans for Keith and Diane, complete with powers of attorney for healthcare and property, pour-over wills, several trusts, probate avoidance, and real peace of mind. We have become their trusted roadside assistants for the retirement ride.

If you’re ready to start getting your estate in order and secure your assets for the “worst-case” scenario, please give our office a call at 800-310-3100 or 630-585-5200. Your first consultation is absolutely free. We’ll let you know what steps you need to take, right now, to protect yourself and your family. Call now.

Sincerely,

Rick L. Law, Attorney, Estate Planner for Retirees.

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future. Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care.


Meeting the Medicare Criteria

By Estate Planning attorney Rick Law of Law ElderLaw, Illinois’ leading Elder Law attorneys.

As you may have read in our previous blog entries, Medicare only cares about you if you can get better.  Many seniors expect that Medicare will take care of them if they need to have long term care later in life, and that’s simply not true.

If you have an ongoing chronic diseases such as Parkinson’s, Alzheimer’s, and other degenerative memory and mobility issues, you will have to pay for the bulk of your costs – especially if you need long term care.

Fortunately, there are tools that a qualified Elder Law attorney can use to help you save some of your assets and even your home.  Be sure you have the right tools in place as soon as possible – because if you’re already out of money, you may be out of options.

Medicare will also pay some of the costs of home healthcare. If you need help only with basic daily activities, then Medicare won’t cover these costs. However, Medicare will cover the expenses of medical care in the home, including help with daily living activities, if it is part of a doctor’s orders.

In order to receive home care coverage from Medicare, the home care agency that is used must be Medicare-approved, and the patient must also meet certain qualifications of their Medicare, Medicare Advantage or Medicare Supplement plan. To meet the criteria set by Medicare in order to qualify for home care coverage, the patient must need at least one or more of the following:

  • Part-time nursing care
  • Physical therapy
  • Speech language therapy
  • Occupational therapy

In addition, the patient must be homebound. This means that leaving their home is a major effort and the person only does it rarely.  For example, the patient would only leave their home to:

  • Attend regular church services
  • Obtain medical treatment, including therapeutic or psychosocial care

If qualified for coverage, the patient must receive their home care services from a home healthcare agency that is approved by Medicare, and/or an adult day care program that is Medicare-approved and state-certified to provide adult day care services.

Too many families needlessly lose everything they have.  Don’t let that be you.  If you need help paying the overwhelming cost of long term care, give our office a call at 800-310-3100.  Your first consultation is absolutely free.  We’ll let you know what steps you need to take, right now, to protect yourself and your family.  Call now, because when you’re out of money, you’re out of options!

Sincerely,

Rick L. Law, Attorney, Estate Planner

Rick was named the #1 Illinois elder law estate planning attorney by Leading Lawyer Magazine. He has been quoted in the Wall Street Journal, AARP Magazine, TheStreet.com, and numerous newspapers and articles. Rick is the lead attorney for Law ElderLaw, LLP, focusing in Estate Planning, Guardianship, and Nursing Home Solutions. His goal is to give retirees an informed edge when it comes to dealing with an uncertain future.  Get flexible retirement strategies that work during good times and bad, plus information on how you can save your home and assets from being used to pay for long term care. 


Guiding Seniors