There is no question that getting a divorce is a stressful and tense time period. Emotions are heightened as paperwork begins to pile up, meetings with attorneys become more frequent and discussions between ex-spouses become argumentative or sad. Did you know, however, that “gray divorces” or divorces that occur much later than life continue to be on the rise?
The Pew Research Institute reports that “among U.S. adults ages 50 and older, the divorce rate has roughly doubled since the 1990s. In 2015, for every 1,000 married persons ages 50 and older, 10 divorced – up from five in 1990, according to data from the National Center for Health Statistics and U.S. Census Bureau. Among those ages 65 and older, the divorce rate has roughly tripled since 1990, reaching six people per 1,000 married persons in 2015.” Does a divorce at 65 years of age more significantly impact an individual than when he or she is younger? What is the impact on elder care law planning?
It is crucial to plan for your elder care needs whether you are married or divorced. For divorced spouses, however, examining how your needs will be met in the future is critical. Revising your estate plan after divorce is an essential part of the process and the first step in preparing yourself for the future. For most seniors on a fixed income, it is important for you to not only plan for your estate but for your potential long-term care needs as well. Let us share a few tips on how to plan forward in light of divorce.
1. Your last will and testament may no longer reflect your wishes.
After divorce in Florida, any provisions in your last will and testament related to your ex-spouse will become invalidated. Under the law, your will treats your spouse as having died at the time of the divorce. This may or may not reflect your wishes. In order to decrease any confusion, new estate planning documents such as a last will and testament or a revocable trust agreement should be created and executed.
2. Change your durable power of attorney as soon as possible.
In many marriages, spouses act as each other’s agent under their durable power of attorney. That means, if one spouse becomes incapacitated, the other spouse can legally make decisions for him or her. Similar to the last will and testament, the former spouses are treated as having predeceased one another. This is a document that must be updated as soon as possible as to prevent a lapse of person with decision making authority.
3. Plan forward with your elder care attorney for long-term care.
There are more options available for married individuals than for single individuals when it comes to long-term care planning. Many of the remaining strategies require a minimum of sixty months to be in effect before the benefits can be received by the individual. There is no guarantee that any of us will be able to avoid the need for long-term care in the future. It is critical to plan early to know how you will be able to afford this care by yourself without spending all of your hard earned money on a nursing home.
Divorce is never easy. It can become more complicated later in life. It is important to adjust all legal documents and your long-term care planning to reflect this new life change. Do not wait to talk to us about what you need moving forward from this difficult time.
Research tells us that more retirees are traveling than ever before. The AARP shares in the 2017 Travel Research Survey that “most Boomers (99%) will take at least one leisure trip in 2017, with an average of five or more trips expected throughout the year.” There continues to be a steady trend that Baby Boomers and older age groups will travel abroad as well, as opposed to staying in the continental United States. How much do you really know, however, about health care when traveling?
Both retirement and travel should be fun! The key to you and your senior loved ones having fun, however, is preparation. Unfortunately, a healthcare crisis can happen at any time. In most instances, traditional Medicare will not pay for your health care needs overseas. Let us share our insights with you on how to best protect yourself as a senior when you travel overseas.
1. Carefully review your health care coverage before you travel.
Traditional Medicare only provides healthcare coverage in the United States and its territories. Therefore, if you’re traveling to tropical destinations such as Puerto Rico, Guam, or the Virgin Islands, Medicare coverage will basically be the same. If you’re traveling outside the United States, however, you may not have any healthcare coverage. Before you leave, it is critical to read through your Medicare plan policy to know what is covered and what is not.
2. Travel with enough medicine to be covered for a longer duration of time.
Most Americans today take at least one prescription medicine. When packing for a trip, it may seem logical to pack just enough medicine to cover the duration of the trip. Best practice when traveling, however, is to pack enough medicine for at least one week beyond your scheduled travel days. You never know when airlines, cruise ships or your travel plans can be significantly delayed or how difficult it will be to have your emergency medicine order shipped to you.
3. Purchase a travel health care insurance policy.
One of the best ways to protect yourself while traveling is to purchase a travel health care insurance policy. Travel health care insurance policies are designed to provide for a gap in your existing coverage. Foreign doctors, hospitals and expedited medicine shipments can all be a part of the coverage. Be sure to read the policy before purchasing it and make sure none of the activities you are considering taking part in are excluded from coverage.
4. Look into emergency evacuation coverage.
In extreme medical situations, you may need to be transported back to the United States by ambulance. This can be extremely costly and not covered in any way by your health care plan. You may want to consider foreign transport or ambulance insurance when you are traveling abroad to make sure every contingency is covered.
Whether you are traveling abroad or staying close to home, when it comes to elder care planning preparation is key! Don’t wait to speak with a member of our legal team about the planning you and your loved ones need today.
If you are a caregiver for multiple ages, you know your job is not easy. Over half of the members of the Sandwich Generation, those caring for a minor child and an aging parent, find themselves balancing a multi-age caregiver schedule. The simple fact is people of different ages require widely different care, oversight and needs. While young children require a lot of supervised attention, seniors typically need more physical and health care assistance. For example, each age group has different daily demands from after school activities to physical therapy appointments.
Your multi-age caregiver schedules can rapidly become packed. Before you know it, your calendar is overflowing, and you are at risk of accidentally missing appointments and activities. In fact, you might find yourself breathing a sigh of relief when you simply remember to pick the children up from school or give the proper day sequence of medicine.
We know just how hard it can be for the family caregiver. This is a role that is often unpaid and over relied on. If this sounds familiar, there are a few tips we can give you to help juggle your busy lifestyle as a multi-age caregiver.
1. Find a local support system. There is nothing wrong with asking for help. Find friends, family members or neighbors to help you when you need it most. You can speak with other parents at your children’s school to see about joining a carpool group. If picking up your children from school coincides daily with your mother’s physical therapy appointments, speak with your school about after school care. Take offers for help whenever they come along, and do not feel ashamed for asking.
2. Stay organized. The most frantic and scattered caregivers are ones that are unorganized. Never knowing what is happening next, who to prioritize or even what day it is, will take a toll on you. Invest the time to set up a calendar on your smartphone or buy a paper calendar from the store. You can even try color coordinating your schedule by either person, age-group or level of priority.
3. Do not allow guilt to sink in. Even the most successful multi-age caregivers feel guilt from time to time. This is because you love the people you care for and want to be everywhere at once. Unfortunately, this is not possible. Do not let yourself feel guilty! Try to give equal attention to all age groups and have open communication with people that are old enough to understand. If you have to miss an appointment with your mom because you want to watch your son at his spelling bee, do not feel guilty. Remember that everything you do is for the best and you will be there for the next appointment.
4. Do not sacrifice personal time. While it is typically the last thing that caregivers do, remember to take time for yourself! Recharge the batteries, take a few deep breaths and clear your head. When juggling so many people and priorities at once, you can easily get extremely stressed out. Do not let it get to that point. Take a few minutes every day or a few hours a week to do something that benefits you. Afterward, you will be able to be more invested in your responsibilities.
5. Take care of your errands online. To put your entire self into the people you care for, some other things may have to be pushed to the side. If you do not have time for grocery shopping, order your groceries online from the store or utilize a meal delivery service like Hello Fresh or Blue Apron. Consider spending a few extra dollars a month on a house cleaner so you can spend that time with the people you care for. If you have no time to do laundry, research a laundry service in your area that can pick up and drop off your clothes.
Life can be stressful as a multi-age caregiver, but it does not have to be overwhelming. Take a deep breath. Remember why you are doing this. Do not hesitate to contact our elder care team as a resource.
Did you know there is a possibility you could one day be responsible for an aging parent’s long-term care costs? Filial responsibility is the legal and financial responsibility of a third party to pay for another’s unpaid expenses. Although it has only been enforced in a handful of states, over twenty-five states have these laws in place. Experts agree that as our states look for ways to pay for the long-term care costs for an increasing senior population, filial responsibility laws may gain traction.
What Is filial responsibility? How could it potentially impact you and your aging parents? Let us share the critical information about filial responsibility laws you need to know to help you plan.
1. The most common form of filial responsibility is the financial duty a child owes to a parent. If a parent is in need of long-term healthcare but cannot afford to pay, an adult child may become legally responsible. The Pittas case from Pennsylvania gives us a clear example of how this law could be used.
2. Filial responsibility laws are in place in over twenty-five states. While not all states have these laws, many do. With these laws in place, this responsibility could be assessed under certain circumstances and other states could seek to add these laws creating similar responsibilities.
3. The degree of responsibility varies from state to state. For example, in Arkansas, adult children are only responsible for paying for mental health care. In Connecticut, the law only applies to parents who are younger than 65. However, in other states there is full responsibility of costs for adult children over parents.
4. You can be sued if you do not pay the bill. Even if the bill comes without notice, these laws can give long-term care facilities the ability to sue if you do not pay. In this instance, and all elder care law scenarios, it is crucial for you and your parents to work with an attorney to plan for this potential issue as early as possible.
5. A Pennsylvania case reversed precedent and made the enforcement of filial responsibility laws a new trend. Prior to 2012, filial responsibility laws were rarely enforced. However, in Health Care & Retirement Corporation of America v. Pittas (May 7, 2012), the Pennsylvania Superior Court upheld a decision to make an adult son liable for a $93,000 nursing home debt.
If enacted and enforced, filial responsibility laws could have a tremendous impact on Florida seniors and their children. One of the best ways to plan ahead is to work with your elder care law attorney to discuss strategies and ways to pay for long-term care early. Do you have questions? You may contact us for more information.
The Tax Cut and Jobs Act (TCJA) is now officially law. Both the House and Senate passed the new tax reform bill in December with straight party-line votes and no support from Democrats. President Trump signed it into law right before Christmas. It is the first overhaul of the tax code in more than 30 years. In our continuing commitment to making sure you and your family are protected we want to share with you the tax reform impact on seniors and persons with disabilities.
Retirees, most of whom are on relatively fixed incomes, are probably the most concerned about what the new tax law will mean for them. But, generally, they will be less affected than others because the changes do not affect how Social Security and investment income are taxed. In fact, many will benefit from the doubling of the standard deduction and, with the new individual tax brackets and rates, will be paying less in taxes when they file their tax returns in April, 2019. (Most of the changes will apply to 2018 income, not 2017 income.)
Let us share the thirteen key individual provisions for retirees and persons with disabilities to know and plan for in advance. These individual provisions are set to expire at the end of 2025 so Congress will need to act before then if they are to continue.
1. (Mostly) Lower Individual Income Tax Rates and Brackets. There are still seven individual tax brackets and rates, but most are lower. Current rates are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. Here are the new rates and how much income will apply to each:
Rate Individuals Married, filing jointly
10% Up to $9,525 Up to $19,050
12% $9,526 to $38,700 $19,051 to $77,400
22% $38,701 to $82,500 $77,401 to $165,000
24% $82,501 to $157,500 $165,001 to $315,000
32% $157,501 to $200,000 $315,001 to $400,000
35% $200,001 to $500,000 $400,001 to $600,000
37% $500,001 and over $600,001 and over
2. Standard Deduction is Almost Doubled. For single filers, the standard deduction is increased from $6,350 to $12,000. For married couples filing jointly, it increases from $12,700 to $24,000. Under the new law, fewer filers would choose to itemize, as the only reason to continue to itemize is if deductions exceed the standard deduction.
3. Personal and Elderly Exemptions. Currently, you can claim a $4,050 personal exemption for yourself, your spouse and each dependent, which lowers your taxable income and resulting taxes. The new law eliminates these personal exemptions, replacing them with the increased standard deduction. The blind and elderly deduction has been retained in the new law. People age 65 and over (or blind) can claim an additional $1,550 deduction if they file as single or head-of-household. Married couples filing jointly can claim $1,250 if one meets the requirement and $2,500 if both do.
4. Medical Expenses Deduction. Currently, people with high medical expenses can deduct the portion of those expenses that exceeds 10% of their income. For example, a couple with $50,000 in income and $10,000 in medical expenses can deduct $5,000 of those medical expenses. The new law increases this to medical expenses that exceed 7.5% of income. In the example above, the couple would be able to deduct $6,250 of their expenses. (Note that this part of the new law applies to medical expenses for 2017 and 2018.)
5. State and Local Tax (SALT) Deduction. The amount you pay in state and local property taxes, income and sales taxes can be deducted from your Federal income taxes—and the amount you can currently deduct is unlimited. The new law limits the deduction for these local and state taxes to $10,000. Residents in the vast majority of counties in the U.S. claim an average SALT deduction below $10,000. Most low- and middle-income families who currently itemize because of their SALT deduction will likely take the much higher standard deduction unless their total itemized deductions (including SALT) are more than $12,000 if single and $24,000 if married filing jointly. Originally lawmakers in the House and Senate wanted to repeal SALT entirely, to help pay for the tax cuts, but lawmakers in high-tax states (specifically CA, IL, NY and NJ) fought to keep it in. Those in higher income households in high-tax states will benefit from the SALT deduction.
6. Lower Cap on Mortgage Interest Deduction. Currently, if you take out a new mortgage on a first or second home, you can deduct the interest on up to $1 million of debt. The new law puts the cap at $750,000 of debt. (If you already have a mortgage, you would not be affected.) The new law also eliminates the deduction for interest on home equity loans, which is currently allowed on loans up to $100,000.
7. Temporary Credit for Non-Child Dependents. Under the new law, parents will be able to take a $500 credit for each non-child dependent they are supporting. This would include a child age 17 or older, an ailing elderly parent or an adult child with a disability. It is temporary because it is set to expire at the end of 2025 along with the other individual provisions.
8. Higher Exemptions for Alternative Minimum Tax (AMT). The AMT was created almost 50 years ago to prevent the very rich from taking so many deductions that they paid no income taxes. It requires high-income earners to run their numbers twice (under regular tax rules and under the stricter AMT rules) and pay the higher amount in taxes. But because the AMT wasn’t tied to inflation, it has gradually been affecting a growing number of middle-class earners. The new tax law reduces the number of filers who would be affected by the AMT by increasing the current income exemption levels for individuals from $54,300 to $70,300 and for married couples from $84,500 to $109,400.
9. Federal Estate Tax Exemptions Doubled. The new law does not repeal the Federal estate tax, but it eliminates it for almost everyone by doubling the estate tax exemption to $11.2 million for individuals and $22.4 million for married couples. Amounts over these exemptions will be taxed at 40%. The new rates are effective starting January 1, 2018 through December 31, 2025.
10. Eliminates Individual Mandate to Buy Health Insurance. With the elimination of the individual mandate to purchase health insurance, there will no longer be a penalty for not buying insurance. This is expected to help offset the cost of the tax bill and save money by reducing the amount the federal government spends on insurance subsidies and Medicaid. The Congressional Budget Office expects that fewer consumers who qualify for subsidies are expected to enroll on Obama Care exchanges and fewer people who are eligible for Medicaid will seek coverage and learn they can sign up for the program. (Estimates of those who are expected to have no health insurance by 2027 are all over the place, ranging from 3-5 million to 13 million.) Critics, including AARP, claim that eliminating the individual mandate will drive up health care premiums, result in more uninsured Americans and add $1.46 trillion to the deficit over the next ten years, which could trigger automatic spending cuts to Medicare, Medicaid, and other entitlement programs unless Congress votes to stop them. Some claim the individual mandate helps to encourage younger and healthier Americans to sign up for coverage. Without it, the individual market might lean more toward sicker and older consumers, which might lead some insurers to drop out of the market. 29% of current enrollees on the federal exchange already have only one option in 2018. Others maintain that the mandate is not a key driver for obtaining insurance. About 4 million taxpayers paid the penalty in 2016.
11. Inflation Adjustments Slowed. The new tax law uses “chained CPI” to measure inflation, which is a slower measure than that currently used. This means that deductions, credits and exemptions will be worth less over time because the inflation-adjusted dollars that determine eligibility and maximum value would grow more slowly. It would also subject more of your income to higher rates in the future.
12. 529 Plans Expanded. 529 plans have been a tax-advantaged way to save for college costs. The new tax law expands the use of tax-free distributions from these plans, including paying for elementary and secondary school expenses for private, public and religious school, as well as some home schooling expenses. Educational therapies for children with disabilities are also included. There is a $10,000 annual limit per student.
13. ABLE Accounts Adjusted. ABLE accounts, established under Section 529A of the Internal Revenue Code, allow some individuals with disabilities to retain higher amounts of savings without losing their Social Security and Medicaid benefits. The new tax law allows money in a 529 education plan to be rolled over to a 529A ABLE account, but rollovers may count toward the annual contribution limit for ABLE accounts ($15,000 in 2018). The new law also changes the rules on contributions to ABLE accounts by designated beneficiaries who have earned income from employment.
As we move further into this year, expect some clarifications and strategies as the experts weigh in on the tax reform impact on seniors. There will also undoubtedly be some adjustments as the new tax bill goes into effect. Please don’t hesitate to contact our legal team if you have questions about these new provisions and how they may impact you or those you work with or if you are ready to start planning in light of these changes.
Estate planning creates a legacy for your spouse, children, and loved ones. This planning enables you to pass your real property, assets and finances to your heirs. In your plan, you choose who will manage your estate once you pass away.
Your estate plan, however, does more than plan for death. When you work with an elder care attorney, you can also plan for incapacity and long-term care. This comprehensive planning allows you to eliminate uncertainties regarding not only your estate but your future as well.
For Florida seniors and their families, this means estate planning is an elder care law goal.
This year, make your estate planning a priority. Set it as a New Year’s resolution! If you already have a plan in place, make it your resolution to review it to determine if it still meets your needs. By taking this proactive step, you are protecting yourself and your surviving family from long-term care issues, probate court, arguments and other serious issues.
If you do not have a plan in place, make it your resolution to decide to meet with an elder care attorney to begin the process of planning for what you need now and in the future. Your attorney can show you how estate planning is an elder care law goal and will benefit your unique situation. It is never too late to start, but it is better to begin this process earlier rather than later. Having everything in order prior to issues that can arise from the aging process or your death can minimize complications and stressors for your family members.
During this process, decide how much you want your family to be involved. When you include your adult children in the process it can help allay fears and help everyone learn what your wishes for the future are. If you decide to include your adult children, make it a goal to meet with them regularly and keep them up-to-date with your decisions, as well as any changes.
Creating a Florida estate plan that fully reflects your wishes and focuses on your elder care needs is critical today.
Only having a part of the plan can cause more harm than good when you need action taken by your decision maker on your behalf. Further, having an out-of-date or inaccurate plan can also lead to stressful events and family friction at a time when you are vulnerable.
The most important resolution you can make is to ensure you have the right plan in place when you need it. We are here to help you. Do not wait to contact a member of our legal team to get started.