Many happily married seniors are facing a previously unthinkable proposition: terminate their marriage or risk losing a majority of their savings to medical expenses, leaving both of them with little savings to enjoy their twilight years, regardless of how well they planned in advance. How can this happen? With medical technology ever improving, allowing us to live longer, most individuals will spend at least a few years in a nursing or retirement facility during our lifetimes. With the baby boomer generation approaching retirement age, more and more of us will fall into this category. How will these long-term care expenses be paid? The choices are private savings, long-term health care insurance, Medicaid or a combination. This is where the dilemma occurs.
For example, consider a devoted husband and wife living financially comfortable in retirement. Husband has a series of strokes and reaches the point physically where wife can no longer care for him. He must move indefinitely into a retirement facility where staff is available to care for him on a full-time basis. How will his care be paid? The couple can pay for his care but at $6,000 per month or more the money can be depleted quickly. The … Read More... “Divorce As A Medicaid Planning Tool?”
There remains great concern among seniors about how the new Health Reform Law will affect them, and it will be years before the true effect of the law among this group of citizens is known. However, some aspects of the law are clear, and the hope is that the overall positives will outweigh the negatives when all is said and done.
Recent estimates indicate that possibly more than twenty-five percent of all homeowners are upside-down on their home mortgages, meaning that they owe more on their home loan or loans than the fair market value of the residence. This makes it virtually impossible to sell at a private sale. When a couple goes through a divorce or dissolution and needs to divide the assets including such a home, what are they to do? One answer is to walk away from the house, which will lead to foreclosure litigation and a crippled credit rating. Another possible answer is to complete a “short sale”.
To the surprise of everyone in the estate planning community, Congress failed to address a critical estate and generation-skipping tax matter before the end of 2009, resulting in the repeal of the federal estate tax. However, this repeal is for 2010 only. In 2011, the exclusion for federal estate tax reverts back to $1,000,000. How is this possible, and what effect does it have on couples’ estate plans, particularly second marriages?
As the end of the year approaches, the following simple tax tips can keep taxes as low as possible.
As we all know, the typical family from the 1950’s television shows such as “Leave it to Beaver” have become a rarity over the years. A couple celebrating their golden wedding anniversary is not so commonplace. Today, approximately fifty percent of all marriages end in divorce. In the traditional family, estates usually involve wills and the use of “joint and survivorship” ownership between husband and wife or “beneficiary designations” to ensure that upon the death of a spouse everything would pass to the surviving spouse. However, in today’s modern family, there may be a second or even third spouse and children from prior marriages. How does an individual take care of his or her current spouse yet protect his/her children from a prior marriage?
Many individuals first think about estate planning when they get married. They realize that, at a minimum, they should have a will, general power of attorney and power of attorney for health care. They may later amend these documents due to life changes or changes in their financial position. However, one might be surprised to know that a recent survey by PNC Wealth Management disclosed that 30% of adults with financial assets of $500,000 or more did not have a will! A recent Harris Interactive survey of the general population found that 58% of all adults had no will. One might be even more surprised that if he or she had a will and became divorced, he or she may be no better off than if he or she had no will.