By Hook Law Center
Older people are getting divorced more frequently than ever before. Divorce can be a significant roadblock for retirement planning and financial security. Although divorcing earlier in life can have a minimal impact on retirement, divorcing after the age of 50 can have huge implications.
Couples who are getting divorced should collect information about all of their retirement accounts, including IRAs, 401(k)s and pensions. Retirement account assets may be awarded to one party, or they may be divided between the divorcing spouses.
Pension plans are handled differently. The spouse who holds the pension has the option of either buying out the other spouse or giving a share of the benefits. To buy out the other spouse, the pension must be valued by actuarial analysis. A court order may order the pension to be split 50/50 or by some other ratio, depending on whether the couple were married for the entire duration of the pension.
If the couple was married for at least 10 years, and one spouse does not have work credits worth at least half of the other spouse’s, then that spouse can receive Social Security benefits. After one spouse’s death, the other spouse can claim the entire amount of the former spouse’s Social Security benefits.
In addition to overhauling one’s retirement plans, a divorced individual should review all estate planning documents to ensure that they reflect the individual’s current wishes.
By Hook Law Center
Deciding what type of health insurance to get can be a daunting task for seniors. Medicare is highly regarded and very popular, but Medicare Advantage differs in ways that could be advantageous to some.
Original Medicare includes Medicare Part A (hospital expenses) and Part B (other health care such as doctor’s office visits). The monthly premium for most participants is $104.90. Participants also pay “coinsurance” of 20 percent of most medical services.
Medicare Advantage, or Medicare Part C plans, are run by private insurance companies, and must offer comparable coverage to parts A and B. Some Medicare Advantage plans charge the same premium as Original Medicare, but many charge an additional premium. Most also charge coinsurance or a copay (a flat fee for a medical service), and these fees vary from plan to plan.
Original Medicare offers the widest choice of doctors and other health care providers. This may be particularly important to you if you like to travel. Original Medicare also has a lower monthly cost than most Medicare Advantage plans.
Most Medicare Advantage plans cover prescription drugs, which costs extra under Original Medicare. Medicare Advantage plans, by law, have a maximum out-of-pocket expense of $6,700 per year. This can give peace of mind, but most people’s out-of-pocket Medicare spending is far less than this amount. Some plans also offer vision, dental, assisted living and nursing home care, unlike Original Medicare.
The decision to go with Original Medicare or Medicare Advantage can only be made based on the particular terms of the Advantage plan that interests you. Because they are offered by private companies, Advantage plans vary widely in terms of their coverages, premiums, copays and coinsurance fees. Consider carefully the pros and cons of each option and consult with an expert if you need help deciding.
By Hook Law Center
If you were denied coverage or payment by Medicare, you have the option of filing an appeal. The denial must be from Medicare, your Medicare Prescription Drug Plan or your Medicare health plan. It is within your right to file an appeal if you were denied any of the following:
- A health care service, prescription drug, item or supply which you think you are entitled to
- Payment for a health care service, prescription drug, item or supply that you already received;
- A change in the amount you are required to pay for a healthcare service, prescription drug,
item or supply.
You can also file an appeal if Medicare or your plan ceases to offer or pay for your health care service, prescription drug, item or supply. If you are enrolled in a Medicare Medical Savings Account (MSA) Plan, you can file an appeal if you believe that you have satisfied your deductible or you think that a service or item should be applied toward your deductible.
In the event that you decide to file an appeal, request any information that could be helpful to your case from your physician, health care provider or supplier. The appeals process consists of five levels. If you do not agree with the decision reached at any level, you can usually proceed to the next level.
The first step in filing an appeal is to review your Medical Summary Notice (MSN), which lists all of the services and supplies that were billed to Medicare during a time frame of three months. It also reveals the amount paid by Medicare, and the amount you may be required to pay the provider. In addition, the MSN shows whether Medicare has denied your medical claim.
You will receive an MSN by mail every three months. Should you decide to file an appeal, you must do so within 120 days of the day on which you received the MSN in question.
Here are the three ways in which you can file an appeal:
- Complete a “Redetermination Request Form” and mail it to the Medicare contractor.
- On the back of the MSN, there are instructions for you to follow. You are required to mail your
request for redetermination to the firm that manages Medicare claims.
- Mail a written request to the firm that manages Medicare claims.
You can also consult an elder law attorney who can help you file an appeal of a claim or reimbursement that was denied.
By Hook Law Center
Estate planning is a complex process, and typically involves learning some new terms and concepts.
Some of the most important estate planning terms to understand include:
- Advance medical directive – A document that details a person’s health care wishes in case they become incapacitated. An advance medical directive also allows the individual to name someone to make health care decisions on their behalf.
- Estate – All of the money, real property and personal property a person owns.
- Estate planning – The process of taking steps to ensure that one’s wishes are followed after death, especially regarding the distribution of one’s wealth and assets.
- Intestate – Describes someone who died without making a will. When a person dies intestate, the state distributes their estate according to established rules of inheritance.
- Power of attorney – A document which allows another person to handle one’s financial affairs in the case of incapacitation, or sometimes even before one is incapacitated. The person granted power of attorney may have power over all financial decisions, or only certain tasks.
- Probate – A court-mediated process in which an estate’s assets are distributed. Probate is a public process that typically takes months. Wills go through probate, as do the estates of people who died without making a will.
- Trust – A document that establishes a situation where property is held by one party in the interests of another. Property that is held in trust does not have to go through probate. Trusts can also allow individuals to give some or all of their estate to charity in a charitable trust, to control how and when a younger family member receives their inheritance, and more.
- Will – A legal document in which a person outlines how their estate should be administered following their death.
By Hook Law Center
A new wave of high-tech home devices could help monitor seniors’ health and safety in the home, potentially allowing them to stay at home longer, and providing a sense of security to family members and other caregivers. Smart home devices can monitor a wide range of factors, from time spent waking up at night, to wandering, to falls and more.
Current offerings include Lively, a wireless monitoring device with accelerometers to detect movement, as well as pill bottles that indicate when it is time to take medication. Even small changes in daily habits can represent significant changes in health, so the potential applications of such devices are substantial.
Experts envision a wide range of other smart devices in the future, such as furniture that monitors vital signs and carpets that analyze walking patterns to identify changes in physical health. Some such devices have already made their way into technology expos, but have some way to go until they are widely adopted. Keeping sensors unobtrusive and easy to install will be key to promoting widespread adaptation.
As 78 million Baby Boomers continue to age, there will be an increased demand for such devices, both from seniors and from their caregivers. Smart homes promise to provide a higher level of independence over a longer period of time, an appealing prospect for independent Boomers.
Supplementing in-person care giving with technology is also appealing from a practical perspective. According to a recent AARP report, in 2010 there were 7.2 middle-age caregivers for every 80-year-old. By 2050, that number will decline to 2.9. If the home is able to serve as an early detection system, alerting family and health care providers of key changes, it may be able to ease the strain on the health care system.
By Hook Law Center
An innovative Dutch “village” for Alzheimer’s patients could serve as a model for how the U.S. cares for its growing population of seniors with dementia.
The village serves as a protected, self-contained world for its inhabitants. It contains apartments, restaurants, a supermarket, gardens and more. Gates and security fences enclose the center, which provides both freedom and protection for residents who wander.
The goal is to create an environment that simulates normal life as much as possible, with dementia patients free to participate in activities they are capable of while receiving help with activities they can no longer perform. Residents can cook, clean and go grocery shopping, as well as go get their hair done or eat at a restaurant. At the same time, caregivers are on hand to help with activities of daily living as necessary.
Each apartment houses six to eight people, including caretakers who wear street clothes. The design of every department is unique, and each is geared toward a particular lifestyle, such as “cultural,” “artisan” or “Christian.”
A growing population of seniors and an increasing life expectancy means that the U.S. will be facing an unprecedented number of Alzheimer’s patients. This change may result in increased strain on both individual caregivers and the healthcare system as a whole in coming years. The number of people with Alzheimer’s has increased by 68 percent since 2000, and that trend will continue as the Baby Boomer population ages. The development of innovative solutions that promote independence and a fulfilling life is essential to the care of this growing population.
Already, a similar village has opened in Switzerland. In the future, it is possible that more such centers will open across Europe and in the United States, potentially improving the care and well-being of individuals with dementia.
By Hook Law Center
Roth IRAs and Roth 401(k)s allow individuals to make tax-free withdrawals in retirement by saving after-tax dollars. Rather than getting a tax break for saving the money, as with a traditional retirement account, Roth accounts result in tax savings later down the line during retirement.
Having a Roth account can be especially beneficial for people who anticipate being in a higher tax bracket when they start making withdrawals than when they deposited the money into the account. In contrast, converting to a Roth may not be the right decision for people who expect to have a lower tax rate in the future.
Those who already have a traditional IRA can convert the funds into a Roth. In the year of the conversion, the individual must pay taxes on the full amount placed in the Roth. If necessary, the conversion can be done in smaller steps over the course of several years. One effective strategy is to convert just enough to reach the top of one’s current tax bracket.
Another advantage of Roth accounts is that withdrawals of earnings can be made with no taxes or penalties, as long as the person is over the age of 59½ and has had at least one Roth open for at least five years. Contributions can be withdrawn without taxes or penalties at any time.
In contrast to traditional IRAs, there is no minimum distribution requirement for Roth IRAs upon reaching the age of 70½. Account holders who do not need to withdraw from their Roth IRA can allow the money to grow in tax shelter until their death. Once the account passes to a non-spouse heir, that person is required to take minimum distributions. The taxes paid on a Roth conversion are not included in a person’s taxable estate.