Comprehensive Planning. Lifelong Solutions.

Premiums for long-term care insurance can be a tax deduction

By Hook Law Center

Under IRS regulations, taxpayers can deduct a greater amount from their 2016 taxes due to the purchase of long-term care insurance. You can deduct premiums for long-term care insurance policies that are “qualified,” to the degree to which they, in conjunction with other medical expenses for which you are not reimbursed, including Medicare premiums, are greater than 10 percent of the adjusted gross income of the insured, or 7.5 percent for taxpayers age 65 or older.

The premiums, which represent the amount the policyholder pays the insurance company to maintain the effectiveness of the policy, can be deducted by the taxpayer, the taxpayer’s spouse and other dependents. The rules for tax-deductibility are somewhat different for a person who is self-employed. You can deduct the premium, provided you realized a net profit. It is not required that your medical expenses are greater than a specific percentage of your income.

However, there is a maximum premium amount that is deductible. This figure is dependent on the age of the plaintiff at the end of the year. Below are the caps on deductibility for 2016. Any premium amounts that exceed these restrictions are not deemed to be a deductible medical expense.

Age prior to the end of the taxable year / Maximum deduction for the year

  • 40 or under / $390
  • Over 40 but not over 50 / $730
  • Over 50 but not over 60 / $1,460
  • Over 60 but not over 70 / $3,900
  • Over 70 / $4,870
Posted on Thursday, October 27th, 2016. Filed under Long-Term Care.

Planning for Small Business Owners Is Critically Important

By Stephan A. Lipskis

At times we all fall victim to focusing on the present at the expense of planning for the future. Many business owners continually focus on the daily, monthly, quarterly, and annual goals of the business and often do not consider what would happen if they, or one of their key team members, would suffer and incapacity or worse. Failing to have a succession plan creates an incredible amount of stress on a business and can be insurmountable in the event of death or incapacity of key members of the business. Proper estate planning coordinates the needs of the individual, the needs of the individual’s family, and the needs of any business interests held by the individual to provide for a smoother transition.

I often describe proper estate planning for business owners as providing “schock absorbers” during a difficult time. Lets face it, the incapacity or death of a business owner impacts many things: the business, the employees, the family of the owner, other businesses that have contracts with the business, among others. Further complicating matters, is that transitions in ownership of the business (even due to death or incapacity) often trigger legal obligations under documents like leases, franchise agreements, loans, shareholder agreements, and more.  Failing to address these obligations in the context of an estate plan can have disastrous results.

So what happens if you fail to plan? Well, it is a similar outcome to driving a care without shock absorbers over a rocky road, you may get through but your car will likely be damaged and the wheels may fall off. To be clear damage from an unplanned transition can impact the owner and the owner’s family, the business, or both. Effective planning means that there are “shock absorbers” on all areas that would be impacted by the death or disability of an owner.

Business succession planning at the business level provides for continuity in the business but may not prevent adverse impact against the business owner’s family. For instance, a business that provides a buyout of an owner’s shares may preserve the business, but an undercompensated buyout may leave the owner’s spouse and family in bad shape financially. In reviewing their estate plan a business owner should closely look at what would happen to their ownership interest in the event of incapacity or death.

Even if an attorney represents a business in which you have an ownership interest, properly integrating any business succession plan with your estate plan requires a comprehensive look at your personal needs and estate planning goals. The estate planning and elder law attorneys at Hook Law Center regularly assist business owners in establishing and implementing their personal estate plans so that they are coordinated with the business’ succession plan. If the opportunity to plan has passed then our attorneys also can help coordinate the aftermath so that the shocks to the individual and business are minimized.

Kit KatAsk Kit Kat – Furless Fashion

Hook Law Center:  Kit Kat, what can you tell us about fashion designers and their use of animal fur in their clothing lines?

Kit Kat:  Well, there has been a lot of progress in this area. In 2015 the brand Hugo Boss discontinued its use of fur fashions. Now, there is word that Giorgio Armani will follow suit. In 2008 Armani stopped using fur in all its products, except for rabbit. Now that, too, will be eliminated. There had been and is tremendous pressure on fashion designers to use fur in their collections, especially the high end ones. Fur has traditionally meant elegance and wealth. However, thanks to lobbying efforts by the Humane Society of the United States (HSUS) among others, Armani decided the time had come to eliminate fur and stand up for what he believes is right. PJ Smith corporate engagement manager of HSUS says, ‘Having the leadership of somebody like Armani is very important: One of the cruelest form of fashion is unnecessary now, and you have the biggest name in fashion design saying that.’ Impacting their decision, in part, is the realization that fake fur has become so attractive, and is a great alternative to using the hide of helpless animals. It’s a win-win for all those involved.

So kudos to Mr. Armani! He is a cat lover and has two in his family. We continue to hope that other designers will follow his lead. HSUS and the Fur-Free Alliance, a coalition of 40 organizations from 28 countries, will continue to press their case for fur-free fashion the world over. (“Fashion without fur,” All Animals, September/October 2016, p. 32-33)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Tuesday, October 4th, 2016. Filed under Long-Term Care, Senior Law News.

Help may be needed in deciding on senior housing

By Hook Law Center

Elderly people who value their independence and are accustomed to living alone are increasingly becoming incapable of doing so. The need for medical attention may prompt some older individuals to consider their options, including moving to a nursing home or another kind of assisted living facility. Another possibility is to have in-home care along with various support services.

Frequently, elders and their family members make decisions about what steps to take after the occurrence of a health emergency, such as when an elderly parent falls, when there are unpaid bills, there is a lapse in housekeeping, or the elderly person’s memory has failed. However, experts admonish against waiting until such an event takes place.

Millions of people, particularly baby boomers and their parents, are wrestling with this problem. In order to make the right decision, some elderly people and their families are seeking the advice of elder care specialists, including financial planners, who can assist them with financial decisions and offer advice regarding the issues of health and aging.

Hook Law Center provides life care planning, including the support, guidance and direction that you need to focus on long-term care. The attorneys at Hook Law Center anticipate the myriad health, safety and quality of life issues that many elders and their families will face. Our seasoned attorneys can work alongside advisors, public benefits specialists and care coordinators to establish a plan for the future.

At Hook Law Center, each life care plan is intended to accomplish three goals, including:

  • The provision of care at home or in a facility that will preserve quality of life;
  • The identification of public and private sources of financing for long-term care while focusing on issues relevant to cost; and
  • Offering peace of mind that you made the right decisions

Life care planning incorporates each aspect of care, including estate planning, qualification for public benefits, and advocacy to make certain that seniors and their families find the appropriate types of services.

Posted on Wednesday, June 22nd, 2016. Filed under Long-Term Care, Senior Law News.

Learn what government benefits are available to help pay for long-term care

By Hook Law Center

There are a few government programs, including Medicare and Medicaid, that can help pay for long-term care services. Each program has certain regulations concerning which services are covered, your eligibility for benefits, the length of time you can receive benefits, and your out-of-pocket costs. In order to prepare for your long-term care needs, you should be aware of the facts regarding your coverage, and keep informed about any changes within each program.

Medicare

Medicare only covers care that is medically necessary, including medical acute care, such as visits to the doctor, medications and time spent in the hospital. In addition, Medicare covers short-term services for ailments that are predicted to improve, including physical therapy.

In order to become eligible for Medicare, you must be age 65 or older, under age 65 with certain disabilities, or any age and have end-stage renal disease, which is permanent kidney failure that has to be treated with dialysis or a kidney transplant.

Medicare does not pay for the most significant aspect of long-term care services or personal care, including assistance with bathing, or for supervision that is frequently referred to as custodial care. Medicare covers the cost of a brief stay in a skilled nursing facility, hospice care, or home health care if you meet certain conditions:

You have recently stayed in a hospital for a minimum of three days;
Within 30 days of your time previously spent in a hospital, you were admitted to a nursing facility that is certified by Medicare;
You require skilled care, including skilled nursing services, physical therapy or other kinds of therapy.

If you meet each of these conditions, Medicare will pay for some of the expenses for a maximum of 100 days. For the initial 20 days, Medicare pays 100 percent of your expenses. Then you are responsible for your expenses up to $140 per day, as of 2013. Medicare pays any remaining balance. After day 100, you are responsible for the entire cost of each day spent in a skilled nursing facility.

Medicare also pays for specific long-term care services for a certain period of time if your physician states that they are medically needed to treat an illness or injury. If you suffer from a terminal illness, and it is anticipated that you will not live more than six months, Medicare will pay for hospice care.

Medicaid

Medicaid is a joint federal and state government program that assists low-income people with the payment of part, or all, of their health care expenses. It covers medical care, including visits to the doctor, and the cost of hospital stays. It also covers long-term care services in nursing homes, as well as those given at home, including visiting nurses and help with personal care. Medicaid differs from Medicare in that it covers the cost of custodial care in nursing homes and at home.

In order to become eligible for Medicaid, you must meet certain qualifications, including having earnings and assets that are not greater than the levels used by your state. Under federal law, if Medicaid pays for your long-term care services, that state must recover the amount that Medicaid expended on your behalf from your estate after your death. This is called Medicaid Estate Recovery.

Posted on Wednesday, May 25th, 2016. Filed under Long-Term Care, Medicaid.

How and why seniors should stay socially engaged

By Hook Law Center

Experts believe that in addition to engaging in regular exercise and eating well, social networking can contribute to the health of seniors. As you become advanced in age, changes that occur in the brain can make it challenging for you to absorb new information or recall things. In people who are afflicted with dementia, the impairment within the brain can become so serious that it prevents them from living normal lives. While in some cases cognitive decline is inevitable, in other situations, keeping your mind active or socializing with your peers may help deflect dementia and depression.

According to a study performed by the Rush Alzheimer’s Disease Center in Chicago, seniors who are very social had a 70 percent lower rate of cognitive decline than their peers who were less social. In another study that was conducted by researchers at the University of Alabama in Birmingham, there was a link between internet use and a 30 percent decrease in symptoms of depression.

There are many ways to maintain social connections and improve intellectual stimulation. Keep in touch with relatives, friends, neighbors and church members. If they’re not geographically close, you can maintain contact via email and Facebook. Statistics from the Pew Research Center’s Internet and American Life Project revealed that people age 74 and older comprise the fastest-growing group throughout online social networks.

Additionally, playing mind games, including doing crossword puzzles and playing chess can help keep your mind active. Playing with others can help you remain socially connected. It may also be beneficial to join a club, such as a book club or garden club, so that you can meet new people and form relationships with others who have comparable interests.

Upon retirement, several people have been known to experience stress. If you desire to return to work, think about obtaining a part-time job. Encore.org and the Work Search program provide help to seniors who wish to return to work. Volunteering can give you a sense of purpose, and make you feel as though you are making a contribution. You can learn more about volunteer opportunities from organizations, such as Senior Corps. Studies indicate that seniors who volunteer have a diminished risk of death in comparison to their peers who do not. Offering to babysit grandchildren or other young relatives can help you stay physically active and enhance your sense of well-being.

Posted on Wednesday, May 11th, 2016. Filed under Long-Term Care.

Early retirees may need alternative withdrawal strategies

By Hook Law Center

When withdrawing funds from individual retirement accounts, Roth IRAs and other such accounts, retirees may encounter inconveniences, taxes and penalties. However, proper planning may reduce or even eliminate such costs. There are techniques that retirees should use to withdraw funds from their tax-sheltered retirement accounts prior to reaching the age of 59 ½.

You can withdraw your contributions to Roth IRAs anytime for any reason without being subject to tax or penalty, irrespective of your age. The IRS permits holders of traditional IRAs to label withdrawals as “contributions” until all contributions have been resolved. Upon withdrawal of the contribution part of the account, you can then remove the earnings portion. But if you have not yet reached age 59 ½, the earnings could be taxed as income and you may have to pay a 10 percent penalty.

It could be an expensive error for the retiree to roll over a work-related retirement plan to an IRA if you need the funds before reaching age 59 ½. If you are age 55 or older and you have stopped working, you can withdraw money from your 401(k) or 403(b) account without being subject to the 10 percent penalty that would usually apply to withdrawals from an IRA owned by an individual under age 59 ½.

You can also remove funds from a 457 plan from a government or nonprofit employer without being subject to a ten percent penalty. If you withdraw funds from a work-related retirement plan, they will be taxed as ordinary income. But since early retirees will have less income, their tax bill will be smaller.

If you must withdraw funds from your IRA to pay for living expenses before reaching age 59½, you should determine whether you have any qualifying expenses that can be set against the IRA withdrawals to avoid the ten percent penalty. Such costs could include considerable out-of-pocket medical bills, higher education expenses or health insurance premiums if you are unemployed.

Furthermore, IRA holders under age 59 ½ can make withdrawals from the account without incurring a penalty if the withdrawals are similar in amount and comply with a certain schedule. These are referred to as substantially equal periodic payments (SEPP). Under the SEPP program, once the payments have started, they must continue for five years or until you attain the age of 59 ½, whichever is second. However, if the requisite amounts and timing of the SEPP accounts are not met exactly, all withdrawals may be subject to the ten percent penalty retroactively.

Posted on Wednesday, February 24th, 2016. Filed under Estate Planning, Long-Term Care, Public Benefits.

Understanding the stages of Alzheimer’s

By Hook Law Center

Reportedly, over five million Americans are afflicted with Alzheimer’s. The Alzheimer’s Association has created a checklist of the usual symptoms to help you identify the warning signs. Among these are changes in memory that interfere with daily life, difficulty planning and resolving problems, becoming disoriented regarding time and place and having issues with words when communicating verbally or in writing.

The seven stages of Alzheimer’s were created by Barry Reisberg, M.D., clinical director of the New York University School of Medicine’s Silberstein Aging and Dementia Research Center. The first stage is one in which there are no symptoms of dementia. The second stage is marked by a very mild cognitive decline, including memory lapses, forgetfulness of words and loss of the ability to find everyday objects.

The third stage consists of mild cognitive decline in which friends, family members or co-workers start to become aware of challenges, including recalling names, thinking of the correct word or name and losing valuable objects. The fourth stage involves moderate cognitive decline, in which a medical interview should detect forgetfulness of recent occurrences and increased difficulty carrying out complicated tasks.

The fifth stage is marked by moderately severe cognitive decline, in which there are clear gaps in memory and thinking, and the person starts to require assistance with daily activities. During this stage, those afflicted with Alzheimer’s may not remember their own address or telephone number, or the academic institutions from which they graduated. They may also become confused about their location or what day it is.

In the sixth stage, their memory loss becomes worse, and they may experience changes in personality. When they are in the seventh stage, they have very severe cognitive decline, in which they are no longer able to respond to their environment, have a conversation or control their movements.

According to the Alzheimer’s Association, there are strategies that can help reduce the risk of developing Alzheimer’s, including control of blood pressure, weight and cholesterol; exercising body and mind; consuming a brain-health diet consisting of fruits and vegetables; and being socially active.

Posted on Saturday, January 16th, 2016. Filed under Long-Term Care.

Transportation is an often overlooked but crucial aspect of retirement planning

By Hook Law Center

When people engage in retirement planning, they often fail to think about transportation. They do not consider that a time may come when they will no longer be able to drive themselves, and will have to rely on others to go to doctors’ appointments and run errands.

Including transportation in your retirement plan is essential. After housing, transportation is the second-greatest household expense. The American Journal of Public Health states that Americans are outliving their capacity to drive in a safe manner. In general, the ability to drive safely as you get older is largely dependent on your health. While some people are capable of driving well into their 90s, others reduce their level of driving by age 65.

But many people do not think about the day that they will not be able to drive themselves, and will instead have to rely on public transportation or others to accomplish basic daily activities. When creating a retirement plan, you should think about whether you would like to remain in your community, downsize or relocate. A 2014 AARP study revealed that by age 65, 87 percent of people prefer to stay in their community as they become older.

Many older adults are benefiting from the Independent Transportation Network, a nonprofit organization that provides rides for the elderly. It has 27 affiliates throughout the country. There are also new transportation services that offer rides for a fee. These include Uber, Lyft and Sidecar. In addition, some senior housing communities provide shuttle buses that transport residents to doctors’ appointments.
When making decisions about where to live and your mode of transportation, perform an analysis of your neighborhood concerning the places to which you usually travel and determine how you might arrive at those destinations if you were not driving. You should also consider your social support network where you have formed relationships.

Posted on Thursday, January 7th, 2016. Filed under Estate Planning, Long-Term Care.

How caregivers can deal with behavioral changes of loved ones with dementia

By Hook Law Center

There is ample research to suggest that family caregivers are more distressed by behavioral problems and changes in the personality of their loved ones than by their physical disabilities. For instance, while it may prove challenging for family members to physically pick up the body of a loved one who has suffered a stroke and has physical limitations, matters are made even more difficult if the loved one is resisting the caregivers’ offers to help, or accusing them of mistreating him or her, due to dementia.

In order to support their endeavors to care for loved ones, caregivers need and deserve recognition and appreciation. However, loved ones who are beset by cognitive and behavioral problems are frequently lacking in the ability to express their gratitude.

There are methods that family caregivers can apply in order to handle their loved ones’ conduct more effectively. Individuals with cognitive and behavioral issues frequently have sensitivity to such stimuli as environmental changes, such as light, noise, temperature and social activity. Become familiar with your family members’ triggers, and take steps to avoid placing them under any undue stress, thus reducing the likelihood that they will become upset.

Because people with behavioral and cognitive problems have a higher sensitivity to anger on the part of caregivers, it is imperative that you maintain your composure when communicating with them. Your capacity to remain calm will have a soothing effect on them. It is also recommended that you take your family member to the doctor on a regular basis for medical evaluations to treat all potential causes of changes in behavior.

Finally, remember that caregivers need care too. Since caring for family members with difficult behaviors can be stressful, it is important for you to have others assume your role periodically in order to give yourself a much-needed break.

Posted on Tuesday, December 29th, 2015. Filed under Long-Term Care, Senior Law News.

Financial elder abuse may be fastest growing type of crime in U.S.

By Hook Law Center

Financial elder abuse has been described as the fastest growing type of crime in the U.S. To avoid having this happen with your senior loved one, it is important to be aware of the dangers.

A study conducted by the Journal of General Internal Medicine revealed that 60 percent of the Adult Protective Services (APS) cases concerning financial abuse across the country involved an adult child of the elderly individual. Sadly, a considerable amount of financial abuse is carried out by family members under various pretenses or justifications.

The majority of the victims of financial elder abuse range in age from 80 to 89, live alone and are attempting to keep their independence. While women are twice as likely to be victimized as men, elderly men also suffer abuse. The generation prior to the baby boomers is living longer, in large part due to advances in medical science. As a result, they are more reliant on caregivers.

Unfortunately, many such crimes are often unreported because the elderly person is too embarrassed or afraid. The senior may also be afraid of being alone. However, the depletion of their savings can result in a serious threat to seniors’ health and well-being.

According to a study carried out by MetLife, the cost of financial elder abuse is estimated to be approximately $2.9 billion annually, and is increasing. Financial elder abuse is receiving more attention than it has in the past, and in 2014 the Consumer Financial Protection Bureau (CFPB) distributed a guide to help the staff at assisted living and nursing facilities provide better protection for those in their care by thwarting and focusing on financial abuse. The guide offers assistance to staff in noticing and reporting financial abuse committed by relatives or other persons who manage the senior’s finances.

Posted on Monday, December 21st, 2015. Filed under Long-Term Care, Senior Law News.