11/5/17

This might be the most egregious tax proposal of them all

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Business Insider explains one of the Republicans’ most egregious proposed changes in the tax code:

The Republican tax plan repeals an itemized deduction that applies to healthcare expenses. That’s key for families with high medical costs, like those dealing with chronic conditions that require medical devices and other expensive equipment. Right now, those expenses can be deducted from their taxes, but under the Republican tax plan, they wouldn’t be able to.

Under current law, individuals who spend over 10% of their income on medical expenses are allowed to deduct part of those costs from their taxes. The proposed new bill would remove that deduction. According to the Internal Revenue Service, for 2016 taxes, individuals were able to deduct in an itemized way “only the amount of your unreimbursed allowable medical and dental expenses that is more than 10 percent of your adjusted gross income [AGI].”

Who spends more than 10 percent of his or her AGI on medical expenses? Generally people at the end of life in nursing-care facilities, where many expenses are not covered by Medicaid or Medicare. CNBC reports:

“This would be a joke if the consequences weren’t so serious,” said Brad Woodhouse, campaign director of health-care advocacy group Protect Our Care, in a statement. “Republican leaders are determined to raise health-care costs for middle-class families who need it most — in this case people with high medical costs or those paying for long-term care.”

While it’s not a widely used tax deduction — about 5 percent of tax filers claim it — for the old and sick it can be significant.

It tends to be mostly … older people who do not have long-term care insurance, and end up in a nursing home,” said Richard Kaplan, a professor who specializes in tax policy and elder law at the University of Illinois College of Law.

The cost of living in a nursing home can easily run up to tens of thousands of dollars per year and wipe out the savings of elderly residents who are paying out of pocket. The deduction can be an important offset to taxes those Americans would owe on their retirement savings distributions.

“For people who are receiving long-term care and are paying for it themselves, this is going to be a huge deal,” said Kaplan.

Andy Slavitt, former head of the Centers for Medicare and Medicaid Services, tells me, “The medical deduction is one of the most popular and important tax credits, particularly for all of us as we age.” He adds, “It keeps many seniors and families out of bankruptcy when in need of end of life care. Ask anyone with chronically ill kids, parents, or spouses.” These are not only very sick, old people but very sick, old and non-rich people. (“AARP has calculated that about three-quarters of those who claim the medical expense deduction are 50 or older, and more than 70 percent have incomes $75,000 or below. Many of those expenses are for long-term care, which is typically not covered by health insurance. Long-term care can cost thousands or tens of thousands of dollars a year.”)

This move doesn’t recoup much revenue in the grand scheme of things. (“It will cost the government about $10 billion a year in lost tax revenues in 2018 and about $144 billion over the next 10 years.”) So why do it? Well, Republicans have given so many tax breaks to the rich and corporations that they are scrounging for ways to take benefits away from others.

Consider this: The giveaway to rich heirs by removing the estate tax and allowing heirs the “stepped-up basis” adjustment in assets comes to $300 billion. They are literally taking money from nursing home residents so that rich heirs won’t have to pay a dime of inheritance taxes on estates exceeding $11 million (for a couple).

Or think about elimination of the alternative minimum tax, something that costs President Trump and other very rich individuals millions or tens of millions. Repealing it would cost $695.5 billion. Literally, they are taking money from people in nursing homes so that Trump and people like him can pay less in taxes.

There’s only one word to describe this sort of trade-off: obscene.

Complete Article HERE!

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09/12/17

How to care for your pets after you die — and what you should never do

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According to the 2017-2018 National Pet Owners Survey, 68 percent of U.S. households, or about 85 million families, own a pet. For many, these animals are not just companions, but beloved family members. From providing comfort in times of trouble to greeting us at the front door, it’s hard to imagine life without their unconditional love.

Nevertheless, whether you’re the proud owner of a miniature box turtle or mammoth Irish Wolfhound, owners have an obligation to ensure that their four legged friends are cared for when they’re no longer around.

But Erach F. Screwvala, an estate-planning attorney with Screwvala LLC, says that he’s noticed a rising trend in asset base management: unusual pet provisions.

Recently, one NYC woman made headlines when she left $300,000 of her $3 million estate to her two cats. The Manhattan lawyer says that though it’s not uncommon to see vast sums allocated to furry friends, you don’t need to allot such sky high funds for adequate care.

“Amounts higher than this are more common in the celebrity world – for example, Oprah Winfrey supposedly has put aside $30 million for her dogs in her will,” Screwvala said. “If such large bequests are desired, it is critical to provide for distribution of any excess amounts after the death of the pets to avoid burdensome probate proceedings to distribute any remaining money.”

In outlining pet provisions for a well-crafted estate plan, Screwvala suggests taking one of three routes: listing a beneficiary, establishing a pet trust, or finding a trustworthy organization to look after your sweet Fluffy or Fido.

First, a beneficiary will inherit your pet when you pass away; preferably, you can leave them money to provide for the animal. Next, if you desire more control, a pet trust, ideally as part of a revocable living trust, is recommended. While this plan is more expensive to set up, it provides certainty that the pet will be cared for precisely how you want, Screwvala said. It is critical to provide sufficient funds for a pet trust, so that the trustee has ample funds to execute your wishes. This is particularly true with animals that have longer life expectancies, like horses, he adds.

Lastly, finding a specialized animal care organization is a viable option to leave your furry friend in good hands. Make sure that you make arrangements in advance, as many groups will have specific guidelines, Screwvala notes. In his years as an estate planning attorney, Screwvala has encountered many bizarre requests for pet provisions.

“One that really sticks out in my mind was when I was asked to include a diamond dog collar and walking leash. Although, this was a rather peculiar request, it was definitely a wise move, as you can imagine a genuine diamond collar is incredibly valuable!” he said. “However, if the dog collar was encrusted with laboratory grown diamonds I would advise against because synthetic diamonds are of no inherent value.”

Additional requests have included a wardrobe of designer animal outfits and provisions for a custom-made wooden casket for a cat, Screwvala said. While such specific requests certainly gave the owners of those animals peace of mind, establishing your estate plan with straightforward pet provisions is beneficial to all.

“The most important thing people should leave is enough money to ensure that their pet is properly cared for after they pass away,” Screwvala said. He suggests avoiding overtly ridiculous food provisions (filet mignon steak only!) or anything else that might be difficult for the caretaker to fulfill.

Ultimately, one of the smartest moves you can make is connecting with an experienced estate planning attorney who understands your local laws, Screwvala says. This expertise is critical: in some states, provisions for pet care in wills are honorary, meaning that they can be ignored by your heirs.

“They don’t need $300,000, but a loving caretaker, regular veterinarian care, and a couple square meals a day will do wonders!” he said.

Complete Article HERE!

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05/4/17

End-of-life discussions head off hardship in times of grief

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By Terry Savage

With Mother’s Day coming up, and Father’s Day soon after, maybe it’s time to have a family discussion about what will happen when the unspeakable happens. Death isn’t pleasant to talk about, but if you’re willing to have that conversation, you’ll make things much easier at a tough time in the future.

No one likes to think about mortality. Young adults consider themselves immortal. Middle agers are fighting the concept of growing older. And the baby boomer generation figures it can bend the rules of aging as it has changed so much of our society in the past 60 years. But sooner or later, our time will come.

Will we leave a giant puzzle for our loved ones and heirs to figure out? Or will we smooth the way to making this transition a bit less painful, leaving them able — and legally empowered — to handle the assets we leave behind?

By the way, this is not a discussion just for aging parents. Families with young children need to organize their finances as well. Who will know the passwords to access everything from bank accounts and 401(k) plans to your valuable cache of airline miles?

Years ago, I created a Personal Financial Organizer form — which is still available free at my website, TerrySavage.com when you sign up for my free newsletter. It comes to you by a link in a return email, and you can print out as many copies as you want, giving them to friends and family to create their own roadmaps to their finances.

This four-page form is used both as a discussion starter and an organizational tool. Once filled out, it serves as a guide to locating your investment accounts, bank and brokerage accounts, will and estate planning documents, cemetery deed, safe deposit box and keys, passwords and credit card account numbers, and myriad other documents that would be hard to find in a crisis or after you’re gone.

But Harris Rosen, a retired executive, has taken it a step further in “My Family Record Book” ($15.95 on Amazon.com). The octogenarian has explained not only what you should organize, but why — and he explains the pitfalls and consequences of not knowing this important information.

Rosen speaks directly to seniors, giving resources and references on everything from how to order a tombstone to services that will take care of your pet after you are gone! There is an entire section on downsizing after the loss of a spouse and advice on how to dispose of furniture and clothing to charitable organizations that will make good use of these items. But mostly he focuses on organizing your financial papers to make life easier for your survivors.

Two other books of a similar genre are the best-selling “Getting it Together” by Melanie Cullen, published by Nolo Press ($14.31 on Amazon), which includes downloadable forms, and the spiral-bound “Peace of Mind Planner” by Peter Pauper Press ($12.04 on Amazon). Both make your planning organized and accessible to family members.

By now you get the idea. Any of these tools will make the perfect gift for the upcoming holidays and provide a starting point for important discussions of end-of-life matters, from locating health care directives and powers of attorney to planning a funeral or finding the policies and assets that will allow the survivors to deal with financial issues.

Yes, it’s a tough subject to tackle on Mother’s Day or Father’s day. But it’s not nearly as tough as it will be to try to figure it out in a crisis when your loved ones are not able or around to help you. And that’s The Savage Truth.

Complete Article HERE!

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03/20/17

How to talk about death and funeral planning

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Death and funeral planning are not subjects most people enjoy talking about. Although we know that it will eventually come to us all, it is human nature to avoid discussing our own mortality and it’s easy to convince ourselves that we don’t need to worry until much, much later in our lives.

Sadly, thousands of people die every year without ever making any arrangements for their funeral, leaving grieving families to plan and pay for this without any clear understanding of their wishes.

Why express final wishes?

No one can know exactly when they will die, so taking the time now to talk about your wishes for your funeral makes sense for everyone, whether you are just starting out in life or enjoying a peaceful retirement.

According to a 2015 Comres survey on ‘Public Opinions to Death and Dying’, eight out of 10 British people say they have strong wishes for the end of their life and more than two thirds of us think that if people were more comfortable talking about dying, it would be easier to have our end-of-life wishes met.

The same survey showed that less than 20 percent of us have actually asked our nearest and dearest about their end-of-life wishes.

Graham Jones, director at Sun Life, discussing the insurer’s latest ‘Cost of Dying’ report, said it’s not just details like what flowers to have. “A third of those organising a funeral had no idea whether the deceased would have wanted to be buried or cremated,” he said.

End of life plans and making them known

The reality is accepting that it’s important to have the conversation with your loved ones and knowing how to raise the issue are two very different things. There’s no easy way to say ‘I’ve been having a think about what I want to happen when I die’.

Rather than springing it on unsuspecting family and friends, it might help to raise your own funeral wishes in relation to the passing of a friend or even a celebrity.  If you are met with a refusal to discuss it, try to point out that it won’t be any easier if you die without anyone knowing what you wanted for your funeral and beyond.

Talking about dying doesn’t make it happen and can bring peace of mind, allowing us to relax knowing that our plans are understood and, when the time comes, our loved ones will know exactly what to do.

“We all need to get better at discussing our end of life plans, including our funeral plans,” said Claire Henry, chief executive of the Dying Matters Coalition. “It gives us peace of mind to know we’ve made and shared our plans, and it makes life easier for our loved ones to know they are giving us the perfect send-off we want.”

Reduce financial burden and stress by planning ahead

By planning ahead, you can help to ease the emotional and the financial burden on loved ones at a very difficult time. One of the best ways to make sure that your family and friends are not left to pay for your funeral is to consider a funeral plan.

Pre-paid funeral plans make sure you have the funeral you want, planned and paid for in advance. When you purchase your plan, a local funeral director is appointed to take care of your requirements and to make sure that your family receives personal service when it really counts.

A pre-paid funeral plan gives you the opportunity to pre-arrange your burial or cremation, choose your coffin and specify transport. With your wishes laid out and a local funeral director appointed all your loved ones have to do when the time comes is make one phone call to the chosen funeral director.

Save by fixing funeral costs

A pre-paid funeral plan not only gives you control of your funeral arrangements, it also allows you to pay for your funeral director’s services included in the plan at today’s prices despite constantly rising costs.

According to the SunLife Cost of Dying Report 2015, in 2004, the average cost of a funeral was £1,920. Today it is £3,897, and at that rate of increase, in another 10 years, the average cost of a funeral could be more than £7,000.

With a pre-paid funeral, you ensure your wishes are shared with your loved ones and in turn, it provides you with peace of mind that your funeral will not burden your loved ones and guarantees that your funeral director’s costs will be covered, even if you stick around for decades.

Complete Article HERE!

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02/26/17

Why Older People Are Vulnerable to Fraud, and How to Protect Them

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By

Older people who are active investors and who prefer unregulated investments may be more susceptible to investment fraud, a report published Thursday by the AARP Fraud Watch Network found.

The network, established in 2013 to help promote fraud prevention, commissioned a study late last summer that included telephone interviews with 200 known victims of investment fraud and 800 interviews with members of the investing public.

Doug Shadel, lead researcher for the network, said that relatively inexperienced people often invest money on their own these days, in part because of the decline in traditional pensions. At the same time, he said, technology makes it easier for scam artists to reach larger numbers of people, by telephone or email.

The report sought to pinpoint traits that may help explain why some people are more susceptible to investment fraud, Mr. Shadel said. Victims were more likely to be men 70 or older, and they tended to be risk takers. About half of fraud victims agreed that they did not mind taking chances with their money, as long as “there’s a chance it might pay off.”

And nearly half of fraud victims, compared with less than a third of general investors, agreed that “the most profitable financial returns are often found in investments that are not regulated by the government.”

Victims were more likely to report valuing wealth accumulation as a measure of success in life and being open to sales pitches, the research found.

Victims reported that they frequently received targeted telephone calls and emails from brokers and that they made five or more investment decisions a year. Also, they were more likely than general investors to respond to remote sales pitches, including those delivered in television commercials.

As many as 17 percent of Americans 65 and older report being the victim of financial exploitation, according to the Consumer Financial Protection Bureau. Estimates of annual losses are in the billions of dollars. One factor that may play a role is mild cognitive impairment, a condition that can be a precursor to dementia and can diminish an older person’s ability to make financial decisions.

Older people are at risk of being swindled not only by strangers, but also by people they know. Douglas Canada, a 78-year-old retiree in Nevada, sought help from the fraud network after he was tricked by an old acquaintance: He received a call in 2015 from a man who had been a co-worker three decades earlier. The man invited Mr. Canada and his wife to lunch to talk about an investment opportunity. The man and his date sported Rolex watches, and they even bought a diamond ring during the outing. “They really put on a good show,” Mr. Canada recalled.

The man told Mr. Canada that he had grown rich by buying and renovating foreclosed homes in another state. He invited Mr. Canada to invest, promising double-digit returns. Mr. Canada sent a cashier’s check for $40,000 — but has since been unable to contact the man. Mr. Canada has hired a lawyer and a private investigator, and he has written to the state authorities, but isn’t optimistic about getting his money back. “He’s a con man,” Mr. Canada said. “I was gullible, and I fell for it.”

Some scams — gold investing, real estate schemes, and even one involving leases on A.T.M.s — may sound improbable after the fact, Mr. Shadel said, but victims report being persuaded — sometimes, because of word of mouth from friends or family.

Recognizing that you may have a predisposition toward risky behavior, like being open to pitches, may help you avoid being taken in, Mr. Shadel said. “You can at least be aware of your psychological mind-set,” he said. Consumers can take a quiz, based on the study’s findings, on the fraud watch website.

Mr. Shadel urged consumers to deal only with regulated brokers and investments, and to “ask and check”: If you get a call from a broker, ask if he or she is registered with state and federal securities regulators, he said, “and then check to see if it’s true.”

You can check a broker’s background though Finra, the Financial Industry Regulatory Authority, using its online BrokerCheck tool at www.finra.org, or by calling 800-289-9999.

Maggie Flowers, associate director for economic security with the National Council on Aging, said that older people should be skeptical of any offers, particularly unsolicited ones. “Always ask for things in writing,” she said, “so you can think it through and talk through the options with a loved one or peers.”

Here are some questions and answers about older people and fraud:
Are older people at risk for fraud only if they are wealthy?

No, Ms. Flowers said. Scam artists know that many older people have fixed incomes, which may make them vulnerable to fraud because they are open to hearing about ways to make money and pay their bills.

Where can I learn more about protecting an older person from fraud?

The National Council on Aging offers tips on avoiding fraud at EconomicCheck.org.

The Consumer Financial Protection Bureau offers a “Money Smart” guide for older adults, and other resources, on its website.

What should I do if I think an older person has been a victim of financial fraud?

You should report it to the local police, and your state attorney general’s office.

You can also contact your local adult protective services agency. You can find a local agency that investigates reports of financial exploitation on the federal Eldercare Locator website or by calling 800-677-1116.

The Justice Department also offers an online “elder abuse resource road map.”

Complete Article HERE!

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07/24/16

How to Die Peacefully, Part 2 Making Arrangements

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Look for Part 1 of this series HERE!

001

1. Prepare an advance directive.

An advance directive is basically just a written document or a series of documents explaining what you want to have happen during your end-of-life care. It may outline a variety of topics, including your wishes for your care, should you become incapacitated, as well as naming proxies and a power of attorney.

  • These documents will need to be drawn up by attorneys and notarized. These aren’t likely things that you’ll want to have to spend a lot of time dealing with yourself, so it’s common to delegate these tasks to others.

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2. Prepare for the distribution of your estate.

There’s a lot of comfort in knowing that you’ve taken care of everything ahead of time and haven’t left big or stressful decisions to be made after you’re gone. If you’re up to it, it’s important to have legal documents drawn up..

  • A living will describes the type of healthcare you hope to receive and whether or not you’d like to remain on life support, and under what circumstances, should you become incapacitated and unable to make your own decisions. Living wills can be prepared by attorneys and should be prepared ahead of time.
  • Last wills are designed to designate property to beneficiaries, assign guardians for minor children, and elucidate any last wishes. This is somewhat different than a living trust, which will transfer property immediately, as opposed to after your death.[3]

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3. Consider naming a health-care proxy.

In some cases, it may be good for you to delegate these responsibilities instead to a proxy, in the event that you’re unwilling or incapable of making these decisions for yourself. This is often an adult-aged child or spouse, who will be tasked with making choices regarding your health care as things progress.

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4. Consider naming a health care power of attorney, if necessary.

In some cases, it may be difficult to choose or assign proxy responsibilities to a private party, and you may wish instead to assign them to an attorney. This is extremely common and can be a relatively stress-free way of turning over technical responsibilities to someone else, allowing you to deal with your own comfort and emotional responsibilities.[4]

  • A health care power of attorney is different than a general power of attorney, which provides for financial assistance after death. While both of these may be appropriate options, it’s important to distinguish between them.[5]

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5. Make arrangements for your remains.

Though it may be slightly unnerving, it’s important to decide what you want to happen to your body after you die. There are many options and considerations, depending on your culture and religious background.

  • If you want a funeral, or religious ritual to be performed after your death, you may want to arrange the ceremony yourself, or delegate the responsibility to a loved one. Make the arrangements in terms of churches, funeral homes, if it helps you to find closure.
  • If you want to be buried, decide where you want to be buried and which family members you want to be buried near, if you haven’t made those decisions already. Secure a burial plot by making a down payment, and make arrangements with a funeral home in your area, if necessary.
  • If you’d like your body to be donated, make sure your donor status is up to date and accurate, according to your wishes. Contact the university or foundation to which you want your remains donated and make the necessary arrangements.

Tomorrow, Part 3 — Making the Most of Your Last Days

Complete Article HERE!

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07/5/16

Survivor’s Checklist After Death

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A checklist of responsibilities for survivors after a death

By Angela Morrow, RN

After the death of a loved one, you might find yourself overwhelmed with the tasks that need to be done. While your grief can make it difficult to focus on these priorities and take action, there are several things that need to be done immediately after a death occurs, and in the weeks/months that follow. This article offers a simple checklist-style overview for survivor’s to help you prioritize and keep track of what needs to be done after the death of a loved one.

  • At the Time of Death, Make the Right Call

TO_DO_LIST

For deaths that occur at home, it’s important to know who to call. If your loved one is a hospice patient, call the hospice agency to report the death. A hospice nurse will come to the home and pronounce the death. The nurse might also call a mortuary for you and arrange for pick up of the body.

If your loved one is not a hospice patient, then you must call emergency services to notify the local police or sheriff of the death. A coroner or medical examiner might also be required at the scene if the death was sudden or unexpected.

  • Contact a Funeral Home

Whether a hospice nurse makes the call or you call yourself, a funeral home must be contacted to arrange for pick-up of the deceased’s body. If funeral arrangements have been made in advance of the death, all you will need to do is confirm the arrangements with the funeral director. If no funeral arrangements were made in advance, you will need to begin planning a funeral.

Determine if your loved one made any arrangements for a funeral or memorial service. If he or she did not make any advance arrangements, then begin to plan the funeral or memorial service. You might want to call on relatives or close friends to assist in making these arrangements. More »

  • Contact Attorney, Accountant and/or Executor of Estate

  • Contact Employer (if applicable)

Ask about any outstanding compensation due. Find out whether dependents (if any) are still eligible for health and/or insurance benefits and whether there is a life-insurance policy through the company.

  • Contact Social Security

Contact Social Security and any other agency that might be making monthly payments to the deceased. The Social Security Administration  (SSA) phone number is 1-800-772-1213 (TTY 1-800-325-0778) or you can visit the SSA website for more information. Find out if survivors are entitled to any further benefits.

  • Contact the Veterans Administration

If your loved one served in the Armed Forces, the Veterans Administration (VA)might offer benefits for funeral or burial costs. Stop any monthly payments that the VA might be paying the deceased.

Please read this article for more information about VA death, burial and memorial benefits for U.S. veterans.

  • Contact Life-insurance Companies and File a Claim

  • Notify Credit-card Companies and Pay Off Balances

  • Discontinue Utilities (if applicable)

  • Stop Subscriptions of Newspapers, Magazines, etc.

  • Forward Mail at the Post Office (if applicable)

  • Find Estate Documents

Locate and review any estate documents, including a will, trust and power of attorney.

  • Locate Important Financial Documents

Some financial documents to look for include:

  • stock certificates
  • title documents
  • bearer bonds
  • bank statements
  • brokerage statements
  • deeds
  • prenuptial agreement
  • Collect Asset and Liability Information

Examples of assets include life-insurance policies, bank accounts, investment accounts, real-estate ownership, retirement accounts, business ownership, etc.

Liabilities might include mortgages, owed taxes, credit-card debt, unpaid bills, etc.

  • Inventory and Distribute Personal Belongings

You might want the help of family members and/or close friends for this task. Determine which of the deceased’s belongings to keep, which to distribute to family and friends, and which to donate or sell.

  • File the Deceased’s Final Tax Return

Complete Article HERE!

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