New York Trusts & Estates

Medicaid Matters—Here’s Why in Yorktown Heights, New York

It is premature for anyone who depends upon either Medicaid or Obamacare to breathe a sigh of life. While recent attempts to repeal Obamacare have failed, both of these programs are being targeted.

Medicaid is far more important to more Americans than most people know. It does provide healthcare for the poor, but it also pays for long term care health care and nursing home care for millions of Americans.

Radio station WTOP in Washington, DC recently posted an article, “Why Medicaid matters to you,” which says that long-term care in the U.S. is extraordinarily expensive: the median annual cost of a private room in a nursing home is more than $92,000. A shared room costs more than $82,000. Expect these prices to continue to increase, since costs have risen by 19% since 2011. Similarly, the median price for care in an assisted living facility exceeds $43,500 and those seniors who want to stay at home with the help of an in-home aide from a home care agency pay $20 an hour or $175,000 a year for round-the-clock care.

The U.S. Department of Health and Human Services found that 70% of people turning age 65 can anticipate needing some form of long-term care during their lives. It’s also important to know that long-term care isn’t usually paid for by Medicare, the government program that covers seniors, or by private health insurance policies.

Many Americans are just not financially able to pay on their own for nursing homes and other types of assistance when they are elderly. About half of households age 55 and older have no retirement savings, such as a 401(k) plan or an IRA.

Many people believe that Medicaid just covers poor people, but in fact 28% of its overall budget is earmarked for long-term care. That money is critical to seniors and to their nursing home care. In 2014, Medicaid paid for 62% of nursing home residents. It is also covering assisted living and in-home care, which many elderly people prefer.

Republican proposals to repeal and replace Obamacare highlighted significant cuts to Medicaid that would have affected seniors receiving long-term care. If a repeal does occur, many elderly will be prohibited from receiving needed care and will have to ask family members for support.  Older adults now receive $470 billion worth of unpaid care each year, and without Medicaid, the elderly may need to ask even more of their relatives. Providing care full-time for someone who is physically disabled or has dementia can be emotionally exhausting and can lead to mental and physical health problems for the caregiver, create fighting within families, and be financially draining, particularly when it impacts the caregiver’s ability to work outside the home.

As America ages, the cost of care for the elderly is expected to increase substantially. By 2030, nearly 73 million Americans will be 65 and over, representing more than 20% of the population. Chances are good they are going to need help with healthcare costs.

For more information on Medicare, Paying for a Nursing Home, Long-Term Care Planning, Medicaid, Medicaid Planning Lawyer; please click to my website

What You Need to Know About Wills in New City, New York

Your best bet for making or changing a will, is to sit down with an experienced estate planning attorney, so that your will won’t be invalid. Mistakes in wills are not easily fixed.

Having an estate plan in place and discussing your estate plan with your loved ones in advance, can help eliminate some of the emotional turmoil that accompanies death. The South Coast Register from down under offers some worthwhile suggestions in “Dying to Know Day: Wills and won’ts of estate planning.”

A will is a legal document that lets you choose the relatives, friends, and charities who you want to inherit your assets when you die.

If you die without a will, your assets will be distributed to relatives by the state laws of intestacy, which may not be according to your wishes.

If you don’t have any relatives, or they can’t be found, your estate will be paid to the state.

You can make your own will, or you can hire an experienced estate planning attorney to assure that every detail is addressed.

If you decided to draft your own will, proceed at your own risk. Make sure that you consider the likely value of your estate, all of your potential beneficiaries, any special gifts or bequests, the disposal of any remaining assets, and the appointment of an executor. Consider having an estate planning attorney from your state review it, because unless you are familiar with the laws of your state, the entire will could be invalid if there are too many mistakes.

You want to be sure your will is written correctly because challenges can be expensive and time consuming. It will also cause unwanted pain and stress to your family and friends.

You’ll need to select an executor, who is an individual that will be responsible for carrying out the provisions of your will. Speak with the person who you want to be your executor and make sure that they are willing to take on this role. Make sure they have contact information for your estate planning attorney so that they can work together, when the time comes.

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US Government Shutting Down myRA in Yorktown Heights, New York

A government program for lower income savers is being closed down.  However, there are still retirement savings accounts appropriate for even small monthly investments.

Given what we know about the longer lives of Americans and the cost of healthcare in retirement, it’s hard to fathom the fact that less than 31% of Americans still don’t have an IRA. Among those who do own an IRA, approximately 19% make contributions every year. A report from TIAA found that a very small percentage—5%—of all Americans contribute more than $5,000 a year to their IRAs.

But Kiplinger reports in its recent article, “Say Goodbye to MyRA, Hello to Roth IRA,” that some people looking to save for retirement are losing a way to do it: the myRA.

The U.S. Treasury Department recently announced it is ending the Obama administration’s myRA program, because it wasn’t cost effective.

myRA was a no-fee way to save for retirement that was designed for people without access to employer-sponsored retirement plans like 401(k)s. It began two years ago for lower-income savers, although it was also open to those with incomes in the six figures. The accounts had no minimum deposits.

The Treasury Department said the demand for and investment in the program has been very low.  Taxpayers have paid about $70 million to manage the program since 2014.

The next question for those of us with modest means, is how to invest for retirement now that myRA is gone? Here are some suggestions:

Don’t cash it in. If you’re in the myRA program, don’t cash your money out of the account.  That could mean taxes and an early-withdrawal penalty, if you’re under age 59½. Set up a Roth IRA with another provider. In fact, the myRA website has added a feature to walk consumers through the process of selecting a new Roth IRA provider and moving their funds.

Plan your rollover. You want to avoid triggering possible taxes or penalties when you move money from your myRA to a new account.  Therefore, prior to initiating a direct rollover or transfer, open a new Roth IRA with a different provider. Work with the new Roth IRA provider to transfer your myRA balance to your new Roth IRA. If you don’t do a direct transfer, redeposit the full amount into a new Roth IRA within 60 days to avoid taxes and penalties.

Set up automatic savings. Start a direct deposit of a set amount of money into a 401(k) or IRA for every pay period. The money in Roth IRAs grows tax-free. Remember these other basics for Roth IRAs:

• The annual maximum amount you can deposit in 2017 is $5,500 ($6,500 if you're 50+);
• Your contributions can’t exceed your earned income;
• You can withdraw your contributions (not your earnings) at any time, regardless of your age, without paying taxes or a penalty (provided you’ve had the account for five years);
• When you hit 59½, all withdrawals are tax-free (provided you’ve had the account for five years); and
• There are income limits for contributions. For single filers in 2017, the ability to contribute begins to phase out at $118,000 (married filing jointly sees the phase out at $186,000).

Let’s face it: many people do not save for retirement because they simply can’t. But many people don’t save for retirement because they don’t wish to give up something today for what seems like a tomorrow that will never come.

Even families with modest income levels, should consider putting aside a little bit of money every month to build some retirement savings.

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Why Women Need Financial Planning More Than Men in New City, New York

Statistically speaking, women live longer and earn less than men. That makes financial and retirement planning far more important for women.

It’s not pleasant to contemplate, but because women often take time out from their careers to raise children or take care of elderly parents and still earn less than their male colleagues, their life-time income is usually lower than the average male. While both sexes need to do financial and retirement planning, women are more likely to find themselves facing financial difficulties as they age.

The Marietta Daily Journal’s article, “With women living longer, more financial planning may be needed,” notes that while the gender pay gap is narrowing, in 2015 women earned 83% of what men earned, according to Bureau of Labor Statistics. This can mean that women get fewer Social Security benefits, save less for retirement, and have smaller pensions. Women are also more likely to live on their own in their senior years, either by choice, divorce or the death of a spouse.

It is, therefore, critical that they assume the sole responsibility for their financial decisions. They should develop a financial plan that is designed to have their assets last through the youngest spouse’s age 92 or later—understanding that odds are one spouse may end up spending several years alone.

With couples, one spouse typically is in charge of the finances, paying bills, and making financial decisions. However, it’s important for both spouses to have an understanding of their overall financial plan, the insurance policies in place, where assets are held and how to access the accounts, if something were to happen to the other spouse.

When only one spouse makes the financial decisions for the family, it’s important for both to be involved in developing the estate plan because each may have differing views on where assets should go.  However, they still make each other their primary beneficiary. If you pass first, your assets may not be used or distributed the way you intended, if your spouse is in control. It also may be a surprise to a surviving spouse to learn that he or she doesn’t have access to assets they thought they would.

When one spouse dies, the surviving spouse will grieve. This can also be the case in divorce or incapacitation. As a result, the surviving spouse shouldn’t make any major decisions for several months. He or she will need to become comfortable with the new financial life. Risk tolerances may change at this point, and plans may need to be altered.

It’s important for both spouses to have a thorough understanding of the estate plan. That way, whichever of the spouses survives, he or she will be better prepared to handle the responsibilities of settling the estate.

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Common Challenges after a Loved One Dies in Yorktown Heights, New York

No matter how much you may be mentally prepared for death, when the time comes, even the most logical people are overwhelmed by grief.

It is not unusual for grief-stricken people to panic, experience severe anxiety or insomnia while mourning a loved one. This is the case, even if the person was very diligent and had a detailed estate plan in place, according to the Houston Chronicle in “Elder Law: Some unforeseen issues usually arise for survivors, executor.”

If you’re the designated executor of a will, you’ll want to know what you need to do ASAP. However, remember that even though you’ve been named in the will, it is still not official because the will must be filed in court with an application. Until the will is admitted to probate, you need to cool your heels because it’s not yet official.

When called upon, you will sign an oath that you promise to faithfully discharge your duties.  Letters testamentary then need to be requested—that is proof you’re authorized to act on behalf of the estate. It’s your “permit” that makes your job as executor official.

A common situation arises when the decedent passes away in his or her home, and you get a call from a police officer. If law enforcement has received clearance to release the body from going to the medical examiner's office for an autopsy, the task is then to locate the right family member or agent to direct the body to a funeral home or other facility. Once the body’s been removed from the place of death to the mortuary and, if the decedent lived alone, your task is to secure the house and any other physical property.  The next step is to look into funeral arrangements.

Many executors think about changing the locks immediately, if they’re uncertain who has keys to the place. It’s not uncommon for a relative or a beneficiary who has not been named executor to help themselves to items in the home. Remove valuables from the house unless you can keep them safe there. These are things like cash, jewelry, guns, precious metals and antiques.

Some other logistical points: don’t turn off the utilities because you’ll need them left on when dealing with the property in the house and later selling the home. Have the person’s mail forwarded to your home or office. Take care of pets and plants in the house and find people to look after them. Maintain the home—cut the grass or shovel the driveway—you need it to look like people live there in order to reduce potential break-ins.

Locate any contracts with a funeral home, in case the person pre-paid for their funeral or cremation. If there is a life insurance policy with the funeral home assigned as the beneficiary to cover funeral costs, you’ll need to locate that document as well.

Finally, if you know the estate planning attorney who helped your loved one create their estate plan, contact them to discuss what needs to happen next. Otherwise, you’ll want to find an experienced estate planning attorney who will be able to help you through the probate process.

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Retiring Soon? Make Sure that Healthcare Costs are in Your Budget in Yorktown Heights, New York

Knowing that healthcare costs are on the rise is one thing. But seeing the numbers in black and white can be a shocker. A recent report from Fidelity Investments reports on the costs, and what some companies are doing to help employees before they retire.

An annual study by Fidelity Investments reports that a 65-year old couple retiring in 2017 should prepare to spend an estimated $275,000 in health care and medical expenses during the course of their retirement years. This is an increase of 6% from last year, which doesn’t sound too bad.  However, since 2002, when Fidelity first began doing this study, the cost has surged by 70%.

The article, “Retiring This Year? Here’s What You’ll Pay for Health Care,” appearing in Think Advisor, says that the $15,000 increase over the 2016 estimate is caused by general market trends and expectations for health care costs across monthly expenses associated with Medicare premiums, Medicare copayments and deductibles and prescription drug out-of-pocket expenses. They also assume Medicare health coverage, but don’t include the added expenses of nursing home or long-term care.

The article also explains why reverse mortgages shouldn’t be used to bridge the income gap when you wait to collect your Social Security benefits. With ongoing uncertainty in health care, you need to understand what you can take to prepare for health care needs in retirement. With these expenses expected to increase in the future, it’s important to add them as a significant part of your retirement plan.

Fidelity’s calculations are based on a hypothetical 65-year-old couple retiring in 2017 with life expectancies from the Society of Actuaries’ RP-2014 Healthy Annuitant rates with Mortality Improvements Scale MP-2016. The estimate was net of taxes. It considered folks who didn’t have employer-provided retiree health care coverage but qualified for Original Medicare. This included cost-sharing provisions associated with Medicare Parts A and B, Medicare Part D premiums, along with out-of-pocket costs, and some services excluded by Original Medicare. It didn’t include other health-related expenses, like over-the-counter medications, dental services and long-term care.

More companies are offering health savings accounts as part of their benefits packages. HSAs are paired with high-deductible health plans which often have lower monthly premiums than traditional health plans. They also include tax benefits of tax-free contributions and balances and savings that can be withdrawn for medical costs without federal tax.

The bottom line: retiree health care costs are only going to increase. The best way to prepare for this is to focus on saving enough during your working years to be prepared for this big retirement cost.

For more information on Paying for a Nursing Home, Long-Term Care Planning, Retirement Planning; please click to my website

Why Women Need Financial Planning More Than Men in New City, New York

Statistically speaking, women live longer and earn less than men. That makes financial and retirement planning far more important for women.

It’s not pleasant to contemplate, but because women often take time out from their careers to raise children or take care of elderly parents and still earn less than their male colleagues, their life-time income is usually lower than the average male. While both sexes need to do financial and retirement planning, women are more likely to find themselves facing financial difficulties as they age.

The Marietta Daily Journal’s article, “With women living longer, more financial planning may be needed,” notes that while the gender pay gap is narrowing, in 2015 women earned 83% of what men earned, according to Bureau of Labor Statistics. This can mean that women get fewer Social Security benefits, save less for retirement, and have smaller pensions. Women are also more likely to live on their own in their senior years, either by choice, divorce or the death of a spouse.

It is, therefore, critical that they assume the sole responsibility for their financial decisions. They should develop a financial plan that is designed to have their assets last through the youngest spouse’s age 92 or later—understanding that odds are one spouse may end up spending several years alone.

With couples, one spouse typically is in charge of the finances, paying bills, and making financial decisions. However, it’s important for both spouses to have an understanding of their overall financial plan, the insurance policies in place, where assets are held and how to access the accounts, if something were to happen to the other spouse.

When only one spouse makes the financial decisions for the family, it’s important for both to be involved in developing the estate plan because each may have differing views on where assets should go.  However, they still make each other their primary beneficiary. If you pass first, your assets may not be used or distributed the way you intended, if your spouse is in control. It also may be a surprise to a surviving spouse to learn that he or she doesn’t have access to assets they thought they would.

When one spouse dies, the surviving spouse will grieve. This can also be the case in divorce or incapacitation. As a result, the surviving spouse shouldn’t make any major decisions for several months. He or she will need to become comfortable with the new financial life. Risk tolerances may change at this point, and plans may need to be altered.

It’s important for both spouses to have a thorough understanding of the estate plan. That way, whichever of the spouses survives, he or she will be better prepared to handle the responsibilities of settling the estate.

For more information on Estate Planning, Asset Protection; please click to my website

Will One Million Be Enough for a Comfortable Retirement? In New City, New York

It used to sound like a lot of money, but a new report says even with $1 million in retirement savings, where you live could make the difference between a comfortable retirement and running out of money.

Depending on what state you live in and how long you live, having a million dollars may or may not be enough to fully enjoy your retirement. A new report from GOBankingRates reveals the state-by-state costs of living and other factors to determine how long a million dollars would last for retirees 65 and older.

Research by the Missouri Economic Research and Information Center multiplied the Bureau of Labor Statistics’ mean annual expenditures for that age group by a cost-of-living measure for each state. They then separated out annual spending on health care, housing, groceries, transportation, and utilities.

Think Advisor’s recent article asks “How Far Does $1 Million Go in Retirement?”

It appears that the takeaway from the number crunching is this: if you want to stretch your dollars as far as possible, retire in the South.

The calculations are conservative and don’t factor in any entertainment or travel. Without those, it would be a pretty grim retirement. It also doesn’t consider inflation’s impact on purchasing power as we get older. Inflation can be more dramatic for seniors due to medical costs. Those expenses can account for a bigger percentage of expenses and have increases at a higher rate than the economy overall.

Estimates indicate that health-care costs for retirees will rise at an average annual rate of 5.5% in the next ten years, according to HealthView Services, a developer of retirement health-care cost projection software.  As an illustration, from 2012 to 2016, the average annual broad inflation rate in the U.S. was 1.9%.

The calculations for the annual expenditure numbers also don’t take into account any return on the money seniors are presumably holding while they’re in retirement. Those gains could offset purchasing power that’s lost to inflation.

Despite these caveats, the information is useful in starting to show the relative power of a fixed sum of savings from one state to another.

For many, the notion of a million-dollar savings fund for retirement is a dream. There are many who make do on much less. For others, a million won’t be nearly enough to fund the kind of lifestyle they want in retirement. Health issues make planning very difficult.

If you are planning on retiring in the next few years, now is the time to begin getting a handle on your costs of living. Start tracking the amount of money that you spend now and create a budget so you can see where your money is going.  You will then know how much you’ll need for retirement.

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South Korean Court Sentences Samsung Heir, Succession Plan Unknown in Yorktown Heights, New York

With a five-year prison term for the chief of Samsung, the global electronic powerhouse now has to determine how to go forward. The conviction and sentencing, which led to the president of the country being ousted, are likely to have a far-reaching impact.

A recent article in USA Today, “Samsung heir sentenced to 5 years prison by South Korea court,” reports that Lee Jae-yong, the billionaire chief of Samsung, was found guilty of offering bribes to Park Geun-hye, the former president of South Korea, and to Park's close friend, to garner government influence and to further his efforts to gain control over the Samsung empire. The outrage of the South Korean public was so strong that the president was removed by a court and hundreds of South Koreans took to the streets to protest the corruption of business and government.

Lee was found guilty of embezzling Samsung funds, hiding assets overseas, concealing profits from criminal acts and perjury. Experts say the verdict won’t have an immediate effect on Samsung's business operations, but long-term business decisions may have to be put on hold because there’s the potential for a destabilizing family feud over inheritance, when the elder Lee dies.

Samsung accounts for about 20% of South Korea's exports.

Lee was charged with offering $38 million in bribes to four entities controlled by Choi Soon-sil, a long-time friend of Park. This was in exchange for government help with a merger that strengthened Lee's control over Samsung after his father suffered a heart attack in 2014.

Samsung hasn’t denied transferring corporate funds, but Lee, vice chairman at Samsung Electronics and the Samsung founder's grandson, said he was innocent in the court proceedings. He claimed that he was unaware of the foundations or the donations, which were overseen by other executives.

The verdict is the latest in a political scandal that prompted millions of South Koreans to protest. Last fall, this resulted in the ouster and arrest of Park as well as the arrests of Choi and Lee. Park, who also was involved in other scandals, was removed from office in March. Park and Choi are both currently on trial.

The verdict of the younger Lee also has an impact on Samsung's publicly-stated position that recent business dealings or restructuring efforts don’t have anything to do with the succession of corporate leadership to Lee from his father.

The judges rejected the company’s assertion that the merger of the two Samsung’s companies, at the heart of the scandal, was being done as a strategic benefit for the business.

The head judge was very clear, stating that Lee was going to benefit the most from the succession work, which was part of what he sought from the president.

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Retirement for Many Americans Impacted by Non-Mortgage Debt in New City, New York

Credit card debt is a serious challenge for a large group of Americans over age 50 that has a ripple effect on the quality of their retirement.

The new MagnifyMoney analysis of data from a study conducted by the University of Michigan Retirement Research Center Health and Retirement, indicates that a third of Americans over age 50 have a significant amount of non-mortgage debt that they are not able to resolve before retiring.

KSDK Five on Your Side reported in a recent story, “Older Americans are getting crushed by debt,” that the study—done annually since 1990—surveys more than 20,000 Americans age 50+ on their financial well-being. Those with debt, on average, have about $4,800 in credit card debt and $12,500 in total non-mortgage debt.

Carrying high-interest debt makes it easy to ruin the ability of older Americans to live a quality lifestyle in retirement. This only gets to be a more significant problem with the inevitable rising cost of their health care needs as they age.

Working with an elder law attorney, you can make the connection between debt and needing institutional care: the higher the debt load, the less likely the individual will have enough cash assets to cover medical care that’s not provided by Medicare.

According to research, 40% of all older Americans have credit card debt over $5,000, and 20% of Americans age 50+ have more than $10,000 in credit card debt. Typically, those individuals with more than $10,000 in credit card debt couldn’t pay off their debt with all the assets they have.

Here are a few thoughts on how to manage debt before you retire:

• Pay down your debt. If you have a lot of high interest credit card debt, pay that off before you put money into your 401(k).
• Cut the cord. Quit financially supporting your adult children and don’t take on more debt on your children’s behalf. Let them work on it the rest of their working lives.
• Downsize. Take action now to lower the costs of your housing and you’ll be able to make more room in your budget for your needs as you age.
• Work a little longer than planned. Don’t give up that paycheck so fast, and do whatever you can to pay off any credit card or other non-mortgage debt before you retire. This will give you more time to shrink any debt and the additional years of work will increase your Social Security benefit.
• Get help from a professional. An elder law attorney will be able to help you design a strategy to manage your debt to protect the quality of your retirement.

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