Year End Planning: Schedule a Family Meeting

 It’s hard to believe that in just a few short weeks, the holiday season will be upon us.  Family gatherings during the holidays are rare occasions when parents and siblings are in the same place at the same time.  While these gatherings are wonderful opportunities for casual conversations and reminiscing, why not use this time to have a productive family meeting?

It is important for families, no matter the ages of the family members, to have serious conversations about the legal and financial planning in place; or the planning that is not in place that needs to be.  Important points for discussion may be:

• Legal Documents – Do all family members over the age of 18 have their own Durable Powers of Attorney (POAs for Health Care and General Financial are needed)?  Do those assigned as POAs understand their potential responsibilities in their roles?  Are wills or trusts in place or needed?
• Financial Savings – Particularly for elder family members, are there financial resources and structures in place to fund potential long-term care needs in the future?  For younger family members, is there an opportunity to use year-end gifting to help fund education or retirement savings (i.e. ROTH IRAs)?
• Elder Care Planning – For family members who are aging, this meeting may be an opportunity to start conversations about future care.   Discussions regarding future housing and care needs, as well as a review of the older relative’s future challenges, alternatives and resources are important.  In particular, beginning to lay out future roles of family members is critical to the future success of this kind of planning.  For a list of questions that might be helpful in starting these conversations, click here.

As you look forward to the holiday season, plan for good food and family stories.  But also plan for important conversations that can affect your family’s legal and financial success.  By planning ahead for these conversations, family members can be prepared to contribute to the planning in a meaningful way.  For additional tips on holding these all-important family meetings, talk to your financial planner.

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Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

Watch Out for Senior Financial Fraud

 Imagine you get a call from your grandmother.  She asks that you take her to the bank because the neighbor that usually takes her is busy, and she needs to get another certified check.  On the way to the bank, your grandmother shares that the lottery company promises that this is the final fee that needs to be paid for her award check to be issued – it has only cost her $1,000 and the award will be $100,000. “What!?!” 

This isn’t just a made-up story meant to scare you.  In fact, Susan Tompor of the Detroit Free Press wrote an article about this very topic recently in an article titled “Time to Look Out for Granparents’ Money”.   It is also consistent with the types of scams that the State of Michigan Offices for Services to the Aging are reporting and trying to combat.

In the Free Press article, Susan Tompor referenced a recent survey conducted by the Investor Protection Trust and the Investor Protection Institute that identified the top three areas of senior scams:

• Theft by family members – family members taking and cashing Social Security checks and/or misusing access to bank accounts.
• Theft by caregivers – similar to family fraud, but by trusted caregivers that are not family members.
• Financial scams involving strangers –
  • Scams can involve strangers pretending to be grandchildren in trouble in a foreign country requesting that money be wired to get them back to the U.S.;
  • Scams indicating that the senior has won a lottery, but needs to send a wire or check to cover processing fees; or
  • Scams requesting personal information (Social Security Numbers, etc.) to verify Medicare or other benefits (seniors providing the requested information can become victims of identity theft).

These scammers take advantage of the trust and good will of older adults.  If you are an older adult, a family member of an older adult, or professional that works with older adults, be aware of possible senior financial fraud.  Take steps to protect yourself or the older adults you know by:

• Protect your information, including Social Security Numbers, account numbers, etc.
• Verify the validity of anyone calling or contacting you asking for personal information and/or transfer of funds.
• Do your due diligence before hiring professionals to assist with providing of care or any other professional services.
• If fraud is suspected, contact the appropriate authorities:
  • Adult Protective Services Vulnerable Adult Helpline 1-800-996-6228
  • Senior Medicare Patrol 1-800-803-1714
  • State Office of Financial and Insurance Regulation 1-877-999-6442
  • OR your local police

If you have questions about this additional Elder Care Planning issues, contact me at Sandy.Adams@CenterFinPlan.com.

VA Aid & Attendance Benefits: Beware of Bad Advice

 Imagine this scenario:  You attend a presentation with your father at his assisted living facility.  The organization presenting is very official looking, with materials covered in flags and red, white and blue.  Although they are not the Veteran’s Services Organization or VA, they claim to be able to help all veteran’s get a monthly pension benefit from the VA, no matter what their financial situation.  They claim clients they work with have never been denied benefits.  Could this be true, or might there be a catch?

The U.S. government provides several benefits to military veterans as a way to honor them for their service.  One of the benefits that might be available to many veterans and their spouses in older age is the VA Aid & Attendance Benefit. 

• Not all veterans are eligible for this benefit, as it is dependent on time of service and medical and financial need.
•  This benefit provides a monthly pension to veterans and/or their spouses in older age when they begin to need assistance with activities of daily living. 
• The Aid & Attendance Benefit is also based on financial need – income versus ongoing medical related expenses and value of assets.  In general, anyone with asset in excess of $80,000 is not eligible (note that this asset number can be adjusted based on age and life expectancy).   *Source:  U.S. Department of Veterans Affairs

If a veteran qualifies within the income and assets requirements, applications can be filed with the Veteran’s Services Organization at no cost.  For veterans who might not be eligible for benefits without additional planning, organizations like those described above will offer to assist by re-registering and/or gifting assets and repositioning assets into insurance based products that generate high commissions to the “advisors” selling them and are not necessary to qualify for benefits. 

If you or someone you know is a veteran or spouse of a veteran who thinks they might benefit from the Aid & Attendance Pension Benefit, here are a few things to remember:

• If the veteran has limited income and assets, go directly to the Veteran’s Services Organization to apply for benefits.
• If you think you may need additional planning to qualify for benefits, seek out a Certified Elder Law Attorney who has been certified by the VA to counsel veterans.  A qualified Elder Law Attorney will counsel you based on the client’s needs now and in the future (i.e. future need for Medicaid benefits), and may recommend that the VA Aid & Attendance Benefit is not appropriate for all clients.
• Be aware of advisers who insist that the only way to qualify for benefits is to shift assets to an Irrevocable Trust and fund the trust with insurance based products (be especially aware if the recommendation is to buy multiple, smaller insurance products – as this may not be a suitable option and the advisors may only be trying to maximize their commissions).  The real truth is that if the trust is appropriate, it may not be necessary for it to be funded with insurance products that might have high commissions and might have surrender charges not appropriate for an older adult.

I don’t know about you, but whenever I think about U.S. military veterans, I think of respect, service and gratitude.  The best way to honor our military veterans is to provide them with the most suitable advice for their situation. Not bad advice that will cost them money. If you are a veteran or know one who might be eligible for the Aid & Attendance Benefit, make certain that the appropriate professionals are consulted. 

Watch for my upcoming post on additional Elder Financial Fraud scams.  Contact me at Sandy.Adams@CenterFinPlan.com if you have additional questions about any elder care related topics.

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The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss.  You should discuss tax or legal matters with the appropriate professional.

When is it Time to Downsize?

 If I give away some of my stuff, am I giving away a part of me?  Does it make “me” less? 

That was the question posed by Dr. Cathy Lysack, PhD, an occupational therapist and the Deputy Director of the Institute of Gerontology at Wayne State. She asked the audience at The Center’s recent educational workshop about downsizing and mobility for thoughts about giving away “stuff”.  This topic can be troublesome, not only for seniors, but their adult children as well.  What’s unique about late life downsizing versus any other move?  According to Dr. Lysack, it’s when downsizing occurs in a compressed time period and is often initiated by health issues.

So when is the right time to move?

The answer to that is not the same for everyone but there are important clues.  The most common is that your body says it’s time.  It becomes obvious when your current living situation, environment, or health simply become too much to handle. Depending on your stage in life, you may also desire to be closer to family or to live in a more fulfilling community.

When the final decision to downsize has been made, there are many emotional decisions that remain.   What should you keep? What must go?   Dr. Lysack said, “We tend to keep things that give us pleasure, have monetary value, or are things we have attached a special memory to.”  Throughout the process we wonder if, by giving these items away, we are going to be giving away a part of ourselves.

Here are three key questions to consider when faced with these tough choices:

• Does it fit in the space I am moving to?
• Does it mean something to me?
• Do I really need it?

Dr. Lysack concluded the presentation with the following thoughts, “There are many different ways to downsize and that the process is more than packing boxes and moving.  Older adults dislike change (like the rest of us), but they are experienced with life, resilient and adaptable. Many show considerable creativity in making decisions about what to keep, sell, donate or gift.

The Center for Financial Planning recognizes first-hand the challenges many aging clients and their families experience moving into later stages in life.   We remain committed to providing well-informed and compassionate advice to those faced with these very emotional decisions.   Please do not hesitate to contact our office if you would like additional information.   

Planning for Elder Care? I’ve Found a Great Resource

 I am in school again.  This time not because I have to or need to, but because I want to.  In my quest to have greater knowledge about the aging process and elder care issues, I recently did a class project to find recources for caregivers and families. My search uncovered a great resource that was new to me – Joy Loverde’s “The Complete Eldercare Planner”. 

Our population is approaching the biggest shift in U.S. history.  By 2030, those Americans 65+ will make up over 20% of the U.S. population.  Even more surprising, in less than 50 years, there will be as many Americans aged 80 and older as there are now people over 65.(Source: Fidelity Research) 

This population shift is putting more and more Americans in the position of caring for aging parents at the same time they are raising their own children.  Without the proper resources, the task of caring for parents can be overwhelming, putting the health and sanity of caregivers and their families at risk.

In her book, “The Complete Eldercare Planner,” Joy Loverde, a well-known consultant in the senior industry for over thirty years, provides valuable insight for caregivers who need to plan and manage eldercare issues.  Particularly helpful are the low-cost and no-cost resources and checklists provided to guide caregivers through the following areas: 

• Effective Overall Planning
• Creating a Care Team
• Care for the Caregiver
• Communication
• Emergency Preparedness
• Money Matters
• Legal Matters
• Insurance
• Housing
• Safety Issues
• Transportation and Mobility
• Managing Medical Care
• Quality of Life
• Death and Dying
• Financial Organization/Document Location

I fell in love with the book when I read the author’s opening message, “Caregiving may be the hardest family responsibility you’ll ever take on. It unquestionably affects our every waking moment – at home, in the workplace, where and how we live, and how we cope.  If eldercare has chosen you, I will be with you every step of the way. Every page, every sentence, and every word in this book contain my personal messages to you, and I have the utmost respect for your decision to accept this role as caregiver.”

”The Complete Eldercare Planner” is easy-to-use. The checklists and resource lists are simple and are likely to be used over and over during the process of caring for an elder family member. 

For additional resources and/or answers to questions regarding Elder Care financial planning, contact me at sandy.adams@centerfinplan.com.

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This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.  Joy Loverde is not affiliated with Raymond James.

The Perfect Recipe for a Balanced Life for the Sandwich Generation

 I think I’m like many Americans that struggle to find personal time amongst the chaos of working full time, raising two children, balancing family relationships, and other obligations (school, church, volunteer work, etc.).  And I am not even one of the many Americans between the ages of 40 and 60 who are raising children AND assisting aging parents.  If I have trouble finding time to balance my life with only one family to raise, how can these members of the “Sandwich Generation” do it?

I had a client of mine explain it this way, “You have to run your family like a business, that’s the bottom line.”  While there are certainly feelings and emotions that complicate the dynamics of these family situations, there has to be a way to get things done without sacrificing all of your time, your relationships, or your sanity. 

Here are 3 ways to managing your multi-tiered family like a business:

1. Plan Strategically – The key here is to have a plan; to be proactive rather than reactive.  Know what has to be done, when it needs to be done, and how it will be paid for.   This includes creating master calendars for who needs to be where and arranging transportation).
2. Manage Resources – Make sure you have the tools in place to make things happen (legal documents, financial resources, and human resources).  If you don’t have the pieces in place to make things happen when the time comes, you end up in crisis mode.  This involves making sure legal documents like durable powers of attorney are in place and arranging for help that is either paid or volunteer for things like care assistance, bill paying, etc.
3. Departmentalize – You are the manager of the family business, which means you oversee but do not need to perform every task.  Make sure that the right people are handling the right tasks, and that everyone is doing their part.  This means involving all family members to do their share (including adult siblings) and hiring the right professionals to handle the duties that are outside your area of expertise (Geriatric Care Managers, Elder Law Attorneys, Financial Planners, etc.).

Before trying to handle every duty that comes managing a multi-tiered family, consider viewing your family like a business.  Doing so will ensure that everyone is served best, and will provide you time to maintain a balanced and quality life.

Please feel free to contact me for additional tips on establishing and managing your family business.

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The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Center for Financial Planning, Inc., and not necessarily those of RJFS or Raymond James.

The Holidays – A Great Time for a Family Board Meeting

If your family is like most, the holidays are one of the few times during the year that the entire family gets together in the same place at the same time.  If you happen to be an adult child serving as a caregiver for an elderly parent (or parents), now is the perfect time to take charge as CEO of your “family care corporation” and schedule your annual board meeting.

Typically, if children are caring for aging parents, one of the children shoulders the burden more than the others.  If you are in this position, do what any corporate CEO would do…schedule a board meeting and do some strategic planning.  Manage the business of family caregiving by working with other members of the board (your siblings and your parents, if they are able) to make sure all parts of the business are being managed efficiently and that all parties are contributing to its success. 

Make sure the following job duties are covered by members of the board:

• Managing the finances.  Making sure that someone is overseeing the finances and making sure that bills are being paid.  With online bill pay and access to bank accounts from remote locations, this may be the perfect job for the out-of-town sibling that is demographically unable to handle other duties. 
• Managing the care.  If you are working with a Geriatric Care Manager or in-home care company, someone needs to be the primary contact for these services and communicate any developments to the rest of the family.
• Managing the day-to-day operations.  This is likely the job for the sibling that lives nearest. It includes running errands and accompanying elderly parents to medical appointments and getting groceries, amongst other things.

Once duties have been delegated, be sure that each sibling has the tools he or she needs to do their job.  Make sure necessary authorizations are in place, which may include legal documents including Durable Powers of Attorney for General/Financial and Durable Powers of Attorney for Health Care.  Schedule frequent reporting sessions so everyone can stay on the same page.  And make it a point to schedule family meetings with your parents’ professional advisors – financial planner, CPA, estate planning attorney, etc.  This group of professionals can serve as a crucial advisory board for you and your family.

A business cannot be successful if one person is trying to fill every position.  As the sibling who has chosen to take charge, make sure you empower your siblings to contribute to the success of your family care corporation.

The Best Gift You Can Give Your Family

What is the best gift you can give to your family?  Is it college education for a grandchild?  Is it a paid family vacation for your children and their families?

Gifting to family members may be an important piece of your financial legacy plan.   You may desire to gift to family members during your lifetime – when the financial support is needed or when you can observe the enjoyment of the gift. 

The BEST gift, as it turns out, is for you to plan ahead for yourself.  Your ability to ensure that you can fund your own financial independence and any future long-term care needs can provide more of an economic (an emotional) benefit to your family than a gift now.

• According to a recent MetLife study, Americans who take time off work to care for their aging parents are losing an estimated $3 trillion dollars in wages, pensions and Social Security benefits.
• A 2010 study by Fidelity Investment Research found that a 65 year-old couple that plans to live into their 90’s spends $250,000 to cover health care expenses, including Medicare premiums, co-pays, coinsurance and some home care costs.  Note:  This does NOT include chronic conditions or long term care costs.  

Before significant gifting is done, it is important to do a realistic assessment of your ability to fund your own retirement and long-term care needs.   Make sure that the proper documents and financial tools are in place to fund your needs now and later. Take the first step now and schedule a time to meet with your financial planner to discuss long term care planning.

Medicare Open Enrollment Starts October 15th

As if Medicare and all of the changes in plans and formularies aren’t enough, you know have to make your choices sooner!  Beginning October 15, 2011, and ending December 7, 2011, you can make changes to your enrollments for:

• Medicare Part D plans
• Medicare Advantage *
• Medigap Plans

*Medicare Advantage plans can also be changed from January 1 to February 12, 2012.

Making the wrong Medicare choices can cost you hundreds of dollars per month.  It is important that during this limited period of time you carefully evaluate your needs and the available plans to make sure that you are in the most cost-effective plan for your situation.   You can do your own analysis by using the online tools provided by Medicare or look for the help provided by local senior organizations or independent Medicare consultants. 

 Taking the time to find the right plan for you can be financially life changing.  Contact your financial planner for resources in your area.