The importance of estate planning

ESTATE PLANNING: AN EXAMPLE

This article is intended to act as an example why someone should be concerned with their current status of their assets, it is intended to be read in conjunction with Estate Planning Parts One through Four (located here), and it is not intended to be read as the “one size fits all” plan. As parts one through four expressed, it is typically very important to avoid the probate system as much as possible. The probate system can add time, money, and emotional distress to your loved ones in the event that they have to come into contact with the probate system. For example . . .

Sally has one home and one car and does have a will leaving everything equally to her three children and naming her first-born, Mark, as executor. Her husband, James, died three years ago. Before James died, he changed the title to his car to have Sally listed as TOD (transferable on death), and the home was in a Joint Survivorship Deed leaving his entire interest to Sally. This is good for Sally because all she would have to do is file an affidavit and the death certificate with the local recorder’s office to transfer the home into her name alone. The death certificate would’ve been taken to the car title office and the transfer would be complete upon payment of a small fee. James was able to help Sally completely avoid the probate system. The transfers were quick and there wasn’t any contact with the court which would have saved Sally a lot of time, headache, and attorney fees.

However, let’s assume that after these two assets are transferred into Sally’s name, she does nothing. Sally has three children: Mark, Mary, and Michael. If Sally was to die, without updating the assets a number of things could happen. First, even though Mark is listed as executor, to be appointed as executor, he would have to take the will to the local probate court and pay court costs (probably exceeding $100.00) to open the estate. Next, the home and vehicle would have to be appraised which would require an appraiser to get a current-market accurate figure at least on the home. Next, the appraiser’s fee would have to be paid and then Mark would have to file the inventory. From the time of appointment to filing of the inventory, including estimate waiting periods for appointment of the executor and conducting the appraisal, you are probably looking at a three month period of time. All the while, real estate taxes and bills for the home and car would have to be paid, including insurance. At this point in time, the heirs would have the option of taking title to the home or selling the home. If they decide to sell, it could lead to additional time to clean out the home, list the property, and allow buyers to inspect and find financing. This period of time could take up to six months whereby additional bills would have to be paid. Finally, Mark would get to the final accounting, where he would have to list the proceeds of the sale, reimburse himself for bills paid, show the remaining balance and distribute the funds.

Nine months of bills, filings with the court, opening of accounts, and payments of fees, is the cost that would have to be paid in the above scenario. Instead, had Sally obtained a Transfer on Death Designation Affidavit for the home and filled out a TOD for the car, the entire process would be condensed. Mark could have completed the required paperwork in a day. The additional fees wouldn’t have been accruing. And, if the children decided to sell the property, they could have listed it the same day instead of waiting on court approval and paying all of the fees and taxes along the way. 

Breaking news on the reversal of Alzheimer's Memory Loss

I don't know about you, but when I hear that something can't be done, it makes me work harder on trying to find a solution. And, this is exactly what clinicians have been saying about "Reversing Memory Loss" for decades, that is, "It can't be done".

So, when I came across an article recently written in LifeExtension magazine summarizing the latest research on slowing and even reversing memory loss, I had to take pause.... What's more, is that the results aren't achieved from some revolutionary drug, they are achieved primarily through carefully choosing what we do or do not eat on a daily basis.

Now, before you run out and buy a subscription to LifeExtension magazine, consider this: The conditions for achieving success in the study by Rush University and other studies like it, are COMPLICATED and difficult to adhere to in their entirety.

Still, the author goes on to note that even where "middle of road compliance" to diet requirements were achieved, statistically valid reductions in memory loss rates of  > 40% can still be achieved.

So, before you say well..., I'm probably one of those "other" people that fell into the 60% majority, consider that over 90% of all test subjects saw a significant impact in their rate of memory loss suggesting some really strong science is at work here.

So here it is in a nutshell:

DO:
- Eliminate simple carbohydrates, gluten, and processed foods from your diet
- Meditate 2x per day and begin yoga to reduce stress
- Sleep 7-8 hours per night
- Take melatonin, methylcobalamin, Vitamin D3, fish oil, and coenzyme Q10 daily
- Optimize oral hygiene by flossing and using an electric toothbrush
- Reinstate hormone replacement therapy
- Fast a minimum of 12 hours between dinner and breakfast
- Exercise a minimum of 30 minutes, 4-6 days per week

DON'T:
- Eat pastries & sweets in excess of 5 servings per week
- Eat red meat in excess of 4 servings per week
- Eat cheese in excess of 1 serving per week
- Eat butter or margarine in excess of 1 tablespoon per day
- Eat fried or fast food in excess of 1 serving per week

Interestingly, all of these things have been suggested to us at some point or another to maintain good health, but never before has there been such compelling, statistical evidence that puts all of these relatively simple ideas together to cure a previously incurable disease!


For more information on this topic, reference LifeExtension magazine, April 2016, "How to Delay Brain Aging by 11 Years" complete with all of its 49 references!

-Phil Smith, First Light HomeCare

Where to turn for help when parents can no longer care for themselves

As I sit here writing this piece, I am reminded that another 10,000 seniors retired today and 10,000 more will retire every single day for the next nineteen years!

If you are a baby boomer, then I'm certainly referring to you.  But if you are not, you may have a loved one who is.  If you or someone you love has been fortunate enough to reach the milestone of retirement, there is no doubt that there are at least two things on your mind;

• "Do I have enough money to live the way I want to for as long as I want" 
• "Am I healthy enough  to enjoy my retirement with no help from others?"

Woody Allen once said "if you want to make God laugh, tell him all about your plans"

For the sake of conversation, let's just focus for a moment on some options for "aging in place" if your retirement aspirations don't go exactly to plan.  For instance, what if your health declines and you can no longer take care of yourself either short or long-term?  Who will you lean on and where will you turn?  Perhaps you feel like your family owes it to you to provide the care you need or maybe you feel like it's the State's responsibility and they will provide for you when the time comes.

At the end of the day, many family members do step in when necessary to help work through a crisis, but what if the challenges are longer lasting?  How much family support is reasonable and at what point will this begin to take its toll on your family's health and well being?

Certainly, it is not my intent to be all doom and gloom because there are so many happy endings to reflect on.  It is my intent, however, to educate you on the options available and provide some pros and cons of each.  Consider the list below:

1. Skilled nursing facility- Stay here for short-tern nursing and physical therapy (PT). Typically covered under Medicare and/or private insurance.
   
2. Skilled nursing agency- Can receive nursing and PT in the comfort of your home.  Typically covered by Medicare and/or private insurance
   
3. Long Term Care (Nursing Home)- Stay here for long term nursing needs where skilled care is needed 24/7.  Covered by insurance after spend down requirements are met for personal funds leading to Medicaid.
   
   
4. Assisted Living- Stay here for long term living when medically stable; still able to transfer and ambulate with minor assistance.  Not covered by insurance and costs can range from $2500-$8000/month
   
   
5. Private Duty Home Care- This provides non-medical support in the comfort of your own home with similar services to Assisted Living including meal prep, light housekeeping, bathing, transportation etc.  Not covered by traditional insurance and rates can range from $19-25/hr.

-Phil Smith, First Light HomeCare

Prescription Drug Plans- Medicare Part D

Medicare offers prescription drug coverage to everyone with Medicare Part A and/or Part B. If you currently use prescription drugs or think you may in the future you should consider joining a Medicare drug plan.  Part D coverage is not mandatory, it’s optional.   Keep in mind that should you decide not to join a prescription drug plan when you’re first eligible, you may have to pay a late enrollment fee.   If you qualify for Extra Help in paying for your prescription drugs or have creditable prescription drug coverage at least as good as Medicare you may not be assessed the late-enrollment penalty or LEP.

There are two ways to get Medicare prescription drug coverage:

       -A stand-alone PDP or Prescription Drug Plan.  You must have Part A or Part B to join.

2.       -A Medicare Advantage Plan or Part C that includes prescription drug coverage.  These plans require that you have Part A and Part B to join and are commonly called MAPD plans.

All plans must meet the same basic guidelines created by the federal government.  Each plan can vary in cost and in the specific drugs they cover on their formulary or drug list.  You want to make sure all your medications are covered on your prescription drug plan.  You also want to know your monthly estimated drug costs,  and if you are going to hit the donut hole during the year.   You must live in the service area of the Medicare drug plan you want to join, and generally you must stay enrolled for the calendar year. 

You can enroll in Part D coverage when you first become eligible for Medicare.  For most people this is three months before the month you turn 65, the month of your birthday, and three months after.   You can also join if you get Part B for the first time during the General Enrollment period, during open enrollment between October 15^th -December 7^th each year, and at any time if you qualify for Extra Help.  If you are on a limited income and you enroll in Part D, you may qualify for Extra Help in paying for your premiums, deductibles and co-payments.  Also, there are certain situations or Special Enrollment Periods when you may be able to join, switch, or drop Medicare drug plans.  An example is if you move out of the service area.  

Medicare Part D has four drug payment stages.

Stage 1 – The annual deductible stage.  The deductible varies from plan to plan.  If your plan has a deductible, you must pay the annual deductible before the plan will pay for your prescription drugs.  Once the deductible is met you move to the initial coverage stage.

Stage 2 – The initial coverage stage.  In this stage you pay a co-payment or coinsurance (percentage of the drug’s total cost), and the plan pays its share for each covered drug until the combined amount which includes the deductible reaches $3310 in 2016. 

Stage 3 – Coverage gap stage which is often called the donut hole begins once your total drug costs reach $3310 for 2016.  At this stage, you pay 45% of the cost of brand name drugs, and 58% of the cost of generic drugs.  What you pay and the discount paid by the drug company in the donut hole counts as out-of-pocket spending.   You continue in this stage until your total out-of-pocket costs reach $4850 for 2016.  Your total out-of-pocket costs are the amount you pay and what others pay on your behalf beginning January 2016. The total out-of-pocket does not include your monthly plan premium.

Stage 4 - Catastrophic Coverage – After your total out-of-pocket costs reach $4850 for 2016, your coverage gaps ends and you only pay a small co-payment or coinsurance amount for each covered drug until the end of the year.

-Jackie Greene, IEN Risk Management

Protecting your income past age 65

The Problem:

·         When protecting income, what usually comes to mind is protecting our loved one’s, in particular young families, through the purchase of life insurance.  This is typically the solution to protecting  income since final expenses, mortgage protection, college education, income replacement are all needs for spouses and dependent children. 

·         Many parents, wanting the best for their families, have also sought to provide their children the opportunity to go to college by helping their children financially.  Although this limits the college financial aid loan repayments awaiting the graduate, this strategy often succeeds at the expense of saving for their own retirement.

·         Income replacement for the 60 something’s is easily overlooked.   The death of an income earning spouse can still cause the household to suffer a real economic loss.

·         This working spouse provides income for current needs, contributions to retirement plans accounts, and provides other benefits such as healthcare, that may be lost with the death of the worker.

In order to make up for a reduced retirement savings, whether due to a lack of planning, or market declines, workers are now planning to retire at an older age.  The expected retirement age of many workers has gone up as has life expectancy. Please see the below table with information from the CDC.    

Exhibit 1: Historical Data for Remaining Life Expectancy at Age 65

	Male	Female
1950	12.8	15
1960	12.8	15.8
1970	13.1	17
1980	14.1	18.3
1990	15.1	18.9
2000	16	19
2010	17.7	20.3
SOURCE: Center for Disease Control
http://www.cdc.gov/nchs/data/hus/2011/022.pdf

The Solutions:

The life insurance industry has seen the evolving of their life insurance company product portfolio’s.  The longer life expectancy, and newfound needs for insurance protection have created some new products, with new applications for customers.  Term life insurance, generally associated with the needs of younger generations, is now commonly used as a solution to protecting the income needs of the 60 somethings.  

If insurable, purchasing a 10-15 year term life policy, can be a cost effective solution.  In many cases, a permanent (whole life or universal life) can be combined with a term policy to provide both short and longer term protection needs.

Although the best solution for a guaranteed death benefit will always be life insurance, some people cannot pass the underwriting requirements. This is where some unique annuity legacy strategies can provide the desired death benefit, and can be a positive addition to your planning.

With many annuities, a death benefit rider can be added at the time of application. Although there is usually an annual fee for this benefit, it can provide for the life of the policy, an annual growth rate that can be left to the beneficiaries. The fee is taken out of the accumulation value, and not the actual death benefit amount.

In addition to guaranteed death benefits, it is also possible to leave an income stream to your beneficiaries as part of your overall legacy plan. This benefit can provide an income to a surviving spouse for the rest of his or her life. 

-Ken Jones, IEN Risk Management

Annual Election Period Checklist

Checklist for AEP

1.        Confirm that you are eligible to enroll -  To join a Medicare Advantage Plan you need to be enrolled in Medicare Part A and Part B and live in the service area.  To enroll in a Prescription Drug Plan you must live in the service area and Medicare Part A and/or Part B.  Also, if you have end-stage renal disease you usually cannot join a Medicare Advantage Plan but here are a few exceptions.   

2.       Review any coverage changes and determine if your current coverage still meets your needs – If you are on a Medicare Advantage or Prescription Drug Plan, carefully review your ANOC or Annual Notice of Change.  Does your plan still meet your health needs and budget?  Does it still have you’re your doctors in network and are your prescriptions on their formulary list?  Do you want to add dental or vision?    

3.       Will making a change affect your other insurance –  You can only be in one Medicare Advantage or Prescription Drug Plan at a time.   A new Medicare Advantage or Prescription Drug Plan will automatically cancel the old one.    If you have retiree or VA benefits, check to see if that insurance covers services that Medicare does not cover.   Talk to your benefits administrator so you know how your insurance works with Medicare.

4.       Do some shopping – Review your health and prescription drug costs and shop around to compare prices.  Medicare plans can vary in what they pay for services and prescription medications.  Make certain your doctors and medications will be covered under your policy.   Be sure to check the Star Ratings of your Medicare Advantage and Prescription Drug plan.   These plans are rated on a scale from 1 to 5 for customer satisfaction and quality. 

Medicare doesn’t have to be confusing, and hopefully this checklist will serve as guide to steps you can take during AEP.   Just think of the Annual Election Period as your yearly Medicare check-up.   If you have any questions regarding AEP, I’m happy to help.

-Jackie Greene, IEN Risk Management

AEP- Annual Election Period for Medicare

^{It’s almost that time again,  AEP ( ANNUAL ELECTION PERIOD) for Medicare Advantage and Medicare prescription drug coverage.    This enrollment period happens every year at the same time,  October 15th through December 7th. During this annual open enrollment period for Medicare you can do any of the following.}

^{·         Switch from Original Medicare to a Medicare Advantage plan.}

^{·         Change from a Medicare Advantage plan back to Original Medicare.}

^{·         Switch from one Medicare Advantage Plan to another Medicare Advantage Plan.}

^{·         Switch from a Medicare Advantage Plan that doesn’t offers drug coverage to a Medicare Advantage Plan that offers drug coverage.}

^{·         Switch from a Medicare Advantage Plan that offers drug coverage to a Medicare Advantage Plan that doesn’t offer drug coverage.}

^{·         Join a Prescription Drug Plan or PDP.}

^{·         Switch from one Medicare Prescription Drug Plan to another Medicare Prescription Drug Plan.}

^{·         Drop your Medicare prescription drug coverage.} 

-Jackie Greene, IEN Risk Management

Home or nursing home?

Home or Nursing Home?

Statistics show that more than 85% of aging seniors have a desire to stay at home while they age, which is probably no surprise to you and certainly no surprise to The Home Care Association of America. (The industry's leading trade association for providers of home care and a major resource to families looking for information on home care all across America.)

After deciding that you are committed to staying home as you age, the next step is to plan accordingly.  Although many Americans have worked hard to afford their retirement, it is no secret that folks are working longer due to the high cost of health insurance, along with fading pension benefits that retirees had once been able to count on. 

Although the process of planning for a successful retirement can be complicated, here are some questions that can help you plan for an unexpected change in health condition.

• If your health degrades to the point where you require help with Activities of Daily Living (e.g. shower assistance), what options exist?
• Depending on the level of assistance needed: In Home Care, Independent Living, Assisted Living or Nursing Home are options.
  
• What is the cost comparison of these options?
• Average home care prices range from $18-$25/hour and can be tailored to your specific needs.  Independent Living can range from $2500-$4000/month. Assisted Living can range from $3500 to well over $10,000 per month depending on the facility and amenities.  Nursing homes can exceed $10,000/month for full nursing care support and is a last resort for most Americans
  
  
• Who will pay for this care?
• Almost all Independent and Assisted Living facilities are private pay; those with long term care insurance may be able to use this benefit for these expenses. Nursing home expenses will also come out of pocket until you have reached the Medicaid threshold.  It is always a good idea to speak with an Attorney on your Estate Planning process; there are many tools and techniques available to help protect your assets in the event that you must exercise some of these options. 
• (For more information on Estate Planning see: Part 1, Part 2, Part 3, Part 4.)
• (For more information on Medicaid see: Medicaid Basics).
  
  
  

If we all had a crystal ball, we would be able to know if we will age gracefully and without the need for support later in life.  Unfortunately, most of us will need to try to anticipate the unexpected by planning for what may or may not happen later in life.

-Phil Smith, owner of FirstLight Homecare

Powers of attorney

(This content was originally featured in the newsletter 7/15/2016)

The purpose of this article is to emphasize the differences between the two types of power of attorney forms available under Ohio law and explain some pitfalls in giving someone a power of attorney. In general, there are two types of power of attorney forms available under Ohio law: Health Care Power of Attorney (HPOA) and a Business Power of Attorney (BPOA). This part may be self-explanatory, but the HPOA is so another person can make health care decisions on your behalf, and the BPOA allows another person to make financial or business decisions on your behalf. The part that many people do not know is the effective date of each of these forms.

Generally, the HPOA is only effective when the person giving the HPOA becomes unconscious or unable to provide direction to medical personnel as to decisions that might need to be made regarding that person’s health. So, the person must not be able to speak for themselves, then the HPOA becomes effective which allows another person to make the decision. In the past, doctors would regularly allow spouses to make decisions for an unconscious spouse. However, because of the tightening of the HIPPA regulations, it now recommended that all people get a HPOA, even if you are married. Some doctors will even refuse to give medical information to a spouse without this form. Finally, most HPOA have a section called a living will. If you are permanently unconscious with no hope of resuscitation, by completing the living will, your HPOA will be authorized to direct the doctor to “pull the plug.” This is different from a DNR (Do Not Resuscitate) which would prevent a doctor from even conducting CPR if it would save your life.

Unlike the HPOA, the BPOA becomes effective immediately! I highly caution anyone considering getting one that they select someone who is very trusted and who won’t abuse the power. While the BPOA form can be limited in scope to one or a few financial areas, if full power is given under the BPOA, the person will have the ability to access (and clear) all bank accounts, investment accounts, and the person could even sell your home and collect the proceeds. When used correctly, the BPOA will allow the person appointed to manage the funds on your behalf and the funds will always be used on your behalf. However, because of the nature of the BPOA, the opportunity for fraud and misuse is high.

One overall benefit to having both forms comes in the form of avoiding a guardianship. In the event that you are no longer able to care for yourself, a Court may deem you incompetent and could appoint a guardian to manage both your health and living decisions as well as your financial decisions. However, where both a HPOA and BPOA are present, a court will be more reluctant to appoint a guardian because all aspects of the incompetent person’s life can be managed by those already appointed. Look for my future article on guardianships and what they mean for your family for more information.

-Attorney Michael Wagner

Medicare Advantage vs. Medicare Supplement plans

(This was originally featured in our newsletter on 7/1/2016)

They provide a single plan that combines help with hospital costs, doctor’s visits and other medical services, plus prescription drug coverage if you want it.

The plans are run by private insurance companies, and they all combine coverage for hospital stays with coverage for doctor visits.  You can choose a plan that includes drug coverage, often at no additional premium, or you can choose a plan without prescription drug coverage.

The different types of Advantage plans are HMO, POS, PPO, Special Needs, Private Fee for Service and Medical Savings Plans. You will need to do some homework to figure out which of the plans will best fit your needs.

Look at the monthly premium (if any) you’ll pay to join.  Then estimate your total cost sharing for services.  Find a plan where the maximum out-of-pocket spending fits your budget.  Consider whether a plan’s network (if it has one) gives you access to the doctors you want to see.

If you choose an HMO, POS, PPO and Special Needs Plans, your care is “coordinated”.  That means the plan may coordinate your coverage through a primary care physician who manages the care you receive from specialists and hospitals.  You may have to choose specific doctors and hospitals.  Start shopping by finding what’s available in your area.

     Medicare Supplemental coverage Is private insurance coverage that helps fill the gaps in Medicare Parts A and B.   These plans cover some or all of the expenses that Medicare Parts A and B do not cover like coinsurance, copayments, or deductibles.  These policies are sometimes refered to “Medigap” policies because they fill in the gaps.  There are ten standard plans identified by letter A through N.   Each plan varies in which gaps in coverage they fill, and each standard plan must offer the same basic benefits no matter which insurance company sells it.   It’s important to note that these plans are sold by private companies and usually the only difference between Medicare supplemental polices with the same letter sold by different insurance companies is cost.  On a side note, the more gaps filled in the plan,  the higher the premium.   These premiums vary widely from carrier to carrier so it’s a good idea to do some research.  Also, not all plans are available in all states.  

       In regards to coverage limits, all supplement policies provide an additional 365 days of hospital care during your lifetime beyond the Medicare lifetime reserve days.   In addition,  no Medicare supplemental polices will cover more than 100 days in a skilled nursing facility, and you can visit any provider or facility in the United States. 

     You can buy a Medicare supplemental policy at any time after you reach age 65 and join Medicare part B.   You have a guarantee right to buy any Medicare supplement policy available in your area during the six months after you turn 65 and enroll in Medicare Part B.  This period is known as your open enrollment period.   The best time time to buy a Medicare supplement policy is during open enrollment because during this period the insurance company can’t consider your medical history in setting premiums.   While the insurance company can’t make you wait for coverage to start during this open enrollment,  it may be able to make you wait for coverage related to a pre-existing condition.  

-Jackie Greene and Bev Cline

Medicare- Getting Started

(Originally featured in our newsletter 6/15/2016)

The first thing you have to do is either be 65 years of age or qualify for enrollment due to disability or other special situation.

Qualifications- You must have “A” or “B” on your red, white, and blue Medicare card from the social security administration. You must also be a United Sates citizen or a legal resident who has lied in the United States for at least five consecutive years.

Types of Medicare- Part A is government-provided and helps with hospital care; Part B is also government-provided and helps with doctor’s visits and outpatient care; Part C is Medicare Advantage, Part D is prescription drug coverage. Both C and D are offered by private companies. Medicare Supplement (also called Medigap) plans are also offered by private companies.

Your biggest decision, and one to make first, is whether you want original Medicare, an Advantage plan, or a full supplement. If you decide to stay on original Medicare, you will need to add a Medicare Part D to cover your prescription drugs; the same applies to full supplements. If you choose an Advantage plan, offered by private companies, and most of them cover prescription drugs. You’ll need to choose from several companies and plans to purchase the one that best fits your needs. It would be advisable to make an appointment with a broker/agent to go over all of your options.

Enrollment- You can sign up for a Medicare plan three months before your 65^th birthday, the month of or three months after giving you a seven month window. If you miss the enrollment window, you must wait to enroll between October 15^th, and December 7^th unless you qualify for an exception. Enrolling later could mean higher premiums.

Cost- You’ll pay a premium for Part B. The amount depends on your yearly income and can be automatically deducted from your Social Security benefits. You may pay a penalty if you don’t sign up for Part B when you are eligible. Your cost for Part B may go up 10% for each full 12-month period that you don’t participate in Part B. You will pay that penalty for as long as you’re enrolled. This penalty may not apply to you if you are still working for an employer who provides group health coverage.

What isn’t covered- Part B focuses on helping you pay the costs of medically necessary care when you’re sick. Only in very limited situations does it cover any care for your eyes, teeth, or hearing. Part B does not cover medical care you receive outside the United States, except in a few very limited situations. Part B also doesn’t cover the cost of help with the activities of daily life, like eating, bathing, or getting dressed.

-Bev Cline

Medicaid- Legal Basics

(This content was originally featured in the newsletter on 6/1/2016)

In a previous article on trusts, available on the blog, we discussed how to protect your assets from the Medicaid look-back period. In this article we will discuss what Medicaid is and how it works.

Unlike Medicare, Medicaid is used to provide long-term care at a nursing facility. So, if you need long-term care and you do not have the funds to cover the cost, Medicaid will cover the cost, but with some strings attached. While you are generally not required to repay Medicare for services that you might receive, Medicaid does require repayment. In fact, in order to qualify for the Medicaid system, you must only have $1,500.00 to your name, or less. Also, there is a five-year look-back period where Medicaid will seek proof that your assets were spent on things necessary to the care of the person seeking to qualify. So, you can’t just give away your stuff in order to qualify, you must actually use any funds available during that five year period on the care of the person. This includes assets such as the home or the car, but does not include whole life insurance policies that do not have a face cash value (typically set up to pay for funeral expenses).

Selling the home or the car can be difficult and does result in some time constraints. With the exception of the home, as soon as the person’s funds are reduced to below $1,500.00 the Medicaid application should be submitted. Medicaid will provide a timeline with which you will have to sell the home, typically 9 months. You must sell the home for at least 90% of the current appraised value. That value is important because it is based on the county auditor’s evaluation. Since the housing crash, many of the home values have plummeted but the auditor’s evaluation has not been updated to reflect that. Or, the interior of the home may have fallen into disrepair which would also have an impact on the auditor’s valuation of the home. To lower the value, the qualifying person would have to file a complaint with the local auditor’s office between January 1^st to March 31^st of that year (the only time you can file this type of complaint). Because of this time constraint, timing of the filing of the Medicaid application is crucial. Guardianship attorneys have the most practice with Medicaid requirements and I highly recommend consulting one if you are facing the Medicaid system because of these time deadlines.

Besides the monetary impacts of going on Medicaid, there are further pitfalls. If you go straight into a nursing home on Medicaid, you may not end up at the facility of your choice. Many of the nicer nursing homes require two to five years of private pay prior to going on Medicaid. For this reason, you might want to consider long-term care insurance that would provide for that private pay period before Medicaid and allow you into a nicer facility. After going on Medicaid, any funds received by the person (from pensions, social security, etc.) must be paid directly to the nursing home and Medicaid will then cover the balance.

-Attorney Michael Wagner

Estate Planning Part 4- Trusts

In Estate Planning Part 1, we talked about how to avoid the probate process on an asset-by-asset basis. Sometimes, it makes more sense to use a trust to accomplish the same goal. However, trusts can be expensive and usually it’s less costly to consider the route in Estate Planning Part 1.  

                       

Generally speaking, in Ohio, there are five times when trusts are recommended as the best way to achieve your estate planning goals: to avoid Medicaid, to avoid the federal estate tax, to plan for special needs adult and minor children, to maximize benefits, and to attach strings from the grave. There are other reasons that you might consider a trust depending on your particular family situation, for more information, please seek the advice of an estate planning attorney.

The first reason to get a trust is to avoid Medicaid. Medicaid has a five year look-back period for asset transfers. So, if you want to protect your asset from Medicaid, you will need to transfer it into an irrevocable trust five years before you need Medicaid assistance. This takes some planning well in advance of going on the Medicaid system. Some pitfalls to an irrevocable trust in this case include loss of control. An irrevocable trust, to be truly irrevocable, must be completely out of your hands. That is, you would have to appoint some other person to control the assets once you transfer them into the trust. Essentially, it’s as though you have already given these assets to your beneficiaries well before your death. These assets, however, would be protected from Medicaid reimbursement and saved for your loved ones.

The second reason is to avoid the federal estate tax. The State of Ohio abolished their estate tax on January 1^st, 2013. The only estate tax for Ohio estates that remains is the federal estate tax. To qualify for that estate tax, you must have Five Million Dollars or more in assets. If you are below that mark, you need not worry about the estate tax. This type of trust may be revocable or irrevocable. So you would still be able to control the assets all the way up until the time of death.

The third reason to get a trust is to plan for special needs adult or minor children. To qualify for state programs that will assist these children, they can only have a limited dollar amount disbursed for their use periodically. A trust can be set up to benefit them over a long period of time and ensure that they get maximum state help and maximum spending money under those state programs.

The fourth reason is to maximize your benefits. Some benefit programs pay more money to those with less assets or income. To maximize your benefits, you can place your assets into an irrevocable trust to shield them from being counted as owned by you (and sometimes you can use a revocable trust in these instances which will allow you to control the asset).

The final reason to consider a trust is to attach strings from the grave. In the event that your beneficiaries’ lives would be ruined from having too much money at one time, or if you want to provide for your family over a long period after your death, a trust can be created that will make periodic payments to them over a long period of time.

Of course, trusts are expensive to make and administer of a long period of time, which is why it is often-times better to use an alternative estate planning method explained in my first article.

-Attorney Michael Wagner 

Estate Planning Part 3- The Probate Process

In the event that you forgot to make an asset non-probate, and you must rely on either the will or the statute, you or your family may have to face the probate process in Ohio. This article is designed to explain what that process is for estates (when someone dies) and what to expect.

After someone dies, and if they have probate assets (all assets unless specifically made non-probate), their stuff will have to go through the probate process. When this happens, whether there is a will or not, someone will have to take the will to the probate court and fill out a number of forms in order to open the estate. If there is a will, the person to do this should be the executor. If there is no will, anybody could apply to administer the estate and be appointed as administrator.

At this point in time, all of the people with an interest in the estate will be notified that the application for appointment has been filed. Provided that all of the people with an interest in the estate sign a waiver form, the applicant will most likely be approved by the court and a ghost hearing will be set where the court approves the applicant. If there is a will, the people with an interest in the estate will also be asked to sign a waiver to contest the will. As long as they all agree that this was the dead person’s last wishes and the dead person was competent when they signed the will, the court will most likely approve the will. If someone disagrees with the applicant, or disagrees with the will, a hearing will be set on those issues.

Once an administrator/executor is appointed and/or the will is accepted by the court, the next phase of an estate is the inventory. The administrator/executor will have to list all of the important assets that need to be handled in the estate. This list will be given to all of the beneficiaries (if no will, the beneficiaries are determined by the statute of decent and distribution, otherwise they are laid out in the will). If the beneficiaries agree that all of the things the dead person owned are listed, then they have the option to waive again- this is just a waiver to contest the inventory. If they disagree, another hearing will be set.

After the inventory, the assets will either be divided up amongst the beneficiaries according to the statute or the will, or the assets may have to be liquidated. Creditors will be given the opportunity to attack the estate and if they file their claim timely, they will have to be paid before the beneficiaries are able to obtain their portion. Assets will have to be liquidated to fulfill the creditor’s claims. Once a plan is created for dividing the assets, liquidation, payment of creditors, and distribution to the beneficiaries, the administrator/executor will report this to the court in the final phase: the final accounting. Again, the beneficiaries will have an opportunity to either waive (meaning they agree with the plan) or be heard at a hearing.

Eventually, a final accounting will be accepted by the court and the estate will come to a close. Generally this process can take between 3 months to 4 years (typically, though, estates should close within 9 months) and become very costly in expenses of the administration, which is why it is important to plan your estate and make your assets non-probate.

-Attorney Michael Wagner 

Estate Planning Part 2- Wills

(Continuation of Estate Planning Part 1)

In my last article, we talked about how to avoid probate on an asset-by-asset basis in Ohio. In this article, we will talk about the safety net in the event that there are any assets that you forgot. This safety net is the will. Many people believe that wills give immediate power to the executor to handle all of the assets after death. This is not true. Wills are only a directive to the probate court and in order for the executor to gain authority to act as executor, the will must be taken to the probate court and the powers of executor must be conferred by the court.

Even if you make all of your assets non-probate (and if they are, they are not subject to the probate court or the will), it is important to still have a will just in case you forgot about an asset or in the event that you want to avoid the statute of decent and distribution. In Ohio, it is this statute that dictates to the court how to distribute your assets. The only thing that can trump the statute in directing the court is the will (trusts can as well, but that will be another article). The statute dictates, in general, that all of your stuff goes to the surviving spouse (and sometimes minor children of the spouse); if there is no spouse, then it goes to the children; if there are no children, then their children; if there are no descendants, then to your parents; if they aren’t around, then their children (your brothers and sisters); then their children; if none of those people are around, it goes back a generation; and then by another generation; and if none of these people exist, then the statute makes allowance for step children; and if they don’t even exist, then all of your stuff will go to the State of Ohio.

Even if you are okay with this plan, it’s still important to have a will to name the executor- the person given the power to distribute the assets. In the will, you can go against the statute and name specific people to have your assets (your beneficiaries). These people could be friends and not necessarily blood relatives. You can disinherit people under the will.

One of the most important times to have a will is after having children. In the will, you can name someone to be guardian over the minor children in the event that you or you and your spouse die. This is important because often times, when both parents die, the court is faced with two sets of grandparents who are equally qualified to have the children. It’s heartbreaking for the kids to watch family members fight over them.

Even with a good plan for the future, you’ll want to make sure your stuff, even the stuff you forgot, is in good hands, so it’s always important to get a will so your final wishes can be heard.

-Attorney Michael Wagner

Estate Planning Part 1- Avoiding Probate

(This content was featured on our newsletter 5/1/2016)

In Ohio, when done correctly, tailor-made estate planning can help your family save thousands of dollars and one way to achieve that is to avoid the probate process. Probate law is an area of law designed to help people who cannot speak for themselves. This includes guardianships of adults and children and also decedents (a nice way to say dead people). Probate law assumes that all assets are probate assets unless a clear intent exists to make the asset non-probate. When your assets enter the probate process, your estate will be subjected to court costs, attorney fees, attack by creditors, and a myriad of other expenses. One way to avoid this headache for your loved ones is to make all of your assets non-probate. Of course, everyone has heard of the wonders of a trust, an entity that can become the owner of all of your assets. While trusts do avoid the probate process, they can be expensive and may not be the right solution for your family. There are five times that trusts become the cheapest, clearest, and most recommended route and that topic will be left to another article.

For most people, the best route to avoid probate is to make your assets non-probate on an a-la-carte basis. All of your stuff can have a designated beneficiary listed on it somehow and this is how we make it non-probate. For real estate, you can get a Transfer on Death Designation Affidavit to list who you want to have your property when you die. This document simply needs to be recorded at the local recorder’s office before you die, to be effective. Alternatively, you can get a Joint Survivorship Deed listing off who will get your half of the property when you die. Be wary of this Deed, though, if you have an active mortgage, and you change title using this deed, then the acceleration clause in the mortgage might be activated making the balance due immediately. Another pitfall of the Deed route is that the other person immediately owns half of your property which means their creditors can attack it.

Similar rules apply to bank accounts. You can talk to your bank’s teller, and ask to make your accounts “payable on death.” This designation allows you to list who gets the account next. Alternatively, you can make the account joint but the same creditor/ownership pitfalls apply here as well and the other person could clear your account at any time. For IRAs, annuities, and other investment accounts, simply ask to list your beneficiaries on the account. Stocks and bonds can be given a Transfer on Death (TOD) designation from either the company or the government (depending on if it’s a stock or a bond). They also can be made joint with the same pitfalls as the other joint assets. For cars, boats, four-wheelers and anything else with a title, you can go to the local title bureau and ask for a new title listing either a transfer on death person, or make it joint but the same pitfalls apply.

Most personal property beyond that has little to no value and the court usually doesn’t bother with it. But if you truly want to make sure that these assets remain non-probate and pass to a particular person, then the best way is to get a lock box at your local bank and designate a beneficiary on the lockbox itself. The problem here is that you must then put that item in the lock box and lock it away. For that reason, it’s always important to have a will as a back-up. Just to be safe. In any event, if you avoid probate, you save your family so much time, effort, and money. Put them before yourself and protect their future!

-Attorney Michael Wagner 

The faces behind the names

Our Team

Ken Jones is a partner of Insurance Exchange Navigators. He has been an independent broker for 25 years, licensed in life, health, as well as property and casualty insurance. Ken is certified in senior products, longer term care, and annuities. He has an insurance designation as a certified professional insurance agent (CPIA). Ken specializes in closely held corporations and has been active in COSE strategic planning for 8 years. Ken is an expert in family business insurance needs along with employee and executive benefits. During his free time, Ken enjoys being in his wood shop creating and building just about anything. 

He can be reached at 440-266-0333 or kenjones@ienrisk.net.

Katharine Johnston has been a broker with the IEN team for 4 years. She is licensed in life and health insurance, as well as property and casualty. She is also ACA certified. She has a Bachelor's Degree from Cleveland State University, and is currently working on her MBA from Lake Erie College. Katharine is an account manager, and does the marketing for the office. 

Katharine can be reached at 440-266-0333 extension 6, or by email at kjohnston@ienrisk.net.

Jackie Greene has been a member of GBA Solutions, a strategic partner of IEN, for 18 years. She is a licensed agent in the State of Ohio for health, life, property and casualty insurance. Jackie concentrates extensively on Medicare Supplements, Medicare Advantage plans, and Part D Plans. Jackie also works closely with individuals under 65, and small groups in finding a plan to meet their needs. Jackie graduated from Otterbein College with a BA in Business Administration and Psychology, and is a member of NEOHUA, the Northeast Ohio Health Underwriters Association. Jackie is married with two girls and enjoys spending her free time on the soccer field or at the track with her family.  

Jackie can be reached at 440-266-0333 x 3, or by email at jackiegreene@ienrisk.net.

Bev is a broker with IEN, and has been in the health insurance business for 14 years. She specializes in Medicare, but has experience in small group, individual, and ancillary markets. She loves working with seniors, and does consultation with potential customers to make sure they understand all of the "ins and outs" of the Medicare process. 

Bev can be reached at 440-266-0333 or by email at bevcline@ienrisk.net.

Phil Smith is an owner and brand ambassador for FirstLight Home Care, one of the fastest growing non-medical care companies in America.  Phil has a passion for patient advocacy through continuing education and always provides an unbiased perspective for families faced with the challenges of senior living.  

He can be reached at 440-286-1342 or by email at psmith@firstlighthomecare.com.

After graduating from Riverside High School in Painesville, Ohio, Attorney Michael A. Wagner attended Ohio University, where he graduated with his Bachelor of Arts in Sociology/Criminology. Michael went on to pursue his Juris Doctorate degree at The Thomas M. Cooley Law School in Lansing, Michigan. During his time in law school, Michael became an editor for The Thomas M. Cooley Law Review, and was given the merit award for his abilities in Advanced Writing. Michael graduated Cum Laude in 2011 after which he passed the Michigan Bar Examination. Michael sat for and passed the Ohio bar in 2013 and was sworn in the same year. His primary focus in practice has been Estate Planning, Real Estate Law, and Elder Care Law, and he currently teaches Real Estate Law at Lakeland Community College. 

He can be reached at 440-286-4770 or by email at mikeanthonywagner@gmail.com.

Welcome!

Whether you found this blog through our e-newsletter, or by typing "What the heck do I do to plan for my future???" into Google...we're happy to have you! On this blog you will find a bi-monthly newsletter that you can sign up to have sent directly to your email (at the bottom of the page you will find a box to add your email if interested). You may also find the occasional post by one of our experts about how to deal with different stages of the aging process.

This blog is maintained by a group of professionals from multiple industries.

Insurance:

Ken Jones (partner with Insurance Exchange Navigators)

Katharine Johnston

Jackie Greene

Bev Cline

Legal:

Michael Wagner (Estate attorney with Frederick H. Green & Associates)

Home care:

Phil Smith (Managing partner with First Light Home Care)

Memorial planning:

Nancy Inman (Marketing manager with Jim Belding Monuments)

Together we are focused on providing the most up to date information on everything you need to know about getting older. Keep an eye out for future posts about each of our members, and feel free to reach out to them personally for more information on anything they talk about!

We are always open to suggestions on information you would like to see featured in the newsletter or on this blog, so please let one of us know if there's something you want to read about!