5 Estate Planning Tips For Retirees

5 Estate Planning Tips For Retirees

5 Estate Planning Tips For Retirees

As you near retirement, your approach to estate planning is different from other stages of your life. When you no longer earn a salary and benefits from a job, how will you sustain your new lifestyle? You must be able to afford your needs while securing your family’s future during retirement. This is where smart estate planning can help. Here are 5 Estate Planning Tips to make your retirement years productive and meaningful.

Tip #1 Maximize Insurance and Retirement Accounts

If you’re looking to pass money to heirs tax free, start converting traditional IRA (Individual Retirement Account) into Roth IRA. The converted amount is subject to regular income taxes, but withdrawals – either by you or your heirs – are tax free. With tax rates at an all-time low, it may be better to pay taxes on the money now rather than later.

Many people with young children decide to purchase life insurance to replace their income if they have an untimely death. However, life insurance can also be an effective estate planning strategy for a financially secure retirement. Life insurance can provide beneficiaries with tax-free funds and provide replacement income for your spouse, your children, your elderly parents, or other individuals who depend on you for financial support.

Tip #2 Plan for Disability

A comprehensive estate plan should include provisions in case you become disabled. Several documents you should create include:

Power of Attorney

A power of attorney gives someone the right to act on your behalf regarding your financial affairs. If you get sick or hurt, your agent can step in and take care of your finances. This lets you name someone you trust to manage your day-to-day finances.

Living Will

A living will puts your wishes regarding end-of-life care in writing. Without it, you may have to undergo extreme medical measures that you would not have asked for if you were able. Also, your loved ones could wind up depleting your estate by insisting on such extreme medical measures.

Advance Health Care Directive

An advance health care directive allows someone you chose to make medical decisions for you if you can’t make them for yourself.

Tip #3 Set up a Trust

If you want to keep your money in the family for as long as possible, a trust can be used to ensure that money is passed from one generation to the next and is protected from divorces, lawsuits and creditor claims.

A trust allows you to designate a trustee to manage your finances according to your instructions. For example, you can direct your trustee to invest in your children’s college education rather than letting minors spend all of their inheritance.

You can instruct your trustee to pay for your family’s medical needs first, or to provide distributions to your children when they are older, like 30 or 40. You can also instruct your trustee to pay for your medical expenses and insurance payments out of trust funds if you become disabled.

Trusts can be set up in several ways. Most people choose to have a revocable living trust, which allows them the most control to change or update their trust when necessary.

irrevocable, or permanent, trusts offer many tax benefits. When money is put into an irrevocable trust, the assets no longer belong to you. They belong to the trust itself. As a result, the money cannot be subject to estate taxes. While a trustee ultimately controls the money, you can create stipulations on its use, and money can be distributed from a trust even while you are alive.

Setting up a trust can allow you to avoid expensive court cases, such as probate and conservatorship proceedings. Additionally, a trust can restrict disbursements so that your property is used only in the way you intended.

Tip #4 Create a Will

Writing a will is the most basic of estate planning strategies. This document stipulates how your assets will be divided after your death.

Without a will, your estate will be divided in probate court, meaning someone else decides who gets your money. Having a will doesn’t mean your heirs avoid probate though. A will still has to go through probate.

It’s also a good idea to review beneficiary information after any major life change, such as the birth of children, the death of a family member, marriage, or divorce.

Tip #5 Donate or Give Away Your Assets

As of 2022, the IRS allows individuals to give up to $16,000 per person per year in gifts. If your goal is to avoid estate taxes, these gifts can decrease the value of your estate. The money is also tax-free for recipients of the gifts.

Another way to reduce your estate value is through charitable donations. Rather than giving a one-time gift, consider setting up a donor-advised fund. This option would give you an immediate tax deduction for money deposited in the fund, and then lets you make charitable grants over time. A child or grandchild could be named as a successor in managing the fund as well.

However, be careful about giving away assets that appreciate in value, such as stocks or a house, which receive a step-up in basis when part of an estate. That means the taxable amount of an asset is adjusted upon the owner’s death and, as a result, it may be beneficial to transfer certain assets after death rather than before.

To kick-start your Retirement Estate Planning process, DOWNLOAD Your Free Estate Planning Guide

What’s next?

Complex rules and changing tax laws can make estate planning difficult. However, ignoring it can leave you and your family bereft during your retirement. Even if you don’t have a lot of money in the bank, the right attorney can make the most out of estate planning tools and strategies so that you can live your best years in retirement.

Start taking action now with your estate planning by booking your free consultation with our team at Crider Law Group.

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5 Estate Planning Tips For SMB Owners

5 Estate Planning Tips For SMB Owners

5 Estate Planning Tips For SMB Owners

What do Activities of Daily Living mean?

When the business is dependent on you as the owner, having an estate plan before you need one is a critical investment. If you suddenly pass away without an estate plan in place, your business may not be able to survive. After your death, your entire business and its assets may have to  go through a lengthy and expensive probate process, which could cause your family to suffer.

Estate planning involves creating a comprehensive legal plan for the management and distribution of your assets after your death. Your assets include all possessions of value, including property, bank accounts, insurance, etc. that are tied to your business. Your estate plan should also include financial instructions and medical directives in case you suddenly fall ill and become incapacitated.

To protect your business and your family, consider these tips to start your estate planning on the right path.

#1 Decide the future of your business

Before you start preparing your  estate planning documents, first imagine if there is a future for your business without you running it. Here are some questions  to help you in your decisions:

What is your Succession Plan?

How will the business continue without you? Do you have a Succession Plan? Many business owners will gesture towards their business and say “THIS is my succession plan.” However, this view may leave out important considerations for transfer of the business, your or your surviving spouse’s income needs, and other important topics.

A Succession Plan is a strategy for the successful transfer of business operations, management and ownership to partners, future generations, or successors. It is important to create a succession plan as part of your estate plan to ensure that whoever replaces you as a business owner is someone you fully trust. The succession plan should include details about not only how the property and financial assets of the business will be transferred to a new owner, but how your income needs will be met after the transfer. 

Would you rather sell the business instead?

Can you and your family live comfortably from the sale proceeds when you retire? If so, selling the business might be the better option. If you’re a sole proprietor, the process is relatively straight forward. But if you have a corporation, an LLC, or multiple business partners, you may need a Buy-Sell Agreement to facilitate the sale of your ownership. Generally, any current co-owners of the business will have a right of first refusal on purchasing any interest that has become available.

#2 Organize your business records

Make the hand-over process easy for your successors by having a secure and organized filing system for your business records. Here are just some of the more important records that you need to update and prepare for your estate plan:

  1. Your business plan
  2. State-filed documents, such as Articles of Organization or Incorporation
  3. Your Operating Agreement, if any
  4. Your Succession Plan, if any
  5. Financial records and statements
  6. Tax returns
  7. Insurance policies
  8. Business licenses

A note on Insurance Policies:

Apart from having a general life and disability insurance and naming your family as beneficiaries, you might consider purchasing a separate life and disability insurance policy for your business called a “key person” policy.

With a key person policy, you can name your business as the beneficiary. These policies provide payouts when a “key person” in the company passes away or experiences a disability. This money could be a lifeline for your small business. This money can also be used to fund the buy-out provision of a Buy-Sell Agreement, providing ready cash to the new owners to pay your surviving spouse or other heirs for the value of your business.

#3 Appoint an Agent in a Power of Attorney

It is in your best interest  as a business owner to appoint someone that you trust to be your agent under a power of attorney who can oversee your business and finances on your behalf.

A durable power of attorney is a legal tool that involves appointing a trusted individual to handle your finances if you can no longer make decisions due to health reasons such as being in a coma, developing dementia or becoming too ill to make decisions.

While an ordinary Power of Attorney expires if you become mentally incapacitated, a Durable Power of Attorney remains intact even if you become incapacitated.

In California, a Durable Power of Attorney can become active whenever you choose. You can make it take effect immediately or choose a specific date in the future.

What can an authorized agent do with a Durable Power of Attorney?

  • Buy and sell property
  • Manage bank accounts, bills, and investments
  • File tax returns
  • Apply for government benefits
  • Manage your business

#4 Create a Living Trust

As a business owner, you own many assets that are tied specifically to your business. Shouldn’t you be concerned about how your beneficiaries will manage your assets when you pass away?

Creating a Living Trust ensures that no matter what happens to you, the assets that keep your business running will be protected and will be managed by your Trustee – the person or entity you trust to manage your financial affairs.

Most people name themselves as the trustee during their lifetime. If you decide to do this, you can remain in control, even though your assets have been put into the trust. You can also name a successor trustee (a person, business, or institution) who will manage the trust’s assets if you ever become unable to manage your property, or when you die.

#5 Audit and review

To help you make smart decisions for your estate plan, you need to take a hard look at your business and personal situation by answering these questions:

  • If you die today, what is the current net worth of your personal and business assets? This can be done by totalling your current assets and liabilities and adding the value of any life insurance.
  • Is estate privacy important to you? Do you want your estate to be public record upon your death? If your estate goes through probate, anything filed with the Court will be a public record.
  • Do you have a list of reliable trustees? It is advisable to have two or more alternates in case your first choice is unwilling or unable to serve.
  • If your heirs or successors predecease you, who are your alternate beneficiaries?
  • How will your assets be distributed after your death, and when will these distributions take place?

What’s next?

Estate planning is complex, especially for entrepreneurs and owners of small and medium businesses. The right attorney can help you protect your business and your family after you’re gone, advise you on such issues as taxes, organize titles and trust documents, and facilitate the smooth transfer of assets and business operations to your beneficiaries.

Start taking action with your estate planning by booking your free consultation with our team at Crider Law Group.

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5 Estate Planning Tips For Farmers

5 Estate Planning Tips For Farmers

5 Estate Planning Tips For Farmers

What do Activities of Daily Living mean?

According to the USDA National Agricultural Statistics Service (NASS) – family-owned farms make up 97% of 2.1 million farms in the US. Among the family farms surveyed, 67% expected ownership to naturally pass on the next generation while only 23% actually had a succession plan.

The report suggests that losing a multi-generation farm business happens more often than you think. In fact, only 30% of the farms surveyed continue into the second generation and even fewer (12%) survive into the third generation.

Don’t let years of hard work come to a devastating end. Here is a list of essential estate planning tips for farmers, farm families, and anyone in the agriculture business. Whether you’re a legacy family enterprise or a start-up farm or ranch owner, you need to map out the long-term success of your farming business with smart estate planning.

Tip #1 Know Your Estate Planning Needs

As a farm business owner, there are many issues to consider to protect the business and ensure its success in case you retire, become incapacitated, or die. Ask yourself these questions to begin the process of creating your farm estate plan and succession plan.

  • What are the farm’s assets and their approximate value?
  • Who should I transfer those assets to—and when?
  • Who should manage those assets if I cannot—either during my lifetime or after my death?
  • Who should make decisions on my behalf if I am unable to?
  • What do I want done with the farm if I suddenly become incapacitated or die?

Download your free copy of our California Estate Planning Guide to maximize the actual value of the farm estate you’ll leave to your heirs and beneficiaries.

Tip #2 State Your Goals

Farm land and a farm business are two different things. However, they both need to be addressed simultaneously, and the specifics of what to do with each will depend on your situation. Some issues to consider:

  • What will happen to the farm when I die?
  • Will the farm operation continue to be run by the family?
  • Will the land stay in the family and will the farm operation be run by others?
  • Will the farm cease operations and assets sold?

Tip #3 Decide on a Transfer Strategy

You’ll need to make a decision about whether to sell to a third party or leave the farm business to your family when you pass away or retire.

If you’re planning on selling the farm business, you’ll want to maximize the value of the farm operation and get top dollar when you sell. 

If you’re transitioning the farm to a family member, the reverse applies. You’ll want to minimize the value of the farm business so you can transfer the most assets for the least amount of tax.

Consider these actions when developing a farm transfer strategy:

Planning to sell:

Establish legal partnerships, LLCs, or corporations to allow separation of management and ownership

  • Prepare Buy-Sell Agreements to ensure an orderly transition of the farm business
  • Consider a Lease Agreement with option to purchase
  • Retain the option to fund your retirement or trust for your beneficiaries from the sale proceeds

 Planning to transfer to beneficiaries:

  • Reduce estate taxes, if you are subject to estate taxes
  • Create the option to hand-over the farm property as a “gift,” subject to donors’ income tax
  • Retain the option to hold the farm assets in a Trust

Tip #4 Create a Farm Succession Plan

If you want a legacy farm, you need to get the family organized so that the business will survive multiple generations. 

Here’s a list of considerations to help you create a family succession plan:

  • Do you have a management team in place?
  • Are family members involved in management of the farm, and, if so, how?
  • Who are your tax and legal advisors?
  • What is the equitable distribution of farm income and assets among family members?
  • Are there family issues to consider? Might there be a conflict between your surviving spouse and your heirs?
  • How will your plan change if there are new family members? If there are disowned family members?
  • How will you adjust your plan if there are changes in your finances or tax laws?
  • What will be your source of income when you retire from the farm business?

For a complete guide to creating an ideal family farm succession plan, check out these resources from California Farmlink.

Tip #5 Place The Farm in a Trust

A farm trust is a legal tool for holding, managing and distributing property. It’s an essential strategy in your farm estate plan that lays out how you want your assets managed during your life and distributed after death.

There are 4 components to a Farm Trust that you need to identify to get started (1) your Trust Property, specifically your farmland, farm business, or cash; (2) your Successor Trustee or Representative; (3) your Trust Beneficiaries, specifically your children, business partners or others; and, (4) your Instructions for how the Trust Property should be used or distributed.

Choose from these 3 Types of Trusts:

1. Revocable Living Trust

This type of trust can be amended or “revoked” before your death. It can be adjusted to accommodate changes in your life circumstances, if you want to add and remove beneficiaries, for example. It’s a flexible strategy that lays out how the farm should be managed in case of disability or incapacity.

Placing the farm in a Revocable Living Trust means the trust owns the farm, and not you as an individual. However, you retain the ability to manage, sell or transfer the farm assets in the trust as the owner or trustee. You keep all the control over the revocable living trust.

2. Irrevocable Living Trust

Like the name suggests, this trust cannot be changed and assets cannot be reclaimed after you create the trust, unless the trust document says so. An irrevocable trust can also be used during your lifetime and in case of disability or incapacity.

3. Testamentary Trust

Often created with a will, a testamentary trust takes effect after your death. It is used to protect your assets and minimize estate taxes for your beneficiaries.

What’s next?

Once you have considered these tips, the next step is to seek the advice and services of a qualified estate planning lawyer who can help you create a farm estate plan, and advise you on such issues as taxes, organizing titles and trust documents, and facilitating the smooth transfer of farm assets and farm operations to your beneficiaries.

Start taking action now with your estate planning by scheduling your free consultation with our team at Crider Law Group.

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VA Guide to Activities of Daily Living

VA Guide to Activities of Daily Living

VA Guide to Activities of Daily Living

What do Activities of Daily Living mean?

US Veterans Affairs defines Activities of Daily Living or ADLs, as tasks of everyday life that are essential to perform one’s ability to live independently. The following tasks are referred to as ADLs:

  1. Eating,
  2. Bathing/showering,
  3. Dressing,
  4. Using the toilet (continence), and
  5. Transferring (mobility as in transferring from a chair to standing)

What is the purpose of assessing ADLs?

The purpose of assessing ADLs is to determine a veteran’s eligibility for Housebound Pension or Aid and Attendance benefits. It provides important information on the veteran’s functional abilities, progress in rehabilitation and identifying necessary assistance to support daily living. VA nurses, case managers, physical therapists and occupational therapists will work with the veteran to complete the assessment of ADLs.

What are Instrumental Activities of Daily Living (IADLs)?

IADLs are tasks that are essential to leading a fully independent, functional and responsible life. The following are referred to as IADLs:

  • Shopping for food
  • Cooking
  • Doing laundry
  • Housecleaning
  • Managing money
  • Managing medications
  • Driving/using public transportation
  • Using the phone

What are Compensatory Skills?(IADLs)?

Compensatory Skills are new ways for a veteran to accomplish Activities of Daily Living with the help of another person or a caregiver. Physical and occupational therapists will help identify which compensatory skills would be the best fit for the Veteran’s specific needs. They will teach you and the Veteran to develop these skills. Some examples of compensatory skills are:

  • Training and adaptation to handle activities such as dressing, bathing, toileting, grooming and feeding.
  • Creating or identifying new methods to complete tasks in a way that accommodates changes in the Veteran’s abilities.
  • Helping the Veteran to re-learn basic skills like cooking and grooming that may have been lost due to injuries such as TBI (Traumatic Brain Injury), for example.
  • Training and adaptation for activities such as shopping, running errands or handling finances.
  • Working with employers and/or schools to adapt the work or home environment so the Veteran is able to do his or her best.
  • Helping to identify and develop healthy, fulfilling hobbies or other activities if he or she can’t return to work.

Does assessing ADL help with claiming VA benefits?

Yes. The VA extends assistance to veterans unable to perform ADLs, such as when a disabled veteran (or the surviving spouse of a veteran) seeks financial aid for in-home care. A veteran with two or more ADLs as a result of physical or mental disability  qualifies for Long-Term Care benefits under the VA.

What is the VA Criteria for Aid and Attendance Besides ADLs?

Besides needing assistance with ADLs, the VA’s other criteria for Aid and Attendance eligibility is when a person:

  • Has corrected vision of 5/200 or less in both eyes; or
  • Has concentric contraction of the visual field to 5 degrees; or
  • Is a patient in a nursing home due to mental or physical incapacity; or
  • Is bedridden apart from any prescribed course of convalescence or treatment

ADLs in VA vs Medicare – Is there a difference?

Yes. Medicare.gov stipulates that help with basic personal tasks such as ADLs do not qualify as medical care. It defines support with ADLs as: custodial care,unskilled care or long-term care. This is an important distinction to understand when checking into long-term care options for seniors.

On the other hand, qualified Veterans or their surviving spouse requiring assistance for ADLs are entitled to financial aid for long term care, home care or custodial care under the VA pension program.

What’s next?

If you need more information about Activities for Daily Living in order to qualify for VA Pension and Aid & Attendance benefits, book your free consultation meeting with us and we’ll help you apply for the financial assistance you so rightfully deserve for your service.

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Medi-Cal For Long Term Care: Guide to Activities of Daily Living

Medi-Cal For Long Term Care: Guide to Activities of Daily Living

Medi-Cal For Long Term Care:
Guide to Activities of Daily Living

What is Long-Term Care?

Long-Term Care refers to a range of services provided to elderly individuals and people with disabilities who need ongoing care due to chronic and debilitating health conditions. These services may include medical care, therapy, rehabilitation, case management, protective supervision, and assistance with “activities of daily living” (ADLs).

What are Activities of Daily Living?

Activities of Daily Living (ADLs) are basic everyday tasks necessary for independent living at home or in the community. The ability to perform ADLs is the basis for assessing the need for medical care, therapy, nursing care and other assistance provided through Medi-Cal’s Long Term Care program.

There are 5 basic categories of ADLs:

1. Personal Hygiene
The ability to perform consistent bathing/showering, grooming, nail care, and oral care.

2. Dressing
Making appropriate clothing choices and physically dressing and undressing oneself.

3. Eating
The ability to feed oneself but not necessarily the skill to prepare food.

4. Maintaining Continence
The ability to use a restroom including getting on and off the toilet and cleaning oneself.

5. Transferring/Mobility
The ability to stand from a sitting position, to get in and out of bed and to walk independently from one location to another.

What are Instrumental Activities of Daily Living (IADLs)?

Similar to ADLs, Instrumental Activities for Daily Living (IADLs) are essential tasks to living independently but are not necessarily done on a daily basis. The ability to perform IADLs can help better determine the level of assistance needed by an elderly or disabled person. IADLs include:

1. Basic Communication Skills
The ability to operate a regular phone, mobile phone, personal computer and other devices for essential communication

2. Transportation
The ability to drive oneself, arrange rides or use public transportation.

3. Meal Preparation
The ability to plan meals, cook, clean up, and safely use kitchen tools

4. Shopping
The ability to make appropriate food and clothing purchase decisions.

5. Housework
The ability to maintain a clean and orderly residence including doing laundry, washing dishes, dusting, vacuuming, etc.

6. Managing Medications
The ability to take the correct amount of medicine at the correct time, follow doctor’s prescription, manage refills, etc.

7. Managing Personal Finances
The ability to manage expenses, operate within a budget, write checks, pay bills, avoid scams, etc.

What is an ADL Assessment and what is it for?

Assessing or measuring the patient’s capacity to perform ADLs and IADLs is necessary to determine the appropriate care and financial support under the Medi-Cal Long Term Care program. Case managers use the above listed ADLs and IADLs and evaluate Medi-Cal applicants based on these metrics – “No help needed”, “some help needed”, or “total help needed”.
If the applicant needs help with three or more activities of daily living, then the highest level of care will be approved for either nursing home eligibility or for care at home. Care at home would then be paid for, in part or fully by Medi-Cal.

Incidentally, a physician’s confirmed diagnosis of “severe dementia” for Alzheimer’s and other dementia patients may serve as a supporting document to the ADL assessment and trigger the same kind of financial aid.

Check out these additional resources from our blog to understand the processes, requirements and benefits of the Medi-Cal for Long Term Care program for seniors.

 

What’s next?

Now that you have a basic knowledge of ADLs and IADLs, get in touch with our team at Crider Law if you wish to have an assessment of ADLs (also called a geriatric assessment) for yourself or your loved one and determine eligibility for assistance under the Medi-Cal program.

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Medi-Cal for Seniors: Guide to Asset Limits

Medi-Cal for Seniors: Guide to Asset Limits

Medi-Cal for Seniors: Guide to Asset Limits

Medi-Cal is a joint federal-state program that provides health insurance to low-income Californians, including seniors and persons with disabilities. Medicaid programs like Medi-Cal are funded by federal and state funds and are administered by individual states.

What is a Medi-Cal Asset Test?

A Medi-Cal Asset Test is a process for determining eligibility for Medi-Cal benefits by evaluating an applicant’s assets. The purpose of the Asset Test is to limit access to Medi-Cal to only those who do not have sufficient resources to pay for their own long-term care. The idea is that if people have substantial assets, they could use these to pay for the care they need.

Who Is Subject to Medi-Cal Asset Testing?

All applicants need to declare their assets as part of the Medi-Cal review process. The following categories of seniors and persons with disabilities are subject to asset testing to qualify for Medi-Cal:

1. SSI Recipients
Those who receive Supplemental Security Income (SSI). SSI is for people with low incomes who are 65 or older, as well as blind or disabled people of any age. SSI eligibility is conditioned on a maximum asset limit.

2. SSI Eligible
Those who would otherwise meet the income and resource requirements of SSI or other benefit programs but do not receive cash assistance.

3. Below Poverty
Seniors and persons with disabilities with incomes less than 100% of the federal poverty limit (FPL).

4. Medically Needy
Seniors and persons with disabilities who have high medical expenses and who meet all eligibility requirements for Medi-Cal except for income.

What are Medi-Cal Asset Limits?

To be eligible for Medi-Cal under any of these categories, applicants must meet, among other requirements. Seniors and persons with disabilities cannot have more than $2,000 in assets for an individual or $3,000 for a couple, if both are applying for Medi-Cal for long-term care.

What are Real Property Assets?

“Real Property” is land, buildings, mobile homes which are taxed as real property, life estates in real property, mortgages, promissory notes, and deeds of trust. These are considered “countable assets” when assessing for Medi-Cal eligibility.

What are the Exemptions to Real Property Assets?

1. Principal Residence
Property used as a home is exempt (not counted in determining eligibility for Medi-Cal). When an applicant or beneficiary is absent from the house for any reason, including institutionalization, the home will remain exempt if the applicant or beneficiary intends to return home someday.

The home also continues to be exempt if the applicant’s or beneficiary’s spouse or dependent relative continues to live in it. Money received from the sale of the home can be exempt for six months if the money is going to be used for the purchase of another home.

2. Other Real Property
Real property value up to $6,000 of the equity value in non-business real estate (excluding the home), mortgages, deeds of trust, or other promissory notes may be exempt. In order to receive this exemption, the property must produce an annual income of 6 percent of the net market value or current face value.

3. Real Property Used in a Business or Trade
Real estate used in a trade or business is exempt regardless of its equity and whether it produces income.

What are Personal Property Assets?

“Personal property” is any kind of liquid or non-liquid asset, i.e., cars, jewelry, stocks, bonds, financial institution accounts, boats, trucks, trailers, etc. Property that is not counted in determining your eligibility is called “exempt” or “unavailable” property.

What are the Personal Property Exemptions?

1. One Motor Vehicle

2. Personal Property Used In a Trade or Business

3. Personal Effects
This includes clothing, heirlooms, weddings and engagement rings, and other jewelry with a net value of under $100.

4. Household Items

5.IRAs, KEOGHs and Other Work-related Pension Plans
These funds are exempt if the family member whose name it is in does not want Medi-Cal. If held in the name of a person who wants Medi-Cal and payments of principal and interest are being received, the balance is considered unavailable and it is not counted.

6. Irrevocable Burial Trusts or Irrevocable Prepaid Burial Contracts

7. One Revocable Burial Fund
Or revocable prepaid burial contract with a value of up to $1,500 plus accrued interest per person.

8. Burial Space

9. Musical Instruments

10. Recreation Items
Including TVs, VCRs, computers, guns, collections, etc.

11. Livestock, Poultry, or Crops

12. Insurance Policies
Countable property equal to the amount of benefits paid under a state-certified, long-term care insurance policy. Each person may have life insurance policies with a combined face value of $1,500 or less accrued interest and dividends.

What is a Property Reserve?

Property Reserve is all of your countable property (property which is not exempt or unavailable). Your countable property must not exceed the property reserve limit. Any amount over the property reserve limit will make you and/or your family ineligible for Medi-Cal. To be eligible for Medi-Cal, your countable property may not exceed the following property reserve limits:

Number of Persons Whose Property is Considered, i.e. Principal, Spouse and Family Members

Property Reserve Limit

1

$2,000

2

$3,000

3

$3,150

4

$3,300

5

$3,450

6

$3,600

7

$3,750

8

$3,900

9

$4,050

10 or more

$4,200

How To Reduce Your Property Reserve

Here are nine allowable expenses and adjustments that you can do to reduce non-exempt property without incurring a period of ineligibility for nursing facility level of care:

  1. Pay Medical Bills
  2. Buy Home Furnishings
  3. Pay Off Home Mortgage
  4. Buy Clothes
  5. Spend on Home Repairs
  6. Pay Off Car Loan
  7. Pay Off Outstanding Debts
  8. Liquidate non-liquid assets such as obtaining the cash surrender value on non-exempt life insurance policies, list property for sale with a qualified broker etc.
  9. Borrow against excess property to cover the cost of medical care or request the medical provider to place a lien against the property to cover the cost of the care.

Important Note:

To be eligible for Medi-Cal you may reduce your property to the property reserve limit before the end of the month in which you are requesting Medi-Cal. Read the related blog on Medi-Cal For Long-term Care Income Limits for more guidance on Medi-Cal’s financial qualifications.

What’s next?

If you need help with qualifying for Medi-Cal benefits for long-term care, contact us today to schedule your free consultation. We’d love to meet with you!

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Guide to VA Asset and Income Limits 2021

Guide to VA Asset and Income Limits 2021

Guide to VA Asset and Income Limits 2021

Veterans Affairs will base the pension amount of a qualified veteran, surviving spouse or dependent child on the difference between their Countable Income and MAPR or Maximum Annual Pension Rate.

 Assets and Income are combined to determine the total net worth of the veteran and their spouse. These include salaries, investments and retirement payments and other income received from benefactors.

 From December 1, 2020 to November 30, 2021 – the annual net worth limit to qualify for VA pensions is $130,773. Below is a list of items to help you determine which income and assets are “counted” to check if you’re within the set limit.

Counted as Income

  • Gambling Winnings
  • Gifts of Stock or Property
  • Inheritance
  • IRA & 401K Withdrawals
  • Social Security
  • Social Security Disability
  • VA Compensation
  • VA DIC (Dependency and Indemnity Compensation)
  • Wages
  • Alimony
  • Revocable Trust
  • Bonuses
  • Commissions
  • Overtime
  • Tips

Counted as Assets

  • Investments, Stocks and Bonds

  • Boats

  • Furniture

NOT Counted as Income

  • Assistance Contributions from Non-Profits

  • Family Assistance to Maintain the Vet’s Home

  • In-Kind Services

  • Installment Sales of Property (in certain situations)

  • Life Insurance Payments or Cash Surrender Value

  • Medicaid Payments

  • Respite Care

  • Supplemental Security Income (SSI)

  • VA Pensions (Housebound and A&A)

  • Loans from Reverse Mortgages

  • Long Term Care Reimbursements

  • Medical Expenses Not Covered by Insurance

  • Education Expenses

NOT Counted as Assets

  • Primary Residence

  • Car

  • Personal Effects

What is MAPR And How Is It Determined?

MAPR is the maximum amount of pension that a veteran, surviving spouse or dependent child could receive. The MAPR is determined according to the number of dependents and whether they have disabilities and receive Housebound or Aid and Attendance benefits.

Congress adjusts the MAPR each year according to the rising cost-of-living. Below you will find your MAPR amount based on VA’s latest figures:

With No Dependents and – MAPR $
You don’t qualify for Housebound or Aid & Attendance Benefits 13,931
You qualify for Housebound Benefits 17,204
You qualify for Aid & Attendance Benefits 23,238

NOTE: If you have medical expenses, you may deduct only the amount that’s above 5% of your MAPR amount ($696 for a Veteran with no spouse or child).

With One Dependent and –

MAPR $

You don’t qualify for Housebound or Aid & Attendance Benefits

18,243

You qualify for Housebound Benefits

21,337

You qualify for Aid & Attendance Benefits

27,549

NOTES:

  • If you have more than one dependent, add $2,382 to your MAPR amount for each additional dependent.
  • If you have a child who works, you may exclude their wages up to $12,550.
  • If you have medical expenses, you may deduct only the amount that’s above 5% of your MAPR amount ($912 for a Veteran with 1 dependent).
Two Veterans Married to Each Other and – MAPR $
Neither of you qualifies for Housebound or Aid and Attendance benefits 18,243
One of you qualifies for Housebound benefits 21,337
Both of you qualify for Housebound benefits 24,428
One of you qualifies for Aid and Attendance benefits 27,549
One of you qualifies for Housebound benefits and one of you qualifies for Aid and Attendance benefits 30,635
Both of you qualify for Aid and Attendance benefits 36,861

How To Compute Your Annual VA Pension Amount

Sample: Surviving Spouse with One Dependent Child Amount $
MAPR with Aid & Attendance 27,549
Annual Income 10,000
Annual VA Pension 17,549

What’s next?

Once you’ve determined that your income is within the prescribed limit and you might qualify for VA Pension, Aid and Attendance, and Housebound Benefits book your free consultation meeting with our team at Crider Law and we’ll help you complete the process of claiming the benefits that you so rightfully deserve for your service.

Whether it’s your first time to file a claim, pursuing an appeal or just want to learn more about your rights and entitlements under the VA pension program, we will support you every step of the way.

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Military Service Requirements for VA Pension and Other Benefits

Military Service Requirements for VA Pension and Other Benefits

Military Service Requirements for VA Pension and Other Benefits

Veterans (and consequently, their surviving spouses) are eligible for VA Pension, Aid & Attendance and Housebound benefits if the veteran is aged 65 years and older and served during wartime.

The Veterans Pension program provides monthly payments to wartime Veterans who meet certain age or disability requirements, and who have income and net worth within certain limits. Here are the military service requirements to be eligible for VA benefits.

Benefit Minimum Time in Active Duty Period of Service Discharge Characterization
VA Pension 90 Days On or Before Sept. 7, 1980 Honorable, general, or VA determination
VA Aid & Attendance 2 Years On or Before Sept. 7, 1980 Honorable, general, or VA determination
VA Housebound 1 Day Any Honorable, general, or VA determination
Military Retirement 20 Years Any Honorable
Military Retirement Homes (100% disabled) 1 Day Any Honorable, general, or VA determination
Funeral Benefits 24 Months

On or Before Sept. 7, 1980

For Officers: Before October 16,1981

Honorable, general, or VA determination
VA Disability Compensation 1 Day Any Honorable, general, or VA determination

Anyone who served on active duty in the Wartime Events listed below, may qualify for VA Basic Pension, Aid & Attendance or Housebound benefits. Veterans who served from August 2, 1990, to present, are considered Gulf War veterans and may be eligible for the same pension benefits.

Wartime Events

Start

End

WORLD WAR II

December 7, 1941

December 31, 1946

KOREAN WAR

June 27, 1950

January 31, 1955

VIETNAM WAR

February 28, 1961

May 7, 1975

GULF WAR

August 2, 1990

Present

VA Survivor Requirements

You may be eligible for VA Pension Benefits as a surviving spouse if you haven’t remarried after the Veteran’s death, and if the deceased Veteran didn’t receive a dishonorable discharge and their service meets at least one of the requirements listed below.

A VA Survivors Pension offers monthly payments to qualified surviving spouses and unmarried dependent children of wartime Veterans who meet the income and military service qualifications. Read our Guide To Veterans Long Term Care Benefits to learn more about the entitlements available to qualified veterans or their dependents.

What’s next?

Once you’ve determined that you might qualify for VA Pension, Aid and Attendance, and Housebound Benefits book your free consultation meeting with our team at Crider Law and we’ll help you complete the process of claiming the benefits that you so rightfully deserve for your service.

 Whether it’s your first time to file a claim, pursuing an appeal or just want to learn more about your rights and entitlements under the VA pension program, we will support you every step of the way.

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Assisted Living in California – What You Need to Know

Assisted Living in California – What You Need to Know

Assisted Living in California – What You Need to Know

The Cost of Assisted Living

Second to Hawaii, California is the most expensive state to retire in according to the U.S. Census 2019 cost of living index. And finding the best assisted living facility that meets your budget and care needs in the Golden State is quite challenging.

According to Genworth’s Cost of Care Survey the average cost of assisted living in California in 2020 is $4,500 per month. The cost ranges from $3,175 to $5,853 per month based on where in the state the assisted living community is located.

Home care (hiring a professional health care assistant to serve in an elderly patient’s private residence) costs an average of $28/hour according to the same survey.

The Agencies Govern Assisted Living Facilities and Services

Residential Care Facilities for the Elderly (RCFEs) in California encompass Assisted Living, Memory Care, and Continuing Care Retirement Communities (CCRCs), RCFEs are licensed, monitored and regulated by the U.S. Department of Health and Human Services and the California Department of Social Services. The California Department of Public Health inspects properties once every five years. However, if the facility has frequent complaints or poor inspection results, it will be inspected annually.

The Rules and Regulations for RCFEs

RCFEs are governed by the California Code of Regulations Title 22, the RCFE Act which establishes additional statutory requirements in many of the same areas as Title 22. The Evaluator Manual is used for the application and enforcement of laws, policies, and procedures.

Additional rules governing Continuing Care Retirement Communities are found in the Health and Safety Code and in the Evaluator Manual for RCFEs with Continuing Care.

There are also new laws which are not yet reflected in the regulations. Although the state has not yet updated the regulations to reflect these new laws, the statutory requirements are in effect and being enforced throughout the state.

Paying for the cost of Assisted Living

With proper Medi-Cal Planning, qualified elderly residents may be eligible for Medi-Cal program, which is funded by the federal and state government. The state’s version of Medicaid is known as Medi-Cal and provides California’s eligible seniors with vital health insurance coverage and a safety net for long-term care when they have exhausted their own financial resources.

How is Medi-Cal different from Medicare? Medi-Cal is a state program while Medicare is a federal health insurance benefit. Medicare covers many healthcare expenses including in-patient and out-patient care and may provide prescription drug coverage. It does not, however, cover long-term care for the elderly care like Medi-Cal.

Learn how you can qualify for Medi-Cal – the specific eligibility rules for long-term care services like nursing homes, assisted living facilities, and home health care services.

Downloadable PDF’s of Assisted Living Regulations

What’s next?

Refer to our Nursing Home Checklist to help you decide which assisted living community or facility is right for you or your loved one. It is also worthwhile to check on linked resources in this article for the state’s requirements on staff training, inspections, residents’ rights and more. Knowing the requirements helps you determine whether the communities you are considering are up to the state’s standards of care.

If you need expert advice on Elder Care and Medi-Cal Planning, schedule your free consultation with our legal team at Crider Law.

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5 Strategies to Help Your Parents Get Financially Ready for Old Age

5 Strategies to Help Your Parents Get Financially Ready for Old Age

5 Strategies to Help Your Parents Get Financially Ready for Old Age

It’s never too early to start preparing for the inevitable – that one day your parents will become too old and dependent on your support. And one of the toughest realities that you will need to face is financing your parents’ care in their old age.

Here’s a short list of strategies to help your family shore up the financial resources to cover the cost of elder care. And even if your parents are financially settled and don’t need your help, it’s still useful to talk about these subjects and be better prepared.

1. Start a Regular Family Dialogue

It’s important to ease into the difficult subject of finances with your parents by starting a regular family dialogue and slowly build trust. A parent may feel guilty about poor money decisions in the past, or feel too proud to let their own child take care of them, or may have other plans on how to spend their money.

Talking about the future and asking the hard questions will bring issues to light and may even help improve your relationship. Once you have established a level of trust through honest and caring dialogue, your parents will soon feel comfortable to accept your help.

2. Set a Clear and Specific Agenda

Prepare for the family dialogue by letting your parents know about the agenda in advance so that you’ll have a productive family meeting. The purpose of these meetings is for you to better understand their financial situation so that you know how you can be most helpful. Below are some questions that can direct your discussion and help formulate a plan of action.

  • Are they financially prepared for retirement?
  • Is there a retirement plan or will they just keep working?
  • Will they need your financial help?
  • Who will oversee activity on bank accounts or help them decide when to file for Social Security?
  • How to create a budget to help prevent them from taking on more debt?
  • Who will accompany them to meet with a lawyer to set up an estate plan?
  • Who will provide them with financial support to continue living independently?
  • Will your parents agree to move in with you for health and financial reasons?
  • Who is the designated family member to discuss a parent’s personal affairs with key professionals, such as doctors, financial representatives and Medicare officials?

3. Set a Plan of Action

Once you’ve reached the point where you can talk freely about finances, help your parents take action. Identify the sources of funds and draft a spending plan now and years into the future. For reference, the average cost of assisted living in California is $4,500 / month according to Genworth’s Cost of Care Survey 2019. Below are some questions to help you get a clear view of your parents’ finances.

  • Have you done an inventory of Assets vs Liabilities? What does that look like?

  • Have you done an assessment of Income vs Expense? What does their monthly expenditure look like?

  • What are their financial gaps? And how do you plan to source the funds to close these gaps?
    When will your insurance policies mature? And how do you plan to spend the returns?

4. Review Healthcare Options

Ask your parents if they’ve thought about needing a greater level of healthcare in the future. It may be weighing on their minds. The sooner you can help them start planning for what may lie ahead, the better you’ll all sleep at night.

Health Insurance

Does their employee benefits package include access to a flexible spending account for health care or other financial or tax incentives they aren’t taking advantage of? There may be ways to help your parents save money on their current insurance plan. During the next open enrollment period, review all of the insurance options available with your parents.

Medicaid

In California, we have a more comprehensive “Medi-Cal” program that pays for long-term care and many non-medical support services for seniors who live in their homes. Check if your parents are eligible for Medi-Cal and prepare for a strict qualification process. To learn more about Medi-Cal eligibility and enrollment visit coverdca.com for the most up-to-date information.

Veterans Benefits

If your parent was in the military, learn about their benefits under the VA pension program. More than a third of Americans over the age of 65 are wartime veterans or are spouses of wartime vets. The Aid and Attendance pension under the VA program pays for long term care for senior veterans and their spouses – a significant financial lifeline in case of a health crisis.

5. Prepare to Offer Direct Financial Support

If your parent has exhausted all the available savings, insurance, employment, government benefits and other resources that could provide a financial cushion for the high cost of elder care, you should also consider giving direct financial support. Do everything you can to assist your parents financially while securing yours and your children’s future.

Consider a no-interest loan to your parents even if they don’t have the ability to pay it back. Just keep in mind you may never see the money again. Reach out to siblings and relatives about setting up a fund to support their financial needs.

SOURCE: Women Who Money

What’s next? Consider a Durable Power of Attorney

A Power of Attorney is a legal document that authorizes you to act on your parent’s behalf on a broad range of business and personal matters, for example, handling personal finances.

An ordinary Power of Attorney expires if your parent becomes mentally incapacitated, while a Durable Power of Attorney ensures that you continue to have legal authority to make important decisions when your parent is unable to.

Our elder law experts at Crider Law will help you draft a Durable Power of Attorney and an Estate Plan that fits your parent’s needs. Schedule your free consultation today.

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