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Having “a talk” with your parents about their long term living situation.

No, we are not talking about the birds and the bees but rather talking about having a conversation with your parents about what their wishes are in regards to their long-term care living situation.  I find in my practice that oftentimes parents will think a lot about where they’re going to live as they age and what type of situation they would prefer to be in.  Unfortunately, many parents do not feel comfortable having the conversation with their children ahead of time for many reasons.  I also find that the opposite is equally true: the kids often wonder what will happen but don’t feel that it’s right to bring it up and don’t want to push mom and dad into having to discuss make decisions about that determination.

I cannot begin to tell you how important it is to discuss these situations early and often.  Both parties are hesitant, but it is better for everybody involved to know what mom and dad think and what their wishes and hopes are for their living situation at the end of the day.  To the extent that mom and dad want to remain home, there are plenty of things that can be done including modifications to the home or purchase of a new home to make that happen.  To the extent that they want to go to an assisted living community and live independently now or to a continuing care retirement community, there are many tours and interviews to take with mom and dad to see where they feel the most comfortable.  The options are plentiful and regardless of what mom and dad are hoping for, it is typically pretty straightforward in finding an option.  

A friend of mine recently told me that she does not want to have the conversation because she is afraid that mom and dad are expecting they will be able to move into her house with her and her family.  My response to her was wouldn’t you rather know that now and have the conversation now with them rather than wait until they need assistance and cause not only them extra stress but you and your family extra stress?  She definitely came around after about a 25-minute conversation explaining that it wasn’t about her and her family but rather about her parents’ wishes.  Just because they wanted to do that doesn’t mean that it would work for her and her family nor does it mean that that is what has to happen, but having the conversation will at least open up the dialogue and allow her to express her concerns and reasons why she doesn’t think that would happen or be able to work and look for another alternative.  Ultimately, she did have the conversation with her family, which is not what they were looking for or expecting, so it was nothing more than a miscommunication.  I urge adult children to have a conversation with their parents about aging and their wishes sooner rather than later. This conversation will avoid lots of heartache and misunderstanding later and allow for plenty of time to plan for the future.

 

If you are interested in learning more about long-term care living, please call our office at 717-845-5390, or click the link here to RSVP to our upcoming workshop to learn more about it.

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With premiums increasing drastically, should I keep my long-term care insurance?

This is a question that I receive on a regular basis in my estate planning and elder law practice. By way of full disclosure, I am not a licensed insurance agent and I am not licensed to be able to sell long-term care insurance or any other insurance product. I am an attorney with approximately 20 years of experience in estate planning and elder law and I happen to be a Certified Elder Law Attorney under the authorization of the Pennsylvania Supreme Court. While I am not the person who will sell the products, I am certainly an individual who has been advising numerous clients over the years and definitely believe in the benefits of a long-term care policy and what they can provide. We have done numerous other logs about long-term care insurance and the benefits of said policies.

When long-term care insurance first gained popularity, many companies completely missed out on the actuarial tables and in predicting what people were going to need. Because of this drastic miscalculation, most of the companies who originally were in the markets for long-term care insurance are no longer there. The few standing companies that are left are trying to figure out ways to make up for the mistakes of the past. Because of that, they are often forced to increase premiums and decrease benefits. Although these companies do have to get permission from the insurance board, it is not a very difficult proposition and in most cases, they will almost always be able to receive permission. The most difficult part is that individuals have been paying into a plan for a number of years and now are learning that they’re going to have to decrease their benefits and even then they may have to increase the premiums that they are paying. It is heart-wrenching to have to provide guidance in these situations and ultimately I always encourage them to bring in their financial professionals to try to make the decisions.  This is as much about the numbers and common sense as it is about the emotion involved. This becomes very easy for us to get disgusted and upset about what is occurring, but it is a cold, harsh reality of the miscalculations that were made in the past.  In some instances increasing premiums and decreasing benefits is the only way some of these companies will survive. 

My best advice to any and all people who are faced with this dilemma is to write out the pros and cons and to try to make the evaluation and determination about numbers and as little as possible about the emotion of the situation. It is too easy to get hung up on the principle of the manner, but the truth is principals are expensive and cause wars. Make the best decision for you and your family based upon the information that you have in front of you. Long-term care is not going away and dropping the policy out of spite is not going to help anyone. 

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Why Improper Planning For A Child With A Disability Can Be Catastrophic.

     Most people go through life and do not often think about planning for the future and what that might look like.  Oftentimes, when people finally get around to planning, they don’t take the necessary time to truly understand the intricacies and the consequences of decisions, but rather want to get something done for the sake of being done.  

     An individual with a disability who is receiving public benefits from the government cannot receive an outright inheritance or they will lose their entitlement to their government benefits.  However, many parents do not completely understand this concept and since they have three children, they’re going to provide for their children equally regardless.  It is imperative if you have a child with a disability or special needs that you seek expert counsel in order to fully understand what the implications of giving money outright to that individual could be now and in the future.  

     It is very easy and straightforward to be able to provide for an individual with a disability by placing money in a special needs trust.  This will allow that individual to continue to receive the money from the parent but also receive the government benefit that they’re currently getting.  This is my example of “having your cake and eating it too.”  While not necessarily overly difficult, it is essential that you work with an estate planning and elder law attorney who does special needs trust on a regular basis.  There are many easy pitfalls that someone can fall into and it is easy to make a mistake in this arena.  If you have a special needs child, please take the time to fully understand how you can protect that individual and the inheritance in the future as well as still providing them any government benefits that they may be entitled to.  

     If you would like to learn more about special needs trust planning, please contact the office at 717-845-5390, to learn more about our workshop for families with individuals with disabilities and how to plan for them. We look forward to seeing you in the future.  

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Sing For A Cure

I recently performed in the lipsync contest called Sing For A Cure at York College.  Sing For A Cure is a charity event to raise money for the Alzheimer’s Association, and is done in conjunction with the Walk To End Alzheimer’s. Bellomo & Associates is proud to support such an incredible organization.  

My grandfather Alfonso Bellomo suffered through, and ultimately passed from, the disease.  I remember vividly going with my parents to see him in the nursing home and realizing that that was not the grandfather I had known. It was so hard to watch his health and cognitive skills deteriorate, and I promised myself that one day I do what I could to help find a cure. However, science was never my thing, so I wasn’t going to find a cure, so I did the best thing I know-how. I support incredible organizations such as the Alzheimer’s Association every time I can.  

Sing For A Cure was an incredible evening with nine talented, amazing acts. I did a medley of three songs, starting with Michael Jackson’s “Smooth Criminal”, then going to Will Smith’s “Fresh Prince of Bel-Air”, and ending with Cyndi Lauper’s “Girls Just Wanna Have Fun”. I had costume changes, and yes, I did wear a dress and a wig for “Girls Just Wanna Have Fun”.  What an incredible evening with great people, raising money for a great cause. I am so honored to have taken part in it and cannot express how incredible the entire night was.  

Hats off to everyone who made the event a success and to the Alzheimer’s Association for everything they do to put an end to this terrible disease.

If you are interested in learning more about Medicaid crisis planning, please call our office at 717-845-5390, or click here to RSVP to our upcoming workshops.

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New Rules for Family Partnerships Coming Soon

All_together_nowThe IRS has long been upset that courts have allowed wealthy families to put their assets in family partnerships or limited liability companies and receive tax discounts on assets that have an easy to determine value. New regulations are expected soon that could put an end to the IRS's consternation.

The idea behind family partnerships and LLCs is rather simple. These vehicles allow families to jointly own assets and provide an easy way for those assets to be distributed if one of the family member owners passes away.

The practice began as a way to handle control of family-owned businesses. However, when a family-owned business is owned by a family legal entity, the only way anyone else could buy into the business is by becoming a member of the partnership or LLC.

For this reason difficult to value property, like businesses, have traditionally received a valuation discount for tax purposes. The theory was that because of the nature of the ownership situation, third-party buyers would expect a discounted price.

The IRS began to have problems however when wealthy people began putting easy to value property into the family partnerships, such as securities and even cash. Many people sought to get tax discounts on that property, and when challenged by the IRS, the wealthy people often won in court.

Now, backed by the Obama administration, new regulations are expected to put an end to the practice as reported recently by the New York Times in "Navigating Tougher I.R.S. Rules for Family Partnerships."

What precisely the new rules will contain is still unknown. However, if you use a family partnership, now would be a good time to speak with your estate planning attorney to see what, if any, changes you need to make.

For more information about estate planning, please visit my estate planning website.

Reference: New York Times (August 7, 2015) "Navigating Tougher I.R.S. Rules for Family Partnerships."

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