Avoiding five common retirement planning mistakes
While I’m not an expert on investing, from my experience and having the benefit of working with thousands of clients over the years, I’ve learned that there are five common mistakes a lot of people make in retirement planning. I’m writing about them in an upcoming book, but here’s a preview:
Mistake #1: Not understanding your options for starting Social Security.
Nearly every leading edge baby boomer wonders, “when should I start Social Security.” Making the right decision is almost impossible without understanding your options under the Social Security law.
Mistake # 2: Not following at least a basic financial plan.
Regardless of your finances, you need a financial plan. Not only does a plan make it more likely that you’ll achieve your financial goals, you will also have more satisfied in retirement knowing how your nest egg-large or small-will treat you based on your expected lifestyle.
Mistake # 3: Never becoming a student of your own investment planning.
Don’t just rely on others for your investment advice. Become and educated investor. Some people can invest on their own, others find a trusted advisor. Be alert to the different types of financial advisors, and which one would be right for you. And above all, learn about investing so that you are an educated consumer, or risk wishing you’d been a better student of your finances when the advice doesn’t work out.
Mistake # 4: Underestimating the length and cost of retirement.
People are living longer than ever. More than half the men age 65 today will live past age 83. And more than half of the women age 65 today will live past 85. Today people need to understand crucial factors such as taxes and inflation, and the true costs of living in retirement can greatly increase the amount of money you will need, over more years than you expect.
Mistake #5: Ignoring nonfinancial planning.
Despite what Jerry McGuire said, it’s not all about te money. In retirement, stay connected to others, and do things that you enjoy. The people who are the happiest in retirement are not always the richest. And simply relaxing gets boring fast. As some of my clients say, they would rather “wear out than rust out.”
In future emails, I’ll explore each of these topics in more detail to help you avoid these common mistakes. In the meantime, if you have questions or have a suggestion for more topics to cover in our emails, please let me know at dtoman@elderlawfirm.com.
Warmly,
Dennis J. Toman, JD, CELA
The Elderlaw Firm: Your trustworthy guide along the elder care journey.
301 N. Elm St., Suite 707
Greensboro, NC 27401
Call: (336) 378-1122
dtoman@elderlawfirm.com | www.elderlawfirm.com
This information is provided for general informational purposes only. It is not specific legal advice and creates no attorney-client relationship.
Photo credit: kenteegardin / Foter.com / CC BY-SA
Protect your family! Don’t write a blank check (and win a free book!)
With 10 other lawyers from around the country, I authored the book “Protect Your Family! Don’t write a Blank Check to the Nur$ing Home.” It contains the collective wisdom from a team of experienced, high-level elder law attorneys.
Written in layman’s terms, the book outlines essential tools and knowledge for effective long-term care planning, encouraging action to protect your family and your hard-earned assets before it’s too late. In the chapter that I wrote, I discussed planning for Alzheimer’s and Parkinson ’s disease. These are terrible diseases and not only affect the body and mind, but also devastate the family and the family finances.
Writing this book taught me a lot about group projects. It took us a while to assemble this team of lawyers and to coordinate our content. Each author is a dedicated, practicing elder law attorney who took time from his or her own busy law practice to share wisdom with others. Each of us dedicated ourselves as authors to creating a book that would be a terrific resource for familiesIn the end, we came together to write the book that we wish every family could read before they ever come to see us.
Why am I telling you this? It’s not because I want you to buy the book. We didn’t write this book to get rich on book sales. However, I benefited from writing the book, and I’m a better lawyer because of it. And because I know that nearly every family can benefit from reading this book, I’m making a special offer. For the first 20 people who call within two days after this email, we’ll be sure to send you a free copy of my book! Just call my office, at 336-378-1122. (I may even sign the book before we send it to you!) Also, you can find the book online, at amazon.com and barnesandnoble.com.
In the introduction, nationally known Kansas City elder law attorney Bill Hammond says, “I truly believe this is a life-changing book for those fortunate enough to read and act upon it. Read this book and follow the advice given. This is that path to peace of mind.”
Happy reading!
Warmly,
Dennis J. Toman, JD, CELA
The Elderlaw Firm: Your trustworthy guide along the elder care journey.
301 N. Elm St., Suite 707
Greensboro, NC 27401
Call: (336) 378-1122
dtoman@elderlawfirm.com | www.elderlawfirm.com
This information is provided for general informational purposes only. It is not specific legal advice and creates no attorney-client relationship.
The elder-care crossroad: How do you know when you’ve reached it?
Mary Jacobs – special contributor
Dallas Morning News
May 13, 2013
Having worked as a hospice nurse, Angela Thomas of University Park felt confident she could handle caring for her husband’s elderly Aunt Grace Bickford in their home.
Yet less than a year after the aunt moved in, Thomas found herself in a social worker’s office, sobbing uncontrollably.
“For me to melt into a puddle of tears for 45 minutes, that tells you how close to the edge I was,” she said. (more…)
What’s in a name?
Some people have asked, “Why is your firm called The Elderlaw Firm?” Usually law firms are named after the founding partners. But I had a different idea.
As many of you know I’ve been an Elder Care Lawyer for many years, even before most people had heard about Elder Law. After experiencing first-hand the frustrations families feel when facing age-related issues for themselves or a loved one, I made it my mission to start a law firm that could make their lives easier.
I could have chosen a name like the “Toman Law Firm”, or “Toman Law Offices”, or “Dennis Toman, Attorney at Law.” That certainly is what most firms do, and it’s the goal of many lawyers to “have their name on the letterhead.”
But I didn’t give my law firm my name. As the founding attorney, I wanted to make sure that the focus of my firm is always on our clients…and not on the lawyers. Our firm is built on what we do and who we serve, and that is most important to me.
As the first lawyer in North Carolina to specialize in both Elder Law and Estate Planning, I am proud that The Elderlaw Firm continues its mission to be a trustworthy guide along the Elder Care journey. Too often families don’t know where to turn for help. By making what we do front and center in our name, my hope is that more families will have an easier time finding the support and service they need from a firm that is knowledgeable, responsive and caring when dealing with the legal issues of aging. And when they call us, we’ll be here.
That’s why I named this firm, The Elderlaw Firm. It describes what we do and who we help. We are “Your Elder Care and Estate Law Firm.”
One last thing about our name: you might chuckle when I tell you that sometimes a person will call and ask, “May I speak with Mr. Elder?” Some folks are actually surprised when they hear that Mr. Elder doesn’t work here and never has!
Warmly,
Dennis J. Toman, JD, CELA
The Elderlaw Firm: Your trustworthy guide along the elder care journey.
301 N. Elm St., Suite 707
Greensboro, NC 27401
Call: (336) 378-1122
dtoman@elderlawfirm.com | www.elderlawfirm.com
This information is provided for general informational purposes only. It is not specific legal advice and creates no attorney-client relationship.
Cutting Through the Fog: Communicating with a Loved One with Alzheimer’s
Communicating with a loved one with Alzheimer’s can be like trying to have a conversation with someone speaking another language: you both want to talk, but there’s this barrier preventing real understanding. Don’t give up! Good communication can decrease and even prevent many behavioral problems, and it makes life a little less frustrating.
Here is the number one tip to remember:
Treat your loved one as person with a disease. Look beyond the behavior to the person.
Your loved one and his or her experiences are still there; that life history will remain throughout this journey. If he was laid back before, he may be more so now. If she had high energy/anxiety, she may be tightly wound now as well. As you interact, keep in mind that everyone needs to have feelings validated; a person with Alzheimer’s is no different. In fact, memory loss and insecurity issues may mean that he or she needs that validation even more now.
For example: Your father has Alzheimer’s and often gets angry with your husband. They always got along well, but now your father blames him for everything. Think of your father’s anger as the dementia talking – not your father. Try saying, “I don’t blame you for being angry,” and then move on. What he is feeling is real to him, even if it’s not accurate for the situation.
You probably need to coach your husband, too. Let him know that your father’s anger isn’t against him personally; it is the nature of the illness, and “this too shall pass.” Remember that people with Alzheimer’s respond well to affirmation. When they do anything, praise them by saying “good job” or “thank you” no matter how insignificant it may seem to you.
Here are a few more ideas to help with communication:
• Lower the tone of your voice; a high pitch may be interpreted as anger.
• Smile and be pleasant.
• If your loved one seems to be in a “different reality” (such as talking about the past as if was happening now), try going there with them in conversation.
• Use gentle touch to get attention (hand on shoulder, hand on knee, hand on hand).
• Don’t argue; try to find something to agree about and then move on to a different topic.
• Don’t give orders or be condescending.
• Don’t talk about your loved one as if he isn’t there. You never know just how aware he may be.
More helpful communication strategies are available in our free indispensable Alzheimer’s Resource Kit available at www.GreensboroMemoryLawyer.com.
Warmly,
Dennis J. Toman, JD, CELA
The Elderlaw Firm: Your trustworthy guide along the elder care journey.
301 N. Elm St., Suite 707
Greensboro, NC 27401
Call: (336) 378-1122
dtoman@elderlawfirm.com | www.elderlawfirm.com
Elder Care Law vs. Estate Planning: what’s the difference?
When new clients come to see us, their focus often is on wills and trusts. They say something like, “I want to make sure my assets pass to my heirs with as little as possible in taxes and other expenses.” That’s typical traditional Estate Planning. But for seniors and leading edge Baby Boomers (retired or nearing retirement), you need to know the difference between Elder Care Law and Estate Planning.
Here’s my answer. An estate plan helps someone worried about “what happens if I die.” It covers distributing your assets, how and to whom, and the process of estate administration.
But for my clients, their concern is not “what happens if I die?” They want to know, “what happens if I don’t die?” By that I mean what happens if you live but become ill and need care. Who will help you make decisions? How will you get good care without going broke? That’s what our clients are planning for, through Elder Care Law.
Here’s another way to think about this. An estate plan directs that if you have assets when you die, they will go to your intended beneficiaries. The key work is “if.” The estate plan will not, however, ensure that there will be any assets left. A lengthy illness, hospital and/or nursing home stay could wipe out your nest egg. You could leave your spouse and family with nothing.
But even more important than protecting assets is protecting dignity. Without the right Elder Care planning, families could find themselves out of money and out of options. If a person in a nursing home goes through all of their retirement savings without planning ahead, they will find themselves on Medicaid with less than $2,000 in the bank and only $30 per month to live on. That’s less than $1 dollar a day! There’s not much dignity in living on a dollar a day.
That’s why it’s so important to us to make sure that families have the right Elder Care plan for long-term care now, before it’s too late. If they wait too long, they will find themselves out of money and out of options at one of the most frail and vulnerable times of their lives.
This is especially important for married couples. Here’s an example similar to what’s faced by many of my older, married clients.
Bob and Mary live in a home valued at $200,000 and have $325,000 of additional assets. Bob is wheelchair bound and needs assistance. Mary, his primary caregiver recently began showing signs of confusion and forgetfulness. Mary’s doctor has told them that Mary is starting to experience dementia.
An estate plan alone won’t help Bob and Mary through the problems they now face. How will they afford the cost of nursing home care if either or both of them need it? Who will care for Bob and Mary when Mary’s dementia gets worse? Can they stay at home with assistance, or will they need to go to a nursing home?
Warmly,
Dennis J. Toman, JD, CELA
The Elderlaw Firm: Your trustworthy guide along the elder care journey.
301 N. Elm St., Suite 707
Greensboro, NC 27401
Call: (336) 378-1122
dtoman@elderlawfirm.com | www.elderlawfirm.com
This information is provided for general informational purposes only. It is not specific legal advice and creates no attorney-client relationship.
Caregiving – don’t go it alone!
Many Boomers find themselves providing care for a parent or grandparent, often while still working. Add those responsibilities to the time you want to spend with family, including your spouse, your children and grandchildren, and it all gets complicated.
If you’re doing all of that and are a primary caregiver, you have a lot on your hands. For those days when you’re feeling frustrated, there is hope…and help available.
If this is your situation, a support group can help to aid with coping strategies. Here are some links with info on groups near you and additional useful advice and resources on caregiving. Just click on an organization’s name to go to their website:
Piedmont Triad Regional Council/ Area Agency on Aging
Greensboro office: (336) 294-4950 Winston Salem: (336) 761-2111
Responds to the changing needs of older people, persons with disabilities, and their families through a community based system of supports and services.
1-800-Medicare
The official U.S. government site for Medicare provides an easy to understand guide to Medicare plus useful information on help with healthcare costs, finding a nursing home and other medical services.
The first community-based nonprofit organization in the country to address the needs of families and friends providing long-term care at home. Long recognized as a pioneer in health services, FCA now offers programs at national, state and local levels to support and sustain caregivers.
The National Institutes of Health’s website for patients, their families and friends providing information about diseases, conditions, and wellness issues in language you can understand. MedlinePlus offers reliable, up-to-date health information, anytime, anywhere, for free.
National Alzheimer’s Association
1-800-272-3900 (open 24 hrs.)
The world’s leading voluntary health organization in Alzheimer’s care, support and research. You can call the Greensboro office at 336-285-5920.
You have a lot ahead of you. Know that while there can be some battles, with help you can make it work.
Warmly,
Dennis
New Medicaid Gifting Rules Now in Effect in North Carolina
In past issues of ElderLaw Today we have been explaining the Medicaid changes under the new Deficit Reduction Act of 2005. We also explained we were waiting for the State to begin enforcing these new rules.
On November 1, 2007, North Carolina issued the DMA Change Notice relating to long-term care elgibility changes. The changes addressed in the memorandum are the following:
- “The beginning date for periods of ineligibility (penalty periods for transfers for less than fair market value) is changed.
- Partial month penalties will be determined when the amount of a transfer is less than the average private pay rate or there is a remainder after dividing the transfer amount by the private pay rate.
- The look-back period for all transfers is changed to 60 months.
- Individuals with home equity that exceeds $500,000 are ineligible for long-term care services.”
The Memorandum goes on to state that these changes are in effect for all transfers made on or after November 1, 2007.
Here is an example of what this means:
Using the new rules, if a Medicaid applicant (or his spouse) transferred $52,000 to his daughter on January 15, 2008 and then applied for Medicaid in February 2009 with less than $2,000 of remaining assets…then the claimant would be eligible for assistance beginning in February except for the transfer. Since February 2009 is the first month of eligibility, the penalty would begin that month because the transfer occurred after November 1, 2007.
What does this mean?
Let’s assume that the claimant transferred the $52,000 as in the above example. The $52,000 transfer would cause a penalty of 10.4 months. That is determined by taking the amount of the transfer ($52,000 in this example) and dividing it by the average cost of a nursing home ($5,000 per month according to the State of North Carolina). In other words, the penalty is now 10.4 months.
The major change in this case, however, is that under the new law the penalty period will not start until the assets have otherwise been spent down. Under the old law the penalty started (for transfers prior to November 1, 2007) in the month the gift was made. No longer. Now the transfer penalty will not start until the Medicaid applicant is already spent down below $2,000 as required by North Carolina law and is in a nursing home and applies for Medicaid. Only then will the penalty start to toll.
Obviously the intent of this new legislation is to require the gifted or transferred funds to be used for the cost of care of the person who made the gift. The effect of the law is to make gifting more difficult.
To make matters worse, the State can no longer “round-down” partial periods of ineligibility. Under the prior law the State would disregard a transfer penalty if the penalty was determined to affect less than a full month. That is no longer permitted under the new law.
Under the new rules, a partial month penalty will be converted to days. Based on the current average cost, each $161.00 will equal a one (1) day sanction. In the example above, 10.4 months would be converted to 10 months and 12 days. Similarly, a gift of $500.00 would incur a 3 day penalty.
There are very important implications to this for all Medicaid applicants. In essence, any gift or transfer (e.g. gifts to children, charities, church tithing, any gifting whatsoever) is now subject to the new transfer rules. If someone makes a gift after November 1, 2007 the penalty period does not begin tolling until the individual is otherwise spent down and in a nursing facility (or receiving CAP services), and applies for Medicaid.
A further implication concerns “simple” applications.
“Simple” Medicaid applications could be filed under the old rules knowing that any small or inadvertent gifting would probably not make the applicant ineligible for Medicaid. There are now very few if any “simple” Medicaid applications. Every application must be scrutinized by someone who knows the new rules!
This law does not mean that there are no ways to protect assets or to do asset transfers. However, now more than ever you will need the expert advice of an elder law attorney to help you through these situations. In the coming months we will continue to provide additional advice and information on the law.
Important Note: If a married person enters a nursing home and needs Medicaid, despite the gifting restrictions, in that case the institutionalized spouse usually can qualify for Medicaid quickly by using the right Medicaid strategy. Future issues of Elderlaw Today will discuss this, or call our office at 336-378-1122 or 877-909-1122 for additional information.
The Path to a Smooth North Carolina Medicaid Application…How to Avoid Denials and Appeals
Have you ever filed a Medicaid application? Or have you worried about the need to file one? An inadequate Medicaid application can lead to delay and lack of payment to the nursing home. These problems lead to denials of applications and appeals.
Filing a Medicaid application can be daunting. Think of an income tax return, where you have to not only provide income, but also asset information, family information, health forms, detailed banking records for past years and do this while a loved one is facing a care crisis. Daunting may be an understatement.
Knowing the ins and outs of Medicaid applications can mean the difference between spending hundreds of thousands of dollars unnecessarily, or preventing a nursing home resident from being discharged for nonpayment. Our office regularly files Medicaid applications in many counties across North Carolina, and we know that families are simply unprepared for what awaits them at the Medicaid office.
Sometimes our clients have already tried to file a Medicaid application and failed. They know firsthand the difficulty in gathering and organizing the needed information, and the frustration of waiting in line to meet with the Medicaid office. After we tell them that we can handle the Medicaid application for them, there is a tremendous sigh of relief and the tension lifts from their shoulders. They smile. They are thrilled to hear that they don’t have to deal directly with a government office. They were worried about filing the wrong information, or saying the wrong thing, or not knowing whether what the caseworker says is correct or not…but not anymore.
On top of that, the Medicaid laws are complex and ever-changing. We’ve seen more errors made by the Medicaid office than we can count. While we were able to catch these mistakes, we wonder about the thousands of people who file applications without expert help… they never know the mistake was made so of course they can’t correct it!
Should families get professional assistance to file Medicaid Applications?
- Families who get advice from well meaning friends, neighbors and even social workers who generally do not understand the potential complexities and ticking bombs involved with these applications.
- You need to know the actions you should take the month before filing a Special Assistance application for a married couple (Medicaid for Assisted Living).
- Medicaid attorneys can advise on issues such as the right time to file (yes, even the right day in the month depending on whether we are dealing with Medicaid or Special Assistance), what information you need to gather in advance to avoid a denial and valuing land and investments.
- Some people seek information from the Medicaid office, and only hear part of the story. You shouldn’t have to be an expert in Medicaid, but you need to know how to find one.
Some REAL Examples!
- A wife has gone to the Medicaid office to apply for her husband in the nursing home, and she was told that they needed to spend half of their money and come back to apply later. Don’t let this happen to you! The Medicaid office will tell you to spend half of your money, while we will show married couples how to preserve nearly all of their assets.
- A family that had tried to apply for Medicaid but was denied was worried that their parent would be forced to leave the nursing home for nonpayment. Not only were we able to get Medicaid approved, we were able to get the facility’s back bills paid in full by working out a contract with the Medicaid office.
- When families have real estate in addition to the home place, they are often told that they have to sell that real estate in order to qualify for Medicaid. That is not the case, but the families believed what they were told by the social worker. By taking the right steps, at the right time and in the right order, we were able to get Medicaid almost immediately…without selling any real estate.
- The Medicaid office has made mistakes in calculating the required monthly payment to the nursing home, which would have cost the family money month-after-month until we had it corrected.
- A family that made transfers before the rule changes in November 2007, assumed that they could not apply for Medicaid because they were under a penalty period. They were afraid to go to the Medicaid office for fear they might be turned away, or be accused of doing something wrong. We reviewed the situation, determined that the transfers were not a problem, and started the Medicaid application right away. Getting the right advice saved that family tens of thousand of dollars.
- We frequently hear from families that they “couldn’t have gotten through this without us,” that they had “no idea that anyone could help them this way.” We truly enjoy helping!
- We have been contacted by nursing homes, who asked whether we could help, and then put their resident in touch with us, so that we could ensure that the resident could qualify for Medicaid and continue to get needed care without fear of being forced to leave for nonpayment.
When it comes to filing a Medicaid application, there is no substitute for knowing the law and how the system works. Our office regularly assists families with their Medicaid applications. We can ensure that the application is handled professionally and promptly. Professional assistance will give families peace of mind, and ensure that the nursing home facility is paid in a prompt and orderly manner.