Wednesday, June 29, 2016

Common Problems with Inherited Homes

According to an article called "Inheriting Trouble" in the March, 2016 issue of the ARRP Bulletin, the Baby Boomer generation is expected to inherit $8.4 trillion.  Much of that will be in the form of real estate, often the parents' primary or vacation homes.

Whenever property is left to two or more adult children, it often brings grudges and resentments between the siblings out into the open. Long simmering jealousies can surface and cause conflict after you die.  According to John Pankauski, author of Pankauski's Probate Litigation Guide: Top 10 Probate Mistakes Revealed, "You never really know someone until you share an inheritance with them."

Other experts point out that the family dynamics change after Mom and Dad pass away.  While the family may have gotten along while the parents were around, old jealousies may re-emerge, according to David Fry, the co-author of Saving the Family Cottage.  This can cause estrangements and lawsuits that present difficulties for years.

The two books mentioned above will help you avoid some of the problems that can arise when passing on a family home.

Guidelines to Avoid Probate Problems When Inheriting a House

*  Ideally, there should be a family discussion about the property before the parents pass away.  Everyone needs to discuss their expectations.  There needs to be clear, direct communication between members of the family.

*  Mom and Dad need to accept that their children may not want to hold onto the family home.

*  Once the parents are deceased, the siblings who inherit the property together need to meet and decide if they want to sell or keep the property.

*  If some of the heirs want to keep the home and one or more of the others do not, decide how the value of the property will be determined.  Will there be an independent appraisal? Will the other siblings buy out the ones who decide to opt out by paying them a full, prorated share of the entire property's value, or will there be a discount put on the value?  How will the payoff be made ... in a one-time cash payment or spread out over several years?

*  For those siblings who decide to keep the property, the heirs should draw up a legal agreement with an attorney.  It can be a joint ownership agreement, a trust or a limited liability company.

*  In the case of family vacation homes, management decisions need to be put in writing, including how the property can be used and how expenses will be paid.  For example, will it be rented out part of the year, or be available only to members of the family?  How many weeks of the year will each heir and their family be allowed to use the home?  Will there be special times of year when the entire family gets together at the property ... such as the Christmas holidays?  Who will take care of regular upkeep and lawn maintenance?  Will there be a fund set up that everyone pays into to handle regular maintenance?  Will there be periodic special "assessments" to handle expensive repairs such as painting or replacing a roof or air conditioning system?  Can everyone afford to pay their fair share?

*  The family needs to agree on basic rules about how the vacation house will be used, including how clean the home should be left when each family leaves, should sheets be changed and beds remade, whether smoking is allowed, if non-family will be allowed to use the property and who will pay for damages.

*  The ownership agreement should also set forth how the property can be passed on to future generations.  For example, if one sibling dies, will their share be divided between their adult children?  What happens if they cannot afford to cover their share of expenses? Or, will the original heirs buy out their nieces and nephews, should one of the siblings die?

What If One of the Children is Already Living with Mom or Dad?

When one of the heirs has been living in the home with the parents at the time of their death, this can create special problems.  Their siblings may not want to kick them out of the house, but the person who is now living alone in the house may not be able to afford to pay their fair share of the expenses involved in maintaining the home.

On the other hand, the heir who is living in the home may be perfectly happy and capable of staying there, but the other siblings may feel disinherited.  They may want to be able to either use the house themselves, or sell it and get the cash.  Either way, the parents should make it clear what is to happen with the home after they die.

Should You Put One Child's Name on the Deed?

According to experts, the worst decision you could make may be to put the name of one of your children on the deed.  That is because the house will automatically become the property of that child.  You may hope that your child will be fair with their siblings, but that does not always happen.  This can cause tremendous conflict between your children.

The exception to this would be if the house then becomes the inheritance of that child and the other children are left a substantially equal share of other assets ... such as stocks or retirement accounts.

If you are leaving real estate property to your heirs when you die, it may be a good idea to read one of the books below.

Want to learn more about retirement planning, where to retire in the U.S. and abroad, medical issues, family relationships and more? Use the tabs or pull down menu at the top of the page to find links to hundreds of additional articles.

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Wednesday, June 22, 2016

2016 Social Security Increase Ridiculously Low

UPDATED Oct. 19, 2016:  In 2017, Social Security recipients will receive a absurdly tiny increase in their benefits, based on government projections released on June 22, 2016.  The 2017 cost-of-living increase is estimated to be only 0.3 percent.  That is going to be just a few coins for most people. It works out to about $3 for every $1000 beneficiaries currently receive in Social Security benefits.  The average recipient will receive approximately $4 extra a month.  Most senior citizens who rely heavily on Social Security to cover their retirement expenses agree that their expenses have increased much more than $4 a month over the past couple of years ... which is how long it has been since they received any raise at all.

At the beginning of 2016, Social Security recipients did not get any increase in their benefits.  However, millions of Medicare beneficiaries who pay their premiums by check, usually because they do not yet collect Social Security or they participate in an alternate retirement program such as state teacher retirement, saw their premiums rise.

2017 Medicare Premiums Could Rise for Millions

Retirees who are not receiving Social Security, because they either have not filed yet or because they participate in an alternative retirement program such as a State Teacher's Retirement plan, could also see their Medicare premiums increase in 2017.  It is estimated that the Medicare Part B in 2017 will be $149, up from 2016's rate of $121.80 and 2015's rate of $104.90.  This will affect about 30 percent of all Medicare recipients.

Current law protects people from getting a Medicare increase that exceeds their Social Security increase unless they are new to Medicare or they pay their Medicare premium by check ... which is the case for millions of people on non-Social Security retirement plans.

This means that in future years, if Social Security premiums increase by more than a couple of dollars, a large increase in Medicare premiums could eat up all or most of the raise.

Congress Continues to Fail to Address Social Security and Medicare Shortfalls

In addition to the ridiculously low increase in Social Security benefits and rising Medicare rates, Congress has continued to fail to resolve shortfalls in these programs, despite the fact they are absolutely essential to the lives of the vast majority of retirees.

The government currently estimates that the trust fund that helps bolster Social Security benefits will run out of money by 2034; the trust fund that helps support Medicare benefits will run out in 2028.  In the case of Medicare, this is two years sooner than previous estimates.

When the trust funds run out, the programs can continue to operate, but at only 75 to 85 percent of their current levels, which could mean cuts in benefits for retirees.

According to the U.S. Treasury Secretary Jack Lew, "reform will be needed and Congress should not wait until the eleventh hour to address the fiscal challenges, given that they represent the cornerstone of economic security for seniors in our country."

Final Numbers Not Yet Confirmed

It is possible that the 0.3 percent 2017 Social Security increase and/or the increase in Medicare premiums could be altered slightly when the final decisions are made in the fall of 2016.  Last year, Congress did vote to decrease the initial projected increase in Medicare premium rates.  However, there is no guarantee that will happen.

Learn More About How to Maximize Your Benefits

If you are planning your retirement, you will want to do whatever you can to maximize your benefits.  The Amazon books available for sale below can help you get the most out of your retirement.

If you are interested in learning more about Social Security, Medicare, financial planning, common medical issues, where to retire and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

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Wednesday, June 15, 2016

Finding Help for Caregivers

According to AARP, approximately 40 million Americans perform the role of caregiver for someone in their family.  Although the typical caregiver is a 49 year old woman, the truth is that more and more men are starting to fill this function in their families.  In addition, about one-fourth of caregivers are young adults between the ages of 18 and 34.  Many Baby Boomers have found themselves in the "sandwich generation."  They are still raising their own children while caring for an aging parent.

The Demands on Caregivers are Becoming More Intense

While the vast majority of ill, disabled or mentally incompetent people have always been cared for by family members, the demands now seem to be greater than ever, putting more stress on families who are caring for someone who cannot fully take care of themselves.

First, insurance companies encourage hospitals to discharge patients sooner, in an effort to save money.  This means that caregivers may have to do more than just feed, dress and bathe their loved ones.  They may also be required to perform traditional nursing duties such as giving injections or inserting catheters. Unfortunately, they may be expected to do these things with little or no training.

In addition, although people are living longer than ever before, they may not be able to take care of their own needs during the last few years of their lives.  Caregivers may be required to take care of a loved one for as much as five or ten years ... which can add a great deal of stress to the job, especially if the caregiver also has children or other family members who need their attention.

Where to Find Help for Caregivers

With all the stress involved, nearly every caregiver is going to need some help at one time or another.  In order to assist them, below is a list of resources to take some of the pressure off.  The organizations below can help you get help in your community.

Eldercare Locator:

Family Care Navigator: (for information on Alzheimer's)

Where to Find Respite Services (when you are traveling or just need a break)
OR  the U.S. Department of Veterans Affairs (sponsors day programs for Vets)
OR  local assisted living facilities often provide temporary respite care

Elder Companions
contact your local Area Agency on Aging

Personal Care Assistance
Contact a local home health agency in your community.  They can provide help with meals, dressing, bathing and similar services.

Meals on Wheels America (provides meals to people living alone who cannot fix their own meals)

Assistance with Transitions to Rehab or Nursing Homes

Caregiver Support for Veterans
VA Caregiver Support Line 

More Caregiver Resources Can Be Found at AARP's website: (in Spanish)

Below are several books which are also excellent resources, followed by practical tools to make caregiving a little easier.  (If you cannot see the book ads, click on the title of this article to be taken to the original article.) 

Technology That Can Help Caregivers

In addition to community resources for caregivers, you may also get some peace of mind by putting technology to use.  Below are some devices that may help:

Invisible GPS - Shoe inserts with a hidden GPS inside.  These are designed for dementia patients who tend to wander off.  Check: GPS SmartSoles

AARP Rx - A free app that will help you organize prescription lists and contact info, so you can share it with family members.

Wireless Blood Pressure Monitoring - Blip BP by BlipCare is a device that you connect to your Wi-Fi.  You can then view the readings online or on an app.

Fall Prevention Lighting - Are you worried that a loved one might fall when they get out of bed at night?  Luna Lights has a pressure pad that automatically will illuminate small portable lights in order to create a path to the bathroom at night.

Medical Alert Devices - You have probably seen the ads in which a woman, lying on the floor, pushes a button on a pendant and say, "Help me!  I can't get up."  There are a variety of these devices, including the Great Call Splash, the Philips Lifeline with AutoAlert and others.  If you are worried about a family member who does not live with you, these devices are a wonderful way to make sure you will be contacted if your loved one falls or has a medical emergency.

Floor Mat Alarm - a mat that can be put by the door or bed.  It will alert you if a dementia patient is leaving their bed, their room, or their house.  Check: the FallGuard Safety Auto Reset Monitor with Floor Mat from the Smart Caregiver Corp.

Home Motion Sensors - These sensors, such as the one made by SafeinHome, will let you know if a loved one who lives alone is unusually inactive.  Check:  SafeinHome

If you are interested in more helpful information about retirement, medical issues as we age, financial planning and more, use the tabs or pull-down menu at the top of this page to find links to hundreds of additional articles.


AARP Bulletin, November, 2015, "Special Report:  Caregiving in America"

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Wednesday, June 8, 2016

How to Successfully Retire Alone

How do you prepare to retire if you have no spouse, no kids and no one to perform the role of caregiver in your life?  Many people outlive or divorce their spouse; they either have no children or they outlive them; they have no near relatives who can take care of them if their health or memory begins to decline.  How can these people make sure they have adequately prepared for the future?

Scary Numbers for Single, Childless Seniors

Currently, about one-third of people between the ages of 45 and 63 are single.  About 15 percent of women in the 40 to 44 age group have no children.

According to Dr. Maria Torroella Carney, in a presentation at the American Geriatric Society's annual meeting, approximately one-fourth of Americans over the age of 65 lack a family member who can take care of them.  Carney refers to them as "elder orphans."

How to Prepare for the Future

Many of the suggestions about how to prepare for the future are the same for single people as they are for those who do have spouses and/or children ... save money, maximize your Social Security, choose a Medicare Advantage or supplement plan, find an appropriate place to live and budget wisely.   However, it can be even more important that they follow through on these suggestions if they are single and/or childless.  Below are some tips to help you navigate your senior years.

About two-thirds of seniors will eventually need long-term care.  It is wise to either buy long-term care insurance or put aside a large enough nest egg that you will be assured there will be money available for your care when you need it.  If you do not qualify for long-term care (and many people do not), you may want to move into a CCRC while you are still ambulatory and do not need assisted living.  Many of these appealing communities do not accept people who are already in need of assisted living or skilled nursing.  A final way to prepare for long-term care, especially if you are a low-income retiree, is to visit and select a Medicaid Approved nursing home in your community so you know where you would like to live, should the time come that you cannot take care of yourself.  Medicaid pays the lifetime cost of nursing home care for low and moderate income retirees with few assets.

Plan for your future housing needs by buying a home or moving into a CCRC - a Continuous Care Retirement Community.  Even if you are not in a CCRC, you may want to move to a location where you can remain independent as long as possible ... with no stairs and within walking distance of doctors and grocery stores or with a convenient bus/train/taxi service.  You may also want to see if there is a local grocery store that can deliver your groceries to you if you have surgery or become too frail to do the shopping by yourself.  Explore other neighborhood assistance that may be available to you, including Meals on Wheels, taxi vouchers, senior apartment complexes, and senior centers.  Keep a list of these services handy so you can contact them easily.

*  Prepare for medical emergencies by getting a comprehensive medical insurance plan, usually a Medicare Advantage or supplemental plan, and putting aside additional money to take care of any out-of-pocket expenses you might have as you age.

Stay connected with other people, both new friends and old friends.  Without a spouse or adult children, you may need the assistance of friends from time to time.  Socializing with friends also serves to keep you healthy, happy and less likely to decline rapidly.

Choose a trusted friend or relative to be your proxy.  Make sure they know where you keep your important documents.  Designate that person as your durable power of attorney for health care decisions, before you begin to lose cognitive function.  If you have no one you can trust, contact an elder care attorney for a reference to a professional who can become your legal proxy as you age.

Make it a priority to stay healthy as long as you can.  Eat well and get daily exercise.  Work your brain as much as your body.  People who do these things and socialize with others tend to age better than those who do not.

Put together an "In-case of Death" Notebook.  What would happen if you were found unconscious in your home by a neighbor, relative or emergency personnel?  You should have an easy to find notebook that lists the names of people to contact, physician names, your health insurance carrier information, life insurance policies, religious preferences, funeral instructions and any other information that you believe they would need.  My personal notebook even includes a copy of our will and trust, as well as a brochure for our children that explains what needs to be done when someone dies.

If you take these steps, you will know that you have done everything possible to make your life easier as you age.  You will also have made things easier for the distant relatives or friends who might be contacted upon your death or serious illness.  Otherwise, they may not know what to do or what you would like done, should the time come when it is difficult or impossible for you to make decisions for yourself. 

If you are interested in learning more about where to retire, health considerations as you age, financial planning and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.
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