Who Pays for Dad’s Nursing Home Stay? It Might Be YOU!

It is a common misconception that parents are supposed to pay for their children and not the other way around. However, more than half of the states in this country have enacted “filial support” legislation (including Ohio) that may be utilized by long-term care facilities to collect on mom and dad’s unpaid bills. Guess who they will be collecting from? It’s you.

This practice has only recently started to pick up steam as public sources of payment for long-term care (i.e. Medicaid) begin to lag due to overuse, abuse and underfunding. Considering the current state of the economy and public resources, it is expected that this practice will increase.

As you probably guessed, the best way to defend against this practice is through planning. When your parents (or you) are in their 60’s, that should be the “last stop” for this type of planning, because once the 80’s roll around, most folks generally need some type of consistent medical care (long-term or otherwise). Options include purchasing long-term-care insurance, utilizing irrevocable trusts to transfer assets outside of Medicaid’s look-back period (currently 5 years), and the ever-popular in-law suite. Whatever option you choose, understand that the most critical component of the planning process is to ensure that there is not a gap between private coverage and public coverage that will later rear its ugly head as a collection claim by the care facility against the children for mom and dad’s expenses.

If you have any questions, please feel free to contact me at josh@theHElawfirm.com or visit our website at http://thehelawfirm.com/. Our Ohio Estate Planning Attorneys can guide you through planning this phase of life, whether for you or for your loved ones.  

Estate Planning Update – Time is Running Out

On January 1, 2011, Congress rewarded good tax planners by increasing the individual estate, gift, and generation-skipping transfer (“GST”) tax exemption amounts, and included a tax rate of only 35% for any estates or gifts that exceeded the increased exemptions. Since the legislation became effective, the individual exemption amount has been $5,120,000. That means if at the time you pass away, your “estate” is worth less than that amount, your estate will not be taxed on the Federal level (the State of Ohio tax exemptions are significantly lower, but will be repealed on January 1, 2013 – i.e. no Ohio Estate Tax for those who pass in 2013). Alternatively, you may give away gifts in an amount up to the Federal limit without incurring any Federal tax (yes, you can be taxed for giving property away). The tax rate comes into play once the value of your estate (and gifts) exceeds $5,120,000. Ultimately, this legislation permitted individuals to pass along significant gifts and engage in creative estate planning while simultaneously taking advantage of a low tax rate. However, all that may change on January 1, 2013.

Unless Congress acts to extend the legislation, it will expire on December 31, 2012, and the exemptions and tax rate will reset to $1,000,000 and 55% respectively. While $1,000,000 may seem a high threshold, if your estate consists of your home, some vehicles, and a retirement account, that threshold can be easily breached. Additionally, the exemption is a “unified” exemption – that means it takes into account the value of gifts you have given away and the value of your estate, and if combined those values exceed $1,000,000, the 55% tax rate is triggered. Obviously, the reduced exemption in combination with the significantly higher tax rate can have devastating effects on your ability to preserve and pass along your assets to family and loved ones.

Perhaps your “glass-half-full” outlook has convinced you to believe that Congress will step in at the last moment to preserve the historical legislation that currently exists. That’s cute. The current consensus is that IF Congress does create new legislation that it will not be as generous as that in place now. For those looking to hedge, if the current exemptions and tax rate are extended it still makes sense to take advantage of them now to capture the appreciation most assets experience (unless you own real estate in Southern California).

There are a variety of tools that can be utilized to plan appropriately for the sunset of the current legislation. Don’t wait until December 30^th to contact your Estate-Planning or Tax Attorney (shameless plug – I can be contacted at (614) 759-4603 or at  http://thehelawfirm.com/contact-us/) and implement a strategy to take advantage of the current estate-planning opportunities. It is critical that you take the necessary steps to ensure your legacy is passed along to those you love, and the current legislation allows you to do so in an unprecedented manner. The future legislation may not be so accommodating.

Beware the Post!

For those of you who find it necessary to post on Facebook, Twitter, or other social media sites and blogs about everything in your life, you should reconsider that thought, especially when you are involved in any type of litigation (or trying to find a job). Facebook can and will be used as evidence against you in court. Many cases, especially those that take place in domestic court consist of “he said/she said” evidence. However, your social media posts (including pictures and videos) are admissible in court and may determine the outcome of your case.

For example, in a divorce case, one party’s Facebook post contradicted that party’s claims in court, and as a result, the Court ruled against that party. This is occurring more often as the frequency with which many people are updating their social media accounts. Another common misstep is when an individual denies drug or alcohol use but posts pictures of that person engaging in those activities. Not a good move.

You may believe that the content you post is protected because you have set your account settings to “Private” where only your friends or followers can view your updates. However, a common source of obtaining your account updates is usually through mutual friends (you would be surprised at what your “friends” will share with others). Understand that your posts are never truly confidential.

The lesson here is be conscious of what you post because it will affect your life. More importantly, if you are involved in any type of a lawsuit, custody battle, or job interview process, consider shutting down your social media accounts. Staying off your accounts will help, however, if you have negative material already posted, it will have a negative effect on your case. If you are going to post something, do so as if it will be read by the judge, jury and your adversary (because it probably will). 

If you have any additional questions, please feel free to contact me office at (614) 759-4603 or our website www.theHElawfirm.com. Good Luck!

Need Help Striking Work-Life Balance?

Believe it or not, it is critical to your health, your quality of life, and the impact you have on those around you to maintain a balanced life with job, family and other interests. Here are some practical tips for maintaining that balance.

1. Evaluate the benefits of a part-time or flex-time schedule. Specifically, a flex-time schedule may be appropriate in a career that is results-driven.
2. Consider working from home. This option has some obvious benefits, but it also presents some challenges that should be evaluated before committing to this decision.
3. Determine and set your work schedule and stick to it. Protect your personal and family time. While it may seem counterintuitive to limit your availability to clients, you will actually be more productive and effective by sticking to a predetermined schedule.
4. Limit or eliminate evening or Saturday appointments. This is consistent with number 3 and in addition to allowing you to maintain your sanity, will result in increased efficiency and effectiveness.
5. Make it a priority to schedule work and other office appointments around your family's events (including birthdays, anniversaries and school schedules). While building and maintaining a successful business requires dedication and sacrifice, if your job becomes more important than those close to you, your priorities should be reevaluated.
6. Remember to identify non-work time (in many cases this means the weekend) for family, friends and personal exploits and abstain from working during that time. Unless you are an on-call ER doctor, you can probably turn off the work cell phone.
7. Give lunch its due. While breakfast is the most important meal of the day, lunch provides a chance to allow your mind to process the first half of the day and reset for the afternoon. Until naps become a part of the accepted American workday, lunch is the next best thing.
8. If you are having difficulty committing to number 7, consider setting lunch appointments with friends. This way you are forced to take a break from work and, assuming you like your friends, you get the added benefit of social interaction with them.
9. As I believe in the importance of the mid-day meal, in addition to recognizing the benefit of being as productive as possible, I suggest also setting lunch meetings with colleagues to brain-storm and share ideas.
10. Organization of your day will also result in increased productivity and the peace of mind that follows routine. Consider taking the last 15 minutes of each day and identifying the tasks for the next day.
11. Train staff to handle calls, drop-ins and matters not requiring your immediate attention. Then delegate, delegate, delegate. Your effectiveness and efficiency should skyrocket as you take advantage of the excellent on-the-job training you have given your staff (you are providing training right?).
12. If you are not already on the right side of the digital divide, it is time to cross-over and start communicating through e-mail to increase convenience for providing responses. The time wasted trading voice mails should be better utilized.
13. Volunteer. Giving your time and talents to benefit the less fortunate will provide you with perspective regarding your own fortune, in addition to the joy that comes from helping others. Why are you complaining about your dirty shoes when the man next to you has no feet?