If You Love Coffee, Like I Love Coffee…

…a new study* shows that drinking one to eight or more cups of coffee per day (regular or decaf) may help you live longer.  It used data from half a million people.  That’s a lot of cuppa joe lovers!  The study provides further evidence that coffee drinking can be part of a healthy diet and offers reassurance to coffee drinkers.  Yay!

Check back for more coffee images as I discover more really creative ones!

*https://jamanetwork.com/journals/jamainternalmedicine/article-abstract/2686145

TALK ABOUT ESTATE PLANNING WITH PARENTS

When you were a young’un, your parents may have sat you down to talk about the “birds and the bees.” Now it’s time to turn the tables and address another uncomfortable topic: their finances. Such conversations mark a reversal in the traditional parent-child dynamic and also can be fraught with concerns over independence, trust and mortality. As a result, in many cases these talks don’t happen at all, and a perceived lack of urgency is to blame, according to a survey conducted this year by Wells Fargo. Roughly one-third of parents over the age of 60 say they’ve never discussed later-life needs with family, including inheritance plans, beneficiaries, important documents or designated representatives, according to the survey. Meanwhile, adult children worry such conversations will cause conflict or make it seem as though they’re after their parents’ money. As daunting as it may seem, it’s important to have “the talk” about finances with your parents to help protect them from scams and elder abuse, which cost Americans more than $36 billion each year, according to financial services firm True Link Financial. These conversations also ensure that a rapid-response plan is in place in the event of disability and that there are no surprises after your parents die, says Ron Long, head of regulatory affairs and elder client initiatives at Wells Fargo Advisors. These four tips can open lines of communication:

1. Start with one conversation When’s a good time to sit your parents down for a hard conversation about their financial well-being, plans for the future, and important legal and financial documents like a will, power of attorney or health care directives?  Don’t wait for tragedy to strike. A study by Ameriprise Financial found that a life-altering incident was the trigger for 90 percent of children who’d actually discussed estate planning with their parents. Instead, carve out time for a family meeting – perhaps on Mother’s Day, Father’s Day or the Friday after Thanksgiving – when all the children are present, Long recommends. “It’s a good way to get the conversation started, and then you can do a refresher or update down the road.” The first conversation should serve as a door-opener. There are weighty decisions at play – which may change over time with your parents’ mental or physical health – so don’t expect a one-and-done conversation.

2. Start with the basics Talking about money inspires reactions ranging from secretive to forthright. Even if your parents aren’t particularly prickly about discussing their finances, it’s prudent to ease into such conversations. Long says a strategy that’s “very helpful” is approaching discussions from a group-planning perspective – sharing what end-of-life goals you’re considering and asking your parents about theirs. “Remember, these are subjects that a lot of older folks hold close to their hearts,” he says. Be sensitive in that initial talk. Think less interrogative (how much money’s at stake and who gets what?) and more collaborative (exchanging information about where accounts are held or who has power of attorney).

3. Broach serious topics Once you’ve established a rapport, tackle topics that make either you or your parents uncomfortable, including the morose (funeral arrangements or declining health) and the dangerous (financial scams targeting seniors that could wipe out their savings). Don’t let the prospect of an awkward conversation now create a bigger headache in the future. Strive for this balance: confronting reality head-on without infantilizing or offending your parents. A bad way to deal? Shutting down future conversations when talks are strained. A better way to deal? Involving other family members to facilitate discussion or working with a financial adviser to handle trickier topics.

4. Leave judgment at the door Conversations with your parents may reveal wildly different opinions about how to handle finances. You’re asking them to part with sensitive information; promise a judgment-free zone in return. Because of the prevalence of financial abuse – it’s estimated one in five elders have been affected – urge your parents to flag potential scams. Don’t shame them for ill-advised financial decisions or falling victim to fraud. Focus on prevention, via routine communication about finances and keeping documents accurate and up-to-date. by Anna-Louise Jackson

Alternatives to Guardianship

Many people with developmental disabilities have sufficient mental capacity to execute wills, revocable trusts, durable powers of attorney, and beneficiary designations. A person has sufficient mental capacity if they have the ability to know the nature and extent of their property, understand that they are providing for the disposition of their property, know the natural objects of their bounty and understand in a reasonable manner the general nature and effect of their act in signing the document.

Guardianship is a formal court process through which a person is declared to be legally incapacitated. The rights and decision-making powers granted to the guardian are simultaneously stripped from the person with a disability. This status is reported to and maintained in the records of the Michigan State Police.

The law regarding guardianships of individuals with developmental disabilities states,
Guardianship for individuals with developmental disability shall be utilized only as is necessary to promote and protect the well-being of the individual, including protection from neglect, exploitation, and abuse; shall take into account the individual’s abilities; shall be designed to encourage the development of maximum self-reliance and independence in the individual; and shall be ordered only to the extent necessitated by the individual’s actual mental and adaptive limitations. MCL 330.1602(1).

Therefore, there is no automatic need to appoint a guardian for a person with a developmental disability, and guardianship is not mandatory when the child turns 18. The decision to pursue a guardianship should always be justified by need and should only occur after less restrictive alternatives have been considered such as:

  1. Representative Payee – controls only those funds paid out by the Social Security Administration (SSA) such as Supplemental Security Income or Social Security Disability. Similar to a guardian, the Representative Payee manages, and spends the funds and must account to the SSA for the funds. The SSA considers court determinations, medical and other evidence to determine whether the interests of the beneficiary would be served by such an appointment. The appointment of a Representative Payee is not a determination of legal incompetence.
  2. Powers of Attorney
    a. Financial – A person appoints an agent to handle their finances. A durable power of attorney is preferred because it remains in effect even if the person is later deemed legally incapacitated. Its authority ceases upon the person’s death.
    b. Health Care (Patient Advocate Designation) – A person appoints an agent to make health care decisions to the degree that they are unable to participate in decisions regarding their care, medical treatment, residence, etc. Its authority ceases upon the person’s death. (A person can separately designate a Funeral Representative to carry out burial, cremation, etc. wishes after death.)
  3. Trust – A person transfers their assets into a trust and designates the trustee, successor trustee and distribution of the assets during their lifetime and upon their death. The creation of the trust document and funding of the trust are carried out by the person’s attorney.
  4. Protective Order – is issued by the probate court upon filing a petition regarding a specific asset or a specific circumstance. This is generically a “one-shot-deal” to permanently resolve a financial issue that does not require ongoing court supervision. For example, changing the character of an asset to make the person eligible for a public benefit.

The Easy Way to Qualify for Medicaid without an Attorney: Strategically Spend Down Your Assets

Let’s recap.  In general, a patient is eligible for Medicaid benefits to pay for long-term skilled nursing care in Michigan if they have not more than:

  1. One motor vehicle,
  2. One house worth not more than $585,000  (This limit does not apply if the patient’s spouse or a blind, disabled, under-21-year-old child lives there.)
  3. Pre-paid funeral goods and services not exceeding $12,770
  4. A very small life insurance policy (Michigan excludes the entire cash surrender value when the total face values of all policies a policy owner has for the same insured are $1,500 or less) and
  5. $2,000 in cash or on deposit

If you have excess cash, buy a car.  Remodel your house.  Buy furniture or carpeting for your house.  Put in a new furnace or put on a new roof.  Pre-pay your funeral and that of your spouse.  

Buy one of the following for each of your parents, children, siblings and the spouse of each of those people: a burial plot, gravesite, crypt, mausoleum, casket, urn or niche.

Pay off your mortgage and/or your home equity loan.  This increases the net worth of your home for the benefit of your heirs.  Just make sure that the home passes to your loved ones outside of probate using a trust or a Lady Bird Quit Claim Deed, for example.  Otherwise the state of Michigan will be a creditor of your probate estate and be reimbursed for the cost of your care before your heirs get anything.

Irrevocably assign your too-large whole life insurance policy proceeds to a reputable funeral director.  This removes the policy from your assets and pre-pays your funeral, a win-win.

Remember, do not give away cash or any other assets!  This is called divestment and will render you ineligible for Medicaid benefits for as long as the value of what you gave away would have paid for your care.

Happy spending!

Financial Planners for the Rest of Us

Whether your retirement savings are small, medium or large, a study shows that you will amass greater wealth with the help of a financial advisor than you would be able to do on your own.  Naturally, the amount of additional wealth accumulated, even with a comprehensive planner, depends on whether your income is modest, medium or high, but this is another area in which there is no substitute for a principled professional.

Beware of “free” advice.  You may be compensating that advisor unbeknownst to you when they steer you to buy the financial product they are selling, not necessarily the best product for you.  Most planners earn a living from commissions and money-management fees.  Frequently these fees are buried in your statements and deciphering the true cost of a product may be nigh unto impossible.

However, some financial planners charge only for advice, without selling a product.  Sometimes referred to as a pay-as-you-go planner, they will review your current assets, income and investments and render unbiased advice.  Budgets, taxes, debt retirement and other specific topics of concern to you can be addressed, too.

Such planners may not be easy to locate, but the unadulterated guidance they provide buys a common-sense road map and priceless peace of mind.  You may be charged hourly or a flat fee.  To pay a monthly or annual fee for answers to questions as they arise may also be available.  Fees could be in the range of $150 per hour or $200 per month.  A full, comprehensive review could cost $5,000.

Be prepared to spend some time on the phone for recommendations, ascertain qualifications and to establish the professional’s compensation.  The good advice you pay for now will earn money for you in the long run.