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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.

Medicaid 101: How to Pay for a Nursing Home

There are basically three ways to fund long-term skilled nursing care in a nursing home:

  1. Private Pay – Pay out of your own assets and income.  If your income exceeds the monthly private pay rate charged at the facility, you will not be eligible for Medicaid benefits.  The private pay rate is the highest rate.
  2. Long-term Care Insurance – Purchase a long-term care policy of insurance.  Premiums for such policies start at more than $200 per month and usually require a waiting period before benefits will be paid.  If admission is imminent, it is too late to purchase such a policy.
  3. Medicaid – Medicaid consists of federal monies distributed to the states.  Each state administers the funds it receives according to its own rules.  Medicaid is a means-tested benefit which means that you will not be eligible if you have more than a certain amount of assets or income.  In General, a patient is eligible in Michigan if they have not more than:
    • One motor vehicle
    • 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
    • Pre-paid funeral goods and services not exceeding $12,770
    • A very small life insurance policy
    • $2,000 in cash or on deposit

There are many factors that determine whether each of these criteria are met.  Your circumstance is unique.  Don’t guess! Make an appointment to review all your details for precise advice.

Note:  These guidelines are established by the Michigan Department of Health and Human Services and are subject to change.

Get Your Ducks in a Row this New Year!

Whatever your age or stage, it’s always the right time to think about and plan for the handling of your health and financial affairs. Getting your ducks in a row now means peace of mind for you and your loved ones into the future.  Protect yourself, your assets and loved ones by making an appointment to create or tune up your powers of attorney, will, trust, privacy waiver, deeds, or beneficiary designations. 

Like exercise, just do it and you’ll be glad to check it off your list!

What is a POST?

POST is the acronym for Physician Orders for Scope of Treatment.  It is a creation of Michigan law and became effective on February 6, 2018.  Completing  a POST is optional, not mandatory.  Although it sounds similar,  is not a Health Care Power of Attorney nor is it an advance directive or living will.

Rather, it sets forth medical treatment orders which have been issued by an “attending health professional” to which the patient or the patient’s “patient representative” consent. Usually medical treatment orders are issued by a treating health professional without consent signed by the patient. The only patients for whom a POST is appropriate are adults with an advanced illness or another medical condition that, despite available curative therapies or modulation, compromises his or her health so as to make death within 1 year foreseeable though not a specific or predicted prognosis.  A POST only applies to treatment settings outside of a hospital.

POST form

Why Should I Pre-pay Funeral Goods and Services?

First of all, prices always go up, they never come down.

Secondly, you will make all your choices for goods and services.  This will save your loved ones from additional preparation and decision making at a difficult time.

Thirdly, prepaid funeral plans and burial spaces are exempt assets for Medicaid eligibility purposes.  The amount that can be certified as exempt is set annually every June 1st.  In 2018-2019 the maximum irrevocable funeral allowance is $12,770.

A funeral plan refers to the prepayment of cemetery and/or funeral goods and services. Exempt burial spaces include cemetery plots, crypts, caskets, urns and/or niches including vaults, headstones, opening and closing the grave and contracts for its care and maintenance.

In addition, funds in an irrevocable prepaid funeral contract are exempt.  Such funds are best certified as irrevocable by issuance of a DHS-8A, Irrevocable Funeral Contract Certification.  This form is available from your licensed funeral director.

A funeral plan can be funded using life insurance or an annuity. A person purchases a life insurance policy and directs the proceeds to be used to pay for funeral goods and services.  It is best to irrevocably/permanently transfer ownership of the policy to a reputable, licensed funeral director who then transfers ownership to a trust.  These funds can be accessed by other funeral directors as well in the event you have moved.

Note:  These guidelines are established by the Michigan Department of Health and Human Services and are subject to change.