One of the most challenging decisions for any spouse is when to place his or her disabled partner in an assisted living facility. The cost, logistics and emotional toll can overwhelm the healthy spouse and trigger a postponement that ends up being dangerous for them both. Of course, we advocate setting up contingency plans and having honest conversations with each other about how you will handle it if one of you becomes disabled. Ideally, you will have time to analyze and purchase an appropriate policy to pay for long-term care, visit facilities together to pick out one you both approve, and write out a step-by-step plan you can activate should the time come. Not everyone enjoys the luxury of time, though. Disabilities and scary diagnoses can sneak up through the shadows of our life and leave us shocked and ill-prepared. Should this happen (and, frankly, even if it doesn’t) you need to rely on the advocacy and wisdom of your financial advisor, preferably one with a fiduciary relationship to you. Your advisor will be able to guide you through the prickly maze of protecting both the ailing spouse and the assets you’ve both accumulated over a lifetime. While some advisors encourage their clients to divest themselves of their assets in order to qualify for Medicaid, we want you to understand that this plan can cause even more troubles down the road. Most facilities cap the amount of Medicaid patients they accept, and those open beds fill up fast. In your effort to control the disbursement of your finances, you may lose the ability to choose the place you and/or your spouse will spend the rest of your lives. While federal Medicaid rules protect a recipient’s home and the property the house is on when calculating Medicaid eligibility, these allowances can vary from state-to-state, especially when the recipient has no plans to return home. Currently, monthly maintenance needs allowances range from… | Read More »
Month: June 2019
Financial tips for blended families
According to a Pew Research Center report, more than 40% of marriages in the United States involve at least one spouse who has been married before and 57% of divorced or widowed people remarry. Those remarriages call for specific financial advice, especially when they involve minor children. While we primarily suggest all betrothed couples visit their financial planner ahead of the ceremony to map out a financial game plan, we also offer the following five general tips to help you and your family set yourselves up for success: If your spouse and his or her family will be moving into your house, consider putting it into a revocable trust, which will protect it during your lifetime. Then you can decide who inherits the house. Be careful about deeding the house to your children with the stipulation that your spouse live in it during his or her lifetime. This can become a tricky situation as the inheritors have little control over the maintenance of the asset they own. Create a trust if you want assets that you brought into the marriage to go to your children when you die. With a bypass trust or a Qualified Terminable Interest Property (QTIP) trust, your assets pass to your children, while your spouse can collect income and possibly some principal in an emergency from the trust during his or her lifetime. Consider carefully who you will name trustee, and make sure they are well suited educationally and emotionally for this task. Discuss how you will handle college loan debts. Legally, one spouse isn’t liable for the other spouse’s federal student loans and, if the spouse with the student loans dies, the surviving spouse does not have to pay them back. However, a significant portion of the joint income will be going to pay off that debt, so it is important to discuss plans to pay it down. Also, you need to be very careful… | Read More »