“Living here and protecting our estate is one of the greatest gifts we can give our children.”

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Money and Finances

Today’s seniors and their families have many significant financial decisions to make. On this page you will find useful information, tips and resources for everything from broaching the topic of money to calculating the affordability of retirement living.

  • Tips for Organizing Financial Documents
    • Getting organized is often at the top of many people’s personal and professional goals. One part of getting organized can be making sure your and maybe your parents’ estate planning issues are in order. Periodic review of estate plans are important to ensure any family changes have not been overlooked in how the estate will be handled, that planning complies with current laws, and to review any changes in financial situation. It may not be a particularly fun task but it can certainly save confusion and upset down the road.
    • The first – and arguably the most important step — in helping to get financial and estate planning affairs in order is simply to have all important documents together in one, clearly designated place where the appropriate person(s) can easily access them. Documents housed in the designated place would include an updated will, all insurance policies, a list of all financial accounts including income and debt, and an updated list of assets and investments including real estate. Proactive communication with all decision-influencing family members can also help to minimize stress during an emergency.
  • Questions to Ask
    • Once the paperwork is assembled, and the appropriate parties have been informed, following are some questions to ask as the documents are reviewed. When appropriate, always seek the advice of an attorney, accountant, investment advisor, insurance agent or similar professionals to help answer questions.
  • Estate planning questions to ask:
    • Are beneficiary designations still correct?
    • Are Power of Attorney arrangements in effect and current as to wishes, including medical treatment elections?
    • Are gifting programs for charities and transfers of family wealth in need of review?
    • Should intra-family asset shifting, such as the establishment of 529 education plans for children or grandchildren, be considered?
    • Should trust arrangements be established or updated to comply with the best interests of the estate and beneficiaries?
  • Investment questions to ask:
    • While your portfolio and investment strategies, including retirement accounts, should be monitored regularly, many of us often neglect to focus on this during the year. The start of a new year can be an appropriate time to make sure to create a periodic review schedule.
    • Do I have investments that are no longer performing as planned, or underperforming the market?
    • Do I have an asset allocation policy that needs to be adjusted?
    • Is my financial advisor providing the services and advice expected?
    • Are cash, checking and money market funds invested to provide for planned short-term needs?
    • Are after-tax rates of return considered in the evaluation of earnings rates?
    • Are asset preservation and transfer planning objectives being met?
    • Should mortgage refinancing be considered to take advantage of low mortgage interest rates?
    • Taking into consideration the low interest rates available for investments, should funds be used to pay down interest bearing credit cards or mortgages with interest rates higher than the rates on earnings?
  • Tax planning questions to ask:
    • Tax planning is important to make sure the timing of taxable distributions from retirement plans, tax deductible expenses, sale of capital assets, etc. are done with consideration to effectively minimize current and future taxes on income.
    • Should consideration be given to selling investments to recognize tax losses, either to offset capital gains or generate a loss to offset against ordinary income based on current tax laws?
    • Have Required Minimum Distributions been distributed properly from retirement accounts?
    • Does it make sense to make additional contributions before the end of the year, or prepay certain taxes deductible as itemized deductions?
    • Are estimated tax payments or withholding adequate to cover anticipated Federal and state income tax obligations?
  • Insurance coverage questions to ask:
    • Health insurance, life insurance, long-term care insurance, homeowners insurance and automobile insurance need periodic review. Considerations may include:
      • Do current life insurance policies provide desired amounts of coverage?
      • Are beneficiary elections current?
      • Should a life settlement structure be considered in lieu of continuing life insurance policies?
      • Have values of real estate and contents changed dramatically enough to warrant a change in coverage?
      • Does the automobile policy accurately reflect the vehicles owned and should adjustments in deductibles and coverage limits be considered?
      • Evaluate daily living limits of long-term care policies, as well as other terms and conditions to consider current costs and situations.
    • These questions are suggestions only and are not meant to be an all-inclusive list or to be viewed as professional recommendations or advice since individual situations and specific circumstances vary. The important thing is that we would all do well to be proactively organized for ourselves and for those we love. The peace of mind is worth it.
  • Selling Your Home Is Possible
    • You decided that a retirement community is the best option for you. Living in a retirement community indeed offers many conveniences and benefits. For many this also means putting a home on the market—at a time when home selling has had its challenges. However, armed with sound professional guidance and a strategic plan, selling your home is possible—and may be less stressful than you think.
    • Understand your market: Lawrence Yun, National Association of Realtors’ chief economist, recently noted on a national level “the housing market is healing.” Chances are, if you take the proper steps and do the necessary and proper research, you can successfully sell your home. Talk to a real estate agent or broker who works on a regular basis in your neighborhood and immediate surrounding area. The housing market actually differs in every area and the national statistics do not apply in each individual case. Homes in your neighborhood— at your price point— may or may not be selling well. Seek the advice of a seasoned local realtor. They can help you determine how you can best sell your home – and what a realistic timeframe might be.
    • Price the house right: You may not get what you might have 3 years ago but those days are long gone and today’s prices will be around for many years ahead. In general, houses that are priced right sell faster with a minimum of negotiation.
    • Make your house appealing: Make your home the most aesthetically appealing of competing houses for sale in your market.
    • Curb Appeal – Ask your realtor about other houses on the market in your area and an opinion as to how your property aesthetically compares. Little tweaks make a big difference, including the power of “curb appeal.” Ask yourself, how does the house look when the buyer first pulls up? Welcoming, neat, tidy or “that’s going to require a lot of work.”
    • De-personalize – The inside of the house needs to look like the home that your potential buyer would want to occupy – one they can make their own home. The buyer should not feel that this is someone else’s home, which means the space needs to be “de-personalized.” And there is often a lot of emotion that goes along with removing from view personal items such as family photos, collections and collectables, hobby equipment, and general accumulated “stuff.” Maybe planning where you might put those personal items for maximum enjoyment in your new home can help to keep the task on a positive note.
    • Fix and Freshen – Following the de-personalization process, take inventory of things on the inside and outside of the house that need to be fixed or freshened. Potential buyers will always favor a house that feels move-in ready over one that needs “elbow grease” or out-of-pocket repairs. Get a recommendation from someone whose opinion you trust about a reputable handy-man company that is bonded and insured – and can accomplish the work in a reasonable timeframe. The dollars spent on the front end will come back to you in the sale price.
    • Sensible Updates – Next, take inventory of items that are outdated. Countertops, faucets, light fixtures, and carpets deserve an objective look as to how potential buyers might react to them. Consider if the cost to replace or update is worth it for the convenience of a fast sale and to sell at the highest possible price point. If your walls look drab, a new coat of neutral paint freshens up the look and can go a long way to a favorable reaction from potential buyers. Clean the rugs and shine the floors. Don’t let a stain or wear and tear on furniture, draperies and carpet ruin that all important first impression.
    • Streamline – Showcase all the living space your home offers. Identify and remove extraneous furniture and show as much floor space as possible. Floor space feels like abundant square footage to a potential buyer whereas a room that is crowded feels smaller with less potential. If there are furniture pieces that are not traveling with you to your chosen retirement community, ask your community representative for the name of a trusted resource to help sell, donate, and/or remove those items.
    • De-clutter – The last and arguably most important yet often overwhelming strategy for making your house outclass the competition for a fast sale: de-clutter – really, really de-clutter. Even the thought of going through a lifetime of accumulated treasures can be stressful. At best it can still be a daunting task. The best advice is to get help from a professional in senior moves and don’t try to do it yourselves. You be the manager and let someone else help with the leg work. Work together one closet or room at a time and separate items into areas marked Keep, Toss, Donate, Sell or Store. It may be necessary to simply store certain things off site until other tasks are accomplished.
    • Store – Make no mistake, closets, cabinets and drawers will be peeked into by potential buyers and need to be neat and not overstuffed. Remove the items you rarely use, and put them in storage bins, which also could be stored off site during the time the house is on the market. Potential buyers also like clutter-free kitchen counters so tuck the toaster and coffee maker neatly in a cabinet where it will be behind closed doors but still accessible to you while the home is on the market.
    • Share – I like the idea of having an informal “keepsake party” where friends and relatives are invited to see and reminisce about the items in the Donate and/or Store categories. It is a wonderful feeling to pass down treasures and know they will be enjoyed by others. Take photographs of the items along with the recipients and record them in a keepsakes scrapbook or photo album. It will provide a great chronicle of old and new memories with loved ones without taking up premium physical space in your new home.
    • Enjoy – Even though we look forward to the end result – a new home where life is easier and more fun – we sometimes dread the moving and home sale process. Hopefully, being informed about your market, planning ahead, and getting help with the logistics can make the task feel more possible, more manageable and less stressful, so you can start enjoying your freedom.
  • Tax Deductibility of Long Term Care
    • We have been asked by many residents and family members if their payments to Brightview are tax deductible. In many cases, a large portion of the monthly cost for Assisted Living, Alzheimer’s and Skilled Nursing care is in fact tax deductible as a medical expense.
    • You will find here a summary of information about the tax treatment of long-term care services. However, please consult your own tax advisor before making decisions regarding tax deductibility of assisted living, Alzheimer’s and/or skilled nursing care expenses.
    • In 1996, the Health Insurance Portability and Accountability Act (the “HIPAA”) was enacted. Prior to the enactment, the cost of long-term care was deductible only if the primary reason for an individual’s admission in a long-term care facility was for medical purposes.
    • According to the HIPAA, for tax years beginning after 1996, “qualified long-term care services” are deductible from gross income as an itemized deduction. This is subject to the limitation that when added to any other un-reimbursed medical expenses for the year, only that amount that exceeds 7.5% of adjusted gross income is an itemized deduction.
    • “Qualified long term care services” can include maintenance or personal care services that are required by a chronically ill individual and that are provided pursuant to a plan of care prescribed by a licensed health care practitioner. A “chronically ill individual” includes someone who is unable to perform (without substantial assistance) at least two Activities of Daily Living for at least 90 days (in the future) due to a loss of functional capacity. It also includes someone who requires substantial supervision to protect themselves from threats to health and safety due to severe cognitive impairment.
    • For assisted living and Alzheimer’s care, the HIPAA now provides some clarity. In order to deduct the care costs, there must be an Activities of Daily Living deficiency or cognitive impairment. In addition, the plan of care must be prescribed by a licensed health care practitioner.
    • For assisted living communities, such as Brightview, that utilize a licensed health care practitioner, i.e. a registered nurse, to help prepare a plan of care in conjunction with the resident’s physician, and for those residents who meet the criteria, it would appear that the entire monthly cost may be deductible.
    • Depending upon your family’s specific situation, eligibility for this deduction may create a substantial tax benefit for residents or their provider. Again, we recommend that you consult with your tax advisor to assist you with your individual situation.
    • Note: This summary should not be treated as tax advice. All residents and potential resident and family members should consult their own income tax advisor before making any care decisions based on the possible tax deductibility of these long-term care costs.
    • Recommended Resource: IRS Publication 502-Medical and Dental Expenses