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Seasons Greetings & Happy New Year to You and Your Family!

December has been a busy month for teaching and attending Elder Law continuing education programs.
Partners Howard Krooks and Ellen Morris attended the Association of Florida Elder Law Attorney's "Unprogram" on December 5, 2008. The "UnProgram" is just that - an unstructured, unusual day of continuing legal education. Facilitators lead small discussion groups on many topics relating to Elder Law. Ms. Morris also presented a Medicaid & Legislative Update to the Palm Beach County Bar Association's Elder Law Affairs Committee Seminar on December 12, 2008.
Being active in the elder law community on the regional and state levels is crucial to providing the best and most accurate legal services to our clients.
We provide The Elder Law Update to our clients and our colleagues who make up a wide range of service providers for seniors and people with disabilities to facilitate the dissemination of helpful and accurate information. We thank you for letting us share our knowledge with you. We continue to welcome your comments and questions. You may send them to Info@ElderLawAssociates.com. |
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Important Tax Law Change
A recent tax law change designed to help address the financial burden facing those who have seen their IRAs or 401(k)s shrink is expected to be signed by President Bush, officially making it law, shortly. Depending on your particular situation, you might want to consider taking action before January.
The new law suspends the required minimum distribution (RMD) requirement for 2009. This waiver, which is available to everyone regardless of your total retirement account balances, applies to all so-called "defined-contribution plans," which includes 401(k) plans, 403(b) plans, 457(b) plans, and IRA accounts. Suspending the RMD requirement allows you to keep the money in your retirement account if you choose, possibly recovering some of the loss.
This new law does not change the requirement for 2008. So, if you have an RMD that must be withdrawn for 2008, that must still be withdrawn. If you turned 70 1/2 in 2008, you can elect to withdraw your 2008 RMD by April 1st of 2009. The new legislation does not change that because it is still a 2008 RMD, not a 2009 RMD; you would still have to withdraw that amount by April 1st of 2009.
Some who withdraw RMDs annually have it set up to occur automatically in January. If that is the case for you, and if you want to take advantage of this new law, you should contact your IRA custodian immediately to take care of that before the RMD is automatically distributed.
If you would like to discuss this matter further, please do not hesitate to email or call us at 561-750-3850. |
Key Elder Law Numbers for 2009
Below is compilation of Medicaid, Medicare, Social Security and other figures for 2009 that are of interest to the elderly and their families.
Medicaid Spousal Impoverishment Figures for 2009
In 2009, the spouse of a Medicaid recipient living in a nursing home (called the "community spouse") may keep as much as $109,560 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Called the "community spouse resource allowance," this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2009 will be $21,912.
Meanwhile, the maximum monthly maintenance needs allowance for 2009 will be $2,739. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse's income. The minimum monthly maintenance needs allowance of $1,750 took effect July 1, 2008 and will not rise until July 1, 2009.
The new figures are effective January 1, 2009. For details, click here.
Annual Gift Tax Exclusion Rises to $13,000
The annual gift tax exclusion will increase from $12,000 to $13,000 effective January 1, 2009, the Internal Revenue Service (IRS) has announced. The gift tax exclusion is the amount the IRS allows a taxpayer to gift to another individual without reporting the gift. For details, click here.
Long-Term Care Premium Deductibility Limits for 2009
The Internal Revenue Service has announced the 2009 limitations on the deductibility of long-term care insurance premiums from taxes. Any premium amounts above these limits are not considered to be a medical expense. (For details, click here.)
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Attained age before the close of the taxable year |
Maximum deduction |
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40 or less |
$320 |
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More than 40 but not more than 50 |
$600 |
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More than 50 but not more than 60 |
$1,190 |
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More than 60 but not more than 70 |
$3,180 |
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More than 70 |
$3,980 |
Benefits from per diem or indemnity policies, which pay a predetermined amount each day, are not included in income except amounts that exceed the beneficiary's total qualified long-term care expenses or $280 per day (for 2009), whichever is greater.
For details from the American Association for Long-Term Care Insurance, click here.
Medicare Premiums, Deductibles and Copayments for 2009
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Basic Part B premium: $96.40/month (unchanged)
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Part B deductible: $135 (unchanged)
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Part A deductible: $1,068 (was $1,024)
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Co-payment for hospital stay days 61-90: $267/day (was $256)
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Co-payment for hospital stay days 91 and beyond: $534/day (was $512)
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Skilled nursing facility co-payment, days 21-100: $133.50/day (was $128)
Premiums for higher-income beneficiaries:
- Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 in 2009 will pay a monthly premium of $134.90.
- Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 in 2009 will pay a monthly premium of $192.70.
- Individuals with annual incomes between $160,000 and $213,000 and married couples with annual incomes between $320,000 and $426,000 in 2009 will pay a monthly premium of $250.50.
- Individuals with annual incomes of $213,000 or more and married couples with annual incomes of $426,000 or more in 2009 will pay a monthly premium of $308.30.
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
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Those with incomes between $85,000 and $128,000 will pay a monthly premium of $250.50.
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Those with incomes greater than $128,000 will pay a monthly premium of $308.30.
For more information, click here.
Social Security Benefit Changes for 2009
- Cost of Living Increase: 5.8 percent
- Estimated Average Monthly Social Security Benefit Payable in January 2009: $1,153
- Maximum Taxable Earnings: $106,800
- Maximum Social Security Benefit: $2,323/mo.
Retirement Earnings Test Exempt Amounts:
- Under full retirement age: $14,160/yr.
- The year an individual reaches full retirement age: $37,680/yr.
SSI Federal Payment Standard:
- Individual: $674/mo.
- Couple: $1,011/mo.
For a complete list of the 2009 Social Security changes, go to: http://ssa.gov/pressoffice/factsheets/colafacts2009.htm
For details, click here. |
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Revoking a Power of Attorney
 If for any reason, you become unhappy with the person you have appointed to make decisions for you under a durable power of attorney, you may revoke the power of attorney at any time. There are a few steps you should take to ensure the document is properly revoked.
While any new power of attorney should state that old powers of attorney are revoked, you should also put the revocation in writing. The revocation should include your name, a statement that you are of sound mind, and your wish to revoke the power of attorney. You should also specify the date the original power of attorney was executed and the person selected as your agent. Sign the document and send it to your current agent as well as any institutions or agencies that have a copy of the power of attorney. Attach your new power of attorney if you have one.
You will also need to get the old power of attorney back from your agent. If you can't get it back, send the agent a certified letter, stating that the power of attorney has been revoked.
Because a durable power of attorney is the most important estate planning instrument available, if you revoke a power of attorney, it is important to have a new one in place. An elder law attorney can assist you in revoking an old power of attorney or drafting a new one.
For more information on powers of attorney, click here. |
More Seniors Turning to Free Food Programs
By Sue Woodman
The story is the same across the country: the combination of a tough economy, rising food and fuel prices, and strained social services are causing dramatically higher numbers of elderly to seek out free food programs.
In big cities like New York, the numbers showing up for free meals at senior centers is increasing by between 20 to 40 each day, according to Aaron Kesselman, president of the Manhattan Borough Wide Interagency Council on Aging (MBIAC), while the 2009 city budget for elder services is being cut by 6 percent, or approximately $37 million. "This is a huge issue, because those most directly affected by all the proposed cuts are the low-income elderly," Kesselman said.
In smaller cities, like Seattle, the central food program is feeding 38 percent more elderly than at this time last year.
"We see more seniors coming in than any other demographic," said Fran Yeatts, executive director of the West Seattle Food Bank, told ElderLawAnswers. "Many of them have lived in this part of the city for a long time. Over the years, house prices have gone up, so property taxes have, too. Then, when food prices started to rise -- that hit a lot of elderly people on fixed incomes who were already feeling the strain."
"We started to see the change over the summer," agreed Sunny Schaeffer, executive director of Operation Food Search in St. Louis, Missouri, which works with 300 organizations, including soup kitchens and homeless shelters. "Many older people who relied on Social Security and small savings are finding themselves no longer able to get by. We get calls from seniors telling us they can't afford both to eat and to pay their medication costs. And many of them seem to be taking such a lot of medications."
Nearly One-Third Choosing Between Food and Medicine
The modern forms of free food programs -- like community food kitchens that provide cooked meals, and food pantries that distribute basic raw food items -- were started across the U.S. in the 1970s. Over the decades, there has been a steady need for them, even in times of a thriving economy, and in good times and in bad, elderly Americans remain more vulnerable than other age groups to what the government terms "food insecurity." According to Feeding America, the country's largest hunger-relief organization, three million seniors seek out their meal services each year, and the organization expects that number to grow by 20 percent in the coming year. Feeding America reports that some 30 percent of the country's elderly have to choose between paying for food or for medicine.
For those who work to provide seniors with free, nourishing food, the challenges of a shrinking economy are formidable. The various groups that support their services -- from the manufacturers and restaurants that donate food to the corporate philanthropies that underwrite them -- also suffer, so that, as demand for food goes up, both provisions and contributions go down.
"Our waiting lists are getting longer, and yet funds for the elderly budget are being cut all over," says Malika Robins, executive chef for Senior Connections in Atlanta, Georgia, where 8,000 meals are served to the elderly each week via senior centers and Meals-on-Wheels services. "I can't understand how we can allow the quality of our elder care to get lower, when what we really need is to generate a better quality of life for seniors, so that they can stay well in their homes. We need to keep them healthy with good nutrition and life-affirming activities. We will need to advocate hard for them to the new Administration."
One recent bright note comes from Kraft Foods, which has promised Feeding America $4.5 million to buy 25 refrigerated trucks over the next three years, to distribute food in areas of need, such as New York, Cincinnati, San Antonio, Chicago, and Madison, Wisconsin. Kraft chairperson, Irene Rosenfeld, says the pantries are the first part of a planned $180 million gift by Kraft aimed at combating hunger.
And in West Seattle, the Food Bank's Fran Yeatts claims that in her city, commitment to feeding the hungry remains strong, no matter what the economic climate.
"We are a diverse community here, with many people in need," she said. "But those with means understand the urgency, and continue to support us in providing the emergency feeding programs this community needs."
Sue Woodman is a freelance writer based in New York City. She is the author of Last Rights: The Struggle Over the Right to Die (Da Capo, 2001).
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Retiring on Obama's Watch: What to Expect from 44
Barack Obama's hair turned a little gray during his 20-month quest for the presidency but he's hardly the only one showing some age. President-elect Obama will lead a country that is aging rapidly as the huge baby boomer generation heads toward retirement. By the year 2030, there will be 72 million Americans over age 65 -- about 20 percent of the total population, according to the U.S. Census Bureau.
With all the urgent problems facing the country, you might think aging and retirement policy issues would be far from the top of the new President's priority list. But many of the issues facing older Americans are tightly bound with the broader economic challenges facing the Obama Administration. That means we're likely to see changes over the next four years that affect anyone who is retired -- or hopes to be soon.
Here are some key areas to watch:
Social Security. First things first: privatization of Social Security is dead as a doornail. Obama and his Democratic allies in Congress are staunch opponents of plans like the one floated by the Bush Administration in 2005, which would have phased in private Social Security accounts with at least some assets invested in equities.
Social Security enjoys tremendous public support, and the program is an important, reliable benefit to millions who would otherwise face a very insecure retirement. Still, the program faces a major solvency problem as boomers start to retire and draw benefits. Most forecasters say Social Security's expenses will surpass incoming revenue starting in 2017, which would force the system to start relying on its trust fund. And that would only last until the year 2041.
Policy experts point to a menu of options for restoring Social Security's fiscal health. These include raising the payroll taxes that fund the program, raising the maximum amount of Social Security benefits subject to tax, or gradually raising the age of full benefit eligibility.
Obama has made clear that he opposes benefit reductions. He has called for boosted payroll taxes -- which fund Social Security -- for individuals with annual income over $250,000 to plug the gap. Still, there will be a great deal of give and take with Congress on fixing Social Security, so don't rule out the possibility that benefits could be trimmed a bit -- probably on a graduated basis over time. Raising the Normal Retirement Age -- now pegged at 66 or 67 for most boomers -- could be in the mix.
Retirement savings. The financial crisis has sharply eroded private retirement savings in 401(k) and IRAs -- but we weren't doing all that great a job saving for retirement even before the market crashed. Half of the country's working population doesn't participate in retirement savings plans -- mostly people who work for small businesses that don't offer qualified plans.
Obama was an early supporter of a bi-partisan concept called the Automatic IRA, which I recently wrote about. Small businesses that don't sponsor their own plans would be mandated to offer a payroll-deduction saving option to employees -- no different from the way employers deduct for taxes.
Another Obama proposal aims to ease the impact of the current economic crisis by allowing retirement savers to withdraw up to $10,000 -- or 15 percent -- of their 401(k) or IRA account funds in 2008 and 2009 without penalty to meet short-term financial needs.
Medicare. The problems with Medicare make Social Security look like a walk in the park. Medicare expenditures are expected to hit $486 billion in 2009, accounting for roughly 14 percent of the federal budget. Expenses are rising much faster than overall inflation, and are on track to hit $887 billion by 2018.
Obama's plans to cure Medicare include letting the federal government negotiate for lower drug prices, and providing greater transparency in the Part D prescription drug program. He also has cited the Medicaid Advantage program as a wasteful privatization plan. He's promised to scale it back or even eliminate big portions of the Advantage program.
Moreover, Obama's broader health insurance program -- which would offer coverage to people without employer-based insurance -- could help people who retire or lose their jobs before age 65, when Medicare eligibility starts. Some health care experts have even called for expanding Medicare eligibility to younger retirees.
Taxes. Obama has promised to eliminate income taxes for seniors who make under $50,000 a year -- but I'm not betting that this will happen. Even advocates for seniors have given the idea lukewarm reviews; most low and moderate income seniors already pay no taxes, and more affluent seniors wouldn't see relief since they may be asset rich but have current income under $50,000.
Long-term care. Obama has recognized problems with the financing and quality of long-term care, and has said he wants to improve care options by training more nurses and providing more non-institutional care options.
Mark Miller is a journalist who writes the weekly column Retire Smart, which appears in more than 30 newspapers around the U.S. RetirementRevised.com is the companion Web site of Retire Smart. This article originally appeared on RetirementRevised.com and is reprinted with permission. |
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Elder Law Associates PA is a boutique elder law firm that practices exclusively in Medicaid and long term care planning including long term care insurance, Medicaid applications, home and community-based Medicaid waiver services, diversion program benefits, nursing home benefits, spousal refusal applications, and Medicaid fair hearings and appeals; nursing home and assisted living facility residents' rights litigation; asset preservation planning with a special focus on planning in light of the Deficit Reduction Act of 2005, including personal service agreements, the purchase of life estates, income producing real estate and spenddown planning; disability planning, including special needs trusts and guardianship; estate planning, including wills and trusts and advance directives; and probate, which encompasses estate and trust administration as well as litigation.
We assist clients in planning for the possibility of disability, incapacity, home health care, assisted living and/or nursing home placement. Our firm enables clients to avoid impoverishment caused by the escalating cost of long term care, to maintain their right to make health care decisions and to avoid unnecessary medical treatment.
We hope you have enjoyed The Elder Law Update. If you have questions about something you read, elder law matters or issues concerning persons with disabilities, we would be delighted to hear from you. We serve as an elder law resource to many professionals and organizations and want to become your elder law resource as well. You can reach us at Info@ElderLawAssociates.com.
Warm regards,
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Ellen S. Morris, Esq. & Howard S. Krooks, Esq., CELA
Elder Law Associates PA
phone: (561) 750-3850 / (800) 353-3752
fax: (561) 750-4069
This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client. |
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