Tom Sammons: Elder Law

Thu, 11 Sep 2003 11:08:46 GMT

Truth about Annuities

Many clients buy annuities. I think it is fair to say that most clients do not understand the annuities and, in many cases, the annuity purchase was an inappropriate choice. In my opininion annuities are appropriate when:

1. The client wants to save more for retirement and already puts the maximum in his or her IRA/401k;

2. The client is in a high tax bracket and wants to reduce taxes;

3. The client won't need the principal for quite a long time and the annuity makes up a small portion of the client's total investments.

I have one client who paid no income tax, was 85 years old, had been retired for 20 years and purchased 4 annuities with all of her liquid assets; her only other assets, after the mass annuity purchases, were her condo and a checking account. The annuities were "unsuitable" for her, but were perfect for the annuity salesperson who netted at least $20,000 in commissions.

See the annuity truth web site for some interesting reading on annuities and whether one is right for you

Thu, 31 Jul 2003 17:24:35 GMT

Assuring that Boomers Inherit Houses or Care for the Poor?

An interesting editorial in the Seattle Times talks about the common practice of a client putting money into his or her home for improvements(the home and all improvements are exempt and need not be sold to pay for the owner's long term care in Washington state) and asks whether it is good public policy or not to let people keep their homes while getting medicaid?

Read the article by clicking here

My personal opinion is that a person's home should be exempt from medicaid laws (meaning it does not have to be sold and the proceeds used for the person's care). In reality, it is usually too expensive for the heirs to pay for the upkeep of the home for an indefinite period. Many times the high cost of maintaining the home means it must be sold, but the family should not be forced to sell the home. Just my opinion....

Wed, 16 Jul 2003 01:24:13 GMT

One of the Best Elder Law Sites on the Internet

In my opinion www.elderlawanswers.com is one of the best elder law site on the internet. It has general information on estate planning, medicaid planning, and an interactive section in which an elder law attorney answers questions for the public.

There is a simple, but very useful, Half-a-loaf calculator that I use frequently. (Half-a-loaf is a medicaid gifting strategy in which a person, usually already in a nursing home, gifts some of their assets, knowingly creating a penalty period, but saves the rest of the funds to private-pay in the nursing home until they can apply for medicaid-- after the penalty period expires- whew, that was a mouthful..) The half a loaf calculator is very helpful, as is the site itself.

Tue, 15 Jul 2003 02:09:53 GMT

Medicaid for Those Between Home and a Nursing Home

There is a fairly new program called the Supportive Living Program. This is a program that "waives" the requirement of skilled nursing care normally required for medicaid. It allows low-income seniors to qualify for medicaid-paid "assisted living," where they otherwise would not qualify because of lack of medical need (medicaid otherwise requires full-time nursing care). The senior must have income of about $900.00 per month; all but $90 of which goes to Medicaid. The "asset" levels are the same as regular medicaid ($2000.00 cash, prepaid funeral, a car etc.) It can be a great alternative for a senior who needs day-to-day help and can't stay home alone anymore, but doesn't need the care of a full-time nursing facility.

See http://www.state.il.us/dpa/html/slf_provider.htm for more information.