Following is an article I wrote for Ellenbecker Investment Group, Inc. I thought many of you might find it useful (and do not forget to gather your financial information throughout the year in order to help avoid tax time stress!):
Are you or a family member paying for assisted living or skilled nursing care? All or a portion of these expenses may qualify you for a medical expense deduction on your personal tax return! First, in order to itemize taxes using Form 1041 – Schedule A. Medical expenses exceeding 7.5% of your adjusted gross income qualify for the deduction. You might be surprised at the wide variety of deductions available. Take a look at the following list, and if any of the items apply to you, consult with your accountant or attorney. Allowable deductions include:
Medicare Part B and D premiums; long-term care insurance premiums for qualified policies; ambulance bills; annual physical exams; eye exams; glasses; surgery; hearing aids; artificial limbs; artificial teeth; bandages and medical supplies; oxygen; wheelchairs; body scans; x-ray costs; diagnostic services; car mileage to and from medical appointments; transportation to and from medical care such as bus, taxi, train fares; dental treatment; drugs (prescription, not over-the-counter); home care; hospital care; nursing care; personal care; assisted living facilities and nursing homes (includes the cost of meals and lodging if the principle reason for being there is to get medical care, and if the reason is not personal); advance payments for lifetime care (a nursing home deposit); capital expenses to install special equipment in your home for medical care (i.e. wheelchair ramps, installing grab bars, lowering cabinet doors, grading the ground outside the home to provide better access).
With health care costs continually rising, it benefits you to take the time to document the previous listed expenses and run the calculations. This is especially true for those on a fixed income. Whether your deduction is hundreds or more, ever little bit helps! Take the time to save your documentation!
February 4, 2012 – 9:45 am
Years ago, one of my closest friends gave me the best piece of advice I ever received and I am offering the same advice to my readers. My grandmother, who lived alone, was having health issues and had been in a rehab facility for some time. Eventually, after she returned home for awhile, it was determined that she needed assisted living, and then hospice.
This was a new situation to me and I did not know how to react or what to do. My grandmother lived a state away, in Illinois, and it seemed that every minute of mine was filled with managing my law practice and dealing with my daily life. My friend told me that the coming weeks would be a period of time in my life that I would never get back. She told me to spend it wisely. I listened to her advice. Each and every weekend I dropped anything and everything I was doing and I drove to Illinois to visit my grandmother.
I had wonderful visits with my grandmother. I knew the visits meant alot to her, and they meant alot to me. Not being one for telling people how I feel, I also wrote her a letter telling her how much she meant to me and why. After she passed away, it meant a great deal to me to hear that she kept my letter in the night stand next to her bed. I know that she read the letter and I know that she knew how I felt about her. Knowing that gave me a true sense of peace.
Of of the last things my grandmother said to me was, “Joanne, you need to write.” Well, Grandma, I am doing that now, and I honestly can’t think of anything better to write about than how much you meant to me, and how happy I am that you knew it. I am happy to pass on some of the best advice I ever received.
Happy birthday, Grandma, on the 25th day of February.
February 4, 2012 – 6:13 am
GETTING BACK ON THE HORSE! Well, every spring it’s bound to happen. My horse is 17 years old, but he doesn’t act like it. Every spring the warmer air causes him to get a special “spring” in his step (pun intended) and often he will buck! While riding last weekend, he bucked, and I found myself sailing through the air. Mid-air, I thought, “I hope this ends well!” Thankfully, it did! I had a soft landing, some sore muscles the next few days, and a bruised ego, but otherwise, I was still in one piece! Nonetheless, after this incident, I took the opportunity to do what all of us should do on a fairly regular basis: I reviewed my Last Will & Testament and my powers of attorney. None of us can predict when accidents happen! The best thing about reviewing your estate planning documents periodically is to know that you have prepared the best we can. I reviewed my documents, so don’t forget to review yours!
FAMILY CAREGIVER AGREEMENTS
More and more, my clients find themselves either caring for a parent, or a parent client finds themselves in need of care, often provided by a son or daughter. Some clients have sold their homes and have moved in with a son or daughter. On occasion, a child has moved in with a parent to help the parent with care needs. In some instances, the situation involves a son or daughter taking time to buy groceries and drop them off, cook on occasion, and arrange for and drive their parent to doctors appointments, etc. If you find yourself in this situation, I recommend you consider a caregiving contract where the son or daughter is paid a reasonable fee for the care being given to the parent. Caregiver agreements accomplish many goals, including: (1) allowing the son or daughter to be compensated for time he or she is unable to work (or taking time off of work) to provide care, drive mom or dad to the doctor, shop, help with a bath or shower, cooking, dressing, etc.; (2) avoid “gifting” penalties from Medicaid (Title 19 or XIX); and (3) provide a medical expense deduction if the parent otherwise qualifies for Aid and Attendance benefits from the VA.
January 24, 2012 – 7:07 am
I thank the Waukesha Rotary Noon Club for the opportunity to speak to the members yesterday about veterans benefits. I was thoroughly impressed with the club and all that you do. I would also like to thank the veterans in the group for their service – you do us all proud. Regarding the contest: the winner will be the first person to email me and correctly identify the new page I will be adding to the website in the coming weeks. The new page will either be reflected along the top or the left side of the home page. Good luck! Thank you again, Joanne
January 22, 2012 – 7:59 am
MOST COMMONLY ASKED LEGAL DEFINITIONS:
My estate planning clients often ask me to define or explain several terms that are extremely relevant and important to their estate planning process. Following are the terms and definitions:
Personal Representative: a personal representative is the person or entity who settles the deceased’s financial affairs, working through the court probate system. If we are in the process of drafting your will (Last Will and Testament), I will need to know who you nominate to serve in this position. Most spouses nominate each other and then provide me with alternate, or successor nominees. Clients who choose trusts for their estate plan (properly drafted and managed trusts avoid the court probate system) still need to nominate personal representatives for their “pourover wills.” Pourover wills are drafted hand-in-hand with trust documents.
Trustee: a trustee is an individual or entity who sets aside property/financial assets to be used for the benefit of another person or persons, such as children. The trustee manages the property and financial assets as provided by the terms of the document that created the arrangement (revocable living trust or testamentary trust). A trustee is a fiduciary, meaning that the trustee is legally bound to act in the best interests of the beneficiary.
Guardian: a guardian of the person is a person appointed by the court to take care of a minor child (or an incompetent adult). The guardianship will remain in place until the minor turns age 18 (or until an incompetent adult is deemed competent). A guardian of the estate is a person or entity appointed by the court to handle the financial affairs of a minor or incompetent adult.
CHANGE IS IN THE AIR!
Before January 1, 2012, Family Care and Medicaid applications were submitted directly to the applicant’s Economic Support Program in the county of residence. Application processing took place in the same county. As of January 1, the State of Wisconsin’s Department of Health and Human Services re-organized and consolidated the counties into consortiums. Waukesha County is grouped in the Moraine Lakes Consortium, which includes the counties of Fond du Lac, Ozaukee, Washington, and Walworth. Inquiries must now be made through the Moraine Lakes Consortium and not the individual county’s Economic Support division.