If you’re thinking of retiring abroad, and you want to purchase (or have already purchased) long-term care insurance, be sure to read the fine print on your policy. Not all policies cover care in other countries, and even if they do, the benefits are often reduced. For example, one large insurer pays only 50 percent of the nursing home benefit if your care is received outside the U.S.
The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2016. If you itemize your deductions, you can generally claim a deduction if your premiums, together with your other unreimbursed medical expenses, amount to more than 10% of your adjusted gross income (or 7.5% if you’re 65 or older).
The U.S. Department of Veterans Affairs offers a pension benefit to low-income veterans (and their spouses) who are in a nursing home or who need help at home with everyday tasks such as dressing or bathing. The program is called “Aid and Attendance.” Unfortunately for many veterans, the government recently proposed new regulations that will tighten the qualification rules and impose a look-back period and transfer penalties similar to those under Medicaid. As a result of these changes,
A recent court decision may make it easier for seniors to use short-term, immediate annuities to qualify for Medicaid more quickly. In general, people who go to a nursing home must spend down their resources before becoming eligible for Medicaid. If you transfer your assets rather than spending them down (such as by making gifts to family members), that triggers a penalty period during which you’re ineligible for Medicaid benefits, even if you would otherwise qualify.
Two Social Security strategies that many married couples have been using to maximize their benefits are being eliminated, as a result of the federal budget deal that President Obama signed into law in November. In the past, these strategies could be worth tens of thousands of dollars over a lifetime for some couples. The fact that they are being phased out means that many seniors should take action now, before the changes take effect, to reduce the impact.
People who set up trusts for children, grandchildren and other family members have a greater ability to limit the beneficiaries’ right to challenge trustees’ decisions in court, as a result of a new U.S. Tax Court decision. Here’s the background: You may know that you can give up to $14,000 a year to any person without incurring the federal gift tax. But that rule generally doesn’t apply if you put the money in a trust for
If you inherited a retirement account, and if the estate of the person you inherited it from owed an estate tax, you might be missing a big income tax deduction when you withdraw funds from the account. Many people forget to claim this deduction. The deduction applies not only to inherited IRAs, but also to inherited 401(k) accounts, certain stock options and unpaid dividends, pretax gains in certain annuities, and some other assets. The idea is
Did you know that it may be possible to avoid paying immediate capital gains taxes when you sell an investment property? That’s true if you’re planning to sell the property and invest the proceeds in another property shortly afterward. For instance, suppose you own a condo as an investment, and you plan to sell it and use the proceeds to buy another investment property. You might be able to treat the sale and the subsequent purchase
The Federal Reserve has begun raising interest rates. And while rates are still historically extremely low, they’re probably at the start of a long, gradual increase. As a result, you might want to consider some estate planning techniques now that benefit from very low rates … because an opportunity like this one might not come around again for many, many years. Here are some ways to use the current low-rate environment to transfer assets to your
Did you forget to file your 2012 federal income tax return? You’re not alone. The IRS says an estimated one million taxpayers did not file a return for that year, leaving refunds totaling $950 million unclaimed. If you’re one of those taxpayers, you must file a 2012 federal income tax return no later than this year’s April tax deadline. There is no penalty for failure to file if you are due a refund. Contact us for
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