Bob Carlson

Article / Updated 06-06-2023

You may want to consider a long-term care policy when planning your finances after 50. Most states participate in a program known as the Long-Term Care Partnership Program. The purpose of the program is to encourage people to purchase private long-term care insurance that meets requirements established by the state. If you live in one of these states and purchase a qualified long-term care policy and keep it in force, the Long-Term Care Partnership Program offers you two key benefits: The program increases the amount of exempt assets you can own and still be eligible for Medicaid. Your beneficiary’s estate may be exempt from the estate recovery process. Suppose you live in a state that participates in the Long-Term Care Partnership Program and you purchase a long-term care insurance policy providing maximum lifetime benefits of $100,000. You enter a nursing home and after a couple of years use up the insurance benefits and apply for Medicaid. The state will allow you to keep up to $100,000 of assets in addition to other assets allowed under Medicaid. In addition, all or part of your estate may be exempt from the recovery process.

Article / Updated 05-03-2023

When you're financial planning after 50, you may be faced with lots of Medicare questions. Medicare is administered and enforced by the federal Centers for Medicare and Medicaid. Chances are you have questions about Medicare, and finding answers can be a challenge, especially if you don’t know where to look. Here is some advice: Through the Medicare office: You can ask questions and order publications by calling 800-MEDICARE (800-633-4227). You can also find a wealth of information at the website medicare.gov. Two of the best sources of information are the publications Medicare and You and Guide to Health Insurance for People with Medicare. You can download these, and other publications, free from the site; you can also order free copies by calling the toll-free number. Through your state Office of Aging (or its equivalent): States also offer help and information about Medicare. Each state has an Office on Aging, which offers free counseling, seminars, and literature. Most state agencies regulating health insurers publish a booklet listing the premiums charged on policies by different insurers in the state and offer this information on their websites. A state’s corporation commission or insurance department usually is the appropriate agency to contact. The agencies also should have information on the financial condition of insurers selling policies in the state.

Article / Updated 03-26-2016

Copyright © 2016 Eric Tyson and Bob Carlson. All rights reserved. You will need to think about tax returns when planning your finances after 50. Many gifts must be reported to the IRS on Form 709, the gift tax return. The gift tax returns filed over time track your use of the lifetime credit, and taxes are due when the lifetime gift tax credit is exhausted. Here are key points to know about filing gift tax returns: Gifts must be reported on Form 709 in the following situations: When they exceed the annual exclusion amount ($14,000 in 2015) — even if they aren’t taxed (because of the lifetime gift tax exclusion or for another reason). When a married couple makes a joint gift that qualifies for the annual exclusion. Each spouse must file a return consenting to the split gift. When each spouse makes separate gifts that don’t exceed the annual exclusion, no return is required. (Though, you probably want to file a return anyway.) When a gift is made that’s less than the annual exclusion amount but isn’t of a “present interest” (and as a result doesn’t qualify for the annual exclusion). You should file gift tax returns any time the value of a gift is estimated. A gift tax return is not required when parents or guardians spend for the legal support obligations of minors. Such expenses include food, shelter, medical care, and clothing. The IRS can challenge the value placed on gifts. It has three years after a gift tax return is filed to challenge the value placed on a gift. The statute of limitations is six years if the value is understated by 25 percent or more. When you don’t file a gift tax return, the IRS has no time limit. The value of the gift can be challenged at any time, even after your death. And keep in mind that with estate audits, the IRS often looks at all lifetime gifts. When the statute of limitations isn’t running, the IRS can challenge a lifetime of gifts and assess much higher estate and gift taxes. You may want to file a gift tax return even when one isn’t required. It provides you peace of mind that you won’t later be audited for valuing your property or assets incorrectly. Suppose, for example, you give property. You must place a value on that property to determine whether the gift is taxable. When you give a publicly traded security (for example, stock or mutual fund shares), assigning a value is easy. After all, a public price is published for that day. When the gift is of other property, such as ownership of a small business or real estate, the value is debatable. The IRS likes to challenge values placed on such gifts, arguing they’re worth more and are taxable. So filing gift tax returns for gifts of non-publicly-traded property is audit insurance. Keep copies of all your gift tax returns and the documentation of how the values were determined.

Article / Updated 03-26-2016

Copyright © 2016 Eric Tyson and Bob Carlson. All rights reserved. Long-term care (LTC) generally refers to any assistance you may need with your day-to-day living. When planning your finances after 50, you may need to consider your options. The forms of long-term care — independent living, home care, assisted living, and nursing home —depend on the level of assistance you need. As you consider LTC when you’re putting together your retirement plan, it may help to have some background information: The concept of long-term care (LTC) is relatively new and still evolving. The first nursing homes in the United States probably were formed in the 1950s. Nursing home care and LTC used to be interchangeable. Later in the 1980s, assisted living facilities took root in the U.S.; home care became more structured about the same time. Long-term care insurance (LTCI) didn’t become a mainstream consumer product until the 1980s. LTCI policies have been around only a few decades. The early policies earned a bad reputation because limited definitions of coverage, a high percentage of declined policyholder claims, and substantial premium increases turned off consumers. As a result, a small percentage of those age 50 and older own LTCI. Things improved for a period. Policy terms generally were standardized. There was less confusion about covered care and few significant premium increases — at least among insurers that had been offering the policies for years. The most widely used definition of long-term care focuses on the activities of daily living (ADL). The ADL are dressing, bathing, eating, walking, and using the bathroom. A widely-used standard states that a person needs LTC when they require assistance with two or more of the ADL. LTC isn’t restricted to medical care. It usually is a combination of medical care and personal assistance. LTC can range from cooking, cleaning, and dressing to physical therapy, skilled nursing care, and administering medication. The phrase “long-term care” can be misleading, because a person could need help with ADL for a relatively brief period while recovering from an injury, illness, or surgery.