Planned Assets CTO

Selecting a Care Facility: Assisted Living Homes

What is assisted living?  Assisted living is for adults who may need help with everyday task or feel it is time to live in an environment where help is available if needed, but over the past few years many of these facilities leaving the old definition of assisted living facility behind.  I some regards assisted living facilities are changing into villages or are a part of a retirement community of seniors living together for many reasons, but with resources to provide care at every level.  Many individual moves to assisted living because they are tired of living alone or they no longer want the day to day task of taking care of a house.  In many cases both the husband and wife move into an assisted living facility well in advance of need.  In this case the couple may even buy a condo within the facility and then pay for services as needed.  Within these same facilities, facilities may be available for visitors of a resident for a limited period.  But the traditional sense of assisted living is a facility catering to the individual that may need help with dressing, bathing, eating, or using the bathroom, but they don't need full-time nursing care.    

Assisted living facilities have a wide range of costs depending on service provided, but again in the traditional sense the basic assisted living facility cost less than nursing home care, but is still fairly expensive.  Individual assets, life insurance,

long-term care insurance even mutual funds will be used to cover costs. Medicare does not cover the costs of assisted living in some cases part are all of the cost may be covered by Medicaid. 

Some assisted living facilities and communities have become specialized for specific problems such as Alzheimer’s, there is one in Tomball.

As assisted living facilities and communities have evolved from their initial reputation more for profit facilities become available, quality improves and ROI for investors has become positive and interesting.  Assisted living facilities unfortunately are not available for everyone.  Using data based on 71 of the larger facilities in Texas, provided by AssistedLivingFacilities.org, the average cost of assisted living in Texas is $3,100 per month.  Actually costs range from a low of $1,000 to a high of $7,600 per month.  Increase of cost for assisted living facilities slowed in 2009 reported as less than 3.0%.

What’s available in our area: The Houston area has several assisted living and senior care options with varying degrees of service and amenities.   Houston, Texas is the largest city in Texas with 2,034,749 residents. Of this population, there are 176,325 residents who are over the age of 65. This number represents 8.7% of the population of Houston, which is slightly lower than the national average of 12.5%. However, the number of seniors in Houston will most certainly grow in the coming years, so will the need for assisted living and long-term-care options. (AssistedLivingFacilities.org)

Selecting a Care Facility: Nursing, Assisted Living or Home Health Care

One of the most difficult tasks we, as children, face is making the decision to move a mother or father, even ourselves, into a care facility, nursing, assisted living or using home health care.  As it becomes more difficult to manage the care of a parent or loved one the question becomes what do I do and where or what is best.

What do I do is a personal question base on personal observation, consultation with their doctors and perhaps a professional working in Elder Care.  Of course the question that jumps out is what is affordable? National median cost of skilled nursing care has risen to $222 per day or $81 to $87,000 per year and assisted living is at $3,300 a month.  Although Texas is somewhat lower it is still growing faster than inflation.  Even Adult Day Care is becoming unaffordable with cost like $61 per day and the national daily median hourly rate for licensed home-health aid services is up to $19 an hour.

Your first step is obtaining as much information as possible and a good place to start is the National Association of Home Care (NAHC).  NAHC is the nation’s largest care trade association.  NAHC has an extensive website of information for consumers to refer to in their search for help. {www.nahc.org}Additionally, doing a web search, state and location specific, can generate a lot of good information.

As is always the case, when looking for good reliable help nothing can replace doing your homework, visiting locations, talking to staff and family members of service users or residents. Again, using an Elder Care specialist to work with and for you will save you from a bad experience, time, and money.

Whether planning for a parent, loved one or yourself this is a project you may find over whelming aside the emotional trauma and should not be tackled alone.  After starting your research and getting some idea of the breath of the problem developing a team is the best approach.  If you have a financial consultant he/she should already be involved.  If you don’t have one, get one.  Then you need an Elder Care professional and an attorney, preferable one work with Elder Care.

Social Security: Part D Surcharges

If you’re a high-income Medicare beneficiary {Single Individual with AGI above $85,000 or married above $170,000} you are aware you can lose your part D pharmacy coverage over an $11.60 to $66.40 a month payment you haven’t made?  For those insured by Medicare Advantage plans you can lose the whole plan. 

In 2011 our government started imposing a surcharge for Medicare beneficiaries with high adjusted gross incomes, similar to the Part B surcharge instituted in ’07.  Even though you paid the premium for your Part D plan, the Centers for Medicare and Medicaid Services (CMS) sends a separate monthly bill for the surcharge to these Medicare beneficiaries not yet enrolled in Social Security.  [Social Security beneficiaries have these charge deducted from their benefit checks.)

April 1st ended the three month grace period which started January 1st with close to 1,000 beneficiaries being disenrolled from their Part D plan or Advantage plan.  Beneficiaries dropped from Part D have 60 days to call Medicare (800 633 4227) to ask for reinstatement.  Of course all back surcharges must be paid if CMS allows reinstatement.  Those on an Advantage plan should first talk to plan administration before calling.

If you are not reinstated, Medicare open enrollment starts October 15th with coverage to begin I January of 2013.

Thinking of converting assets to or establishing a Roth IRA? Roth IRA’s are a consistent recommendation by the financial press and financial planners.  Predominate value of the Roth is future tax avoidance, but it is not for everyone.   For those at a younger age and who qualify, developing a Roth IRA in concert with other planning makes inordinate sense.  But those close to retirement must contend with current tax ramifications of moving taxable money into a Roth.  Converting assets to a Roth IRA will legally allow you to keep more of your nest egg and move your IRA from forever taxed to never taxed, even when passed to your heirs.

When considering establishing a Roth, the first rule is prudence!  Your money can grow tax free well into your 70s, 80s or beyond unaffected by RMDs. (Required Minimum Distributions)  But considering current real income tax cost, will future projected growth of converted assets reward you sufficiently to warrant the change?

Prior to establishing or converting to a Roth, advice from you CPA is prudent.

Recharacterization:

Tax time is a good time to determine if your Roth Conversions should be recharacterized back to a traditional IRA.  If switching back to a standard IRA now makes more sense file for an extension and you will have until October 15th to complete the recharacterization or pay tax due for moving to a Roth, but you should be discussing this with your tax professional. 

Moving assets is not the only tax play available to have tax free income, not have to bother with RMDs and pass unused assets to the next generation.  

Is now the time to have a conversation concerning your plans for retirement income and how you can develop a retirement income you can count on?  Time is not on your side concerning retirement planning; regardless of when you plan for retirement it will get here before you know it.  A conversation with us today could save tomorrow.  Please call us at 888 270 9870 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it. , today!

Many if not most individuals are confused with the term “Living Will” or had it miss represented.  Do you know what a ‘Living Will’ is, do you have one?

A Living Will has nothing to do with estate planning but much to do with your medical care and or end of life; A Living Will is a Directive to Physicians and Family or Surrogate; at the minimum expresses your wishes about whether you do (or do not) want life support systems or heroic actions to be used in the event you are dying, with little or no hope for recovery.

In context of estate planning a ‘Living Will’ is often a miss labeled title for Revocable Living Trust.

The Revocable Living Trust (RLT) may be classified as a Will substitute, which may accomplish many estate planning objective better than a Will.  However, while the RLT will remove assets from probate charges it will not remove the asset from estate tax consideration.  Value of the asset is still estate taxable and may receive a stepped up in biases on the death of the grantor.

Revocable Living Trust (RLT) Value:

1.Allows for effective management transfer in the event of mental or physical disability, as well as eliminating or avoiding conservatorship proceeding for assets within the trust.

2.At death of the Grantor assets within the trust are handled under powers of the trust, which is now an irrevocable trust.  As such, the assets do not enter probate and cost is avoided.

3.Although any document may be challenged in court after death, an RLT now an irrevocable trust is less successfully challenged if correctly established.

4.Any Will is publicly filed an open to public observation, RLT or Irrevocable Trust are not thereby providing confidentiality.

5.The RLT may help in handling administration of out of state assets such as property.

RLTs do not abrogate the need for at least two other ‘estate planning’ documents.

1.A Will or better yet a ‘pour over will’.  Among the several things RLTs may not do is designate the guardian or trustee of minor children.  Appointing a guardian or trustee must be accomplished through a Will and is subject to the court’s approval. 

2.“Durable’ power of attorney; there is considerable difference in a power of attorney and a durable power of attorney.  In relation to the RLT, the durable power of attorney will allow the appointed representative to act for and in place of the grantor if the grantor becomes disabled.

Several years ago, more like 20, Revocable Living Trust became an item often recommended by financial/estate planners and much marketed by many attorneys’, at considerable expense and time.  As effective as RLTs are, they are not for everyone.  First there is a good deal of paperwork in transferring assets to the trust.  Secondly expense and management of the trust may be more than it’s worth.  As with any planning device, it is wise to evaluate actual cost, financial, time and effect.  

Before transferring real property to any trust obtain the advice of a real estate attorney.  Personally, I do not advocate maintaining real property within a trust in most situations.

Establishing an RLT for partial care or distribution of assets may be very effective for some in estate planning, possibly lowering estate value where it may be handled under summary probate and unsupervised administration.  However, an RLT is only one part of effective estate or retirement plan.  In the course of my practice I often have discussed RLT’s and even involved some planning, but for the most part we and my clients lawyer decided to drop the idea.  In the late ‘90s individuals watching late night TV were impressed by other than righteous attorneys that RLTs could solve all estate problems but close investigation, financial professionals and better attorneys often disabused them of the idea.  However, it effectively motivated many to do much needed planning; would this concept be solve certain problems for you—perhaps/perhaps not?

Is now the time to have a conversation concerning your estate and how you can develop an effective estate plan you can count on?  Estate planning is not just about saving estate taxes.  Time is not on your side concerning retirement planning; regardless of when you plan for retirement it will get here before you know it.  A conversation with us today could save tomorrow.  Please call us at 888 270 9870 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it. , today!

Enrollment:  If you or your spouse (or family member if you’re disabled) is still working and you have health coverage through that employer or union, it in your best interest to contact your employer or union benefits administrator to find out how your coverage works with Medicare.  For some small business employees this may mean talking with the owner and/or the agent working with the business.  For teachers this will mean making an appointment with the districts administration office and then taking time off to meet with them.

If you have the above referenced coverage you may not need to enroll in Part B and may do so without fear of penalty.  Once you retire, are laid off, leave employment or your plan is terminated you have up to 8 months to sign up for Part B without a penalty.  This 8 month period will continue whether or not you choose COBRA coverage.  COBRA coverage does not stop the penalty clock from running.  If after 8 months on COBRA you have not enrolled with Part B you may face a penalty and increased premium. 

Individuals with TRICARE (insurance for active-duty military or retirees (medically retired) and their families), you must have Part B to keep your TRICARE coverage without a break.  TRICARE requires you to enroll with Part A & B not late than the month before you turn 65 to maintain TRICARE without a break.  When you turn 65 your TRICARE becomes TRICARE for Life and fills the Medicare gaps in a manner similar to Medicare Supplement Insurance.  If your dependents are not yet qualified for Medicare, they will remain with TRICARE.  For questions contact the TRICARE administrator in your region.

Cost: Medicare Part B is paid for by premiums paid by members and the Federal Government.  If you are receiving Social Security benefits your premium may be drawn from your Social Security benefit otherwise you will normally receive a quarterly bill from U.S. Department of Health & Human Services Centers for Medicare & Medicaid Services (CMS).  One advantage to have your premium paid from your Social Security benefits is that your premium may not be increased in years that Social Security benefit are not increased.

October 27, 2011 HHA Secretary Kathleen Seblius announced that for 2012 Medicare Part B premiums would be lower for those not having their premium paid by Social Security and those paying by Social Security would catch up to a standard monthly premium of $99.90.  This decrease was allowed by decreasing cost allowed doctors and hospitals (perhaps decreasing the number of doctors accepting Medicare in the future), increasing the cost of Medicaid for the states (increasing taxes) and sense 2007 requiring those with Modified Adjusted Gross Income above $85,000 (single) and $170,000 (married) to pay ever increasing monthly premiums, in 2012 the standard premium of $99.90 + $219.80 (penalty for doing well) for the same coverage.  Premiums are based on previously filed tax returns of two years past, this year 2010 tax returns are used.

With the ever increasing cost of Health Care no doubt the cost of Medicare Part B will continue to increase.  Because of this there are several programs to help those who no longer can afford the cost of their Medicare coverage.  One such program is the Medicare Savings Program provided by each state, in Texas the Health Information Counseling and Advocacy Program (HICAP) phone 1-800-252-9240.

For questions concerning Medicare you should contact your local Social Security office.  Depending on information from other sources such as AARP will not excuse you if it incorrect.  For questions concerning Medicare Supplement Policies or your current health insurance please call (888 270 9870) or email ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ). 

3.7.12

Medicare Insurance: Part B, Eligibility & Enrollment (1)

Eligibility: If you are entitled to premium-free Hospital Insurance (Part A) having been enrolled through Social Security or manual enrollment or if you are paying  premium for Hospital Insurance (Part A) for the working disabled under Medicare, then you are eligible to enroll in Medical Insurance (Part B).  All Social Security and Railroad Retirement beneficiaries, age 65 or over, are automatically eligible to enroll in Medicare Part B Medical Insurance.  But any person age 65 or over may enroll in Medicare Part B if he/she is a resident of the United States and is either (1) a citizen of the United States or (2) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the five years immediately prior to the month in which he/she applies for enrollment.

Workers receiving disability benefits under the age of 65, widows age 50 to 64, and children under age 18 or who were disable prior to 22 and have received disability benefits for at least two years may obtain coverage the  same as persons age 65 or over.  Employed persons who are employed but are not medically recovered and whose disability benefits are terminated may retain coverage for an additional 48 months.  If this is trial employment, benefits are paid for the first nine months of the work period and then for an additional three months.  After 48 months and with continued disability coverage is available the same as for non-insured persons 65 or over.

Medicare Hospital Insurance (Part A) alone or with Medical Insurance (Part B) may be retained as long as the individual remains disabled.  Disabled individuals do have an initial enrollment period beginning the month after notification they are no longer eligible for Social Security paid Hospital Insurance (Part A) and remains open for seven months thereafter.  Failure to enroll at this time closes the initial enrollment period but the individual may subsequently enroll during any general enrollment period or during a special enrollment period. 

Enrollment: As with Part A, persons already receiving Social Security or Railroad Retirement benefits will be enrolled automatically when they become eligible for Hospital Insurance (Part A).  Individuals may elect not to be enrolled in Part B, not Part A, at this time by completing a form which will be sent to them at the time they become qualified for enrollment.  Those not receiving not receiving Social Security or Railroad Retirement may enroll by contacting their nearest Social Security office.

Enrollment period without penalty is for a full seven months starting with the first day of the third month before the month a person first becomes eligible for enrollment.  The initial enrollment period terminates the last day of the third month after the month a person becomes 65 and is eligible to enroll.

Generally those failing to enroll at this time without appropriate will have to wait until a general enrollment period and may face a penalty due to their failure. 

For questions concerning Social Security you should contact your local Social Security office.  For questions concerning Medicare Supplement Policies or your current health insurance please call (888 270 9870) or email ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ). 

As previously discussed, [Medicare: Do you know Part A, Enrolling] Original Medicare consists of Part A (hospital Insurance) and Part B (Medical or Outpatient Insurance)

You are required to individually apply for Medicare unless you already receive Social Security and enrollment is automatic.  Most individual should enroll for part A as soon as qualified other than those with HSA health savings plans through their employer and who want to remain on the group HSA plan. {If you enroll or are enrolled automatically, you cannot continue contributing to you Health Savings Account}

Benefits provided by Medicare part A is not without cost.  As with your Health Insurance before going to Medicare there are deductibles and copayments when receiving care.

Medicare part A benefits are measured in benefit periods as opposed to the annual deductible of your current health insurance.  Unlike you private or group health insurance it is possible to have more than one deductible during the year.  The hospital deductible for 2012 is $1,156 and covers most (not all) cost during the first through sixtieth day of treatment as an inpatient. {Not all overnight stays are classified as inpatient, so check with your doctor.} Day 61 to 90 require a copay of $289 (2012) per day and day 91 through 150 requires a copay of $578 per day. (Day 91 through 150 is reserve days and you only have 60 of these, lifetime.) 

Cost is based on benefit periods and periods start on the 1st day coverage is provided ending when you have not received skilled impatient care in any facility for a consecutive 60 days.  If you return for skilled inpatient care after the 60th day a new deductible is required and the period starts anew.  However, if you return for skilled inpatient care during the 60 day period after release, you continue under the former claim and no new deductible is required, but you may be required to pay copays.

Part A covers Skilled Nursing care Facilities but requires 3 days (72 hours) of prior inpatient hospitalization.  Medicare pays 100% of cost for the first 20 days, followed by a copay of $144.50 per day for any additional day up to 100.  {Medicare does not cover custodial care}

Part A provides Home Health Care: If a person requires post-institutional skilled health care at home, Medicare will cover some of the cost on a limited bases.  Part A Hospital Insurance covers a maximum of 100 home health visits made on an intermittent basis.  Care must be certified as needed, skilled nursing or therapy services are required and services are provided by a Medicare certified home health agency.

Hospice or end of life care is the last function of Part A Hospital Insurance:  Medicare through Part A Hospital Insurance recognizes the care required by the impending death of an individual.  Hospice is not considered treatment but care to make the patient as comfortable as possible with the goal of maintaining continued life with minimal disruption to normal activities while remaining in the home.

Hospice benefit periods consist of two 90-day periods followed by an unlimited number of 60-day periods.  The patient must be re-certified that he/she is still terminally ill at the beginning of each 60-day period.  During Hospice care there are no deductible and patients do not pay for Medicare covered services except for a 5% or $5 (whichever is less) copay for cost of outpatient prescriptions.

Impatient respite care is also provide, the patient is charged 5% of the amount paid by Medicare per respite care day.

Having a Medicare Supplement policy sold by a private insurance company fills in the out of pock cost gaps of Medicare part A.

If you would like to have a conversation concerning your current health care coverage, Medicare or Medicare Supplements, call (888 270 9870 or email ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ).

Medicare coverage is available for many more people than those turning 65.  And if you have significant medical problems such as Lou Gehrig's disease, kidney failure, and some other disabilities you may want to investigate availability of Medicare.  

Part A (Medicare Hospital Insurance) and Part B (Medicare Medical Insurance) combine to form, since 1998, comprise what is known as the Original Medicare plan. Part A & B is traditional fee-for-service Medicare plans, in that a patient has some free choice regarding medical care.

Medicare Part A, Hospital Insurance, is financed directly through Social Security taxes.  You are eligible for premium free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years.  If you (or your spouse) did not pay Medicare taxes while you worked, and you are age 65 or older and a citizen or permanent resident of the United States, you may be able to buy Part A. {Other qualification may exist, if you meet age or have medical problems you should check} {Social Security offices provide Medicare information and forms.}

You may enroll in Medicare up to 3 months before the month you turn 65 you still have 3 month after the month you turn 65 but your start date will be delayed.  This period is known as the initial enrollment period.  If you fail to enroll during this time you will then have to wait until the following January through March to enroll and coverage will not start until July. 

If you’re already getting Social Security checks, enrollment into Part should be automatic.  You should receive your Medicare card three months before your 65th birthday.  If you enroll prior to the month you turn 65 or you’re enrolled automatically your benefits start on the first day of the month you turn 65.

Even if you keep working after you turn 65, you should sign up for Medicare Part A assuming you have group health insurance and your group is larger than 20.  [With some small businesses where there are more than 20 employees the group still may not include more than 20 employees.  Not knowing will cost you increased premium the rest of your life if you do not know and do not sign up for Part B.  It is up to you to ask your employer.]  If you have health coverage through a group larger than 20 Part A may help pay some of the out of pocket cost not covered by your group plan.  For smaller business Part A & B become the primary payer and your group health insurance becomes the secondary payer.

Military Retirees covered by TriCare:  Your TriCare coverage stops on the first of the month you turn 65.  If you have not enrolled in Medicare and TriCare is your primary coverage you will have no coverage until you enroll with Medicare Part A & B.  You must also contact TriCare and switch from TriCare to TriCare for Life, which becomes you Medicare Supplement.

If you have reached an age or medical condition where a conversation about continuing health care would help or have questions about your current health care call (888 270 9870) or email ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ).

Most Americans fail to recognize their limited Money Management skills and inability to focus what little free time is actually allotted to planning their financial future.  Because of lack of time, information or ineffective planning, money trickles out of income continuously, unnecessarily and unknowingly reducing savings and life style.

While increasing rates of return on saved assets is always helpful the associated increase of risk is not.  Today, many people are investing more aggressively in hopes higher returns will recover lost earnings or close a savings gap.  To close a savings gap or increase wealth accumulation, most financial professionals recommend maximizing the tax-efficiency of your portfolio, reviewing your asset allocation, and of course, “saving more and spending less.”  Always good advice, but you have taken these courses of action to the best of yours and your advisors capability and find it is not enough.  Now, apparently your only option is to spend less and reduce your standard of living or ramp up investment risk in hopes higher returns will close the savings gap.

Instead of searching for the perfect investment formula; we find the greatest potential for wealth accumulation is not higher return on your investment, but finding those places where inefficiency and resultant opportunity cost drain away income for savings and life style.  We call this drain “Wealth Transfers”; defined as unnecessary and unknowingly transfers of income out of the family.  It is not unusual to find wealth transfers of 15, 20% or more of earned income within a family.  We think stopping wealth transfers and redirecting part to saving and part to life style is more effective, safer and satisfying than taking additional investment risk.

We are Planned Assets and we would like to have a conversation with you about a subject you or your financial advisor may not be familiar with, Wealth Transfers.  Everyday wealth transfers erode saving and reduce life style by stealing income from Americans.  Saving 10, 15, even 20% of income due to wealth transfers is more effective and safer than increasing rates of return. 

If spending a small amount of time having this type conversation makes sense to please register at [link], call (888 270 870) or email ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ) Hubert W. McMinn.  There is no cost for the conversation just a small investment of your time and the return could be significant.

Wow,

What a great year! Planned Assets has had a great decade despite the economic downturns of late and is excited to unveil our new website and financial information hub/blog.

As the senior CTO (Chief Technology Officer) for our company you can imagine the excitement of our expansion. We look forward to offering more indepth informational and fiscal planning than we have ever offered.

In the months to come our goals are to expand our consulting division and add 10,000 new families and business to our investing family.

We look forward to serving you!

Sincerely,

Michael H. Twigg M.Ed. - CTO