Planning for End of Life Care with Hospice

Contributed by: Sandra Adams, CFP®

I watched recently as a good friend of mine struggled to arrange care for her mother at the end of her life. Her mother struggled with dementia, and after a fall, her health took a severe turn for the worse. It suddenly became clear that she was not going to recover. My friend wanted a quality and pain-free remainder of life for her mother, so she decided to call in Hospice care. Hospice care is a service for people with serious illnesses who choose not to get (or continue) treatment to cure or control their illness. Hospice care focuses on the care, comfort, and quality of life of a person with a serious illness approaching the end of life. It often also includes emotional and spiritual support for both the patient and their loved ones.

Many people hear about Hospice, but if you have never had experience with it, you may have some questions. You might be wondering:

When are you eligible for Hospice Care? Anyone with a serious illness who physicians think have less than six months to live usually qualifies for Hospice Care. For Medicare to pay for Hospice Care, patients must stop aggressive medical treatment intended to cure or control their illness.

When is the right time to start Hospice Care? This is a decision you make with your doctor about your illness and how it is progressing. Still, it is good to remember that the earlier you start Hospice services, the longer they may have to provide meaningful care, and the longer you may have to spend quality time with your loved ones.

Where does Hospice Care take place? It can take place in several settings, including your home, assisted living, nursing home, or hospital.

What services does Hospice provide? Depending on the needs of the patient and family and the patient's end-of-life wishes, Hospice can provide a wide range of services. Services can include emotional and spiritual support for the patient and the family, and relief of symptoms and pain (pain management, therapy services, and many more) personalized to the patient and family.

Before I worked for The Center, I worked for a Hospice. I regularly saw the value of the services provided both for the patients and the families when the end of life was certain. Several of my family members have also used Hospice services, and I don't know how our family would have dealt with the end of their lives without the empathy and compassion of the nurses, doctors, and social workers. If you or someone you know is facing the end of life and prefers to face it with pain management and a quality of life focus, search for a Hospice near you at www.mihospice.org if you are in Michigan or www.nationalhospicelocator.com if you are in other states. If you have other aging planning questions or issues that we can help with, don't hesitate to contact me at Sandy.Adams@CenterFinPlan.com

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author and not necessarily those of Raymond James.

Survival Tips for Caregivers

Contributed by: Sandra Adams, CFP®

It’s no surprise that our population is aging at a rapid pace. Currently, more than 46 million older adults, age 65 and above, live in the U.S.; and this number is expected to grow to more than 90 million by 2050! In any given year, there are more than 50 million people providing care in the U.S., many of whom claim they did not have a choice in taking on their caregiving responsibilities.

I had the privilege of attending the annual Alzheimer’s Association-Michigan Chapter/Wayne State University Institute of Gerontology – A Meaningful Life with Alzheimer’s Conference recently. Much of the conference focused on how to make sure that caregivers are being taken care of, so they can then provide the best care to others. Many caregivers are so focused on those they are caring for that they’ll skip their own doctor appointments (54%) or miss work (65%), which puts them in potential medical and financial harm, as well as risk for caregiver burnout for the sake of focusing on the person they are caring for.

Action Steps to Help Caregivers Survive Burnout:

1. Acknowledge that you matter — take time for yourself!

2. Make a plan for your mind, body, and soul — take time to rest your mind, exercise your body, and feed your soul!

3. Don’t sweat the small stuff — don’t worry about things you cannot control!

4. Stay socially active — take time to do things with family and friends that are not in a caregiving capacity.

5. Find someone to talk to about your frustrations — whether it’s a friend, a caregiver support group, or a therapist.

As a caregiver, you can be overwhelmed with so many responsibilities. You may have a family of your own and care for older adult parents, or you may be caring for a spouse while holding down a job or other responsibilities. Whatever your caregiving role, it is never easy. It is important to remember that you are not in it alone; there are others to rely on and delegate to, whether in health care, financial, legal, or other roles. And it is most important to take care of yourself. It takes a happy, healthy caregiver to take care of others in the best way possible. If you or anyone you know is serving as a caregiver and are in need of support, please reach out. We are always happy to help.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

How to Reduce the Risks of Dementia and Diminished Capacity to Your Retirement Plan

Contributed by: Sandra Adams, CFP®

Senility is what they used to call it and it only happened to the very elderly like our great grandparents.  Surely, not us. We are healthy, educated, and financially well off, so we don’t need to talk about senility or plan for it. THINK AGAIN!

Senility is now known as Alzheimer’s, a disease that accounts for 60-80% of dementia. The statistics are alarming! According to the Alzheimer’s Association, more than 1 in 9 people over age 65 have Alzheimer’s disease. The chances of an Alzheimer’s diagnosis doubles every five years after age 65 (beginning at approximately 5.3% at age 65 and going from there).   If the disease runs in your family, a head injury, hypertension, diabetes, stress, excess weight, depression, and many other conditions increase your risk of diagnosis.

Risks of Not Planning

I don’t need to tell you that losing your memory is a scary proposition. The fact that you could live for years (if you are otherwise healthy) without knowing who you are, where you are, who any of your loved ones are, and not recall your short nor most of your long-term past is frightening.  Even more disturbing is that you also forget how to care for yourself, and your body begins to forget how to function.  Family may be able to assist you at first, but as time goes on professional care is usually needed.  A few thousand per month for at-home caregivers is not out of the question.  As more care is required, the few thousand dollars per month can quickly become five thousand to ten or twelve thousand dollars a month, depending on the level of care needed and where you live. The impact on your financials, if you haven’t planned, can be detrimental.

In addition to the care risks, there are capacity risks.  Those who develop Alzheimer’s or related dementia go through a period (sometimes before their diagnosis or possibly early in their diagnosis) when their capacity is considered “diminished.”  They are not yet considered fully incapable of making their own decisions. In other words, the right to make decisions has not yet been taken from them, but their ability to make decisions is compromised.  In this stage of the game, we are generally watching for behavioral changes in clients:

• Missing Appointments

• Getting confused about instructions/having difficulty following instructions

• Making more frequent calls to the office to ask the same questions

• Trouble handling paperwork

• Difficulty recalling decisions or actions

• Changes to mood or personality

• Poor judgment

• Memory Loss (generally)

• Difficulty with basic financial concepts

Concerns that are more significant can be financial fraud and exploitation. Clients with diminished capacity are incredibly vulnerable to others who try to take advantage of their inability to understand what is or is not real. Unfortunately, 1 in 10 seniors over age 65 are victims of financial exploitation, according to the Government Accountability Office, with losses totaling over $3 billion annually. While most of this exploitation is at the hands of strangers, sometimes family, friends, and caregivers exploit the vulnerable.

Proactive Solutions

Now that I have completely frightened you about dementia and diminished capacity, let’s take a step back and look at what we can and should be doing to plan and protect your plan proactively against these risks.

From a personal health perspective, the Alzheimer’s Association suggests:

• Combined physical and mental exercise

• Continuous Learning

• Social Engagement

• Get good sleep

• Eat a healthy diet (Mediterranean Diet recommended)

From a financial planning perspective, it makes sense to put together a proactive aging strategy as part of your retirement planning to address the potential risks of dementia/Alzheimer’s/diminished capacity on your comprehensive financial plan.  What should this aging strategy address?

•  Legal Documents

• Care

• Finances

• Legacy

Dementia and diminished capacity are scary.  We don’t want to think about a time when we might not remember our names, remember our loved ones, or even recognize our reflections in the mirror. Dementia and diminished capacity can wreak havoc on our families and our financial security if we don’t plan. Take steps today to put together an aging strategy so that you and your loved ones are prepared. Preparation is the best defense!  If you or anyone you know need assistance with this topic, please let us know.  We are always happy to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

Planning Opportunities for LGBTQ+ Elders

Contributed by: Lauren Adams, CFA®, CFP®

For over 35 years, our independent wealth management firm Center for Financial Planning, Inc. has partnered with Raymond James Financial Services to achieve our mission of “Improving lives through financial planning done right.” In addition to providing our clients with custodial services for their investment accounts, Raymond James also offers a wide range of resources to The Center from everything from equity research reports to educational opportunities to stay on top of the ever-changing financial planning landscape.

One wonderful resource example is the Raymond James Pride Financial Advisors Network, a network of advisors serving the Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ+) community that was founded in 2020, and its “Inaugural Business of Pride Symposium,” held in June 2021. At the Symposium, I had the opportunity to attend a session titled, “The LGBT+ Aging Crisis – Planning Opportunities for our LGBT+ Elders,” presented by Dan Steward, National Program Director for the Human Rights Campaign Aging Project, and Sherrill Wayland, Director of National Education Initiatives for SAGE.

In the presentation, Steward and Wayland discussed practical ways for financial planners to address and better serve members of the LGBTQ+ community:

• Recognize the distinct needs of this growing and diverse community: It is estimated that there are over 2.7 million older adults that self-identify as members of the LGBTQ+ community. Citing the work of leading researcher Professor Karen Fredriksen-Goldsen, the presenters explained that within this group, however, there is a wide range of generational experiences: from the oldest “Invisible Generation” that grew up when public discussion of LGBTQ+ issues was unheard of, to “The Silent Generation” that grew up when issues were being discussed but faced heavy discrimination, to the younger “Pride Generation” where many have been out for decades. Recognizing that there are nuances within the community, but also understanding the overarching themes of discrimination and resiliency, is an important component of developing the cultural competency required to best serve these clients.

• Plan, Plan, Plan: I’ve seen firsthand how the benefits of pairing comprehensive financial planning with a thoughtfully constructed, well-diversified investment portfolio that fits the clients’ needs and objectives can be liberating and even life-changing for so many. Working with a financial planner early on can help members of the community develop good financial health and financial security that will position them well later in life. Thoughtful estate planning (including considering if wills, Durable Powers of Attorney for Healthcare and Financial Matters, and living trusts are right for the situation) become all the more critical given that members of the LGBTQ+ community still face legal discrimination in many areas. Proper insurance planning can help manage risks and protect assets, including the potential need for long-term care coverage, over a client’s lifetime.

• Be aware of the elevated risk of financial exploitation and barriers to seeking help: According to SAGE, a significant portion of the elder LGBTQ+ community does not wish to live alone, has shrinking support networks, and may be inclined to seek companionship online. These factors can conspire to put these clients at higher risk of financial exploitation (including online “sweetheart scams”) and elder abuse. At the same time, coming from a place of resilience and self-sufficiency after facing discrimination throughout their lives, LGBTQ+ elders may be reluctant to seek help. They may fear being outed if they need assistance, that they won’t be believed by authorities, the loss of financial support from the abusive person, or the prospect of living alone. Financial planners – who may be some of the most trusted people in the client’s life – must be aware of these concerns and be ready to help encourage reaching out to authorities or seeking assistance if needed.

• Know your resources: In the effort to assist, planners must know what resources are available and be cognizant of the added layer of being able to identify inclusive service providers. Steward and Wayland identified several resources that financial planners serving this community should be aware of:

  • The Long-Term Care Equality Index – The first national benchmarking system for residential long-term care communities. The index was launched in June 2021 and 184 communities participated. It was created by a partnership between the Human Rights Campaign Foundation and SAGE to promote equitable and inclusive care for LGBTQ+ older adults.

  • National Resource Center on LGBT Aging – This project is funded by the U.S. Administration for Community Living and serves as a resource center to improve the quality of services and support offered to LGBTQ+ older adults. It offers a host of resources ranging from caregiver support to Social Security, Medicare, and Medicaid guides to resource directories on the national and state level.

  • SAGE – SAGECare provides LGBTQ+ cultural competency training on aging issues to service providers. Their “Find a Provider” tool can be used to locate service providers that have participated in their cultural competency training programs.

 By keeping these considerations and resources in mind, financial professionals can ensure all clients –regardless of sexual orientation or gender identity – can benefit from the power of financial planning and act as true advocates for the aging LGBTQ+ community.

Lauren Adams, CFA®, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional and Director of Operations at Center for Financial Planning, Inc.® She works with clients and their families to achieve their financial planning goals and also leads the client service, marketing, finance, and human resources departments.

The Importance of Naming Your Future Advocates

Contributed by: Sandra Adams, CFP®

Estate planning and topics like “incapacity” or “end of life” are topics that most clients dread and often put off taking care of. Not only are these unpleasant topics to think about, but there are often difficult decisions to make in the process.

Aside from making decisions about what to leave people once you are gone and who to leave things to, some of the most critical decisions that need to be made have to do with who you name to make decisions on your behalf – most importantly during your lifetime when you might not be able to make them for yourself. This would come into play with your:

• Patient Advocate/Health Care Durable Power of Attorney

• General/Financial Durable Power of Attorney

• Trust – listing of your Successor Trustee

For each of these, it is important to choose someone that you trust. Someone that could take over handling responsibilities and making decisions for you if you could no longer handle those for yourself, either on a temporary or permanent basis. It is important to note that the advocates for each of these roles DO NOT have to be the same person. You may decide to name a different Health Care/Patient advocate than the person you name for your General/Financial and Successor Trustee. For instance, your daughter that is a nurse may be the perfect person to name as your Patient Advocate. Likewise, your daughter that is the accountant is the perfect person to name as the General/Financial and Successor Trustee because numbers are in her blood. It is also important to remember that you should name at least one or two backup advocates, just in case your first choice is for some reason not available when the time comes. Another tip – it is not a great idea to name multiple people to serve at the same time that cannot make decisions independently. For instance, don’t name your three children to act as your Patient Advocate together – BAD IDEA – even siblings that get along likely won’t all agree when the pressure is on!

What happens when you are single and have no children or family (and maybe no close friends younger than you) to name as your advocate? Surprisingly, this comes up quite often and this makes it hard to find an appropriate advocate. Try naming professional advocates. Here are some possibilities:

• Often, attorneys are willing to serve as General/Financial Powers of Attorney

• Health Care Professionals like Geriatric Care Managers that will serve as Patient Advocates. There is likely to be an hourly cost for their services, but these folks are well qualified and will serve and the proper fiduciaries when the time comes.

• For successor trustees, attorneys or Financial Institution/Broker-Dealer Trust Departments can be named as success trustees or co-successor trustees (also for a cost) to make sure the trust document is followed and the client is protected.

These advocate decisions, especially those that apply to possible lifetime incapacity, are some of the most important estate planning decisions you will make. As much as you don’t want to make them, it is important that you do. We encourage you to consult with your financial planner and estate planning attorney on these and other important estate planning decisions. Don’t put off today making these important decisions that could impact your financial plan!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

7 Ways The Planning Doesn't Stop When You Retire

Contributed by: Sandra Adams, CFP®

Most materials related to retirement planning are focused on “preparing for retirement” to help clients set goals and retire successfully. Does that mean when goals are met, the planning is done? In my work, there is often a feeling that once clients cross the retirement “finish line” it should be smooth sailing from a planning standpoint. Unfortunately, nothing could be further from the truth. For many clients, post-retirement is likely when they’ll need the assistance of a planner the most!

Here are 7 planning post-retirement issues that might require the ongoing assistance of a financial advisor:

1. Retirement Income Planning 

An advisor can help you put together a year-by-year plan including income, resources, pensions, deferred compensation, Social Security, and investments.  The goal is to structure a tax-efficient strategy that is most beneficial to you.

2. Investments 

Once you are retired, a couple of things happen to make it even more important to keep an active eye on your investments: (1) You will probably begin withdrawing from investments and will likely need to manage the ongoing liquidity of at least a portion of your investment accounts and (2) You have an ongoing shorter time horizon and less tolerance for risk.

3. Social Security

It is likely that in pre-retirement planning you may have talked in generalities about what you might do with your Social Security and which strategy you might implement when you reached Social Security benefit age. However, once you reach retirement, the rubber hits the road and you need to navigate all of the available options and determine the best strategy for your situation – not necessarily something you want to do on your own without guidance.  

4. Health Insurance and Medicare

It’s a challenge for clients retiring before age 65 who have employers that don’t offer retiree healthcare. There’s often a significant expense surrounding retirement healthcare pre-Medicare.

For those under their employer healthcare, switching to Medicare is no small task – there are complications involved in “getting it right” by ensuring that clients are fully covered from an insurance standpoint once they get to retirement.  

5. Life Insurance and Long-Term Care Insurance

Life and long-term care insurances are items we hope to have in place pre-retirement. Especially since the cost and the ability to become insured becomes incredibly difficult the older one gets. However, maintaining these policies, understanding them, and having assistance once it comes time to draw on the benefits is quite another story.  

6. Estate and Multigenerational Planning

It makes sense for clients to manage their estate planning even after retirement and until the end of their lives. It’s the best way to ensure that their wealth is passed on to the next generation in the most efficient way possible. This is partly why we manage retirement income so close (account titling, beneficiaries, and estate documents). We also encourage families to document assets and have family conversations about their values and intentions for how they wish their wealth to be passed on. Many planners can help to structure and facilitate these kinds of conversations.

7. Planning for Aging

For many clients just entering retirement, one of their greatest challenges is how to help their now elderly parents manage the aging process. Like how to navigate the health care system? How to get the best care? How to determine the best place to live as they age? How best to pay for their care, especially if parents haven’t saved well enough for their retirement? How to avoid digging into your own retirement pockets to pay for your parents’ care? How to find the best resources in the community? And what questions to ask (since this is likely foreign territory for most)? 

Since humans are living longer lives, there will likely be an increased need and/or desire to plan. In an emergency, it could be difficult to make a decision uninformed. A planner can help you create a contingency plan for potential future health changes.

While it seems like the majority of materials, time, and energy of the financial planning world focuses on planning to reach retirement, there is so much still to do post-retirement. Perhaps as much OR MORE as there is pre-retirement. Having the help of a planner in post-retirement is likely something you might not realize you needed, but something you’ll certainly be glad you had.

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

A Dementia Diagnosis and Your Financial Plan

Contributed by: Sandra Adams, CFP®, CeFT™

The inevitable has happened. You or someone you love has received the dreaded diagnosis of Alzheimer’s disease or one of many related dementias. You feel like your world is in a tail spin; you don’t know which end is up, and you certainly don’t know where to start planning…especially from a financial perspective. What should you do?

First, discuss the diagnosis with your financial advisor. Communicate your fears and concerns, and ask for help to make sure that all of your financial “ducks” are in row.

You can check these things off the list now:

• Make sure that important documents are in place assigning advocates who will handle health care and financial affairs when you (or your loved one) are unable to handle them. **Coordinate this with your estate planning attorney.

• Also, make sure that beneficiaries and estate planning documents are updated to reflect current wishes.

• From an organizational standpoint, this is a perfect time to make sure everything is organized, documented (see our Personal Financial Record Keeping Document for help), simplified as much as possible (think consolidating accounts held by multiple firms), and titled properly.

At some point, your financial advisor may want to help you look at additional retirement/financial independence scenarios that include long-term care expenses faced by those who have dementia/Alzheimer’s. This will give you the opportunity to look at the adjustments you may need to make immediately or in the near term.

As time goes on and costs increase, which may be a few months or years depending on disease progression, additional retirement distribution planning may both stretch available dollars and strategize tax efficiencies based on tax law at the time. For instance, in years with very high medical costs/deductions, it may make sense to take distributions from IRAs, so the medical deductions offset the taxable income from the distributions.

It is also extremely important to review all insurances (Long Term Care, life insurances with terminal illness or LTC riders, annuities with such riders, etc.) to understand how they work and how they may benefit you in the future.

Planning with your family

Aside from the purely financial considerations, it is critical to have a conversation with your family about your care (who, where, etc.), your money, your quality of life, and the overall plan for your last phase of life with your new diagnosis, so that everyone is on the same page, with a coordinated plan.

Everyone should know the available resources, the players, and your desires. Having helped families in these situations, I know those who work together and understand the desires of their loved one, no matter what the financial situation, are able to get through tough times and support their loved one much more successfully than those who don’t.

Above all, ask for help, from your advisors, from your family, from your friends and community supports (church, community groups, etc.). You can’t, and shouldn’t, go it alone. If you or someone you know is facing a dementia challenge and needs to plan, please let us know. We are here to help.

Sandra Adams, CFP®, CeFT™ is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.

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Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

The One Mistake You DON’T Want to Make with Your Long Term Care Insurance

Contributed by: Sandra Adams, CFP®

If you’re reading this, you are likely among the few people who have planned ahead and purchased Long Term Care insurance. By doing this, you intend to protect yourself and your family, and hedge your assets against the possible threat of a long-term care event (need for care in your home, assisted living or nursing home).

Given that only about 15% of Americans own Long Term Care insurance (Fidelity 2016) and 70% of Americans over the age of 65 will need some form of long-term care services for cognitive or physical impairment (HealthView Insights 2014), you will likely need the insurance you’ve purchased. The question is, will you use your Long Term Care insurance when the time comes?

I have had several client experiences that looked like this:

• The client was at or near a point of qualifying for benefits under their Long Term Care insurance for either physical or cognitive reasons;

• The client and/or the family made the decision to not begin the claim process. Why? They wanted to wait a while longer, continue to try to care for the client on their own, save the Long Term Care insurance benefits for later, when they really needed them.

• The results in nearly all of these cases? The clients either never filed a claim or filed far too late, ended up in a long-term care facility, and ultimately passed away without ever receiving the policy benefits for which they had made years – even decades – of payments.

In my experience as a financial advisor, I have never had a client run out of a Long Term Care benefit pool. I am not here to tell you that it does not happen – it certainly can. But I am here to tell you that I do not believe it happens often. I have searched far and wide for statistics that would show how often it happens and cannot find a number!

Although your Long Term Care insurance company would prefer that you wait to put in your claim, I recommend that you do so as soon as you are eligible. You can always stop the benefits if you no longer need them, then restart later. And if you max out your benefits, you have the satisfaction of knowing that you received 100% of your benefits and protected your assets to the greatest possible degree. Don’t lose out (or let your parents lose out) on the Long Term Care insurance benefits they have purchased!

If you have questions or need additional guidance on this or related issues, please do not hesitate to reach out. We are always happy to help! Sandy.Adams@centerfinplan.com

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Any opinions are those of Sandra D. Adams, CFP® and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Guarantees are based on the claims paying ability of the issuing company. Long Term Care Insurance or Asset Based Long Term Care Insurance Products may not be suitable for all investors. Surrender charges may apply for early withdrawals and, if made prior to age 59 1⁄2, may be subject to a 10% federal tax penalty in addition to any gains being taxed as ordinary income. Please consult with a licensed financial professional when considering your insurance options. These policies have exclusions and/or limitations. The cost and availability of Long Term Care insurance depend on factors such as age, health, and the type and amount of insurance purchased. As with most financial decisions, there are expenses associated with the purchase of Long Term Care insurance. Guarantees are based on the claims paying ability of the insurance company.

When It Might Make Sense to Distribute an IRA Account

Contributed by: Sandra Adams, CFP®

As you might imagine, most financial planners (and most clients) have a preference for stretching the distribution of their IRA (or other qualified retirement) accounts over long periods of time so as to lessen the income tax burden on those accounts over many years.  And, if possible, most clients would prefer the ability to leave dollars in those accounts to their children and grandchildren as a form of legacy/inheritance. However, as life circumstances change, it sometimes makes sense to keep an open mind about how we view the distribution of those accounts. 

In our experience, we have found that it sometimes makes sense to consider accelerating the distribution of IRAs/qualified retirement accounts when the following circumstances are present:

• Owner of the IRA is an older adult (in this context, meaning beyond RMD status)

• IRA/Qualified Retirement Accounts are smaller accounts within the clients overall investment portfolio (i.e. have a $30k IRA and have other investment accounts/bank accounts to draw from)

• Are likely in a lower tax bracket than the heirs they might be leaving the assets to

• May have medical/health care costs to write off to offset the income from the potential income from IRA/qualified account distributions

While these circumstances certainly will not apply to MOST clients, they might apply to a select few. When they do, this strategy can not only save significant tax dollars but can simplify the distribution of an estate long term by avoiding the division of a small IRA amongst multiple beneficiaries.

If you or your family have questions about whether this strategy might apply to you or someone you know, please reach out to our Center Team.  We are always happy to help!

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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Any opinions are those of Center for Financial Planning, Inc. and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary of all available data necessary for making a financial decision and does not constitute a recommendation. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. Raymond James does not provide tax advice. You should consult a tax professional for any tax matters related to your individual situation.

5 Estate Planning Action Steps to Stay in Control of Your Future

Contributed by: Sandra Adams, CFP®

I recently attended a 2-day training in Elder Mediation.  Coming from a world in which we work with our clients on a regular basis to make sure estate planning documents are in place and up-to-date, I was alarmed to learn that less than 45% of the U.S. adult population has an active will or durable powers of attorney in place (2017 Caring.com Study). Unfortunately, when these documents are not in place, and the adult (at any age) becomes unable to make decisions for themselves, the court must appoint someone...and families aren’t always in agreement.

According to a 2013 AARP report, there was an estimated 1.5 million older adults with court-appointed guardians; record keeping in many constituencies is not accurate nor complete.  A guardian is appointed to make medical and care decisions for someone who is unable to make decisions for themselves; a conservator is appointed to make financial decisions and handle financial affairs for someone who is unable to handle those duties on their own behalf.  And if the family disagrees about who should be appointed to any/either of these roles, they can voluntarily seek mediation to resolve their differences or the court may order mediation.  In many cases, a family member is ultimately appointed to these roles, but in some cases a third party is appointed to serve in these roles as ordered by the court, leaving the fate of the older adult in the hands of someone who doesn’t know them or their wishes well.

Doing the work now to get documents and plans in place can save you and your family unnecessary stress and anxiety in the future, and can help to make sure that the wishes you have for yourself and your future are carried out even if you are no longer the director of those decisions. 

What action steps can you take now to make sure you maintain ultimate control over what happens to you if/when you can no longer make decisions for yourself?

To ensure that you have the ability to name who you wish to make decisions for you when it is time, I recommend taking the following steps:

1. Make sure you have up-to-date estate planning documents and review them often.  The most important documents to have in place during your lifetime are Durable Powers of Attorney — General/Financial AND Health Care (also known as a Patient Advocate Designation).  Additionally, you may want/need to have a Revocable Living Trust and a Will.

2. Consider drafting your Durable Power of Attorney documents as “Immediate” rather than “Springing”.  Immediate Powers of Attorney allow your advocate to act on your behalf immediately or at any time that you need them to, while a Springing Power of Attorney generally requires two doctors to declare you incompetent to make your own decisions before your advocate can act on your behalf.

3. Be clear and specific about your wishes for your future medical care, personal care and handling of your financial affairs.  Put things in writing and communicate your wishes to your family members and/or key people in your life.  Consider a family meeting to discuss your future wishes and ensure that everyone is on the same page.

4. Plan ahead.  It is never possible to plan for every contingency, but if you are able to plan for things that might happen (chronic health issues, incapacity, etc.), you and your finances can have a better chance of surviving.  Document your plans and communicate them to those that may be in charge of handling your affairs in the future if/when you cannot.

5. Put a team in place before it becomes necessary.  Make sure your financial planner, CPA, Attorney, any healthcare professionals and your family know your plan and your wishes and know one another so that they can carry out your plan when you might not be able to give clear directions.

If you or your family have questions or would like guidance on how to get these plans in place, please do not hesitate to reach out.  We are always here to help!

Sandra Adams, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc.® Sandy specializes in Elder Care Financial Planning and is a frequent speaker on related topics. In addition to her frequent contributions to Money Centered, she is regularly quoted in national media publications such as The Wall Street Journal, Research Magazine and Journal of Financial Planning.

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The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Sandra Adams and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.