You or Your Family Member Needs Assisted Care- Now How Do You Pay For It?

I was asked to write an article for a local publication so I thought I'd pass on the info here as well.

More often than not we prefer not to think of the time we or our family member s will need the assistance of another person or place to help with our physical or mental needs. In our minds it happens to other people but not to us.

However, it does happen and we are rarely prepared. It might be a sudden stroke, the onset of dementia, complications after surgery or a fall, macular degeneration or simply just getting more frail as we naturally age.

Now we have to pay someone to come to our homes, move in with family, move to assisted living or even to a 24 hour care facility. Costs can run from an average of $20/hr for homecare to 3 to 7 thousand or more per month.

A lifetime of savings can disappear in months and a spouse may become impoverished if the other spouse requires extended care. Medicare does not cover many costs of this type and the state welfare program, Medical , only kicks in once your savings are gone- and then your choices are limited home care or a nursing facility of their choice.

So, what are some options to pay for care? Limited space cannot afford much detail, but here are some choices:

· Long Term Care Policies, purchased prior to need, can be worth their weight in gold and well worth the premiums paid. They come in all shapes and sizes and should be geared to your personal situation and budget

· There are now both life insurance policies and annuities that have long term care riders which allow for financial benefits should long term care be needed in the future.

· There are companies that may offer lump sum payments for such things as no longer needed life policies, annuities in payout, and even interests in established CRTs. These don’t apply to everyone, but it pays to know about them in case they do.

· There are some benefits for veterans and surviving spouses under the VA non service connected Improved Pension Benefit with aid and attendance add on.

· If you need to sell assets such as appreciated real estate, there are tax saving strategies that will allow you to keep more of the value of your asset and minimize your tax obligations. These need to be put in place prior to the sale.

· There may be some foundations, churches and charities that provide support services.
· Family members may be able to chip in or you might share some services with a neighbor.

It really helps to do some checking into facilities and home care companies prior to needing them. Scrambling for information when the need is a reality might lead to bad experiences and loss of precious savings. Also, be sure you have a power of attorney document for both medical and financial decisions. Let your preferences be known to those you trust so the decision for your care is not left up to the courts and strangers.

For more information on any of the above, call Paula Straub at 760-917-0858 or email Paula at savegainstax@gmail.com

How Immediate Legacy TM Can Help

How Immediate Legacy TM Can Help

In speaking with a number of charities recently, I notice a big difference between those who have workers that are in it for the cause and those who just subsist in order to collect a paycheck. A bit like politicians, I think, who should be in politics to serve the public but often just serve themselves.

Anyway, in order to find a way to help those who really do want to see their mission succeed, I put up a web page that can provide an overview of the benefits of the Immediate Legacy TM concept, watch a recent Fox Business News Interview with the developer of it and then contact me if more details are desired.

Here is the link:

http://www.savegainstax.com/legacy.html

Feel free to forward this to any charity you believe can benefit from additional funds. This is not a magic bullet or a cure all for every non-profit, but when it works it works extremely well and everybody wins.

Paula Straub
www.savegainstax.com
760-917-0858

Do You Support A Worthwhile Cause?

There are so many good Charities and Non-Profits who are really hurting these days because donations are down just when money is most needed.

I have an important favor to ask of you and it won’t cost you a dime.

I want you to email me, fax me or call me with the name of your favorite charity and the contact information for the person who is responsible for fund raising. That’s it.

It can be a school, church, research foundation, animal charity or any legitimate non profit you feel is doing good work and in need of additional donations.

I will invite them personally to a webinar introducing a brand new way to raise significant immediate donations that has no cost to the organization and no net out of pocket cost to the supporter. There are no risky financial tools used.

In all my years of financial planning, I haven’t seen a better win-win situation for both parties when the fit is right.

This will be by invitation only and only open to non-profits. It will take 45 minutes of their time from the comfort of their home or office and they can decide if they want to find out more after attending.

I personally guarantee they have not seen this method before and their time will be well spent.

So, help me help your favorite charity. Feel free to forward this post to anyone who supports a good cause. You can make a difference.

Paula Straub
savegainstax@gmail.com
760-917-0858 phone
866-401-0424 fax

Do You Know If You Are Paying Too Much In Taxes?

"It’s not how much you make, but how much you keep." How true.

I specialize in capital gains tax savings but also talk with my clients about how else taxes may be impacting their bottom line. I know they do mine.

Not everyone has a CPA do their taxes. You might do your own, use a software program like Turbo Tax, or take your data to a local tax preparer like H&R Block.

CPAs can be pricey to employ and you may not think you have enough issues to hire one to prepare your returns. However, you may also be missing something that may be costing you money that could be still in your bank account.

I have worked out a deal with a CPA firm I do some work with that you can take advantage of.
For $30.00, a CPA from Gradient Tax Services will do a thorough review of your last year’s tax return. I get no compensation from this offer. It goes directly to them for the review.

They will let you know if you are not taking advantage of any tax breaks you are entitled to, or if there might be a way to reduce future taxes. You may be eligible to amend your return and get money back from last year.

With this economy, we need to keep every penny we’re entitled to.

If you would like to have Gradient review your return, email me your name and telephone contact number and I will tell you the procedure to complete the review.

$30.00 is a minimal amount for a Certified Public Accountant to see if they can save you a heck of a lot more.

Paula Straub
Savegainstax@gmail.com
760-917-0858

More Are Seeing the Light

Thank you for all the emails I received following my last email titled “Lump Sums vs. Income Streams”. It tells me that mindsets are truly beginning to change, mostly due to personal experiences and recent losses.

Just a few situations presented were people getting hit with a large tax bill after the installment sale note they were carrying was terminated due to the buyer selling the property part way into the note term, a person falling prey to a Ponzi scheme and losing a large sum of money, several people who opted for a lump sum after taxes to reinvest and seeing their proceeds further diminish, a person losing most of his life savings after trusting an advisor his attorney recommended, several more who were promised double digit returns and who now have much less than they started with.

It will be difficult to overcome these unfortunate losses.

There is something to be said for a protected and fixed income stream which at least covers your basic expenses. This is the principle pensions and social security benefits were based on.

As you are approaching or are in retirement stages this should be your first priority. This means no matter what else happens, you have money to live on and money you cannot outlive. You need a reasonable (5-7%) annual return (not found in CDs) but this is not money you gamble with. This means not investing in anything that can go down or is subject to changing market conditions.

Once you have the basics covered, you can consider more risky investments if you need a little excitement. Excitement is not all it is cracked up to be when you run out of money!

This is not a new concept, it’s just that we have strayed from the basic rules of protecting ourselves from the very disasters many of us are facing now and in the foreseeable future.

So, if you are selling your appreciated assets, it is prudent to minimize your taxes, protect your principle and provide yourself with a steady income. I am here to help guide you to the best plan for you and your family. Call or email me.

Paula Straub
(760)917-0858
savegainstax@gmail.com
www.savegainstax.com

Lump Sum vs. Income Stream

Peter decided to take a lump sum of approximately 500K, pay his capital gains and depreciation recapture of close to 150K and invest the 350K he had left over after the sale of his investment property. Peter was 64.

Peter paid off credit cards and bought some purchases he had been putting off such as a new car and gave some money to his kids and put the remainder into some investments his financial advisor recommended. That was two years ago.

Peter is now out of work and has been selling stocks and mutual funds at a loss to cover his bills. He lost a good deal in value on his investments over the last year. He has about 120K left of that 350K and it is dropping fast.

If Peter had taken a 20 year income stream from a self directed installment sale, he would be receiving about $3500.00 per month or 42K per year for another 18 years. After paying his taxes on this it would still be about $2450. per month he could count on coming in.

If he had simply used this income to pay off his credit cards over the last couple of years he would be out of debt. He may not have the new car or his kids may not have gotten the monetary gifts but he would have an ongoing source of income when he lost his job and would have a means of support going forward if he is unable to find another.

His investments would not have lost value and over the 20 year period he would have received about 110K more using the compounded earning power of the money that went immediately to taxes when he took the lump sum.

Which would you rather have, the lump sum or the income stream?

Paula Straub
760-917-0858
savegainstax@gmail.com
www.savegainstax.com

Is There Any Way Out of a CRT or Other Charitable Trust?

A couple of times of year I get a call from someone who is unhappy with a CRT or other Charitable Trust they are receiving payments from.

Either they no longer like the charity it was set up with, someone (the trustee) has mismanaged funds, they need a lump sum rather than the monthly payments they are receiving or the trust has lost money and they are afraid it will run out short of making the payments due.

Up until now, there haven’t been many options to make any significant changes, but recently I have met with a couple of companies that may have a viable solution. It is definitely worth exploring.

Upon review of your trust, you may be eligible for a cash offer of a lump sum payment in exchange for your future rights to payments from the trust. This lump sum may be taxed at capital gains tax rates versus ordinary income that you have been paying for your monthly check.

Currently, this option was only available to large corporations and investment firms, but now individual cases are being considered.

This can solve an immediate need for long term care expenses, a way to pass more money to heirs, and a way to disengage from a less than desirable situation with the charity.

You may even have an option to spread out the lump sum over a number of years to minimize the taxes if you wish.

If you or someone you know finds themselves in a similar situation, please give me a call to go over your options.

Paula Straub
Savegainstax@gmail.com
760-917-0858 or 888-338-3036 toll free
www.savegainstax.com