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                Dave called me because his dad had just recently suffered a stroke and was in the hospital but ready to be discharged.  Dave told me, “Dad can’t go home.  We’ve been able to keep a promise we made to keep him home but at this point the family recognizes he needs nursing home care.”                 I then asked him about Dad’s finances.  “He has only $30,000 in the bank but he owns his home”, Dave said.  “It’s not in great shape but we can probably net $200,000 after paying off his home equity loan.  I’ve called a realtor and I am going to immediately put the house on the market so we can use the sale proceeds to pay the nursing home.”                 Dave figured the money would last 18 to 24 months and he would then apply for Medicaid.  So we turned our conversation to the past 5 years.  I explained to Dave that Medicaid will ask for and scrutinize Dad’s account statements over a 5 year period dating back from the filing of the application.                 “Did your dad make any gifts or draw out a lot of cash”, I asked Dave.  That’s when he told me that Dad had

     Last week I was sharing with you Mary’s story. She had been considering the purchase of a life insurance based long term care (LTC) policy to protect her against the cost of long term care.  She was then shown a life insurance policy with a terminal illness and chronic care rider at a less expensive premium.  Thinking that they will provide her with similar coverage for long term care, Mary asked me why she shouldn’t simply opt for the second choice.      Let's examine this a little more closely. A big difference with the chronic care rider is that some of the riders require that the condition be a permanent one whereas other insurance companies offer riders which cover both temporary and permanent conditions. The one offered to Mary only covers permanent conditions which she did not realize until I pointed it out to her.      Life insurance with long term care benefits covers both temporary and permanent conditions. This is important since people often tap into their long term care policies more than once before reaching the stage of needing substantial care for the rest of their lives. That may not be possible with a chronic care rider.      Another important

     Mary is considering the purchase of a life insurance based long term care insurance product, which she expressed an interest in after reading about it on my blog.  Mary then said to me that her life insurance agent quoted her a premium on a life insurance policy with a terminal illness and chronic care rider. He told her that there is no additional charge for the rider and that she does not have to go thru underwriting to add it.  She then asked me, " why would I need the product you're showing me? This is less expensive and seems like it would be easier to get."      "Because they are not the same thing", I told Mary.  "Chronic illness riders and long term care insurance are not the same thing.  You need to be very clear on what you are getting and what is missing with the chronic care rider."      Lets's first define some terms. A terminally ill person is one who has been certified by a doctor to have an illness or physical condition which can reasonably be expected to result in death within 24 months after the date of certification.      A chronically ill person is one who

            Last week , I wrote about the announced compromise between Governor Christie and legislative leaders that will replenish the out of money transportation fund and get much needed road projects started again.  The compromise involves a 23 cent gas tax increase but tax cuts in other areas, including the elimination of New Jersey’s estate tax completely by January 1, 2018.  The bill was approved by New Jersey’s Senate and Assembly this past Friday and will go to Governor Christie for his approval this week.             Let’s talk about what it actually means.  For 2017 the estate tax exemption will increase to $2,000,000.  Only estates over that amount will face estate tax.  In 2018 the tax will be gone.  But, does that eliminate any need to do estate and tax planning?  No, it doesn’t but it may change how we go about planning.             There is still a federal estate tax with an exemption that is currently $5,450,000.  If your estate is approaching or already exceeds that amount then tax planning with credit shelter trusts and irrevocable life insurance trust may still be advisable.  Admittedly, this will only apply to a small segment of the population.             General estate planning, including a will

            On Friday, Governor Christie and Democratic leaders in the New Jersey Legislature announced they had reached a compromise on funding New Jersey’s bankrupt transportation fund, which pays for road and bridge improvement projects and other infrastructure upgrades such as the rail system which has been very much in the news as a result of last week’s tragic Hoboken commuter train crash.             If you have followed the ongoing saga in the last several months, you know that a standoff between Governor Christie and Democratic leaders caused a shutdown of existing road and bridge projects until a decision on how to replenish the transportation fund could be reached.  Finally, we have a decision.             What has this got to do with New Jersey’s estate tax?  Like any political compromise this one involved some “horse trading”.  The highlight of the deal is an increase in the gas tax by 23 cents a gallon, meaning our gas tax will go from the second lowest to the seventh highest.  It is reported that this tax will put $16 billion into the Transportation Fund so that much needed improvement projects can be restarted.             The compromise comes in the form of tax cuts in other areas.  This

            Last week I was telling you how Joe got scammed.  He paid money to increase his odds of winning a Publisher’s Clearinghouse prize.  It was all a lie and he lost more than $22,000 which he wired to an overseas account.             His children were as upset about it as Joe was.  Could anything have been done to prevent it? Let’s take a closer look.             Could Joe’s children have stepped in to stop Joe?  Not really because Joe still handles his own finances.  His son, Joe, Jr. had tried to get Dad to allow him to help but Joe had steadfastly refused.  While his children speak or see Dad several times a week he mentioned nothing about the calls he received.  In fact when his daughter, Mary was present when he took one of the calls and asked him what the call was about, Joe replied that it was a solicitation.             What about the bank?  Does it have any responsibility?  Joe went to his local branch to wire funds to an overseas account as he was instructed to.  While it isn’t clear exactly what the bank employee who helped him asked Joe or what Joe said in response (he gave