Terminal Illness and Chronic Care Rider – A Substitute for Long Term Care Insurance?
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
Increased Gas Tax – How Does It Impact NJ Estate Tax? Part 2
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
Increased Gas Tax – How Does it Impact NJ Estate Tax? #NewJerseyEstateTax
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
Yet Another Scam (Part 2)
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
Yet Another Scam
6 months ago I wrote about some common scams that target seniors. Here's another one that doesn't just prey on seniors but really on anyone who is struggling financially. Joe received numerous phone calls from Publisher's Clearinghouse. That's the company that many of us remember because Ed McMahon was their pitchman. It's the company that runs a "sweepstakes" in which participants can win $1,000,000. They ran commercials for years in which winners were presented with an oversized check at their front door. The caller told Joe that if he paid a fee he could "move up the list" and soon be a winner. Of course, this wasn't true. It certainly sounds like a crime to rig a contest by telling contestants if they pay money it increases their chance of winning. Nevertheless, Joe was desperate. His wife had just entered a nursing home and he was stressing out about how to pay for it. It all sounded too good to be true. He knew that but he wanted to believe it. Joe was told that if he paid $7500 he'd increase his odds of winning $1,000,000 as well as some of the lesser prizes. He went to his bank
A Simple Estate Matter? Not so Fast (Part 2)
Last week I was telling you about Mark’s call regarding the administration of his sister, Melanie’s estate. He had gone to the Surrogate to get appointed as administrator of the estate but had listed only 4 of 5 siblings as heirs, thinking his brother, Frank should not be listed because he “can’t” receive a share. What he really meant was that he can’t receive that share without losing his government benefits, including Medicaid. However, I explained to Mark that legally Frank was entitled to a share because Melanie didn’t leave a will. Intestacy laws establish that because she wasn’t married, didn’t have children and both her parents had already died, the next in line to receive her estate are her siblings. Mark was correct that Frank’s receipt of his share would jeopardize his benefits and could result in his losing his housing in a group home he has been living in all his adult life. I told Mark what we need to do is establish a special needs trust #SpecialNeedsTrust for Frank’s benefit. His share of the estate could be placed in that trust as long as he is disabled and under age 65 (he is). The trust can only