About the Umbrella policy... Can't remember the details, since we did this about 6 years ago. We carry our house and our cars with one company... We had 500K liability on the cars. When we took on the umbrella liability policy, it covered all three. Since y'all seem to think that this isn't correct, I'll go back to the company and see if I'm telling you wrong. Could it have to do with an accident free record? The agent suggested the umbrella policy and as I recall, by dropping the car liability, the net cost of adding the Umbrella policy was only $80.
Sharing 23 years of Frugal Retirement
- Thread starter imoldernu
- Start date
I (and many others) want to know the company that writes your umbrella policy if you have first dollar liability coverage!
My umbrella policy costs about $340 per year plus I think it cost me an additional $200 for the liability limit increase on my auto policy to mesh with where the umbrella kicks in. The true cost of the liability policy is over $500 per year.
psweath
Recycles dryer sheets
Unbelievable. How did that conversation go? "Um boys, let's talk. We just want to be clear that visiting and staying in touch is ok, as long as you're not having any problems in your lives. If you are, please don't visit those on us whatever you do. We'd prefer you always be happy and upbeat around us. Oh, and no more of those sappy Christmas or birthday cards and definitely never a gift, ok?"Goodness, no... We visit and stay in contact on a regular basis... what I meant was that we don't live in each other's lives. Like, we don't visit our problems on them and they do the same... Makes for a great relationship... always happy, always upbeat. Some of our friends talk to their kids three or four times a day...and are involved in every minute of their lives. Easy to do... I suppose that having four boys helps here...
Did you tell them about the cancer scare? I'm surprised you see them at all.
FWIW.... the Insurance company...
Personal Liability Insurance | American Family Insurance
Will confirm w/agent... Y'all could be right...
What might have happened was that I already had 500K liability on the cars... and the umbrella allowed us to reduce the amount in the cars... I'm just not sure. CRS dontcha know.
edit... to add lik to PDF on Umbrella policy.
http://www.amfam.com/pdf/insurance/umbrella/personal-liability-umbrella.pdf
Personal Liability Insurance | American Family Insurance
Will confirm w/agent... Y'all could be right...
What might have happened was that I already had 500K liability on the cars... and the umbrella allowed us to reduce the amount in the cars... I'm just not sure. CRS dontcha know.
edit... to add lik to PDF on Umbrella policy.
http://www.amfam.com/pdf/insurance/umbrella/personal-liability-umbrella.pdf
Last edited:
Purron
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 23, 2007
- Messages
- 5,596
Our family agreed to give up cards and gifts years ago. We realized we were buying stuff none of us needed or wanted. Instead, we have great visits and treat ourselves to a nice meal for various occassions. I think it's improved the quality of our relationship since there's no pressure to buy the "right gift".
#5
___
When I started posting here, I didn't know how much experience regular members had. This may be a little on the simple side... and my income level may be well below that of others....Anyway...
Net Worth
In order to calculate the amount you may need to retire, net worth is the benchmark that is used to determine how long your money may last.
Net worth is also the most difficult number to tie down... practically, theoretically, statistically and comparatively. Not the number... but the way in which it is used for planning.
Don't even bother to look for national statistics, unless you're prepared to jump through hoops to determine urban rural, male female, family vs individual or couple, and then to figure at your current age. Mostly a thing for financial planners. FWIW, a generally accepted net worth figure for age 55-64 is $232,000... but that is meaningful only in the context in which it was determined.
Here's the overly simple way that I see to calculate net worth. (yeah, I know I covered this before, but I'm covering it again.)
Add the current cash value of all of your belongings. The TRUE value... What you would get if you sold it on the open market, today. That means the $2,000 diamond ring is worth $300... the comic book collection is worth $150, not the $1200 shown in the catalog, and the $23,000 car you bought in 2009 is worth $10,000 today.
Don't forget to net out your "worth" by subtracting the credit card debt, the auto loan, and the house mortgage. If you have stocks, pick a point in time to calculate their worth... not before the crash.
Being honest with yourself here is important. (My first attempt at doing this, overstated our net worth by about 35%, and turned the rest of my planning upside down.)
So why "net worth"? Simply because, that, coupled with any ongoing income is what you'll have to live on in your years of retirement. (Unless of course you incorporate winning a lottery in your plans.)
........................................................
So here's how I use net worth... Not the normal planning guide , but my own guide....
1. Instead of starting from what you need to retire, look at what you'll have to retire on. "Reality based planning"
2. Calculate how much income you can count on, from fixed sources. Social Security, Guaranteed Pensions, Annuities, Don't try to calculate inflation... either here or in your retirement expenses, later on. If you're planning on investment income from stocks or bonds, use a conservative ROI percentage, not the 8% that your pension fund uses.
(Note: For planning purposes, don't used income compounding... this is an offset to the inflation factor that you won't be considering.
Example: (use annual figures for simplicity)
..........Social Security... $22K
..........Pension........... $10K
..........Stock............. $5K
..........Pt. Time work..... $8K
..........Tot. income....... $45K
3. Spending down net worth...
Calculate this, by taking your total net worth (let's say $230K) and dividing this by the number of years between your retirement date,and your currrent life expectency.
Thus if you retire at 62 and your life expectency is 85, your number is 23 ... 85 -62 = 23
Now, you can spend down that at $10,000 per year.
$230 / 23 = 10K
4. Your simple retirement plan would thus allow you to spend
$45K + $10K or $55,000 per year.
...................................................
The obvious... What about inflation? All I can say here, is that somehow, over the past 20 years inflation and income has somehow equalized, probably due to the low CPI... but for simple, basic planning purposes, up until now, this has not affected my own plan.
At the very least, whether this scenario looks right for you or not, it gives some kind of a base to build on.
As stated earlier, this would be a best circumstance budget, built from the income expectations.
You might consider creating a "nominal" budget, by simply not using the sell-down of assets.
Of course, an austerity budget is built from the ground up... based on minimal expenses.
___
When I started posting here, I didn't know how much experience regular members had. This may be a little on the simple side... and my income level may be well below that of others....Anyway...
Net Worth
In order to calculate the amount you may need to retire, net worth is the benchmark that is used to determine how long your money may last.
Net worth is also the most difficult number to tie down... practically, theoretically, statistically and comparatively. Not the number... but the way in which it is used for planning.
Don't even bother to look for national statistics, unless you're prepared to jump through hoops to determine urban rural, male female, family vs individual or couple, and then to figure at your current age. Mostly a thing for financial planners. FWIW, a generally accepted net worth figure for age 55-64 is $232,000... but that is meaningful only in the context in which it was determined.
Here's the overly simple way that I see to calculate net worth. (yeah, I know I covered this before, but I'm covering it again.)
Add the current cash value of all of your belongings. The TRUE value... What you would get if you sold it on the open market, today. That means the $2,000 diamond ring is worth $300... the comic book collection is worth $150, not the $1200 shown in the catalog, and the $23,000 car you bought in 2009 is worth $10,000 today.
Don't forget to net out your "worth" by subtracting the credit card debt, the auto loan, and the house mortgage. If you have stocks, pick a point in time to calculate their worth... not before the crash.
Being honest with yourself here is important. (My first attempt at doing this, overstated our net worth by about 35%, and turned the rest of my planning upside down.)
So why "net worth"? Simply because, that, coupled with any ongoing income is what you'll have to live on in your years of retirement. (Unless of course you incorporate winning a lottery in your plans.)
........................................................
So here's how I use net worth... Not the normal planning guide , but my own guide....
1. Instead of starting from what you need to retire, look at what you'll have to retire on. "Reality based planning"
2. Calculate how much income you can count on, from fixed sources. Social Security, Guaranteed Pensions, Annuities, Don't try to calculate inflation... either here or in your retirement expenses, later on. If you're planning on investment income from stocks or bonds, use a conservative ROI percentage, not the 8% that your pension fund uses.
(Note: For planning purposes, don't used income compounding... this is an offset to the inflation factor that you won't be considering.
Example: (use annual figures for simplicity)
..........Social Security... $22K
..........Pension........... $10K
..........Stock............. $5K
..........Pt. Time work..... $8K
..........Tot. income....... $45K
3. Spending down net worth...
Calculate this, by taking your total net worth (let's say $230K) and dividing this by the number of years between your retirement date,and your currrent life expectency.
Thus if you retire at 62 and your life expectency is 85, your number is 23 ... 85 -62 = 23
Now, you can spend down that at $10,000 per year.
$230 / 23 = 10K
4. Your simple retirement plan would thus allow you to spend
$45K + $10K or $55,000 per year.
...................................................
The obvious... What about inflation? All I can say here, is that somehow, over the past 20 years inflation and income has somehow equalized, probably due to the low CPI... but for simple, basic planning purposes, up until now, this has not affected my own plan.
At the very least, whether this scenario looks right for you or not, it gives some kind of a base to build on.
As stated earlier, this would be a best circumstance budget, built from the income expectations.
You might consider creating a "nominal" budget, by simply not using the sell-down of assets.
Of course, an austerity budget is built from the ground up... based on minimal expenses.
packrat44
Thinks s/he gets paid by the post
I have my houses, autos, and umbrella with USAA. They require liability on the autos if you have an umbrella. When I put a truck in storage and asked for only Comp to cover it in case of a fire, etc, I found USAA automatically added liability back on the vehicle. Now when I put a vehicle in storage for an extended time I drop all coverage for that vehicle.
#6
___
Where you live.
Where you're going to live.
Downsizing.
Protecting the surviving spouse.
......................................................
No one can give advice on this, but it's good to think about it anyway.
In our case, we lived in suburbia/exurbia... and compared to where we moved, the actual costs were reduced by about (today's prices) $7,000
House mortgage(extrapolated) $3000
House Taxes $2500
Entertainment, eating out... $1,000
Maintenance/services ....$500
Auto costs.... $600
Shopping/buying for house $800
That may sound like a lot, but in our case, much of the expense amounted to little more that the frills associated with living in a more upscale community, where just about everything from gas to common services like auto and house maintenance services are more expensive.
You can check out the income statistics for US communities by googling
income statistics by city.
From our original home to our current home, the average wages go from from $88K to $41K... in a distance of about 95 miles. In our case, we didn't have to sacrifice services, as is the case in some rural communities... but this is something to consider. Hospitals and specialty care becomes much more important as we age. A tough part about moving (at a later age) is the losing and replacing of social contacts. Very small communities may be somewhat closed for people who aren't naturally outgoing. We spent a fair amount of time... maybe 20 hours, riding around the new town, going into businesses, city hall, hospitals, grocery stores, post offices, govrenment offices, nursing homes, libraries, etc, etc... as well as visiting different neighborhoods, and (in our case), a community college.
If downsizing is a part of your retirement plan, and relocation is being considered, I'd suggest that you take plenty of time to make a choice.
The thought of moving farther away was at one time a consideration. A good friend made the choice to move to a South American Country in an American enclave... for the obvious reason of making the Dollar go farther. In this case it was a bad choice. He (they) could not adapt to the loss of culture and services, and returned within a year.
This is all general stuff, that you surely already knew, but frankly, I hadn't though much about. We "lucked out" in our choices... but much of that was by chance. In retrospect, I would have done more research. As it is, there are some apsects of snowbirding that can be negative, as in certain types of homeowners or condominium associations. Especially in this economy.
I'll come back to "protecting your spouse" in another post.
While I think of it, here are two of many hundreds of Senior advice sites. The first is for Senior Care... and the second, (a good source) legal advice.
Caregiving Questions | Senior Health and Legal Questions | Caring.com
http://www.uaelderlaw.org/
___
Where you live.
Where you're going to live.
Downsizing.
Protecting the surviving spouse.
......................................................
No one can give advice on this, but it's good to think about it anyway.
In our case, we lived in suburbia/exurbia... and compared to where we moved, the actual costs were reduced by about (today's prices) $7,000
House mortgage(extrapolated) $3000
House Taxes $2500
Entertainment, eating out... $1,000
Maintenance/services ....$500
Auto costs.... $600
Shopping/buying for house $800
That may sound like a lot, but in our case, much of the expense amounted to little more that the frills associated with living in a more upscale community, where just about everything from gas to common services like auto and house maintenance services are more expensive.
You can check out the income statistics for US communities by googling
income statistics by city.
From our original home to our current home, the average wages go from from $88K to $41K... in a distance of about 95 miles. In our case, we didn't have to sacrifice services, as is the case in some rural communities... but this is something to consider. Hospitals and specialty care becomes much more important as we age. A tough part about moving (at a later age) is the losing and replacing of social contacts. Very small communities may be somewhat closed for people who aren't naturally outgoing. We spent a fair amount of time... maybe 20 hours, riding around the new town, going into businesses, city hall, hospitals, grocery stores, post offices, govrenment offices, nursing homes, libraries, etc, etc... as well as visiting different neighborhoods, and (in our case), a community college.
If downsizing is a part of your retirement plan, and relocation is being considered, I'd suggest that you take plenty of time to make a choice.
The thought of moving farther away was at one time a consideration. A good friend made the choice to move to a South American Country in an American enclave... for the obvious reason of making the Dollar go farther. In this case it was a bad choice. He (they) could not adapt to the loss of culture and services, and returned within a year.
This is all general stuff, that you surely already knew, but frankly, I hadn't though much about. We "lucked out" in our choices... but much of that was by chance. In retrospect, I would have done more research. As it is, there are some apsects of snowbirding that can be negative, as in certain types of homeowners or condominium associations. Especially in this economy.
I'll come back to "protecting your spouse" in another post.
While I think of it, here are two of many hundreds of Senior advice sites. The first is for Senior Care... and the second, (a good source) legal advice.
Caregiving Questions | Senior Health and Legal Questions | Caring.com
http://www.uaelderlaw.org/
#7
___
Perhaps the most important part of this thread on retirement, is the matter of protecting one's assets... and even more important, thinking ahead to protect the assets of a spouse, when health requires extraordinary expenses.
Since we, and our spouses will always be healthy, we don't think about what could happen. We just assume we'll both die at the same time.
Statistically that ain't gonna happen. If you already have a net worth of 2 Million dollars, don't read the rest... It doesn't apply to you.
Current medicaid law allows for payment of nursing home expenses under certain conditions. If you understand those conditions, you could save hundreds of thousands of dollars for yourself, your spouse, or your estate... (your kids).
Here are the things you should know about:
Current nursing home costs average from $75,000 to $90,000/yr. A friend on Long Island is currently paying over $135,000/yr. for just basic care.
The state (medicaid) does not automatically pay for this.
You should understand "exclusions".
Know that the "look back period" is now 5 years.
...........................................
As long as a married couple have assets, if one spouse should have to go into a nursing home, the couple's assets will be used to pay for the medical care until the assets go below a certain level, at which time, the state medicaid program will pay for the nursing home care. The asset level varies by state.
............................................
Here's an example that happened to friend, that points up the importance of planning ahead. Bob retired with his wife May, to Florida from Maine. He sold his Maine house for $280,000 and planned to use this as his nest egg during his retirement. He bought a mobile home..(downsized)for $35,000. Shortly after retiring, May began a long slide into Alzheimers, and after three years has to go into a nursing home. (at the time $65,000/yr.) She lived there for 5 years before passing away. Because Bob and May had assets from the sale of their house, medicaid would not pay, and The nest egg was gone.
..............................................
Now, here's what happens....
1. In counting assets, Bob is allowed certain exclusions. In General, the exclusions in his case, were... His house @ $35,000, His car $20,000, Cash (then, $40,000) and some smaller amounts like burial plot and non cash life insurance.
2. The logical thing to have done would be to give away the money in the nest egg, so the state wouldn't take it. That's where the lookback comes in. If he had given away the money to his kids, the state would not have taken the money... but... to prevent this from happening, the state will "look back" five years and deny medicaid payment,if this 'gift" transaction had taken place.
As it happened, May died, an Bob had nothing but his Social Security left to live on.
.................................................
Here's what I took from this...
Nine years ago, we owned a mobile home, and a park model trailer in a campground. Understanding Bob's situation, we took some of our savings, and purchased a home outright. This took the money out of our assets and put it into the house "exclusion". Now, if one of us shold have to go into a nursing home, the state may take from our savings account, but they will not take the house... Essentially this means that one of us will still be able to keep some substantial assets, hopefully enough to stay above the poverty level.
.............................................
This is just one of many, many reasons to look ahead to the future.
See the link to Elder Law on Exclusions. (website)
This is not a pleasant, nor a fun post. Most of you probably have some understanding of the laws, but the matter of elderlaw is extremely complex.
IMHO, when a case involving medical expense, or the legal position of any older relative, the very first thing to do is to contact an geriatric or eldercare lawyer. Not just any lawyer, but one who is deeply involved in elderlaw.
Bookmark the site on Elderlaw. There is a series of Q and A's bout real life situations, that should shed much light on a difficult subject. I thought I was relatively knowledgeable but found that in more cases than not, I had no idea of how the law treats estates and legal matters involving older people.
I have more nighmare stories about friends or neighbors who lost literal fortunes because of small errors in handling legal matters, either because of mistake in timing, or failure to obtain proper legal permissions. Anyone who has dealt with estate administration will understand what I'm talking about.
FWIW, I don't pretend to be a legal reference, and so some of the above may be wrong. Feel free to correct errors.
Just to point up the dangers involved in ignorance of the law. Back to the long Island situation, which involved a very good friend who has since passed away.
When Jim's wife showed early signs of Alzheimers, he sought advice from his children, who were lawyers, but not versed in elderlaw. They suggested that he "gift" to his 8 grandchildren to lower his liquid assets by $200,000, which might later be required to pay for his wife's coming nursing home costs. The gifting was legal. Two years later his wife went into a nursing home. When he declared his assets, he made no mention of the "gifts". After paying for two years of care, he had depleted what was left in his bank account, and the transfer of costs for the nursing home care went to the state. His wife lived in the nursing home for three more years.
As the state went over the accounting, they reviewed the "lookback" period, and found that the "gifting" had been omitted from the application. My friend was charged with medicaid fraud, and found guilty, and sentenced to a jail term. His children hired a criminal lawyer, who, for a considerable payment $150,000, managed to get the sentence revoked. Unfortunately, the interim years of stress took its' toll, and led to his early death... aged 78, but probably unnecessary.
A lesson in crime and punishment, but my point is that the law is involved, and has to be respected. Ignorance of the law is no excuse. Thus the suggestion for the Elderlaw Lawyer.
___
Perhaps the most important part of this thread on retirement, is the matter of protecting one's assets... and even more important, thinking ahead to protect the assets of a spouse, when health requires extraordinary expenses.
Since we, and our spouses will always be healthy, we don't think about what could happen. We just assume we'll both die at the same time.
Statistically that ain't gonna happen. If you already have a net worth of 2 Million dollars, don't read the rest... It doesn't apply to you.
Current medicaid law allows for payment of nursing home expenses under certain conditions. If you understand those conditions, you could save hundreds of thousands of dollars for yourself, your spouse, or your estate... (your kids).
Here are the things you should know about:
Current nursing home costs average from $75,000 to $90,000/yr. A friend on Long Island is currently paying over $135,000/yr. for just basic care.
The state (medicaid) does not automatically pay for this.
You should understand "exclusions".
Know that the "look back period" is now 5 years.
...........................................
As long as a married couple have assets, if one spouse should have to go into a nursing home, the couple's assets will be used to pay for the medical care until the assets go below a certain level, at which time, the state medicaid program will pay for the nursing home care. The asset level varies by state.
............................................
Here's an example that happened to friend, that points up the importance of planning ahead. Bob retired with his wife May, to Florida from Maine. He sold his Maine house for $280,000 and planned to use this as his nest egg during his retirement. He bought a mobile home..(downsized)for $35,000. Shortly after retiring, May began a long slide into Alzheimers, and after three years has to go into a nursing home. (at the time $65,000/yr.) She lived there for 5 years before passing away. Because Bob and May had assets from the sale of their house, medicaid would not pay, and The nest egg was gone.
..............................................
Now, here's what happens....
1. In counting assets, Bob is allowed certain exclusions. In General, the exclusions in his case, were... His house @ $35,000, His car $20,000, Cash (then, $40,000) and some smaller amounts like burial plot and non cash life insurance.
2. The logical thing to have done would be to give away the money in the nest egg, so the state wouldn't take it. That's where the lookback comes in. If he had given away the money to his kids, the state would not have taken the money... but... to prevent this from happening, the state will "look back" five years and deny medicaid payment,if this 'gift" transaction had taken place.
As it happened, May died, an Bob had nothing but his Social Security left to live on.
.................................................
Here's what I took from this...
Nine years ago, we owned a mobile home, and a park model trailer in a campground. Understanding Bob's situation, we took some of our savings, and purchased a home outright. This took the money out of our assets and put it into the house "exclusion". Now, if one of us shold have to go into a nursing home, the state may take from our savings account, but they will not take the house... Essentially this means that one of us will still be able to keep some substantial assets, hopefully enough to stay above the poverty level.
.............................................
This is just one of many, many reasons to look ahead to the future.
See the link to Elder Law on Exclusions. (website)
This is not a pleasant, nor a fun post. Most of you probably have some understanding of the laws, but the matter of elderlaw is extremely complex.
IMHO, when a case involving medical expense, or the legal position of any older relative, the very first thing to do is to contact an geriatric or eldercare lawyer. Not just any lawyer, but one who is deeply involved in elderlaw.
Bookmark the site on Elderlaw. There is a series of Q and A's bout real life situations, that should shed much light on a difficult subject. I thought I was relatively knowledgeable but found that in more cases than not, I had no idea of how the law treats estates and legal matters involving older people.
I have more nighmare stories about friends or neighbors who lost literal fortunes because of small errors in handling legal matters, either because of mistake in timing, or failure to obtain proper legal permissions. Anyone who has dealt with estate administration will understand what I'm talking about.
FWIW, I don't pretend to be a legal reference, and so some of the above may be wrong. Feel free to correct errors.
Just to point up the dangers involved in ignorance of the law. Back to the long Island situation, which involved a very good friend who has since passed away.
When Jim's wife showed early signs of Alzheimers, he sought advice from his children, who were lawyers, but not versed in elderlaw. They suggested that he "gift" to his 8 grandchildren to lower his liquid assets by $200,000, which might later be required to pay for his wife's coming nursing home costs. The gifting was legal. Two years later his wife went into a nursing home. When he declared his assets, he made no mention of the "gifts". After paying for two years of care, he had depleted what was left in his bank account, and the transfer of costs for the nursing home care went to the state. His wife lived in the nursing home for three more years.
As the state went over the accounting, they reviewed the "lookback" period, and found that the "gifting" had been omitted from the application. My friend was charged with medicaid fraud, and found guilty, and sentenced to a jail term. His children hired a criminal lawyer, who, for a considerable payment $150,000, managed to get the sentence revoked. Unfortunately, the interim years of stress took its' toll, and led to his early death... aged 78, but probably unnecessary.
A lesson in crime and punishment, but my point is that the law is involved, and has to be respected. Ignorance of the law is no excuse. Thus the suggestion for the Elderlaw Lawyer.
youbet
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I wonder how your friend's children, "the lawyers," feel about having given their dad such lame advise.
No doubt, when the Medicaid form asks whether you've gifted money during the past five years, and you have, better answer "yes."
walkinwood
Thinks s/he gets paid by the post
Your point about owning your home to shelter some of your assets was a revelation to me. I knew that you could keep your home when qualifying for medicare, but didn't put the two together.
A good reason to avoid a mortgage as you get older. (if you can afford to pay for the house, obviously)
A good reason to avoid a mortgage as you get older. (if you can afford to pay for the house, obviously)
Retire2013
Recycles dryer sheets
Dear imoldethanu,
I would like to thank you for taking the time to share all of this useful information.
Have a wonderful evening!
Retire 2014
I would like to thank you for taking the time to share all of this useful information.
Have a wonderful evening!
Retire 2014
Purron
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 23, 2007
- Messages
- 5,596
Just had a memory of MMND, not sure why...
Last edited:
qualifying for medicare. I didn't think owning a home has anything to do with medicare qualification. I think you meant medicaid.
Anyway, is there a limit on how many houses you own? In the OP's case, he has 2.
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
You can be a billionaire, all cash, and qualify for Medicare. You may mean Medicaid?
Ha
- Joined
- Apr 14, 2006
- Messages
- 23,058
Catnip flashbacks.
donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
We still exchange gifts with the kids but my brothers, sisters, nieces and nephews adopted the no gifts policy a while back. Just too much of a hassle and never fostered any additional intimacy. Some people seem like they equate the amount and or effort put into a gift as some sort of proof of love. I don't like that at all.
Last edited:
Good question for two reasons...
First... The home has to be the primary residence, and has to be purchased or bought to replace another primary residence of the same or lower value than the current home... AND MUST confirm to the lookback period...
(so you can't suddenly buy a million dollar mansion, and expect that to shelter assets)
We began to relax about this in 2009, when our home purchase cleared the 5 year hurdle... BTW... that lookback used to be just 3 years.
........................................................................
The question brings up another good point that needs some legal interpretation, especially for "snowbirds", or for anyone who has two addresses, such as a campground, or a "cottage on the lake", and like that.
Primary residence is important from many standpoints, and failure to stay "legal" can have consequences. Please don't take this as gospel, 'cuz i'm not a lawyer... (another reason for geriatric lawyers who have a better understanding of senior concerns).
Here are some of the issues where legal residence is important.
-Homestead exemptions
-Senior Tax freezes
-Resident state for Medicare Supplement
-State and local taxes
-Drivers Licences
-Medicaid
-Auto Insurance and vehicle garaging
-Campground addresses... (usually not allowed)
-Residence time periods... Most States have 6 Month limits on campgrounds.
-State and local benefits... senior passes, transportation, education etc.
-Food Stamps
Twenty years ago, the residence issue wasn't a big deal, but as the squeeze tightens, it's pretty important to understand the ramifications of
legal residence.
Thanks for the question...
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walkinwood
Thinks s/he gets paid by the post
Yes, I did mean medicaid. Thanks.
+1 thanks!
Here is one more wrinkle to the nursing home bill
lt kids on the hook for nursing home bills?
Long Term Care Insurance Honor Roll
By Clark Howard
Got a parent in a nursing home? A surprise big bill could be headed your way even if you haven't signed for financial responsibility for that parent.
The Wall Street Journal reports that 29 states have passed what are called 'filial responsibility laws' to deal with the budget shortfall for Medicaid, which pays for long term care of impoverished seniors.
Among the states are Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, and West Virginia.
For years, I have said that if your mom or dad ends up in a nursing home and you have not signed for financial responsibility, then you are not responsible. (Of course, you as executor or executrix will have to parcel out the estate at the time of your parent's death to meet any obligations, and final expenses are the highest priority claimant in some states.)
But this new info flies in the face of what I've traditionally said.
To this point, Pennsylvania is the only state where financial liability against an adult child has been upheld in a court of law. (It doesn't matter if an adult child isn't involved in the life of a parent. They can still be held responsible in the eyes of the law.)
Obviously, this is a still evolving situation as our population ages. Only time will tell how courts in other states rule on this issue.
So what should you do if you have an aging parent?
If you are of means, it is to your advantage to do the kinds of things necessary to care for your parent. That might mean buying a long term care policy for parents. Or in the early stages, before your parents really starts going downhill, sit down with an elder-law attorney to discuss what kind of protections you can set up for yourself and your assets.
Adult children may be on the hook for nursing home bills | www.clarkhoward.com
lt kids on the hook for nursing home bills?
Long Term Care Insurance Honor Roll
By Clark Howard
Got a parent in a nursing home? A surprise big bill could be headed your way even if you haven't signed for financial responsibility for that parent.
The Wall Street Journal reports that 29 states have passed what are called 'filial responsibility laws' to deal with the budget shortfall for Medicaid, which pays for long term care of impoverished seniors.
Among the states are Alaska, Arkansas, California, Connecticut, Delaware, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nevada, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Virginia, and West Virginia.
For years, I have said that if your mom or dad ends up in a nursing home and you have not signed for financial responsibility, then you are not responsible. (Of course, you as executor or executrix will have to parcel out the estate at the time of your parent's death to meet any obligations, and final expenses are the highest priority claimant in some states.)
But this new info flies in the face of what I've traditionally said.
To this point, Pennsylvania is the only state where financial liability against an adult child has been upheld in a court of law. (It doesn't matter if an adult child isn't involved in the life of a parent. They can still be held responsible in the eyes of the law.)
Obviously, this is a still evolving situation as our population ages. Only time will tell how courts in other states rule on this issue.
So what should you do if you have an aging parent?
If you are of means, it is to your advantage to do the kinds of things necessary to care for your parent. That might mean buying a long term care policy for parents. Or in the early stages, before your parents really starts going downhill, sit down with an elder-law attorney to discuss what kind of protections you can set up for yourself and your assets.
Adult children may be on the hook for nursing home bills | www.clarkhoward.com
donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
scary stuff. I suspect that, if you read the decision, the kids had power of attorney and didn't take prudent steps to apply for Medicaid or something like that. It doesn't seem reasonable that states Could generally declare your parents your dependants. Why not siblings. Why not neighbors.
Has anyone actually read any of these filial liability laws?
donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
A quick look indicates these things may be for real. Worth pushing your parents to get long term care if you are in the wrong state.
NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Well, when the gummint's coffers are empty, drastic measures will have to be taken. We do not want to be like Greece, do we?
But I surely hope that some more sensible policies will get enacted first, before they go after the children. For example, the surviving spouse will need a place to live, and it is too cruel to confiscate the house. But how big a house? How about downsizing it to a mobile home? A little RV?
But I surely hope that some more sensible policies will get enacted first, before they go after the children. For example, the surviving spouse will need a place to live, and it is too cruel to confiscate the house. But how big a house? How about downsizing it to a mobile home? A little RV?
