The year was 1983: The U.S. invaded Granada. A gallon of gas cost 96 cents. Michael Jackson’s ‘Thriller’ video premiered. That year was also the last time that Social Security recipients saw a cost-of-living increase steeper than the one just announced for 2022. This year, Social Security benefits will rise 5.9 percent, the sharpest upsurge for Social Security beneficiaries since 1983’s 7.4 percent jump. 

Cost-of-living increases are tied to the consumer price index, and rising inflation rates and gas prices caused by the ongoing coronavirus pandemic mean Social Security beneficiaries will get a large boost in 2022. The 5.9 percent increase dwarfs last year’s 1.3 percent rise, and over the past decade hikes have averaged just 1.65 percent. The average monthly benefit of $1,565 in 2021 will go up by $92 a month to $1,657 a month for an individual Social Security beneficiary, or $19,884 yearly. 

The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $142,800 to $147,000.

For 2022, the monthly federal Supplemental Security Income (SSI) payment standard will be $841 for an individual and $1,261 for a couple.

Part of the increase will be eaten up by higher Medicare Part B premiums, however. The standard monthly premium for Medicare Part B enrollees has not been announced yet, but it is projected to rise $10 a month to $158.30.  And the 5.9 percent increase for Social Security beneficiaries may not be enough for seniors to keep pace with rising health care and prescription drug costs.

“You’re glad that you get a 5.9 percent increase, but it doesn’t feel like you’re getting 5.9 percent when all of your other costs are going up much higher,” said Nancy Altman, president of the advocacy group Social Security Works.

Most Social Security beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2021. While you can still receive your increase notice by mail, you have the option to get the notice online instead.

For more on the 2022 Social Security benefit levels, click here.

For questions related to retirement planning, estate and elder law planning, contact the attorneys at Elville and Associates to schedule a consultation.  Through their education-based process and focus on collaboration, they will work to ensure peace of mind and work in partnership with your financial advisors to ensure your estate planning works in tandem with the rest of your financial planning you have in place. 

#elvilleeducation

#elvillewebinarseries

Posted in Blog | Comments Off on In 2022, Social Security Beneficiaries Will See the Biggest Increase in 39 Years

Presenters:  Ms. Ellen Platt & Dr. Michelle Fritsch

In part one of the Elville Webinar Series’ new Wellness Series, guest presenters Ms. Ellen Platt and Dr. Michelle Fritsch will briefly summarize the last 18 months of the pandemic, discuss how it has impacted us, and how it may impact us going forward.  They will also provide you strategies to help make the best of it.

Featuring nationally renowned speakers Ms. Ellen Platt, a certified Aging LifeCare Manager and Owner of The Option Group, and Dr. Michelle Fritsch, a board certified, doctoral trained health professional and founder of Retirement Wellness Strategies and cofounder of Propel Comprehensive Wellness, this presentation is one you will not want to miss!  

 

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

Posted in Videos & Webinar Recordings | Comments Off on Wellness During Uncertainty

Presenters:  Ms. Ellen Platt & Dr. Michelle Fritsch

In part two of the Elville Webinar Series’ new Wellness Series, guest presenters Ms. Ellen Platt and Dr. Michelle Fritsch will discuss how change is uncomfortable and sometimes disruptive.  They will talk about how these changes can impact your daily functioning and you will be provided with strategies and supports to navigate the disruptions and prevail!

Featuring nationally renowned speakers Ms. Ellen Platt, a certified Aging LifeCare Manager and Owner of The Option Group, and Dr. Michelle Fritsch, a board certified, doctoral trained health professional and founder of Retirement Wellness Strategies and cofounder of Propel Comprehensive Wellness, this presentation is one you will not want to miss!  

 

 

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

Posted in Uncategorized, Videos & Webinar Recordings | Comments Off on Navigating Unexpected Change

As a business grows its needs for additional workers increases. The law regarding employees is complex and often misunderstood or misapplied. Even innocent mistakes can result in disastrous consequences for the employer. Business law attorney Chuck Borek, J.D.,MBA, CPA, of The Borek Group, LLC and special counsel to Elville and Associates covers the following issues in this webinar session:

• Distinguishing employees from independent contractors
• Steps you must take when you hire an employee
• When you must pay an employee hourly and pay for overtime
• The effective use of written employment agreements
• Protections employees enjoy that you may not be aware of

 

 

More Webinars from Elville and Associates

The education of clients and their families through counseling and superior legal-technical knowledge is the mission of Elville and Associates.  We hold multiple educational events every month. Click to view our calendar of educational webinars and events or visit the Elville and Associates YouTube channel to view recordings of our past webinars.

Posted in Videos & Webinar Recordings | Comments Off on Surprises in the Employment Relationship – What You Don’t Know Can Hurt You

Law provides Medicaid special protections for the spouses of Medicaid applicants to make sure the spouses have the minimum support needed to continue to live in the community while their husband or wife is receiving long-term care benefits, usually in a nursing home.

The so-called “Medicaid spousal protections” work this way: if the Medicaid applicant is married, the countable assets of both the community spouse and the institutionalized spouse are totaled as of the date of “institutionalization,” the day on which the ill spouse enters either a hospital or a long-term care facility in which he or she then stays for at least 30 days. (This is sometimes called the “snapshot” date because Medicaid is taking a picture of the couple’s assets as of this date.)

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (an amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple’s total “countable” assets up to a maximum of $130,380 (in 2021). Called the “community spouse resource allowance,” this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $26,076 (in 2021).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple’s assets have been reduced to a combined figure of $52,000 — $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse with Medicaid spousal protections. In these states, the community spouse may keep up to $130,380 (in 2021), regardless of whether or not this represents half the couple’s assets. For example, if the couple had $100,000 in countable assets on the “snapshot” date, the community spouse could keep the entire amount, instead of being limited to half.

The income of the community spouse is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted. Thus, even if the community spouse is still working and earning, say, $5,000 a month, she will not have to contribute to the cost of caring for her spouse in a nursing home if he is covered by Medicaid. In some states, however, if the community spouse’s income exceeds certain levels, he or she does have to make a monetary contribution towards the cost of the institutionalized spouse’s care. The community spouse’s income is not considered in determining eligibility, but there is a subsequent contribution requirement.

But what if most of the couple’s income is in the name of the institutionalized spouse and the community spouse’s income is not enough to live on? In such cases, the community spouse is entitled to some or all of the monthly income of the institutionalized spouse. How much the community spouse is entitled to depends on what the Medicaid agency determines to be a minimum income level for the community spouse. This figure, known as the minimum monthly maintenance needs allowance or MMMNA, is calculated for each community spouse according to a complicated formula based on his or her housing costs. The MMMNA may range from a low of $2,155 to a high of $3,259.50 a month (in 2021). If the community spouse’s own income falls below his or her MMMNA, the shortfall is made up from the nursing home spouse’s income.

Example: Joe Smith and his wife Sally Brown have a joint income of $3,000 a month, $1,700 of which is in Mr. Smith’s name and $700 is in Ms. Brown’s name. Mr. Smith enters a nursing home and applies for Medicaid. The Medicaid agency determines that Ms. Brown’s MMMNA is $2,200 (based on her housing costs). Since Ms. Brown’s own income is only $700 a month, the Medicaid agency allocates $1,500 of Mr. Smith’s income to her support. Since Mr. Smith also may keep a $60-a-month personal needs allowance, his obligation to pay the nursing home is only $140 a month ($1,700 – $1,500 – $60 = $140).

In exceptional circumstances, community spouses may seek an increase in their MMMNAs either by appealing to the state Medicaid agency or by obtaining a court order of spousal support.

Contact the elder law attorneys at Elville and Associates to find out what Medicaid spousal protections are available and what you can do to make sure your spouse has enough income to live on.  The firm’s elder law attorneys are well-versed in Medicaid law and can offer solutions and peace of mind to your family’s situation. 

For the dollar amounts that your state allows community spouses to retain, go to Find an Attorney, click on your state, and then “Key Medicaid Information” for that state.

Posted in Blog | Comments Off on Medicaid Spousal Protections for the Healthy Spouse

By:  Jeffrey D. Stauffer, Executive Director – Elville Center for the Creative Arts, Inc.

Do you have an instrument taking up space in a closet or attic not being used anymore?  Perhaps your son or daughter has moved on to other activities and their instrument could use a good home!

As the fall semester in schools is underway, the Elville Center has developed many new school partnerships that have many, many needs for instruments for students that want to participate in band or orchestra but don’t have the means to do so on their own.  And, that’s where the Elville Center and you come in.

The Elville Center for the Creative Arts depends on people like you to donate musical instruments we then refurbish so they’re like new before we get them in the hands of student musicians in music programs we support in local schools.  We also fund other educational initiatives in schools as well as in organizations such as the Columbia Orchestra and The Annapolis Symphony Orchestra, to name just a couple.  Virtually all instruments are gladly accepted – clarinets, trumpets, saxophones, violins, bassoons, flutes, guitars, cellos, baritones – and everything in between (no pianos or recorders, though – sorry!)

The Elville Center is a small charity and we work hard to make a difference in the communities we serve.  Typically, an instrument can cost  anywhere between $75 and $200 to refurbish.  And, as a small charity, we ask anyone looking to donate an instrument to consider making a monetary donation of $50 or more to help with the cost to refurbish the instrument and/or purchase necessary items such as a new case, new mouthpieces, reeds and other supplies.  If this is something you’re willing and able to do, it would be most appreciated and make a tremendous difference; however, if it is not, you’re still welcome to donate the instrument and it will find a good home with one

of our school music partners.

If you’re willing and able to donate, you can do so by visiting here — https://www.paypal.com/donate/?hosted_button_id=TPBET4HBSGC6W —

which is the donation page on our website.

The one instrument we are not accepting at this time are pianos, and this is for many reasons.  To learn how you can donate your piano, please view our suggestions on our website here.

Lastly, if you’d like the Elville Center to furnish a tax receipt for your instrument and/or monetary

donation, as a 501(c)(3) non-profit we’re very happy to do so.  The two pieces of

information we need to furnish this receipt are your full name and home address (to be used solely for this letter).

You’re welcome to drop off the instrument at our office, which is located within the office of Elville and Associates, P.C., an estate planning, elder law, and special needs planning firm based in Columbia.  The charity was founded by the firm’s Managing Principal and Lead Attorney, Stephen Elville.  I, Executive Director Jeffrey Stauffer, also work for the firm as its Community Relations Director.

To donate or for more information, please contact me at jeff@elvillecenter.org, or at 443-676-9691.  You can also fill out a contact form on our website home page by clicking here.

Thank you again for your interest in the Elville Center for the Creative Arts and have a wonderful day!  We value your support!

With appreciation,

Jeffrey D. Stauffer

Executive Director

Elville Center for the Creative Arts, Inc.

7100 Columbia Gateway Drive, Suite 190 Columbia, Maryland 21046

P:  443-393-7696 (Main)

E:  jeff@elvillecenter.org

W:  jeff@elvillecenter.org

Posted in Blog | Comments Off on Donate Your Used or Unwanted Musical Instruments to the Elville Center Today!

Inheriting real estate from your parents is either a blessing or a burden — or a little bit of both. Figuring out what to do with the property can be overwhelming, so it is good to carefully think through your choices. 

There are three main options when you inheriting real estate: move in, sell, or rent. Which one you choose will depend on your current living situation, whether or not you have siblings, your finances, whether the house has a mortgage or liens, and the physical condition of the house. The following are some things to consider:

• Taxes. In most situations, you do not have to pay taxes when inheriting real estate, but if you sell the property, you will be subject to capital gains tax. The good news is that inherited property receives a step-up in basis. This means that if you inherit a house that was purchased years ago for $150,000 and it is now worth $350,000, you will receive a step up from the original cost basis from $150,000 to $350,000. You should get an appraisal done as soon as possible to find out how much the house is currently worth. If you sell the property right away, you should not owe any capital gains taxes. If you hold on to the property and sell it for $400,000 in a few years, you will owe capital gains on $50,000 (the difference between the sale value and the stepped-up basis). On the other hand, if you use the property as your primary residence for at least two years and then sell the property, you may be able to exclude up to $250,000 ($500,000 for a couple) of capital gains from your taxes. 
• Mortgage. Does the house have a mortgage on it – either a regular mortgage or a reverse mortgage? Sometimes it is specified in the estate plan that the estate will pay off the mortgage. In cases where it doesn’t, with a regular mortgage you will likely have to assume the monthly payments. There are some mortgages, however, that require the heirs to pay off the mortgage immediately. With a reverse mortgage, you usually have a limited time to pay off the mortgage in full. 
• Repairs. After inheriting real estate, it is a good idea to hire a home inspector to assess the condition of the house. If the property needs significant repairs, it may affect what you do with it. Renovations and repairs can be costly and time-consuming. You may want to consult with a realtor before taking on any big projects. It may not make sense to spend a lot of money on the house.
• Property Maintenance. Once you inherit the property, you will be responsible for maintaining it. The first thing you want to do after inheriting real estate is make sure the utilities and homeowners’ insurance are transferred to the new owners and continue to be paid on time. You will also need to pay all the property taxes and any other fees associated with the property. 
• Other Owners. If inheriting real estate with siblings, you will all need to agree on what to do with the property. If one sibling wants the property, he or she can buy it from the other siblings. Otherwise, you can sell or rent the property and split the profits. If there is a dispute among siblings, you can try professional mediation. In mediation, the disputing parties engage the services of a neutral third party to help them hammer out a legally binding agreement that all concerned can live with. The disputing parties can control the process and they have a chance to explain their perspectives and feelings. If you go to court, the judge will likely order the house to be sold so the profits can be split. 

Ultimately, there are many decisions to make when inheriting real estate and deciding what to do with it can be a very emotional decision. If possible, try not to rush into any decisions until you’ve had time to thoroughly consider your options.  Also, be sure to speak with the estate planning attorneys at Elville and Associates to ensure your inherited real estate is accounted for in your estate plan.

#elvilleeducation

Posted in Blog | Comments Off on When Inheriting Real Estate, Consider Your Options

When interest rates are low, intrafamily loans can be a good way to assist a relative (typically a child) with purchasing a house or a family business, and in certain circumstances they can be used to gift money to the next generation. 

An intrafamily loan allows family members to borrow money from each other at a special rate, but it must be structured properly so that the loan is not considered a gift. This means the intrafamily loan must have a written promissory note, require repayment, and charge interest (if the loan is for more than $10,000). The IRS sets the Applicable Federal Rate (AFR) each month, and the interest on the intrafamily loan must equal the AFR. The rate is different, depending on the term of the loan, which can be a short-term loan (0-3 years), a mid-term loan (3-9 years), or a long-term loan (9 or more years). The AFR is typically lower than the interest rate a bank would charge, and the borrower’s credit doesn’t affect the loan, so someone with bad credit can still get an intrafamily loan. 

When structured properly, an intrafamily loan can assist children with purchases and pass on assets. The following are some of the ways an intrafamily loan can be used: 

• Pay for a house. An intrafamily loan can be used to fund a mortgage for children or grandchildren. Because the interest rates are lower, the children will pay less overall than going through a traditional mortgage lender. 
• Pass on a family business. Depending on how large the business is, giving away a business could exceed the prevailing gift tax exemption. Instead, parents can loan money to a child to purchase the family business. Parents who are financially able could use the annual gift limit ($15,000 in 2021) to give children money to repay the intrafamily loan. Alternatively, if the family business produces income, the child can use the income to pay back the loan. Even if the business doesn’t exceed the gift tax exemption, this can be a good strategy for parents who want to pass on the business, but still need a steady income stream. 
• Pass on assets. An intrafamily loan can be used as a method of passing on assets provided the borrower can invest the money in a way that brings in a higher rate of return than the interest rate on the loan. Given the low interest rate on an intrafamily loan, this can be a successful strategy. If the intrafamily loans are a large one, it may be wise to loan the money to a family trust. The trust invests the money and repays the loan. After the loan is repaid, the remaining assets are protected by the trust and can be distributed to beneficiaries as dictated by the trust terms. 

The downside of an intrafamily loans are the same as with any loan: The loan must be repaid. If the child defaults on the intrafamily loan, it could trigger a gift tax for the person making the loan. It is also important to have the correct paperwork and documentation. 

An intrafamily loan should only be set up in consultation with the experienced estate planning attorneys at Elville and Associates.  Consider a consultation to discuss your situation further by contacting the firm’s Legal Administrator, Mary Guay Kramer, at mary@elvilleassociates.com, or at 443-741-3635.

#elvilleeducation

Posted in Blog | Comments Off on How to Use Intrafamily Loans as Part of Your Estate Plan

The SECURE Act, passed at the end of 2019, changed a number of rules regarding inherited IRAs, making it more difficult for most beneficiaries to save on taxes by “stretching” distributions over many years. However, an exception to the new rules potentially changes advice that special needs planners often give clients, and leaving an IRA to a special needs trust is no longer such a bad idea.

For many reasons, it’s usually not advisable to make an individual with special needs the beneficiary of an IRA or 401(k) plan (i.e., leaving an IRA to a special needs trust). She may not be able to manage the funds, and owning the account may render her ineligible for vital public benefits. This is why planners always recommend that parents with children with special needs leave their share of their estates in a special needs trust for the child’s benefit. But parents are often encouraged to leave their retirement plans to other children, if any, because holding a retirement plan in a special needs trust gets complicated.

Why a SECURE SNT Can Save in Taxes

But in light of the SECURE Act’s new rules, this advice may no longer apply, especially in the case of people with larger retirement plan accounts. Under the terms of the SECURE Act, most people who inherit retirement plans now must withdraw all the funds, and pay income taxes on them, within 10 years of inheriting them. One of several exceptions to this rule is recipients who are disabled. They can withdraw the funds over their life expectancies, which can be several decades, both postponing tax payments and potentially paying at lower rates for two reasons.

First, by spreading out the withdrawals over many years, the withdrawn funds are less likely to push the recipient into a higher tax bracket. Second, a beneficiary with a disability is likely to be in a lower tax bracket in the first place than a non-disabled beneficiary.

Happily, the new law states that the retirement plan owner can designate a SNT as the beneficiary, and the trustee can use the required minimum distributions to pay for the care and support of the person with special needs.  Leaving an IRA to a special needs trust is now a viable option. 

For these reasons, it may well make more sense for some people to have some or all of their retirement plans payable to a special needs trust for their children or grandchildren with special needs, including leaving an IRA to a special needs trust. It’s still more complicated to make use of a trust, but now the benefits of doing so are more likely to justify the added expense and complications. Whether it makes sense in your case depends on your exact situation.

Review Your Existing SNT

You should also be aware that if you have an existing special needs trust that was designed to accept retirement plan benefits, it needs to be updated to conform with the SECURE Act. Whether you have questions about your existing plan or would like to consider creating a SECURE special needs trust, contact your special needs planning attorneys at Elville and Associates.  Through their educational approach to planning, they’ll counsel you on the best approach for you and offer peace of mind along the way.  You can also reach out to the firm’s Legal Administrator, Mary Guay Kramer, at mary@elvilleassociates.com or at 443-741-3635, and she’ll gladly work with you to set a convenient time to meet with one of our attorneys to discuss your planning needs.

#elvilleeducation

Posted in Blog | Comments Off on Leaving an IRA to a Special Needs Trust Is No Longer Such a Bad Idea

The VA offers two veterans’ disability programs. Disability compensation is available only for veterans with service-connected disabilities, while the disability pension benefit is available to anyone who served during wartime and has a disability. The disability does not have to be related to military service.

Disability compensation benefit

If you have an injury or disease that happened while on active duty or if active duty made an existing injury or disease worse, you may be eligible for disability compensation/veterans’ benefits. The amount of compensation you get depends on how disabled you are and whether you have children or other dependents. To determine your disability rating, which is used to calculate compensation, you may use this disability calculator. Click here to see the current compensation rates. Additional funds may be available if you have severe disabilities, such as loss of limbs, or a seriously disabled spouse.

Disability pension benefit

The Veterans’ Administration pays a pension to disabled veterans who are not able to work. This veterans’ benefit is also available for surviving spouses and children. This pension is available whether or not your disability is service-connected, but to be eligible you must meet the following requirements:

• You must not have been discharged under dishonorable conditions.
• If you enlisted before September 7, 1980, you must have served 90 days or more of active duty with at least one day during a period of war. Anyone who enlisted after September 7, 1980, however, must serve at least 24 months or the full period for which that person was called to serve.
• You must be permanently and totally disabled, or age 65 or older. You will need a letter from your doctor to prove that you are disabled.

In addition, your income must be below the yearly limit set by law; called the Maximum Annual Pension Rate (MAPR). The MAPR for 2021 is below:

Veteran with no dependents	$13,931
Veteran with a spouse or a child	$18,243
Housebound veteran with no dependents	$17,024
Housebound veteran with one dependent	$21,337
Additional children	$2,382 for each child

Your veterans’ benefit depends on your income. The VA pays the difference between your income and the MAPR. The pension is usually paid in 12 equal payments.

Example: John is a single veteran and has a yearly income of $8,015. His pension benefit would be $5,916 (13,931 – 8,015). Therefore, he would get $493 a month.

Your income does not include welfare benefits or Supplemental Security Income. It also does not include unreimbursed medical expenses actually paid by the veteran or a member of his or her family. This can include Medicare, Medigap, and long-term care insurance premiums; over-the-counter medications taken at a doctor’s recommendation; long-term care costs, such as nursing home fees; the cost of an in-home attendant that provides some medical or nursing services; and the cost of an assisted living facility. These expenses must be unreimbursed. This means that insurance must not pay the expenses. The expenses should also be recurring this means they should recur every month.

Aid and Attendance

A veteran who needs the help of an attendant may qualify for additional help on top of the disability pension benefit. The veteran needs to show that he or she needs the help of an attendant on a regular basis. A veteran who lives in an assisted living facility is presumed to need aid and attendance.

A veteran who meets these requirements will get the difference between his or her income and the MAPR below (in 2021 figures):

Veteran who needs aid and attendance and has no dependents $23,238 Veteran who needs aid and attendance and has one dependent $27,549

How to apply

You can apply for both veterans’ benefits by filling out VA Form 21-526, Veteran’s Application for Compensation or Pension. If available, you should attach copies of dependency records (marriage & children’s birth certificates) and current medical evidence (doctor & hospital reports). You can apply online at https://www.va.gov/disability/how-to-file-claim/.

Veterans of the United States armed forces may be eligible for a broad range of program, services, and veterans’ benefits provided by the U.S. Department of Veterans Affairs (VA).  The process to apply can be complicated, though, and rules have recently changed.  Contact Elville and Associates’ senior elder law attorney Lindsay V.R. Moss to discuss how she can assist you with the application process for VA Aid & Attendance veterans’ benefit.  Ms. Moss is one of a select few VA-accredited attorneys in the Howard County area and an outstanding resource for your loved one’s or your needs.  She can be reached at 443-393-7696 or by email at lindsay@elvilleassociates.com.  You can also fill out a contact form here and she’ll respond to your request promptly.

Other resources for veterans:

https://www.mesotheliomaveterans.org/ — The Mesothelioma Veterans Center offers free resources that are reviewed by certified oncologists and provide detailed information about mesothelioma and its health impacts. Its mission is to raise awareness about cancer and other asbestos-related diseases such as mesothelioma.

Posted in Blog | Comments Off on An Introduction to Veterans’ Benefits