Michigan Estate Planning Blog

Understanding “Medicare” Programs

It’s no secret that Medicare is a difficult system to understand. Unfortunately, it’s a fact of life for our nation’s seniors. As a result, Medicare is something we have to work to understand. For many of us, though, there is at least one more resource available to many of us, according to a recent article by SmartMoney. The problem with so many Medicare informational resources is that you have to read through tomes of legalese, sift through graphs and charts, and, in the end, you still haven’t figured out the answer to your question. Good news: A new program called “Seniors Out Speaking,” or SOS, is a peer-advice program through which volunteer seniors teach other senior about Medicare. It’s a program of the Medicare Rights Center, and it’s currently operating (or starting up) in New York, Kansas, Maryland and New Jersey, Alabama, Florida, Maine and Wisconsin. Although SOS currently doesn’t exist everywhere, the Center hopes to expand its support. The Center believes the program can be easily replicated in communities across the country. As a result, a generation hitting retirement all at once will be able to help each other through it. Think baby boomers. If SOS exists in your area, it might be worth looking into as a listener or as a teacher. There also may be similar programs in your community. On the other hand, you may want to start a program in your own community. More information on Medicare itself can be found on the Medicare Rights Center website. Also, it might be worth looking into your local community events calendar to see if there are any seminars or programs in your area.

Reference: SmartMoney (August 29, 2011) “Medicare, Now Less Complicated”

Asset Protection Pointer: Start Yesterday

We tend to think of the law as a rigid structure, unless of course it’s bending to help us. On the other hand, the law also might bend against us… and that can be rather unsettling, especially when you are a debtor attempting to protect your assets. Unfortunately, it seems creditors win most of the asset protection cases brought to court. In fact, a review of such cases suggests that courts have a bias in favor of creditors over debtors. Jay Atkinson at Forbes recently weighed in on why that is so and offers a glimpse into the politics and psychology of the court. I thought you might find it instructive. Truth be told, assessing the value of asset protection is not something that can be done by merely scanning a record of court wins and losses for debtors and creditors. Why? Consider this: Creditors, by nature, tend to be the litigants who are after something. That means they can call it quits if they feel their legal position is not particularly strong. As a result, they are more likely to pursue an out of court settlement. Debtors, however, have to stay on the defensive no matter how much ground they’re forced to surrender. Unfortunately, too, this means that most of the court precedents and legal interpretations are going to be pro-creditor, because the only way the court can affect change is by coming to a decision. If the decisions are always victories for creditors, then it follows that the precedents will also be pro-creditor. As Atkinson concludes: “The cases that are ‘good’ for debtors usually settle; the cases that are ‘good’ for creditors will probably go to a decision and thus ‘make law.’” That is about as well-summarized as I have seen it. Atkinson has some more to say, particularly on the topic of judicial psychology, but the main lesson here: Court is not a “friendly” place for debtors. Indeed, as Atkinson points out, proper asset protection is really all about avoiding court or the need for a court decision. Simply put, proper asset protection is about proper planning and having it completed far ahead of time.

Reference: Forbes (August 25, 2011) “Why Do Creditors Win In Most of the Reported Asset Protection Cases?”

Debt Deal: Not (Really) A Done Deal

I suppose it goes without saying that the past few weeks have been a rather tumultuous time, and especially so for America’s seniors. It’s quickly proving to be a vital time to take stock of the situation and prepare. Luckily, the news is awash with important reminders and advice about what’s at stake. First, the debt deal was finally passed. As I mentioned last week, it’s already been called a mixed bag by AARP, but the bad may outweigh the good and there are specific changes to watch with interest. Robert Powell of MarketWatch has put together another resource detailing what you ought to know with a special emphasis on budget cuts on programs (both the $1 trillion already going into affect and future cuts to Medicare), along with interest rates and taxes. Immediately following on the heels of the debt deal, however, the S&P downgraded the U.S. and forced a rather volatile “market correction.” As SmartMoney points out in this article, it’s like 2008 all over again, because it’s the baby-boomers who have the most to lose and must taken action to engage strategies to protect their nest egg if market forces continue to threaten it. And, finally, there’s looking to the future… the future of rehashing the past few months and the debt debate. The deal that was reached calls for the commission of a super committee to make more suggestions for cutting the debt. That means Medicare and Social Security might not remain safe, since the debate isn’t actually over. Indeed, if the committee’s suggestions are not implemented, then immediate spending cuts to Medicare will go into affect by Christmas. Reuter’s, for one, thinks there’s reason enough to be wary of the super committee altogether, especially if you’re concerned about retirement. In fact, they’ve found eight reasons to worry.

Reference: MarketWatch (August 4, 2011) “How the Debt Deal Will Affect Retirees”

                  SmartMoney (August 8, 2011) “The 2011 Correction: Another Bad Turn for Boomers.”

                  Reuters Money (August 5, 2011) “8 ways the super committee is not super for retirement”

SMALL BUSINESS / SBA FUNDING

If you are a small business owner, you may be pleased to learn that the Small Business Administration (SBA) dodged the budget-bullet last week. Despite bantering about a number of potential cuts, in the end, House and Senate negotiators agreed to restore the SBA appropriation to $433 million. The compromise spending bill includes a cut of 7 to 8 percent on total non-military discretionary spending. The SBA emerged, however, largely intact. Also, the business loan guarantee programs, which are financed through a separate account, also retained its 2010 funding of $236 million. Short-term, it looks like the SBA is still in business (in pun intended). But budget cuts and debt-reduction remain hot political topics. The Republican House already has made its intents known, suggesting cuts of $100 million from the SBA. President Obama also proposes to strip $28 million from the agency for 2012. If you were thinking of turning to the SBA for assistance in expanding your small business, you may be well-advised to move sooner rather than later.

Link: http://boss.blogs.nytimes.com/2011/04/12/s-b-a-spared-in-2011-spending-deal/?ref=smallbusiness

 From The New York Times Online (April 12, 2011) “SBA Spared in 2011 Spending Deal”

ESTATE PLANNING / FUNDAMENTAL ESTATE PLANNING

From SMARTBUSINESS (Feb 27, 2011) “How to craft a well-thought-out estate plan”

Article Quotation:

For many executives, estate planning is an uncomfortable subject. That’s understandable, but there are adverse consequences to avoiding it.

 It certainly is understandable that no one enjoys a conversation about death – especially their own! And, with the estate tax exemption now set at $5 million for an individual and $10 million for a couple, many people may believe they have no reason to consult an attorney about their estate planning. But avoiding the topic of estate planning can mean unnecessary expense, confusion and conflict.

SmartBusiness last week highlighted the fundamentals of a “well-thought-out estate plan,” with topics that everyone should consider – whether prince or pauper.

• Why do you need an estate plan? A comprehensive estate plan ensures that your estate id distributed according to your wishes, provides protection for your in the event of your own disability, and allows you to plan for minor children, pets, and charitable causes.
• Can I write my own will? You certainly can, and there are many online sites to help you do so! However, as in most things of life, you do get what you pay for. Improperly drafted or last-minute, hand-written wills frequently are contested and invalidated in court. If you don’t know what you’re doing, the outcome could be much different than you expect.
• What should every estate plan have? SmartBusiness recommends two powers of attorney and a living will. I agree, but would expand the list to include a will, powers of attorney for financial affairs and for health care, and a living will.
• What about trusts? Many people choose to create trusts, not only to reduce estate taxes, but also to help their heirs avoid probate. Trusts also can help shield assets from loss to due to unforeseen circumstances, such as the bankruptcy, divorce or lawsuits of your heirs.
• What mistakes to people tend to make in estate planning? The writer points out two common mistakes: failure to plan for their personal effects, and failure to review and update their plans over time.

You can learn more about comprehensive estate planning in the Fundamental Estate Planning Practice Center on our website. You also may want to review the November issue of our estate planning newsletter, Are You Ready?, which focuses on how to get (and keep) your legal affairs in order.

Project SALUTE

Project SALUTE is a special program that provides pro bono attorney services to assist low-income Veterans in obtaining the federal disability and pension benefits they deserve.

I have received my Certificate of Completion for the Project SALUTE Basic Training in Veteran's Federal Benefits Law for Pro Bono Attorneys from the Univeresity of Detroit Mercy School of Law in October, 2009.

If you are a Veteran or know of a Veteran who may qualify for this service, contact me, or the University of Detroit Mercy School of Law at 313-596-0235.

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