RETIREMENT TRENDS

RETIREMENT TRENDS

  • Baby Boomers – The Vulnerable Years

These are the individuals born between 1946 and 1964 who are just beginning to retire. They likely will be receiving Social Security Benefits in addition to those who have had the foresight to have significant retirement accounts in place.

  • Generation X

These are the individuals born between 1965 and 1981. Unfortunately, this is the generation where traditional pensions have long been eliminated and the possibility exists that Social Security may not be around when they retire. Their advantage is they have more time to prepare for their retirement including IRA’s, 401k’s and other retirement strategies.

  • Millennials

These are the individuals born between 1982 and 2000. This group statistically is currently the largest in the US Labor Force. Unfortunately, they also have the largest amount of student and credit card debt. This generation also appears to be the savviest when it comes to contributing to employer sponsored retirement accounts which is the most effective way to prepare for ultimate retirement.

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SOCIAL SECURITY CHANGES IN 2017

  • For people born between 1943 and 1954, full retirement age is 66. That will be increased in 2017 by 2 months for people born in 1955. Ultimately, the increases will continue until the full retirement age ends up being 67 for those born in 1960 or later.
  • There will be a .3% increase in monthly benefits in 2017, this is an average monthly increase of five dollars.
  • Earnings subject to Social Security tax will increase in 2017 to $127,200.00. This will effect approximately 12 million IRS payers.

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FLURRY OF CHANGES IN MICHIGAN STATUTES

  • Just before the Michigan Legislature went on its Christmas break in December of 2016, it passed and the Governor signed various laws:
    • Modified penalties for unendorsed motorcycle riders.
    • Allowed private college security officers to provide off-campus law enforcement.
    • Expanded the arrest authority of peace officers to include airport authority police
    • Allowed driving of autonomous vehicles in a test setting and provide for an autonomous-vehicle mobility research center.
    • Provide compensation of $50,000 per year and re-entry services for people who are wrongly convicted and imprisoned.
    • Change the penalties for a minor in possession of alcohol from a misdemeanor to a civil infraction.
    • Removed the requirement for a Dower provision in Judgments of Divorce or legal separation.

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Structuring Estate Plans

Many would agree the primary objectives of most estate planning are to avoid probate and paying taxes. But just focusing only on these could mean disaster for surviving relatives.

Traditionally, estate plans are designed to divide the estate to maximize gift and estate transfer options; they defer immediate taxation through alternatives like trusts; otherwise, the estate is simply dropped into the laps of immature, ill-prepared inheritors and depleted. But what if estate planning lived up to its name and was centered on planning for future generations?

Structuring estate plans with family in mind instead of taxes would promote responsibility, good stewardship and family unity. One advisor advocates making estate assets available through grants for specific needs like health, education, home maintenance or support of family members. The estate could also provide enhancement loans and investment opportunities to family members.

A prime example: Family-owned businesses are often passed on from one generation to the next. Unfortunately, only a fraction of them remain viable under the guidance of third or fourth generation family members, usually because those recipients aren’t prepared for the responsibility to enhance the next generation.

By making family the priority, pitfalls like this one might be avoided when establishing estate plans. Not only would it protect estate assets, it also would help surviving family members successfully manage their newly acquired estate.

Post Death Insurance Renewals

Failure to change the named insured on a policy after the policyholder died voids coverage; the Michigan Court of Appeals has ruled (Auto Owners Insurance vs. McGowan Trust).

The named insured was still the deceased father – not the children, the court said.

After their father died, the Trust kept the policy on the family cottage with Auto-Owners, but never specifically notified it of their insured’s death. They did not change the policy’s named insured or send in a copy of a Death Certificate.

The record indicates that, consistent with the insurance policy, Auto-Owners mailed documents to the deceased, paid claims in the name of the deceased, applied a ‘mature homeowner discount,’ and interacted with defendants with regard to the execution of its duty under its contract with Robert Sr., “the appeals court wrote.

The Trust changing the address on the policy, using checks with the Trust name on it to pay premiums and submitting claims against the policy was unfortunately not enough according to the Court of Appeals to provide actual notice to the insurance company of the insured’s death.

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National Elder Care Law Expert Mary T. Schmitt Smith Presents at Second Annual ICLE Elder Law Institute

Schmitt SmithMary T. Schmitt Smith, a Partner at the Lipson Neilson law firm and a nationally recognized Elder Care Law expert, presented “Drafting Your Legal Representation Agreement” at the Institute of Continuing Legal Education’s (ICLE) second annual Elder Care Law Institute. This two-day event was held during September 15-16, 2016. Mary’s presentation provided attendees with valuable insight into topics including identifying who is and who is not your client, establishing the essential terms of the representation agreement, laying the groundwork for timely payments, keeping “the file” and for how long and in what format, and when to end the relationship. Mary also discussed the topic of being involved after the client’s passing, and how an attorney could address this potential with a client and secure consent in advance.

Mary T. Schmitt Smith advises clients about estate planning, tax, and probate options, with a distinct focus on drafting and administration of Special Needs Trusts. She is Michigan’s first Certified Elder Law Attorney. Ms. Smith served on the National Academy of Elder Law Attorneys Board of Directors and was recognized as a Fellow of the Academy in 2003. In 2005, she established the Theresa Law Center PC. She has received an AV-rating from Martindale-Hubbell for the past 17 years, and has been recognized as a Super Lawyer for the past ten years.

Ms. Smith became the ninth annual recipient of the national Theresa Foundation Award in recognition of her community service for people with disabilities in 2003. She received the EP Maxwell J. Schleifer Distinguished Service Award at Disability Awareness Night at Comerica Park in August 2011. Ms. Smith is a past president of the ARC of Oakland County, the nation’s sixth-largest ARC, and served on the Board of Directors for a dozen years, then on the Advisory Board for more than a decade. She is also a member of the ElderCounsel Advisory Board.

Ms. Smith is a founding member of the Special Needs Alliance, a national network of lawyers dedicated to disability and public benefits law. She has presented on probate, tax, estate planning, and special needs trust topics for bar associations and law schools in Michigan, Florida, Wisconsin, Massachusetts, Texas, and New Jersey, as well as NAELA. Ms. Smith is admitted to practice before the U.S. Tax Court and the U.S. Court of Appeals (6th Circuit), where she successfully appealed a federal district court decision interpreting Medicaid law in favor of a Trustee of a Special Needs Trust. She has published numerous articles in such publications as Michigan Bar Journal, the Oakland County Bar Association’s LACHES magazine, and publications distributed by national Elder Care organizations. To learn more please visit www.LipsonNeilson.com.

Contact: Mary T. Schmitt Smith
Phone: 248-593-5000
Email: msmith@lipsonneilson.com

The ARC: Special Needs Attorneys Who Share Your Values

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Lipson Neilson attorney Mary Schmitt Smith is a Past President of The ARC of Oakland County, Inc., the nation’s sixth largest ARC, and served on the Board of Directors for twelve years. Mary is also charter member of the Special Needs Alliance, a national network of lawyers dedicated to Disability and Public Benefits Law. Click here to view the most recent newsletter from The ARC.

The Special Needs Alliance’s (SNA®) three-year partnership with The Arc has been built on shared values. Like The Arc, our member attorneys advocate on behalf of individuals with I/DD in their quest for inclusion, self-determination and personal fulfillment. We are a national non-profit comprised of legal professionals who assist people with disabilities and their families with public benefits, special needs trusts, special education and supported decision-making.

Moving to a New State can get Complicated

By Wendy H. Sheinberg, CELA; July 5, 2016

Moving to another state is a challenge for most families. If a family member has disabilities, that challenge is even greater. State benefit programs vary, and states administer federal programs at the local level making it even more complex. When a member of your family has disabilities, it pays to do plenty of upfront research and to construct a “safety net” to protect against unanticipated gaps in service, problems and delays.

Health Care

Over the years, you have probably spent considerable time scouting for doctors, therapists, and other service providers to meet your loved one’s specific needs. Be prepared to start over.

First, there’s the question of insurance. If you have a private policy, perhaps through an employer, moving to a new state may mean a new policy with different coverage or different premiums. If you have purchased coverage under the Affordable Care Act (ACA) through a state insurance exchange, you will need to learn what is available in the new location. ACA typically provides for a 60-day special enrollment period when a permanent move requires a change in health plan. To be safe, check on eligibility requirements early.

Medicaid is even more complicated, since you must reapply once you have moved. It can take anywhere from 15 to 90 days for approval to come through, although coverage will be retroactive. In the meantime, you will need to make other arrangements to handle critical needs.

Medicare is a federal program. Moving to a new state should not affect Medicare benefits. However, it is important to review and confirm that your Medicare supplemental policy and your prescription drug plan provide coverage in the new state.

Once you understand how you will be paying for health care, you will need to determine what resources are available. Local advocacy groups─ such as chapters of The Arc─ will likely be a source for advice and referrals. To minimize disruptions, establish as much of your new provider network as possible ahead of time.

Interview early intervention services and doctors before you relocate—ideally face-to-face, or by traditional or video teleconference, if necessary. Have medical records sent ahead to new physicians and schedule visits as soon as possible once you’ve moved. Ask your new insurance provider to pre-authorize prescriptions, and bring at least a 30-day supply of important medications with you.

Special Education

While the Individuals with Disabilities Education Act (IDEA) requires your new school district to provide services and supports comparable to those provided in the existing Individualized Education Program (IEP), you may have to renegotiate the IEP. Additionally, a 504 plan or other modified curriculum may also require renegotiation. The good news is that your existing records should provide a strong foundation for new discussions. In fact, if it’s time for the current plan to be updated, do so before the move so that your assessments and supporting materials are as current as possible. It can be hard to get school files during the summer, if you are moving during the summer, be sure to get the needed copies before classes end.

For military families, who generally relocate every few years, this is a recurring problem. Check out the Department of Defense’s special ed checklist.

Decision-Making Supports and Guardianship

Decision-making support can vary from state to state. If your adult child has executed a power of attorney, health care proxy or a supported decision-making agreement, consult with a special needs attorney in the new state to confirm their validity.

If your family member has a court-appointed guardian, you should consult a special needs attorney in both locations to understand your particular situation. Some states require that the guardian obtain court approval before the person under guardianship moves to another jurisdiction. You may also want to take this opportunity to explore a less restrictive means of providing support in the new state.

Many states do not recognize guardianships granted elsewhere. Unless both states have signed a reciprocity agreement, you could face different definitions of capacity, restrictions on a guardian’s role and more. Even if your new state will recognize a guardianship originated in your home state, most uniform guardianship statutes require some form of filing with the court in the new state.

SSI/SSDI

If you inform the Social Security Administration of your new address early, there should be no disruption to your SSI (Supplemental Security Income) or Social Security disability benefits. However, the amount of your monthly SSI payment could change, since it has both federal and state components. There will be no difference in Social Security disability benefits, based on work history of the individual or their parent.

SNAP (Food Stamps)

Check regulations in your new home state ahead of time, since there are differences in how this federal program is implemented locally. In some areas, there are significant asset limits for people with disabilities.

Social Service Agencies

Day care, in-home services, social programs, career assistance and other supports vary greatly from state to state. Do your research well in advance to understand what awaits you.

Medicaid Waivers

While Medicaid eligibility is based on federal law, the eligibility standards, services, and support available through Medicaid waivers vary dramatically between states. These services include case management, residential services, employment services, and other non-residential services. An important consideration is that many states have years-long waiting lists for services, and new residents must reapply and go to the end of the line.

Housing

  • Home Ownership– Accessibility features may be high on your list, and it could be necessary to make alterations to your new residence. Architects or housing planners may be willing to view properties on your behalf and to advise on costs, which can differ sharply from state to state.
  • Section 8 vouchers – This is a national rent subsidy program, so if you already have a voucher, it will be recognized anywhere in the U.S. However, you will be responsible for letting your current Public Housing Authority know that you wish to move, working with the Public Housing Authority in your new area to locate your own housing, and terminating your current lease in accordance with its terms. “Portability” in Section 8 housing is very complicated and there are many pitfalls. See: https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_35623.pdf

Special Needs Trusts (SNTs)

Have any special needs trusts (SNTs) checked by a special needs attorney in your new home state as soon as possible, since it may be necessary to have technical corrections/amendments made.

ABLE Savings Accounts

At this writing, 46 out of 51 states have enacted ABLE Act legislation, and many states are beginning to launch their ABLE programs. The original ABLE account legislation required the creation of the ABLE account in the individual’s state of residence. The December 15, 2015, amendment of the Able Act, as part of the Tax Extenders Package, removed the residency requirement. If the individual moves to a new state, the move will not affect the validity of the existing ABLE account. When moving, it is important to remember that each individual may only have one ABLE account. While you do not have to open a new account in the new state, if you decide to have a local account, be sure to follow all procedures to transfer the account so that there is only one account in existence.

Disability Parking Permits

To avoid delays in obtaining a disability-parking permit, try to register cars and vans ahead of time by having a family member relocate early. You’d be surprised how long this can take in some states.

The regulations and paperwork involved in crossing state lines can be dizzying. Delays and omissions can have serious repercussions for your loved one’s quality of life. Unfortunately, there’s no way to make this process easy, but if you begin planning early, you can lower your family’s stress level.

Think about keeping a binder with important documents that you update each year. Another option is scanning and filing documents online in a “cloud” account, which will save you from combing through boxes upon arrival in your new home.

Mary Schmitt Smith resized 1The Special Needs Alliance (SNA) is a national non-profit comprised of attorneys who assist individuals with special needs, their families, and the professionals who serve them. SNA is partnering with The Arc to provide educational resources, build public awareness, and advocate for policies on behalf of people with intellectual/developmental disabilities and their families. Lipson Neilson attorney Mary T. Schmitt Smith is a charter member of the Special Needs Alliance. To learn more please contact Mary by calling 248-593-5000, or by email to msmith@lipsonneilson.com.