Financial Health

SHINE On…
State Program Provides Seniors With Nursing Home Alternative

By Sheila Curtis
The Home and Community-Based Services Waiver (HCBS) enables Massachusetts residents who otherwise would qualify for a nursing facility or other institutional care to remain in their homes if they so choose. The goal of the program is to help frail seniors, people with mental retardation, and young children with autism live safely in their communities, and to prevent or delay institutionalization.

You are eligible for this senior waiver if you are a resident of Massachusetts and:

• Are age 65 or older;
• Or, if under 65, are permanently and totally disabled;
• Are certified by the state as medically eligible for nursing home care;
• Are able to live safely at home with one or more support services;
• And meet the HCBS waiver income and asset limits.

You are medically eligible for nursing facility care if you meet either of these criteria:

• Need at least one skilled nursing or therapist service daily (for example, an IV, feeding tube, oxygen, sterile dressings, catheters, skilled-nursing evaluation, physical therapy, speech therapy, occupational therapy);
• Or need a nursing service at least three times a week, plus two other services, such as assistance with Activities of Daily Living or additional nursing services. Activities of Daily Living services include bathing, dressing, toileting, getting in or out of a bed or chair, walking (or moving a wheelchair), or eating.

For adults, the financial limits for the HCBS Waiver program are gross income no greater than $2,022 per month in 2009 and countable assets no greater than $2,000. If married, your spouse's income and assets are not considered.

If eligible, you will receive MassHealth Standard medical coverage and Waiver services at home or in the community. For seniors, these may include personal care services, housekeeping and other chores, laundry, home health aide, skilled nursing, companion services, home delivered meals, grocery shopping, transportation, a wander response system, respite care and transitional assistance.

The type and amount of services depends on needs of the client and what’s available in the community.

For further information call the Regional SHINE (Serving the Health Information Needs of Elders) office at 1-800-243-4636, then press 3.
(Ms. Curtis is Regional Director of SHINE, a division of the Massachusetts Executive Office of Elder Affairs.)

12 Items You Should Consider Before Investing In Real Estate

By G. Robert King II, CFP®, AIF®
It is natural to dream of owning real estate. Buying your first home or an investment property provides a feeling of control and pride in ownership. Few other investments provide this level of satisfaction.

Historically, real estate has been a good investment; at times, a great investment. But, as we know now, there are periods when it is important to move slowly in buying real estate.

Professionals tend to look at real estate ownership as long-term investment. They are prepared for the long haul, especially during down markets. Also, they tend to specialize. Let’s review some of the common pitfalls savvy professionals have learned to avoid.

1. Real estate is typically not a liquid investment. You might not be able to sell when you want to, in which case you need a fallback position;
2. How will you own the property?  Discuss ownership options with your attorney, and don’t forget all the insurance ramifications;
3. Have a plan prior to the purchase. What type of real estate are you looking for?  Raw land, income property, residential, commercial or a seasonal rental?  Will you be using the property for your business? How handy are you? Can you repair small problems yourself or will you be forced to hire professionals?  Heating costs? Real estate taxes? Parking?
4. What is your current occupation? Can you take time off from work to deal with the issues that will crop up. If not, how much will you have to pay a manager to oversee your property?
5. Will you be buying the property using debt?  Does the property have a current tenant? How long can you carry the property without a tenant? Many successful real estate professionals hold little or no debt on their investment property;
6. Keep an annual budget;
7. Don’t buy the first place you see;
8. Location, location, location;
9. What is the vacancy rate in your area?
10. Keep good records! Improving the property may increase your tax cost basis; operating expenses will affect your bottom line
11. Get professional help. The learning curve is steep and mistakes are common
12. Ask questions!

And, finally, never be afraid of walking away from a deal. There’s always a new one right around the corner.
(Mr. King is a Certified Financial Planner in Hyannis, 508-790-7100 or info@capitalportfolios.net.)

Tax Man’s Frumious Bandersnatch Can Flusterate Your Estate Planning

By Russell E. Haddleton
In the poem “Jabberwocky,” Lewis Carroll warned of the frumious bandersnatch. I have never seen one, but I suspect he’s the trickster who hides my car keys in the morning.

We have the equivalent in the federal estate tax law, Section 2036. It snatches back what you thought you had given away and subjects it to transfer tax. The federal estate tax is no longer a consideration for many people, since the floor is now $3.5 million, but Massachusetts estate taxes start at $1 million, so we must be careful not to keep a string on what we give away.

Section 2036 of the Internal Revenue Code provides that if you give something away and retain certain rights in it, it will be includible in your estate for federal estate tax purposes. Except for the starting point, the Massachusetts estate tax law tracks the federal statute, so this governs for state purposes also.

I do not have room here to discuss Section 2036 in detail– see our Web site–but I will mention two situations in which I have seen the Section 2036 trap sprung. Those are the family home that has been given to the children, and assets that have been added to a family limited partnership or a limited liability company.

Before the federal estate tax floor was raised, many taxpayers transferred their valuable houses to their children to reduce their estates for transfer tax purposes. If a taxpayer continues to stay in the house, and does not pay rent to the children, the IRS or the Massachusetts Department of Revenue can take the position that the taxpayer transferred it with the retained right to occupy it, and therefore it is includible in the estate.

Other problems occur when taxpayers contribute assets to a family limited partnership or limited liability company. The IRS dislikes both of those vehicles and applies the tests of Section 2036.

Sometimes, when the taxpayer retains forbidden rights over the transferred assets, the courts allows the frumious bandersnatch to strike again, and the assets are back in the estate for tax purposes.
(Mr. Haddleton is a principal of the Hyannis law firm of Haddleton & Associates P.C., 508-771-3132, www.Haddletonlaw.com.)

Sheehan Gets Bank Post

Gary Sheehan, President/CEO of Cape Medical Supply and a member of the Advisory Board of To Your Good Health, A Healthcare Newsletter, has been named a corporator of Cape Cod Cooperative Bank, bank President Joel G. Crowell has announced.

Mr. Sheehan, a resident of West Yarmouth, serves on the Board of Directors of Cape and Islands United Way and Cape Cod Young Professionals and is a member of the Steering Committee for Cape Cod Focus.