What is Filial Responsibility Law? Will it Affect You?

What is Filial Law? Will it Affect You?

In 29 States with filial responsibility laws create statutory liability for children of the long term care patients. In other words, take notice of the period of time between the patient of long term care runs out of money and when they can qualify for Medicaid.

In these 29 states, Indiana, Kentucky, and Ohio included, adult children of the patient can be legally responsible for the money owed to the facility. This is a law on the books within these 29 states but not enforced until May 2012 in Pennsylvania (Health Care & Retirement Corp. of America v. John Pittas).

With the federal and state governments running up debts, they may start to enforce the law more and more in the future. Whether you think states should seek to recover the expenses or not, you should be aware of the law.

Proper estate planning with a qualified estate planner can expose such liability.

Get Informed! For a complete listing of the states included go to:

http://blogs.wsj.com/law/2012/06/25/29-states-that-could-make-adult-children-pay-for-mom%E2%80%99s-care/

QE3 New Makes a Strong Case for Fixed Income Sources

QE3 News Makes a Strong Case for Fixed Income Sources

Ben Bernanke, Fed Chairman, says that while savings at a higher rate are important, getting the country heading in the right direction is the goal. And while every economic book I’ve ever studied said that borrowing money at the rate the U.S. is will only lead to higher inflation while those rates stay low.

Realtor associations have already released comments on QE3 saying that while the housing market is seeing an increase in home sales on a fairly consistent basis and home prices are mirroring the sales numbers. They also state that while the consumer may jump at first due to rates staying low, overall sales may take a hit because the consumer now knows the rates will be consistently low for quite some time.

“In August, Gross, who runs the world’s biggest bond fund, cut his holdings of U.S. Treasuries to the lowest since October. He said in a Twitter post on Sept. 12 that more stimulus from the Federal Reserve will lead to a resurgence of inflation.”

Investments, insurance products, and savings vehicles that are directly related to rates being higher and sounder, will definitely continue to be impacted. For my clients, we have talked about fixed products. And what I am discovering is the clients are coming to me asking about guaranteed growth and some asking for information concerning income for life.

You’re taught to stay the course in investing. The only problem is we haven’t seen these economic conditions for a long, long time. Many of my clients aren’t interested, at their age, to chance their retirement funds, especially with QE3 now in the news.

While the rates are tied to U.S. Treasuries, the rates in an investment or savings vehicle will reflect the notion that rates being low, coupled with debt accumulating at this rate, will surely lead to inflationary times.

Although 401k’s have bounced back nicely, as they are supposed to, aging clients don’t have time for recovery again. I say to this group of clients, we shouldn’t chance it, guaranteed growth is guaranteed. Different strategies, once scoffed at, are now being listened to by the general public. 

"Hard Dollars vs.Soft Dollars" and How it Matters to You

Hard Dollars vs. Soft Dollars and How They Matter to You

What are hard dollars? What are soft dollars? One thing is for sure if you don’t know, you better learn. It is really quite simple, although when I first heard…I had no idea. Honestly, I thought about hearing for first time about hard water. We’ll start with hard dollars.

Think about it this way, if it is “hard” to earn the dollars, they are probably hard dollars. Your paycheck would be considered hard dollars. Cash and currency in your pocket literally and figuratively speaking are considered hard dollars. Not much of a detailed meaning but I think you grasp the idea.

Soft dollars are usually money and value that is created with hard dollars as in growth from an investment, life insurance death benefits that have been bought by paying your premiums in return for a large death benefit which by far outweighs the amount of hard dollars used to pay those premiums.

Now, how do these two types of hard and soft dollars matter to you? I’ll answer that with a question, as I do to avoid tough questions sometimes! Seriously, how do you want to pay for your burial in 100 years? Would you like to pay with hard or soft dollars? Let me ask that another way. Would you like for your loved ones to use money out of the checking account or would you prefer they use a life insurance policy that you paid $50,000 over your lifetime to receive the $500,000 death benefit from your typical term policy? The difference in hard & soft dollars in this example would be the difference between $500,000 and the $50,000 (hypothetical of course) you paid for the policy.

I know my wife would much rather prefer that she paid for the burial with the soft dollars than take away new shoe money or clothes money. I’m joking, so to speak. Although quick, knowing that many readers fully understand what it is I’m talking about here. And it goes without saying, that if I get, I know you can.

So, the moral of the story, get some soft dollars. Max out the contribution to your 401k your employers is offering and match it to maximize the soft dollars you’ll get in return. Look into a universal life policy and jam some cash into it to get back and combine with the soft dollars you’ll gain in return. And then send me a check for the advice to help me recover some of the hard dollars used for shoes and clothes! Just joking.

Leave Your Legacy During the Life Insurance Awareness Month

Recently, all of the talk lately in politics concerning wealth, and with the discussion of “haves & have nots” provides an opportunity to discuss what should be most important to you…you and your family. I, like you, care about my family and am passionate about their quality of life they have when my day has come. Lately I have been focused on the legacy I will leave for my wife and children.

When I speak of legacy, one probably thinks what people will think of me in the past tense. For me, the limitation does not conclude at what others think of me that day, my focus is on what my family will think of me from a fiscal responsible aspect. Hopefully they think well of me, as a husband, father, friend and provider. And with those titles I have comes a great deal of responsibility and expectations. These expectations are the wood on the fire that we call “pressure.” We need a degree of pressure in our lives to help us perform a little better.

I can remember in athletics when I was younger that I always seemed to be a little faster, a little more competitive, and much more aware of my surroundings when I had pressure on me. Its funny when you hear a coach tell says, “Sports is like life.” I have to agree.

In answering the bell everyday for my family and myself, I often think without my financial contribution, how will they do? I mean will the girls go to school on money that we saved, money left for them through my estate or will they be forced to borrow and assume debt, something we have preached they won’t have to endure as they get older.

Like the old saying goes, “the painter’s house probably needs painting.” I didn’t want to be that person. Through proper estate planning and the use of life insurance within that estate plan, I am able to go to bed every night and know that if today is my last day this family will be able to grieve and carry on with their lives and with a good work ethic, achieve their goals.

I try not to be “the insurance guy.” I don’t call on my family and friends, using my relationship to drum up business. What I do is simply tell those that I see on a daily or weekly basis that we all know tomorrow is not guaranteed but since there has never been an insurance company that has not paid its claims in our history. One has come close, AIG, and even they have worked to pay back a good portion of their U.S. taxpayer debt and they still vow to pay 100% back. Life insurance, as long as the premiums are paid, is the closest thing to a guarantee that your family will be taken care of when the time comes.

Assuming what you just read is the gospel, if you are able to have proper estate planning, your estate will be settled without having to pass through government probate court. Probate court will add monetary fees and take up time with assets that your family may not have the time to wait on in life.

I urge you to leave your legacy, assure your family that their quality of life is one of the most sacred things in the forefront of your mind and allow them to grieve and get on with life with the opportunities they deserve. I know I gave a general course in estate planning and I don’t want to confuse you, feel free to contact me to help you get started. 

Why Are Income Annuities Not Part of Your Retirement Portfolio?

It's not just about purchasing a guarantee from the annuity company, it is the protection of principle. Sure the volatility is taken out of the equation. Yes, the exchange or rollover bonus from 5-10% is nice. Ask yourself to the best of your knowledge, has there been an insurance company that couldn't pay its claims or provide income as promised to annuitants? AIG came close, but they have made tremendous progress to repay their debt. They own American General out of Texas, and it is a very strong performer for them. To the best of my knowledge, there is not an insurance company that couldn't pay its claims or provide income as promised to annuitants.
I know in the days to come, there will be a person that walks into their local bank, sits down and purchases a CD with a very modest 1.5% rate, and I do occasionally run into this person and I will be blunt in out conservation...FDIC is what I hear 9 or 10 times out of ten. If you are along the same lines as the bank customer, I urge you to do your research and formulate your own opinion of FDIC. If it works, get in line for that interest rate that doesn't keep up with inflation. If it doesn't I urge you to email, research, or even call me for information about some of the best Fixed-Income annuities (FIA's) on the market. If we don't do business, at least you will have a good idea why to not sit down and grab onto that 1.5% rate. Go to my website: www.prospectsfinancial.com and visit the "Library" link. You will find a Wharton article of FIA's for you to read. As with any financial product, strategy, policy or contract...please research and read what you're about to agree to in writing.
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