A Benefit for Those Who Deserve it the Most

In recent weeks John has welcomed Mark Emberton , a Volunteer Veterans’ Advocate, on the show to help our listeners understand some of the benefits that may be available if they have served in the Armed Forces.  Many people have no idea that The Non-Service Connected Disability Pension, exists. This program was enacted in 1952 under an act of congress, written in the U.S.Code Title 38. This legislation allocates roughly 4.5 BILLION dollars annually for qualified veterans and their surviving spouses.

Eligibility

This is a benefit primarily designed to help those qualified Vets with a monthly pension to help defray some of the qualified expenses resulting from their need for assisted care or skilled nursing care. The major guidelines that determine qualification for the benefit include:

• Military service-90 days active duty, one day must have been during a period of conflict.
• Medical necessity- Loss of activities of daily living (ADL’s), that must be confirmed by a doctor.

Planning

A majority of the people Mark works with are in a “crisis planning” phase, where a loved one has had a health issue (stroke, heart attack, broken hip, etc) and is forced into a long-term care situation. Discussing these scenarios really highlights the need for people to do “pre-planning”. This can make life a whole lot easier than scrambling to figure it out when the primary focus should be recovery.

As part of the pre-planning phase, Mark also explained the importance of having a solid estate plan. This is not financial planning, but rather the plan to make sure that the legal documents, including a Trust and both Financial and Healthcare Powers of Attorney are “all encompassing”. Many people already have a Revocable Living Trust to avoid probate at time of death – this is a long-range estate plan. It’s still a good plan; however, in this situation we must consider some intermediate/short-range planning that may have been missed. Many of those people who have a Revocable Living Trust believe that it will protect their assets. In the eyes of both VA and Medicaid (ALTCS), these types of trusts just simply don’t work. Some additional estate planning documents may be created in order to protect the assets and ensure eligibility for VA/Medicaid benefits.

Prior to applying for the Non-Service Connected Disability Pension, the estate planning documents must be reviewed to be sure that the language allows the POA/trustee the legal ability to engage in asset protection/trust creation in the event of a health related issue where the veteran or /spouse is incapacitated and can’t make these decisions for themselves.

If you have questions about the Non-Service Connected Disability Pension, including qualification guidelines and getting volunteer assistance with the VA application process, you can contact Mark Emberton by calling 855-202-0969.

2011 Tax Tips: 8 Ways to Stay on Uncle Sam’s Good Side

If you’re a listener in the Phoenix area, you’re probably familiar with guest host, Daren Sigrist, CPA from Sigrist, Cheek, Potter & Huyser.  Over the last couple of weeks, Daren has really been helping us out with some 2011 tax tips.  Keep in mind these are just tips, they are not designed to take the place of sitting down and meeting with your accountant to review your individual tax circumstances.

1.  W2′s and 1099′s should be mailed to you no later than January 31.  If you don’t get a W2 or 1099, make sure you’ve updated your address with all your employers and contractors.

Expect to receive a 1099 MISC for all earnings over $600 if you aren’t an employee.  If you made less than that, you won’t get a 1099, but you still must report the income! If a company you work with asks for your information (name, address, id#), you should give it to them, otherwise you may get stuck with 28% backup withholding on future payments from that company.

2.  Many of the IRS forms won’t be ready until early to mid-February, but this doesn’t mean you should delay in getting your information together and to your CPA!  Use this time wisely, so that when the forms are available, you don’t rush and miss something important.

4.  If you sold investments in 2011, be sure to review your investment statements and realized gain/loss statements for correct cost information.  Many times the information is wrong or incomplete. If there is a discrepancy, be sure to contact that company immediately to clear it up.  New for 2011:  Brokers who are otherwise required to file a Form 1099-B to report gross proceeds from the sale of stocks, bonds or other securities must also include the following on Form 1099-B for securities acquired AFTER 2010:

• The customer’s adjusted basis in the security.
• Whether gain or loss with respect to the security is long- or short-term.

For mutual funds and stock acquired through a dividend reinvestment plan, the new requirements apply to shares acquired after 2011.

5.  Did you forget to take your RMD from your IRA for 2011?  You may be facing a 50% excess accumulation penalty if you did.  The IRS may waive the penalty if you can show reasonable cause and if you take remedial action.  Make sure you report it properly, and you may be able to escape the penalty forever, or until the IRS rejects your request.

6.  Roth IRAs - The income limit for conversions has been permanently removed, so it may still make sense to convert your ordinary IRA to a Roth IRA.  You no longer have the option of deferring conversion into later years.

7.  Foreign account reporting: This is a big one! If you have over $10,000 balance in a foreign account, you must report it (FBAR rules). For 2011, if you have foreign financial assets above $50,000, there is a new asset report to file.  Penalties for not reporting these are substantial!

8.  Higher net worth taxpayers should review their Trust and Estate planning documents.  Many documents become outdated, and therefore ineffective as part of a tax-planning strategy.  It’s important to periodically review these to be sure any changes concerning births, marriages, and property acquisitions or sales are up-to-date.

Remember, as Luke 20:25 reminds us: “And he said unto them, Render therefore unto Caesar the things which be Caesar’s, and unto God the things which be God’s.”

Let’s just take care that you don’t render to Caesar what should belong to you!

If you have questions about your 2011 tax return or other accounting issues, you can contact Daren Sigrist by calling Sigrist, Cheek & Potter, PLLC, at 480-730-1569.

Grab the Bull by the Horns!

There’s always so much to talk about when it comes to estate planning but the most important thing is that you get it done. The New Year is a great time to grab the bull by the horns, to stop deferring the really important things that we’ve been putting off for the last year (or 2, or 3).  Nobody really wakes up one morning and says ‘I feel like taking care of my estate plan today’, so the question is how do we motivate people to take care of these important issues?

January is a good time to get your estate plan started because it’s one of those things that should be updated every year.  It’s also the perfect time to capitalize on that energy associated with spring cleaning and beginning the New Year on the right track.  The anxiety and the tension of unfinished plans hanging over your head are much greater than the realization of coming in, sitting down and getting your will or your trust put together.

• If I die, what do I do with all of my stuff?  Where does it go and who gets it?
• I’m worried about how my children might spend my money, what can I do?
• I want to take care of a relative, how can I do that?
• What will happen to my animals?

All of these questions can be overwhelming; they can even become stumbling blocks that can lead to procrastination. You may have heard Attorney Jonathan Muntz explaining how these and many more issues can be addressed inside of a Revocable Living Trust. When we spoke with him about it, he had this to say:

“Many trusts are overly long and complicated, and in most cases that is probably not necessary.  A trust should be simple and straightforward. My test is that if I were to have 50 people read a document, I want 50 people to come to the same conclusion.”

Creating an estate plan should give you peace of mind, not anxiety.  On the show we often talk about the reasons you should or should not have a trust, the advantages that a trust can provide, as well as new estate planning rules.  There are all sorts of helpful things that we can share with you , but the most important thing to know about an estate plan is that it won’t do a single thing for you if you don’t have one in place.

God bless you, Friends, and take care.

(Follow me on Twitter @wordonwealth)

To reach Attorney Jonathan Muntz, call Grand Canyon Planning Associates at 480.991.1055.

Welcome to The Word on Wealth Blog!

John Dombroski, Jr. is a nationally recognized Financial Advisor, with over 20 years of experience helping Arizona residents with their retirement and estate planning needs. His broad balance of financial expertise comes from many years in the financial industry providing insurance and financial solutions, along with his lengthy tenure as an accomplished real estate broker. This expertise is reflected in the success of his thriving financial and estate planning practice. He has helped thousands of people to create a retirement income that is safe and dependable. Visit GrandCanyonPlanning.com to learn more, or call us at 855-2020-WOW.