| by

Adult Day Care Adults with mental or physical limitations can spend the day in a supervised environment that offers recreation, meals and other services. Having a safe place for the ailing person to go can provide the care giving family member with much needed respite.
Transportation to and from the site is usually provided.

Geriatric Care Manager This professional, often a social worker, registered nurse or psychologist, coordinates the services that help people remain in their homes for as long as possible. They are equipped to assess the needs of the elderly; arrange for services; review legal, financial and medical issues to avoid problems and unnecessary expenses; coordinate the various government, private and community services available; offer counseling; and act as liaison for distant families.

Reverse Mortgage This allows senior citizens who are house rich and cash poor to obtain a loan based on the equity in their home. They retain title to their home as long as they continue to live there and receive nontaxable income. With the terms of most mortgages, the loan, interest and other costs do not have to be paid back until the owner vacates the property through a move or death. Almost all reverse mortgages provide a guarantee of lifetime tenancy. Most reverse mortgages are a nonrecourse loan that means the lender can look only to the value of the home for repayment.
Continue Reading

| by

Effective January 1, 2010, Illinois enacted its Virtual Representation Statute which enlarges the circumstances under which a trustee and certain beneficiaries can modify an irrevocable trust by nonjudicial agreement. This modification can be made without the expense of going to court.

The Virtual Representation Statute does two things. It greatly expands the application of virtual representation, under which certain beneficiaries who are adults with capacity can represent other beneficiaries, including minors, unborn children, disabled beneficiaries and beneficiaries with remote contingent interests. Also, it expands and clarifies the matters that can be resolved by the interested parties in a trust through nonjudicial agreement.
Continue Reading

| by

Effective January 1, 2010, Illinois enacted the Banking Convenience Account for Depositors Act which allows account owners to create joint accounts that allow non-owners to make deposits and withdrawals. The accounts do not have Payable On Death or Transfer on Death designations. The non-owners have no survivorship rights as there would be with a common joint tenancy account.

The accounts are useful where an elderly person has an adult child assist with banking, such as making deposits and paying bills, but where there is no intention to make the balance in the account a gift to the non-owner upon the death of the owner.

The banks are protected. Until the bank receives written notice of the death of the account owner, it has no liability for continuing to pay funds to the non-owner. Once the bank does receive written notice, unless there is a restraining order or injunction in place, the bank is discharged from liability by delivering the remaining funds in the account to the executor, administrator or other representative of the estate.
Continue Reading

| by

If there is controversy in an estate, commencing a probate proceeding will provide a forum to resolve the controversy. This is a situation where one may not want to avoid probate.

Opening probate when there is controversy will also provide a forum to the other side. For example, all creditors’ claims are dismissed after two years under the probate act. By opening an estate, the period is shortened to six months, but the creditor is also provided a forum to file his claim. If no estate is opened, it is harder for the creditor to file his claim.
Continue Reading

| by

Under current law, any estate tax exemption amount that a spouse does not use by the time of his death cannot be used by a surviving spouse and expires upon the first spouse’s death.

Portability, as proposed in the Taxpayer Certainty and Relief Act of 2009, would allow the surviving spouse to be credited with the deceased spouse’s unused exclusion amount.

The Act includes safeguards including provisions which limit the unused exclusion amounts which a surviving spouse of multiple deceased spouses can use. The entire exclusion available to the surviving spouse would be the applicable exclusion amount otherwise available to a decedent.
Continue Reading

| by

In 2010, the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) gets rid of the income ceiling that prevented individuals with modified adjusted gross income in excess of $100,000 from making a qualified rollover to a Roth IRA.

After 2009, any kind of IRA (Individual Retirement Account) can be converted to a Roth IRA, including traditional deductible, nondeductible, rollover and inherited IRAs.

A Roth IRA rollover in 2010 is subject to income tax (payable over two years in 2011 and 2012) because it has not been previously taxed. The distributions are not subject to income tax. The minimum required distribution rules do not apply.
Continue Reading

| by

The Illinois Power of Attorney Act includes provisions for powers of attorney for healthcare.

A power of attorney for healthcare allows an individual (Principal) to give another individual (Agent) authority to act on the Principal’s behalf as far as healthcare decisions. The Principal may specify when the Agent has authority to act on his behalf and when this authority ends; the rights, powers, duties, limitations and immunities applicable to the Agent and to all persons dealing with the Agent; and other terms applicable to the Agent.

There is no authority for euthanasia, assisted suicide or any course of action which violates state or federal law. A Principal can impose limitations on the Agent as far as when to withdraw life sustaining treatment, whether certain treatments should be denied based on religious beliefs or an instruction to continue foods and fluids in all circumstances.

Once a court enters a judgment of dissolution of marriage or legal separation between the principal and his or her spouse following the signing of the agency, the spouse is treated as dead for purposes of the Power of Attorney agency at the time of judgment.
Continue Reading

| by

Effective January 1, 2010, the income tax limit for transferring assets from a traditional Individual Retirement Account (IRA) to a Roth IRA is permanently dropped. These conversions will be subject to income tax, but future withdrawals (that meet holding requirements) will be tax free.

There are three options for paying income taxes throughout the year and thereby avoiding penalty and interest for underpayment of income tax when the conversion is made:

1) Pay 100% of last year’s tax (110% if your Adjusted Gross Income was over $150,000). Then pay any income tax for a 2010 Roth conversion as part of the 2010 tax return.

2) Pay 90% of the current year’s tax. If a large amount is being converted to a Roth in 2010, this is a way to have less to pay quarterly or have withheld from your paycheck in 2011.

3) Estimate your income each quarter and pay tax on it for that quarter. You can have the tax withheld from your paycheck, make quarterly payments or a combination of both.

Roth IRA conversion will also affect your Illinois Income Tax Return.
Continue Reading

| by

Effective November 6, 2009 a new tax credit is available for both repeat and first-time home buyers. The National Association of Home Builders’s website provides specific details.

One can qualify for a tax credit up to 10% of the purchase price of a new home (maximum credit $6500) if one has lived in one residence for five consecutive years of the last eight years.

Income limits apply. For single filers the credits phase out between $125,000 and $145,000 of modified adjusted gross income. For married couples, the phase out is between $225,000 and $245,000.

Other limits apply. The credit cannot be taken if the home is purchased from a spouse or the spouse’s lineal relatives. The person claiming the credit must use the home as a principal residence.

The new law is unclear as to whether one must sell one’s previous home to qualify for the credit.
Continue Reading

| by

Reverse mortgages are available to homeowners age 62 and older. There is no minimum income or credit score requirement.

A provision in the economic stimulus package raised the maximum home value that can be counted for reverse mortgages from $417,000 to $625,500. However, the full value of the home is not available to the reverse mortgagor and a formula must be used to determine the amount that is available.

In addition to the regular closing costs, an origination fee of 2% on the first $200,000 of the loan balance will be charged and a 1% fee on any amount above $200,000 will be added. Also, a mortgage insurance premium of about 2% and a monthly service charge fee will be included.
Continue Reading