Credit shelter trusts
Can you imagine a world where robots help to take care of the seniors in our community? Do you think that would be a good technological development, or a bad mistake? The reality is that in the future the elderly will likely account for over 15% of the global population. Caring for those seniors, emotionally, mentally, and physically will be an enormous undertaking. The load may be too large to handle for the number of trained professionals who are willing to take on the job. Experts at the University of Salford in England are working to find a potential solution to this future problem.
According to these scientists, robots may hold the key to meeting the needs of the aging population. One model has already been designed that is able to monitor patients, communicate with doctors, and provide basic care and even companionship. For many people, robots may seem like an impersonal solution that cannot possibly provide real, valuable care. However, the experts who have developed the idea claim that robots have great potential. Automated home systems are already able to detect everything from falls to the stove being left on too long. Robots are able to take this level of care a step further. They can remind people with memory problems of important information like when to take medicine, or what someone’s phone number is. Robots may also help to promote social activity and brain stimulation in aging adults who don’t have family or friends. These elder-care robots are able to actually chit-chat and have the capacity to challenge the user with games while tracking their progress or loss of memory over time.
Some ideas for these robots involve the inclusion of screens which would allow patients and doctors to connect more often without a visit to the office. Family and friends would also be able to connect through the screen in a way similar to Skype on the computer today. The robots also may have the capacity to check vitals and report back to medical professionals making inconvenient doctor visits less frequent.
Japan is already experimenting with elder care robots. The Japanese government is seriously considering robots as a solution to the growing elder care problem there and has already budgeted $34 million for research of senior care robots. It will most likely be over twenty years, if ever, before elder care robots are a universal reality. Researchers are working on improving reliability and general function but there will always be the issue of ethics. Is it morally wrong to allow our elders to be cared for by machines? Or is it an ingenious solution to a growing problem? That is something for future generations to decide.
In addition to the annual exclusion we discussed in the last blog, there is also an unlimited gift tax exclusion for direct payments of some educational and medical expenses. This exception applies regardless of your relationship to the educational or medical services recipient, however, the payments must be made directly to the provider. IRS regulations define which types of payments qualify for this unlimited tax exclusion.
Educational expenses for tuition at an institution that maintains a regular facility and includes grade school, high school, and higher education qualify. However, payments for books, dormitory fees, and other similar expenses do not qualify.
Medical expenses qualify for the tax exclusion if they are incurred for diagnosis, cure, mitigation, treatment, or prevention of disease. Expenses for transportation essential to medical care and payments for medical insurance are also eligible. However, medical care reimbursed by insurance is not eligible for the exclusion.
The annual exclusion and unlimited health and education exclusion provide a simple yet effective tax savings technique. Also, remember that the earlier you begin to gift, the more that benefits from tax savings can build up!
Although depression is becoming more and more common for people age 65 and over, it is not a normal part of the aging process. Depression often goes undiagnosed in older individuals for a variety of reasons. In senior citizens it can sometimes be difficult to tell the difference between depression and other illnesses such as dementia. It can also be embarrassing for individuals to speak with their family or doctor about feelings of depression, but it is nothing to be embarrassed about. Depression is not a personal weakness, it is a medical condition that can be prevented and treated.
Many things that older adults go through can bring on feelings of depression. Retirement, health problems, and the loss of loved ones can all contribute to feelings of sadness or hopelessness. Keep in mind, though, that it is not normal for these feelings to persist or to keep you from daily activities.
In addition to the regular symptoms of depression experienced by younger people, older individuals may also display feelings of boredom, memory problems, and hallucinations. If you are a friend or family member caring for a senior, look for signs of depression and consider contacting your doctor. A doctor may be able to run tests to rule out certain medical problems, talk with the individual themselves, and ask you or other family members important questions. The doctor may also be able to develop a treatment plan that will allow your loved one to live a happier life.
If you, or a loved one, are experiencing depression, contact your doctor. There are a variety of causes of this illness that can often be treated by medication or therapy. There are also many support groups available to individuals suffering from depression and their families.
- Investment Expenses – Income gained from interest, dividends, or capital gain on investments is taxed at a much lower rate than other forms of income. Furthermore, this type of income is not subject to taxes for Social Security or Medicare. Also, any expenses related to your investments that exceed 2% of your AGI can be included with your itemized deductions. These expenses might include accounting fees, attorney fees, online broking fees, and fees to financial planners.
- Business Expenses – If you own a business you may be able to claim business expenses as a senior tax break. These expenses might include business travel expenses, equipment, and office costs. Most any business expenses can qualify so long as they are necessary and reasonable.
- Contributions to Charity – Contributions to charitable organizations are deductible as an itemized deduction. Donations of money exceeding 50% of your AGI are deductible as is the fair market value of any property you have donated.
- Standard Deduction – The standard deduction is the tax deduction you take at the end of the year if you do not itemize your deductions. If you are 65 or older, your standard deduction can increase. Furthermore, if you are legally blind you may be eligible for a larger standard deduction.
The VA recently announced a decision to expedite compensation claims for veterans who have been waiting for one year or longer to receive a claims decision. As a result of the decision, VA claims processors immediately began making decisions on the oldest claims on file. This action comes as another part of the VA’s goal to eliminate backlog by 2015, and should allow those veterans who have been waiting the longest to receive much needed benefits, faster.
The new initiative will also allow veterans to submit additional evidence for consideration for up to a full year after the provisional decision before the VA makes a final decision on their claim. If the VA receives additional information that warrants an increase in benefits, the new amount will become retroactive to when the claim was originally filed. This opportunity will provide veterans with a “safety net” time period to be able to provide all evidence and to receive the maximum benefits they are entitled to.
Throughout this initiative, the VA will continue to prioritize claims by homeless veterans, the terminally ill, former Prisoners of War, Medal of Honor recipients, and veterans filing Fully Developed Claims. Furthermore, claims for Wounded Warriors separating from the military for medical reasons will continue to be handled separately and on a priority basis. Wounded Warriors currently receive VA compensation benefits in an average of 61 days following the end of their service.
During the time that claims are being processed, eligible veterans will have the opportunity to receive free healthcare in addition to other benefits from the VA. Veterans who have served in recent conflicts are eligible to receive five years of free healthcare. If you are a veteran who is waiting for a decision on your compensation claim, research what benefits may be available to you right now.
Unfortunately, memory loss is quite common as we begin to age. For some it becomes more difficult to learn new names or to acquire new skills, while others struggle to remember events or people from their past. More extreme forms of memory loss can also lead to disorientation and dementia.
The University of Alabama at Birmingham recently conducted a study that indicated that an irregular heartbeat may contribute to earlier memory loss in seniors. This study was comprised of 5,000 individuals age 65 and over, and examined the effects of atrial fibrillation on the human brain, and more specifically on its memory capabilities. During the study, these individuals were given a 100-point memory and thinking test. Researchers found that those who had an irregular heartbeat were likely to have lower scores than those who did not. The study found that there is some correlation between atrial fibrillation and memory loss, however, the exact cause and effect is still unknown.
There are a couple of possible reasons for why people with an irregular heartbeat tend to suffer memory loss earlier. First, atrial fibrillation can sometimes cause small blood clots to form in the heart and travel to the brain. These blood clots are often too small to cause larger health problems, like a stroke. However, over time, even a small clot can cause gradual damage that can lead to a milder mental decline.
The second possible explanation could simply be that people with an irregular heartbeat have less blood flowing to their brain. Without a sufficient blood supply, the brain may not get enough oxygen which can lead to gradual damage as well.
Currently it is not clear why atrial fibrillation causes a higher rate of early memory loss. Doctors and researchers hope that if this question can be definitively answered, perhaps we can learn how to prevent the problem. Today, over 3 million people in the United States suffer from atrial fibrillation. The most common treatment is a blood thinner regimen that reduces the risk of stroke, and according to this study, likely the risk of dementia as well.
A future interest in property is a legal right to that property that will begin at some point in the future. If a person has a future interest, then they do not have a right to possess or enjoy the property at this time. Future interests are created when an estate has a condition or “triggering” event that transfers ownership of a property right. One of the most common examples of a future interest is seen in a landlord-tenant relationship. While a person is renting a house, the landlord typically does not have the right to live in or enjoy the house. However, upon termination of the lease, the landlord will regain full rights to the property. In this case, the landlord has a future interest in the property. Future interests can typically be transferred by sale, gift, or will.
There are three main types of future interests:
- Reversion – “Bob gives property to Jane for life.” In this case Jane will have ownership of the property until she dies, at which point the property rights will return to Bob (or his estate). Here Bob has a future interest in the property that triggers when Jane dies.
- Possibility of Reverter – “Bob gives property to Jane, as long as she doesn’t drink alcohol.” This type of future interest occurs when an estate will revert to the grantor if a specific condition is violated. Here, Bob has a future interest in the property that triggers if and when Jane drinks alcohol.
- Right of Entry – “Bob gives property to Jane, on condition that Jane refrains from drinking alcohol.” This type of interest is a little different than a possibility of reverter in that the property will return to the grantor when the condition is violated and if the grantor decides to reclaim the estate. Here, if Jane drinks alcohol then Bob can decide to reclaim the property or not, it will not automatically transfer back to him if and when she drinks.
A concurrent interest, or concurrent estate, describes the various ways that two or more people can own a portion of real property at the same time.
The people who own this property together are called co-owners, co-tenants, or joint tenants. There are three main types of concurrent estates:
- Tenancy in common – with this type of interest, each co-owner holds the right to a fractional share of the entire property and each is entitled to possess and enjoy the entire property at the same time. A tenancy in common can be transferred during the owner’s lifetime or after death.
- Example: Bob gives property to Jane and Jack.
- Joint tenancy – this type of interest is similar to a tenancy in common in that it involves two or more people who each hold the right to a share of an entire piece of property. However, in a joint tenancy, if one co-owner dies before the other, then the surviving owner becomes the sole owner of the property. In this situation, the estate becomes a fee simple absolute.
- Example: Bob gives property to Jane and Jack as joint tenants, with the right of survivorship.
- Tenancy by the entirety – this type of interest has been abolished in many states today. It can only be created by joint tenancy of a husband and wife and can be terminated only by divorce, death of one spouse, or mutual agreement of both spouses.
- Example: Bob gives property to Jane and Jack (spouses), as tenants by the entirety.
Each co-tenant has an equal right to possession and enjoyment of the entire property regardless of the size of his or her share. Furthermore, any tenant in common or joint tenant may sue to end the concurrent estate at any time. Finally, when estate planning it is important to note that concurrent interests can be left in a will to a beneficiary.
A Non-Freehold interest is an estate that lasts for a definite time period and is not inheritable. There are four main types of Non-Freehold interests. Because these interests usually involve tenants, they are referred to as “tenancies.”
- Tenancy for years – also called an estate for years or tenancy for a definite term, this is an estate that is created by a lease. A lease is a contractual agreement where a tenant has interest in the property for a specific duration. The term must have a definite beginning and end. These leases terminate automatically at the specified end date without the need for notice by either party.
- Tenancy from period to period – an estate that exists when the tenancy is for a definite time, but is automatically renewable. These estates are of indefinite duration since they can be renewed indefinitely. A tenancy from period to period may be from year to year, month to month, week to week or even day to day.
- Tenancy at will – This type of tenancy can be terminated at any time by either the owner or the tenant. A tenant is generally entitled to a reasonable amount of time in which to vacate the property. Landlords may prefer a tenancy at will when a property is for sale and they may want tenants to vacate quickly. Tenants may favor a tenancy at will if they plan on renting only for a short period of time.
- Tenancy at sufferance – This type of interest exists as the result of circumstance, and is never deliberately created. It arises when a person goes into possession of land in a lawful manner, but remains on the property without any right to do so, and without the owner’s consent. The only difference between a tenant at sufferance and a trespasser is that the tenant at sufferance had at one time a right to be on the property, but has stayed beyond the terms of the previous agreement. The tenant in this situation can be evicted at any time without notice.
Perhaps the most important aspect of Non-Freehold interests to note when estate planning is that they are not inheritable. For example, if someone is a tenant in a house with a lease of one year and passes away, they cannot leave their “right of tenancy” in a will to any beneficiary. At death, the lease automatically terminates and the property rights revert to the landlord.