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Monthly Archives

September 2012

Reverse Mortgage-Consumer Financial Protection Bureau seeks Stronger Disclosures

By Elder Law, Estate Planning, Real EstateNo Comments

The Consumer Financial Protection Bureau is planning stronger disclosure requirements for reverse mortgages as more evidence emerges that senior citizens are using the product without fully understanding its main features and risks.

As part of a Dodd-Frank Act requirement, the agency was set to release a study showing  that signs reverse mortgages are not being used as intended, with increasingly younger borrowers taking out larger pots of money rather than gradual income streams to help finance their later years.

The bureau, which is required to study the reverse mortgage sector and identify potential consumer protection concerns, found that 73% of borrowers last year accessed nearly all or almost all of their home equity available in the reverse mortgage — an increase of 30 percentage points since 2008 — leaving few funds available later in life.

Nearly half of borrowers were younger than 70, and taking out a loan at the earliest eligibility (typically age 62) has become more common. The study found the biggest players in selling reverse mortgages currently are nonbanks, and the sector is “increasingly dominated by small originators.” The two largest providers, Wells Fargo and Bank of America, left the market last year and MetLife left it in April.

“It can be hard to tell a reverse mortgage is better than downsizing, refinancing or using a traditional home equity loan,” CFPB Director Richard Cordray said. “Even when a homeowner makes a careful decision to take out a reverse mortgage, it can be a challenge to select the right product and determine the appropriate amount to borrow initially.”

Consumers need to better understand reverse mortgage loans.  Additionally, consumers need to understand that this is an expensive product which is only recommended as a last resort.

If you need legal advice for reviewing a reverse mortgage, Medicaid planning, VA planning, tax planning, estate planning or trust and probate administration please contact our office for an initial consultation at (941) 906-1231.

September 27, 2012
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The Taxpayer Advocate Service –Your Voice at the IRS

By Tax LawNo Comments

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS. They help taxpayers who are experiencing economic harm, taxpayers who are seeking help in resolving problems with the IRS and those who believe an IRS system or procedure is not working as it should. Here are ten things every taxpayer should know about TAS:

  • This service is free and tailored to meet your needs.
  • You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn’t working as it should.
  • The worst thing you can do is nothing at all!
  • TAS helps taxpayers whose problems in dealing with the IRS are causing financial difficulty or significant cost, including the cost of professional representation.  This includes businesses as well as individuals.
  • The Taxpayer Advocate Service is your voice at the IRS.
  • If you qualify for help, they’ll do everything they can to get your problem resolved.  You will be assigned to one advocate who will be with you at every turn.
  • They have at least one local taxpayer advocate office in every state, the District of Columbia, and Puerto Rico.  You can call your local advocate, whose number is in your phone book and in Pub. 1546, Taxpayer Advocate Service — Your Voice at the IRS.  You can also call their toll-free number at 1-877-777-4778.
  • As a taxpayer, you have rights that the IRS must abide by in its dealings with you.  The tax toolkit at www.taxtoolkit.irs.gov can help you understand these rights.
  • TAS also handles large-scale or systemic problems that affect many taxpayers.  If you know of one of these broad issues, please report it to TAS through the Systemic Advocacy Management System.
  • You can get updates on hot tax topics by visiting the TAS YouTube channel at www.youtube.com/tasnta and the TAS Facebook Page.

 

For more information on your tax return and tax filing deadlines, visit www.irs.gov.  Please contact our office for an initial consultation if you need legal advice at (941) 906-1231.

September 26, 2012
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People with Medicare Beware- COBRA is Not Coverage as a “Current” Employee

By MedicareNo Comments

There is an increase in the number of Medicare beneficiaries who are delaying beyond age 65 to enroll in Medicare Part B.   They are thinking that because they pay for and receive health coverage under COBRA that they do not need to enroll in Medicare Part B.  This is incorrect and comes with heavy penalties.

The beneficiary who does not enroll during the initial enrollment period at their 65th birthday must wait to enroll in the next general enrollment period (January-March) and the coverage does not begin until July 1st of that year.  Further, there is a 10% late penalty assessed to the standard monthly premium for every 12 months of delayed enrollment in Part B.  This penalty has no durational limit, so it continues for the lifetime of the Medicaid beneficiary.

Beneficiaries may, however, qualify for a Special Enrollment Period to enroll in Plan D if the drug coverage they had under COBRA is considered creditable coverage.  The individual will have to pay a penalty if there is a continuous period of 63 days or longer after the individual’s initial enrollment period.

If you need legal advice for probate and trust administration, tax advice, estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation at (941) 906-1231.

September 13, 2012
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Long-Term Care Expenses Can Be Tax Deductible

By Long-Term Care, Tax LawNo Comments

Long-term care expenses quickly add up, but it is good to know that many long-term care expenses can be deducted from your taxes. Under the tax code, expenses for medical care may be claimed as an itemized deduction if they exceed 10 percent of adjusted gross income. The definition of medical expenses includes the cost of long-term care if a doctor has determined you are chronically ill. “Chronically ill” means you need help with activities like eating, going to the bathroom, bathing, and dressing, or you require substantial supervision due to a severe cognitive impairment.

For more information on your tax return, visit www.irs.gov.  Please contact our office for an initial consultation if you need legal advice at (941) 906-1231.

September 12, 2012
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Who can Draft a Qualified Income Trust?

By Elder Law, Estate Planning, Medicaid PlanningNo Comments

Only an attorney is licensed to draft a Qualified Income Trust.Medicaid planning companies are not licensed to draft Qualified Income Trusts, unless they have a Florida licensed attorney on staff who is directly and actively representing the trust Grantor.

If you need legal advice for estate planning, Medicaid planning, or VA planning, please contact our office for an initial consultation at (941) 906-1231.

September 6, 2012
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Tax Tips-Which Records Should you Keep?

By Tax LawNo Comments

After you file your taxes, you will have many records that may help document items on your tax return. You will need these documents should the IRS select your return for examination. Here are five tips from the IRS about keeping good records.

  1. Normally, tax records should be kept for three years.
  2. Some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.
  3. Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
  4. For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on the IRS website at http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

For your tax advice needs, please contact our office for an initial consultation at (941) 906-1231.

September 6, 2012
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