How do you protect your relative in a nursing home during a pandemic?

COVID-19 is challenging all of us and reshaping our lives, but the virus is a unique challenge to nursing home residents. How can you ensure your loved one stays healthy during a pandemic?   The first step is to research the nursing home. You probably did your research before your loved one moved in, but you may not have gotten specific information about the facility’s policies for preventing infection. The Centers for Disease Control (CDC) has a factsheet that covers key questions to ask nursing home officials about their infection prevention policies, including:

• How does the facility communicate with family when an outbreak occurs?

• Are sick staff members allowed to go home without losing pay or time off? 

• How are staff trained on hygiene?

• Are there private rooms for residents who develop symptoms?

• How is shared equipment cleaned?

You should also check staffing levels. In an understaffed facility, workers may rush and not practice good hand-washing. There are no minimum staffing levels for nurses aides, who provide the most day-to-day care, but the federal government recommends a daily minimum standard of 4.1 hours of total nursing time per patient.  The Centers for Medicare and Medicaid Services and the CDC have issued guidance to nursing homes to try to prevent the spread of the coronavirus, including restricting all visitors except in end-of-life situations. It is crucial to follow the rules of the facility. If the facility is not limiting or allowing visitors, do not try to break the rules. Try FaceTime, Skype, or similar alternatives to communicate with your loved one instead. You should check with the facility to make sure it is following the guidance from CMS and the CDC, which includes recommendations to do the following:

• Restrict all visitors, with exceptions for compassionate care

• Restrict all volunteers and nonessential health care personnel

• Cancel all group activities and communal dining

• Begin screening residents and health care personnel for fever and respiratory symptoms

• Put hand sanitizer in every room and common area

• Make facemasks available to people who are coughing

• Have hospital-grade disinfectants available

When communicating with the facility, please remember the employees are also under tremendous stress during this outbreak. It's more important than ever to remain civil to each other!

To read the detailed guidance from the CDC, click here.

Seniors: take advantage of free tax filing software

If you're a senior citizen or retiree, you may be able to use online tax preparation software free of charge. Most low- and middle-income Americans qualify for the free help, but do not take advantage of it, and all seniors are eligible for free counseling assistance from the IRS. The tax preparation software industry has had a decades-long deal with the Internal Revenue Service (IRS) to make free versions of its software available to low- and middle-income individuals. However, a report by ProPublica in April 2019 revealed that the software companies were making it difficult for customers to find the free tax filing software, including going so far as to hide it from a Google search. According to the IRS’s Taxpayer Advocate Service, around 70 percent of taxpayers qualified for free filing, but only 1.6 percent used the free software in 2018. The IRS has now amended its agreement with the software industry to bar tax preparation companies from hiding the free products.  The IRS Free File website links to the available free products. Each company sets its own eligibility standards based on income, age, and state residency. As long as your adjusted gross income last year was $69,000 or less, you will find at least one free product to use. There are also two products that are in Spanish. If you would rather not prepare your own tax return, seniors can use the IRS’s Tax Counseling for the Elderly (TCE) program. The TCE program is available to taxpayers who are 60 years old or older and specializes in answering questions about pensions and retirement plans.

Does your estate plan include IRAs? A new law means it may be time to reevaluate.

Both workers and retirees may need to rethink some of their estate planning in light of the newest spending bill. The Setting Every Community Up for Retirement Enhancement (SECURE) Act, part of the massive bill, makes major changes to retirement plan rules, including inherited plans.  Passed in December 2019, the SECURE Act changes the law surrounding retirement plans in several ways, but the biggest change eliminates “stretch” IRAs. Under the previous law, if you named anyone other than a spouse as the beneficiary of your IRA (or other tax-favored retirement account, such as a 401(k)), that beneficiary could choose to take required minimum distributions (RMDs) over his or her lifetime and pass what was left on to future generations (called the "stretch" option). The required minimum distributions were calculated based on the beneficiary’s life expectancy. This allowed the money to grow tax-deferred over the course of the beneficiary’s life and to be passed on to his or her own beneficiaries.  The SECURE Act requires that most non-spouse beneficiaries of an IRA withdraw all the money in the IRA within 10 years of the IRA holder’s death. In many cases, these withdrawals would take place during the beneficiary’s highest tax years, meaning that the elimination of the stretch IRA is effectively a tax increase on many Americans. This provision will apply to those who inherit IRAs starting on January 1, 2020.   Spouses who inherit an IRA are still able to treat the IRA as their own (and take distributions over their lifetime), and the following non-spouse beneficiaries are also treated like spouses: •    Disabled or chronically ill individuals •    Individuals who are not more than 10 years younger than the account owner •    Minor children. But once the child reaches the age of majority, he or she has 10 years to withdraw the money from the account. Given these changes, those with retirement accounts need to immediately reevaluate their estate plans.  Look at Disclaiming  With regard to estates of certain people who died during 2019, there is a planning option for individuals who are inheriting a large IRA. Beneficiaries of large IRAs have the option of disclaiming them and allowing their beneficiaries to stretch their withdrawals. The disclaimer has to be done within nine months of the IRA owner’s death. Disclaimed property is treated as if the person inheriting it had actually died before the decedent.  For example, assume that Robert died on September 1, 2019, leaving a $1 million IRA to his wife, Stacy. The contingent beneficiaries are their three children. Stacy could choose to disclaim the IRA (or a portion of it) so that it passes directly to her three children. They then could stretch the withdrawals over their life expectancies, postponing the bulk of their withdrawals until they are older and presumably retired and subject to lower tax brackets. Stacy has to execute her disclaimer by March 31st so that it's within nine months of Robert's death. The window for this option will continue to narrow until it closes completely on October 1, 2020. Review Your Conduit Trust  Your estate plan may have been designed to have your retirement plans pass into trust for the benefit of your spouse, your children, or others. If your spouse is the only beneficiary, your trust is fine because the SECURE Act did not change any of the rules for spouses inheriting IRAs. But the rules did change for just about everyone else in a way that could affect how the trust would work.  Under the previous rules, so-called "conduit" trusts were set up to pay out RMDs to the beneficiaries. Under the new law, RMDs are not required but the IRA must be completely withdrawn by the end of the 10th year after the owner's death, and if it's held by a conduit trust, it must be completely distributed to the trust beneficiaries. If you created the trust to protect assets in the event of divorce or bankruptcy, or simply so they will be professionally managed, the new rules could undermine the purpose of the trust by distributing all of the assets out of the trust. If your IRA names a trust as a beneficiary, you should review the trust with your estate planning attorney. Check Your Special Needs Trust Special needs trusts, unlike most other trusts, are usually drafted as so-called "accumulation" trusts. Unlike conduit trusts, accumulation trusts do not require that the RMDs be distributed. Instead, they can be retained by the trust and distributed as the trustees deem appropriate. Automatically distributing RMDs could undermine eligibility for public benefits the disabled beneficiary may be receiving.  Under the new law, disabled beneficiaries are deemed "eligible designated beneficiaries" and fall under an exception that permits them to continue to stretch withdrawals under the old inherited IRA age-based schedule. But the trust will only qualify for this treatment if the disabled individual is the only beneficiary of the trust during his or her life. If the trust also permits distributions to a spouse or children, it won't qualify and the IRA will have to be completely withdrawn under the 10-year rule.  One of the problems with the 10-year rule for accumulation trusts, as opposed to conduit trusts, is that the withdrawn funds if held by the trust will pay taxes at trust tax rates, which are much higher than individual tax rates in most cases. As a result, if your estate plan includes a special needs trust that could be a beneficiary of your retirement plan assets, it's important to review the trust with your estate planning attorney. For more on the new law, please contact our office.