Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, March 16, 1992 TAG: 9203140208
SECTION: BUSINESS PAGE: B6 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
If a person entered an institution on or after Sept. 30, 1989, the spouse is entitled to retain some assets and need not become completely impoverished in order to qualify for Medicaid assistance.
The spouse can keep one-half of the couple's resources up to $68,700. The other half of that amount (now $34,350) must be spent on the spouse in the nursing home. The minimum amount that the spouse can keep is $13,740. These figures will adjust for inflation each year and exclude the value of a home, household goods and one car regardless of their value.
The spouse is also entitled to monthly income for shelter expenses. The amount varies by locality, and for Roanoke is $984 a month.
Anyone whose spouse entered a nursing home after that date should apply for assistance and a resource assessment at a local social services department.
\ Your sleep's important
Q: When is it advantageous to use the services of a financial planner whose minimum fee is $350?
A: You probably need a financial planner if you face a complex family or economic situation or if you feel confused about how to handle your finances.
People who have a lot of money generally have more complex finances, but this is not always true. Conversely, families with modest income and savings might have many entanglements.
It's not unlike consulting a doctor or lawyer when you have a medical or legal problems regardless of the fee. You should hire a financial planner if you think you need professional help in order to sleep well at night.
\ Too late to sue
Q: I foolishly traded in commodities from 1979 until 1986, and I lost a lot. I was, at the time, managing my own business and trusted the broker to "watch over me."
After retiring in 1989, I did an audit and discovered that they, on many occasions, would let margin accounts run on after positions were closed, on one occasion for more than three months. I was paying interest on unborrowed money.
I had one conference and wrote several letters requesting return of overcharges, but was told there was a statute of limitations. I call this theft, not regular business transactions. Do I have a case?
A: The only way to find out if you have a case is to take your records to a lawyer who specializes in securities and business law.
But, as your broker suggested, time probably has run out on your right to sue or even to question the transactions. You are talking about events that happened six to 13 years ago and many business dealings have a five-year statute of limitations.
There might be an exception if you can prove fraud, but this would be hard to do if the transactions were reported on your brokerage statements at the time. If so, you should have been aware of your situation.
Because you were dealing in commodities, you might well be considered a sophisticated investor unless your broker got you into that risky business without your knowledge. People who invest, even if it's only in a bank savings account, have an obligation to review their monthly statements for accuracy as they arrive.
\ The cost of death
Q: Recently I developed a health problem that could shorten my life. My wife being my sole heir will inherit my 401(k) at about $350,000 and my insurance at $225,000. Our home is jointly owned at an approximate value of $140,000. I have a will leaving everything to her.
How much federal, state and local taxes and fees will she have to pay at my death?
A: David Zimmer, a certified public accountant with the Norfolk firm of Edmondson, Ledbetter & Ballard, said your wife will receive the marital deduction. It will be subtracted from your gross estate so that she won't have to pay any taxes at all.
Because she is the direct beneficiary of the 401(k) and the insurance, he said, probate costs will be minimal.
The problem will come at your wife's death, Zimmer said. Adding $645,000 (including half the house) to her assets, would subject her estate to an average tax of 38 percent. If her estate grows to be worth $1 million at her death, your wife's estate would be taxed at about $150,000.
Zimmer suggested that you work with a certified public accountant and a lawyer who specializes in estate planning. You can arrange to reduce the taxes when the money passes to the next generation.
\ Mag Poff covers banking and finance for the Roanoke Times & World-News. She will help find answers to your personal finance questions. Send them to her at the Roanoke Times & World-News, P.O. Box 2491, Roanoke, Va. 24010.
by CNB