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    Bob Mauterstock

    2012 Resolutions for Boomers with Elderly Parents

    This is the time every year that we decide what we are going to do differently in the coming year, how we are going to improve, what we are going to stop doing and what we are going to start. I’d to suggest some resolutions that would be very helpful to you and your elderly parents. Here they are;

    Take the time to ask your parents how they met. Bring along a tape recorder or video camera and record their answers.

    At the same meeting ask them how they want to be remembered by their grandchildren and great grandchildren. Again record their answers.

    Schedule a family meeting with your parents, and your siblings to discuss the critical issues that your family will face as your parents get older.

    Complete the Five Wishes Questionnaire yourself and then bring copies to your parents for them to complete. You can find this form at www.agingwithdignity.org

    Find out where your parents keep all their important papers and make sure they are safe. These important papers should include wills, durable powers of attorney, health care proxies, life insurance policies and beneficiary statements for all annuities and retirement accounts.

    Ask your parents to record the names of all bank accounts and investment accounts   that they have. Ask them to include account numbers as well. Have them keep this information in the same place they keep their important papers.

    If your parents have online accounts ask them to record the URL addresses of these accounts, their user names and their passwords. Again keep this info in the same place as their important papers.

    If you complete these resolutions you will save your family much heartache and anxiety. You will also provide your parents with peace of mind, knowing that they have done the critical planning that will keep their family together.

    Grieving for a Loved One

    Recently I discovered the work of Amy Florian, a consultant who helps people understand and endure the process of grieving for the loss of a loved one. Her website, http://www.corgenius.com, has a great deal of valuable information to help families with the grieving process.

    Amy refers to the work of Elisabeth Kubler-Ross and her groundbreaking book on dying, On Death and Dying. It was the first time that anyone had studied the emotional process of someone’s end of life. Kubler-Ross stated that there were five steps to the dying process: Denial, Anger, Bargaining, Depression and Acceptance. Amy states that we often infer that these five stages are also the five stages of grief. But she points out that until someone observes these fives stages in a loved one,  they cannot really begin grieving.

    And grief often does not progress in a linear form. It can become a roller coaster, not merely a series of steps. Sometimes people skips steps in the process or they may experience more of one than the other. They may not become angry at all or they may become extremely angry and stay that way for awhile. Psychologists are now talking more about behaviors that people exhibit than stages in the grieving process. These behaviors may include shock or numbness, sleeplessness, shortness of breath, depression, guilt, or withdrawal. All of these are normal.

    The Center for Grief and Healing in Boston, http://www.griefandhealing.org, points out that there are a number of misconceptions and myths about grief. They include:

    • The pain will go away faster if you ignore it.
    • It’s important to be strong in the face of loss.
    • If you don’t cry, it means you are not sorry about the loss.
    • Grief should last about a year.
    • Moving on with your life means you’re forgetting about the one you lost.
    • Friends can help by not bringing up the subject.

    None of these statements are true. Each of us experiences grief in a personal, unique way. Trying to ignore your pain or keep it from surfacing will only make it last longer. Showing your true feelings will help you and those around you. There is no right or wrong time frame for grieving, and you can hold on to your memory of a loved one and still move on with the rest of your life. You can help a grieving friend by giving them the freedom to express and discuss their grief with you.

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    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.

    Preserve Your Parents’ Legacy!

    David Solie, in his book, How to Say It To Seniors, reminds us that the two most important things to our elder parents are maintaining control of their lives and preserving their legacy. Our parents want to know how they will be remembered by their children and grandchildren. It’s important that we help them do that.

    In the last few months that my father was alive, I visited him at the rehab. center where he was trying to cope with Parkinson’s disease. He had lost the ability to walk and swallow but could still talk clearly. We would sit together every Wednesday afternoon and just talk. It was during these meetings that I really began to understand who he was. He told me of his life as the son of a Methodist Minister, having to move from town to town every few years as his father’s church assignments changed. He informed me that he never went with his parents to a department store to buy clothes. All his clothes were donated by members of the church. They would dump their castoffs in a barrel and he and his sisters would sort through them to add to their wardrobe.

    If we did not have this time together, I never would have really understood what his life was like and why he cherished everything he had so much. Unfortunately, I did not record these conversations. It would have been so valuable to share them with my daughter so she could understand her grandfather’s life.

    That is why I want to strongly advise you to make the effort to sit down with your parents and record their history. I call it creating a digital biography. Have you ever asked them how they met and decided to get married? Do you know what growing up was like for them? What was their relationship with their parents and their siblings like? Did they go through the Great Depression or World War II?

    It is so easy now to record these conversations. It’s as simple as getting an old cassette tape record with a microphone. Just turn it on and start talking. But if you really want to do it right and you have a video camera, a tablet or a smartphone, you can record them in HD stereo. Don’t make it too complicated, but just make the effort to preserve their legacy. Ten years from now you will be very glad you did.

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    Financial Advisors may reprint any articles from The Gift of Communication Blog in your own print or electronic newsletter. But please include the following paragraph:

    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.

    Are your parents a tax deduction?

    You may have already started putting the information together for your taxes. But there’s something important you need to know. If you are providing substantial financial assistance to your parents, you should be aware that you may qualify for significant tax deductions!

    The key to Internal Revenue Service assistance in caring for an elderly relative is whether you can claim the person as a dependent. If you and your parent meet IRS requirements, you’ll be able to claim an added personal exemption on your income tax return. For 2016, each exemption allows you to reduce your taxable income by $4,050.

    Then there are possible deductions and credits. If you pay medical expenses for a dependent parent, you may be able to deduct some of those costs. Hire a caregiver to help you out and a credit could cut your tax bill a bit more.

    A dependent parent cannot make more than the exemption amount. This is $4,050 for 2016. The income barrier represents taxable income. Social Security normally is excludible, but if they have other income, which in many cases means interest and dividends, some is taxable. If your parent meets the income requirement, than you must determine the level of support you provide.

    To be deemed a dependent for tax purposes, your parent must get more than half of his or her support from you.

    If your parent lives in your home, to reach the 50-percent-plus threshold, you can take into account the fair-market room rental, food, medicine and other little support items.

    But your parent doesn’t have to live with you. When a parent is able to remain in his or her own house, in an assisted living facility or a nursing home, costs you pay for parental support at those locations count toward meeting the IRS requirement.

    Once your parent meets the IRS dependency tests, you can use any medical expenses you pay for mom or dad toward your itemized deductions. Since medical costs must exceed 7.5 percent of your adjusted gross income before you can claim them, a parent’s added expenses could help you meet the requirement.

    When adding up those parental medical costs, don’t forget premiums for supplementary Medicare coverage or long-term care insurance. Once your parent is your dependent, some of these payments that you make can be counted toward your deductible medical expenses.

    And if your dependent parent lives with you and requires continual care, you may be eligible for another tax break. What you spend for this attention generally won’t count toward the medical deduction. But if it’s necessary so that you can go to work, you can claim the dependent care credit, which could be as much as $3000. The amount is based on a formula considering your income level. But it’s a credit not a deduction. This means its a dollar for dollar reduction in taxes.

    If you share the cost of caring for your parents with your siblings you should file Form 2120, Multiple Support Declaration with your tax return. This form indicates that while several siblings contributed to your parent’s support, the others waive any tax-exemption claim.

    You also need to get signed statements from your siblings acknowledging that they waived their tax claims. You don’t have to send these documents with your 1040, but keep them in your records in case the IRS ever questions your exemption or medical deduction claims.

    If this arrangement sounds unfair to your siblings, you should inform them that the tax benefit can be rotated among you. One child can claim the deduction one year and another the next. But be careful that you pay the expenses in the year you claim the deduction.

    For more detailed information on how to claim your parent as a tax deduction, please refer to this article at TurboTax.

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    Financial Advisors may reprint any articles from The Gift of Communication Blog in your own print or electronic newsletter. But please include the following paragraph:

    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.

    Check Your Aging Parents’ Life Policies For Expensive Mistakes

    Do your aging parents have life insurance policies or annuities? If so, the first thing you must do is find the annuity or life insurance policies themselves. Don’t fret. If you can’t find them, you can order replacement policies from the companies if you know the policy number and who the insured is.

    Once you find your parents’ policies, you must locate the beneficiary statements for each of them. The statement may be attached to the policy itself or just a separate form with the policy number identifying it. If you can’t find the beneficiary statement, you must contact the insurance company to confirm who the beneficiary is. Type a letter and ask your parent (the owner of the policy) to sign it requesting a copy of the beneficiary statement.

    You may ask why it’s so important to find these beneficiary statements. I checked one of my client’s life policies. A $100,0000 policy listed a former wife as beneficiary. It had never been changed. If he died she would have received the funds no questions asked.

    Your parents may list someone who is deceased as beneficiary or may not have listed a contingent beneficiary. If there is no clear beneficiary, the funds will be paid to your parent’s estate when they die, subjecting the proceeds to the cost and delay of probate. ( A listed beneficiary avoids probate!)

    If the beneficiaries are out-of-date or incorrect, your parent can change the beneficiary by submitting a new form to the insurance company. They may list as many primary beneficiaries as they like, stating the percentage going to each. They must also list contingent beneficiaries. If the primary beneficiary is deceased, the proceeds will automatically go to the contingent. If none is listed, the proceeds will again have to go through probate.

    Once you have found the policies and determined that the beneficiaries are correct and the policy is still in force, check with the company again. Make sure you keep the policies and the beneficiary statements in a safe place. Make a separate copy of the face page of the annuity or life insurance policy and the beneficiary statements and keep them with your own records.

    By the way, when you check all these policies, make sure you check your own, too!

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    PERMISSION TO REPRINT:
    =======================
    Financial Advisors may reprint any articles from The Gift of Communication Blog in your own print or electronic newsletter. But please include the following paragraph:

    Reprinted from Bob Mauterstock’s The Gift of Communication Blog. Subscribe at http://www.GiftofCommunication.com  and receive Bob’s Family Meeting Checklist Guide.