Thursday, April 30, 2015

Florida’s taxes not as low as you might think

Florida TaxWatch's latest report, "How Florida Compares," shows the state's per capita state tax collections have fallen to 48th in the nation. While Floridians' state tax burden is low, the report shows that more than half of all government revenues are paid by local taxpayers. Local government revenues comprise 54.8 percent of Florida government revenues, which is the highest percentage in the nation.

When state and local taxes are combined, Florida's tax burden rises higher.

Tuesday, April 28, 2015

How to qualify for Medicaid without going broke

If you are ever confronted with the fact that your spouse needs nursing home care, the shock can be devastating. Besides the emotional drain, the financial impact can put you in a serious bind.

Medicaid will cover expenses as long as you don’t have much money. And if you’re wealthy, you can afford the cost of private care. But if you fall in middle with $300,000 in savings for example, you could be on the hook for $10,000 to $20,000 a month for your spouse’s care. Of course you could spend down that money to qualify for a Medicaid-paid facility. However, that would leave you with next to nothing for your own needs.

One option to consider is a Medicaid compliant single-premium immediate annuity. The amount you put into this annuity won’t count against your spouse’s Medicaid eligibility. This type of annuity is purchased during times of crisis when a doctor recommends nursing home care or when a short-term rehab stay becomes a long-term one.

For an example of how this could work, assume you and your spouse have saved $300,000 over your lifetimes. Medicaid rules vary depending on which state you live in. Let’s say for this example you live in a state that will let you keep $100,000 in assets, plus your home.

Since your state will let you protect $100,000, the $200,000 balance will be available for your spouse’s nursing home costs. But you could take that $200,000 and buy a Medicaid Compliant annuity that will pay you a monthly income for the rest of your life … no matter how long you live. And if you die before your spouse, the income will go towards his or her care.

A Medicaid compliant immediate annuity will allow your spouse to qualify for Medicaid without spending down your savings. At the same time you’ll have a guaranteed stream of income each and every month for as long as you live. For the full details contact a financial advisor and an elder care attorney who are familiar with the rules in your state.