Creative Planning for Your Senior Years Should Begin Now

Creative Planning for Your Senior Years Should Begin Now

Just as most younger people make detailed plans before entering college or starting their careers, older Americans must also carefully plan how they want to live out the last decades of their lives. If you’ll start this process early, you’re much more likely to have many positive options and choices available.

Yet before older Americans or “seniors” start thinking about vacations and other pleasure pursuits – it’s crucial to first address such basic needs as finances, housing and medical care. A good way to start this process is by asking yourself each of the following questions.

  • What family, financial and legal resources do I currently have?
  • When – and in what order — should I begin drawing upon those resources in the most efficient manner?
  • If I’m short on all or most resources – how can I immediately begin creating a supportive community of friends, relatives and others to help me?

Your financial and legal resources require immediate planning and regular oversight

You’ll always need to know more than just how much money you have and how quickly you can liquidate it in case of an emergency. Although it’s important to be able to access large amounts of money should you or your spouse require immediate medical care that isn’t readily covered by insurance, there are other more critical issues you should address first.

Stated simply, everyone needs to secure Medical Power of Attorney documents, a Will and other supporting documents. You can easily acquire this paperwork by meeting with your Houston estate planning lawyer long before you reach your senior years. This will help you obtain the best medical care available – in keeping with your preferences.  You can also inquire about other documents that can grant trusted individuals the right to handle your finances (especially if you’re single without adult children) if you become temporarily incapacitated.

Given how many older Americans now live alone, these matters should never be postponed. As of 2010, about 12% of women between the ages of 80 and 84 were unmarried and childless. By 2018, some experts predict that about 16% of women in that age group will fit that description.

Of course, many men may also have similar needs since the average woman only outlives the average male by a few years.

Once you and your attorney have created all this legal paperwork, be sure to give copies to trusted relatives or friends so that they can make sure you obtain the care you need right when you need it the most.

If you’re age sixty and single (or even if married) – start proactively deciding where you’ll live Afraid to face the reality of eventual death, too many people refuse to move into proper housing before their health seriously deteriorates. When this happens, helpful family members or friends are often greatly inconvenienced by your avoidable tardiness.

Give serious thought to moving into a place now that offers different levels of care. Otherwise, if a sudden emergency develops, you might not wind up where you want to be. Try looking for unique living arrangements where seniors can blend in with others of all ages. Places like Hope Meadows are often a blessing to many.

Think positive if you have little money – consider part-time work – and keep socializing

Stay active pursuing activities that are meaningful, useful and fun. As you get to know others better, you may want to suggest becoming part of each other’s support network. Friendships with others of all ages can prove very beneficial to everyone involved.

If you currently have a tech-savvy friend or family member — and want to live at home as long as possible — be sure to check out the newest “apps” that can help keep you and your financial world safe.

Always be kind to yourself. If current media articles make you feel that you made poor choices in the past regarding marriage and children, keep in mind that married couples (and older singles) with children don’t always “have it made” regarding help while growing older. Many of these people have adult children who: (1) live far away, (2) are estranged from them, (3) are coping with serious addictions – or are (4) barely staying afloat in their own busy family and work lives.

Finally, since so many entrepreneurs are now rushing into the “longevity market,” you must make sure you’re interacting with reputable people and not scam artists. Just because someone is financially “bonded” to do their work, doesn’t mean they’ll do what’s best for you. Stay in touch with your lawyer and always have at least one trusted friend help you make critical decisions.

Please feel free to schedule an appointment with one of our Murray Lobb attorneys so we can help you prepare all the estate planning legal paperwork that you need. We can also review any contracts you’re being asked to sign regarding a continuing care retirement community (CCRC). We look forward to being of service to you.

IRS Clarifies “Employee” Versus “Independent Contractor” Test

The IRS recently issued clarifying guidelines to help employers determine which workers should be treated as independent contractors or employees. The government naturally wants accurate decisions to be made since they determine when it’s paid certain taxes on each worker’s wages.

The main deductions that should be subtracted from all employees’ paychecks include those for Social Security, Medicare, unemployment and income taxes. When a business has work done by an independent contractor, that person must pay all those taxes in the form of self-employment tax.

What remains the general standard for deciding if a worker is an independent contractor?

If an employer reserves the right to only direct control over the result of the work – and cannot tell a worker exactly what to do and how to handle the assignment – then that worker will usually be legally viewed as an independent contractor.

However, deciding what constitutes specific directions for completing a given task can still fall into a gray area.

Fortunately, there are three basic analytic categories that can help employers accurately determine when workers are properly classified as “employees” or “independent contractors.”

What are the three main categories of analysis for deciding a worker’s correct status?

The IRS indicates that employers should carefully examine the following three aspects of how they relate to workers to determine their proper work status.

  1. Behavior control. An employer may have behavior control over a worker even when it does not exercise it. For example, when such control is involved, it may include telling a worker which specific tools to use and where those supplies should be purchased. Under those circumstances, the worker should be considered an employee. Conversely, the less control over a worker’s behavior, the greater the chance that the person is working as an independent contractor.

If there are strict guidelines for determining the quality of the work provided, there’s a strong chance that the worker is an employee. When the worker is provided a bit more leeway in terms of quality control – there’s a stronger chance that the person is an independent contractor.

Of course, the two parties will usually need to agree to some basic quality standards, regardless of whether the worker is an employee or independent contractor. Finally, if periodic training or ongoing training is required of a worker – that increases the chances that the worker should be treated as an employee.

  1. Financial control. Does the worker have to personally cover the majority (or all) of the expenses tied to completing the work? These might include the purchase and maintenance of proper computers, printers, fax machines, scanners and other required equipment. If the worker is covering all those expenses, he or she should probably be classified as an independent contractor.

Stated differently, when a worker has many unreimbursed expenses, that person is usually an independent contractor — not an employee. Independent contractors are also those who retain the right to continue obtaining additional work from other parties. As for the payment for services, independent contractors are usually paid a flat fee – although that arrangement can vary in some cases.

  1. How the employer and worker each perceive the nature of their relationship. When the parties have not negotiated any employee benefits like vacation pay, sick pay, a pension plan and stock options – the worker is usually an independent contractor. While a written contract signed by the two parties can indicate how they view their interactions, it’s not always the only evidence the IRS and the courts will review when classifying the work relationship. All relevant documents and communications may need to be examined.

The main consequence for an employer who misclassifies a worker is that the employer may be required to pay all employment taxes currently owing for that worker – as opposed to requiring the worker to cover them.

What unique emphasis is placed on these three categories in the updated guidelines?

As for behavior control, employers really shouldn’t be telling the independent contractor the exact sequence of events for all tasks to be performed or exactly how they should be handled.

Regarding financial control, only independent contractors can experience a profit or loss while handling assigned tasks. Employees whose expenses are generally covered will usually not experience any profit or loss while completing assigned tasks on a given schedule.

As for how the parties view their work relationship, a fully executed contract can be controlling when other conclusive details aren’t available. However, as briefly noted above, the parties’ communications can usually provide clear indications of whether they’re interacting as employer-employee or employer and independent contractor.

The key bottom line for employers who don’t want to only work with employees – is to allow their independent contractors considerable flexibility while completing tasks – while respecting professional standards acceptable to both parties.

Please give our law firm a call if you need any help determining which workers are employees or independent contractors. We can also help you better understand the many different types of classifications that govern a wide range of employees you may want to hire – and the tax consequences for hiring those who fit in each group.

Our firm always remains available to help you draft many different types of contracts that can serve all your business needs.