The median cost of a private nursing home room in the United States increased to $100,375 a year in 2018, up 3 percent from 2017, according to Genworth's Cost of Care survey, which the insurer conducts annually.  Massachusetts came in with a state median cost for a private room at a nursing home at $12,775 a month or $153,000 a year. 

At the same time, Genworth reports that the median cost of a semi-private room in a nursing home is $89,297, up 4 percent from 2017. While significant, the rise in prices is not quite as steep as the 5.5 percent and 4.4 percent gains, respectively, in 2017.

But the median cost of assisted living facilities jumped 6.7 percent, to $4,000 a month. The national median rate for the services of a home health aide is $22 an hour, and the cost of adult day care, which provides support services in a protective setting during part of the day, rose from $70 to $72 a day.

Alaska continues to be the costliest state for nursing home care by far, with the median annual cost of a private nursing home room totaling $330,873. Oklahoma again was found to be the most affordable state, with a median annual cost of a private room of $63,510.

The 2018 survey, conducted by CareScout for the fifteenth straight year, was based on responses from more than 15,500 nursing homes, assisted living facilities, adult day health facilities and home care providers.  Survey respondents were contacted by phone during May and June 2018.

As the survey indicates, nursing home care is growing ever more expensive. Contact us today to learn how you can protect some or all of your family's assets.
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For more on Genworth’s 2018 Cost of Care Survey, including costs for your state, click here.

A recent case involving basketball star Caldwell Jones demonstrates the danger in having only one spouse's name on a reverse mortgage. A federal appeals court has ruled that an insurance company may foreclose on a reverse mortgage after the death of the borrower, Mr. Jones, even though Mr. Jones’ widow is still living in the house. While there are protections in place for non-borrowing spouses, many spouses are still facing foreclosure and eviction.

A reverse mortgage allows homeowners to use the equity in their home to take out a loan, but borrowers must be 62 years or older to qualify for this type of mortgage. If one spouse is under age 62, the younger spouse has to be left off the loan in order for the couple to qualify for a reverse mortgage. Some lenders have actually encouraged couples to put only the older spouse on the mortgage because the couple could borrow more money that way. But couples often did this without realizing the potentially catastrophic implications. If only one spouse's name was on the mortgage and that spouse died, the surviving spouse would be required to either repay the loan in full or face eviction.

In order to protect non-borrowing spouses, the federal government revised its guidelines for reverse mortgages taken out after August 4, 2014 to allow spouses to stay in the house as long as they meet certain criteria, including proving ownership within 90 days of the borrowers death. In 2015, the federal government allowed lenders to defer foreclosure on a widow or widower and assign the mortgage to the federal government. Advocacy groups looking at reverse mortgage foreclosures have found that despite these new regulations, lenders are still foreclosing on non-borrowing spouses. Of the 591 non-borrowing spouses who have sought help to avoid foreclosure, only 317 received assistance.

These regulations did not help Mr. Jones' wife, Vanessa. Mr. Jones, who blocked more than 2,200 shots during his 17-year professional basketball career, obtained a reverse mortgage in 2014 on the Georgia home he lived in with his wife. The contract defined the "borrower" to be "Caldwell Jones, Jr., a married man." Ms. Jones did not put her name on the reverse mortgage because she was under age 62 at the time of the mortgage. Mr. Jones died later that year, and when Ms. Jones did not repay the loan, the insurer began foreclosure proceedings.

Ms. Jones sued the insurer in federal court to prevent the foreclosure, arguing that federal law prohibited the insurer from foreclosing on the house while she lived in it. Under a provision in federal law, the federal government "may not insure" a reverse mortgage unless the "homeowner" does not have to repay the loan until the homeowner either dies or sells the mortgaged property and defines "homeowner" to include the borrower’s spouse.

On appeal, the 11th Circuit Court of Appeals (Estate of Caldwell Jones, Jr. v. Live Well Financial (U.S. Ct. App., 11th Cir., No. 17-14677, Sept. 5, 2018)) ruled that the federal law in question only covers what the federal government can insure and does not govern the insurer's right to foreclose. The court agrees with Ms. Jones that the law is intended to safeguard widows and implies that the federal government should not have insured the loan in the first place, but finds that federal law does not cover the insurer's private right to demand immediate payment and pursue foreclosure.
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When purchasing a reverse mortgage, it is always safer to put both spouse's names on the mortgage. If one spouse is underage when the mortgage is originally taken out, that spouse can be added to the mortgage when he or she reaches age 65. If you have a reverse mortgage with only one spouse on it, contact us to find out the best way to protect the non-borrowing spouse. 

The Social Security Administration has announced a 2.8 percent increase in benefits in 2019, the largest increase since 2012.  The change will put an additional $468 annually in the pocket of the average retired beneficiary.

Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means recipients get a boost in 2019. The 2.8 percent increase is higher than last year’s 2 percent rise and the .3 percent increase in 2017. The average monthly benefit of $1,422 in 2018 will increase by $39 a month to $1,461 a month for an individual beneficiary, or $468 yearly. The cost of living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $128,700 to $132,900.

And there is more good news: Unlike last year's increase, the additional income should not be entirely eaten up by higher Medicare Part B premiums. The standard monthly premium for Medicare Part B enrollees will increase only $1.50 to $135.50.

For 2019, the monthly federal Supplemental Security Income (SSI) payment standard will be $771 for an individual and $1,157 for a couple.

Most beneficiaries will be able to find out their cost of living adjustment online by logging on to my Social Security in December 2018. While you will still receive your increase notice by mail, in the future you will be able to choose whether to receive your notice online instead of on paper.
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For more on the 2019 Social Security benefit levels, click here.

On November 5, 2018 the Real Estate Bar Association for Massachusetts (REBA) adopted Attorney Herbst's proposal to modify Title Standard No. 3 which addresses federal estate tax liens on real estate after someone passes away.  On small estates the Personal Representative can simply sign an affidavit indicating that the gross estate is less than the federal exemption and the recorded affidavit clears the title for this issue.

However, if the size of the estate exceeds the federal exemption you previously would either need a closing letter or lien release from the IRS which frequently can take 18 to 24 months to process (after the filing of a return).  Recognizing that this was an unacceptably long time to wait before one could sell real estate, the IRS issued Notice 2017-12 telling everyone that they should rely on a transcript when such transcript reports that the examination of the return is closed.  In a recent filing for an estate our office was able to obtain such a transcript from the IRS just 32 days after filing the return, a much shorter time period than 18 to 24 months.

Therefore last year Attorney Herbst submitted a request to the REBA Standards Committee requesting that Title Standard No. 3 be amended to recognize the new option available in IRS Notice 2017-12.  Just this week the committee approved the modification and we now have one more option – a hopefully much quicker option – to clear real estate titles from the impact of the federal estate tax lien.

Two big thank you’s are owed to Attorney Lisa Delaney and Plymouth County Register of Probate Matt McDonough.  Attorney Delaney sits on the standards committee and guided the amendment process taking it from initial thoughts, making sure the supporting documents the committee needed were there, and seeing it through to final vote.  Register McDonough assisted in figuring out what could and could not be filed in the probate court’s file to create the record that the committee wanted to rely on.

Whenever you have real estate in a probate estate it is important to identify the title clearing steps necessary as early on as possible as many steps can take a long time to complete.  By starting the process earlier you’ll have a less difficult time later when you go to sell the property.