Financial Planning

Financial Planning

Investors will be happier if they approach the market like this

Market update from Aug. 14, 2017

Margie Patel, Wells Fargo, and Doug Mackay, Broadleaf Partners in Hudson, discuss how to play the current action in the markets

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Financial Planning


It Pays to Coordinate

Financial Planning


Steve had a big decision to make.

His daughter was getting married, and he wanted to give her the wedding of her dreams. To do it, he dipped into his IRA. Although the wedding was everything he and his daughter had hoped, it pushed him up into a new tax bracket, costing him thousands of dollars in additional taxes. This caused his Medicare premiums to skyrocket by more than 40 percent for the following year as well.

Steve had the resources he needed to give his daughter the wedding she wanted, but because of a lack of coordination and understanding, he paid thousands in unnecessary taxes. His mistake was focusing on only a single aspect of a major decision.

Consider a Financial Quarterback

Steve’s situation explains why it’s important that all your advisers are connected and understand the big picture. When you make a major decision like Steve did, there will be outcomes you might not have considered.

So how do you make financial decisions that have been reviewed from every angle? Try a holistic approach to your financial health that includes professionals who will help with all of your tax, insurance, legal and financial planning needs.

New advisers should be open to working with existing advisers whom you know and trust as well. It’s important for each adviser to be aware of what another is doing. Using a network of connected advisers helps people decide which decision is right for their situation.

Coordination gives clients a peace of mind that saves time and money, and lets them focus on more important things — such as wedding plans. Your goal should be to find an adviser that will make sure every financial decision is examined through the lens of all the available options so nothing is missed.

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Special Needs Trusts Workshop


Summit DD Hosts Butcher Elder Law for

an Exclusive Workshop: Special Needs Trusts 101


Free event presents the essentials all families of persons with special needs should know


Tallmadge, OHIO – In honor of Developmental Disabilities Awareness Month, Butcher Elder Law is partnering with Summit DD to present an exclusive workshop, Special Needs Trusts 101 on Tuesday, April 4 from 5 – 7 pm in the Multipurpose Room at the Summit County Developmental Disabilities Board, 89 E. Howe Road, Tallmadge.


Special Needs Trusts are documents established for the benefit of an individual who receives government benefits based on need, such as Supplemental Security Income (SSI) and Medicaid.


Should a person with an intellectual or developmental disability receive an inheritance or settlement, those government benefits could be impacted or jeopardized by receipt of unanticipated funds.


The free workshop will present the essentials of establishing a Special Needs Trust and how they can guarantee the stability of benefits for years to come.


Lead by Sam Butcher and Erin Eurenius from Butcher Elder Law, the program will cover:

  • Who needs a Special Needs Trust
  • What is involved in creating a Special Needs Trust
  • Why it is different from other legal documents
  • How funds from Special Needs Trusts can be used


The workshop is open to persons and families served by Summit DD as well as the general public. Space is limited and an RSVP is required in order to attend. Please call Ann Watt at Butcher Elder Law at 440.268.8284 or go to Eventbrite to confirm workshop reservation.


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Social Security Strategies – How the New Budget Deal May Affect You

At the beginning of each year, many of us create resolutions for saving and spending.

This year it is especially vital to understand a crucial policy change MMthat Congress passed late last year as part of a budget deal. In it, Congress phased out a Social Security claiming strategy called “File & Suspend/Restricted Spousal Application.”

This news caused quite a stir, particularly because there has been much concern over the viability of the Social Security program. As pensions become less common, Social Security is quickly becoming the backbone of retirement for many.

Strategies vary based on marital status, earnings and disability history. Social Security benefits can be con- fusing and policy changes may seem alarming. Between the various claiming options, updates to the program and misinformation available, exactly how should you decide on a strategy?

To start, when reviewing your Social Security benefits, it’s best to do so within the context of a full financial plan. Each individual’s tax situation and spending goals, marital history, health status and retirement date varies.

Keep these key point in mind: The soonest you may apply for benefits (which varies, but is generally 62), the age you may collect “full,” unreduced benefits called “Full Retirement Age” (FRA) and the latest you may collect benefits, which is age 70 for everyone.


Because the Social Security Administration is no longer regularly mailing statements, it’s best to visit the Social Security website to determine your benefits. On the site, create a login to your personal record and find your “Full Retirement Age.” This is the age any American who has worked long enough at a job where they paid into the Social Security system (at least 40 calendar quarters total) may claim the “full” benefit.

If you fall into this category and are married or divorced but previously married for more than 10 years, the recent legislative changes may apply to you.

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Retirement – Learn, Make a Plan, Enjoy

Is retirement still part of the American Dream?

Thankfully, the answer is yes for most of us. But it will require some planning on your part.

A study by the Economic Policy Institute showed that half the people on the cusp of retirement (ages 56 to 61) had a retirement account balance of less than $91,000. At a typical draw-down rate of about 4 percent per year, that equals around $303 a month in retirement income. That probably won’t get you where you want to go.

Slow, Steady Growth

To plan for a comfortable, successful retirement, follow a couple of ground rules. The first is that financial literacy is a lifelong pursuit. Do it right, and financial planning will be downright boring. Plain-vanilla strategies such as regular contributions, slow-and-steady growth and diversification are often most effective over the long term. It’s also important to get advice from trusted, neutral sources.

The second is to understand your future medical expenses. People often assume that Medicare covers everything, but it doesn’t. After the age of 65, the average couple will spend about $260,000 out of pocket on health care — including insurance and nursing home care. The problem is most households don’t have $260,000. That means that many households face the risk of impoverishment or ending up on Medicaid.

Retirement is changing, and planning for it is changing as well. This is no longer your grandparents’ retirement. Life expectancy is changing, and many people go back to work shortly after retiring. They realize that they retired from something, but not to something. Clients should think about what comes next for them.

If you’re wondering about what a comfortable retirement looks like for you, the right financial consultant can help. Specialized software takes into account inflation, taxes and other variables out of your control, and helps optimize retirement planning.

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New Rules – Medicaid, Your House and Big Change

Ohio has made a significant change regarding homeowners who apply for Medicaid benefits for nursing home or assisted living care.

Until July 31, 2016, an unmarried homeowner who wanted Medicaid to pay for long-term care costs had 13 months to put his home up for sale. If the Medicaid applicant was married and the spouse still lived in the home, there was no obligation to sell.

That 13-month time period is gone. As part of the Aug. 1, 2016 change in rules, Ohio Medicaid rescinded the 13-month rule. Now, the unmarried applicant must decide to keep the house or to sell before applying for Medicaid.


If the person decides not to sell, he can choose to invoke Medicaid’s “intent to return home” condition. That means he is not required to sell the house before getting Medicaid coverage. The intent must be expressed in a written, signed statement. This exemption ends if he later establishes a “principal place of residence” elsewhere.

This new “principal place of residence” condition can jeopardize Medicaid coverage.

If someone has been in a nursing home or assisted living community for many months (not for rehabilitation purposes) it’s unlikely his home can still be called his principal place of residence.

If the person’s health isn’t likely to improve, the principal place of residence has probably become the nursing home or assisted liv- ing community. Even if the intent to return home is real, it may not be realistic. As a result, Ohio Medicaid may stop paying expenses for someone whose intent to return home is not realistic.

For now, it’s uncertain if Medicaid will challenge an applicant’s written statement of intent to return home. Upon renewal of Medicaid benefits, however, if he remains in the nursing home or assisted living community, Medicaid officials may rule the person’s house is no longer his “principal place of residence” because, by the time of the first renewal, he will have lived out of the house for at least a year.

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Good Gifts – Charitable Giving and Your Financial Plans

Money is a tool, and usually we look at how it can be used to our benefit. But that tool can be used to benefit others through gifting and charitable giving. If you have a desire to share your financial success, incorporate those thoughts into your financial plans.

After you determine who gets your money, you need to decide when the giving will occur. If the gifts are to individuals, as of 2016 donors can give $14,000 to each person and the gifts do not need to be reported on tax forms or subjected to gift taxes.

If you are married, both you and your spouse each can give up to $14,000 without triggering tax on the gift. For example, together, couples can give $28,000 to an individual. Gifts above that amount are not subject to gift taxes until the couple’s accumulated lifetime gifts to all exceeds $10.68 million. However, they must be reported on the giver’s tax returns by filling out Form 709. Those gifts can be specified to be used now or for a long-term benefit such as funding a 529 College Savings Plan, a Roth IRA or a saving and investment account.


If the gift is to a charity, it may be tax-deductible. To deduct a charitable contribution, taxpayers must file Good Gifts Charitable Giving and Your Financial Plans By James S. Lineweaver Form 1040 and itemize deductions on Schedule A. Charitable gifts can be made now, or planned for the future. Future gifts can be specified in your will or by naming a charity as a beneficiary on a retirement account or life insurance policy.

Planned gifts are both smart and generous. If you need money for your lifetime expenses, they are available, and the remaining assets benefit your desired charity. If you don’t itemize deductions on your 1040, once you reach age 70 1/2 you can transfer up to $100,000 a year from your IRA directly to charity as a Qualified Charitable Distribution (QCD), without that distribution counting as part of your adjusted gross income.

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Medicaid Changes – “Too Much Income” to Qualify? What Does That Mean?

On Aug. 1, 2016, the Ohio Department of Medicaid drastically changed eligibility rules for Medicaid benefits for people who are disabled and others who need long-term care.

My column in the September/ October 2016 issue of this magazine highlighted three significant changes in these new rules: How Medicaid deals with the applicant’s home, how Medicaid treats retirement funds that belong to an applicant’s spouse, and the applicability of a rule (new in Ohio) that bars Medicaid coverage for people who have too much income.


As I wrote in the last issue, “too much income” sounds weird. But because Medicaid provides money for medical coverage for the poor, having “too much income” can make someone ineligible for help.

Those whose gross income is higher than $2,199 per month are ineligible for Medicaid coverage for long-term care. (That amount is adjusted from time to time to compensate for inflation.) That $2,199 is not enough to pay for long-term care for most people; it would cover a few hours of home care each week.

Because the amount of income that blocks eligibility is not enough to keep up with the costs of long-term care, a method has been created to make it so that only part of a Medicaid recipient’s income actually counts as income. As an aside, don’t look for logic here. This stuff is crazy. It’s what satisfies the rules, though. The only explanation I can offer for this “too much income” thing is that these are the rules.

To make some income not count as income for Medicaid purposes, recipients can run some of their income each month through a Qualified Income Trust, commonly referred to as a Miller Trust.

“Qualified Income” is not counted as income for Medicaid eligibility purposes, and the monthly money that goes through the Qualified Income Trust is “Qualified Income.” The result is someone can become (or remain) eligible for Medicaid help with long-term care costs by using a Miller Trust.

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