My DW passed from Parkinson's very recently and I thought some of the experience might be of interest or help to some in the community, especially to the degree that it sheds additional light on related questions and topics in recent and past threads. No medical advice is intended. I do have a question about cost basis step up upon death of a spouse at the end.
. 1 . Hospice and Medicaid
Around 2004 we decided to self-insure through purchase of index funds plus holding some cash rather than buy LTC (long-term care) insurance. DW probably already had very slowly developing Parkinson's (PD) by then but we did not know it. About a year ago the PD kicked in hard. Being retired and healthy, I was able to provide the care needed. Another couple we know was in similar condition. They have LTC insurance which they started using which made their lives easier. I did not want to engage out-of-my-own-pocket the type of morning and evening help they were receiving through their insurance lest we start depleting funds before we really had to with the risk of finding two or three years down the road when we "really" needed help we could not fully afford it because we used it before we had to.
Then the PD kicked in worse - - really bad. After years of very slow progression it went into warp speed. I got temporary help from family members when care turned into a 24 hour continuum and they saw me wearing out. Then we contacted an agency to hire hourly help. The owner of the franchise and his nurse/medical expert came to our home to help us evaluate our needs. They could have easily convinced us to go for eight to sixteen hours a day of their service. Instead; and sincerely, may they be rewarded by higher powers; they told us about hospice AND contacted hospice on our behalf to expedite the service, so that when we called hospice two hours later the hospice was ready to send an evaluator, authorize DW to their service (for in-home assistance), and within a few hours deliver a hospital bed (ordered maybe at 8 PM and arriving and set up in our home at approx 2 AM along with oxygen and other supplies!!!) by kind, knowledgeable delivery people.
Hospice provides pain relief and comfort services, but not any disease cure. It goes far beyond what a supplier of hourly help can do by itself. Hospice provided meds, equipment, nursing, and some grooming/bathing support with extraordinary care, kindness, and professionalism without charging any money - - in fact, without even asking for our secondary insurance information.
The pain-relief and restfulness for DW resulting from hospice's palliatives made care much easier, and with continued help from family we were able to manage on our own without engaging help. However, with the end of summer approaching, family members would be needing to go home to work and so hospice's case manager called to inform me about Medicaid. I told her that there was no way on earth that we would qualify, but she insisted that given DW's inability to perform required daily living activities that we could qualify and should at least apply because there would be no financial issue associated with whether we qualify. As I understood it, we conceivably could have qualified for daily no-expense nursing support. Even though I thought I'd rather hire my own help than rely on Medicaid, I scheduled a call with a Medicaid intake advisor for about 3 weeks out. DW passed before that time, so I cancelled the appointment and never got more info.
Perhaps a reader with knowledge can comment on the possibility of "Medicaid nursing regardless of financial need."
. 2 . LTC Insurance
We had rejected LTC insurance years ago because we were afraid of price increases (which was reasonable) and because (with incredible ignorance/stupidity) I reasoned that if you couldn't perform combinations of daily living tasks like toileting and feeding yourself for the LTC 90 day exclusion period, then you'd be dead soon anyway so why bother with the insurance.
Unless you are super-wealthy, even if you have self-insured, there is risk that fear of running out of funds disables you from engaging help when you need it. The reasoning is, "I am not completely exhausted. I need to delay engaging help because I do not absolutely need it now and if I spend the funds before I really need to, they will be gone when I really do need them." For me there was a cloud of uncertainty as to when to stop exhausting myself caring for my loved one and get help I needed. I think It would be different with insurance because even if you don't want to exhaust it prematurely, you also want to use it to its full advantage.
Obviously, everyone and everyone's situations are different so I am not recommending for or against any way of looking at or handling LTC. Financially, I was very lucky. The investments we made to self-insure increased dramatically, we paid no LTC premiums, and before I incapacitated myself caring for DW first my family and then hospice helped and it ended up that we hardly dipped into the self-insurance funds at all. But any of these things could have been different, especially had we not been put in touch with hospice.
. 3 . End-of-Life and DNR - - - Emotion vs Rationality
Any Boglehead reader will be familiar with the concept that holding bonds as ballast helps you stay the course when stocks plummet so that your emotion does not persuade you to sell at the bottom. From this concept as a premise, the conclusion is drawn that early on in the financial planning process you need to use your rationality to commit to an allocation strategy and not let emotions rule in extreme circumstances.
And so it is with "do not resuscitate" and "do not feed" types of directives for end of life. The emotions that come into play in such situations are incredibly powerful. Having directives made in advance with pure rationality helps when the time comes because of their legal importance and because they serve as a reminder of your joint thoughts when two of you were making rational decisions together as opposed to the contrary emotions you may feel very, very strongly alone aside your loved one's death bed.
. 3 . Death Certificates (this is a minor, minor point)
I helped administer an estate some 40 years ago. No matter how many certified death certificates you ordered, it seemed not to be enough. Things seem to have changed. Today, in my experience, nearly everyone accepts PDF scans.
. 4 . Step-Up for Jointly Owned Stocks
I knew that when children inherit stock from their deceased parents that there's a step-up feature that adjusts the actual cost-basis to the then-current price of the stock. I did not know that when a spouse dies there can be a 50% step up on jointly owned stocks.
THREE QUESTIONS
So consider a hundred jointly owned shares of a mutual fund or ETF with a cost basis of $100 per share and a total cost basis of ten thousand dollars. Suppose a spouse dies, and at the time of death the current price is $200 per share.
Q1: Is there a choice as to how the 50% step-up will be applied? Is it up to you whether the new cost-basis will be $150 for all 100 shares or whether it will be $200 for fifty of the shares and $100 for the other fifty?
Q2: If there is a choice, the second choice seems to allow for tax-loss harvesting or for a partial sale with no capital gain consequence in a way that the first choice does not. So if indeed there is a choice, is choosing to have 50 at the original cost basis and 50 at the stepped-up cost basis the best choice? Is there a compelling reason not to?
Q3: Is the step-up always based on the price of the stock on the date of death? I think this must be true but I thought I heard someone suggest it may not always be (but I also think that had to do with non-spousal inheritance issues).
Thank you in advance for answers to my questions. And in return for all I've learned on this site and to make whatever good I can out of so sad an experience I hope that sharing aspects of my experience may be helpful to others.
. 1 . Hospice and Medicaid
Around 2004 we decided to self-insure through purchase of index funds plus holding some cash rather than buy LTC (long-term care) insurance. DW probably already had very slowly developing Parkinson's (PD) by then but we did not know it. About a year ago the PD kicked in hard. Being retired and healthy, I was able to provide the care needed. Another couple we know was in similar condition. They have LTC insurance which they started using which made their lives easier. I did not want to engage out-of-my-own-pocket the type of morning and evening help they were receiving through their insurance lest we start depleting funds before we really had to with the risk of finding two or three years down the road when we "really" needed help we could not fully afford it because we used it before we had to.
Then the PD kicked in worse - - really bad. After years of very slow progression it went into warp speed. I got temporary help from family members when care turned into a 24 hour continuum and they saw me wearing out. Then we contacted an agency to hire hourly help. The owner of the franchise and his nurse/medical expert came to our home to help us evaluate our needs. They could have easily convinced us to go for eight to sixteen hours a day of their service. Instead; and sincerely, may they be rewarded by higher powers; they told us about hospice AND contacted hospice on our behalf to expedite the service, so that when we called hospice two hours later the hospice was ready to send an evaluator, authorize DW to their service (for in-home assistance), and within a few hours deliver a hospital bed (ordered maybe at 8 PM and arriving and set up in our home at approx 2 AM along with oxygen and other supplies!!!) by kind, knowledgeable delivery people.
Hospice provides pain relief and comfort services, but not any disease cure. It goes far beyond what a supplier of hourly help can do by itself. Hospice provided meds, equipment, nursing, and some grooming/bathing support with extraordinary care, kindness, and professionalism without charging any money - - in fact, without even asking for our secondary insurance information.
The pain-relief and restfulness for DW resulting from hospice's palliatives made care much easier, and with continued help from family we were able to manage on our own without engaging help. However, with the end of summer approaching, family members would be needing to go home to work and so hospice's case manager called to inform me about Medicaid. I told her that there was no way on earth that we would qualify, but she insisted that given DW's inability to perform required daily living activities that we could qualify and should at least apply because there would be no financial issue associated with whether we qualify. As I understood it, we conceivably could have qualified for daily no-expense nursing support. Even though I thought I'd rather hire my own help than rely on Medicaid, I scheduled a call with a Medicaid intake advisor for about 3 weeks out. DW passed before that time, so I cancelled the appointment and never got more info.
Perhaps a reader with knowledge can comment on the possibility of "Medicaid nursing regardless of financial need."
. 2 . LTC Insurance
We had rejected LTC insurance years ago because we were afraid of price increases (which was reasonable) and because (with incredible ignorance/stupidity) I reasoned that if you couldn't perform combinations of daily living tasks like toileting and feeding yourself for the LTC 90 day exclusion period, then you'd be dead soon anyway so why bother with the insurance.
Unless you are super-wealthy, even if you have self-insured, there is risk that fear of running out of funds disables you from engaging help when you need it. The reasoning is, "I am not completely exhausted. I need to delay engaging help because I do not absolutely need it now and if I spend the funds before I really need to, they will be gone when I really do need them." For me there was a cloud of uncertainty as to when to stop exhausting myself caring for my loved one and get help I needed. I think It would be different with insurance because even if you don't want to exhaust it prematurely, you also want to use it to its full advantage.
Obviously, everyone and everyone's situations are different so I am not recommending for or against any way of looking at or handling LTC. Financially, I was very lucky. The investments we made to self-insure increased dramatically, we paid no LTC premiums, and before I incapacitated myself caring for DW first my family and then hospice helped and it ended up that we hardly dipped into the self-insurance funds at all. But any of these things could have been different, especially had we not been put in touch with hospice.
. 3 . End-of-Life and DNR - - - Emotion vs Rationality
Any Boglehead reader will be familiar with the concept that holding bonds as ballast helps you stay the course when stocks plummet so that your emotion does not persuade you to sell at the bottom. From this concept as a premise, the conclusion is drawn that early on in the financial planning process you need to use your rationality to commit to an allocation strategy and not let emotions rule in extreme circumstances.
And so it is with "do not resuscitate" and "do not feed" types of directives for end of life. The emotions that come into play in such situations are incredibly powerful. Having directives made in advance with pure rationality helps when the time comes because of their legal importance and because they serve as a reminder of your joint thoughts when two of you were making rational decisions together as opposed to the contrary emotions you may feel very, very strongly alone aside your loved one's death bed.
. 3 . Death Certificates (this is a minor, minor point)
I helped administer an estate some 40 years ago. No matter how many certified death certificates you ordered, it seemed not to be enough. Things seem to have changed. Today, in my experience, nearly everyone accepts PDF scans.
. 4 . Step-Up for Jointly Owned Stocks
I knew that when children inherit stock from their deceased parents that there's a step-up feature that adjusts the actual cost-basis to the then-current price of the stock. I did not know that when a spouse dies there can be a 50% step up on jointly owned stocks.
THREE QUESTIONS
So consider a hundred jointly owned shares of a mutual fund or ETF with a cost basis of $100 per share and a total cost basis of ten thousand dollars. Suppose a spouse dies, and at the time of death the current price is $200 per share.
Q1: Is there a choice as to how the 50% step-up will be applied? Is it up to you whether the new cost-basis will be $150 for all 100 shares or whether it will be $200 for fifty of the shares and $100 for the other fifty?
Q2: If there is a choice, the second choice seems to allow for tax-loss harvesting or for a partial sale with no capital gain consequence in a way that the first choice does not. So if indeed there is a choice, is choosing to have 50 at the original cost basis and 50 at the stepped-up cost basis the best choice? Is there a compelling reason not to?
Q3: Is the step-up always based on the price of the stock on the date of death? I think this must be true but I thought I heard someone suggest it may not always be (but I also think that had to do with non-spousal inheritance issues).
Thank you in advance for answers to my questions. And in return for all I've learned on this site and to make whatever good I can out of so sad an experience I hope that sharing aspects of my experience may be helpful to others.
Statistics: Posted by Beehave — Wed Sep 18, 2024 3:46 pm — Replies 7 — Views 578