Tuesday, August 19, 2014

Is it Time to Ask for Help?

By: Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Are you concerned for a friend, neighbor or family member that may need some extra help to continue to live safely at home?

You may have noticed one or more of the following:

• They have bruises on their arms and are unstable when they walk
• They miss doctor, hair and/or dentist appointments
• Bills pile up and are not opened
• They have a hard time dressing or eating
• They are isolated from friends
• They have become a danger to themselves or a danger to others, because the stove is left on or they have become poor drivers.

What can you do to help? Express your concern to them and also to the person(s) they rely upon. It is best to get help before there is a crisis. Once any problems are identified, it is easier to solve them with paid or volunteer help, or with other simple solutions such as better lighting, physical therapy or removing throw rugs.

Everyone will have greater peace of mind, knowing there is a plan in place to keep loved ones safe as they age.

Tuesday, August 5, 2014

Your Child's "Scorecard"

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Do you have one child you can always rely upon and the rest never follow through?  Do you have one child who needs more financial and emotional help that you end up providing, perhaps not telling your other children?

Families and the relationships among family members are complex.  This week I talked with a mother, Sally, who has three sons.  One son, George, lives out of town, has millions of dollars and calls Mom once each month.  Another son, Sam, lives in town, receives Social Security disability benefits and is always short of money.  He sees his mother once a month when she takes him out to Sunday Brunch.  Mom provides $600 in cash to Sam each month out of her $1700 social security check and does not want her other kids to know.  Frank, the youngest son, has worked as a mechanic for 20 years and stops by weekly to visit and mow his mother’s lawn.   

Sally wants to set up her estate plan and is undecided about what to do.  She has a house and $500,000 in investments.  George does not need the money.  Frank is the most attentive, and Sam needs the money the most as he will have no retirement benefits.  She loves all of her sons, and does not regard any one of them as a “black sheep”.  She initially decided to give it all to Sam in a trust to provide a financial safety net for him for life.  Sally did not feel quite right about this, as she thought her other two sons would be insulted.

An inheritance is perceived as a “scorecard” of love and appreciation.  Sally wanted to be certain that her wishes would be “right” for her family.  She felt she had two choices:  1) Divide everything equally among her sons; or 2) Make the division unequal, and explain why in writing.  She finally elected to make an equal distribution among her sons. 

Each family is unique.  There is no universal answer.  Just remember the perception of the “scorecard” that reflects your appreciation of individuals after you die will leave a lasting statement of how you valued each of them being a part of your life.  

Tuesday, July 22, 2014

Inherited IRAs are no Longer Protected in Bankruptcy. Can This be Fixed?

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

The U.S. Supreme Court decided on June 12, 2014 in Clarket ux. v. RamekerTrusteeet al., that an inherited Individual Retirement Account (IRA) does not share the same characteristics as a traditional IRA and, in a bankruptcy, is not a protected asset for the person who inherits the IRA.

IRAs are protected assets in bankruptcy, but only for the original owner of the IRA.  If an IRA is inherited by a child, the asset is no longer protected in bankruptcy.

What can be done for an inherited IRA to receive bankruptcy protection?  The owner of the IRA can name an “irrevocable, asset protection trust”, created for the benefit of a child, as beneficiary of the IRA after the owner’s death.  These special trusts are often referred to as dynasty, inheritance, legacy and heritage trusts.  A carefully drafted trust may provide that the child is the trustee, and the child has limited access to the funds for health, support, maintenance and education.  These special trusts are complex.  To take advantage of this technique, set up an appointment with your estate planning professional.  

Tuesday, July 15, 2014

Important Family Stories

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

I inherited the oldest item I own, an Egyptian scarab.  It came with a story from my Cousin Kathie who died at age 99. 

A British soldier was in Egypt helping the English government empty (loot) the pyramid tomb.  He was told if he stole any items he would be severely punished.  Carrying items out of the tomb, he dropped a scarab.  His hands were full, so he just picked it up and put it in his pocket.  Later that day he found it in his pocket and was too frightened to report it.  The soldier ended up being a neighbor to my great grandfather.  The soldier had no family when he died.  My grandfather purchased the house and all its contents.  My great-grandfather had the scarab made into a man’s ring and gave it as a wedding present to his daughter’s husband. 

I received the ring with the story attached. 

What a difference it made to have the story.  The ring is worn, and would have had little meaning to me without the story.

Have you created a list of personal items you want to pass on when you die?  Have you added stories about each item?

A great example is reflected in the “Lighthouse Keeper” video that is on my website.  It is a 12-minute video showing the powerful effect of providing stories with the items you pass on.  To watch it, go to my website:  www.SeniorEdgeLegal.com.   Click on “Resources” and you will then find a button to select to watch the video.

Your stories are worth more than your money, so take the time to write them down now.

Tuesday, July 8, 2014

How to Pay for Long-Term Care Using Medicaid

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

The latest government report on Medicaid applicants highlighted the four most common methods used to reduce countable assets to qualify for Medicaid in a nursing home. 

The Government Accountability Office issued a report on June 23, 2014, in which about 300 applications for Medicaid in three states, New York, Florida and South Carolina were reviewed. [1]  The report stated the average cost for nursing home care is $7,000 per month, or $85,000 per year.  Medicaid, a joint state and federal program, provides services to certain individuals whose assets are insufficient to meet the costs of necessary long-term medical care. One of the tests that must be met is a measurement of the assets available to a Medicaid applicant.  If the applicant has too many assets, they will not qualify for the Medicaid benefit. 

The report identified the top four methods used to reduce the assets considered to qualify for Medicaid:

  1. The countable assets were used to purchase “exempt” assets, which are assets ignored by Medicaid.One common practice was to prepay a burial.
  2. An annuity that meets the strict Medicaid rules was purchased
  3. Assets were gifted to family members.
  4. Assets were shifted to the healthy spouse, who then purchased an "exempt" annuity, meeting the Medicaid standards.
The Medicaid applicants in these three states surely needed professional help to navigate the complexities of the Medicaid rules and qualify for the benefit of having their nursing home care paid for by the government.   Gifting is a dangerous and aggressive technique.   Often a gift will disqualify an applicant from receiving benefits if the gift was made within five years of applying for Medicaid.  Using annuities to reduce assets requires that the annuity falls within the narrow limits allowed.  This is next to impossible without assistance from a knowledgeable professional.

The GAO report states the obvious:
 “Medicaid spending for nursing home care is projected to increase, placing an additional burden on already strained federal and state resources.”[2]    

What does this mean for you?  Everyone should plan for the need for long-term care and how to pay for it.


[1] “Medicaid:  Financial Characteristics of Approved Applicants and Methods Used to Reduce Assets to Qualify for Nursing Home Coverage,” Government Accountability Office, June 23, 2014.

[2]  Page 1, GAO-14-473 Medicaid Nursing Home Financial Eligiblity

Tuesday, June 17, 2014

Who Knows Your Passwords?

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Do you have too many passwords?  Who, other than you, knows what they are or where you keep them?

Passwords are now in the news every few weeks.  We learn they are stolen and used to access our private accounts.  Even the sophisticated, technology savvy companies such as eBay and Google cannot keep the passwords of their customers safe. 

Why does this matter to you?  What if you are sick, die or just forget a password - how can you or someone you trust get into your account? 

The solution – Take a piece of paper, and for each account, write down the: 

  • Name of the account
  • User name
  • Password

Store the list in a safe place.  In addition, give a copy to someone you trust, or place a copy of the written list with your estate planning documents.  Lastly, create a reminder to update the list at least once each year.

If you take these steps to keep track of your passwords, it won’t stop hackers, but it will make it much simpler to access your accounts when necessary, should you be too ill to remember, or after you die.

Tuesday, June 10, 2014

Hospital "Observation" Status - Federal Legislation Update

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Picture yourself in the hospital - you are 65 years old.  You have been there for a week receiving care and treatment.  You are then discharged to a skilled nursing or rehabilitation facility.  Next you find out you were not “admitted” to the hospital, but instead were there just for “observation.”  What difference does it make?  You received the same level of care.  The difference is huge.  If you are there for “observation”, Medicare (the health insurance for people over age 65) and your supplemental health insurance will not pay for your care in the hospital and in the facility.  It is a crazy rule that cheats Medicare participants and costs them breathtaking out-of-pocket expenses that can range from $6,000 to $45,000.

I am a member of the National Academy of Elder Law Attorneys, Inc. (NAELA).  They are working with other groups to change the law.  The following is a recent article provided by NAELA.  Unfortunately it appears that changing the law to eliminate the difference between “admitted” and “observation” is unlikely in this legislative session.

“The Improving Access to Medicare Coverage Act (H.R. 1179/S. 569) would change the admission standard to count outpatient “observation” time spent in a hospital toward the three-day inpatient hospital stay required before Medicare pays for subsequent skilled nursing facility or rehabilitation services.  Support for this legislation is growing.  The bill has garnered the support of 144 cosponsors in the House and 25 cosponsors in the Senate.  The next big hurdle is to find a health-related legislative vehicle to use to pass it through Congress.  During a lame duck session, there are few potential legislative vehicles. 

Judith Stein, Founder and Executive Director of the Center for Medicare Advocacy and NAELA Past President, wrote the latest NAELA: Eye on Elder and Special Needs Issues article, “Observation Stays in the Hospital: The Impact on Medicare Beneficiaries.”  In the article, Stein discussed the increased use of observation status, the costly implications of not changing this policy, and how to take action.  

On May 20, 2014, Toby Edelman from the Center for Medicare Advocacy testified in front of the House Ways and Means Subcommittee on Health.  The congressional hearing focused on current hospital issues in the Medicare program, with an emphasis on the Centers for Medicare and Medicaid Services (CMS) two-midnights policy, short inpatient stays, outpatient observation stays, auditing, and appeals.  Read Health Subcommittee Chairman Kevin Brady’s hearing announcement.”[1]


[1] Advocacy Update, May 29, 2014, Published by the National Academy of Elder Law Attorneys, Inc. (NAELA)

Tuesday, May 27, 2014

End-of-Life Treatment - "Do Not Resuscitate"?

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

What do young doctors think about end-of-life choices?  A Stanford University study determined that 88% of young doctors prefer to avoid resuscitation and related heroic treatments when they have an illness that will result in death in the near future.[1]

Do you want high intensity care when you are terminally ill?   Do you just want the assurance of no pain when your death is near?  These important questions are best answered by you.  If you fail to make these decisions, the legal and medical system makes the election for you and requires in most circumstances that you receive, at a minimum, nutrition and hydration with nose or stomach tubes. 

This problem is easily solved.  Sign a Living Will.  This document goes into effect when a doctor has determined that your death is imminent or you are in a persistent vegetative state.  You are permitted a minimum of three choices, all of which provide pain medication to keep you comfortable.  Choice #1 is to use all the fancy machines and medical procedures to keep you going as long as possible.   Choice #2 scales back to providing you with nutrition and/or hydration with tubes.  Choice #3 is to keep you comfortable, and let you go.  The forms and choices may vary by state.

If you have not completed one of these forms, check with your Secretary of State’s office, they may have forms available. 

You are the best person to make the choice for your end-of-life care.


[1] Do Not Resuscitate:  What Young Doctors Would Choose, by Paula Span, The New York Times, May 20, 2014.

Friday, May 10, 2013

Traditional Death Tax Estate Planning gone for most. Now what?

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho


The federal death tax free estate in 2013 is set at $5,000,000 or less.  That means if you die as a single person owning less than $5 million, there is no death tax to pay to the IRS.  Who does that impact?  Not many.  In the year 2000 when the federal death tax free estate was $675,000, there were just over 50,000 federal death tax returns filed (officially called a 706 death tax return).  In the year 2011, when the death tax free estate was $5,000,000, there were approximately 1,500 federal death tax returns filed.

What does that mean for you?  Forget about death taxes as a reason to plan.

Unless you have an estate in excess of $5 million it is not necessary to focus on tax avoidance as the motivator for planning your estate.  Instead, focus on what is important to you personally.  Most good plans include:

  1. maintaining your personal independence for the rest of your life,
  2. planning for the possibility of being unable to care for yourself (you have a 50-70% chance of needing care before you die), and
  3. protecting the assets you have worked a lifetime to create so they are available for you and those you care about after you are gone. 

If you have no plan in place, your state government has one for you.  Most likely the state plan for you is way off the mark of what you would like. 

What should you do?  Contact your estate planning attorney to put a plan in place that covers you now, during the good days.  More importantly, it is there should you be unable to care for yourself or when you die.

Friday, February 22, 2013

New Tax Laws -- an opportunity to review your plan

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

We have new federal tax laws adopted in early 2013.   What does that mean for you?

Some of the tax laws are generous, such as allowing the federal death-tax-free estate to remain at over $5 million.  If you are a single person and assets you own, including the death benefit of life insurance, have a value of less than $5 million, there is no federal death tax (officially called an estate tax) to be paid.  If you live in Idaho, there is also no Idaho death tax (called an inheritance tax) to be paid.  If you are a resident of another state, such as Oregon, there is a state death tax on estates in excess of $1 million.

Some laws are not so generous to the taxpayer.  For example, the federal capital gains tax has been raised from 15% to 20%.  The result will be 5% more being paid as tax on the sale of an asset that has increased in value.

Estate planning has many facets.  For most people tax planning should not be the controlling motivation.  The best plans include some or all of the following features.

•   Flexibility to address foreseeable changes in the future. 

•   A team of professionals to share ideas and coordinate plans to meet your goals.  This team may include an attorney, certified public accountant, financial planner and insurance agent.

•   If you are married, issues to be addressed will include second marriages and asset protection for the surviving spouse.

•   Steps to be taken for asset protection.

•   Retirement planning so you can live the life you want in retirement.

•   Business succession planning to assure a smooth transition that is financially equitable to all the parties.

•  Investments that match your goals.

•  Creditor protection.

Call your planning professional and start the process so you get the maximum benefit of the new laws.  

Saturday, January 19, 2013

Secure Your Retirement - A New Year Resolution

By:  Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

A new year is the time to take a deep breath, and make a fresh start.  There were probably things you did or did not do in 2012 that in hindsight you wish you had done.  That’s just life repeating itself.  No matter, you still have a chance to improve your retirement future.

The Wall Street Journal recently identified “Five Big Retirement Mistakes”[1]

         1.  Not paying for financial guidance.  Most people pay for an accountant to do their taxes and an attorney to write their estate planning documents, but they often expect free advice on how to invest their assets.   The financial people have the ability to plug your assets, income, expenses and other variables into computer programs that will help you project your financial future.

         2.   Investing in something you don’t understand.  If you can’t explain how your investments work to someone else, then don’t buy it.  

         3.  Supporting your adult children.  If you co-sign on a student loan, on a house mortgage or on a car loan that means your child does not have the financial ability to get the funds.  You are on the hook when the child does not pay.  Last month, one of my clients told me they co-signed on a son’s house and now the house is in foreclosure.  My clients will be responsible to make up the difference between the house sale and the mortgage that is much larger than the house is worth today.  What does that mean for them?  They will have to pay over $50,000, a huge part of the nest egg they set aside for their retirement. 

         4.   Lowballing eldercare costs.  Most people ignore the reality of aging.  Look around you.  Older people more often than not need help with daily living activities.  Expecting family or friends or the government to provide this assistance is an unrealistic fantasy.  The cost of home care is approximately $25 per hour or $200 per day for an 8-hour shift. 

         5.    Underestimating how much you will need.  This issue goes back to the first point, talk to a professional financial person to help you get a more accurate picture of what it will cost to live the lifestyle you want for the rest of your life no matter how long that will be.  You may live longer than you anticipate.   My father-in-law planned to be dead at age 80 and was irritated at the surprise birthday party I arranged.  I took him aside and asked why he was so grumpy when I had set up such a grand party.  His answer:  “I don’t not want to be 80.”  I told him “get over it”--you are stuck.  My Cousin Kathie never dreamed that she would be 99 when she died after living in a nursing home the last 4 years of her life, paying over $8,000 per month for her care. 

         6.  What can you do to create a more secure retirement?  Follow the steps outlined above.  In addition, make certain your estate planning documents are up to date.  Are your agents still available to help out when you need them to step up if you are unable to care for yourself or when you die?  Do your planning papers reflect your current wishes or have things changed and you need to adjust your documents? 

         The security of your future is in your hands.  Start the process by talking with a professional: a financial person, your accountant or lawyer to cover all the bases.

         Happy New Year!

[1] Five Big Retirement Mistakes, Ellen E. Schultz, The Wall  Street Journal, p B9, December 29, 2012


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