|
|
AATEELA Blog
Saturday, January 19, 2013
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
Saturday, December 8, 2012
by Susan M. Graham, CELA, Senior Edge Legal, Boise, Idaho
There are two phases of legal planning for caregiver: how to protect the independence, assets and family of the person needing care in the good days and during the time of needing help due to mental or physical incapacity. The best planning provides maximum personal independence, protection of assets and protection of other family members.
The following are some legal techniques that help accomplish planning goals.
Phase One: The Good Days (or mostly good days). This phase assumes that the person creating a plan is competent. That means they are mentally and physically able to contract.
• Sign a Financial Power of Attorney. This gives the persons listed the right to do modest financial business on behalf of the person who signs the documents.
• Sign a Health Power of Attorney and Living Will. This document provides for the persons who can make health decisions with the treating health professionals, and also allows for an election of the type of care to be provided when death is near.
• Sign a Last Will and Testament. This document will indicate who is in charge of the finances after death and who is to receive the decedent’s property.
• If a caregiver spouse or the person being cared for is a Veteran, contact the Veteran’s administration or an attorney accredited with the Veteran’s Administration to see what benefits are available to help pay for caregivers.
If one of the planning goals includes protecting assets for the person being cared for, as well as their spouse or the family, there are more complex legal plans that can help.
• Have the individual requiring care sign a revocable trust, providing for others to manage finances and make health decisions. This trust also covers who is to receive that individual’s assets when they die.
• For a married person, often the healthy, caregiver spouse, can sign a Last Will and Testament, that provides if the healthy spouse dies first, the deceased spouse’s share of the family assets will be set aside for the benefit of the ill spouse, in a manner that provides continued support but will not interfere with the ability to receive government benefits.
• Single and married people can protect substantial assets if they have the ability to pay their expenses for at least five years.
Phase Two: The Bad Days – Incompetency. At this time the individual being cared for lacks the mental or physical capacity to contract and, therefore, cannot sign legal documents.
• It may be possible for the incompetent person’s agents on the financial power of attorney and health power of attorney and the Trustee of a revocable trust to work with those documents without the need for a court order.
• If there is no financial power of attorney and no health power of attorney, it may be necessary to file papers in the local Court to ask that someone be appointed as Conservator and Guardian for the incapacited person in order to give someone the legal right to make financial and health decisions for the vulnerable person. The Conservator makes financial decisions, and the Guardian makes the health and housing decisions. The Conservator and Guardian are often the same person. It is necessary to use an attorney to help with this process.
• The caregiver needs to consider how to pay for the care required.
Thursday, November 1, 2012
Florida Certified Elder Law Specialist
Nationally Certified Elder Law Attorney
Florida and New York Bar
What is the difference between a revocable trust that prevents your estate from going through probate, and a revocable trust that's just a stack of papers?
The answer: funding your revocable trust. This is an essential step you must take once the ink is dry on your documents. Without proper funding, your estate cannot avoid probate.
Funding means transferring your assets into your revocable trust. (The revocable trust is also known as a living trust.)For example, if Mary Smith has a bank account in the name of Mary Smith, after executing her documents she would request that the account be retitled in the name of the Mary Smith Revocable Trust, Mary Smith, Trustor.
Any financial assets not in your trust that does not have a a co-owner with right of survivorship, or a named beneficiary, will end up in probate, regardless of how beautifully crafted your revocable trust.
As a Florida estate planning lawyer, I am often consulted by people who want me to review their revocable trusts that have been drafted elsewhere. Occasionally I’ll discover the trust was never funded, or funded improperly. Fortunately, these are people who I can help to rectify their mistake. Think of all the folks out there with unfunded trusts or improperly funded trusts who never follow up with an experienced estate planning attorney. Like the emperor with no clothes, they think they're protected, but they're not. When they pass away and their families find out the truth, the mistake will no longer be rectifiable. The family will end up dealing with the hassle and expense of Probate Court.
Your estate planning attorney should advise you about the funding process. He/she should tell you which of your assets belong in your trust, and as importantly, which do not. For example, putting a qualified plan (e.g., IRA, 401k or 403b) in your trust would trigger undesirable income tax consequences, even though the asset would still avoid probate because it has a designated beneficiaries. Life insurance is another example of an asset that typically does not belong in a revocable trust.
Thursday, November 1, 2012
Florida Certified Elder Law Specialist
Nationally Certified Elder Law Attorney
Florida and New Yokr Bar
The pitches are everywhere in Florida: So-called Veterans Benefits experts offer free seminars to condo associations. They advertise on radio and in newspapers. The companies they represent have patriotic-sounding names. They distribute glossy brochures stuffed with red, white and blue.
So what are these folks selling? Veterans Annuities. The pitch is this: If you are an otherwise eligible veteran who cannot get Aid and Attendance benefits because of excess assets, all you need to do is buy one of these annuities with the excess assets, and voila: instant access to benefits to help you pay the costs of long-term care nursing home, assisted living or home care. It is true enough that the V.A. does not "look back" at asset transfers, but there's a lot more to this issue that you need to consider before taking the leap.
First, tying up money in an annuity is almost never a good idea for an elderly person. If you ever need the money, you'll incur substantial penalties when you withdraw it.
Second, people need more intensive help as they age, not less. So if you're a veteran or surviving spouse in need of Aid and Attendance benefits, somewhere down the line you may want to apply for Florida Medicaid benefits for long-term care to help you with your more extensive needs. In Florida, if the veteran purchases an annuity and then has to apply for Medicaid for long-term care, the state of Florida MUST be designated as a beneficiary of that annuity for Medicaid expenses. That's the part that the annuity salesperson doesn't tell you, and may not know himself. One thing is for sure: the commission to the salesperson on these products is quite handsome.
Iif you are a veteran or a veteran's surviving spouse and need help, DO NOT purchase an annuity without consulting with a Florida Bar Certified Elder Law Attorney who is also accredited by the V.A. to give benefits advice. Your attorney will help you fully understand the pros and the cons and explain alternatives to buying an annuity. All the attorneys of The Karp Law Firm are V.A. accredited.
Thursday, November 1, 2012
By Joseph S. Karp
Florida Bar Certified Elder Law Specialist
Nationally Certified Elder Law Attorney
Florida and New York Bar
A sweeping change in Medicare policy may greatly help beneficiaries with chronic conditions who need skilled nursing and rehabilitation.
In the past, Medicare would continue to cover skilled nursing care and short-term rehabilitation, like physical and speech therapy, only if the patient demonstrated that he had the potential to improve as a result of treatment. Obviously, those with chronic conditions like Alzheimer's Disease, heart disease, Parkinsons, Lou Gehrigs disease, arthritis - in other words, those who could not meet the so-called improvement standard -- were most impacted by this rule. (In fact, the so-called "improvement standard" was technically never a part of Medicare law; it had simply become the de facto standard used by Medicare decision makers.)
Now, a federal court has ruled that the improvement standard cannot be used to deny Medicare coverage for skilled nursing care and rehabilitation. The settlement in the class action lawsuit Jimmo v. Sibelius requires Medicare to cover skilled nursing and therapy even if it just maintains a person's medical condition or prevents further deterioration. The proposed settlement was reached in federal district court on Oct. 16, 2012.
However, it's critical to note these important caveats:
-
The case does not change the maximum number of days of skilled care Medicare covers per benefit period. Medicare will pay 100% for a maximum of 100 days, and only if it follows a hospital stay or stay in a rehab facility.
-
The case does not impact whatsoever on long-term, custodial nursing care, which is still not covered by Medicare, but may be covered under certain circumstances and with proper planning byFlorida Medicaid.
Details on the Medicare rule change here.
Thursday, November 1, 2012
By Joseph S. Karp
Florida Bar Certified Elder Law Specialist
Nationally Certified Elder Law Attorney
Florida and New York Bar
A sweeping change in Medicare policy may greatly help beneficiaries with chronic conditions who need skilled nursing and rehabilitation.
In the past, Medicare would continue to cover skilled nursing care and short-term rehabilitation, like physical and speech therapy, only if the patient demonstrated that he had the potential to improve as a result of treatment. Obviously, those with chronic conditions like Alzheimer's Disease, heart disease, Parkinsons, Lou Gehrigs disease, arthritis - in other words, those who could not meet the so-called improvement standard -- were most impacted by this rule. (In fact, the so-called "improvement standard" was technically never a part of Medicare law; it had simply become the de facto standard used by Medicare decision makers.)
Now, a federal court has ruled that the improvement standard cannot be used to deny Medicare coverage for skilled nursing care and rehabilitation. The settlement in the class action lawsuit Jimmo v. Sibelius requires Medicare to cover skilled nursing and therapy even if it just maintains a person's medical condition or prevents further deterioration. The proposed settlement was reached in federal district court on Oct. 16, 2012.
However, it's critical to note these important caveats:
-
The case does not change the maximum number of days of skilled care Medicare covers per benefit period. Medicare will pay 100% for a maximum of 100 days, and only if it follows a hospital stay or stay in a rehab facility.
-
The case does not impact whatsoever on long-term, custodial nursing care, which is still not covered by Medicare, but may be covered under certain circumstances and with proper planning byFlorida Medicaid.
Details on the Medicare rule change here.
Sunday, October 7, 2012
By Susan M. Graham, CELA, Senior Edge Legal, Boise, Idaho
The U.S. Government has no money! Can seniors expect help from the government to pay their long term care expenses?
Who needs long term care?
People over age 65 have a 50-70% chance of needing care before they die.
What does it cost?
At home: $20 per hour to $15,000/month for 24-hour care
Assisted Living: $3,500 to $5,000 per month
Skilled Nursing Care (Nursing Home) $6,000 to $10,000 per month
Crabby/Difficult Senior: $16,000 to $18,000 per month
What are the six ways to pay for care?
Family and friends provide the care for free.
Take money out of your pocket
Long Term Care Insurance
Medicare
Veteran - Non Service Connected Disability (Aid and Attendance)
Medicaid
How do each of the six ways work?
-
Family and friends provide the care for free.
When a spouse becomes a caregiver, it increases the likelihood that they will die before the spouse who is being cared for. If children are the caregivers, it ruins their lives. They stop working early, lose out on wages and benefits, and have less time to spend with their own family and friends. If they are paid without a written contract, this can create problems later if the person needing care wants to qualify for government benefits.
2. Pay “Out of Pocket,”
Pay the expenses for you or your spouse from your funds until you run out of money.
3. Long-Term Care (LTC) Insurance.
You purchase LTC insurance. You decide how much coverage you want in terms of a daily rate to pay for your care and for how long. To qualify for and purchase LTC insurance, you need to be healthy and have the funds to pay the premiums. Why buy LTC insurance? You get the most flexibility to choose the location for your care and how the funds will be spent. The worry about our government’s ability to pay for your care and everyone else’s care is lessened.
4. Medicare.
Medicare is a Federal HEALTH insurance program for people 65 and over.
There is a short-term residential care component for Medicare if you qualify.
You must be admitted to a hospital for 3 or more days.
When you are discharged to a rehabilitative facility, you must participate in the rehabilitative activities and be improving.
If these two events occur, then Medicare will pay 100% for the first 20 days of rehabilitative care. The bills I have seen for the first 20-day stay range from $6,000 to $30,000.
If you continue to be in rehab, Medicare will pay part and you or your supplemental health insurance will pay part of the bills for the next 80 days.
This benefit is being taken away with the hospital stating that a person is not “admitted” but rather is in the hospital for “observation.” That means the patient is ineligible for Medicare coverage for subsequent skilled nursing care in a facility.
Also, this benefit is not available if the patient is not “improving” or participating in the rehabilitative activities.
The result: Seniors must pay for their post-acute care out of pocket or forego the treatment.
5. Veteran’s Non-Service Connected Disability (Aid and Attendance).
The Veterans program will help pay between $1,094 to $2,631 per month for long-term care in your home or a facility.
How can this benefit be accessed?
You or your spouse must be
Age 65 or older
Served 90 days on active duty
One day during wartime [1]
Received a discharge that is not dishonorable
Meet the income test
Meet the asset test
6. Medicaid (a loan program).
Medicaid is a State and Federal program that provides for long-term residential care to people who are aged, blind or disabled. Each state is responsible for administering the Medicaid prorgram in its state. I will address the program for the “aged.” Aged means someone is age 65 or older.
What is this benefit? If a person qualifies, the benefit will pay for the cost of care in assisted living or a skilled nursing home facility that participates in the Medicaid program. There are some funds to help pay for care at home, but frequently the payment is not enough to provide full care for an individual in their own home.
What does it take to qualify for Medicaid?
The applicant must be blind, disabled (using a social security definition) or age 65 or older.
The applicant must have a medical need.
The applicant must pass an income test. If they fail this test, it is often possible to take some steps to meet this requirement.
The applicant has to meet an asset test. This test is complex and cannot be covered in this short article.
Once the Medicaid recipient (and their spouse) dies, the State is entitled to be reimbursed for the funds they paid out on behalf of the Medicaid recipient.
Summary: What is the best way to plan for long-term care, when it is more likely than not to happen?
-
Consider LTC insurance, even if you think you can self-insure.
-
If it is too expensive or too late to get LTC insurance, contact an attorney who is familiar with Medicare, Medicaid and VA benefits to explore other alternatives. Asset protection is only possible with the right tools. The sooner planning is done, the more flexibility the individual and their family have for lifestyle choices and the greater the ability to protect a lifetime of earnings.
-
A Family Legacy Trust may fit to preserve assets, and help pay for care.
-
Act now. Don’t wait for a crisis, because then it may be too late to make choices that are best for the family. Under the current law, to have the most flexibility in planning, it needs to start five years before a need arises.
This information is intended to be helpful and general and not intended as legal advice. These rules for Medicare, VA and Medicaid benefits are complex and change frequently.
[1] WWII 12-07-41 to 12-31-1946, Korean 6-27-50 to 1-31-1955, Vietnam 2-28-61 to 5-7-75 for Veterans who served in Vietnam during that period, or 8-5-64 to 5-7-75 inclusive for all others, Persian Gulf 8-2-90 through present.
Friday, July 6, 2012
By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Paying for long-term care in a nursing home or assisted living facility is expensive. It can range from $3,000 to $10,000 monthly. What if the senior cannot pay the bills?
In 2011 a Pennsylvania nursing home received a $90,000 judgment against an adult child of a parent who had an unpaid nursing home bill. [1] The suit was based on a law that states[2]
(a) Liability. --
(1) Except as set forth in paragraph (2), all of the following individuals have the responsibility to care for and maintain or financially assist an indigent person, regardless of whether the indigent person is a public charge:
(i) The spouse of the indigent person.
(ii) A child of the indigent person.
(iii) A parent of the indigent person.
(2) Paragraph (1) does not apply in any of the following cases:
(i) If an individual does not have sufficient financial ability to support the indigent person.
(ii) A child shall not be liable for the support of a parent who abandoned the child and persisted in the abandonment for a period of ten years during the child's minority.
North Dakota has an old law adopted in 1877, which creates a duty to support a parent.
“It is the duty of the father, the mother, and every child of any person who is unable to support oneself, to maintain that person to the extent of the ability of each. This liability may be enforced by any person furnishing necessaries to that person. The promise of an adult child to pay for necessaries furnished to the child’s parent is binding.” North Dakota Statutes § 14-09-10
An article in the North Dakota Dickinson Press highlighted the potential that nursing homes are considering using this old law to recoup unpaid bills.[3]
[1] Health Care & Retirement Corp. of America v. Pittas, 2012 PA Super 96, 536 EAD 2011 (May 7, 2011)
[3] “Nursing homes eye old law as tool to recoup unpaid bills” by Dave Olson, The Dickinson Press, June 23, 2012.
Friday, June 22, 2012
By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Here are two recent headlines “Uncivil Fight Over Rosa Parks Estate”[1] and “Dispute over Thomas Kinkade’s will heads to court”[2]
Rosa Parks, a civil-rights pioneer, died in 2005 leaving personal papers and effects worth potentially millions of dollars. Her Last Will and Testament left most of her estate to a friend and a charity. Two attorneys were appointed by a Michigan probate judge to handle the estate. A lawsuit has been filed by the two heirs to remove the judge and recover administrative and attorney fees of $595,000 that have been charged against the estate. What is the end result? More attorney fees and less money to be distributed to Mrs. Parks friend and charity. This result is clearly not what she wanted.
Then there is the Thomas Kinkade Estate. This financially successful artist died in April, 2012 at age 54. His girlfriend found his body. At the time he had been separated from his wife for two years, and living with his girlfriend. The girlfriend has asserted a claim for $10,000,000 and a mansion, all based on two handwritten notes that were signed in 2011. A hearing has been set for July where the court “will determine the authenticity and legal weight of the notes.” What a mess.
There will be a huge amount spent on personal anguish as well as attorney fees in these two cases.
How could this be avoided? Working with a lawyer who understands estate planning ways to accomplish a client’s goals is a great first step. Estate planning documents need to be kept up to date, because the Last Will and Testament goes into effect on the date of death, which may be years down the road.
What can you do to avoid fights when you die? Make certain your documents are up to date. If they are not, or you are not sure, set up a review appointment with your estate planning attorney.
[1] The Wall Street Journal, May 18, 2012 page A2
[2] Associated Press, June 13, 2012
Friday, June 15, 2012
By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Last Friday I attended a meeting sponsored by the “Justice Alliance for Vulnerable Adults”. The focus of the meeting was to examine abuse and financial exploitation cases from a health care, legal, and social services perspective. The summit brought together national and Idaho experts to discuss the issues with professionals working with vulnerable adults. The primary spotlight was on seniors. The distressing part of the meeting was to learn how many seniors are abused.
Let’s start with a basic truth. Taking assets of an elder or vulnerable adult is a CRIME.
Common victim characteristics include: the victim is a man who is grieving the loss of a spouse or close friend, and they are lonely and isolated. Experts state only one in every 23 events is reported. Only a handful of cases of elder abuse are prosecuted in Idaho each year. The support agencies and legal system in Idaho are not coordinated in a way to effectively protect seniors from caregivers, family and other predators.
Each year, hundreds of thousands of older persons are abused, neglected, and exploited. In addition, elders throughout the United States lose an estimated $2.6 billion or more annually due to elder financial abuse and exploitation, funds that could have been used to pay for basic needs such as housing, food, and medical care. Unfortunately, no one is immune to abuse, neglect, and exploitation. It occurs in every demographic, and can happen to anyone--a family member, a neighbor, even you. ??World Elder Abuse Awareness Day (WEAAD) was launched on June 15, 2006 by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations. The purpose of WEAAD is to provide a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic processes affecting elder abuse and neglect.
How Can You Be Involved? An easy first step is to call or visit an isolated senior.
_________________
Source: International Network for the Prevention of Elder Abuse
Idaho Commission on Aging Website: aging.idaho.gov
Friday, June 1, 2012
By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
There must have been a secret mark on the front of my father-in-law’s house only visible to scam artists. He lived alone and one day bought a freezer full of fish. A month later, the same sales person sold him another freezer load of fish along with a second freezer to hold it. Then there was the man who knocked on the front door and offered to paint his peeling front steps. That person used his tools and paint, was paid and stole all of the tools from Dad’s garage.
My neighbor’s wife died and he decided to continue to hire the caregiver who helped during the last months of his wife’s illness. He did not need the help, but he felt sorry for her because she told him she needed the work to pay her bills, so he hired her for two days a week. Later she was sad one day. He asked why and she said she was behind in her rent, so he hired her an additional day, that he did not need.
My client, Betty, was in her 70s and lived alone. Her grandson, George, had a drug habit and came over frequently, giving her a sad story of how he was short of money. When her son, Bruce, noticed $5,000 disappeared from her bank account in one month, he asked Betty where it went. She made up a story, because she was embarrassed to admit she gave it to George. The only way to stop this was for Bruce to be appointed by the court as Betty’s Guardian and Conservator.
Undue influence of elder persons is becoming an increasingly severe problem. Through fraud, duress, threat, intimidation, emotional manipulation, isolation and other techniques that foster helplessness and dependency, unscrupulous perpetrators cheat vulnerable older persons out of their life savings. This trend is increasing because those older than age 50 now control at least 70% of the nation’s household net worth. Wealthy, and even middle class, older persons have become frequent targets for criminals, including family members and care givers, who want to divest them of their assets.
Legally, the concept of undue influence, particularly when it occurs to the competent elderly, is a difficult issue. It should be suspected when significant others or caretakers develop trusting relationships that isolate the victim, foster a siege mentality, induce dependence, promote a sense of helplessness, hopelessness, or powerlessness, and manipulate the elderly person’s fears or instill new fears and vulnerabilities.
We really are our brothers’ and sisters’ keepers and need to watch out for our seniors. Early intervention and reporting can prevent devastating emotional and financial losses for older persons who have worked their entire lives to become financially independent.
__________________________
Source:
Exploitation of the Elderly: Undue Influence as a Form of Elder Abuse, by Ryan C. W. Hall, MD, Richard C. W. Hall, MC and Marcia J. Chapman. Clinical Geriatrics, Vol. 13(2), 28-36; 2005
|
|
 |
|