Thursday, August 2, 2012

IRS Improving Art Appraisal Services

An appraisal is an expert assessment of the value of a particular asset at a given time. Many factors involved in the appraisal of a property can easily distort its value--overvaluing or undervaluing it. The IRS uses appraisals in the process of assessing property taxes, which requires the appeal of experts in the subject. As such, the IRS's Art Appraisal Services' (AAS) job consists of assessing the value of works of art for tax purposes.

A recent article in Accounting Today discusses the IRS' need to improve its appraisal of the value of art and the Government Accountability Office (GAO) report on the matter. The GAO report set the spotlight on the lack of comprehensive quality review and continuing education requirement for the IRS' appraisers, which consistently result in a misstated and most times unfavorable appraisal for the taxpayer.

The report examined not only the appraised values of artwork but also other categories of property such as real estate, automobile and businesses, reaching the conclusion that the burden on taxpayers could be reduced and selected practices improved.

Concerning art appraisals, the report found that the valuation of the property has a huge impact on the tax liabilities of individuals who make non-cash charitable donations or who receive inheritances or gifts of property. Appraisers' task requires them to be familiar with the subject matter and be able to note any factors that may affect the value of the property (e.g., location, surrounding area and condition of the property). But, some properties such as art, real estate, businesses and easements have very unique characteristics, making an independent appraisal essential to determine exactly how much the taxpayer should report to the IRS.

The GAO recommended that the IRS offer a continuing education program to its appraisers, along with a comprehensive quality review program, specifically for the AAS staff. They also suggested that Congress should consider raising the dollar threshold at which qualified appraisals are required for noncash contributions to reflect inflation.

Friday, July 27, 2012

Making Sure the Surviving Spouse has Income

The National Association of Personal Financial Advisors was recently polled determine common surprises encountered by their clients planning for retirement. A Chicago Tribune article highlighted one of the most common responses from those advisors:  a failure to set aside significant income for a surviving spouse.

It is one thing to examine how long an individual is expected to live, subtract that from their current age, and determine how much is needed each of those years. By no means is this an exact science, but it is somewhat intuitive to roughly understand how much a single individual needs to retire. Things get more confusing, however, when spouses get thrown into the mix. As one planner interviewed for the article noted, "One thing people don't plan for is the reduction of income if a spouse or partner dies."

Think about Social Security. When two partners are alive, each may receive Social Security benefits. However, if one of the spouses dies, his or her income will disappear. Even taking into account a larger benefit for the surviving spouse, the overall family income will be lower than before. Similar problems can arise for those living off a pension. A spouse's death may cause the pension income to dry up. If not accounted for, this can thrown some seniors into a financial tailspin. One professional interviewed for the Chicago Tribune story told of a recent client whose retirement income dropped 35% following her husband's passing, but who found only a 10% decrease in expenses. This ultimately required a significant lifestyle change for the woman at the very moment when she craved stability following the loss.

Various tactics can be used to minimize the long-term consequences and provide more stability no matter what the future holds. For instance, a higher-earning spouse may choose to refrain from taking Social Security. This may earn him or her "delayed credits" up to 8% a year until the age of 70. If that spouse passes on, the surviving spouse may be able to switch to the value of the other's benefit, including delayed credits and cost-of-living adjustments. For pensions, a "joint and survivor annuity" might be appropriate, where less is paid out monthly for the peace of mind of knowing that income will continue even if the pensioner dies first.

Tuesday, July 24, 2012

Federal Bill to Prevent Senior Abuse Advances in Senate

Over the past two years there has been increased focus on the scourge of elder abuse of all kinds.  Yet, the awareness effort has not led to any federal legal changes to help protect seniors from things like physical neglect at home or senior financial exploitation.  That may soon change.

Minnesota Democrat Sen. Amy Klobuchar and Texas Republican Sen. John Cornyn have sponsored a bill in the U.S. Senate to help prevent these harms recently advanced out of the Senate Judiciary Committee.  The bill passed out of committee on a 15-3 vote this month and will now be sent to the full Senate for approval.

Known as the Guardian Accountability and Senior Protection Act, the measure strengthens the tools available to states to provide proper oversight of guardians and senior conservators.  This focus on oversight is critical, as a lack of third-party monitoring often allows the problem to go unnoticed.  Considering the obvious need for improvement, the measure is supported by those on both sides of the aisle.

Advancement of the bill and increased focus on senior caregiving could not come at a better time, because the senior population continues to rise each and every day.  Failure to account for the issue now means that millions might be affected in coming years.  To address the problem, the measure allows states to use existing money to improve monitoring systems and creates an electronic filing system to monitor guardians and conservatorship audits.

As Sen. Klobuchar noted during committee hearings, "I know every state has incidences of people getting ripped off millions of dollars when their loved one is supposed to be under the care of a guardian. Most guardians do amazing work, good work, but again you have a situation where you have a few that are causing a lot of harm."

Friday, July 20, 2012

Are You Spending More Time Planning Your Vacation Than Your Estate Plan?

This weekend Lake County News published an interesting story noting how many community members spend more time planning their summer vacation than their inheritance and long-term issues. Think about it: how many different contingencies are accounted for when heading away from home for a one to two week trip? Pet sitters are hired, mail is paused, email auto-responders are set-up, plants are moved inside and friends are asked to water them, doors are locked, and a spare key is left in case of emergency. We take these steps just in case, so that we can enjoy our time away with the peace of mind that everything back home can be dealt with in most situations.

In many ways estate planning involves similar forethought--understanding possible issues down the road and taking steps to account for those contingencies. Yet, vacation planning is done instinctively, while estate plans are often delayed or ignore due to either procrastination or apprehension of one's mortality.  It is easy to procrastinate on these sorts of issues without immediate compulsion. Summer vacation planning has to be done by a known date. Estate planning is not that easy, because no one knows for sure how much time they have or if they may need long-term care. The indefinite future makes it easier to procrastinate. Yet, planning is vastly more effective when conducted before emergency necessitates it. You will also get the peace of mind that comes with knowing inheritance and plans are in place.

Many also put off the planning because they assume that the planning is complex and time-consuming. Planning will be done when they finally "have time" for it. There will likely never be a time when you want to do your estate plan; instead one simply has to make time to do things that matter. But beyond that, the planning itself does not necessarily have to be as complex or time-consuming as one imagines. After all, the whole point of having professional help with these issues is to hand of the work to those who deal with these matters day in and day out. In most cases, a legal professional will explain how a trust or will can be created and how to put other documents into place, including a Power of Attorney and Health Care Proxy. Even if nothing more complex is required, having these few pieces in place can make all the difference in case something happens unexpectedly.

Tuesday, July 17, 2012

Documentary on Financial Elder Abuse Starring Mickey Rooney

A new documentary entitled Last Will and Embezzlement that is slated for release tackles senior financial exploitation.  The film will touch on all aspects of the problem with the ultimate goal of raising awareness of the problem to ultimately lower the incidence of mistreatment.

The centerpiece of the film is an extended interview with perhaps the most well-known advocate against elder financial abuse: Mickey Rooney.  The 91-year old film star testified before Congress last year while detailing abuse that he suffered at the hands of a family member.  His purpose in appearing in the film is to dispel the myth that this sort of exploitation occurs only to those who live alone or have few close friends and family members.  In fact the documentary tagline is: "If it can happen to Mickey Rooney, it can happen to anybody."

The filmmaker was motivated to take on the project after watching her father fall victim to abuse. She explains how her father was in a nursing home, when mysteriously, a stranger entered the facility and claimed to be his son. The senior had just lost his wife and was suffering from severe Alzheimer's at the time. The filmmaker states that her father "would have signed the Magna Carta" if it was placed in front of him at that point in his life.

The scammer used his lie about being a relative to acquire sensitive financial information and exploit the ailing senior. The man also acquired a Power of Attorney over the senior, making it incredibly difficult for the family to unravel the problem down the road. It ultimately took two years before the woman finally learned of the depth of the exploitation.  Her advice: "Set it up so you don't become a victim...know the laws against elder abuse."

Since the Supreme Court upheld the Affordable Car Act, The Elder Justice Act contained in it can be implemented.  It aims to combat financial, physical, and mental crimes and abuse committed against the elderly.  Some help may also be coming in the form of federal legislation. New York Senator Chuck Schumer, for example, is fighting for stepped up federal laws requiring more mandatory reporting of suspicions of elder mistreatment. While these new rules may help, by no means do they offer clear avenues to eliminate all mistreatment.

Planning and oversight by the family are crucial preventative steps. Obviously having elder law attorneys and other advocates in the mix is one way to ensure abusers aren't able to obtain legal documents and wreak havoc on the life of a vulnerable senior who may not fully understand the situation.  Overall, it's best to have comprehensive oversight and proper preparation before disability or cognitive vulnerability sets in.

Thursday, July 12, 2012

Losing the Family Home Over a $400 Tax Bill

Senior care advocates repeatedly remind families that oversight is needed in some cases to ensure seniors do not fall victim to financial exploitation. Beyond protecting against scammers and hucksters, many seniors are facing a new financial crisis that is not rooted in illegal misconduct. When on a fixed income and struggling with confusing money issues, some seniors might face incredibly severe financial penalties for falling behind on certain bills or taxes.  CNN Money reported this week on a growing number of individuals who are losing their homes because they owe relatively small sums.  A report from the National Consumer Law Center (NCLC) detailed how some states have outdated laws that allow states to sell tax liens on delinquent properties.  This means that instead of the government having a lien on a piece of property that owed back taxes or bills for services like water and gas, private investors own the lien.  The investor then collects interests on the overdue bill or, in some cases, forecloses on the home.  Some states allow investors to charge staggeringly high interest rates, from 15% to 50%.

Seniors are particularly vulnerable to falling behind in this way, either because of challenges of being on a fixed income or confusion with the bill paying process.  The NCLC report details one case of an 81-year old woman who lost the home she lived in for 40 years because she owed $474 on a sewer bill.  The NCLC report noted that seniors with cognitive diseases, like dementia and Alzheimer's are prone to fall victim to this situation.  It is very confusing to follow the changing financial arrangements.  The seniors are usually notified of the situation in legalese that many do not understand.  As a result, they do nothing, rack up interest debt, eventually default, and often lose their home.  The report elaborated that seniors without family members or who have not visited with elder law attorneys and other professionals were more likely to be hurt by this situation.  In one case, an elderly woman who lived alone without family fell back $5,000 on taxes.  Eventually, she lost her home and lost about $150,000 in equity that she had accumulated.

Advocates are working to change laws so that interest rates are lowered and adequate warnings are provided to homeowners.  It remains unclear if those efforts will be successful, and so putting preventative measures in place now is prudent for local seniors to avoid this situation.

Monday, July 9, 2012

How Does the Affordable Care Act Affect Taxes and Estate Planning?

No legal news item last week was bigger than the U.S. Supreme Court's decision to uphold virtually the entirety of the Affordable Care Act. In a move that surprised many observers, in a 5-4 decision the Court deemed the controversial "individual mandate" portion of the measure constitutional on grounds that it constituted a tax. While the court held that the Congress could not pass the law pursuant to its power to regulate interstate commerce, it did find it a permissible use of the legislature's taxing power.

Now that the matter is reasonably settled, local residents may be wondering how the law affects their estate planning, if at all. A recent Smart Money story talked about some of these issues, explaining how certain tax matters will indeed change in the upcoming year as a result of the decision. A few select rates will change next year. For example, an extra .9% Medicare tax increase will start for various individuals making over $200,000 or $250,000. In addition, some investment income (long-term capital gains and dividends) may face a 3.8% "Medicare contribution tax." This is in addition to the rising rates if the "Bush tax cuts" expire without renewal.

Starting in 2013, a cap will be added on contributions to a healthcare "flexible spending account" (FSA) plan. Right now there is no cap, so an unlimited amount of money can be contributed to the plan which is then subtracted from taxable income. The money can be used to reimburse qualified medical expenses. Starting next year, contributions to those plans will be capped at $2,500. Similarly, itemized deductions for medical expenses will now apply only to expenses that exceed 10% of annual gross income (up from the current 7.5%).

However, it is important to keep these tax issues in perspective, because they represent just a part of the bill. The overall goal is to provide comprehensive health insurance for more Americans so that overall expenditures go down while quality of care goes up, but the long-term effect of these sweeping changes will not be fully fleshed out for years to come. While the high-profile and controversial nature of the law may suggest that many things will change for all residents once it is fully in effect, the truth may be a bit less dramatic for many local families.

Tuesday, June 26, 2012

Planning for Couples with an Age Gap

Each estate plan is slightly different, but there are some challenges in estate planning that present themselves to different couples.  One common challenge is planning for married couples who have a significant age difference.

Perhaps the most obvious issue involves overall financial planning.  With age differences, one spouse is likely to outlive the other, perhaps by a considerable length of time.  The younger spouse may therefore feel more comfortable taking certain risks than the older spouse who is more likely to suffer from short-term financial dips.  It is important to balance the interests of both partners.  Couples of different ages require unique planning so that time horizons are meshed.  Retirement planning can be tricky if one spouse plans on working longer.  Similarly, long-term health care planning will be implicated by the age differential.  One spouse may need care earlier, though it is usually not prudent to automatically assume that the younger spouse will be able to provide the needed care.

A recent Morning Star article touched on many of these topics and mentioned a few other issues to consider for couples in this situation.  One point made in the story is that these couples often need to prioritize long-term care and life insurance.  Planning for disability is particularly crucial to couples, because family finances must account for both partners.  If one spouse is injured or faces a medical complication and is disabled, then family finances may be decimated if expensive, long-term care is needed.  In the worst-case scenario, assets are exhausted to care for one spouse while the second spouse remains healthy.  In order for the sick spouse to receive Medicaid support, assets for the entire couple must be below a certain level.  The healthier spouse can be left with little to no assets.  In these situations it is critical to get professional advice, as certain strategies can be employed in order to save as many assets for the second spouse as possible while still allowing the ill spouse to qualify for Medicaid.  This is particularly true for spouses with large age differences, because the younger spouse often needs assets to last for many years to come.

Thursday, June 21, 2012

Family Feuds Over Inheritance While Parents Are Alive

Family inheritance disputes are extremely common.  In most of the cases that make headlines, a famous individual passes away without conducting thorough estate planning and various family members publicly feud to get their fair share of the individual's wealth.  Family disagreements regarding an inheritance are quite common, particularly when no planning is done and the matters must be left up to the court-centered probate process.  Sometimes, though, feuding occurs even before the family matriarch or patriarch passes away.  For example, a recent Sacramento Bee letter explored a situation where two siblings seemingly isolated an aging mother from other siblings. Claims of undue influence and abuse were made. The three ostracized siblings were left wondering what options were available to ensure they received their share of the inheritance.

The case: The 80-year-old mother drafted a will specifying that she wanted all of her assets split evenly between her children.  However, after the will was created, two siblings convinced the mother to take out loans totaling more than $100,000 for their children's college education and to purchase a house.  One daughter obtained power of attorney over the mother and moved into the mother's home.

The three remaining siblings became concerned about the situation, questioning whether their mother was being taken advantage of, and reported their suspicions to local authorities.  The mother is now on Social Security and has no assets other than her home, which may even have been used as collateral on the loans. The siblings are left wondering if they will have any inheritance at all.

This situation presents a wide range of legal issues, and the case is a reminder of the dangers of relying only on a will.  Legally, the resolution of these issues will depend on a range of factors, including whether the siblings signed promissory notes on the loans and whether any changes to the will were made in the time that the daughter has lived with the mother.  No matter how it ends, it is likely to be a contentious, drawn-out process.

The lesson: Parents can ensure that their children never deal with this situation by locking down inheritance affairs early on with more comprehensive legal tools, like trusts. Children are well-served by encouraging their parents to deal with these issues as soon as possible since planning will not only settle inheritance issues, but also save on taxes and provide for potential disability.

Tuesday, June 5, 2012

Did You Know Your Taxes Are Going Up?

At a recent national meeting of the American Academy of Trust, Estate and Elder Law Attorneys, a premier educational seminar for estate planning attorneys, a major topic we discussed was taxes.  There are some important increases that you should know about.

Taxes are scheduled to increase dramatically in 2013: 
                                                                           2012                  2013
Estate and Gift Tax – Top Tax Rate                       35%                   55%
Estate and Gift Tax Exemption                              $5 million           $1 million
Federal Income Taxes – top rates
         Capital Gains                                              15%                   20%
         Qualified Dividends                                      15%                   39.6%
         Interest & Compensation Income                  35%                   39.6%
In the current political climate, Congress and the President are not likely to reach a compromise on these issues.  What does this mean for you?  2012 is a year of opportunity while taxes are lower.  It would be wise to schedule an appointment to review your estate plan before September 1, and see if there are steps you can take to improve your family’s position.  If you wait to the last minute, it may not be possible to put a plan in place before the law changes.

Thursday, May 31, 2012

VA Demands Compensation for Overpayment

If you are a veteran receiving benefits for non-service connected pension and Aid and Attendance, the VA may make a demand to be paid back for overpayment to you. What can you do?
The VA can forgive any debt if there was no indication of fraud, misrepresentation, or bad faith on the part of the claimant and recovery of the debt would be against equity and good conscience.  [38 USC § 3502 and 38 CFR § 1.963(a)]. You can submit a request for the debt to be forgiven or ask that there be a “waiver of the debt.”  The request must be in writing and received by the VA within 180 days of the VA’s request for repayment .  If you fail to request that the debt be forgiven within the deadline, the VA can garnish Social Security benefits, stop your VA benefits, and garnish any tax return you may be receiving.

In summary, pay attention to your mail if you have been receiving VA benefits.  If you receive a letter stating you have been overpaid, take action so that you don't end up on the hook for the overpayment.

Wednesday, May 16, 2012

Should Each Spouse Have Their Own Estate Planning Lawyer?

Estate planning requires the attention of an entire family:  husbands, wives, children, grandchildren, and others all have a stake in ensuring that planning is done properly and timely.  This raises the question whether each individual with a stake in the planning needs their own lawyer.  Does each spouse in a blended family have adverse interests such that a single lawyer cannot represent them both in their planning?  An article in Forbes recently discussed this very question.

Of course, in certain family situations it is usually vital that couples have separate counsel. For example, while certain types of uncontested divorces exist, in most cases couples going through a separation must have their own legal advocate, because the entire process is contentious. Most times, though, the same issues do not apply in elder law estate planning.  While divorce involves a "tug-of-war" over property splitting and other issues, estate planning is a collaborative process where families talk together with the counsel of experienced legal professionals to discuss their long-term financial wishes and potential care needs.  There is typically much less inherent conflict.  This does not necessarily mean that that both spouses will automatically agree on every single detail of a plan, but the resolution of those disagreements are generally not so contentious that they necessitate each party have their own individual legal counsel.

The article mentions an added benefit of going through the process together, noting that "it builds greater trust and more open communication between the two of you, and possibly with all of the children in your lives. There are certain situations where separate representation may have benefits, though.  It is usually a combination of factors which might result in significant dispute, including situations where only one spouse has a child, where one spouse is much wealthier than the other, if the relationship is still very new, if there is a prenuptial agreement, if there is a large age difference between spouses, or if one spouse has certain privacy issues that they might not want exposed during the process.  It's a topic worth considering when starting a family estate plan.

Thursday, May 10, 2012

Passing on Religious Values in Your Estate Plan

An estate plan usually includes a range of features, from a trust and pour-over will to a Power of Attorney, and yet no two plans are identical. While inheritance, retirement, and long-term care issues are common to all, the exact way to accomplish those goals depend on one's situation, perspective, and values.
For example, religious belief can have very large implications on some of these issues. End-of-life decisions delineated in a living will reflect an individual's personal perspective on advanced life support measures--often guided by a particular faith. In some case an advanced medical directive might include a clause that indicates such end-of-life decisions must be made by an individual with a particular religious perspective, such as an Orthodox rabbi with an expertise in Jewish law.

Religious traditions and inheritance issues are usually the most controversial way that one's faith can affect their estate plan. Many families have individuals with varying kinds and degrees of religious faith, which can be a recipe for feuding for a family when religious issues are involved in how assets will be dispersed. Often there are few easy answers.

The most conflict-ridden of these issues relates to parents who wish their children to marry someone within the tradition. These parents often seek to disinherit those who marry outside the faith. Disinheritance on these grounds often lead to family divisions and costly legal fights. That is why it is important to talk with experienced professionals about these concerns to be made fully aware of one's options and the potential ramifications of certain actions.

Clauses in inheritance documents that hinge on marriage decisions by heirs have been upheld in many courts so long as they are not deemed to encourage divorce. Yet, one purpose of planning is to account for possible legal challenges before they occur to hopefully prevent them altogether. One common alternative that may be less divisive is to leave assets to heirs in trust with a trustee given broad criteria to make distributions. In that way, religious conduct may play a role in the inheritance while allowing special circumstances to be taken into account.

One way to pass on beliefs is to craft an "ethical will." These wills are not legally binding but instead are exercises undertaken by thinking about one's overall legacy. An ethical will is often given to a family while one is still alive. It acts as a way to pass on the values, wisdom, and perspective gained over the course of a lifetime. Quite often an ethical will shares morals and lessons rooted in the author's spiritual faith. It is yet another way for one to pass on those faith-based beliefs to loved ones.

Wednesday, May 2, 2012

Estate Planning and Medicaid Planning Workshops in May

Join us for our upcoming in-office seminars this month!  Please call 512.476.0888 to register or for more information.  Attendance is free!

Tuesday, May 15th in Austin, TX 
Estate Planning Basics 2-3 pm
Medicaid Planning 3-3:30 pm

Wednesday, May 16th in Georgetown, TX
Estate Planning Basics 2-3 pm 
Medicaid Planning 3-3:30 pm
In Estate Planning Basics you will learn about:
  • Living Trusts, a powerful estate planning tool
  • Wills, uses and misconceptions
  • Estate planning for IRAs and life insurance proceeds
  • Protecting your assets
  • Reducing death taxes, attorney’s fees, and other costs
  • Avoiding guardianship
  • Living wills and powers of attorney
  • Avoiding probate court
  • Avoiding Estate Planning Pitfalls

In Medicaid Planning you will learn about:
  • What you may own and still be eligible for Medicaid
  • The truth about the new look-back rule...when the look-back starts and why you may still be eligible for Medicaid even if you have transferred assets in the last five years
  • How you may still be eligible for Medicaid for nursing home care even if you earn more than $1,911 per month
  • How you can provide for your spouse before you spend it all on nursing home expenses
  • How assets may still be preserved if you are currently in a nursing home
  • How an Irrevocable Trust may preserve and protect assets

Attendees of both workshops will receive the opportunity to schedule a complimentary private consultation with Ronald Greening regarding Texas planning.

Friday, April 20, 2012

Niche Retirement Communities Becoming More Popular

We've all seen the ads: smiling seniors lounging at the pool or playing golf, laughing, and enjoying the sunshine as a voice-over speaker describes the available space at a new senior living location. Retirement communities have long been popular, but that these assisted living locations are becoming more sought-after than ever. According to a recent US News article, nique senior communities are popping up across the country at a steady clip catering to more and more specific niches in an attempt to closely meet the needs of certain segments of the senior population. Some of the most popular niche senior living facilities (besides those around beaches or golf courses) are "university-based retirement communities." These locations are built around college campuses in order to provide seniors with the opportunity to attend campus events and even sit in on classes.

Many other communities are being built that center around specific hobbies and activities. Across the country new facilities have recently been built targeting seniors who want to become artists, providing help for those seeking to learn how to paint or write their first novel. Another senior facility is even referred to as an "astronomer's village" and is geared toward stargazers with every living unit equipped with a built-in telescope. Yet another targets "aging hippies" where residents are encouraged to make their own living space and practice sustainability techniques. No longer are nursing homes or assisted living facilities the only places where seniors can plan on spending their golden years. Most expect these activity-based living centers to slowly begin branching out to include support for those in need of more and more specialized healthcare.

Costs for these niche communities are somewhat similar to other long-term care options. For example, a recent MetLife Market Survey found that the average national rent for an assisted living facility was about $3,500. Many retirement communities have rent prices that are comparable, ranging anywhere from $2,500 to $7,000 monthly. However, many of these locations also come with "entry fees" which range from $150,000 to $600,000. All or part of the fee may be returned when the resident leaves or dies. Units at these locations can sometimes be purchased.

Monday, April 16, 2012

Where do you keep your important documents?

Who knows where you keep your important papers?  In an emergency situation, valuable time could be wasted tracking down important legal papers.  Make it a point to tell your children, successor trustee, or personal representative where they can find your original documents.  If you store those documents in a safe deposit box, or a safe at home, make certain they have the ability to get into the box or safe. 

We frequently receive calls from our clients’ family members who want to know where they can find these documents, and they need them “now” because there is a family crisis.   There are legal limitations that tie our hands so often we cannot provide our copies to the family.

You do not have to tell anyone about the contents of the papers, just let them know how they can access them in an emergency.

Tuesday, April 10, 2012

Need for Alzheimer's Association Expected to Grow

There were 39.6 million individuals in the U.S. over 65 years old in 2009. In roughly twenty years that number is expected to increase to 72.1 million. At that point the senior population will constitute roughly 19% of the total American populace. The changing demographics are placing significant strain on public Medicare and Medicaid resources. That is why many observers have focused more attention on the ways that outside not-for-profit groups are working to help seniors in need. It remains unclear if public programs will be able to fully handle the influx of seniors, and it is likely that local nonprofit groups will continue to play a vital role in ensuring that particularly vulnerable elderly community members receive the care they need.

A new Western Edition article recently summarized some organizations that provide various types of aid to seniors. For example, the Alzheimer's Association is the nation's leading organization raising awareness of this cognitive disease that affects so many local residents. Beyond advocating for support in research, the organization provides patient and family services to help those dealing with the effects of the condition which causes memory, thinking, and behavior challenges. The agency has a 24-hour a day help line where families can call for information and referrals.

Over 5.4 million Americans are currently living with Alzheimer's and the number is expected to more than triple in the next few decades. It is currently the sixth leading cause of death in the United States.  According to the Alzheimer's Association, more than $210 billion worth of unpaid care is currently being supplied by family members helping loved ones with different forms of dementia.

The Association reminds local residents that diagnosis is often delayed because the elderly and their family members mistake signs of the dementia as a "senior moment." In reality, the incident may be part of a serious cognitive condition. Dealing with the condition is much more difficult when health and legal affairs are not handled until the mental condition has deteriorated. 

To learn more about these issues, please take a look at the Alzheimer's Association website or call their hotline at 1-800-272-3900.  Please feel free to call our firm if you would like to discuss your family's situation in regard to estate planning.

Thursday, March 15, 2012

Missing Your Social Security Statements?

Have you noticed you haven't received one of those green and white social security statements lately?  That's because last April, as a cost-saving measure, the Social Security Administration (SSA) stopped mailing them out.  Later this year they plan to launch an online statement service, although the launch date is still forthcoming.

In the meantime, if you're looking for an estimate of your retirement benefits, try the SSA's retirement estimator. It's interesting to see what you've got - assuming of course it's still solvent when it's your time to retire!

Wednesday, February 8, 2012

Family Input Can Help Detect Dementia Earlier

Recently, USA Today reminded readers of the role that family members play in catching the onset of cognitive mental diseases in seniors, such as dementia and Alzheimer's.  These issues are of particular importance in the legal context because mental issues can affect one's legal capacity.  The ability to conduct estate planning, receive Medicaid, or otherwise make prudent decisions for the future will be made more difficult if begun after dementia or Alzheimer's has set in.

By the very nature of the condition, the one who is suffering from these issues has difficultly identifying the problem themselves.  That is why a family plays a crucial role in identifying the cognition problem and addressing it.  As the article notes, "dementia can sneak up on families. Its sufferers are pretty adept at covering lapses early on."  Often it is not until there is some major accident or life-threatening complication that adult children, spouses, and others become fully aware of the problem.

To combat the challenges of early detection, experts urge family members to be more involved.  As part of the first "National Alzheimer's Plan," advocates are trying to raise awareness about the need for relatives to be diligent about a senior's actions to ensure mental cognition issues are caught as soon as possible.  One advocate noted, "family input should be's the only way to know if the person really is eating enough and taking her medicines as she claims, and not forgetting to turn off the stove."
 In addition, there is a growing call for primary-care doctors to take a more active role in detecting dementia early.  For example, in a regular visit the doctor might ask "How are you doing?"  Usually the senior patient replies, "Fine," and then the matter is dropped.  This minimal discussion of basic life circumstances is too brief for the physician to have any way to ensure that the senior's mental condition has not reached a dangerous level.

On top of that, as part of the early detection programs, government officials working on dementia and Alzheimer's issues are trying to get families to conduct advanced planning.  Having a Power of Attorney and Health Care Proxy are crucial as soon as dementia is diagnosed.  No one is fully prepared for the challenges that aging can bring--particularly conditions that attack the mind. No amount of financial preparation or long-term care plans can make the process easy.   However, the overall stress of the situation is less taxing when steps have been taken ahead of time to ensure that sticky matters like estate preparation and proper long-term care planning are decided ahead of time.

Wednesday, February 1, 2012

"The Long Goodbye"

Earlier this year a featured article in Atlanta Magazine offered a uniquely detailed and accurate portrait of what it is like to help an ailing parent or loved one as their heath deteriorates. Entitled, "The Long Goodbye," the article shares the author's own story of heartbreak, worry, stress, financial loss, and confusion while caring for his ailing father. Our firm understands that it is often helpful to hear real, individual stories about the aging and caregiving process. Discussing numbers--assets saved, taxes avoided--is necessary, but at the end of the day this process is very much about emotions and family values.

The author explains that he thought his father was going to die in 2001. The elderly man had fallen while trying to get the mail, hitting his head hard on the ground and temporarily losing consciousness. The man then  crawled back up his driveway to the front door of his house. It was that incident that prompted his family to take him to the hospital where he was diagnosed with a deteriorating spine and prostate cancer. A risky operation was undertaken, and the family was warned that the man was likely in his final days. However, he was not actually in his final days.

Similar to the experiences of many local community members, the elderly man persisted. For the next eleven years he was shuttled from care facilities, hospices, and other locations as those involved struggled to find the best fit for him.

The eleven years of care took its toll on the family finances. The author explained, "Daddy's long goodbye has drained his retirement income and life savings of more than $300,000. Where's the money gone? Assisted living, mostly. Of course, that amount doesn't account for his medical bills, most of which have been paid by Medicare and insurance policies that were part of his retirement."

The family was completely unprepared to deal with their father's deterioration. They were not familiar with long-term planning options, had not spoken with an elder law attorney, and did not know where to begin to get him the care he needed. The author warned others that while it may not be comfortable to talk about, the benefits of figuring some of these details out ahead of time is absolutely essential.

Friday, January 20, 2012

Lack of Autopsies after Elderly Die Conceals Health Flaws

Abuse in nursing homes and suspicious deaths among seniors often go undetected because post-mortem examinations for seniors are becoming less common. In 2011, a National Public Radio (NPR) News and ProPublica investigation found that because of a lack of resources (both financial and staffing) many jurisdictions stopped doing autopsies on people over the age of 60 unless it was obvious that a violent death occurred.  This is as the population of individuals over the age of 65 increases in America. The investigation has uncovered more than three dozen cases in which alleged abuse, neglect, and murder of seniors that were not discovered by authorities. Only after a whistle-blower or relative pushed medical and law enforcement officials for answers were the cases reopened.

The latest report tells the case of a 76-year-old man whose death was tied to a combination of ailments related to poor care and  an "inappropriate administration of powerful antipsychotic drugs, which have potentially lethal side effects for seniors." His original death certificate said "heart failure brought on by clogged arteries." The real reasons for his death only came to light after a nursing-home staffer spoke up.  The reporting reveals that the number of U.S. autopsies performed on seniors dropped from 37 to 17 percent between 1972 and 2007. 

In the article, Dr. Kathryn Locatell, a geriatrician who specializes in diagnosing elder abuse, said: "We're where child abuse was 30 years ago. I think it's ageism -- I think it boils down to that one word. We don't value old people. We don't want to think about ourselves getting old."

To read the whole article, visit

Wednesday, January 11, 2012

Who Gets the Vacation Home?

Recently, the Wall Street Journal published an article entitled "Who Gets the Vacation Home?"   The article explores some of the issues involved with family cabins or vacation homes, including payment of expenses and the issues of access and use.  Often, once the owner of the property passes, the children have a difficult time of "splitting-up" or sharing the property.

The article suggests three possible solutions to sharing a property (and its inherent expenses): setting up a limited liability company trust, a dynasty trust, or a "qualified personal residence trust" (QPRT).  In these arrangements, family members can all contribute funds to expenses like taxes, insurance, utilities, etc.  In most situations, by gifting the property to a trust, there is the added benefit of not having to pay estate taxes.  

No matter what method is chosen, always make sure to include an "exit strategy" so that future generations can sell the property if they choose to do so.  The article gives a fine overview of a topic that often causes families confusion and strife. 

Tuesday, January 3, 2012

Home Care Workers: the Minimum Wage Controversy

Seniors typically obtain peace of mind knowing that they will be able to receive late-in-life care in an ideal setting and that the care will be of top quality.  These simple goals should not be out of reach for any older community member.  However, many seniors will be forced to deal with less than adequate care, often in institutional settings where they would rather not live.

Part of the problem is that many will not have planned for late-in-life care.  Staying in one's home while aging usually requires advance planning and ensuring that a home care worker is actually providing an appropriate level of care. Recently there has been a shortage of quality home care workers.  One of the biggest problems is that for a period these workers were exempt from minimum wage laws.  When Congress passed minimum rights legislation, all home care workers were lumped into the category of exempt employees who acted as "companions."  This was the case even for workers who engaged in a wide range of physical labor helping seniors bathe, dress, use the facilities, walk, get exercise, and eat properly.  Of course, it seems intuitively unfair for these workers to be forced to live in dire poverty at incredibly low wages and no overtime pay.

Fortunately, the legal error was recently corrected.  One reason the law took so long to change was that many of the individuals who fill these roles, often including women and those who are not native English speakers, have few advocates.  Also, as a result of the prolonged period of abysmal pay, advocates are worried that there is a shortage of well-trained, capable home health care workers.  The need for these workers is expected to skyrocket in the coming decades.

The shortage of quality caregivers makes it important for local residents to conduct proper research when deciding on an appropriate home care provider for their loved one.  Therefore, most advocates recommend going through a qualified agency to find these assistants.  Most agencies are required to perform multi-state background checks, screen for drug use, and require references. The risk of abuse or theft is always much higher when home care workers are unsupervised and unaccountable.  Home care is of little value if that home care worker is inadequate.