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A Red Flag on Reverse Mortgages
Ron Lieber
The New York Times
It is the saddest of paradoxes: a government-backed financial maneuver intended to free up extra money for struggling older people turns out to have left some widows and widowers on the brink of foreclosure.
This week, AARP sued the Housing and Urban Development Department over a handful of reverse mortgages gone awry. Lenders, following the letter of one of HUD’s rules, are requiring newly widowed people who want to stay in their homes to pay off the balance of their loans quickly, even if it is much more than the value of the home. Because they can’t (or won’t), the lenders are foreclosing.
This is happening only to a small number of people who did not have their names on the reverse mortgage for a variety of reasons. Some spouses did not put their names on the applications in order to qualify for a bigger loan, without necessarily realizing that they were putting themselves in jeopardy.
Reverse mortgages were not supposed to work like this. Instead, the big idea was to let people who were cash-poor but relatively rich in home equity draw on some (but not all) of that stored value. They’d get a lump sum, a line of credit or a monthly check for either a fixed period or for as long as they stayed in the home. And nearly everyone thought the rules were clear: homeowners or their heirs would never, even decades later, owe a cent beyond the value of the property.
The fact that it hasn’t turned out that way for some people is yet another warning sign on a financial product that has the potential to help those who have no other money to draw on in their old age. Reverse mortgages, after all, have historically been marked by high fees. Charlatans looking to extract people’s home equity and put that money into high-fee annuities and other questionable financial products sometimes used reverse mortgages to do it.
So if you’re even remotely considering a reverse mortgage or have a parent or friend who is, this is something else that can go horribly wrong if you’re not paying close attention during the application process.
But first, a review session. (And a disclaimer: This should be only the first of many stops in your reverse mortgage research efforts. I’ve linked to a couple of our best articles on the topic in the online version of this column. You should also check out AARP’s “Borrowing Against Your Home” guide, which HUD actually links to from its reverse mortgage information home page.)
In a regular mortgage, you pay the bank. With a reverse mortgage, which you can get only if you are 62 or above, the bank pays you, drawing on the equity you already have in your home. It’s different from a home equity loan in two crucial ways: You don’t have to make payments on a reverse mortgage as you do with a home equity loan, and there’s no credit check involved with a reverse mortgage.
As you can imagine, you need to have a fair bit of equity in your home to even qualify for a reverse mortgage. The amount of money you can get from the loan depends on that equity, along with the prevailing interest rates and your age. Lenders do their underwriting in part based on how long they think you’ll be in the house. The younger you are, the less money you’ll get because you’re likely to stay a while before paying back the loan. (There is more on how repayment works below.)
The mortgage amount also depends on whether you choose a fixed or variable rate loan and whether you take a lump sum, a line of credit or a periodic payment. That payment can be a set amount for a limited number of years or more like an annuity, the same monthly amount for all remaining years that you (or your spouse who is on the mortgage) stay in the home. Lenders often charge origination fees, and you have to pay mortgage insurance. All of this can cost a lot more than a regular mortgage, though as with standard mortgages, you can roll all the costs into the loan instead of paying them out of your own pocket upfront.
It is possible to qualify for a reverse mortgage if you still have a regular mortgage outstanding on your home, but you have to use the proceeds of the reverse mortgage to pay off any existing home loans. To run the numbers for your own situation, try the reverse mortgage calculator on the National Reverse Mortgage Lenders Association’s Web site.
Because this is a loan, the bank does eventually get its money back, with interest. Every dollar you take out gets subtracted from the available equity that the loan allows you to draw on, and the bank keeps a running tab of the interest on the money you draw down, too. Once you (or your spouse, assuming you’re both on the loan) move out, whether because you’ve downsized, moved permanently to a second residence or nursing home or died, you or your heirs sell the home and the bank uses the proceeds to pay off the loan. You or your heirs keep any money that’s left.
HUD sets the rules for these loans and insures them as well. For years, most borrowers and lenders read HUD’s rules to mean that a borrower or the heirs would never owe more than the loan balance or the value of the property, whichever was less. This is all well and good for couples who are both on the mortgage. Even if one of them dies, the other can stay in the home and keep drawing on any remaining money from the reverse mortgage until he or she no longer lives there.
But in 2008, HUD, worried about falling housing prices, issued what it called a clarification, though AARP argued it was a rule change. The upshot of HUD’s notice is that the home is subject to foreclosure upon the death of the borrower if the estate or heir (say a spouse who was not on the original reverse mortgage) wants to keep the home but is unable to pay off the balance. The heir would have to pay that amount, no matter what the home was worth.
Here’s the practical result of all this: Let’s say a widowed spouse who wasn’t a party to the reverse mortgage loan inherited the home. She could sell it without having to pay the lender anything more than the prevailing market price (or a even little less) as long as she followed a few simple rules.
But if she wanted to stay in the home, the HUD rule would force her to pay off the entire original balance fairly quickly, even if it was for way more than what the home was actually worth because of declining home values.
And why might a spouse not be on the reverse mortgage loan? If her husband is 64 and she is under 62, she wouldn’t be eligible. Or one spouse may have owned the home and taken out the reverse mortgage before the marriage.
A more likely possibility, however, and one that comes up in the AARP lawsuit, is that lenders encouraged younger halves of a couple not to put their names on the mortgage. Why? Well, when the older half of the couple applies alone, he or she qualifies for more money.But a 401(k) also requires steady, significant savings. And unlike corporate pension plans, which are guaranteed by the U.S. government, 401(k) plans have no such backstop.
As complicated as this particular legal dustup appears, there is a simple moral. If you’re a couple with plans to take out a reverse mortgage — and it really ought to be a last resort, only for those who can’t make ends meet any other way — both of you ought to be on the reverse mortgage so you don’t end up in this predicament.
HUD requires anyone who is applying for a reverse mortgage to talk to a counselor. I’d urge you to pay to talk to two, preferably two who work for different organizations. Lyn R. Link, a former reverse mortgage lender and the proprietor of reversemortgagecritic.com, suggested consulting an elder law attorney with reverse mortgage experience if you can find such a person.
This may all seem a bit extreme. But my guess is that we’ll see a lot more people (or those who are lucky enough to have any home equity, at least) turning to these products in the next couple of decades if HUD doesn’t tighten its rules too much more.
By the time people need to tap their home equity in this way, it will probably be the biggest asset by far that they have left. At that point, it’s simply not possible to be too careful.
Making the Case to Buy an Annuity
By LAVONNE KUYKENDALL, Wall Street Jounral
Retirees may get more financial security by combining insurance products and mutual funds, some analysts say
Many investors approaching retirement think they have no need for annuities. But the lifetime-income guarantees offered by these insurance-company products can add security to portfolios that are mostly composed of stock and bond mutual funds.
A market downturn that hits right before or early in retirement can leave even conservative investors with far less money to draw from than planned and little time to recoup the losses, increasing the risk they could run out. By putting a portion of their retirement funds in annuities, some investment researchers say, investors can arrange for a more dependable income stream for life.
"The longer we live, the greater stress that puts on our ability to pay for our retirement-income goal—an inflation-adjusted income stream that lasts as long as we do," says Tom Idzorek, chief investment officer at Morningstar Inc.'s Ibbotson Associates unit. "We need to go beyond the universe of mutual funds and exchange-traded funds and consider longevity-risk products."
According to Financial Research Corp., a Boston research firm, a 65-year-old retiree who withdraws an inflation-adjusted $45,000 annually from a $1 million portfolio of stock and bond investments has a 25% chance of running out of money before age 92. But if the retiree gets the same annual income by investing $400,000 in an immediate annuity and withdrawing the rest from $600,000 invested in stocks and bonds, the chance of running out of money drops to 6%, the research firm says.
To be sure, Ibbotson and a number of other companies and academics that have cited the benefits of annuities do consulting work or otherwise earn income from insurers that sell annuities. But they make a persuasive case, particularly in light of the two bear markets of the past decade.
An Annuity Fan
One believer is Bud Hebeler, 77, a retired Boeing executive who runs www.analyzenow.com, a retirement-planning website. He says annuities have made his retirement more secure, helping him avoid the problems that plague many retirees who rely primarily on their savings.
"People didn't think they would live that long, and they spent too much too early," Mr. Hebeler says. Low interest rates over the past few years have hurt, too. "Now, they are trying to ration a limited amount of savings."
According to actuarial mortality tables, a healthy 65-year-old man has a 33% chance and a healthy woman a 44% chance of living beyond 90. For a 65-year-old couple, there's more than a 50% chance that at least one of them will live beyond 90.
Mr. Hebeler has invested in "immediate" annuities in stages over three years—a strategy known as "laddering"—to take advantage of potentially rising interest rates. With an immediate annuity, investors hand a lump sum to an insurer and get a promise of regular payments that will last for as long as they live; when interest rates are low, as they are today, investors lock in payments that are smaller than they might get in other environments.
People in poor health or those with a family history of early death usually are advised to steer clear of annuities. But Mr. Hebeler says he hopes to live into his 90s like his parents did, which would make the annuities a great deal for him and allow him to leave more money to his children. He also says the protection provided by the annuities has enabled him to invest the rest of his portfolio more aggressively, with a larger percentage in stocks than he might have had otherwise.
Two Types of Annuities
Retirees may do best by augmenting their mutual-fund portfolios with both immediate annuities and a second variety—variable annuities that have lifetime-income benefits—according to both Ibbotson and Moshe Milevsky, a finance professor at York University in Toronto who has written extensively about the benefits of annuities.
With a variable annuity, investors typically invest in mutual-fund-like subaccounts—but have the option of buying income benefits that can reduce the risk that a market downturn during retirement will devastate investment values.
For an added fee, typically 0.5% to 1% a year, a rider promises the contract owner a set percentage of the original investment, typically around 5%, annually for life.
If the investments do well, the contract value and annual payout may step up to reflect the higher balance. Money not withdrawn in the holder's lifetime can be left to heirs.
On the negative side, variable annuities have long had a reputation as being too expensive and pushed by salespeople for large commissions.
In a paper written for insurer MetLife Inc. Mr. Milevsky explains that immediate annuities and variable annuities with guaranteed living benefits provide different advantages to a portfolio. He gives immediate annuities top marks for protecting investors against the risk of outliving their money, particularly if the investors live longer than expected. Variable annuities with lifetime-income benefits, meanwhile, help protect investments from "sequence of returns risk," or the hazard of a big downturn just before or after retirement.
Ibbotson has developed proprietary guidelines to make personalized recommendations on annuity purchases based on an investor's answers to typical retirement-planning questions. It has licensed the program to some insurers and investment managers, including TIAA-CREF, New York Life and Great-West Retirement Services, a unit of Great-West Life & Annuity Insurance Co.
In general, the guidelines recommend that older investors allocate more of their money to immediate fixed annuities to take advantage of the higher payout that is keyed to age at the time payments begin. A typical 65-year-old should put around 20% of his money in a fixed annuity and about 30% in a variable annuity, according to the guidelines. A 75-year-old should put around 35% in a fixed annuity and a little less than 30% in a variable annuity with a minimum withdrawal benefit for life, Ibbotson says.
Conservative investors should consider investing a little more in each than investors who are comfortable with market risk.
Invest Aggressively
Wealthy investors who face no risk of outliving their money probably don't need annuities at all, many advisers say. But retirees whose pensions and Social Security income fall well short of their needs may want to put a higher percentage of savings into a longevity product. For investors who want to maintain greater control of their assets, a variable annuity with a minimum withdrawal benefit for life should be favored over immediate annuities, some advisers say.
Ibbotson's Mr. Idzorek recommends that investors take advantage of the downside protection in a variable annuity by investing their subaccount funds as aggressively as their contract allows. The fee for the guaranteed-minimum-withdrawal feature is typically the same no matter how the funds are invested.
Most investors buy variable annuities right around retirement. But it may be a good idea to start buying these products five to 10 years before retirement and spread the deposits over several years, rather than try to time the market with one big buy, according to Great-West Retirement Services.
Variable annuities are beginning to make an appearance in some 401(k) plans, and Great-West says it has gotten a lot of interest in its 401(k) annuity offering, launched last year.
Taxpayer May Deduct Medical Expenses and Real Estate Taxes Paid by Another
The United States Tax Court rules in a Memo that a taxpayer is allowed to deduct medical expenses and real estate taxes that her mother, who was not legally obligated to do so, paid directly to medical providers and the city government. Lang v. Commissioner of Internal Revenue (T.C. Memo 2010-286, Dec. 30, 2010).
Judith Lang filed a timely 2006 federal income tax return with a $27,776 itemized deduction for medical expenses and a $6,840 deduction for real estate taxes, among other deductions. Ms. Lang was an adult and was not listed as a dependent on anyone's tax return. The Internal Revenue Service issued a notice of deficiency after it determined that Ms. Lang's mother had paid $24,559 of Ms. Lang's medical expenses directly to her medical providers and $5,508 of Ms. Lang's real estate bill directly to the city. Ms. Lang filed an appeal with the United States Tax Court.
In the ensuing proceeding, the IRS took the position that Ms. Lang could not deduct the payments that were made by her mother because the funds used to make the payments were not hers. Ms. Lang argued that although her mother paid the bills directly, the payments should be treated first as a gift to Ms. Lang and then a subsequent payment of her own expenses.
The United States Tax Court issues a Tax Court Memo allowing Ms. Lang to fully deduct the medical expenses and real estate taxes. Discussing the medical expenses, the court notes that although the direct payment of medical expenses does not incur gift tax, Ms. Lang's mother made the payments with donative intent, and therefore "[a]pplying substance over form, we treat [Ms. Lang] as having received from her mother a gift of $24,559 with which [she] paid her own medical expenses." The court points out that the direct payment of real estate taxes is a taxable gift, and it applies the same "substance over form" rationale to allow the full deduction of taxes. The court also explains that "there is no danger of a 'double deduction' arising from our decision on this issue . . . [b]ecause the real estate tax was imposed upon [Ms. Lang], she is the only taxpayer who may deduct it."
Remember, that load of laundry isn't going anywhere. Setting it aside for one day may be necessary for you to be the best parent and caregiver that you can be. Rejuvenate and enjoy some one on one time with your child. You'll be glad that you did.
For the full text of this decision, go to: http://www.ustaxcourt.gov/InOpHistoric/La5ng.TCM.WPD.pdf
Alert! New Criteria for Medicaid Applicants
If you have unpaid Pre Eligibility Medical Expenses (PEME) that you are still obligated to pay, you may be eligible for a reduction in your Patient Pay Amount (PPA), you may be eligible for a reduction in your PPA to help you pay off the old debt.
Click here to view the full article.
OBSERVATION SERVICES:
WHAT CAN BENEFICIARIES AND ADVOCATES DO?
Being in a hospital bed in a Medicare-participating hospital is no guarantee that a Medicare beneficiary is an inpatient. In our December 11, 2008 Alert, the Center for Medicare Advocacy described the increasingly common practice of placing Medicare beneficiaries in acute care hospital beds and calling them outpatients.[1]
Beneficiaries who remain in hospital beds for multiple days, or even weeks, receiving physician and nursing services, tests, medications, food, and supplies, are in many instances nevertheless identified as outpatients. One major consequence of outpatient status is that beneficiaries are denied coverage for a subsequent stay in a skilled nursing facility (SNF) on the grounds that they have not been inpatients in the hospital for three or more consecutive days. Beneficiaries receiving outpatient observation services, which are covered under Medicare Part B, are also billed for services such as prescription drugs that would ordinarily be covered under Medicare Part A during an inpatient hospital stay. Placement in observation services has the effect of shifting significant health care costs that should be covered under Medicare Part A from the Medicare program to Medicare beneficiaries.
At the same time that the use of observation services is becoming more extensive by hospitals throughout the country, some beneficiaries who have appealed the denials of their hospital stays have been successful. This article describes a new brochure from the Centers for Medicare & Medicaid Services (CMS) – CMS's first description of observation services for beneficiaries. It also discusses three recent favorable decisions – two at the Administrative Law Judge level of appeal and a third at the level of the Qualified Independent Contractor (QIC), Maximus Federal Services. A fourth case, which is not about observation services, addresses the InterQual criteria and process that are used by hospitals to determine whether a patient is receiving inpatient care.
What are Observation Services?
Observation services are defined in Medicare's manuals as:
a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.[2]
The Manuals suggest that a patient may not remain in observation status for more than 24 or 48 hours.[3] Since 2004, CMS has authorized hospitalization utilization review (UR) committees to change a patient's status from inpatient to outpatient, retroactively, if (1) the change is made while the patient is still hospitalized; (2) the hospital has not submitted a claim to Medicare for the inpatient admission; (3) a physician concurs in the UR committee's decision; and (4) the physician's concurrence is documented in the patient's medical record.[4] CMS anticipated that retroactive reclassifications would occur infrequently, "such as a late-night weekend admission when no case manager is on duty to offer guidance."[5]
CMS Brochure
A new six-page CMS brochure entitled "Are You a Hospital Inpatient or Outpatient?"[6] begins with the statement, "Did you know that even if you stay in the hospital overnight, you might still be considered an 'outpatient'?" The brochure suggests that patients who are in the hospital for "more than a few hours" ask their doctor or hospital staff if they are inpatients or outpatients.
The brochure incorrectly suggests in two places that decisions to place a beneficiary in observation are made by the beneficiary's own physician.[7] In fact, CMS allows any physician to confirm a decision by a hospital's UR committee to reverse an inpatient admission decision made by an attending physician.
Even more significant, while the brochure may give beneficiaries notice of their status as observation patients, it does not give them any rights to challenge their placement in observation. The brochure's discussion of "rights" says only that beneficiaries have the right to "get a review of (appeal) certain decisions about health care payment, coverage of services."
The brochure may have the effect of discouraging beneficiaries from appealing their placement in observation services if they erroneously believe that their attending physician ordered observation services. As discussed below, the Center encourages beneficiaries and their advocates to appeal observation decisions, regardless of whether the decisions are made by attending physicians or hospitals’ UR committees. Moreover, despite the lack of clarity about beneficiary appeal rights,[8] some beneficiaries have filed appeals and prevailed.
Favorable Decisions
In January 2010, Administrative Law Judge (ALJ) P. Arthur McAfee overruled a decision by Maximus Federal Services and held that a Medicare beneficiary's entire five-day stay in an acute care hospital should have been covered by Medicare Part A.[9]
The beneficiary's physician had ordered that she be admitted "for inpatient care secondary to a diagnosis of an L1 compression fracture." Her condition was "fair" and she required monitoring, assessment, and intravenous fluids, including multiple doses of intravenous morphine. On her third day in the hospital, October 25, 2008, she was notified that her status was being changed from inpatient to outpatient. On appeal, the Quality Improvement Organization (QIO) found that inpatient coverage was appropriate for days three through five, October 25-27. The QIO did not review the beneficiary's observation status for the first two days of her hospital stay. On appeal, Maximus issued an unfavorable decision, finding that the claim had already been processed for payment.
The ALJ cited the Medicare statute and two Manual provisions as guiding his analysis. First, he cited the Medicare Benefit Policy Manual, which describes:
the decision to admit a patient [as] a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient's medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital's by-laws and admissions policies, and the relative appropriateness of treatment in each setting.[10]
Relevant factors to be taken into consideration include "the severity of the signs and symptoms exhibited by the patient," "the medical predictability of something adverse happening to the patient," "the need for diagnostic studies that appropriately are outpatient services," and "the availability of diagnostic procedures at the time when and at the location where the patient presents."[11] He also cited Chapter 1, §10 of the MBPM, which uses "a 24-hour period as a benchmark" and wrote, "physicians should order admission for patients who are expected to need hospital care for 24 hours or more."
The second Manual relied on by the ALJ was the QIO Manual, which gives guidance to QIOs on reviewing inpatient hospital admission decisions and directs a physician reviewer to "consider, in his/her review of the medical record, any preexisting medical problems or extenuating circumstances that make admission of the patient medically necessary."[12] Inpatient care is "required only if the patient's medical condition, safety, or health would be significantly and directly threatened if care was provided in a less intensive setting."
Applying these criteria, the ALJ reversed Maximus's denial of inpatient status for the beneficiary's entire five-day stay, finding "The documentation provides no foundation to go against the judgment of the admitting physician."
A second favorable decision, issued by Maximus on November 10, 2009, involved "a 79-year old man who presented to the emergency room (ER) from his assisted living facility with progressive altered mental status over the prior week."[13] The man had been "fully oriented," but at the time he was brought to the ER, he was "quite disoriented" or delirious.
The Maximus decision recognized that "Delirium represents an acutely life-threatening condition, evaluation and management of which can be complex and extended." Although it turned out that the management of the patient was not complex, Maximus wrote, "it was not reliably predictable at the time of admission that the necessary work-up of the balance of the differential diagnosis would have been able to be completed within a reasonable period of hospital observation." Relying on the Medicare Benefit Policy Manual, Pub. 100-2, Chapter 1, §10, the same provision relied on by the ALJ in the decision discussed above, and on the Program Integrity Manual, Pub. 100-8, Chapter 8, §6.5.2,[14] Maximus authorized inpatient hospital coverage for the entire five-day period.
A third decision addressed the denial of coverage for a 30-day stay in a SNF because of the absence of a three-day prior hospital stay, despite the fact that the beneficiary, classified as an outpatient receiving observation services, had been hospitalized for 13 days. Following a telephone hearing, ALJ Michael D. Bartko ruled both that the beneficiary met the three-day qualifying hospital stay required for SNF coverage and that she needed and received Medicare-covered care in the SNF.[15]
The fourth decision addressed whether a Medicare Advantage beneficiary's inpatient hospital admission ended, as set out in the Notice of Denial of Medicare Coverage, or should continue.[16] The ALJ discussed the hospital's reliance on InterQual criteria, which are also used in observation cases to determine whether a beneficiary should be classified as an inpatient.
At the ALJ level, the hospital was required to produce the patient's complete medical records, the CareEnhanced Review Manager Enterprise (CERME), and the InterQual/McKesson Manual. The ALJ found "a significantly limited independent review of the approximately 6000 pages of medical records in this case [italics in original]" by the QIO physician who cited physical therapy notes, wound care notes, and a single physician note in upholding the discharge notice. He then described the InterQual Manual and CERME as proprietary tools that are used for various purposes, including "coverage denial management programs." He wrote, "Information is obtained from patient medical charts and from other captured data which is input into a software program that generates a summary report." Although the ALJ sealed the InterQual and CERME documents because they were proprietary, he found that "the inputs are very subjective" and that, in this case, they were "inconsistent with the known medical treatment" provided to the patient, as described in her medical records. He concluded that the patient's inpatient stay was medically necessary and that Medicare coverage properly continued after the beneficiary received the notice denying further coverage.
What Should Beneficiaries and Their Advocates Do?
The Center for Medicare Advocacy suggests that beneficiaries file an appeal from any hospital notices describing their observation status and any subsequent Advanced Beneficiary Notice/Notice of Exclusion from Medicare Benefits they receive from a SNF.[17] In the likely absence of any notice, particularly from a hospital, the Center recommends that beneficiaries appeal when they receive the Medicare Summary Notice, which sets out all health care services received by a beneficiary in the prior quarter.
In all cases, beneficiaries and their advocates should gather the complete medical records from the hospital to establish the entire set of services and treatments that were received during the period of hospitalization. Advocates should request copies of all documents used by the hospital, its UR committee, and outside consultants to determine beneficiaries' status. Advocates should present the medical and nursing facts and cite any physician support for inpatient status to demonstrate that the beneficiary met Medicare's criteria for an inpatient stay. If SNF coverage is also at issue, advocates must demonstrate not only that the beneficiary met the criteria for Medicare-covered care in the SNF but also that the beneficiary received Medicare-covered care in the SNF.
Advocates should not be discouraged if they lose at the early stages of appeal: reconsideration, QIO, and QIC review. Three of the four cases discussed in this Alert were won later, at the ALJ level.
Continuing Work
The increasing use of administratively-created observation services is undermining the Medicare Part A hospital benefit, which authorizes inpatient hospital care for both diagnosis and treatment,[18] by essentially redefining diagnosis as observation under Part B. Observation services also violate the Medicare statute by allowing hospital UR committees to issue retroactive and binding determinations that a patient, admitted to inpatient status by the patient's attending physician, is instead receiving observation services.[19]
The Center for Medicare Advocacy is interested in hearing from advocates and beneficiaries about their experiences with observation services, including issues stemming from the lack of notice and the inability to use existing appeals processes.
[1] "When Is a Hospital Stay Not a Hospital Stay? When the Patient Is in 'Observation Status," (Dec. 11, 2008 Weekly Alert), http://medicareadvocacy.org/InfoByTopic/SkilledNursingFacility/SNF_08_12.11.ObservationStatus.htm.
[2] Medicare Benefit Policy Manual, CMS Pub. 100-02, Chapter 6, §20.6; same language in Medicare Claims Processing Manual, CMS Pub. 100-04, Chapter 4, §290.1.
[3] Id.
[4] Medicare Claims Processing Manual, CMS Pub. No. 100-04, Chapter 1, §50.3, originally issued as CMS, "Use of Condition Code 44, 'Inpatient Admission Changed to Outpatient,'" Transmittal 299, Change Request 3444 (Sep. 10, 2004).
[5] CMS, "Clarification of Medicare Payment Policy When Inpatient Admission Is Determined Not To Be Medically Necessary, Including the Use of Condition Code 44: 'Inpatient Admission Changed to Outpatient,'" MedLearn Matters (Sep. 10, 2004), now at Medicare Claims Processing Manual, CMS Pub. No. 100-04, Ch. 1, §50.3.
"Use of Condition Code 44 is not intended to serve as a substitute for adequate staffing of utilization management personnel or for continued education of physicians and hospital staff about each hospital's existing policies and admission protocols. As education and staffing efforts continue to progress, the need for hospitals to correct inappropriate admissions and to report condition code 44 should become increasingly rare." Question and Answer 3.
[6] CMS Product No. 11435 (Dec. 2009), http://www.medicare.gov/Publications/Pubs/pdf/11435.pdf
[7] "Your doctor may order 'observation services' to help decide whether you need to be admitted to the hospital as an inpatient or can be discharged," page 4; and fifth example in the chart, page 3, indicates that if "your doctor" admits you as an in-patient and the hospital later changes your status to out-patient, "your doctor must agree."
[8] The Center’s December 11, 2008 Weekly Alert addressed various notices that beneficiaries might receive advising them of appeal rights. See footnote 1, supra.
[9] ALJ Appeal No. 1-517883673 (Jan. 8, 2010), available at: www.medicareadvocacy.org\InfoByTopic\ObservationStatus\Decisions\VT_ALJ_01.10.pdf.
[10] Pub. No. 100-2, chapter 1, §10.
[11] Id.
[12] Pub. No. 100-10, chapter 4, §4110.
[13] Medicare Appeal No. 1-496442359 (Nov. 10, 2009), available at: www.medicareadvocacy.org\InfoByTopic\ObservationStatus\Decisions\MN_Maximus_11.09.pdf.
[14] The ALJ described the Manual as requiring medical reviewers to "consider any pre-existing medical problems or extenuating circumstances that make admissions of the beneficiary medically necessary."
[15] ALJ Appeal No. 1-380068132 (April 9, 2009) available at: www.medicareadvocacy.org\InfoByTopic\ObservationStatus\Decisions\WI_ALJ_04.09.09.pdf.
[16] ALJ Appeal No. 1-424979831 (Dec. 9, 2009), available at: www.medicareadvocacy.org\InfoByTopic\ObservationStatus\Decisions\CA_ALJ_inpatient_InterQual_12.09.pdf.
[17] http://www.cms.gov/BNI/Downloads/CMS20014.pdf
[18] The Medicare statute defines "hospitals" as providing both diagnostic and treatment services to inpatients. 42 U.S.C. §1395x(e)(1)(A). It similarly defines "inpatient hospital services" to include diagnostic or treatment services. 42 U.S.C. §1395x(b)(3).
[19] 42 U.S.C. §1395.
All information is copyright © Center for Medicare Advocacy, Inc.
New Tax Laws
Congress has provided us with some much needed certainty, at least for the moment. The billlocks in the current marginal tax rates for all income levels. The measure also sets new parameters for the estate tax, creates a raft of other individual and business tax breaks, and extends unemployment benefits. While the $858 billion bill offers a measure of relief, it may be only temporary. Most of the measure's provisions will expire in 2012 unless they are renewed again. The following is a summary...
Individual Tax Extenders & Incentives
- Estate Tax Compromise - The Tax Relief Act revives the estate tax for decedents dying after December 31, 2009. The maximum estate rate will be 35 percent with an exclusion of $5 million (per person) and is scheduled to sunset on December 31, 2012;
-Gift Tax - For gifts made this year, the gift tax is computed using a new schedule with a top tax rate of 35 percent and a maximum exclusion amount of $1 million. For gifts made after 2010, the gift tax will match the estate tax with a top gift tax of 35% and a maximum exclusion amount of $5 million;
-Alternative Minimum Tax (AMT) Patch - The 2010 Tax Relief Act provides a two year patch intended to prevent the AMT from encroaching on middle income taxpayers by providing high exemption amounts for 2010 and 2011.
-Individual Tax Rates -The 2010 Tax Relief Act extends all individual rates at 10, 15, 25, 28, 33 and 35 percent for two years through December 31, 2012.
-Payroll Tax Cut - Employees' payroll tax (FICA) will be cut from 6.2% to 4.2% for wages earned in the 2011 calendar year up to $106,800 in earnings. Self-employed individuals would pay 10.4 percent on self-employment income to the threshold.
-Capital Gains/Dividends - Qualified capital gains and dividends are currently taxed at a maximum of 15 percent for 2010. The 2010 Tax Relief Act continues this treatment for two years through December 31, 2012.
-Itemized Deduction Limitation - The "Pease" limitation reduces the total amount of a higher-income individual's otherwise allowable deductions. Due to expire at the end of the year, the Tax Relief Act extended it through December 31, 2012.
-Personal Exemption Phase-out - Prior to 2010, individual taxpayers with incomes over certain amounts were subject to the personal exemption phase-out (PEP). The PEP reduces the total amount of exemptions that may be claimed by 2 percent for each $2,500 by which the taxpayer's income exceeded the applicable threshold. The PEP has been extended for two years through December 31, 2012.
Business Tax Extenders & Incentives
-100% Bonus Depreciation - The Tax Relief Act increases the 50% bonus depreciation to 100% for qualified equipment, software and intangible property investments made after September 8, 2010 and before January 1, 2011. 50% bonus depreciation will be allowed after December 31, 2011 and before January 1, 2013.
-Section 179 Expensing - The Small Business Jobs Act increased the Section 179 dollar/investments limits to $500,000/$2M for 2010 and 2011. The Tax Relief Act provides for a $125,000 dollar limit (indexed for inflation) and a $200,000 investment limit (indexed for inflation) for tax years beginning in 2012.
-Research Tax Credit - The Research Tax Credit originally expired at the end of 2009. The Tax Relief Act renews this credit for a period of two years through December 31, 2011. It is retroactive for 2010 and is effective for amounts paid after December 31, 2009.
'New' Dementia Affects 1.3 Million But Is Often Unknown to Doctors
Quick, what is the the second-most common type of progressive dementia in the elderly? Lewy body dementia (LBD) affects an estimated 1.3 million individuals and their families in the United States, but because LBD symptoms can closely resemble other more commonly known diseases like Alzheimer's (the most common type of progressive dementia) and Parkinson's, it is currently widely underdiagnosed and there is a good chance your primary care physician is not familiar with it.
Despite the disease's prevalence, people with LBD have to see an average of three doctors before the LBD diagnosis is made. In order to raise awareness about LBD in the general public and in the medical profession, The Lewy Body Dementia Association is leading the first national LBD awareness campaign, A Week To Remember, from October 10 to 16, 2010.
Lewy body dementia is a degenerative brain disease that has been described by LBD family caregivers as like trying to manage Alzheimer's, Parkinson's and a psychiatric disorder rolled into one disease. Early and accurate diagnosis of LBD is of critical importance because people with LBD respond more poorly to certain medications for behavior and movement than people with Alzheimer's or Parkinson's, sometimes with dangerous or permanent side effects.
Recognition of LBD as a common form of dementia grew to prominence among neurologists only within the past five years, and general awareness of LBD as a disease has yet to make its way to primary care physicians. "Given the growing population of older Americans, at some point in your life LBD will likely affect someone you know," said Angela Herron, President of LBDAs Board of Directors. "The general public, including many primary care doctors and nurses, have never heard of LBD. So in addition to trying to manage a very difficult disease, LBD families find themselves in the unanticipated role of educator and advocate."
LBD symptoms include dementia plus any combination of: unpredictable levels of cognitive abilities, attention and alertness, changes in movement or gait, visual hallucinations, a sleep disorder where people physically act out their dreams, and severe medication sensitivities. The severe medication sensitivities in LBD make it a very difficult disease to treat without worsening already problematic LBD symptoms. At the same time, people with LBD may respond more favorably to certain dementia medications than people with Alzheimer's.
To learn more about LBD
-ALzheimer's Association: http://alz.org/alzheimers_disease_dementia_with_lewy_bodies.asp
-National Institutes of Neurological Disorders and Stroke
Dementia with Lewy Bodies Information Page
Information from one of the National Institutes of Health (NIH).
-Mayo Clinic - Lewy body dementia
Information from Mayo Clinic’s consumer health information Web site.
-Lewy Body Dementia Association, Inc.
A nonprofit organization providing information and assistance to individuals with the disease, caregivers and medical professionals.
Bill Signed Removing 'Mentally Retarded' From Federal Laws
By Academy of Special Needs Planners
President Obama has signed into law a bill eliminating use of the phrase "mentally retarded" from all federal law. The the law is named Rosa's Law after the Maryland 8-year-old with Down syndrome whose family initially advocated for the change.
Rosa's Law was proposed on the heals of several notorious incidents involving celebrities using the "r-word" in interviews, and gained national momentum as more states, including Maryland and Massachusetts, removed "retardation" from the names of departments serving people with intellectual disabilities. The law amends several prominent pieces of legislation affecting people with special needs, including the Elementary and Secondary Education Act, the Rehabilitation Act, and the Individuals with Disabilities Education Act (IDEA), striking all references to "mental retardation" and replacing them with "intellectual disabilities." It also prohibits the federal agencies from using "mental retardation" when creating regulations to enforce these laws.
In an article on CNN.com, Peter Berns, the CEO of the ARC (which used to be called the National Association for Retarded Children until it changed its name in 1992) explained the impact of Rosa's Law. According to Berns, "language plays a crucial role in how people with intellectual disabilities are perceived and treated in society. Changing how we talk about people with disabilities is a critical step in promoting and protecting their basic civil and human rights.
To read the full text of Rosa's Law, click here.
Federal guardianship abuse probe raises major concerns
CNN has an interesting article today about a soon-to-be-released federal study by the Government Accountability Office, raising some major red flags about the guardianship system:
Some court-appointed guardians for incapacitated seniors are not screened before they're appointed, and many are not monitored by the courts after they've taken over the affairs of their charges, resulting in hundreds of allegations of abuse, a federal probe found.
An investigation by the Government Accountability Office found allegations of abuse by legal guardians in 45 states and the District of Columbia, according to an advance copy of the report obtained by CNN. The report is scheduled to be released Wednesday.
In 20 cases studied by the office in which criminal or civil penalties resulted, investigators found that guardians stole at least $5.4 million in assets from 158 victims, the report said. In some instances, these same guardians abused or physically neglected the people they were supposed to help and protect.
In six of the 20 cases examined, the courts failed to screen guardians before giving them control over the financial affairs and care of their wards, the federal agency found.
You can < href=http://mw.cnn.com/snarticle?c=cnnd_us&p=0&aId=20101027:elderly.abuse:1>read the full article here.
The study will be used by the Senate Special Committee on Aging to help implement changes at a national level, so that state court systems can change the way they screen, train and oversee professional guardians and others in the adult guardianship system, such as judges and other legal personnel.
Presently, it is up to each state to monitor, certify and select guardians, with no federal oversight at all. There have been widespread reports of abuse and exploitation for many years; it is refreshing to see the federal government acting to intercede.
It is important to note, however, that flaws in the system and unscrupulous public guardians who take advantage of our country's weakest citizens, while very troubling, do not mean that the entire guardianship system or all professional guardians are bad. There is room for improvement, but guardians play a very important role helping those seniors when no one else can. There are bad apples in any profession, but most guardians are undervalued for the service they provide.
That reality does not change the fact that, clearly, new systems are needed in most states, as this investigation demonstrates. Hopefully changes are coming soon.
If you have a loved one involved in a troubling guardianship situation, and suspect that a guardian is not doing his or her job properly, consider speaking with an experienced guardianship attorney to see what options you have.
Posted by: Andrew W. Mayoras and Danielle B. Mayoras, co-authors of Trial and Heirs: Famous Fortune Fights! and co-founders of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law. Andrew and Danielle are husband and wife attorneys, professional speakers and consultants across the country. Follow us on Facebook.
4 Key changes to Medicare Drug Coverage
By By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
Here's what to look for when reviewing your Part D options during open enrollment this year.
Should I consider changing my Medicare Part D plan during open enrollment? Will there be many changes to Part D prescription drug plans for 2011?
Yes to both questions. New coverage rules, rising premiums and co-payments, the elimination of some popular plans, and the introduction of some intriguing new competitors means it is particularly important that you review all of your Medicare Part D options this year. You have from November 15 to December 31 to pick a Part D plan for 2011.
Doughnut hole shrinking. The big news is the shrinking of the doughnut-hole coverage gap. In 2010, the coverage gap kicks in when your prescription-drug expenses total $2,830 for the year (including both your share and the insurer’s share of the costs). At that point, you generally have to pay all of your drug bills yourself until the total cost of your drugs for the year reaches $6,440, when the insurer picks up most of the bill. Those limits rise slightly in 2011, to $2,840 and $6,448. (By 2020, the dreaded doughnut hole will have shrunk dramatically.)
New in 2011: a 50% discount on brand-name drugs in the doughnut hole. Beneficiaries also get a slight break on the cost of generic drugs in the doughnut hole next year– paying 93% of the cost rather than the full 100%. So if you’ve been paying extra for coverage in the doughnut hole, it’s a good time to reassess your options.
Premiums rising. Average premiums for Part D are rising by just $1 in 2011, to $30 per month, according to the Centers for Medicare & Medicaid Services. But several of the more popular plans are increasing their premiums substantially. Premiums for the ten largest Part D plans are rising by an average of 10% in 2011, according to a study by Avalere Health. And for several plans, those increases come on top of significant increases over the past few years.
Popular plans leaving. Also, a few popular plans are leaving the business, as insurers consolidate some of their offerings. For example, United HealthGroup’s AARP Medicare Saver, the second-most popular Part D plan last year, is going away, and customers will be switched to another of the insurer’s plans. If you are among those moved over, be sure to review all of your options. Another plan may be a better match for your medications.
New plans appearing. Meanwhile, a few interesting, low-cost plans are entering the business in 2011, such as the Humana Walmart-Preferred Rx plan, which costs just $14.80 per month – well below the average price for Part D policies. But your out-of-pocket costs will vary depending on where you purchase your medications. If you buy them at Walmart, Sam's Club or RightSource Rx mail-order pharmacy, you'll pay $2 to $5 for generics (or $0 for generics through RightSource); 20% of the cost of preferred brand-name drugs; and 35% of the cost of non-preferred brand-name drugs. But if you use an outside pharmacy, your co-pay for both levels of generics is $10, and you’ll pay 37% co-insurance for non-preferred generics and preferred brand-name drugs, and a whopping 50% for non-preferred brand-name drugs.
How to compare plans
As always, when comparing your options, consider premiums as well as the coverage for your specific drugs -- a plan with a low premium could cost you more if you have to pay high co-payments for your medications. Ask your doctor if you can switch to generics or other lower-cost drugs before you pick your 2011 plan – the plan with the best deal for brand-name drugs might be different than the best plan for generics (see our Doughnut Hole Calculator to find generics and other lower-cost alternatives).
Depending on the drugs you take, your total out-of-pocket costs can vary even among plans offered by the same company. A beneficiary in Miami who takes four common medications would pay a total of $573 over the year for co-payments plus premiums under the new Humana Walmart Preferred Rx plan, as long as he or she used one of the preferred pharmacies . But, says Ross Blair, CEO of PlanPrescriber.com, that beneficiary would pay much more for the same drugs under other plans offered in Miami: $784 for Humana Enhanced, $1,485 for Humana Complete, $743 for United Healthcare AARP MedicareRx Preferred PDP, $1,230 for United Healthcare AARP Medicare Rx Enhanced PDP, $605 for Wellcare Signature and $706 for Wellcare Classic.
To compare the total costs for your specific medications, go to Medicare.gov’s newly improved Plan Finder tool, which lets you type in your zip code, drugs and dosages, and shows the total out-of-pocket costs -- premiums plus co-pays -- you’d pay for the year.
Also keep in mind that starting in 2011, individuals who earn more than $85,000 (or $170,000 if married filing jointly) will have to pay a high-income surcharge for Part D premiums, similar to the high-income surcharge for Medicare Part B. The amount of the surcharge has not yet been determined .
The system is bigger than the economy of most countries. Find out how to maximize your payout
By Emily Brandon, U.S. News & World Report Money
The Social Security
program turns 75 this week. Since Franklin Delano Roosevelt signed the Social Security Act on August 14, 1935, few workers have not been impacted by the social program. Almost all Americans pay into the system, and Social Security is the largest source of income for citizens age 65 and older. Yet this huge entitlement has many facets, some of which are not widely known. Here are 10 things you may not know about Social Security:
The system is bigger than the economy of most countries.
For the past 20 years, the Social Security program has been the largest single item in the federal government's budget. "The amount of money flowing through the Social Security system each year is larger than the total economies of all but the 16 richest nations in the world," says Larry DeWitt, the U.S. Social Security Administration historian. The Social Security program has collected $13 trillion in income and expended $10.6 trillion in payments since the first tax collections began in 1937 through 2007. That's an amount of money that Social Security's first beneficiary, Ida May Fuller of Ludlow, Vt.—who collected initial payments of $22.54 a month for 35 years—probably never dreamed of.
It's not just a retirement program.
The original Social Security program paid benefits only to retired workers. Later, disability benefits and payments for a beneficiary's spouse and children and were added to the program. "If you graduated from college four years ago, you are already protected against disability," says Edward Berkowitz, professor of history and public policy and public administration at George Washington University. "If you are married and have children, your dependents are protected." Annual Social Security Administration mailings to all workers age 25 and older include an estimated amount that you would be paid if you become disabled and how much your spouse and children would receive if you should pass away.
You pay 6.2 percent of your income into the system.
Almost all American workers (94 percent) pay 6.2 percent of their taxable income, up to $106,800 annually, into the Social Security trust fund. Employers pay a matching 6.2 percent for each worker. Self-employed workers must contribute 12.4 percent of their income annually.
There haven't always been cost-of-living increases.
Annual cost-of-living adjustments didn't become a part of Social Security until 1975 (as a result of a 1972 law). Prior to 1975, an act of Congress was required to increase benefits to keep up with consumer prices. "Before then, benefits were protected from inflation only when Congress chose to notice it," says Berkowitz. Now increases in payments are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers. Annual increases have ranged from 1.3 percent in 1996 and 1998 to 14.3 percent in 1980. For the first time in 2010, there was no cost of living boost because the index did not increase between the third quarter of 2008 and 2009.
Retirees can increase annual payments by waiting to claim.
Workers can begin receiving Social Security benefits at age 62. But payouts increase by 7 to 8 percent for each year you delay your start date, up until age 70. Workers who sign up early receive smaller monthly checks over a great number of years, while those who delay claiming receive bigger payouts for the rest of their life. "If you know you are going to live past the age of 80, you are better off delaying Social Security," says Lita Epstein, author of The Complete Idiot's Guide to Social Security and Medicare. "Baby boomers who know they are going to have a long life are much better off waiting." Epstein, who is spending down her Roth IRA assets in order to delay claiming Social Security, says her benefits will increase by about $500 each month by waiting until age 70 to sign up.
Couples have extra options.
Spouses are entitled to Social Security benefits of up to 50 percent of the higher earner's check if that amount is higher than the payments based on his or her own working record. Widows and widowers are entitled to the higher earner's full retirement payout. Duel-earner couples who have reached their full retirement age can even claim twice by first signing up for a spousal payment, then claiming again later based on their own work record (which will then be higher due to delayed claiming). Ex-spouses are also eligible for benefits if the marriage lasted at least 10 years.
Existing beneficiaries can get a do-over.
If you've already signed up for Social Security and received a reduced payout, it's not too late to boost your check. If you pay back the entire amount you have already received from Social Security without interest, you can then qualify for higher payments for the rest of your life.
Social Security numbers have significance.
The first three digits of your Social Security number are assigned based on geographical region, with the lowest numbers being assigned in the Northeast and increasingly higher numbers assigned to residents in the West. The middle two digits, called the group number, are allocated in a precise but nonconsecutive order between 01 and 99. The last four digits are issued in a sequential order. Over 420 million unique numbers have been issued and they are not reused after a person's death. Social Security numbers have been assigned shortly after birth since 1989, which makes younger American's Social Security numbers somewhat predictable if you know a person's date of birth and home town, which is common information that young people list on social networking websites, according to research by Alessandro Acquisti, an associate professor of information technology and public policy at Carnegie Mellon University. "Do not offer personal information such as date of birth and hometown publicly," he advises.
Paper Social Security checks will soon be retired.
Social Security recipients will be required to collect payments by direct deposit into a bank account
or a government Direct Express Debit MasterCard beginning on March 1, 2011. Existing beneficiaries must switch to electronic payments by March 1, 2013. Paperless payments are expected to save $300 million over five years, according to Treasury Department estimates.
The trust fund has a projected deficit.
The Social Security trust fund is currently projected to be sufficient to provide payments until the end of 2037. Then, unless changes are made to the program, there will only be sufficient resources to pay about 78 percent of scheduled benefits. Congress is currently considering a variety of potential fixes, including tax increases, benefit cuts, and pushing back the retirement age. A U.S. Senate Special Committee on Aging report released in May found that relatively minor tweaks could put the trust fund back on sound financial ground for at least 75 more years. "It's a shame that the tone of the 75th celebration is sort of nostalgic," says Berkowitz. "I would hope that the 75th anniversary is not only about how good things used to be, but also about how good things could still be in the future."
Talking about the decline of driving skills long before problems are evident may help minimize conflict, experts say. Asking "Have you thought about what you'd do if you could no longer drive?" is one way to start a discussion.
The Hartford insurance company offers a brochure, "We Need to Talk," which includes an advance directive similar to a living will in the event that a person can no longer drive safely and tips about how to have such conversations. To see the brochure, go to http://www.thehartford.com/talkwitholderdrivers/brochure/brochure.htm.
One way to deflect a confrontation may be to focus on powerful medications a person is taking, or a medical problem that's less stigmatizing than dementia, such as poorly controlled diabetes.
In other cases, emphasizing the possible legal and financial consequences that could result from an accident might be persuasive. Maryland driving instructor Carol Wheatley recalls one woman whose reluctant husband agreed to stop driving after she told him, "Honey, I don't want to lose our house."
Families should be prepared to take action by calling a physician or filing a report with motor vehicle officials if a driver denies having a problem. Sometimes it is necessary to confiscate the keys or to disable, remove or even sell a car. If you're unsure about intervening, consider whether you'd let your children ride with the driver.
-- Sandra G. Boodman
-- Difficulty merging into traffic or staying in lane.
-- Abrupt lane changes.
-- Increased aggressiveness or irritation while driving.
-- Speeding or going too slow for road conditions.
-- Several fender benders or unexplained dents on the car, garage or mailbox.
-- Warnings or traffic tickets.
-- Difficulty turning the head or moving the foot from the gas pedal to the brake.
-- Getting lost in familiar surroundings.
-- Using a "co-pilot" such as a spouse or friend to direct driving.
-- Sandra G. Boodman
SOURCES: AARP; National Highway Traffic Safety Administration; the Hartford; AAA Foundation for Safety
Families Needed for New TV Show, "Estate Wars".
Andrew and Danielle Mayoras are consulting for a new television pilot called “Estate Wars,” which involves families fighting or in conflict over personal effects (antiques, coin collections or jewelry) after a loved one passes away. The goal of the show is to have the conflict resolved with the help of an appraiser and mediator.
If you know any families involved in a conflict like this that would be interested in being on TV, please have them contact us at contact@trialandheirs.com as soon as possible. The pilot is being produced for a top-ranked national cable station by the Emmy Award winning production company behind “Storm Chasers”, “The Rachel Zoe Project”, and “LA Ink”.
Memory Lapse or Alzheimer's? Multi-Tasking Fuels Forgetting
By Sharon Jayson, USA TODAY
SAN DIEGO — Those twinges of forgetfulness that appear to be getting more pronounced may worry you. After all, the statistics are scary: Every 70 seconds, someone in the USA develops Alzheimer's. But every lapse isn't a signal that your memory is kaput.
Cheryl Edwards-Cannon, 57, says she relies on Post-it notes and spiral notebooks to help her remember, since she's multitasking "the majority of the time."
Edwards-Cannon, of Belmont, Mich., is married and works for a company that manages charter schools. She travels 10 to 15 days a month. She also oversees care of her father, who is in assisted-living, and her mother, who suffers from dementia and requires a different place, four miles from her father's.
"When I think I'm being overly forgetful, I have to give myself a timeout. 'You need to take a deep breath here,' " she reminds herself. "I keep a spiral notebook in both cars so if something should click, I can write it down in the moment. I write it down or use the recording device on my cellphone, like 'Remember to pick up Aqua Velva for Dad.'"
There are many reasons for memory lapses: aging, stress, lack of sleep, distraction, inattention and disease. There's a lot coming at us, and sometimes we may feel like we're on information overload.
"Distraction may be just a very important factor that goes hand-in-hand with multitasking," says Suparna Rajaram, a psychology professor at Stony Brook University in Stony Brook, N.Y.
Whether new information sticks is "very dependent" on how much you focus, she says.
"Even if you're distracted when remembering, you may be all right, but if you're distracted when learning, you pay for it," she says.
Rajaram is among researchers presenting new findings on memory at the American Psychological Association's annual meeting, which opens today in San Diego. About 14,000 psychology professionals are expected to attend the four days of presentations.
Researchers are finding out more every day about the awareness that we call memory. Decades of studies have shown that the ability to remember something from the past — what the experts call retrospective memory — is just part of the story. Those who study the intricacies of the mind are also discovering the key role of prospective memory, which involves intentions for the future — often where we find our memory fails us the most. Although we may be preoccupied with warding off Alzheimer's (the most common type of dementia) with tactics such as exercises or word challenges, researchers are trying to uncover just why our memories fail and how we can keep our minds sharp.
"People are trying to multitask more than they used to, but they don't have to keep as many things in memory as they used to, because they have electronic devices that do that," says psychology professor Nelson Cowan of the University of Missouri-Columbia. "Overall, I'm not sure whether this is training our brains or letting them go lax."
Normal effect of aging
Cowan is presenting research on "working memory," which is the small amount of information that we can hold in our minds at any moment. The limit on what we can remember varies by situation; a study he published earlier this year in the journal Current Directions in Psychological Science has found that normal adults can remember about three or four chunks of new information (letters, digits or words) at a time, in a matter of seconds.
Angela Karwoski, 48, of Marietta, Ga., who works in financial services, says she's noticing that it's harder to remember the kinds of things she used to easily recall. "My business is very detail-oriented. Years ago, I would remember all that stuff. Now, I really feel like I can't remember details like I did 15 years ago."
Karwoski says she thought she had a "very, very good memory, but I see that as I'm getting older, it's not so true."
Some reduction in memory is typical in healthy, normal aging, says Mark McDaniel, a psychology professor at Washington University in St. Louis. Most lapses involve remembering arbitrary information, such as a name that goes with a face or a PIN.
But there will be definite signals when memory really starts to go awry, he says.
"An older adult who has started to have trouble remembering the way home and the streets in the neighborhood where they have lived for a while has a potential sign they've got something pathological," McDaniel says. "If you're aging normally, you would not have difficulty remembering common environmental landmarks and how to get home."
And that bugaboo of all time: Where are the keys?
"One reason they can't remember where they put their keys is they're not paying attention and are thinking about something else," McDaniel says.
"When you put your keys down, stop and say out loud, 'I'm putting my keys on my dresser.' It makes you pay attention and allows encoding of that fact. The other thing is always put your keys in the same place, so it just becomes a habit to go to that place to look for your keys."
Inattentiveness definitely leads to bad memory, says McDaniel, who will not be at the meeting but co-authored a presentation being made on Sunday.
"Fatigue and lack of sleep also puts us at risk to put our information into memory. Stress is a big one," he says. "We think it's because when you're stressed, you're preoccupied, and if you're preoccupied, you're not attentive to the situation at hand and to prospective memory tasks."
Another reason for not being able to remember could have to do with social situations, suggests Rajaram. Her work is part of an emerging area of research that considers the social nature of memory and the effect of group interaction. Rajaram says the findings she will discuss at the meeting are counterintuitive: "People remember less when they remember together."
Sleep on it
As an example, she cites what can happen when friends go to a rock concert and don't sit together but are in the same place at the same time. "Even if people were to experience something together, when they later try to recall it together, they're not always successful. ... It's as if they are blocking each other," she says.
Memories that are stressful or emotional are more likely to be stored and remembered, says Christa McIntyre, assistant professor of cognition and neuroscience at the University of Texas-Dallas, who will present research.
"Multiplication tables you had to study, but something emotionally arousing will be remembered after a single experience," she says. "You usually don't remember every new environment you enter, but if you trip or embarrass yourself, you would remember that. That would make the difference."
Brain-imaging research in the lab of Daniel Schacter, a psychology professor at Harvard University in Cambridge, Mass., is focused on the role that memory plays in thinking and planning for the future, as well as trying to better understand why people err in remembering.
"Most memories have elements of accuracy and some of distortion," he says.
Schacter, editor of a 1999 book about false memories and cognitive neuropsychology, says there also are a lot of similarities in brain activity during true and false memories.
"The therapeutic techniques that encourage people to imagine events that might have occurred when they were young can attribute to false memories. A lot of the same brain regions are active," Schacter says. "It turned out for people who claim to recover (memories of) childhood sexual abuse in therapy, it was hard to corroborate the accuracy of evidence, as opposed to people who spontaneously recovered memories on their own. That turned out to be more reliable."
Research published last year in the journal Learning and Memory suggests sleep may reduce mistakes in memory. A study to be presented at the conference supports the concept that sleep improves memory in infants. Rebecca Gomez, associate professor of psychology at the University of Arizona-Tucson, finds that in infants, sleep is essential for early learning and retention.
"This shows babies aren't like adults," she says. "They need to sleep fairly soon after learning."
Edwards-Cannon says sleep hasn't really been a problem for her, but sometimes things she intends to do slip her mind, such as, "I meant to bring the clothes with me to replenish Mom's closet, but I got preoccupied with something else and I forgot."
Because there are few visual cues for prospective memory, McDaniel says, it's easier to forget an intention, such as to take your lunch to work. If it's hidden in the fridge, you're more likely to forget it. But if it's out on the counter, you'd have a visual cue.
"All of us are distractible, and we get on another line of thought and the original thought has left our awareness," he says.
Rajaram adds that people vary in memory capacity; some are just more forgetful. "Forgetfulness is not just being poor at remembering; it also occurs because as we gain experience in life and get older, we have more to remember," she says.
Help for Alzheimer's caregivers
Government and private organizations can aid those taking care of a loved one or seeking a facility.
By Lisa Zamosky, Special to the Los Angeles Times
July 26, 2010
If you're caring for a loved one with Alzheimer's, you're in plenty of company. Nearly 11 million people take care of the 5.3 million Americans with the disease, a number that's expected to grow to almost 16 million by 2050, according to the Alzheimer's Assn.
The demands of care-taking often place enormous pressure on a family's time and resources. A 2009 AARP and National Alliance for Caregiving survey found that caregivers — most commonly middle-aged women caring for a parent — give more than 20 hours of their time per week. Most say it interferes with work, and the longer someone is a caregiver, the more likely her own health is to suffer.
Experts say that handling the challenges of caring for someone with Alzheimer's depends in large part on the steps you take to reach out for support and information and devise a plan.
Get a thorough evaluation from a specialist. "You can get diagnosed incorrectly," says Nancy Foldi, director of the Neuropsychology Laboratory of Aging and Dementia at Queens College, City University of New York. Many families don't realize that some illnesses, such as urinary tract infections or depression in an older person, can look like dementia.
A comprehensive evaluation typically involves a full medical history, as well as psychological and neurological evaluations. And the key is to work with experts. "You need a medical provider who identifies dementia as a major interest in their practice," says Dr. Gary Kennedy, director of the Division of Geriatric Psychiatry at Montefiore in New York. "There are some family physicians and internists who are superb with people with Alzheimer's disease and other dementias. There are others who are not, and you may need to consult either a neurologist or geriatric psychiatrist."
Alzheimer's disease research centers are a good option for a comprehensive initial evaluation and treatment, and to connect with a group of Alzheimer's specialists for ongoing care. You can also inquire about research studies, something experts say can improve an Alzheimer's patients' cognitive abilities even if they receive a placebo.
The Alzheimer's Assn., which has chapters throughout the country, can help consumers locate specialists and research and treatment centers in their area. Call the 24-hour hotline at (800) 272-3900 or visit the association's national website (http://www.alz.org).
Services can also be located through the Family Caregiver Alliance's family care navigator, a state-by-state resource (http://www.caregiver.org).
For Southern California residents, a guide to local diagnostic centers and treatment resources can be found on the home page of the Alzheimer's Assn.'s California Southland Chapter's website (www.alz.org/californiasouthland).
Make financial and legal plans early. "Find an attorney who understands elder law and financial planning and get your house in order," advises Cathy Ladd, vice president of programs for the Alzheimer's Assn., California Southland Chapter.
According to Ruth Phelps, president of the National Academy of Elder Law Attorneys, a meeting with an elder-care lawyer should happen as soon as possible after an Alzheimer's diagnosis and include discussions about estate and long-term care planning, as well as putting in place or updating legal documents such as advance healthcare directives, wills and trusts. This is the time to discuss end-of-life wishes, such as whether a feeding tube or cardiac resuscitation will be used.
Failing to put legal structures in place before a person's memory declines often blocks family members from helping in a crisis. Without planning, "how do you help [your mom] pay her electric bill because no one else is on her bank account?" Phelps asks. "You can't step in and get into her bank or go to her doctor with her. The doctor won't tell you anything because of HIPAA," the federal law that protects patients' rights to privacy. "You come to a roadblock where the only choice is to go to court and be appointed conservator." Conservators are granted legal control to make medical, legal and financial decisions on someone's behalf. In California, the process can take four to six weeks.
Medicare does not cover long-term nursing-home stays, which can cost $60,000 to $200,000 a year, depending upon where you live. Unless you are able to pay yourself or have good long-term care insurance, you'll need help planning for the option to use the Medicaid system (called Medi-Cal in California).
For information about healthcare as well as legal and financial options, consumers can go to Help4srs.org, which provides information about healthcare documents, estate planning and more.
You can download advance directives for each state at the National Hospice and Palliative Care Organization's Caring Connections website (http://www.caringinfo.org). They can be filled out without the help of an attorney.
To find an attorney specializing in elder care, check the National Academy of Elder Law Attorneys' online directory (http://www.naela.org). In California, legal and financial services (as well as others) are available at no cost at 11 Care Resource Centers, a statewide system established by the California Department of Mental Health, including one in Los Angeles based at USC's Andrus Gerontology Center.
Don't go it alone. "Most people are going to need some help at home with the person they're caring for at some point," Kennedy says. Adult day services are one resource. They provide Alzheimer's patients with a safe environment in which to spend the day and caregivers some much-needed respite. Some programs are paid for by Medicaid, while others accept only private pay. Medicare does not cover the cost of adult day services.
California residents on Medi-Cal can access a program called In-Home Supportive Services (IHSS) (http://www.dss.cahwnet.gov/cdssweb/PG139.htm), which aims to keep seniors who might otherwise be placed in a nursing facility safely at home. Medicare doesn't cover in-home care (except for brief periods following hospitalization). But a three-year pilot project funded by the new health reform law will test the idea of in-home care coverage for Medicare recipients.
The Department of Health and Human Services offers an Eldercare Locater (eldercare.gov or [800] 677-1116) to help families find aid such as home care, caregiver support services and transportation. The National Institute on Aging's Alzheimer's Disease Education and Referral Center (http://www.nia.nih.gov/alzheimers) also provides a wealth of resources.
Evaluate nursing homes carefully. Many families decide early on that they will never place their loved one in a nursing home or similar residence. Yet most people with the disease do, ultimately, move into some kind of residence providing professional care. That isn't necessarily a bad thing, says Dr. G. Allen Power, clinical associate professor of medicine at the University of Rochester, N.Y., and author of the book "Dementia Beyond Drugs: Changing the Culture of Care." "I've seen people get a lot better when they move to the nursing home because they get many shifts of people providing the care that one tired person was trying to do. They have better socialization, they have people who are more skilled … and all of a sudden, they come to life."
But many families worry about how to find a place that provides good care. The best way to determine the quality of care, experts say, is to ask about the nursing staff turnover rates. "That's the single most important criterion, because it's the nursing staff that is there with the patients," Kennedy says. "If 25% of the nursing home staff is turning over every year, that would bother me."
A new website (CalQualityCare.org), sponsored by the California HealthCare Foundation in partnership with UC San Francisco, helps consumers choose among available long-term care options in California. The site also rates the care provided by a number of long-term care providers. And Medicare has a tool called Nursing Home Compare (http://www.medicare.gov/nhcompare) that provides detailed information about nursing homes across the country.
Care for yourself as well. While looking after someone with Alzheimer's, try not to forget about yourself, says Carolina Rodriguez, study coordinator with UCLA's Easton Center for Alzheimer's Research. Look for support groups (the Alzheimer's Assn. is a good place to start), care-giving classes and ways to help you relax — be it meditation or stress reduction classes or time for a cup of coffee with friends — to help maintain your own health.
New Senate Estate Tax Offering Would Levy Billionaire Surtax
Motivated by the first billion-dollar estate passing to heirs tax-free, Sen. Bernard Sanders (I-VT) and four co-sponsors have introduced a bill that would return the estate tax to the 2009 exemption level of $3.5 million but add a progressive tax rate structure that would start at 45 percent, rise to a top level of 55 percent, and add a 10 percent surtax on billionaires. The proposal would be retroactive to the start of 2010.
The Responsible Estate Tax Act (S. 3533), introduced on June 24, 2010, is cosponsored by Sens. Sherrod Brown (D-OH), Al Franken (D-MN), Tom Harkin (D-IA), and Sheldon Whitehouse (D-RI). According to its sponsors, the proposal would bring in at least $264 billion over a decade while exempting 99.7 percent of Americans from paying any estate tax. The retroactivity provision would likely face a court challenge from heirs of wealthy individuals such as the late Dan L. Duncan, a Texas oil and gas pipeline magnate who died in March with a net worth estimated at $9.8 billion. Duncan's heirs stand to inherit his wealth estate tax free, although an aide to Sen. Sanders said he believes retroactivity would be constitutional and would withstand a court test.
The bill would:
- Create a progressive rate so the very wealthy pay more. The tax rate for estates valued between $3.5 million and $10 million would be 45 percent, the same as the 2009 level. The rate on estates worth more than $10 million and below $50 million would be 50 percent, and the rate on estates worth more than $50 million would be 55 percent.
- Include a billionaire's surtax of 10 percent. According to Forbes magazine, there are only 403 billionaires in the United States, with a collective net worth of $1.3 trillion. The tax would apply to estates above $500 million, which would allow couples o pass $1 billion on to heirs without facing the surtax.
- Protect family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes. The bill also would increase the maximum exclusion for conservation easements to $2 million.
- Close estate and gift tax loopholes as President Obama proposed in his budget for next year. The White House estimates that closing the loopholes would generate at least $23.7 billion in revenue over 10 years
"The Sanders proposal is one extreme in the current debate," Clint Stretch, an analyst at Deloitte Tax, told the Wall Street Journal. "The challenge for the Senate is whether the members can agree to anything at all."
Iowa Sen. Charles Grassley, the highest-ranking Republican on the Senate Finance Committee, said "I welcome the other side's finally putting a proposal on the table."
The Dangers of DIY Estate Planning
By Kimberly Palmer, US Money
Every year, thousands of consumers bypass lawyers and create their own wills, powers of attorney, and other estate planning documents with the help of online tools and books. As one might expect, lawyers don't like this do-it-yourself approach. They say it breeds mistakes, since when it comes to legal issues, one size never fits all. Do they have a valid point, or are they just trying to protect their own livelihoods?
The answer might be a little bit of both. As one might expect, the pros and cons of creating your own legal documents without professional help vary by individual. Almost everyone agrees that for people with complicated family or legal situations involving children from multiple spouses or great wealth, professional help is the way to go. But for people with relatively straightforward needs—a will for a single person without much money, for example—there's more room for disagreement.
"People are starting to realize that they can be empowered to handle common legal matters on their own," says Chas Rampenthal, general counsel for LegalZoom, a Los Angeles-based company that sells Web-based DIY legal documents. And despite some of the risks that other lawyers point out, Rampenthal insists that having a DIY document is better than having no document at all. According to a LegalZoom survey, about 3 in 4 married couples with minor children lack a legal document that names a guardian for their children. And on the other end of the spectrum, all the legal assistance money can buy didn't help Michael Jackson get his affairs in order before his unexpected death last summer.
While Rampenthal acknowledges that some people would likely benefit from professional help, he says that LegalZoom, which has about a million customers, helps people who otherwise wouldn't get any help at all. After all, lawyers are expensive, and many people simply don't bother to seek one out. "People who benefit from us are individuals who are otherwise not going to pay $300 an hour for a lawyer," he says.
There are plenty of lawyers who disagree with him: "Unless you are single and have absolutely no money," says Brooklyn-based estate planning and tax lawyer Hani Sarji, you need an estate planner, because people tend to make mistakes when they fill out their own forms online. "People might get a false sense of security from DIY estate planning," Sarji adds, and answering one question incorrectly or overlooking something such as appointing a guardian for children can lead to major problems down the road.
On her blog, estate planning lawyer Leanna Hamill writes about a colleague who had a client who used an online do-it-yourself will that he failed to update after some of his beneficiaries died and he opened new bank accounts that weren't mentioned on the form. "That is the reason to have an attorney assist you with this process. We know the questions to ask, and we know what to do with the answers," she writes.
"Without a lawyer, you might not understand the terms," says Deborah Jacobs, author of Estate Planning Smarts. Therefore, you could inadvertently give someone more power than you want to when creating a "durable power of attorney" document, for example. That document essentially gives someone else the power to take care of your finances if you become incapacitated. Jacobs says that if that person isn't trustworthy, he or she could steal from you. She also warns that if the document isn't executed properly—in some states you need witnesses to your signature—then it might not even be valid.
Another risk, says Jacobs, is that when it comes to transferring your money to family members after you pass away, a self-written will might contain holes that lead to errors. Without the help of a lawyer—or sometimes even with the help of a lawyer—a person might not prepare for contingencies such as being pre-deceased by children, divorce, or the births of new children. (Again, the King of Pop comes to mind, as does Anna Nicole Smith.)
A third problem with do-it-yourself wills is the complicated world of estate taxes. For people with estates of over $3.5 million, who in normal years can expect to pay a federal estate tax, 2010 provided a temporary reprieve: Due to a quirk, the federal estate tax doesn't exist this year. But next year, barring any moves by Congress, it will return for anyone with assets over $1 million. That has led to a lot of legal maneuvering that even lawyers have trouble keeping up with, let alone people without professional help. "I think it's so completely irresponsible for anyone to suggest that people should go and write their own estate planning documents in an environment where lawyers are wringing their hands and tearing their hair out to devise a strategy for clients that will cope with the current uncertainties," says Jacobs, who spent $4,500 after her son was born to draw up her estate planning documents.
Jacobs suggests using some time-saving strategies to cut down on legal costs. She suggests reading up on estate planning before scheduling an appointment with a lawyer, so you go into the meeting prepared and can skip much of the introductory conversation on estate law. If the lawyer is charging you by the hour, every minute you save is less money out of your pocket. Jacobs also says that small firms tend to be less expensive than large firms, but she adds that you want to be sure you're visiting a lawyer with expertise in estate planning.
Lastly, Jacobs suggests telling your lawyer in advance that you want to keep costs to a minimum, so they should inform you if anything will cost extra and avoid customizing documents beyond what's necessary.
DIY yourself advocates and estate planning lawyers do agree on one thing: the importance of keeping estate planning documents up-to-date. So whether you use a fill-in-the-blank form or a boutique lawyer, be sure to revisit your documents at least once a year to make any necessary changes.
$250 Medicare checks coming
By Julianne Pepitone, staff reporterJune 7, 2010: 1:17 PM ET
NEW YORK (CNNMoney.com) -- The government is mailing $250 checks this week to seniors who fall into the gap in Medicare's prescription drug coverage.
The first checks will be sent June 10, three weeks earlier than scheduled, to about 80,000 people. The rebates are the first step in closing the Medicare "donut hole."
The Department of Health and Human Services estimates that about 4 million seniors will get the rebates in 2010.
The move is one of the first tangible results of the health reform law. At a press conference last month, HHS Secretary Kathleen Sebelius said closing the donut hole is "one of the biggest ways the new law is going to help seniors."
Seniors get stuck in the donut hole if their prescription drugs cost too much to be paid for through basic Medicare coverage, but aren't expensive enough to qualify for catastrophic coverage.
"We think our members will see these checks as a good faith down payment on what they've been looking for so long: closing this coverage gap," said Cheryl Matheis, AARP's senior vice president for health strategy.
"Many Medicare patients are on a fixed income, so every dollar helps," she added.
What's the donut hole? In addition to a $310 deductible, Medicare beneficiaries pay 25% of their drug costs until the total reaches $2,830 for the year. Then, they fall into a coverage gap. At that point, enrollees must pay all costs out of pocket until their annual expenses exceed $6,440. After that, seniors pay 5% of drug costs for the rest of the year.
Starting in 2011, seniors who fall into the donut hole will receive a 50% discount on brand-name drugs. The discount for generic drugs will be 7%. Those figures will rise over the years, eventually reaching a total 75% discount that effectively will eliminate the gap in 2020.
The Centers for Medicare and Medicaid Services said checks will be mailed monthly throughout the year as Medicare beneficiaries hit the donut hole. Those who qualify can expect to receive their check within 45 days of reaching the gap.
The CMS also warned of potential scams, noting that qualifying seniors will receive their checks automatically and are not required to fill out any forms. Seniors don't need to provide any personal information such as Medicare or Social Security numbers in order to receive the rebate.
"Medicare beneficiaries waited a long time to get prescription drug coverage in the first place," said AARP's Matheis. "Once we close the gap, that need will finally be truly fulfilled."
As Senate Deal Breaks Down, Probability of $1M Estate Tax Exemption Rises
Last Updated: 5/21/2010 4:42:45 PM
An agreement between Senate Democrats and Republicans on an estate tax proposal has broken down, according to one of the lead negotiators, Senate Minority Whip Jon Kyl (R-AZ). Observers say that with each passing day, estate tax legislation that would apply retroactively appears less and less likely, while the probability grows of a return to a 55 percent rate and $1 million exemption beginning January 1, 2011.
"I don't know what's going to happen," said Sen. Mary Landrieu (D-LA). "It just doesn't seem like there's enough votes to do anything."
Kyl said the deal broke down because of Senate Democrats' unwillingness to allow any legislation to reach the floor that lacked the support of a majority of its members.
"We no longer have an agreement because the Democratic side has decided that unless a matter has a guaranteed majority of Democratic votes going in, they're not going to allow it on the floor, at least not voluntarily," Kyle said. "So we have to find a way to get a reasonable permanent estate tax reform to the floor where members can vote on it."
This happening anytime soon seems unlikely, with GOP members holding firm for a $5 million exemption with a 35 percent tax rate, while "80 percent" of Senate Democrats oppose this plan, according to Sen. Bob Casey (D-PA).
"I think we're not yet at the point where we're drawing lines, but the idea that we're going to give an incredible economic advantage to less than 1 percent of our taxpaying population is really offensive to me, to understate it dramatically," Casey said. "Most of our caucus is very concerned about what will happen on the estate tax, and I think there are some who would probably be with Sen. Kyl, but I think it's a small number."
"My personal opinion remains that were not likely to see any estate tax legislation before the November elections, and that retroactive legislation is less likely with each passing day," writes Matthew Crider of the Sacramento Estate Planning Examiner
The Andrew and Danielle Mayoras Interview
Leslie Shepard-Owsley
June 09, 2010 -
Andrew and Danielle Mayoras of West Bloomfield co-authored the book, "Trial and Heirs: Famous Fortune Fights," which sheds a bright light on many loopholes and disputes involving wills, trusts, and estates. The married couple have a solid reputation and extensive experience in estate planning, and are sought after educators for individuals and businesses around the country. In addition to being renowned as an estate planning attorney, Danielle is a Credentialed Professional Gerontologist. Andrew is likewise renowned as an attorney and for his blog, "The Probate Lawyer Blog: Famous Fortune Fights!" that explores stories of national interest. His speciality includes contested legal issues affecting seniors, caregivers and their families including probate litigation, guardianships and conservatorships, and exploitation of the elderly. Together they co-founded The Center for Elder Law, The Center for Special Needs Planning, and The Center for Probate Litigation. They graduated from the University of Michigan Law School, and work for The Center for Elder Law, a division of the Law Firm of Barron, Rosenberg, Mayoras and Mayoras, in Troy. The couple, with their three children, split their time between West Bloomfield Township and southern California.
SCN: We understand you specialize in elder law. How do you define this type of practice, and what are some of the key issues involved?
DM: Elder law is estate planning plus. Besides the basic wills and trusts and power of attorneys, we're going to go beyond that and also look at what happens if there is a long term care issue. How does someone pay for a nursing home, home care, assisted living. It's really as I said, estate planning-plus.
SCN: How was your book conceptualized and how did it evolve?
AM: Our book was a two-year process that we spent researching and writing. We wanted a way to help families discuss the uncomfortable topic of estate planning and planning for when they pass away, and also help families avoid the family fights that unfortunately are far too common. We compiled a great collection of celebrity stories to help teach people what not to do, because the same mistakes these celebrities are making, everyday families make as well.
SCN: Were people reluctant to speak to you?
DM: Fortunately for us, we worked with celebrities in the sense that we worked off of public documents and court records. There are some cases from our practice in Troy, Michigan, as well, in the book, but the majority are high profile celebrity cases.
SCN: Share with our readers some of the more interesting cases you uncovered during your research.
AM: There are a lot of them. One of my favorites is the Ted Williams case. Ted Williams was a famous baseball player. There was a big fight between his daughter from his first marriage, and the kids from his second marriage, over whether he should be cryogenically frozen when he passed away. He had signed a note saying that he and his two kids wanted to be frozen just in case medical science could ever bring them back together, and so the older daughter fought it because the will said he wanted to be cremated. It was a long nasty battle. In the end, the note won and he was cryogenically frozen after he passed away. It shows not all of these cases are about money. Emotion plays a very big role, especially when you have second marriage situations.
DM: As Andy said, it's very hard to choose because there are so many different cases, but each case illustrates a different principal, so I'm going through my head trying to pick. I think I'll go with the Sonny Bono case, which is a great case for your readers and listeners because that is someone who obviously had a lot of wealth, who was a congressman and an entertainer, who probably had a lot of sophisticated planners around him, but believe it or not, when he passed away at the young age of 62 he did not even have a simple will in place. I think this is a great case to illustrate that no one is promised tomorrow and people of all different ages need to do the planning and not procrastinate. In his case, because he didn't have a simple will in place, his widow had to go through a lot of grief in the court system dealing with a lot of creditors coming out of the woodwork, including Cher. There was an alleged "love child" who came forward and said she was entitled to a portion of the money and if Sonny would have had this simple will in place, he could have saved his widow and his children a lot of grief, time and stress.
SCN: What can the average person glean from these celebrity estate fights?
AM: It's interesting, because even though these same fights and same mistakes that happen in celebrity families are over a lot more money, the exact same mistakes lead to fighting in everyday families. The Sonny Bono case that Danielle talked about is a great example. Everybody needs to have a will. A lot of the other stories, in fact, all of them have lessons that everyday families can take away to learn how to do the proper estate planning and also protect their families from fighting. The celebrity angle gives families a good basis to start a dialogue because even talking about this subject with loved ones is uncomfortable and having celebrities to talk about to compare to your own situation(to) makes that conversation easier.
SCN: A lot of the scenarios you cite in the book make one wonder how these oversights occurred when the parties had the money and could afford the guidance to protect their assets. How did good estate planning go bad?
DM: I think, as Andy said, you don't have to be rich and famous to make mistakes, and even if you have a lot of money you still make mistakes. I think the statistics show us that about two-thirds of Americans don't even have a simple will. I find that as an estate planning attorney and an educator, one of the reasons that this happens so frequently is because everybody is busy, number one. We're all busy with our aging parents, with our children, with our jobs--we're all juggling a lot of different things and it's easy to put our estate planning on the back burner. Secondly, it's because, let's face it, it's not always an exciting thing to do. A lot of us don't want to think of our own mortality. We don't want to think about what happens when we are no longer mentally competent or what happens when we pass away. It's something we want to sweep under the carpet and not think about, and because that lack of planning is done on our part, our family pays the price.
SCN: What, if any, southeast Michigan cases did you write about, and why?
AM: We did intermingle several cases from our law practice in Oakland County for the reason to show that these fights don't just happen to celebrity families. There are a couple of celebrity stories based in SE Michigan --Rosa Parks is a good one that comes to mind. Her estate has been fought over in the court system of Detroit for years over accusations that her estate executors weren't doing what they were supposed to do. In terms of cases from our practice, there's a number of cases we like to share. One of them which is one of our most favorite, involves a nurse who actually had a boyfriend and used sex medication to try to coerce him out of his money and to leave all of his assets to her and nothing to his children. That led to a long lawsuit, and we were able, on behalf of the children, to protect the father and recover the money, but it just shows these crazy stories don't just happen to the rich and famous.
SCN: It's fascinating to read about cases like Mark Twain, who requested in his will that his works remain private but were published in the New York Times because a will is public information, whereas a trust would respect his privacy. It appears as though he was misdirected by his attorney. Should the attorney be faulted in this case, or where else would you attribute the blame.
DM: I think that's a tough question and it's really a case-by-case basis. I think of Michael Jackson's case, that we talk about in the book, he had a trust but he never transferred his assets into the trust and that's why we're seeing this media circus going on in the public court. So I think you can't say that the attorney is at fault in all cases. A lot of the time, attorneys may give the client information, and the client may drop the ball and not follow through.
SCN: As part of your practice, you deal with the changes of the rules of Medicaid eligibility for nursing home coverage. Given the large population of seniors, what advice can you give on the new Medicaid laws going into effect?
SCN: How can people get educated and be a self-advocate, especially if they don't have the resources to retain an attorney?
DM: There are pro-bono organizations out there, and your listeners and readers can feel free to go to our website at the centerforelderlaw.com or contact us, and we'll be happy to share those resources. We also have a monthly e-letter that comes out from the Center of Elder Law called the "Insight," and they can register for that at our website as well and that will provides families with free resources and educational articles to help them deal with elder law and special needs as well as general estate planning issues.
SCN: Tell our readers what key questions they should be concerned about relative to estate planning, and what they should be looking for in an attorney?
AM: Actually in our book, Trial and Heirs, we have several tips to find a good planning estate attorney because not all attorneys are created equal, and there are a lot of attorneys who may dabble in estate planning without specializing in it. It's not the number of gray hairs that the attorney has that shows they've got experience in this area. It's important that when people talk to attorneys, they interview them, find out how much of their practice is involved in estate planning, how long have they been doing it, and work with a specialist. That's the number one rule--working with an experienced estate planning attorney is the best way to prevent these kinds of problems from happening.
SCN: Do you have any speaking engagements planned in the area in the upcoming months, and if so where?
DM: Absolutely. We have a lot of speaking engagements scheduled everywhere from Northern Michigan to Arizona. If individuals want to learn more about our upcoming speaking engagements, they can go to our website at: trialandheirs.com and can register for the legacy update which is also a a monthly e-letter that comes out and keeps families apprised of not only our speaking engagements coming up, but get information on the latest celebrity cases and what their families can learn from those cases.
ALERT: New Medicaid Regulations
Issue Alert - Six month housing allowance for short stay Medicaid-funded nursing home residents (BEM 100)
Document Actions
Date: 05/05/2010
Program Area: Medicaid (MA)
Issue Summary: Medicaid funded nursing home residents whose doctors certify they are likely to remain in the nursing home six months or less can apply for a “Special Director” or “Olmstead” Exception to permit them to divert income to pay necessary expenses to maintain their home rather than using their income for their patient pay obligation to the nursing home. Directions for caseworkers regarding how and when to adjust beneficiaries’ patient pay amounts after an exception has been granted are now included in BEM 100, p. 9, effective May 1, 2010.
Persons Affected: Medicaid funded nursing home residents whose doctors certify they are likely to return home within six months.
For More Information: Michigan Poverty Law Program, 3490 Belle Chase Way, Suite 50, Lansing, MI 48823. Phone: (517) 394-2985, x 231. Fax: (517) 394-4276
Background
Pursuant to 42 CFR 435.725(d), states may permit Medicaid funded nursing home residents to use their income to maintain their homes for up to six months instead of paying the majority of their incomes to their nursing homes as their patient cost of care. During the last year, Michigan’s Medical Services Administration (MSA) has begun implementing this federal option as a benefit available through a Special Medicaid Director’s or “Olmstead” exception. MSA may eventually expand this option so that individual caseworkers are permitted to adjust the beneficiary’s patient pay amount without first obtaining approval from the Medicaid Director.
What's Happening?
Although MSA has already granted a number of special exceptions to permit beneficiaries to divert income to maintain their homes, directions for caseworkers regarding how to proceed in these cases after the exception has been granted have just been included in BEM 100, p. 9.
The policy does not clarify how beneficiaries can seek the Special Director’s or “Olmstead” exception initially and contains confusing directions for caseworkers how to proceed once the exception has been granted by the Medicaid Director. Moreover, the policy set forth in the BEM appears more restrictive than MSA had initially proposed and may not accurately reflect current policy and practice.
According to the BEM, caseworkers should divert income for maintenance of the home, up to the amount of the shelter expense set forth in BEM 546, if:
- The Medicaid Director has approved the exception
- A physician has certified that the individual is medically likely to return home within six months
- The individual is currently Medicaid eligible and residing in a nursing facility
- The home is not occupied by a community spouse
- The individual has a legal obligation to pay the housing expenses and had provided verification of the expense
- The request is being made by the resident or an individual authorized to act on behalf of the resident.
Moreover, the effective date of the exception is the first day of Medicaid eligibility as a nursing facility resident.
These provisions are confusing because exceptions will be granted by the Medicaid Director only if the request is made by the resident or an authorized representative and includes the medical certification, proof of housing expenses, and other information necessary to obtain an exception. Once the exception is granted, the caseworker’s role should be merely recalculating the patient pay amount after deducting the amount of income the Medicaid Director has approved to be diverted for legitimate housing expenses. By identifying the standard that needs to be met for approval of the exception, the provision appears to require caseworkers to obtain and re-examine the same information that has already been provided to the Medicaid policy staff and that was deemed sufficient by the Medicaid Director to approve the request for an exception. Requiring caseworkers to duplicate this effort will lead to delay, unnecessary burdens on caseworkers and clients, and the possibility of a denial at the caseworker level despite approval by the Medicaid Director.
Moreover, the policy includes restrictions that were not initially imposed by the Medicaid Director. Requests for exceptions may be granted even if the individual does not have a legal obligation to pay housing expenses if he or she can provide evidence that he or she routinely pays those expenses or that circumstances have changed and that his or her housing would be imperiled if he or she failed to pay that expense. Moreover, some individuals who have already left nursing facilities have been able to obtain retroactive adjustments to their patient pay amount if they used their income to maintain their homes while in the facility and therefore incurred a debt to the nursing home for failing to pay their patient pay amounts.
Contrary to the language of the BEM, the Medicaid Director may approve exceptions for individuals for up to six months for a period beginning after the first day of Medicaid eligibility as long as a doctor certifies that the resident is likely to go home within six months from the date the benefit is effective. This could be important if a resident is able to pay housing expenses out of savings or through family contributions or other means for some period of time. In that case, he or she may wish to utilize the six month housing allowance only at the point where other sources of funding are no longer available to maintain housing. This may be permissible as long as it is within six months of when the doctor certifies the resident is likely to go home.
What Should Advocates Do?
Advocates for Medicaid beneficiaries in nursing home who seek to maintain their homes and whose doctors are willing to certify they are likely to go home within six months should request an exception. To do so they must provide:
1.Authorization to disclose protected health information, DCH-1183 available at www.michigan.gov/mdch
2. Proof of housing expenses, such as rent or mortgage payments, utilities, telephone. Expenses such as car payments or auto insurance and internet fees are not countable as a Medicaid expense.
3. Physician statement verifying this individual is medically likely to return home within six months. The information should be submitted to:
Special Director Exception
Eligibility Policy Section
P.O. Box 30479
Lansing, MI 48909
When Your Parents Are Not Down the Street Long-Term Care
Reprinted from Source: Kate Ashford, Money Magazine staff reporter, May 2007
You live here. They live there. The best ways to help your aging parents when they're not down the street.
When Allison Gage gave birth to her first child three years ago in Minneapolis, it should have been a joyful moment. Instead, she was worried sick about her elderly parents, Baldwin and Linda Yeung. The couple live 2,000 miles away in Sonoma, Calif. and hadn't returned any of her phone calls.
As it turns out, the Yeungs had decided to spend the night at a relative's house because they were simply too tired to drive home. The experience, however, was an eye-opener for Allison, who realized that she had no way of finding out if her parents - both in their 70's- were in trouble. “It's just as important to know that they're safe as to know that they're not safe,” she says. “The worst part was not knowing.”
In recent years, more adult children are finding themselves hundreds or even thousands of miles away from their aging parents - and struggling to manage the geographic gap. More than 5 million caregivers, defined as anyone providing unpaid care or support to an adult, live at least an hour from the person they're assisting, according to a 2004 survey by the National Alliance for Caregiving and AARP. And experts predict that the number will increase substantially as baby boomers age.
“People are very mobile these days,” says Chip Simon, a Poughkeepsie, N.Y. certified financial planner. “Families are living at a distance, and before you say, 'I need you to move out of your house and closer to me,' the intermediary step is managing things from afar.”
If Mom and Dad are in West Palm Beach and you're in Chicago, it can be tough to make sure everything's okay. You have a career and a home of your own to tend to, and popping by is out of the question. But that doesn't mean you can't be involved and even help them out substantially from wherever you are. Here's how to make it work.
Have the talk. It's a tough topic to broach, but experts agree: Don't wait for a crisis. “If you ask any attorney or C.P.A. for the saddest cases, they'll talk about the clients who run into their office when there's an emergency,” Simon says. “Assuming some of the responsibility for an aging parent is a process, not an event.”
The easiest way to start the conversation: Take advantage of a comment or complaint. Are they starting to talk about the house being a burden? Ask if you can help them take care of some things.
Once you've cleared that delicate hurdle, you can tackle trickier matters - such as their finances. Ask if they'd like some help paying their bills. Blame the hard-to-read fine print, blame their busy lives, but offer a hand.
If you can't visit often, try calling a geriatric-care manager, usually a professional such as a nurse or social worker who specializes in elder care. He or she can drop by your parents' house and see what kind of help they might need.
If you think your parents might be resistant, shift the perspective. “You can say, 'Mom, I'm worried about you, and it would really help me if you'd consider having this person come over and check on you,' “ says Nina Herndon, a geriatric-care manager in San Francisco. “That way the parent is doing something to help the child, rather than acquiescing to care they don't think they need.”
Find someone near your parents' home, the Web site of the National Association of Professional Geriatric Care Managers is a good place to start.
Help them automate. The more of your parents' finances you can put on autopilot, the better. Make sure their Social Security and pension checks are being deposited directly into their bank account. Have utility-bill balances billed to a credit card each month (if possible) to take advantage of the card's built-in consumer- protection features.
If your parents are comfortable with the idea, monitor their bank and credit-card accounts online (get their user names and passwords) so you know where their money is going. You'll be better equipped to spot trouble before it escalates.
Create a safety net. Get to know the services available to your parents where they live. When you visit, introduce yourself to your folks' neighbors and friends so they know who you are. Get names, phone numbers and e-mail addresses so you'll know who to call if, say, you need someone to run over and check on Mom.
It also pays to track down the local agency on aging, which can be a great resource. Visit eldercare.gov to find one in your parents' city.
Also, come up with an emergency contact plan. Consider getting your parents a cell phone with large buttons they can see and program emergency numbers - including yours - into the speed-dial slots.
And since any telephone is both a lifeline and a source of scams, have your parents' phone number delisted from telemarketing directories by visiting donotcall.gov.
Put powers in place. If you're going to help your parents with their financial affairs, you should, if possible, be empowered to act on their behalf. Talk to them about establishing a durable power of attorney. You want one that goes into effect the moment it's signed - as opposed to the “springing” type, which applies only after a doctor declares your parents incapacitated.
“There's that gray area between health and incapacitation, where they just need a little bit of assistance,” says John Peelle, a certified financial planner in San Diego. “Durable power of attorney is the way to go.”
There's also something called a medical power of attorney, which enables you to make decisions about your parents' health care. You'll be able to talk to doctors on their behalf and get medical information about them, something that can be extremely difficult under current patient-privacy laws. If you have siblings, consider splitting financial and medical powers of attorney between you, so no one bears the whole burden.
Get help. If you can't be with your parents frequently, be prepared to lean on professionals. For her parents, Allison found a local financial adviser who speaks Chinese, their native language, because she couldn't always be available for their requests for advice. She helped the adviser set up her parents' portfolio and has copies of their financial statements mailed to her.
The important thing is to get started, and recognize that it might take a while to get the ball rolling. “The biggest mistake people make is doing too much too fast,” says Lancaster, Pa. certified financial planner Rick Rodgers. “You want to be perceived as helping, rather than coming in and taking over. That really frightens older people.”
Fortunately for Allison and her parents, the process has been a welcome one. “Having someone you trust oversee such an important aspect of life, such as our finances, especially in retirement is invaluable,” says Allison's mother Linda Yeung. “It's such an important aspect of life. And there's nobody we trust more than our own daughter.”
What Happen's When The Family Can't Get Along?
How To Spot, Avoid and Address Family Disputes And Related
Legal Problems That Effect Seniors
By: Andrew W. Mayoras, Esq.
awmayoras@brmmlaw.com
www.TrialAndHeirs.com
www.ProbateLawyerBlog.com
www.TheCenterforProbateLitigation.com
Dealing with a loved one with Alzheimer's disease, dementia or another condition causing loss of competence is difficult enough. The problem becomes even more troublesome when the condition acts as a spark to ignite family conflict. Sibling rivalries, second marriages, the refusal to accept reduced competency, and simple greed are but some of the situations that add fuel to the fire and foster dramatic family feuds. Often the fire grows so great that families become torn in half, spending months B or even years B battling in probate court. Sadly, many families are never able to repair the damage, emotionally or financially.
No one wants to end up in probate court fighting in a public family squabble. What can be done to avoid it? Sometimes nothing. If someone else is determined to steal from, cheat, take advantage of, or improperly care for someone suffering from Alzheimer's or dementia, you may have no choice but to go to court. Other times, however, messy and expensive probate court battles can be prevented, or at least minimized. How? Two ways: Know when to call an experienced probate litigation attorney, and know your legal rights.
The first one is easy. Anytime you suspect that someone is not acting properly towards an elderly loved one in a way that will either jeopardize that persons- care or well-being, or may result in a loss of assets, then you should call an attorney who regularly represents clients in contested probate matters. Many such attorneys offer a low-cost or even free consultation. For example, the experienced attorneys at The Center For Probate Litigation will provide a free consultation to discuss your specific situation and let you know whether action is required. Too many families regret waiting and doing nothing - when in doubt, call an expert.
The result was somewhat surprising, because in a smaller previous trial, Dimebon had shown what some experts characterized as better results than any of the drugs already approved for Alzheimer’s disease. It seemed to improve cognitive function or at least stave off mental decline for about 18 months, while the existing treatments do so for only about six months, experts said.
The second way to protect your family and often avoid drawn out court proceedings is to become educated about your legal rights. The Center For Elder Law and The Center For Probate Litigation have issued a series of articles for families of a loved one with Alzheimer's disease or dementia, to educate about what they may face when a family dispute or conflict threatens to surface. These articles address the following topics under Michigan law:
- Challenging a Power of Attorney or Patient Advocate Designation
- Guardianship & Conservatorship Disputes
- Theft and Exploitation of Assets
- Legal Challenges Involving Joint Assets, Wills and Trusts
These articles are for information purposes only and are not a substitute for legal advice.
To view the articles, visit www.thecenterforprobatelitigation.com and click on the "Articles" button on the top.
Social Security Adds 38 New Medical Conditions that Qualify for Disability Help
Adding new conditions, like early-onset Alzheimer’s disease, will speed benefits to thousands of disabled
Feb. 12, 2010 – The latest move by the Social Security Administration, in an ongoing effort to speed up the decision process for consideration of applications for disability benefits to those not yet age 65, is the addition of 38 new medical conditions to the list of Compassionate Allowances, which clearly qualify applicants. The new conditions range from early-onset Alzheimer’s disease to rare diseases that primarily affect children.
This is the first expansion since the original list of 50 conditions - 25 rare diseases and 25 cancers - was announced in October 2008, according to the announcement yesterday by Michael J. Astrue, Commissioner of Social Security.
The complete list of the newly recognized medical conditions that clearly qualify patients for Social Security and Supplemental Security Income disability benefits - Compassionate Allowance conditions - is below.
“The addition of these new conditions expands the scope of Compassionate Allowances to a broader subgroup of conditions like early-onset Alzheimer’s disease,” Commissioner Astrue said.
“The expansion we are announcing today means tens of thousands of Americans with devastating disabilities will now get approved for benefits in a matter of days rather than months and years.”
The quick identification of these conditions allows the agency to electronically target and make speedy decisions for the most obviously disabled individuals.
In developing the expanded list of conditions, Social Security held public hearings and worked closely with the National Institutes of Health, the Alzheimer’s Association, the National Organization for Rare Disorders, and other groups.
"The diagnosis of Alzheimer's indicates significant cognitive impairment that interferes with daily living activities, including the ability to work," said Harry Johns, President and CEO of the Alzheimer's Association.
"Now, individuals who are dealing with the enormous challenges of Alzheimer's won't also have to endure the financial and emotional toll of a long disability decision process."
“This truly innovative program will provide invaluable assistance and support to patients and families coping with severely disabling rare diseases,” said Peter L. Saltonstall, President and CEO of the National Organization for Rare Disorders (NORD).
“On behalf of those patients and families, I want to thank Commissioner Astrue and his enthusiastic team for creating and now expanding a program that will have a direct impact on the quality of life of thousands of individuals.".
“The initiative not only assists those whose applications are quickly processed, but also assists those whose applications need more time and attention from SSA adjudicators,” said Marty Ford, Co-Chair, Social Security Task Force, Consortium for Citizens with Disabilities.
“We are pleased to see today's expansion and look forward to working with Commissioner Astrue on further expansion of this decision-making tool and other ways to expedite determinations and decisions for disability claims.”
“We will continue to hold hearings and look for other diseases and conditions that can be added to our list of Compassionate Allowances," Commissioner Astrue said. “There can be no higher priority than getting disability benefits quickly to those Americans with these severe and life-threatening conditions.”
Social Security will begin electronically identifying these 38 new conditions March 1.
For more information about the agency’s Compassionate Allowances initiative, go to www.socialsecurity.gov/compassionateallowances.
New Compassionate Allowance Conditions
1. Alstrom Syndrome
2. Amegakaryocytic Thrombocytopenia
3. Ataxia Spinocerebellar
4. Ataxia Telangiectasia
5. Batten Disease
6. Bilateral Retinoblastoma
7. Cri du Chat Syndrome
8. Degos Disease
9. Early-Onset Alzheimer’s Disease
10. Edwards Syndrome
11. Fibrodysplasia Ossificans Progressiva
12. Fukuyama Congenital Muscular Dystrophy
13. Glutaric Acidemia Type II
14. Hemophagocytic Lymphohistiocytosis (HLH), Familial Type
15. Hurler Syndrome, Type IH
16. Hunter Syndrome, Type II
17. Idiopathic Pulmonary Fibrosis
18. Junctional Epidermolysis Bullosa, Lethal Type
19. Late Infantile Neuronal Ceroid Lipofuscinoses
20. Leigh’s Disease
21. Maple Syrup Urine Disease
22. Merosin Deficient Congenital Muscular Dystrophy
23. Mixed Dementia
24. Mucosal Malignant Melanoma
25. Neonatal Adrenoleukodystrophy
26. Neuronal Ceroid Lipofuscinoses, Infantile Type
27. Niemann-Pick Type C
28. Patau Syndrome
29. Primary Progressive Aphasia
30. Progressive Multifocal Leukoencephalopathy
31. Sanfilippo Syndrome
32. Subacute Sclerosis Panencephalitis
33. Tay Sachs Disease
34. Thanatophoric Dysplasia, Type 1
35. Ullrich Congenital Muscular Dystrophy
36. Walker Warburg Syndrome
37. Wolman Disease
38. Zellweger Syndrome
Source: seniorjournal.com and Social Security Administration
Alzheimer's Rates Expected to Rise Dramatically for Michiganders
Early Detection Webinars Enable Families to Plan for the Future
(Southfield) May 2010 – With over 180,000 Michigan individuals living with Alzheimer’s disease, the Alzheimer's Association - Greater Michigan Chapter has partnered with Art Van and the Community Foundation of Southeast Michigan to offer an exciting workshop free of charge to Michiganders with questions and concerns about the warning signs of Alzheimer’s disease. These workshops will be offered in person and as webinars.
“It’s important to seek guidance and support as soon as possible if you notice cognitive changes that disrupt daily life in yourself or someone else,” said Carrie Collins, Client Access Director for the Alzheimer's Association. “Early detection of Alzheimer’s disease gives people with Alzheimer’s the opportunity to plan for their future and take advantage of the resources that are currently available to them. Even more exciting, our webinars allow busy caregivers and professionals the chance to access this information from their home.”
Benefits of an early diagnosis of Alzheimer’s disease
- Benefit from treatments that may improve symptoms and help maintain a level of independence longer
- Have more time to plan for the future
- Increase chances of participating in clinical drug trials, helping advance research
- Participate in decisions about their care, transportation, living options, financial and legal matters
- Develop a relationship with doctors and care partners
- Benefit from care and support services, making it easier for them and their family to manage the disease
Alzheimer’s Association 10 Warning Signs of Alzheimer’s
Everyone forgets a name or misplaces their keys occasionally. Many healthy people are less able to remember certain kinds of information as they get older. Memory loss that disrupts daily life is not a typical part of aging. It may be a symptom of Alzheimer's, a fatal brain disease that causes a slow decline in memory, thinking and reasoning skills. Every individual may experience one or more of these signs in different degrees. If you notice any of them, please see a doctor.
Memory loss that disrupts daily life. One of the most common signs of Alzheimer's is memory loss, especially forgetting recently learned information. Others include forgetting important dates or events; asking for the same information over and over; relying on memory aides (e.g., reminder notes or electronic devices) or family members for things they used to handle on their own.
- What's typical: Sometimes forgetting names or appointments, but remembering them later.
Challenges in planning or solving problems. Some people may experience changes in their ability to develop and follow a plan or work with numbers. They may have trouble following a familiar recipe or keeping track of monthly bills. They may have difficulty concentrating and take much longer to do things than they did before.
- What's typical: Making occasional errors when balancing a checkbook.
Difficulty completing familiar tasks at home, at work or at leisure. People with Alzheimer's often find it hard to complete daily tasks. Sometimes, people may have trouble driving to a familiar location, managing a budget at work or remembering the rules of a favorite game.
- What's typical: Occasionally needing help to use the settings on a microwave or to record a television show.
Confusion with time or place: People with Alzheimer's can lose track of dates, seasons and the passage of time. They may have trouble understanding something if it is not happening immediately. Sometimes they may forget where they are or how they got there.
- What's typical: Getting confused about the day of the week but figuring it out later.
Trouble understanding visual images and spatial relationships. For some people, having vision problems is a sign of Alzheimer's. They may have difficulty reading, judging distance and determining color or contrast. In terms of perception, they may pass a mirror and think someone else is in the room. They may not realize they are the person in the mirror.
-
What's typical: Vision changes related to cataracts.
New problems with words in speaking or writing. People with Alzheimer's may have trouble following or joining a conversation. They may stop in the middle of a conversation and have no idea how to continue or they may repeat themselves. They may struggle with vocabulary, have problems finding the right word or call things by the wrong name (e.g., calling a "watch" a "hand-clock").
- What's typical: Sometimes having trouble finding the right word.
Misplacing things and losing the ability to retrace steps. A person with Alzheimer's disease may put things in unusual places. They may lose things and be unable to go back over their steps to find them again. Sometimes, they may accuse others of stealing. This may occur more frequently over time.
- What's typical: Misplacing things from time to time, such as a pair of glasses or the remote control.
Decreased or poor judgment. People with Alzheimer's may experience changes in judgment or decision-making. For example, they may use poor judgment when dealing with money, giving large amounts to telemarketers. They may pay less attention to grooming or keeping themselves clean.
- What's typical: Making a bad decision once in a while.
Withdrawal from work or social activities. A person with Alzheimer's may start to remove themselves from hobbies, social activities, work projects or sports. They may have trouble keeping up with a favorite sports team or remembering how to complete a favorite hobby. They may also avoid being social because of the changes they have experienced.
- What's typical: Sometimes feeling weary of work, family and social obligations.
Changes in mood and personality. The mood and personalities of people with Alzheimer's can change. They can become confused, suspicious, depressed, fearful or anxious. They may be easily upset at home, at work, with friends or in places where they are out of their comfort zone.
- What's typical: Developing very specific ways of doing things and becoming irritable when a routine is disrupted.
If you recognize any warning signs in yourself or someone else, the Alzheimer’s Association recommends consulting a doctor immediately. Early diagnosis of Alzheimer’s disease or other dementias is an important step to getting appropriate treatment, care and support services. To find out more information on the warning signs of Alzheimer’s disease, visit the Alzheimer’s Association at www.alz.org/10signs.
The Alzheimer’s Association
The Alzheimer's Association is the leading voluntary health organization in Alzheimer care, support and research. Our mission is to eliminate Alzheimer’s disease through the advancement of research; to provide and enhance care and support for all affected; and to reduce the risk of dementia through the promotion of brain health. Our vision is a world without Alzheimer’s. For more information, visit www.alz.org.
Tools you don't want to use
Financial-planning software doesn't adequately address retirement risks: Study
Source Robert Powell, MarketWatch
BOSTON (MarketWatch) -- In among the year-end statements now arriving in your mailboxes from financial-services firms are invitations to use their retirement-planning calculators. You'd be wise to ignore that offer.
Or, if you do, use them with this caveat in mind: Most tools neglect one or more significant retirement risks, according to a report in December by the Society of Actuaries and Actuarial Foundation (SOA).
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"Financial-planning software makes more in-depth planning possible," according to the report, Retirement Planning Software and Post-Retirement Risks. "But the majority of available tools are still not effectively addressing the wide range of individual issues related to retirement."
The SOA analyzed 12 financial-planning software programs most commonly used by individuals and financial advisers. The tools were either available to individuals over the Internet or were designed for use by financial planners for their clients.
Failing to address key issues
- Longevity. The handling of longevity risk varies considerably among the programs with some apparent inconsistencies. This is an important planning factor because the range of lifetimes between users can be significant with different probabilities of living beyond a given age. (Last August, the Centers for Disease Control and Prevention reported that U.S. life expectancy reached almost 78 years in 2007.)
- Unexpected events and risks. Financial-planning software under-represents extreme events, such as the current financial crisis. The examined retirement programs generally were unable to analyze the risks of variable-rate mortgages or large declines in housing prices. The majority of software surveyed did not consider the possibility of a large stock market and housing market decline occurring at the same time that a person nearing retirement has lost a job.
- Housing: There is inconsistent treatment of housing as an asset for use in financing retirement. Some programs allow users to specify whether they are willing to sell their home to meet retirement expenses.
- Social Security: Software programs inadequately estimated the level of Social Security benefits users are entitled to, and did not direct consumers to the Social Security Administration Web site to obtain an accurate benefit estimate at no charge.
- Annuities: Software programs usually did not evaluate the possibility of annuitization -- converting assets into lifetime income annuities -- as an option to reduce risk. There was also a lack of consideration of different options for timing of payouts.
'Some help is better than no help'
Not all agree with the SOA's assessment. For consumers, any software is better than no software, said Joel Bruckenstein, a certified financial planner and publisher of "T3: The Newsletter" and author of the 2009 Software and Technology Survey.
The problem, according to Bruckenstein, is that the firms and organizations that offer free software programs are between a rock and hard place. Consumers won't use anything that takes longer than five minutes to complete, but any software that takes less than five minutes can't address all the factors that need addressing -- such as the timing of Social Security benefits, the use of home equity in retirement, or life expectancy.
"For consumers, these types of software programs are a good start," Bruckenstein said. "Some help is better than no help."
As for the financial-planning software programs used by financial professionals, such as EISI's NaviPlan, Money Tree and PIEtech's MoneyGuidePro, Bruckenstein said much of the SOA's criticism is somewhat unfair. For instance, the SOA report criticized the default longevity settings used in the professional programs. But to Bruckenstein's way of thinking, any professional worth his or her salt wouldn't use the default -- they'd override that setting and plug in more personalized data. "The defaults are starting points," he said.
Bruckenstein said it's somewhat true that software programs used by financial professionals don't take into account unexpected risks and events. But that's a function of which professional is using which software and which entity is regulating that professional. In some cases, for compliance reasons, an adviser might not be able to factor in unexpected risk and events.
As for the criticism that housing is not considered in most retirement-income planning programs, Bruckenstein said it's near impossible to get the industry to agree on whether such an asset should be included. "There's no right answer," he said. Some include it, some don't. In the main, however, he said clients of professionals typically don't need to tap the equity in their home in retirement. So there's typically no need to include it in software programs used by professionals, he said.
Bruckenstein agreed that very few, if any, software programs used by professionals or consumers help users optimize Social Security benefits. Some do have links to Social Security's Web site, but he said adding this functionality could be difficult. "Some programs cannot give you every scenario," he said.
As for annuities, there's no industry agreement on the use and value of such products in a retirement-income plan, he said. Insurers tend to want such solutions included in software programs while other entities don't.
Few use planning tools
Now, whether these programs have flaws and whether those flaws are significant might not matter one whit in the hearts, souls and wallets of average Americans. According to the SOA, which also conducted a survey of consumers, 55% of individuals "are skeptical about retirement computer software and online tools, saying they have little to no trust that the tools provide an adequate assessment for retirement planning."
What's more, the SOA asked Americans which types of tools, resources or services they or their spouses used to prepare for retirement. The result? Just one in 10 surveyed used retirement planning software, while 36% relied on advice from friends and family. Here's hoping their family and friends know a thing or two about longevity, Social Security and behavioral finance.
Read the SOA's release and report at this site.
Read Bruckenstein's report at this site.
Robert Powell is the editor of Retirement Weekly. Learn more about Retirement Weekly here.
60 MINUTES: "DELAY, DENY AND HOPE THAT I DIE" (print version)
Segment from January 3, 2010, focuses on the problems getting claims through the red tape at the Veterans' Benefits Administration.
NOTE from Larry Scott, VA Watchdog dot Org ... Following is the print version of the 60 MINUTES segment on the Veterans' Benefits Administration.
Why The VA Frustrates Veterans
60 Minutes: Two Wars Are Slowing The Large Bureaucracy, Delaying Benefits
Watch the video here
(CBS) There is a sacred tradition in the military: leave no one behind on the battlefield. But many veterans are beginning to believe their country has left them behind at home, once they're out of uniform and in need of help. That help is supposed to come from the Department of Veterans Affairs and the financial compensation it gives to veterans disabled by their military service.
It was Abraham Lincoln who said the purpose of the VA was to "care for him who shall have borne the battle." But the wars in Iraq and Afghanistan have pushed the VA further behind in that mission, and today there are a million veterans waiting for the VA to handle their disability claims.
That has led some to latch onto another motto making the rounds for how the VA operates: "Delay, Deny and Hope That I Die."
"When I hear that, I will tell you that it really troubles me. As somebody who has devoted 35 years of my life to this organization, and to serving veterans, it's extremely troubling that there are veterans who feel that way," the VA's Deputy Undersecretary for Benefits Michael Walcoff, told 60 Minutes correspondent Byron Pitts.
Last year, $30 billion dollars - one third of the VA's total budget - was paid in disability compensation to nearly three million veterans.
To receive a disability benefit, a veteran has to be honorably discharged.
"They have to have a current disability, and provide evidence that it was service related?" Pitts asked Walcoff.
"That it's connected to their service, right," he replied.
"Why, then, is the claim form 23 pages long?" Pitts asked.
"A 23-page application form I think is probably, goes beyond just what is required. And one of the things that we're looking at is to try to simplify the process," Walcoff said.
That process has been strained by a flood of disability claims - everything from combat wounds to injuries off the battlefield, illnesses and psychological disorders. Since 2003, 400,000 claims have come from veterans of the wars in Iraq and Afghanistan, hundreds of thousands more from aging veterans of earlier conflicts.
Add to that the recession, which is forcing more veterans to turn to the VA for help. Paul Sullivan was an Army scout during the Gulf War in 1991 and later spent six years working at the VA, analyzing trends in disability claims.
"All of those things have resulted in the Veterans Benefits Administration facing a backlog of one million claims," Sullivan told Pitts.
Sullivan said the system is "absolutely overwhelmed." He is now executive director of Veterans for Common Sense, a group that champions veterans issues.
"Veterans wait on average about six months to receive an initial answer on a disability claim. If a veteran disagrees with VA's decision, the veteran waits another four years. That is a crisis," Sullivan said.
And that's how Army veteran Joe Devins sees it. In late 2003, he was on patrol in Baghdad when he says an IED exploded near his truck.
Remembering the blast, he told Pitts, "I'd say for the first few seconds afterwards, I wasn't really sure if I was dead or alive."
Devins left the Army in 2004 and now receives $704 a month for a back injury and for migraine headaches that he says were caused by the IED. Devins also claims to suffer from sleeplessness, anxiety and anger. "I haven't had a single night's sleep without either over-the-counter or prescription medication since probably December of '03."
Yet it wasn't until two years after his discharge that a VA counselor told Devins he had PTSD (Post-traumatic stress disorder) and should apply for benefits. So he did.
Ten months later, the VA rejected his claim.
Asked why they denied the PTSD claim, Devins told Pitts, "Because they said I had to prove, show them proof that the incident with the IED actually happened."
But Devins was already getting benefits for the migraines he says were caused by the IED. Asked if that doesn't prove he was there, Devins told Pitts, "I would think so, but apparently that wasn't enough proof for them."
"What do you think they were saying about you, though?" Pitts asked.
"That I was making stuff up," Devins said. "That I was just out to get money."
The VA doesn't say that Devins is making up his claim, only that he can't prove it. He gets benefits for migraines, simply because they started while he was in the Army. But there is no mention of an IED explosion in his military records.
Devins' situation is not uncommon. It can be difficult to pin down a particular cause of PTSD. So the VA says it is changing the rules for these claims, and veterans will no longer have to prove a connection between specific incidents and their Post-traumatic stress disorder.
Changing the rules will take some of the work load off of people like Ron Robinson, a VA employee for 13 years, and a veteran who spent 20 years in the Army.
Robinson told Pitts he was proud to serve and work for the VA, but that he's not proud of the work the VA is doing. "We can do better," he said.
Problems in the VA's benefits branch have been the subject of GAO reports and congressional hearings for years. Starting in 2007, the VA received sizable increases in its budget and began hiring thousands of new employees. Yet the backlog of claims keeps growing.
"We keep tryin' to fix it, but it keeps gettin' out of hand. We throw more money at the problem, more people, we still have the problem," Robinson said.
"So, what is it then? If more people can't fix the problem, more money can't fix the problem, how do you fix it?" Pitts asked.
"It's a culture. It's a leadership problem," Robinson replied.
Robinson points to the VA's requirement that employees meet production quotas. It's a convoluted system of earning points for processing the paperwork in a claims file. The idea is to bring down the backlog, but Robinson says it also leads employees to make mistakes.
"Because they're focused on, as opposed to dealing with this veteran's case properly, they're focused on getting their points for that case?" Pitts asked.
"Of course. Anyone will tell you that," Robinson said.
Asked what happens if employees don't meet their quotas, Robinson said, "Well, if you don't get your points, you know, you don't get bonuses, promotions, you know, you don't get the bennies."
"I don't believe that they're being pressured to produce claims at the expense of quality," the VA's Michael Walcoff said. "We stress over and over again to our employees that quality is our number one indicator, that that's absolutely a requirement for successful performance."
But last March, the VA's inspector general discovered that the VA was making more mistakes than it reported: the internal investigation found that nearly one out of four files had errors. That's 200,000 claims that "may be incorrect."
Attorney Douglas Rosinski has been handling veterans' cases for ten years.
He characterizes the VA's disability benefit system as "broken."
"This is one vet's file," Rosinski told Pitts, showing him a cardboard box full of documents. "I've seen claims files that were two or three of these boxes.
Claims are being denied unfairly, Rosinski says, because VA employees don't have the time to read the files thoroughly. "When you get a denial, and it says, 'We didn't see,' that's right. I mean, they're not lying, but if you don't look, you don't see. And even if you're looking, it's hard to find out what's in there," he told Pitts.
Michael Walcoff told Pitts there is no incentive to deny claims. "And there's no pressure from anybody to deny a claim. And I can't say it any simpler than that."
David Pitts is an Air Force veteran and one of Rosinski's clients; he served for 18 years.
"Is your country serving you now?" Byron Pitts asked.
"It's not my country that's doing this, it's the VA. You know, there is no prouder American than I am," David Pitts replied.
In 1968, David Pitts was on temporary duty in Korea when the Tet Offensive in Vietnam caught American forces off guard. Pitts says he was quickly dispatched to deliver communication codes across Vietnam when his helicopter made a hard landing.
"When we hit, we hit hard, got out of that and I didn't have any problem for that for about a year. But this was what I started receiving the VA disability for it," he said.
David Pitts receives $644 a month for back and leg injuries that he says are related to the crash. He also believes he is eligible for additional benefits because Vietnam War vets with illnesses that could have been caused by exposure to Agent Orange are given automatic compensation.
The problem for David Pitts is he can't prove he was even in Vietnam. He says his two brief assignments were under verbal orders, and he was told there are no records of his having been in the country.
"You had people and equipment just flooding into Korea and suddenly Tet happens," he explained. "And it was just - it was a period of mass confusion."
He said recordkeeping wasn't a priority at the time. "Recordkeeping was not any type of priority at the time."
In recent years, David Pitts says he tried to find his former commanding officer from Korea, plus a hometown friend he says he ran into while in Vietnam, but both had died. Without corroboration or records, Pitts never applied for the benefit. Then in November of 2008, out of the blue, the VA sent him this letter.
"It says, 'According to records with the Department of Veterans Affairs, you were stationed in the Republic of Vietnam during your military service,'" Byron Pitts read. "And you got this letter, you thought what?"
"Well, somebody has found something," David Pitts replied.
Based on the letter, David Pitts filed a claim. It took the VA ten months to review it before denying it.
It's an example of the complexity that both the VBA and veterans face in establishing what happened years - sometimes decades - after events have taken place. The VA says it needs evidence to grant a claim and it could not find any records putting David Pitts in Vietnam.
The VA told 60 Minutes that the letter was sent by mistake, something it has not explained to David Pitts.
The Obama administration and the VA say they have given top priority to ending confusion over military records and that new computer technology will someday track veterans from their first day in uniform through the rest of their lives.
"Why should veterans believe what you say? That, 'Ah ha, now we're gonna get it right'?" Pitts asked Michael Walcoff.
"That's a tough question," he replied. "Because, certainly, some of the problems that we see in VBA have existed for quite a while. There have been efforts, believe me, to try to improve the system."
"The one difference that I think really is in place right now is that, I believe that we are seeing the advent of technology that is going to allow us to really change the basic way that we process benefits," he added.
"Why should the average American care about the fact that veterans, their benefits are delayed, whether it's three years, five years, seven years?" Pitts asked Ron Robinson.
"Put on a uniform," he replied. "We served our country honorably and faithfully. And we deserve, we deposited into America's bank account. And when we come home, it's time for us to make a withdrawal. That's why we should care."
Dennis Hopper battling his wife; says she's after his will
Dennis Hopper was already fighting against advanced prostate cancer. Now the 73-year-old actor is turning up the heat in his battle against his wife, 41-year-old Victoria. He filed for divorce in January, and according to published reports, the key factor is his will.
Victoria is a 25% beneficiary under Hopper's will. But, in the case of divorce, the couple's prenuptial agreement says that she gets nothing. And that's the sole motivating factor behind the divorce, according to Victoria. She blames his three children from a prior marriage and says that Dennis is not making rational decisions, due in large part to the medication he's taking.
In other words, she says it's all about the estate planning.
And it's hard to argue with that point. Dennis Hopper's lawyer was in court last week, seeking a restraining order against Victoria to keep her away from him. His attorney filed a doctor's report saying that his estranged wife is hampering his recovery. The doctor feels that the less he sees of her, the better.
Why? According to papers filed in the divorce proceeding, Dennis says that she's after his will. Dennis claims that in November, Victoria's mother told him he should change the will and leave everything to Victoria, because he was going to die soon. Dennis also says his wife and mother-in-law would wake him in the middle of the night and badger him about his will.
So, yes, it seems the divorce is all about the estate planning.
But who is the bad guy here? Is it Victoria, a scheming gold-digger after his money? Dennis says so. He feels he gave her every luxury he could, which of course only made her want more.
Or are Dennis' children the bad actors? Are they taking advantage of their father in a weakened state to cut his wife out, so they can get more?
Or is it Dennis himself? Victoria says he threatened to kill her, and she found a loaded handgun and shotgun in her bedroom, despite the fact they were living with their six-year-old daughter.
According to Dennis Hopper's doctor, he's perfectly capable of making his own decisions and is in fine mental health. It seems like the Judge agrees, because the divorce is going full-steam ahead. Dennis got his restraining order a few days ago.
So, it looks like Dennis and his children will get their wish, and Victoria will get cut out of the will. Unless he succumbs to his battle with cancer first, that is.
The really sad part of this saga isn't that it's happening to the Hopper family. Rather, to me, the really tragic part is that this type of family drama is far too common. Families often place aging or disabled seniors in the middle of a tug-of-war over money, especially in second marriage situations. Do you think people stoop to this level only when millions of dollars are involved?
No! In this economy especially, I see families act just as ruthlessly over $100,000, or even less. Too many people see sickness and death as a financial opportunity. And that's the real tragedy.
There is some hope. A well-crafted estate plan, from an experienced estate planning attorney, is a good start. And a vigilant family who protects aging or dying loved ones from unsavory sorts is a must.
The problem is that spotting the true gold-digger isn't always easy. Sometimes it's a new spouse or girlfriend. Sometimes, it's the children from a prior marriage. Other times, it's a caregiver.
Regardless, anyone who thinks that this only happens in Hollywood--and that it can't happen to their family--needs to think again.
Posted by: Author and probate attorney Andrew W. Mayoras, co-author of Trial & Heirs: Famous Fortune Fights! and co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law. You can email him at awmayoras @ brmmlaw.com.
PLANNING STRATEGIES FOR INDIVIDUALS WITH SPECIAL NEEDS FROM MID LIFE AND BEYOND
by: Danielle Mayoras, Attorney and Director of Education
of
The Center for Special Needs Planning
A lot of articles explore Special Needs Trusts and the wonderful benefits that they provide to both parents and individuals with special needs who are on government benefits. When a parent leaves an inheritance over $2,000 to an individual with special needs, the inheritance is actually a gift to the government because it eliminates that child's qualification for government benefits. The use of a Special Needs Trust eliminates this disqualification because the inheritance is not left to the special needs individual, but rather to his or her trust. As a result, the individual maintains his or her government benefits and receives an inheritance. These trusts provide peace of mind to the parents and an additional fund for the individual with special needs. The Special Needs Trust answers questions, such as follows: "who will look after my loved one with special needs when I pass away?" and "how will my loved one's extras be paid after I pass away?"
This article, however, goes beyond the basic Special Needs Trust and also focuses on the planning for an individual with special needs from mid life and beyond. In addition to the general concerns that parents of special needs children have, parents also worry about the long term care costs of their special needs loved ones. Specifically, what if the individual with special needs outlives his or her parent and needs long term care? What if the parents are not around to provide the long term care? How will the long term care costs be paid?
The statistics show that it is likely that an individual with special needs will require some type of long term care. They are currently 1.2 million disabled Medicaid enrollees either receiving acute care or long term care. There are several different long term care options including home care, assisted living, adult foster care, and nursing homes. Each of these will be addressed separately below.
Home care is health and supportive care provided to an individual in their own home by a licensed medical professional. The advantages of home care are obvious - your loved one receives care in the comfort of their own home. This ensures more privacy for your special needs loved one and also allows the family to better monitor the quality of health care that their special needs loved one is receiving.
Assisted living facilities are a middle ground between home care and nursing home care. Typically residents of assisted living facilities require help with their activities of daily living, but do not need skilled nursing home care. The advantages of receiving care in an assisted living facility are clear - the environment is more residential and less restrictive with a greater emphasis on privacy and autonomy.
With the average hourly rate for home care at $19.18 per hour, and the average cost of assisted living at nearly $40,000.00 per year, receiving care in these environments will be cost prohibitive for most families. Some long term care alternatives to these high costs are Adult Foster Care and nursing homes.
Adult Foster Care (AFC) is a licensed, sheltered living arrangement for adults with special needs who are unable to live alone. AFC homes provide five basic services: room, board, supervision, protection, and household services (laundry, cleaning, etc). Additionally, adult foster care homes may provide the following services:
1. Assistance with dressing, personal hygiene, and/or eating;
2. Transportation to appointments, senior centers, shopping, or activities;
3. Medication reminders of administration; and
4. Assistance with money management.
Typically there is a minimum room and board payment made to providers per month, which is set by the State. This amount is typically equal to the monthly income that the adult with special needs receives in governmental benefits. Adult foster care may be a cost-effective alternative to nursing homes or larger assisted-living facilities. For many special needs individuals who need long term care, Adult Foster Care is appropriate medically and financially is a good long term care option as well.
On the other hand, nursing care facilities are places of residence for people who require constant care and assistance with their activities of daily living. Residents include both the elderly and individuals with special needs. The numbers are startling - the average cost of nursing home care in the United States exceeds $77,000.00 per year and is expected to reach $190,000 per year in 2030. Furthermore, almost 56% of nursing home residents spend at least one year in the nursing home, with another almost 26% spending at least three years in the nursing home. Many parents wonder how their special needs loved one will be able to afford it.
One way is to qualify your adult child with special needs for Medicaid. Medicaid is a state administered program that pays for long term care costs if certain eligibility requirements are met. Although this is a Federal program, each state has its own guidelines regarding eligibility and services. Therefore, it is critical to consult with a special needs attorney who is familiar with the specialized Medicaid laws in the state where your loved one resides.
Certain requirements must be met to qualify for Medicaid. These may include your age, whether you are disabled, blind, or aged; your income and resources; whether you are a United States citizen or a lawfully admitted immigrant. The rules for counting your income and resources vary from state to state and from group to group. There are special rules for those who live in nursing homes and for disabled children living at home.
A single individual who resides in a nursing home may own certain assets, which Medicaid views as exempt assets, and still qualify for Medicaid. For example, in the State of Michigan, those exempt assets for Medicaid eligibility are as follows:
1. Home (with certain restrictions);
2. Car;
3. Personal Property;
4. Burial Blot and Burial Space items;
5. Funeral Contract worth up to $11,450.00;
6. Life Insurance with face value of $1,500.00;
7. $2,000 in cash assets;
8. Assets that are in a Special Needs Trust, an OBRA Trust or a Pooled Income Trust; and
9. Immediate Annuity.
All other assets are countable and an adult child with special needs will not be Medicaid eligible until those assets are spent down or converted into one of the above exempt assets.
You can ensure that your child with special needs qualifies for Medicaid upon your death by planning ahead. By completing a full estate plan, parents are able to place the adult child's portion of their inheritance into a Special Needs Trust. This trust allows the adult child to maintain government benefits as the Trust is an exempt asset under Medicaid guidelines. When the parents create their own estate plan, their revocable living trust will provide the inheritance, for the benefit of their special needs child, be funneled into the Special Needs Trust
The Special Needs Trust has a trustee, who is responsible for administering the trust and ensuring that the adult child's needs are met. Assets in a trust of this nature are not countable and in the event that the child requires long term care and needs to qualify for Medicaid, these trust assets will be preserved for the adult child's benefit. A trust of this nature can be used for most any item the adult child may need with the exception of food and shelter. For example, the trustee can purchase clothing, an automobile, electronic equipment, furniture, fitness equipment, funeral expenses, vacation and travel costs, vocational programs, therapy, personal care items and much more. The trustee can also use the funds from the trust for non-reimbursed medical expenses.
While government agencies recognize Special Needs Trusts, there are strict rules and it is critical that you work with an experienced special needs attorney to draft the Trust. We have reviewed countless Special Needs Trusts that do not comply with Social Security Insurance and Medicaid Rules. If the funds are used for food or shelter, however, then there is the potential that the adult child's governmental benefits may be reduced or eliminated. With respect to shelter, your child can use the money to purchase a home, but cannot use the money for rent. In fact, one wrong word or phrase can make the difference between an inheritance that benefits your child and one that causes your child to lose the many services, assistance, and benefits available.
In the event that the parents pass away without having the proper estate planning in place, there are still planning strategies that can be implemented to preserve the inheritance of the adult child with special needs allowing the adult child to maintain or qualify for government benefits. The inheritance can be placed into an OBRA Disability Payback Trust or into a Pooled Income Trust. These trusts provide the same protections as the above discussed special needs trust with one important difference - both of these trusts have a provision that require the assets to be used for specific purposes after the death of the adult child with special needs. The OBRA Trust requires that in the event there are any funds remaining in the trust at the death of the adult child with special needs, Medicaid is paid back for any services rendered up to the full amount of assets in the trust. The Pooled Income Trust, which is run by a non profit organization, requires that the organization be the remainder beneficiary of the trust.
Something else to keep in mind is the possibility of your special needs loved one executing Durable Powers of Attorney. If your adult child with special needs is competent, then he or she can execute Durable Powers of Attorney. There are two types of Durable Power of Attorney: Financial Durable Power of Attorney and Medical Durable Power of Attorney/Patient Advocate Designation. By executing a Financial Durable Power of Attorney, your child appoints an attorney-in-fact to handle his or her financial affairs in the event that he or she is physically or mentally unable to do so. For example, this may include banking, real estate, signing tax returns, hiring and firing agents, and commencing litigation.
The Medical Durable Power of Attorney/Patient Advocate Designation addresses all of your loved one=s medical decisions including, residential placement, surgery and treatment, and daily medical decisions. If your adult child with special needs is able to execute Durable Powers of Attorney, this will generally eliminate the need to go through the probate court system to obtain a guardianship or conservatorship. These documents cannot be executed by your child until he or she is an adult and is 18 years of age. As probate court can be expensive (legal fees and court costs), burdensome (annual report requirements and multiple trips to court), and time consuming, it is highly advisable that if your adult child with special needs has the requisite capacity to execute legal documents that they do so. Most importantly, he or she would be able to maintain control of his or her financial and medical decisions.
We know that every parent=s greatest worry is what will happen to their special needs loved one after they are gone. With the proper planning, there are government programs that can ensure that your adult child with special needs receives long term care after you are gone and receives an inheritance from you that does not disqualify them from government benefits. Estate planning is always important to do; however, when one of the beneficiaries is a special needs loved one, the planning becomes critical.
It is important to note that the laws are constantly changing and it is vital that parents concerned about special needs planning consult with an expert. If you would like more information, a referral to an attorney to assist you, or training and workshops on this topic, you can contact The Center for Special Needs Planning at 1-877-PLAN-758. You can also subscribe to our monthly e-letter at www.thecenterforspecialneedsplanning.com to keep current on the laws.
This article provides general information concerning a variety of legal topics. It is not intended to be a legal opinion and should not be relied upon as legal advice. Legal advice should not be given without investigation of your particular circumstances.
Plundered by her own children? Feud rages over estate
It's a she said, she said on wealthy, elderly mom's missing money
BY DAVID ASHENFELTER
FREE PRESS STAFF WRITER
Francine Stanton Cohen says she knew there would be trouble when her 94-year-old mother entrusted her financial affairs to Cohen's two youngest sisters in 2007.
In the months that followed, Cohen said, her sisters persuaded their mother to add their names to her bank accounts."They've been ripping through her money ever since," Cohen, 71, a retired schoolteacher, said last week.
On Dec. 8, a Wayne County probate judge jailed one of the daughters, Janice Stanton Hines, 58, a City of Houston disaster relief coordinator, for refusing to return most of the $789,288 she withdrew from her mother's accounts in 2008 -- and used to buy $150,000 worth of gold coins and ingots that have since vanished.
The case highlights legal perils families face as Michigan's population ages and a growing number of older parents can no longer manage their affairs.
Judges and legal experts said they're seeing more family fights play out in the courts partly because of Michigan's poor economy and high unemployment. They said the case underscores the importance of carefully choosing the person to handle your affairs.
Her story, her mother's money
Hardly anyone believes Hines' account about how she obtained and disposed of more than a half-million dollars of her mother's money.
Not the judges who have reviewed the case, nor the lawyers who are trying to recover the missing loot.
"I think the money is hidden somewhere, but I don't know where and neither does anyone else," said Royal Oak attorney Steven Geller, whom Wayne County Probate Judge David Szymanski appointed last year to try to recover the loot.
Geller and others say they believe Hines, with the help of her daughter Akwokwo Redhead, 36, of Atlanta, looted the estate of M. Louise Stanton, a 94-year-old retired Detroit schoolteacher and widow of a successful Detroit pool hall and storefront owner. They think the money is hidden in an offshore bank account.
"It's pretty obvious that Janice Hines and her daughter are lying," Geller said.
Hines and Redhead, a $90,000-a-year research scientist, insisted in sworn depositions last year they are telling the truth.
Hines, who has been in Wayne County Jail for the past seven weeks for disobeying Szymanski's order to return the money, said by phone Friday: "If I had the money, don't you think I would have returned it?" Besides her problems in Michigan, she is being sued in Houston, where she works, by her mother's estate.
As for Redhead: "The only comment I have is that it's unfortunate, in 2010, that my mom can't get due process in the State of Michigan."
Choose who you trust wisely
She moved in with her daughters after falling and breaking her hips in 2005 and 2007, lawyers for Stanton's estate say. Stanton's estate contends she added her daughters' names to her bank accounts so they could pay her bills while she recuperated. She also gave them power of attorney over her affairs.
Legal experts said the incident is a cautionary tale about what can happen when people pick the wrong person to handle their affairs.
Michigan judges and lawyers say they're seeing more family brawls in probate court as children jockey with siblings and other relatives for control of their parents' assets in the aftermath of the recession.
"People are fighting more, we're seeing more contested cases, and we're spending more time mediating family feuds," said Milton Mack, chief judge of Wayne County Probate Court. He said he referees such disputes almost daily.
Mack and others said picking the wrong person to handle your affairs is a prescription for having your estate plundered. By the time the case winds up in probate court, if it ever does, there often is little the court can do to get the money back. So, whether creating a comprehensive estate plan or putting a child's name on a house or bank account, they said it's critical to choose wisely.
"Clients sometimes make the mistake of wanting to choose the child that lives the closest, or the oldest child to handle their affairs, instead of thinking about who they really trust to make decisions on their behalf," said Danielle Mayoras, a Troy estate lawyer and coauthor of the 2009 book "Trial & Heirs: Famous Fortune Fights." Even then, there's no guarantee they'll do the right thing, she said.
"Clients sometimes make the mistake of wanting to choose the child that lives the closest, or the oldest child to handle their affairs, instead of thinking about who they really trust to make decisions on their behalf," said Danielle Mayoras, a Troy estate lawyer and coauthor of the 2009 book "Trial & Heirs: Famous Fortune Fights." Even then, there's no guarantee they'll do the right thing, she said.
"Given the aging of our society and the downturn in the economy, there needs to be a more aggressive posture by law enforcement to prosecute these cases and send a message to offenders," he said.
The $363,281 bag
In last year's deposition, Hines, 58, who also is a lawyer, said her mother gave her permission to withdraw $789,288 from Stanton's accounts in October 2008.
Hines said that, as a co-signatory on the accounts with her sister Cynthia Grant Brown, she had the legal right to take the money.
"They were my funds," she said in the deposition. "I could put them anywhere I wanted to put them. ... Anybody who was a signer on the account could use moneys out of the account."
After withdrawing the money, Hines said she bought $149,281 worth of gold -- two 2-pound ingots and 117 gold coins -- which she gave to Redhead in a duffel bag in Washington during President Barack Obama's January 2009 inauguration.
The bag also contained $214,000 in cash, she said.
Vanishing gold
Redhead, in her deposition in the Texas lawsuit, said she returned to Atlanta with the bag and hid its contents in a closet and pantry. She said she spent the cash in six months on such things as a $60,000 time-share retreat in the Dominican Republic.
The gold disappeared in August, she testified.
"We've looked all over the house," Redhead told estate lawyer James Plummer. "Maybe it got misplaced. ... My son might have thrown it away."
Plummer, expressing disbelief that her 2-year-old son was capable of throwing away gold coins and ingots, replied: "Now, you're blaming your kids? That's amazing."
Redhead didn't report the loss to the police or her insurance company.
The explanations haven't gotten much traction in Wayne County Probate Court.
On Dec. 8, Szymanski jailed Hines for contempt for refusing to return the money. Hines earlier returned $285,889 to the estate, leaving a shortfall of about $500,000.
"I think it's very conniving and suspicious that you took that money," Szymanski told Hines, admonishing her for violating her fiduciary duties to her mother. "You're trying to cover up some stuff here."
In late December, Wayne County Circuit Judge Robert Colombo Jr. upheld the jailing, saying he didn't believe the women.
On Jan. 13, Circuit Judge Prentis Edwards also refused to free her.
Hines' lawyer, Charles Murphy of Birmingham, said: "It's a miscarriage of justice for her to be held in Wayne County Jail under the circumstances of the case."
Murphy said Szymanski should have delayed jailing Hines until she had a lawyer, and until the judge had determined whether Hines' mother gave her the money.
Szymanski has set a Feb. 5 hearing to decide whether Hines or her sister Brown misused the accounts.
Sibling rivalry
Hines contends Brown, 61, a retired insurance company trainer, withdrew at least $127,000 for her own use. Hines said Brown was willing to overlook what Hines had done if Hines had given her a cut.
Brown disputes that and insisted that any money she spent was solely for her mother's care.
Brown declined to comment to the Free Press.
Her lawyer, Denise Hudson of Detroit, said: "She was shocked by what happened and she's conflicted. She loves her sister, but she has a duty to get back what belongs to her mother."
A third sister, Francine Stanton Cohen, 71, a retired Detroit teacher, says both sisters are unfit to handle their mother's affairs. But Szymanski declined to put her and her son in charge of Stanton's affairs.
A fourth sister, Constance Stanton Molette of Nashville, Tenn., told Szymanski in a letter last year that Cohen is interested in only their mother's money, which Cohen denies.
Although the incident put a major dent in Stanton's retirement funds, court records show she is getting by on nearly $3,000 a month in Social Security and her pension. She's living with Brown in Detroit.
Geller, meanwhile, said Hines controls her fate: "All she needs to do is give back the money."
Contact DAVID ASHENFELTER: dashenfelter@freepress.com
Avoiding estate fights
Here are tips that Troy lawyers Andrew and Danielle Mayoras offer for avoiding battles over your estate. They wrote a book, "Trial & Heirs: Famous Fortune Fights," (published by Wise Circle Books, $19.95, available at www.trialandheirs.com) to help people avoid mistakes in estate planning.
•Get expert advice: Consider consulting an estate lawyer who will know the ins and outs of estate planning. It's usually money well spent.
• Beware of joint accounts: When you add someone else's name to your accounts, they usually can remove money even without a durable power of attorney.
• Consider a springing power of attorney: Your attorney can draft the power of attorney so that it takes effect only when you are found to be incompetent.
• Choose wisely: You should designate individuals to act on your behalf that you trust the most, not merely the oldest child or the closest relative.
• Have checks and balances: Talk with your attorney about designating more than one person. But to avoid fights, consider having a tie-breaker, or majority vote.
• Select someone to monitor your accounts: You can give another family member, or even a trusted adviser, the ability to monitor your accounts, such as Internet banking, to make sure that your assets are protected.
When Elder Care Brings Back Sibling Tensions
Source:By Francine Russo, TIME, Monday, Feb. 1, 2010
When my mother's health was failing, I was the "bad" sister who lived far away and wasn't involved. My sister helped my parents. She never asked me to do anything, and I didn't volunteer. I was widowed, raising kids and working, but that wasn't really why I kept to weekly calls and short, infrequent visits. I was stuck in my adolescent role as the aloof achiever, defending myself from my judgmental mother and other family craziness. As always, I deflected my sister's digs about my not being around more — and I didn't hear her rising desperation. It wasn't until my mom's funeral, watching my dad and sister cling to each other and weep, that I got a hint of their long ordeal — and how badly I'd screwed up.
My sister was so furious, she barely spoke to me during my father's last years. Honest, I'm not a terrible person. So how did I get it so wrong? (See how to prevent illness at any age.)
We hear a lot about the costs of taking care of our graying population. But the big story roiling beneath the surface is the psychological crisis among middle-aged siblings who are fuming or fighting over issues involving their aging parents. According to a new survey by the AARP- and MetLife-funded National Alliance for Caregiving, an estimated 43.5 million adults in the U.S. are looking after an older relative or friend. Of these, 43% said they did not feel they had a choice in this role. And although 7 in 10 said another unpaid caregiver had provided help in the past year, only 1 in 10 said the burden was split equally.
As siblings who are often separated geographically and emotionally, we are having to come together to decide such thorny issues as where Mom and Dad should live and where they should be buried. "It's like being put down with your siblings in the center of a nuclear reactor and being told, 'Figure it out,' " says University of Colorado geropsychologist Sara Honn Qualls. (Comment on this story below.)
Eldercare and end-of-life debates often hit families after decades of negotiating nothing more serious than where to spend Thanksgiving. We can be grownups with successful careers and kids of our own, yet all the old stuff ambushes us: sibling rivalry, entrenched roles and resentments, the way our family talked or didn't talk about important things.
One two-year study of married women caring for parents with dementia found that siblings were not only the greatest source of help to these caregivers but also the biggest source of interpersonal stress. (See questions about retirement and medicare.)
Friction often stems from parents giving their children different information about how they're doing. Mom may put on a good show for the out-of-towner, who then discounts what the local sibling says. Annie Groeber, 43, a freelance media producer, used to pop up from Washington to see her mother, who would make light of her many health problems. So until Groeber moved to Baltimore to help out more, she had trouble believing what her sister said about their mother's deteriorating condition or the personality changes caused by her medications. "Tracey would say, 'You have no idea what this is like,'" Groeber recalls. "Within a couple of weeks of my moving, I said to her, 'You're right. I had no idea.' "
Not all siblings fight, and some become closer during their parents' twilight years. The Hiatts have managed this period better than most. After years of talks with their five far-flung kids, in 2002 the parents moved from Boise, Idaho, to an assisted-living facility in Eugene, Ore., 10 minutes from Jeanne Walker, the daughter who has had the best relationship with their (often difficult) mother. At 59, Walker works part time as a nurse. Her older brother helps out twice a week, and their three siblings, who live in other states, spend their vacations on parent duty. When their mom complains unrelentingly, Walker calls her siblings to vent. "It makes a difference to me to feel I have their support," she says. (See the top 10 medical breakthroughs of 2009.)
Research shows that emotional support for caregivers is critical to their well-being and to family harmony. Too often, anger on one side leads to guilt and defensiveness on the other, resulting in sibling gridlock. Sometimes a therapist or clergyperson needs to referee family meetings. For status updates, Patricia Mulvey, a geriatric-care manager in New York, favors simultaneous e-mails. "That way," she says, "Susie won't hear it before Joey, and that can reduce tension."
As for me, I became more present for my father in his last years. After he died, I apologized to my sister. And so, in our imperfect way, we remain "family" and sometimes even laugh over a childhood memory that, now that our parents are gone, we are the only people on earth who share.
You Are Married With an Estate Worth Less Than $3.5 Million
There won’t be any federal estate tax hit if you die today, and there would not have been one had you died last year. We can only hope the same will be true if you die next year. In any case, you don’t need any tax-saving estate plan right now. But if your plan was set up several years ago, I recommend checking in with your estate planning pro to make sure your house is still in order. You don’t need to run. You can walk.
Russo, a contributor to TIME since 1999, is the author of the new book They're Your Parents, Too! How Siblings Can Survive Their Parents' Aging Without Driving Each Other Crazy (Bantam; 304 pages)
Nutritional drink, imaging show promise for Alzheimer'sAource: By Elizabeth Landau, CNN
STORY HIGHLIGHTS
• One of the features of a brain with Alzheimer's disease may be loss of synapses
• Souvenaid is a drink with nutrients that scientists believe restore synapses
• Kind of MRI called diffusion tensor imaging may pick up signs of Alzheimer's
• Too early to tell whether this would be an effective way to diagnose Alzheimer's
Doctors are already good at diagnosing Alzheimer's disease in a patient with obvious symptoms, which include memory loss, vision problems and confusion. But the cutting-edge research is looking for the brain mechanisms of the condition at its earliest stages, maximizing the potential for intervention.
Two studies published this week that may help pave the way for better treatments for people with Alzheimer's, which affects as many as 5.3 million Americans, according to the Alzheimer's Association. One is a drink that you may one day be able to pick up at the pharmacy; the other is a detection method.
Drink to your health?
One of the features of a brain with Alzheimer's disease is the loss of synapses, which are junctions between two neurons or between a neuron and a muscle. Research suggests some connection between low numbers of synapses in a person's brain and Alzheimer's symptoms such as memory impairment and language deterioration.
Scientists have developed a drink called Souvenaid that is a "medical food," meaning it's taken under the guidance of a physician to manage a specific condition. The drink has three components -- uridine, choline, and the omega-3 fatty acid DHA -- that, working together, help restore synapses, said Dr. Richard Wurtman, professor at the Massachusetts Institute of Technology and co-author of the study. Uridine is a molecule used in the genetic coding for RNA, choline is in the vitamin B family, and DHA is found in certain fish and fish oils.
These nutrients are already found in the human body and have been shown to be safe, he said. But taking a supplement of any one of them will not have the same beneficial effect, he said. Together in the right proportions, the cocktail increases the production of fatty constituents and proteins needed for synapses.
The study looked at 225 patients who had mild Alzheimer's, according to an examination. Some took Souvenaid, and the control group participants received a non-medical drink, once a day for 12 weeks.
They found that patients showed significant improvement in the delayed verbal recall task, in which participants were asked to remember what they had been told earlier. The idea is that the formation of synapses delays the symptoms of Alzheimer's, but it is not a cure, experts said.
"There was a clear difference. The difference was greatest in people with very mild but quite real Alzheimer's," he said.
The product may be commercialized as early as next year, Nigel Hughes, general manager of Nutricia America. Nutricia is a unit of the international food giant Danone (Dannon in the United States), for which Wurtman is also a consultant.
There are other clinical studies of Souvenaid going on of 500 participants each, and the company plans to do an "early experience program" of selling the product in a small geographic area in the United States, having it available in pharmacies, he said.
Although the product has been shown to be safe, there is no evidence whatsoever that it should be taken by anyone who does not have mild or early stage Alzheimer's disease, Hughes said.
Early Alzheimer's patients drinking the combination of these nutrients is akin to pregnant women taking folic acid supplements, Wurtman said. It's not that they are deficient in these nutrients, but the addition of more of them carries benefits, he said.
Yian Gu, postdoctoral researcher in neurology at Columbia University Medical Center, who studies the relationship between diet and Alzheimer's, said the study looks promising if the claims of memory improvement hold up, but noted that further research should be done to confirm those results. There should also be comparisons with nutritional supplements currently available on the market, such as multivitamins and fish oil, Gu said.
There were also cognitive and memory tasks that the drink did not seem to improve, according to the study, and the researchers should look further into what other improvements can be seen besides the verbal recall finding, Gu said.
The study is published in the journal Alzheimer's & Dementia.
Scanning for the earliest signs
While the Souvenaid study focused on the loss of synapses as the mechanism behind Alzheimer's symptoms, an Italian group is working on identifying a different marker of the condition.
In a study published in the journal Neurology, researchers showed that a kind of MRI called diffusion tensor imaging may pick up signs of Alzheimer's in healthy elderly individuals.
Lead author Dr. Giovanni Carlesimo, of Tor Vergata University and the Santa Lucia Foundation in Rome, Italy, said the findings are preliminary but could be useful for future drug therapies to target the specific brain changes shown on the scan.
Researchers looked at the hippocampus, the brain structure associated with memory. They found that the mean diffusivity of the hippocampus -- a measure of how water is distributed within the tissues -- was correlated with how well participants performed on tests of verbal and visual-spatial memory.
The mean diffusivity in the hippocampus, as reflected in this brain scan, could represent some of the earliest structural changes that occur in the early stages of Alzheimer's, researchers say.
The research was done on 76 healthy people ages 20 to 80. The effect was most pronounced in the over-50-year-olds, the scientists reported.
The study is an important demonstration that MRI can be used to understand age-associated changes in the brain, said Adam Brickman, assistant professor of neuropsychology at Columbia University Medical Center.
But Brickman cautioned that this does not mean everyone should request this test.
"This might be something that will be useful down the road, but it's not diagnostic right now," he said.
Could Your Cell Phone Help Shield You From Alzheimer's?
In mouse study, exposure to electromagnetic field prevented and even reversed brain impairment
By Amanda Gardner
HealthDay Reporter
WEDNESDAY, Jan. 6 (HealthDay News) -- Cell phone addicts of the world, listen up: Electromagnetic waves emanating from these ubiquitous gadgets may prevent or even reverse Alzheimer's disease, researchers say.
Normal mice who had long-term exposure to such electromagnetic waves avoided developing Alzheimer's, while mice who were already sick started getting better, scientists report in the Jan. 6 issue of the Journal of Alzheimer's Disease.
The findings were actually the opposite of what the researchers were expecting.
"You can imagine our surprise when we did our first memory assessment and they were actually better," said study author Gary Arendash, a research professor with the Florida Alzheimer's Disease Research Center, part of the University of South Florida in Tampa. "[And] we continued to see the beneficial effects in test after test, in group after group."
Although preliminary, the findings also raise the tantalizing possibility that exposing people to electromagnetic waves could stave off or treat the debilitating disorder, which currently affects 5.3 million people in the United States alone.
"This needs further study to figure out how well this carries over to other animals, but it does start making you think that maybe there's something to it," said Dr. Michael Palm, an assistant professor of neuroscience and experimental therapeutics and internal medicine at Texas A&M Health Science Center College of Medicine in College Station. "But I don't think we can quite jump to having people strap cell phones to their heads."
William Thies, chief medical and scientific officer at the Alzheimer's Association, agreed.
"This article is certainly no call to self-medicate by spending more time on your cell phone, especially in risky environments such as while driving," Thies said in a statement. "No one should feel they are being protected from Alzheimer's/dementia/cognitive decline by using their cell phones based on this study."
Thies believes the finding "needs to be replicated in animals before we begin to even consider trying it in people, as animal models of Alzheimer's and people with the disease are very different. Potential therapies that have been successful in mouse models of Alzheimer's have not worked in people."
Although various international health organizations have decided there are no health problems associated with cell phone-generated electromagnetic fields (EMFs), there's a paucity of data on the long-range effects of EMFs on the brain, the study authors noted.
And researchers are still trying to tease out any risks associated with regular cell phone use. For instance, one recent study found an association -- albeit a weak one -- between talking on the cell phone and brain tumors.
In the new study, the USF team exposed mice that were genetically engineered to have Alzheimer's disease to two one-hour sessions of high-frequency electromagnetic waves per day, for seven to nine months.
Healthy, younger mice exposed to the waves avoided developing Alzheimer's altogether, while older mice with Alzheimer's saw memory and other cognitive deficits improve, the researchers found.
Normal mice also developed better memory capacity after EMF exposure, the team noted.
Autopsies revealed that the waves had diminished the beta-amyloid protein plaques in the mouse brain -- plaques that are believed by many to cause Alzheimer's disease. The researchers hypothesized that an increase in brain temperature while being exposed to magnetic waves might be responsible for the change.
Autopsies revealed that the waves had diminished the beta-amyloid protein plaques in the mouse brain -- plaques that are believed by many to cause Alzheimer's disease. The researchers hypothesized that an increase in brain temperature while being exposed to magnetic waves might be responsible for the change.
"In the Alzheimer's mice, the cell phone exposure seems to have two effects that directly affect the disease process," Arendash explained. "One is that electromagnetic fields suppress the aggregation of the bad protein. If the newly formed bad protein, beta amyloid, can't form plaques, it's more likely to be removed from the brain into the blood."
The second possible method of action is that exposure increases brain cell activity which, again, could help flush bad proteins out of the brain, Arendash said.
While raising hopes, the small animal study does leave a slew of other questions unanswered, Palm said.
"The mouse model for Alzheimer's doesn't correlate exactly with what people have," he noted.
And scientists don't know how well cell phone-generated electromagnetic waves might penetrate the much thicker human skull, he added.
The researchers also didn't look at neurofibrillary tangles, another hallmark of the disease typically found in the brain tissue of Alzheimer's patients.
"Is this the whole picture or not?" Palm asked.
According to Arendash, the researchers next want to see if they can speed up any beneficial effects on the brain by changing the frequency or strength of the electromagnetic waves. Safety is also a big concern. And, of course, the findings need to be replicated in humans, he said.
More information
There's more on this condition at the
Alzheimer's Association.
SOURCES: Gary Arendash, Ph.D., research professor, Florida Alzheimer's Disease Research Center, University of South Florida, Tampa; Michael Palm, M.D., assistant professor, neuroscience and experimental therapeutics and internal medicine, Texas A&M Health Science Center College of Medicine, College Station, Texas, and director, Parkinson's and Headache programs, Texas Brain and Spine Institute, Bryan, Texas; Jan. 6, 2010, news release, Alzheimer's Association; Jan. 6, 2010, Journal of Alzheimer's Disease
Last Updated: Jan. 07, 2010
Copyright © 2010 ScoutNews, LLC. All rights reserved.
The Federal Estate Tax Is Dead: Now What?
Source: SmartMoney It's your money. Be Smart.
January 7, 2010
Washington, we have a problem. You just let the federal estate tax expire and the citizens are confused. Nobody saw this coming, least of all me. Now that I’ve recovered from falling off my chair, let me explain how we got here and my take on what you may need to do (or not do) right now.
The Tax Was Programmed to Die This Year (and It Did), but the Story Is Not Over
Since 2001, the federal estate tax has always been scheduled to expire this year. But it was always a two-part story, because the tax is also scheduled to come roaring back with a vengeance in 2011 and beyond. In those years, estates worth as little as $1 million are lined up for a tax whipping. No informed person ever thought these two things would be allowed to happen because, taken together, they make no sense.
So we all sleepily assumed Congress would step in to continue the relatively generous (by historical standards) $3.5 million federal estate exemption we had in 2009. Some thought it might even get bumped up to $5 million or so.
No such luck. Our Congressional pals did nothing about the estate tax last year, and it could be months before they get around to tackling it this year. By then, the issue may be so contentious that all previous predictions about what might happen (from guys like me) get thrown out the window.
To sum up, we are now in a very strange place with no federal estate tax on those who happen to die this year and a confiscatory tax looming over those who happen to die later on. This bizarre situation will continue until the law gets changed, which I’m still pretty sure it will. Meanwhile, you want to know what to do today. Here’s my advice.
You Are Married With an Estate Worth Over $3.5 Million
If you fall into this rather well-off category, I hope you have already set up a tax-saving estate plan. If so, you should probably leave it alone unless you have one of the two problems I’m about to explain.
First, your existing plan may be horribly flawed if it calls for giving as much money as possible (rather than a specific dollar amount) to your kids and/or grandkids without triggering a federal estate tax bill, with the rest then going to your spouse. Last year, this plan would have directed $3.5 million to the kids, which presumably was fine by you. But with the federal estate tax currently missing in action, dying now would result in your spouse getting absolutely nothing. All your assets would go to the younger generations. If this is not what you intend, please run (don’t walk) to your estate planning pro and get the problem fixed. I think the common-sense solution is to stipulate that your spouse would get a specific dollar amount or percentage of your estate with the rest going to the youngsters. You may have to retool your plan later when Congress finally does whatever it does. Oh well. Cross that bridge when you come to it.
The second potential problem is much less serious, and you may decide to not even worry about it. Say your current estate plan calls for leaving the specific amount of $3.5 million to your kids and/or grandkids, with the rest then going to your spouse. Last year, this was a good plan. It avoided any federal estate tax hit by taking full advantage of last year’s $3.5 million exemption. As of today, however, you can leave as much as you want to the youngsters with no federal estate tax due. So if your existing plan gives your spouse more than he or she really needs, you can change the deal and leave more to the youngsters and less to your spouse. Once again, you may have to rework your plan when Congress finally takes action.
You Are Married With an Estate Worth Less Than $3.5 Million
There won’t be any federal estate tax hit if you die today, and there would not have been one had you died last year. We can only hope the same will be true if you die next year. In any case, you don’t need any tax-saving estate plan right now. But if your plan was set up several years ago, I recommend checking in with your estate planning pro to make sure your house is still in order. You don’t need to run. You can walk.
You Are Single With an Estate Worth Over $3.5 Million
Last year, you couldn’t leave over $3.5 million to loved ones without triggering a federal estate tax bill. So your existing plan might still call for your estate to make enough charitable donations to whittle its net worth down to $3.5 million before giving that amount to your loved ones. Since you can now leave an unlimited amount to loved ones with no federal estate tax due, you might want to make a change. Of course, you may have to revisit your plan after Congress makes its move.
Don’t Forget About State Estate Taxes
Yes Virginia, it’s not just the feds that charge estate taxes. So if you decide to update your plan because of the federal estate tax considerations I’ve mentioned here, make sure the changes don’t unnecessarily increase your exposure to the state tax collector. This is yet another good reason to visit your professional adviser pronto.
Who got the money? Who had the biggest family feuds? The mistakes that were made — and what we can learn from them. Two legal experts in estate planning and the authors of Trial & Heirs have the scoop.
Click here to read the full article from wowOwow.
New Medicare Law Change May Enable People to Get "Extra Help" Paying for Drug Costs
A change in the Medicare law should make it easier for many Americans with lower income to obtain extra help in paying for their Medicare prescription drugs.
Source Timothy L. Takacs, elder law attorney, Hendersonville, Tennessee
The extra help program currently provides assistance to more than nine million senior and disabled Americans -- saving them an average of almost $4,000 a year on their Medicare prescription drug plan costs. To apply for extra help, there is an easy-to-use online application available at www.socialsecurity.gov/extrahelp.
The Social Security Administration and Chubby Checker, the rock and roll legend, launched a new campaign to inform millions of Americans about a new “twist” in the law that makes it easier to qualify for extra help with Medicare prescription drug costs.
To qualify for extra help, people must meet certain resource and income limits. The new Medicare law eases those requirements in two ways.
First, it eliminates the cash value of life insurance from counting as a resource.
Second, it eliminates the assistance people receive from others to pay for household expenses, such as food, rent, mortgage or utilities, from counting as income.
There also is another important “twist” in the law. The application for extra help can now start the application process for Medicare Savings Programs -- state programs that provide help with other Medicare costs. These programs help pay Medicare Part B (medical insurance) premiums. For some people, the Medicare Savings Programs also pay Medicare Part A (hospital insurance) premiums, if any, and Part A and B deductibles and co-payments.
Anyone who has Medicare can get Medicare Part D prescription drug coverage. Some people with limited income and resources are eligible for Extra Help to pay for the costs–monthly premiums, annual deductibles, and prescription co-payments–related to a Medicare prescription drug plan. To qualify for Extra Help:
- You must reside in one of the 50 states or the District of Columbia.
- Your resources must be limited to $12,510 for an individual or $25,010 for a married couple living together. Resources include such things as bank accounts, stocks, and bonds. The extra help program does not count your house and car as resources; and
- Your annual income must be limited to $16,245 for an individual or $21,855 for a married couple living together. Even if your annual income is higher, you still may be able to get some help. Some examples where your income may be higher are if you or your spouse:
- Support other family members who live with you;
- Have earnings from work; or
- Live in Alaska or Hawaii.
Putting IRA Withdrawals Back Into Your Account
The IRS recently extended the period during which you can put 2009 required minimum distributions back into an IRA without tax consequences.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
October 26, 2009
I know that required minimum distributions from IRAs have been suspended for 2009, but I had automatically received my regular IRA payments in a lump sum at the beginning of the year. Can I put the money back into the account so I can avoid paying taxes on it? And what do I need to do about my 2010 withdrawals?
Yes, you can put at least some of the money back into the account if you act quickly. And that could be a good idea if you don’t need the money now and want to avoid paying taxes on the distribution this year.
The IRS recently extended the period during which you can put 2009 required minimum distributions back into an IRA without tax consequences. Originally, you had only 60 days after receiving the money to put it back into the account. But now you have until November 30 or 60 days from the time you withdraw the money, whichever is later, to return 2009 RMD money to the account.
To make it easy to keep track of the time limit, brokerage firm Fidelity is telling customers that if they took RMDs from January 1 to October 1, 2009, they will have until November 30 to roll the money back in. But if they took the withdrawals from October 2 to December 31, they have 60 days to return the distribution.
There is a catch: You are allowed to put one IRA withdrawal back into the account within 365 days. So if you received regular distributions every month, for example, then you can put only one of the withdrawals back in. If you received the RMD money in a lump sum, however, then you can put it all back into the account.
If you had any taxes withheld from the distribution, then you’ll need to put that money back into the account, too; otherwise the amount withheld will be considered a distribution and will be taxed as ordinary income..
For more information about the rules for putting IRA withdrawals back into your account, see the IRS Notice about the new guidance. For more about 2009 RMDs in general, see Who Has to Take an IRA Distribution in ’09 and Wise Moves for a Year With No RMDs. Also see A Break in ’09 for Withdrawals From Inherited IRAs for special rules about putting the money back into an inherited IRA.
It puts the remaining children in the position of potentially having to prove their parents didn't intend to cut them out of their estate, and could present gift-tax issues for the child who gets it all, experts said.
Another option: Because you aren’t required to withdraw the money this year, you may want to roll some of it into a Roth IRA. You’ll have to pay taxes when you make the switch, but you can take tax-free withdrawals after five years, you never have to take required minimum
distributions, and you can create a tax-free inheritance for your heirs. You don’t need earned income to convert a traditional IRA to a Roth; your adjusted gross income just needs to be less than $100,000 in 2009. That income limit for conversions disappears in 2010. See The New Roth Rollover Rules Explained for more information about rolling over a traditional IRA to a Roth, including details about how to figure out the tax bill.
And you can still make a tax-free rollover from an IRA to a charity in 2009, too. See Making Charitable Contributions From an IRA for details.
Required minimum distributions will resume in 2010, so this is a key time to think about next year’s withdrawals. If you’d like to receive regular payments throughout the year, it’s important to let your IRA administrator know. Depending on how you stopped them for 2009, you may need to fill out new paperwork.
At Vanguard, for example, if you originally signed up for automatic RMDs but had the service suspended for 2009, you should have been offered the option to reestablish the automatic RMDs for 2010. Vanguard will send a RMD statement in January with the details. If you removed the RMD service entirely, you’ll need to sign up again to schedule your 2010 distributions.
"Trial & Heirs'" Top Five Tips to Avoid Common Estate Planning Mistakes!
WGN recently interviewed two partners of our firm, Andrew W. Mayoras and Danielle B. Mayoras, where they discussed "Trial & Heirs'" Top Five Tips on how to avoid some very common estate planning mistakes.
WGNtv Interview with Andrew W. Mayoras and Danielle B. Mayoras
For more interesting stories on celebrity estate battles and information on how to avoid making the same mistakes visit "Trial & Heirs: Famous Fortune Fights!"
Seeking the Best Medical Care Prices
Stuart Isett for The New York Times
By WALECIA KONRAD
Published: November 27, 2009
Health care consumers are encouraged to comparison-shop on things like doctor’s fees and heart surgery rates. But unfortunately, most of us have little clear or useful information to go shopping with.
“When you go to the doctor, how much you fork over when all is said and done is often just a mystery,” said Dr. Anthony P. Geraci, a Manhattan neurologist who is trying to buck that trend by posting his prices on his Web site.
With the growing number of uninsured people, the increase in high-deductible insurance plans and big jumps in co-payments, just about everybody is paying more out of pocket for health care nowadays. An estimated 15 percent of adults younger than 65 now pay with their own money medical costs greater than 5 percent of their annual household income, according to the Center for Studying Health System Change, a nonpartisan research group in Washington.
So the typical person is probably far more motivated to ask how much an M.R.I. or a hip replacement costs. And just as often, people are asking — or should be — “How can I get a better price?”
Take Katie Kyser, 30, the mother of a year-old daughter, who lives north of Seattle. She and her husband, Jason, who works in construction, recently moved from California. They have no health insurance, so they pay all costs out of pocket.
When Ms. Kyser needed a routine gynecological exam, she called a handful of local doctors, all of whom were charging $200 or more. “There’s no way we could pay that,” Ms. Kyser said. “I had to find another way.” .
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Having seen an ad for PriceDoc.com, a new Web site that lists doctors throughout the country who are willing to post their prices and negotiate with patients, she decided to try it. Ms. Kyser found a nearby clinic where doctors charged only $75 for the exam.
“I was a little nervous at first because the price was so cheap, but when I got there, it was wonderful,” Ms. Kyser said. “Everyone was so professional and helpful.”
The crucial part of shopping wisely for health care (or anything else for that matter) is comparing prices the way Ms. Kyser did.
But that is also where problems arise. Medical pricing is a quagmire, oozing with jargon and current procedural terminology codes. Just look, if you dare, at your latest “explanation of benefits” from your insurer.
What’s more, rarely is there one standard price for a medical treatment. Prices vary based on geography and type of provider — whether hospital, stand-alone clinic or any alternative.
Then, doctors, hospitals and other providers may negotiate different rates with different insurers. It is not unusual for a provider to have 10 or more different prices for the same procedure, depending on who is paying. Providers often charge a completely different rate for people paying on their own, which is almost always much more expensive than the discounted rate that insurers pay.
“It’s a challenge for consumers to sift through these different price structures,” said Ha T. Tu, senior health researcher at the Center for Studying Health System Change. And there is no one place to go for good information, she added.
Despite the challenges, here are several steps consumers can take to make health care shopping a bit more manageable:
CHECK WITH YOUR INSURER Many insurance companies have begun posting provider prices on their Web sites so enrollees can access cost information. These tools allow you to compare prices among network doctors (not all network doctors are paid the same) and check on the price of diagnostic tests and other treatments.
“This is especially helpful if you’re in a high-deductible plan,” said Ms. Tu, “because you can see how much you’ll pay out of pocket.”
USE THE INTERNET A few Web companies have tried to fill the price information gap online, all with varying approaches.
On PriceDoc.com, the site Ms. Kyser used, you plug in your ZIP code to find a list of providers in your area who have posted their prices. You can also plug in the price you’re willing to pay. Providers will then respond if they are willing to accept that price.
HealthcareBlueBook.com compiles prices paid for specific treatments and procedures in ZIP codes throughout the country, then lists what the site determines is a range of fair prices. Consumers can then use these ranges as a jumping-off point for negotiating with their providers, said Dr. Jeffrey Rice, the chief executive of the concern.
Dr. Rice tells the story of a woman in northern Ohio who had been quoted a price at a local hospital of $2,500 for an M.R.I. of her knee. When she looked up the test on the site, she found the fair price in that area was more like $500.
She went back to the hospital where she had been quoted the high price and started asking questions. The clerk told her it would be much less expensive if she went to the clinic down the street instead of the hospital. The woman followed that advice and paid $300 for her M.R.I.
Another Web site, OutOfPocket.com, combines price information that users send in to determine a going rate for specific health care costs throughout the country.
None of these sites are comprehensive, although all of them are easy to use and are expanding their listings. It’s worth taking a look to see if you can glean any useful information from them.
BROWSE STATE DATA If you’re checking out hospitals, you will want to see what information your state government offers. At least 33 states mandate that hospitals make their prices public, Ms. Tu says.
But there are caveats. Often, only the most expensive, nondiscounted prices are listed
Moreover, on most sites, costs are not bundled, so you may find the price of a general surgery, for example, but it would not include the surgeon’s or anesthesiologist’s fees.
Some states offer more information than others, points out Ms. Tu. Minnesota, for example, uses average prices for some procedures, and New Hampshire and Maine have some bundled prices. To see what information, if any, is available in your state, you can use the links on healthcarebluebook.com.
PICK UP THE PHONE “The most important thing to do if you’re looking for price information is call your doctor,” said Jonathan Weiner, professor of health policy and management at Johns Hopkins University.
“This is still an awkward discussion for most doctors,” Professor Weiner said. “But if you sit down and talk about money, it almost always leads to discounts, particularly for self-paid people.”
If your doctor balks at having this conversation, ask to speak to the office worker in charge of billing, who will know the prices your doctor charges and can at least estimate what you will be paying. Then, when you do collect price information, you can return to that person to negotiate a better price.
Sign in to Recommend More Articles in Health » A version of this article appeared in print on November 28, 2009, on page B5 of the New York edition.
New GPS Tracking Device Helps Elderly Live More Freely While Protected from Wandering
i-TAG along GPS uses global positioning satellites, features geofencing to establish electronic barrier
Nov. 11, 2009 – A major problem in the care of many elderly people, especially those with Alzheimer’s Disease, is to protect them from wandering. Many, for example, are lost every year who wander from their residence and forget the way back. New technology, however, is offering a promising solution – the i-TAG along GPS.
The small GPS tracking device can be used for many safety objectives like the tracking of children or teenagers, but the main objective - where there can be the largest impact - is the protection of our senior citizens with some form of dementia or Alzheimer's, according to Jenaro T. Centeno, Principal, i-TAG - Identity Solutions in St. Louis.
“Our GPS tracking device operates through global positioning satellites and has additional features such as live monitoring from any internet-enabled computer, geofencing to establish a perimeter, text and email alerts and an SOS call function,” Centeno says.
Approximately the size of a nine-volt battery, the GPS tracking device operates with a battery that lasts a week on average and is rechargeable, according to the company Website.
“I -T-A may be diminutive but it is the most intelligent, affordable personal GPS location product on the market,” says Centeno.
“It is tied to a very instinctive, easy-to-use web portal for device location. In addition, the device is so small, it can be placed on your children, pets, cars, bikes, or anything else you can imagine that needs to be located at a moment's notice.
Geofencing is one of the most touted features of the device. The i-tag-along GPS can be programmed with a geofence – an area in which the person wearing it can travel, but if they leave that area, an alert will be sent via text, email or voice.
“Programming the geofence is easily done on our web portal,” says Centeno. .
“So now if your loved one leaves the geofence, you will automatically receive an email, text message, or voice message on your designated phone line.
“An added advantage of our device is the ability to program one of the industry's first polygonal geofences. Polygonal geofences give you the ability to create multi-sided pathways to allow for non-circular paths like tracking your daughter’s path to and from school or tracking a patient with dementia and their typical path to a social event. Now this patient can still feel like they have some independence and you feel secure knowing that if they wander, you can find them.”
For institutions like Assisted Living Facilities, the geofence feature creates a safety net that allows you the option of offering a better quality of life with more independence while at the same time protecting your patients and providing peace of mind to both administrator and caregivers.
You can also log on at any time to check on the whereabouts of your loved one or you can view a report of their activities throughout the day, he adds.
In addition, the i-tag-along GPS is equipped with an SOS button, he says. “If your loved one becomes disoriented, All they would need to do is press the button which will send a message to your phone or email letting you know where they are and that they need help.
New evidence coming in the Michael Jackson Estate case
The Michael Jackson probate dispute between his mother and his two executors has been active since it started this summer. But it looks like it's about to really get heated up.
For starters, Katherine Jackson, Michael's mother and a primary beneficiary (along with his children and unnamed charities), has been challenging decisions made by co-executors John Branca and John McClain on a regular basis. She had asked for, and received, permission from the judge to allow her to challenge them based on conflict of interest and undue influence without jeopardizing her rights as a beneficiary under the "no contest clause" of Jackson's will and trust.
A "no contest clause" is a common provision than many people use in their wills and trusts to discourage family fighting. It usually says that anyone who files a legal challenge and loses gives up their inheritance. Katherine Jackson wanted to be free to challenge Branca and McClain without fear of losing her inheritance, and the judge allowed her to do so.
So far, her challenge have been limited to objecting to certain decisions they make (such as the many business deals they've entered into on behalf of the Jackson Estate) and asking the judge to reduce their legal authority. The judge so far has allowed them to keep control and make decisions, including entering into business deals and deal with creditors without his approval, as long as Katherine didn't object. He also recently reiterated that Katherine Jackson is be kept informed.
But it seems this isn't enough for Katherine. Instead, she seems ready to ramp up her efforts. Just a couple days ago, Katherine replaced her legal team with a new attorney, who has handled celebrity probate battles in the Anna Nicole Smith, Marlon Brando and James Brown cases.
One of the other attorneys representing Katherine says that this new probate lawyer was brought in because of "new evidence". This evidence must be important, for he also said, "The case is now moving in a different direction".
So what is the new evidence? Cnn.com and TMZ both said the new evidence questions the authenticity of Michael Jackson's signature on the will. Family members said that he was in New York when the will was supposed to have been signed, meaning he couldn't possibly have signed it.
"
What do you think? You can read Michael Jackson's will here and see his signature for yourself.
Disputes over celebrity wills, trusts and estates can make for interesting reading. But they can also be very helpul for those who don't want their families to end up the same way. Don't let your heirs suffer from the same celebrity planning errors that happen time and time again.
Visit TrialAndHeirs.com to learn more how to use these celebrity stories to protect your family.
Source: Posted by: Author and probate attorney Andrew W. Mayoras, co-author of Trial & Heirs: Famous Fortune Fights! and co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law. You can email him at awmayoras@brmmlaw.com.
Advocates: NYC Astor case a win on financial abuse
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(AP Photo/Serge J-F. Levy, File)
FILE - In this May 1, 1997 file photo, the late socialite and philanthropist Brooke Astor is seen in New York. Senior citizens' advocates say New York City philanthropist Brooke Astor is a poster child for an insidious kind of financial crime. But they and legal experts say the convictions of her son and a lawyer for exploiting her mental decline to raid her $200 million estate show that such prosecutions can succeed.
NEW YORK (Map, News) -
To senior citizens' advocates, Brooke Astor is a Park Avenue poster child for an insidious kind of financial crime.
They kept close tabs as the late philanthropist's son and a lawyer were tried on charges of exploiting her mental decline to raid her nearly $200 million fortune. An article on the AARP's news Web site called it "the most infamous case of financial elder abuse in recent memory."
Advocates and legal experts saw last week's convictions as a high-wattage signal that such cases, often seen as difficult to prosecute, can succeed - even if few others spur a five-month-long big money trial with boldface names.
"To lose this kind of case would have sent a very discouraging signal" to prosecutors pursuing elder abuse cases, said Thomas L. Hafemeister, a University of Virginia law professor who specializes in financial exploitation of the elderly.
There have been plenty of prominent court fights over claims that elderly millionaires were manipulated into parting with money.
J. Seward Johnson Sr.'s children accused his third wife - and former chambermaid - of browbeating the dying drug company heir into leaving her nearly all his $500 million fortune; the 16-week trial in 1986 ended with a settlement giving the children and an oceanographic institute about $160 million. Former Playboy Playmate Anna Nicole Smith's inheritance tussle with her oil-tycoon husband's son reached all the way to the U.S. Supreme Court but continues years after both she and the son died.
But these and many other fortune feuds played out in civil courts - not in criminal cases carrying the prospect of prison time, which Astor's 85-year-old son now faces.
Criminal cases in which ailing elderly people are conned by identity theft, real estate scams or light-fingered caregivers are fairly common, although few are as extensive as the Astor case - where prosecutors used thousands of pages of documents and called dozens of witnesses ranging from Henry Kissinger to household helpers.
Some prosecutors focus on scenarios involving physical harm. Others are reluctant to take on cases that can be blurred by family loyalties and disputes, said Catherine T. Wettlaufer, a Buffalo estates lawyer.
The cases also can be hard to prove. While there may be a financial paper trail, the victims often are unable to testify or unwilling to take the stand against a relative or needed caretaker.
Prosecutors then have to prove they know what the victim intended - a task often complicated by a victim's failing mind, said Andrew Mayoras, a Michigan lawyer and co-author of "Trial & Heirs: Famous Fortune Fights!," due out next month.
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The question becomes: "How do you get into somebody's head - someone with dementia?" he said.
Manhattan prosecutors called more than 70 witnesses to illuminate Astor's mental state in the years leading up to her death in 2007 at age 105.
Jurors heard that the Alzheimer's disease-stricken socialite signed a letter giving her son $5 million on a day she didn't know where she was. That she was afraid of her shadow and didn't recognize people she had known for decades. That she referred to her son, Anthony Marshall, at times as her husband and "the man who wants to kill me."
The Manhattan District Attorney's office, which declined to comment on the case, took some criticism during the trial for the lengthy presentation. But the testimony on Astor's decline, especially from her doctors, made an impression on juror Barbara Tomanelli.
"We started to feel very sorry for Mrs. Astor's condition," she said after the trial.
Defense lawyers, who plan to appeal, also strove to peer into Astor's brain, highlighting some of her letters and remarks to argue that she was lucid at points - including when she signed changes to her will that gave her son control of millions that had been destined for her favorite charities.
The defense also emphasized that Marshall had legal authority to give himself gifts as he managed his mother's money.
"It appears that the jury may have held Tony to a stricter standard of spending than his mother did," defense lawyer John Cuti said.
Marshall and lawyer Francis X. Morrissey Jr. are due to be sentenced in December; Marshall faces at least a year in prison and up to 25 years for 14 counts including grand larceny.
While prosecutions of such cases may be rare, authorities can intervene in other ways.
Connecticut Attorney General Richard Blumenthal stepped in after a Greenwich woman agreed - while hospitalized a month before her death - to sell her house for less than half its $1.2 million estimated value to her neighbor and her accountant.
A probate judge ruled in July that the house must be sold at market value. The proceeds will go to eight charities named in Mona Lee Johnson's will.
A lawyer for the neighbor and accountant didn't return calls Friday.
Blumenthal said his office investigates several such cases a year.
"The Astor case is this phenomenon writ large or at the extreme - but also, maybe not," he said in an interview Friday. "It just involves bigger numbers or bigger celebrities."
Soure: Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Estate Planning Can Save Headaches for Heirs
Living on less than you expected in retirement? That's no reason to skip estate planning.
While smaller retirement portfolios may not call for costly trust arrangements, they still need attention, said Ronni Davidowitz, an estate attorney with Katten Muchin Rosenman in New York.
Some states, for example, impose estate taxes, often with exemption limits lower than the federal government's, or have cumbersome and expensive probate processes, said Davidowitz.
Regardless of how small your estate, cover these bases:
A will or a trust? A will is a legal document for the transfer of your property after death, names someone to manage the estate and sometimes names guardians for minor children. A will typically goes through probate, the court process that disperses assets.
A revocable trust lets you transfer assets into it and avoid probate.
Do you need both? Not always, said Dennis Sandoval, director of education for the American Academy of Estate Planning Attorneys. But a trust will save your heirs the time and cost of probate, which can be considerable, he said.
You can go with just a trust, Sandoval said, if all assets are transferred to it. Otherwise, not having a will would be a problem, he said.
Blending families: Avoid bequeathing specific assets to specific heirs based on today's market values, attorneys said.
Sandoval said more families are crafting trusts that allot income to spouses, but switches most of the control to adult children if the spouse remarries.
Joint accounts: Older people often name an adult child as a joint holder on certain assets as a way for the child to more easily pay bills or pass on assets. Often, those parents expect the child to naturally share the account with their siblings when both have died.
This is a mistake, said Andrew Mayoras, a Troy, Mich., estate attorney and co-author of "Trial & Heirs: Famous Fortune Fights!" which documents celebrity missteps in estate planning.
It puts the remaining children in the position of potentially having to prove their parents didn't intend to cut them out of their estate, and could present gift-tax issues for the child who gets it all, experts said.
Have a retirement question? Write to yourmoney@tribune.com, or via mail at Your Money, Chicago Tribune, Room 400, 435 N. Michigan Ave., Chicago, IL 60611.
Solving Your Greatest Worry
Have you ever wondered what would happen to your special needs loved one if you passed away tomorrow? Have you done everything possible to ensure that your loved one with special needs will maintain his or her government benefits and receive an inheritance from you? For many parents with special needs children, whether the children are minors or adults, these questions linger in the back of their minds. Estate planning is always important to do; however, when one of our beneficiaries is a special needs loved one, the planning becomes critical.
When a parent leaves an inheritance over $2,000 to an individual with special needs, then that inheritance is actually a gift to the government because it eliminates that child’s qualification for government benefits. Parents and attorneys armed with the basic knowledge that you cannot have assets in the excess of $2,000 and still qualify for government benefits, often think that the only reliable method to protect a special needs loved one is to disinherit them. They believe, or are counseled; that leaving their inheritance to another child or individual who will morally take care of their special needs loved one solves the problem. In most cases, however, this does not solve the problem, but only makes it worse. Leaving everything to your daughter “Susie” if “Johnny” has special needs would allow Susie’s creditors to attach Johnny’s money. In addition, if Susie is having a bad year financially, there is nothing to stop her from using the money for herself. Furthermore, if Susie passes away, this money would go on to her beneficiaries and not to Johnny.
Parents can solve all of these problems by creating a Special Needs Trust. A properly drafted Special Needs Trust allows the special needs individual to maintain government benefits and to use the inheritance for everything but food and shelter. The Special Needs Trust is the perfect solution and the only reliable method to make sure that your inheritance benefits your child with special needs. The Special Needs Trust keeps assets in a form that will be available for your child and allows your child to maintain and receive government benefits.
A properly drafted Special Needs Trust will specify that funds from the Trust only supplement and do not replace the government benefits. These funds can be used for extra medical care, personal items, such as televisions, radios, computers, vacations, companionship, advocates or any other item or service to enhance your child’s self-esteem and situation (anything except food and shelter). With respect to shelter, your child can use the money to purchase a home, but cannot use the money for rent.
Challenging a Power of Attorney or Patient Advocate Designation
Oftentimes, parents who have minor or adult children with special needs wonder what the future will hold for their special loved one. Will they be productive in society, will they need governmental benefits, who will take care of them and be responsible for their financial needs? We have developed a very unique approach to address these questions – the “Wait and See Special Needs Trust”. A Special Needs Trust would be set up as a vessel into which an inheritance would go. However, a decision would be made by the trustee at the time that the parents pass away whether or not this individual is likely to need government benefits in the future. Specifically, the Wait and See Trust requires the trustee to test and have your special needs loved one evaluated educationally, cognitively, rehabilitatively, physically and emotionally.
These evaluations also include, but are not limited to, a physical and psychological evaluation, and evaluation of education and training programs, work opportunities and earning, recreation, leisure time, and social needs. If he or she is not likely to need government benefits, then the Special Needs Trust would not be used and the assets can then be used for basic needs as well as special needs. The benefit of this, of course, is that we have the advantage of planning for an unknown future.
As a parent, not only do you want to provide an inheritance to your children, but when you have a child with special needs, you often are the only one who knows their medical needs (i.e. doctors, prescriptions, as well as the child’s likes and dislikes). The Special Needs Trust incorporates a Letter of Guidance that addresses all of the information that caregivers so vitally need.
While government agencies recognize Special Needs Trusts, there are strict rules and it is critical that you work with an experienced special needs attorney to draft the Trust. One wrong word or phrase can make the difference between an inheritance that benefits your child and one that causes your child to lose the many services, assistance and benefits available.
Parents of special needs children can solve their greatest worry with a properly drafted Special Needs Trust.
For more information on Special Needs Trusts and to stay up to date on the laws, contact The Center for Special Needs Planning at 1-877-PLAN-758 or www.thecenterforspecialneedsplanning.com, for a personal consultation and/or to subscribe to the informational e-letter, “The Insight: News, Stories, and Thoughts on Elder, Special Needs and Probate Law.”
This article provides general information concerning a variety of legal topics. It is not intended to be a legal opinion and should not be relied upon as legal advice. Legal advice should not be given without investigation of your particular circumstances. .
Top Ten Tips on How To Keep Your Legal Affairs
in Order.
Written by: Danielle B. Mayoras, Attorney and Director of Education for
The Center for Probate Litigation, The Center for Elder Law, and The Center for Special Needs Planning, divisions of Barron, Rosenberg,
Mayoras & Mayoras, PC
1 – Keep a list of the names and numbers of the professions that you work with as well as your account numbers, securities and insurance information.
2 – Keep your list from #1 above and your Estate Planning documents together and help your family avoid the
Scavenger Hunt.
3 – Use a fireproof box for those documents that the family has access to in the event of an emergency.
Alternatively use a safe deposit box that the family can get into in the event of an emergency.
4 – Review and update your Estate Planning documents every three to five years.
5 – Make sure to have alternate designees on your documents.
6 – Make sure that your documents have a HIPAA representative designated on the Power of Attorney.
7 – If you have a Revocable Living Trust, make sure that it is
funded.
8 – Make sure to consult with an Elder Law attorney to create a long term care plan in the event that the unexpected happens.
9 – If you have loved ones with special needs, make sure that you have a properly drafted Special Needs Trust.
10 – Make certain that your medical attorney-in-fact and patient advocate designee has a copy of your medical documents that he/she can fax to a hospital in the event of an emergency.
Tolkien Estate Settles Lawsuit over Movie Proceeds
The Lord of The Rings creator can finally rest in peace! Those in charge of J.R.R. Tolkien's estate filed a lawsuit in February 2008 against New Line Cinema claiming that the estate was deprived of hundreds of millions of dollars. It just been settled, to the delight of hobbits everywhere.
Why the lawsuit? Apparently, the orc-like movie producers only paid $62,500 for the movie rights despite earning an estimated six billion dollars! The estate's attorney says they were promised 7.5% of that figure and hadn't been paid. Let's do the math: 7.5% x 6,000,000,000 = $450,000,000. That's 450 million dollars. What, the check got lost in the mail?
Tolkien's heirs weren't the only ones screaming about not being paid. The director, Peter Jackson, also feuded with the All Seeing Evil Eye . . . I mean, the movie studio over his share of the profits. New Line Cinema had settled that mess too.
Source: Probate attorney Andrew W. Mayoras, co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law, among other areas. You can reach him by phone at 248-641-7070 or email at awmayoras@brmmlaw.com.
Marketing of Reverse Mortgages Lacks Adequate Consumer Protections, GAO Warns
As the economy has slowed and housing values have dropped, reverse mortgages have become even more attractive to seniors looking for ways to use the equity in their homes without moving. But a new study by the Government Accountability Office (GAO) raises concerns about the adequacy of consumer protections for reverse mortgage borrowers, who are sometimes subjected to misleading marketing and inappropriate cross-selling of other financial products that may be unsuitable for them.
A reverse mortgage allows homeowners 62 or older to convert the equity in their home to a flexible cash advance that does not have to be repaid until the homeowner moves, sells, or dies. Almost all reverse mortgages are made under the Home Equity Conversion Mortgage (HECM) program, which is administered by the Department of Housing and Urban Development (HUD). In the first quarter of 2009, HUD backed about $7.8 billion worth of reverse mortgages, the largest amount in any quarter since the agency launched the program in 1988, the Washington Post reports.
While reverse mortgages look like no-lose propositions at first glance, they are complex products that have significant downsides for some. For example, these loans carry large insurance and origination costs, they may affect eligibility for government benefits like Medicaid, and they are not ideal for parents whose major objective is to safeguard an inheritance for their children.
GAO reviewed marketing materials used by reverse mortgage lenders and found some claims that were "potentially misleading because they were inaccurate, incomplete, or employed questionable sales tactics."
GAO also found evidence that potentially unsuitable financial products like annuities are being sold in conjunction with reverse mortgages. The Housing and Economic Recovery Act of 2008 is intended to restrict this inappropriate cross-selling, but HUD is still in the early stages of developing regulations.
To help seniors make informed decisions about whether to obtain a reverse mortgage, Congress requires prospective borrowers to obtain adequate counseling by an independent third party. As part of its investigation, the GAO employees went undercover to receive such counseling. While the GAO found that the counselors generally conveyed accurate and useful information, none of the counselors covered all of the topics required by HUD and in nearly half the sessions the counselors did not discuss required information about alternatives to reverse mortgages.
The GAO concludes that these issues pose "emerging consumer protection risks" for reverse mortgage borrowers and the agency makes a number of recommendations to improve consumer protections.
To read the GAO report, "Reverse Mortgages: Product Complexity and Consumer Protection Issues Underscore Need for Improved Controls over Counseling for Borrowers," click here.
The Cost of Feuding Families:
What Happens When The Family Can't Get Along?
Dealing with a loved one with Alzheimer's or dementia is difficult enough, but the problem becomes even more troublesome when the condition acts as a spark to ignite family conflict. Sibling rivalries, second marriages, denied incompetence, and simple greed are but some of the situations that add fuel to the fire and foster dramatic family feuds. Often the fire grows so great that families become torn in half, spending months - or even years - battling in probate court. Sadly, many families are never able to repair the damage, emotionally or financially.
No one wants to end up in probate court fighting in a public family squabble. What can be done to avoid it? Sometimes nothing. If someone else is determined to steal from, cheat, or improperly care for someone suffering from Alzheimer's or dementia, you may have no choice but to go to court. Other times, probate court battles can be prevented, or at least minimized. How? Two ways: know when to call an experienced probate litigation attorney and know your legal rights.
The first one is easy. Anytime you suspect that someone is not acting properly towards an elderly loved one in a way that will either jeopardize that persons' care or well-being, or may result in a loss of assets, then you should call an attorney who regularly represents clients in contested probate matters. Many such attorneys offer a low-cost or even free consultation. For example, the experienced attorneys at The Center for Probate Litigation will provide a free consultation to discuss your specific situation and let you know whether action is required. Too many families regret waiting and doing nothing - when in doubt, call an expert.
The second way to protect your family and often avoid court is to become educated about your legal rights. The following is an overview of the basic concepts that families of a loved one with Alzheimer's or dementia may face when a family dispute or conflict threatens to surface.
Challenging a Power of Attorney or Patient Advocate Designation
Many people believe that once someone signs a power of attorney, for either health care or financial decisions, or a patient advocate designation, then all control has been surrendered to the person designated to make decisions (called the attorney-in-fact or agent) and the rest of the family has no choice but to step aside. In reality, the appointment of an attorney-in-fact or agent is often just the beginning.
A power of attorney or patient advocate designation is only valid if it was executed in compliance with Michigan law, and the person was legally competent at the time of execution. If a power of attorney or patient advocate was signed by someone who was not competent, then the document can be voided.
Even when dealing with a valid power of attorney or patient advocate designation, the attorney-in-fact has a legal responsibility to act in the best interest of the principal. For health care decisions, this means deciding where to live and whom to provide care, based on what is best for the person in need of care, not what is most convenient for the agents. Often the person appointed to make these decisions want to make these decisions based on what will maximize their inheritance or what is easiest for them. This does not fulfill their responsibility.
For financial decisions, this requires the attorney-in-fact to invest prudently and refrain from self-dealing. Often, a person with Alzheimer's or dementia requires much more conservative investments than he or she had previously chosen earlier in life. This may require a sale of annuities or securities, and insuring the portfolio is diversified, liquid and protected from extreme market fluctuations.
When the loved one has significant assets, following the advice of a credentialed, knowledgeable and ethical financial planner is essential. But Agents must use common sense too - just because a licensed stock broker or annuity salesmen recommends an investment does not make it suitable for a senior citizen with Alzheimer's or dementia.
Guardianship & Conservatorship Disputes
What do you do when you discover an invalid power of attorney or patient advocate designation, or that the attorney-in-fact is not acting in the best interests of your loved one with Alzheimer's or dementia? The only way to make sure that control is taken away from an agent who is not acting appropriately is to initiate guardianship and/or conservatorship proceedings.
Both proceedings are handled in probate court and involve someone asking for a decision maker to be appointed. Guardians make medical, placement and other life decisions, while Conservators make financial decisions. One person can serve in both functions, but courts can appoint different people as well.
Who gets appointed in these roles? Most often, it is a family member or another loved one of the individual in need of protection, or ward. And, the ward's choice does matter! This is especially true for someone with early stages Alzheimer's or dementia who still retains some decision-making ability, but requires some assistance. Even an incompetent person's choice will carry great weight if it was expressed through a power of attorney or patient advocate signed while the person was still competent.
Judges who make this decision often have a difficult time when the family disputes who should act in that role. Sibling rivalries and second marriages present significant challenges. Because probate judges have a great deal of discretion in making decisions, family members vying for appointment must do everything they can to convince the judge that they are the most suitable, and that their opponent is not. This process is not fun for anyone who participates, but sometimes is necessary.
Once the guardian and/or conservator is appointed, those who serve have similar fiduciary obligations as an Attorney-in-Fact. The big difference is that they are monitored by the probate court, and file detailed reports on an annual basis, so that the probate court can make sure that the ward is properly protected. Probate courts often also require bonds to be posted when the protected person has significant assets.
Certainly, no one should choose to initiate a guardianship or conservatorships proceeding unless they have no other good choice. But when diplomacy has failed, or when a loved one's Alzheimer's or dementia causes them to be too stubborn to admit that they need help making decisions, it is the only safe choice. With an experienced attorney guiding the family, protective proceedings through probate court helps many people sleep at night knowing their loved one is safe.
Theft and Loss of Assets
Court disputes are not always done to safeguard a person's well-being. Often they are necessary to help a loved one from losing assets, either through mismanagement caused by their dementia or Alzheimer's, or theft or exploitation from an unsavory family member or annuity salesman. Knowing when to intervene or not is not always easy.
Many seniors suffering from Alzheimer's or dementia do not want to admit that they need help with their financial decisions. Often, their children do not want to insult them by asking too many questions. But when you have a loved one diagnosed with dementia or Alzheimer's, you owe it to them to probe. Make sure their investments are secure and appropriate, and their assets are protected.
In doing so, pay attention to warning signs of exploitation. The National Center on Elder Abuse lists many warning signs of exploitation, including sudden changes in banking practice, unexplained withdrawal of large sums of money, the addition of names on a bank signature card, unauthorized withdrawal of the elder's funds using an ATM card, abrupt changes in a will or other financial document; substandard care being provided or bills unpaid despite the availability of adequate financial resources, forged signatures, and unexplained transfers of assets, among others.
If you discover any of these warning signs, talk to an elder law attorney with knowledge in financial matters immediately. Often, children or other trusted family members are the ones exploiting or even stealing money from someone suffering from Alzheimer's or dementia. In other cases, there are greedy financial planners who target vulnerable adults with high-commission, inappropriate investments. Financial exploitation is not always easy to spot. Being on guard and proactive is the best defense.
Challenging Changes to a Joint Asset, Will or Trust
What do you do when you discover financial exploitation in a way that is not as overt as theft? What do you do when your father with Alzheimer's or dementia has added his second wife's name to a bank account that was always meant for the family, or your mother changed her will or trust to omit you in favor of your brother or sister?
All of these can be successfully challenged in court under the right circumstances, with the help of an experienced probate litigation attorney, but only if the help is sought before it is too late. Sometimes, it is not too late even after the exploited senior passes away. Will and trust changes, joint assets -- including bank accounts and real estate, and even outright gifts can be set aside and undone on the basis of incompetence, undue influence, fraud and other reasons.
Incompetence - The test for competency varies depending on the document challenged, but for every situation, the crucial factor is whether the individual reasonably understood the nature of the document or transaction when it was signed. For someone in the early stages of Alzheimer's or dementia, this is not a bright line test with an easy answer.
Undue Influence - When a person is compelled to make a decision that he or she would not have made, the decision is often the product of undue influence, which is a basis to set it aside. In fact, the law presumes undue influence has occurred when the beneficiary was acting as the power-of-attorney, or otherwise occupied a position of confidence and trust, before the decision or document was made.
Fraud - Even when competent, vulnerable adults with Alzheimer's or dementia can be tricked into transferring assets, or changing bank accounts or estate planning documents, based on material statements of fact that are false. When someone relies on a material and false representation, the transaction or document can be set aside as invalid.
Accounts of Convenience - For joint bank accounts in particular, and sometimes other joint assets (sometimes even real estate), a loved one with Alzheimer's or dementia may add the name of a child or other trusted relative as a convenience to help will bill paying, financial management or as a "poor man's will" to save costs. If the person did not intend the joint owner to keep the asset on death, but instead only added the joint name as a convenience, then courts can and do order the asset to be turned over to the estate and shared with the other beneficiaries.
The decision whether or not to contest the joint nature of an asset, or a new estate planning document, is not always an easy one, and certainly should not be made lightly. Court battles seeking to set aside documents or transactions can be costly and time-consuming. But sometimes, honoring the true wishes of a loved one with Alzheimer's or dementia is worth the fight.
Source: Andrew W. Mayoras.
Please contact Andrew W. Mayoras for additional information or questions at awmayoras@brmmlaw.com or 1-877-PLAN-758.
You can also visit:
www.thecenterforelderlaw.com, www.thecenterforspecialneedsplanning.com, www.thecenterforprobatelitigation.com
Warning For Veterans And Their Families When Seeking Improved Pension - Aid and Attendance Care Benefits:
Purchasing Annuities, Gold and Financial Products is Not the Answer
For most veterans, the idea of collecting a pension benefit from the military does not seem like a real possibility, unless the veteran suffered a service connected disability. However, there is a veteran's pension benefit program available to all veterans, and their families, which is available to pay for un-reimbursed home health and medical expenses and the un-reimbursed cost of assisted living. This program is called the "Aid and Attendance Program" ("AA") and does not require a service connected disability. The purpose of this bulletin is not to provide a comprehensive explanation of the program but to briefly explain the pension benefit and WARN Veterans and their families that there are companies that are taking advantages of Veterans and the surviving spouses of the veteran. These companies claim to be providing "educational seminars" to the public, however their motive is to sell some type of financial product such as an annuity and sometime even gold to the family of the veteran. In fact there are some companies that use the word "Veterans" and "American" in their company name which in reality are sometimes an assumed name for a financial planning firm.
WARNING: Recently and over the last several years, individuals have formed various companies stating their main goal is to "help" our veterans, but their true agenda is anything but. Many of these individuals, regardless of their affiliations or backgrounds, repeatedly contact Assisted Living and Independent Living facilities offering to put on "free informational seminars" educating the general public as to what they may be missing out on. The fact of the matter is, these individuals have surfaced as "Financial Advisors" and are using their "free informational" presentation, and a confusingly similar name appeared to be linked to a legitimate Veterans organization, to market and sell annuities and gold which are unsuitable to the Veteran and their families. Not only are these investments not suitable, but they are not necessary and in most cases extremely detrimental to the Veteran and their families. These organizations also suggest the Veteran give away most of their assets without considering any of the tax consequences or devastating Medicaid qualification penalty if their health should worsen and the Veteran would need a nursing home.
Veterans and their families should understand that it is never necessary to purchase a financial product to qualify for Aid and Attendance benefits. Veterans and their families are encouraged to seek the advice of an Accredited Veterans and qualified elder law attorney.
Eligibility for the AA Program. In order to be eligible for the AA Program, a veteran must have served 90 days on active duty with at least one day during wartime, and must have been discharged under conditions other than dishonorable. Additionally, the veteran must be "permanently and totally disabled" though the disability need not be service connected.
The specific periods of Wartime Service are:
WWI: April 6, 1917 to November 11, 1918
WWII: December 7, 1941 to December 31, 1946
Korean Conflict: June 27, 1950 to January 31, 1955
Vietnam Era: August 5, 1964 (February 28, 1961, for veterans who served "in country" before August 4, 1964) to May 7, 1975
Gulf War: August 2, 1990 - TBA
The term Permanently and Totally Disabled means that a veteran must require "care or assistance on a regular basis," which protects him or her from dangers of a daily living environment. The term can be established by showing the veteran: is blind, has a visual impairment; is a patient in a nursing home or hospice facility because of mental or physical incapacity; is unable to dress or undress or keep himself or herself clean and presentable; needs adjustments to any special prosthetic, orthopedic appliance, or is not able to attend to the prosthetic, or appliance; or has a physical or mental incapacity (dementia) that requires assistance on a regular basis to protect the veteran from the hazards of his or her environment. Furthermore, it is generally presumed that a veteran who is residing in an assisted living facility does meet one, or more, of the aforementioned conditions.
The current AA monthly pension benefits are: Veteran & Spouse: $1,950; Veteran: $1,645.00 and the Surviving Spouse of a Veteran: $1,057.00.
Un-reimbursed Medical Expenses. Un-reimbursed medical expenses are generally defined to include the costs associated to health and Medicare insurance premiums, prescriptions drugs, dental and vision care, and expenses related to an assisted living facility, and in-home care aid, and/or adult day care.
Net Worth Valuation. Finally, assuming a veteran, and/or his or her spouse, has tentatively qualified for the AA monthly pension benefit, the final test is to fulfill the qualification process related to the net worth of the applicant. With the exception of the applicant's home, an automobile, traditional household furnishings and personal property, which are treated as non-countable, veterans' assets cannot exceed the amount necessary to pay for their medical costs. In other words, the asset limit is a formula that calculates the expenses both medical and household and multiplies the shortfall by the veterans life expectancy. There is an unwritten asset limit that is commonly referenced and maintains that a single veteran could have $40,000 in assets and married couple could have $80,000. However, if the veteran is aged and therefore has a shortened life expectancy, then these numbers may be significantly reduced. Unfortunately, some of the groups in the community advertising that they are helping veterans with eligibility for the program are not considering all the factors when evaluating a veteran's income and assets.
AA Pre-Planning. The Veterans Administration only looks at the applicant's net worth at the time of the actual AA application. At this time, since there is no penalty period for the transfer of assets prior to the time of the application, it is fair to conclude that with proper planning, just about any veteran, and/or his or her spouse, can qualify for a monthly AA pension benefit. Even though there is no penalty, transferring assets to qualify for this benefit may have other negative effects when planning for Long Term Care. Many of these organizations will suggest and encourage gifting assets to the children. Once again this should only be done if there is a complete understanding of all the risks.
Medicaid Benefits. With the Medicaid program having stricter rules and regulations regarding asset transfers than the Veterans AA Program, it is very important that Veterans and their families engage a Veteran accredited and qualified elder law attorney when developing a Long-Term Care Plan. For instance, transferring assets to qualify for AA Benefits could result in a 5 year ineligibility for Medicaid benefits.
Attorney Accreditation. The United States Department of Veterans Affairs now requires attorneys to be accredited in order to represent or advise a Veteran on eligibility requirements relating to improved pension benefits. The purpose of the new rules of the VA's accreditation program is to ensure that claimants for VA benefits receive qualified assistance in preparing and presenting their claims.
BEWARE: Some companies have exploited veterans by charging inflated costs for filing the application, sold inappropriate products as a means of achieving eligibility, and have provided inaccurate and incomplete advice which has resulted in some veterans having to pay back the Veterans Administration for inaccurate claims. Beware of these groups and seek a second opinion.
Source: This article/bulletin is authored by the Elder Law and Disability Rights Section of the State Bar of Michigan. For more information please contact Don L. Rosenberg, chair-elect of the section at rosedr@brmmlaw.com or 248-641-7070.
Don has been practicing law for over twenty-eight years. His practice is limited to specializing in issues concerning disability, estate, long term care, nursing home, Medicaid and special needs planning. He is the Chairman of the Board of Directors of the Alzheimer's Association - Greater Michigan Chapter and member of the Association's executive committee; Member of National Academy of Elder Law Attorneys and has been listed since 1991 in the Academy's Experience Registry. He is also the Chair-Elect and Officer of the Governing Council of the Elder Law and Disability Rights Section of the State Bar of Michigan and a Charter Member of the Academy of Special Needs Planners. Don is a member of the Financial and Estate Planning Council of Metropolitan Detroit and recently has become an accredited attorney with the US Department of Veterans.
Learn from Michael Jackson’s Estate Mistakes:
Michael Jackson's Mother Won't Administer his Estate
The Michael Jackson Estate was back in court again earlier this week, now that his will has surfaced. I posted the will and my thoughts about it a few days ago. Previously, Michael Jackson's mother had been temporarily granted control of his estate after she opened the probate proceeding stating she was not aware of him having a will.
Generally, it's pretty cut and dry when there is a will. Whomever the will names as the executor (or co-executors when multiple people are named as in this case) is normally appointed by the probate court to have legal authority to make the decisions for the estate, including gathering property that belonged to the person who died, paying debts and dealing with creditors, selling assets, and distributing money to the beneficiaries.
Of course, nothing can be easy with the Michael Jackson Estate. The judge held a hearing on Monday to determine if attorney John Branca and music executive John McClain should be granted the legal authority that normally goes to those named in the will as executors. Katherine Jackson argued the duo wasn't suitable to act, may have conflicts of interest, and that Branca had been fired by Jackson. Branca says he was rehired on June 17th, about a week before Jackson died.
The judge sided with Branca and McClain, but only in part. He appointed them on a temporary basis until August 3rd, at which time another court hearing will take place to determine if the will should be accepted as valid by the probate court. Katherine Jackson's attorney says they are still looking to see if any other subsequent wills exist that would override the 2002 will. They also have the right to contest the 2002 will as invalid, which Katherine apparently doesn't wish to do.
Branca and McClain were given the power to negotiate with the concert promotion company that may be owed money because Jackson died without performing the concert tour that was scheduled. The pair also can seek to stop all those who have (and will continue to) profit from Jackson's death without permission, by selling t-shirts and other memorabilia with the King of Pop's name and image.
But, the judge also ordered that they have to keep Katherine informed of their actions. He will consider her wishes before allowing Branca and McClain to enter into any agreements that effect the Estate. The LA Times wrote about the court hearing today.
As I wrote in my prior post, Jackson tried to protect his family from probate court by creating a Family Trust. Everything that the Estate does will be for the benefit of that Trust. Because trusts (unlike wills) are private documents that the public does not have a right to see, we may never know how Jackson's property ultimately passes. Of course, it is widely assumed that his children are the primary beneficiaries.
What all this fighting in court does tell us about the Trust is that Jackson apparently did not use it the right way. If he had properly funded that Trust -- by placing all of his property, rights and other assets into it -- then the trustees of that Trust would control everything, not the executors of his Estate. In other words, none of the court hearings would be necessary, and the matter would be handled in private by those he trusted to do so. Probate courts don't have to oversee what happens with a Trust, but they do for wills and estates.
If you want to learn more about the difference between wills and trusts, here is a chart used by a division of my law firm, The Center for Elder Law.
Court documents filed in the probate court proceeding indicate the Michael Jackson estate has a value of at least $500 million. If this valuable property had been placed into the Trust during Jackson's life -- as he should have done -- then it would not matter who was appointed as the Estate administrator.
I have a feeling that as this matter progresses, we'll learn a lot more about Jackson's property, debt, trust and estate, all because Jackson didn't properly use his Trust. This highlights how important it is for anyone with even a modest net worth to work with a good estate planning attorney. With a properly funded trust, there is no need for families to waste time or money in probate court.
Source: Probate attorney Andrew W. Mayoras, co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law, among other areas. You can reach him by phone at 248-641-7070 or email at awmayoras@brmmlaw.com.
10 Reasons to Create an Estate Plan Now
Many people think that estate plans are for someone else, not them. They may rationalize that they are too young or don't have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth. (For more information on estate planning, see our Estate Planning section.)
- Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).
- Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.
- Dying without a will. Who will inherit your assets? Without a plan, your assets pass to your heirs according to your state's laws of intestacy (dying without a will). Your family members (and perhaps not the ones you would choose) will receive your assets without benefit of your direction or of trust protection. With a plan, you decide who gets your assets, and when and how they receive them.
- Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse and to the children from a prior marriage or marriages.
- Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.
- Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child's spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.
- Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.
- Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.
- Business ownership. Do you own a business? Without a plan, you don't name a successor, thus risking that your family could lose control of the business. With a plan, you choose who will own and control the business after you are gone.
- Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.
How Parents Can Provide Financially for a Special Needs Child in This Uncertain Economy
Have you ever wondered what would happen to your special needs loved one if you passed away tomorrow? Have you done everything possible to ensure that your loved one with special needs will maintain his or her government benefits and receive an inheritance from you? For many parents with special needs children, whether the children are minors or adults, these questions linger in the back of their minds. Estate planning is always important to do, however, when one of our beneficiaries is a special needs loved one, the planning becomes critical.
When a parent leaves an inheritance over $2,000 to an individual with special needs, then that inheritance is actually a gift to the government because it eliminates that child's qualification for government benefits. Parents and attorneys armed with the basic knowledge, that you cannot have assets in excess of $2,000 and still qualify for government benefits, often think that the only reliable method to protect a special needs loved one is to disinherit them. They believe, or are counseled, that leaving their inheritance to another child or individual who will morally take care of their special needs loved one solves the problem. In most cases, however, this does not solve the problem, but only makes it worse. Leaving everything to your daughter “Susie” if “Johnny” has special needs, would allow Susie's creditors to attach Johnny's money. In addition, if Susie is having a bad year financially, there is nothing to stop her from using the money for herself. Furthermore, if Susie passes away, this money would go on to her beneficiaries and not to Johnny.
Parents can solve all of these problems by creating a Special Needs Trust. A properly drafted Special Needs Trust allows the special needs individual to maintain government benefits and to use the inheritance for everything but food and shelter. The Special Needs Trust is the perfect solution and the only reliable method to make sure that your inheritance benefits your child with special needs. The Special Needs Trust keeps assets in a form that will be available for your child and allows your child to maintain and receive government benefits.
A properly drafted Special Needs Trust will specify that funds from the Trust only supplement and do not replace the government benefits. These funds can be used for extra medical care, personal items, such as t.v.s, radios, computers, vacations, companionship, advocates or any other item or service to enhance your child's self-esteem and situation, anything except food and shelter. With respect to shelter, your child can use the money to purchase a home, but cannot use the money for rent.
Oftentimes, parents who have minor or adult children with Cerebral Palsy wonder what the future will hold for their special loved one. Will they be productive in society, will they need governmental benefits, who will take care of them and be responsible for their financial needs? We have developed a very unique approach to address these questions - the Wait and See Special Needs Trust. A Special Needs Trust would be set up as a vessel for an inheritance to go into, however, a decision would be made by the trustee at the time that the parents pass away whether or not this individual is likely to need government benefits in the future. Specifically the Wait and See Trust requires the trustee to test and have your special needs loved one evaluated educationally, cognitively, rehabilitatively, physically and emotionally. These evaluations also include, but are not limited to, a physical and psychological evaluation, an evaluation of education and training programs, work opportunities and earnings, recreation, leisure time, and social needs. If he or she is not likely to need government benefits, then the Special Needs Trust would not be used and the assets can then be used for basic needs as well as special needs. The benefit of this, of course, is that we have the advantage of planning for an unknown future.
As a parent, not only do you want to provide an inheritance for you child or your children, but when you have a child with special needs, you often are the only one who knows their medical needs i.e. doctors, prescriptions, as well as the child's likes and dislikes. The Special Needs Trust incorporates a Letter of Guidance that addresses all of the information that caregivers so vitally need.
While government agencies recognize Special Needs Trusts, there are strict rules and it is critical that you work with an experienced special needs attorney to draft the Trust. We have reviewed countless Special Needs Trusts that do not comply with Social Security Insurance and Medicaid rules. One wrong word or phrase can make the difference between an inheritance that benefits your child and one that causes your child to lose the many services, assistance and benefits available.
We know that a parent's greatest worry is what will happen after I am gone. One parent shares his experience as follows:
It had been in the back of my mind for years, soon after I found out my son had this lifelong disability. What would the future hold for him when I wasn't there anymore to be his advocate, friend and supporter? It was both a big and little worry. Big, because it gave me a hole in my gut whenever the question crept in. And little, in the sense that I tried not to think about it. I'd think: I'll worry about that tomorrow, next week, when he's older, when I'm older.
Of course, I've done things to prepare for that future he's going to have without me, things like teaching him how to wash clothes and shop. But should I write a Will? Make an estate plan? No, for years, I dodged that one totally.
But you know, it's funny. Now that we're finished setting up our estate and only need periodically to review our plans, I feel like an enormous burden has been lifted up from me. The big, black, scary shadow is gone. Well, not totally gone, I suppose. I still worry about Samuel, what will happen to him in his life. I guess every parent does that. But now I don't worry in the same way. I know I've done all I can do for that part of his future, something that was extremely important to do, and I am very relieved. Now I feel like we can deal fully with the present day and see to the other things that need to be done to prepare our child for life as an adult. And that's very exciting.
Parents of special needs children can solve their greatest worry with a properly drafted Special Needs Trust. If you would like more information on Special Needs Trusts, you can contact The Center for Special Needs Planning at (248) 641-7070 or visit our website at www.thecenterforspecialneedsplanning.com.
Source: Danielle Mayoras and Don Rosenberg,
attorneys from The Center for Special Needs Planning
Wesley Snipes and the Pure Trust scam
In my Michigan probate litigation practice, I see many instances of scams and exploitation of seniors. I've been working on a new case involving a "pure trust". Normally, I'm all in favor of trusts. That is, legitimate trusts, such as the revocable living trusts that most reputable estate planning attorneys use.
Any trusts offered by a company rather than a lawyer should be questioned right off the bat. For example, I previously posted an article about "trust kits" and why they are dangerous. Pure trusts, sometimes known as "common law trusts" or "constitutional trusts", are even worse.
Since the early 1990's, unscrupulous companies have been peddling these documents to help people place assets into what they describe as separate legal entities that are outside of the jurisdiction of the United States. Why would that interest people? Taxes. You transfer your assets into these pure trusts, the sales pitch goes, and boom -- no more taxes!
Sound too good to be true? It is. The IRS has been cracking down on pure trust companies, such as Commonwealth Trust Company, prosecuting everyone involved for tax evasion and fraud. Many of those involved (at least the ones who could be found) have received lengthy jail sentences.
Companies like this prey on the seniors and other vulnerable, trusting adults with seminars and other sales efforts that sound legitimate. They promise that there is legal precedence that pure trusts work. Many unsuspecting elderly adults, and others, plop down thousands, transfer their investments, and then stop paying taxes. And yes, customers have been prosecuted, convicted and sentenced, along with principals.
And if the risk of jail time wasn't enough, there's more. Those who invest money into these products lose control. That means their money can be placed into shady offshore investments -- or even worse, outright stolen. And seniors are a prime target because they are considered easier to dupe.
So how exactly does Wesley Snipes fit into all this? It seems he was a big proponent of pure trusts. The IRS alleged he intentionally failed to file tax returns and committed fraud. While Snipes proclaimed his innocence, the federal government had evidence he hosted seminars for companies that sold these and tried to convince others to become their clients and stop paying taxes.
Snipes was tried by a jury in 2008. He was found guilty of three counts of failing to file tax returns and pay taxes. He was sentenced to 36 months in jail (the maximum sentence) and ordered to pay restitution in the amount of $17 million, plus interest and penalties.
However, Snipes was found innocent of the felony charges of tax fraud and conspiracy. His two co-defendants were found guilty of those charges and received longer jail sentences.
You can read the sentencing report filed about Wesley Snipes' case, which details some of the evidence against him. It claims that he evaded paying taxes of more than 15 million dollars and cost the United States Treasury more than $41 million. He also was part of a scheme, the government contends, of submitting false tax refunds claims and other fraudulent documents seeking tens of millions of dollars.
So far, Snipes has avoided jail time by appealing the case to the Eleventh Circuit Court of Appeals. He claims he was an innocent bystander in the pure trust scams, not a participant. His attorneys argue the trial was improper and the sentence too long.
A very comprehensive discussion of the history of pure trust companies and their methods is available on the anti-defamation league website.
How do you know the difference between a legitimate trust and a scam? First, work with a reputable and experienced estate planning attorney. Don't try to save money working without one.
Second, if it sounds to good to be true, it probably is. You can't avoid taxes by placing your money into a trust.
Third, never, ever sign anything that names someone as a trustee who you don't know. Only those you trust can fill that important role.
You wouldn't hand your money to a stranger and trust him or her to take care of you. But that's exactly what you're doing if you fall prey to a pure trust. Protect yourself -- and your elderly loved ones.
Even with the IRS crackdown, these scams are still prevalent on the internet and elsewhere. Warn your elderly family members. And when in doubt about any legal document you consider signing, talk to an attorney first.
Source: Probate attorney Andrew W. Mayoras, co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law, among other areas. You can reach him by phone at 248.641.7070 or email at awmayoras@brmmlaw.com.
What’s in Your Parent’s Wallet? (And What That Means for You)
Taking stock of your elderly parent’s financial situation usually requires initiating a potentially uncomfortable discussion--money matters are a touchy subject, especially when family comes into play. Elderly parents are often reluctant to share control of their finances. It may be simply that they just don’t know the details surrounding the state of their finances. No matter what the situation, try to include your parents in managing their finances. Eliminating their involvement may prove to be psychologically debilitating to them, as it can feel like a loss of control.
Show your acknowledgment and concern by sharing and exchanging information with your parents. This open dialogue will help with difficult decisions or changes that might need to be made. Oftentimes, an objective third party can help gather the necessary information without the intimidating family interplay.
The state of one’s financial affairs can incite many emotional issues. Familial rivalries, differing needs and relationships with the parent can all result in unproductive rifts that complicate the situation for everyone. Consider that your parents’ life experiences affect the way they think, and the decisions they wish to make. Please respect the fact that their financial resources are just that--theirs!
Create a Budget--Simple as 1-2-3
Calculate a budget by identifying all income and expenses. Don’t be intimidated by this task--you can complete it in three painless steps.
- Review bank account records, investment information and old bills. These will give you some guidance. Order copies if necessary, and use the table below to guide you.
Income Expenses
Present
Projected
Future Needs
- Now calculate your parents’ net worth. Inventory the assets from the most liquid (i.e, the easiest and least costly to access) to the assets that are more difficult to liquidate. For example, you may want to begin the list with checking and money market accounts and end it with assets such as real estate.
- Follow this with a specific list of all debt and other unpaid liabilities. Be sure the asset values you use are conservative and pad the liabilities for safety.
Questions to Consider in Helping Manage Your Parents’ Finances
- Are your elderly parents able to continue managing their finances on their own?
- Do they merely need assistance with bill paying, necessary record keeping or organization?
- Is a change in strategy required either because of their living situation and care needs, or market conditions?
- Are they financially stable, having more than adequate income to meet increasing expense demands?
- Do they have sufficient assets (or insurance coverage) to tap that would cover any increasing financial burden?
- What is the present and future going to demand financially?
- Will the cost of long-term care be a factor?
Be realistic! Identifying options and their costs begins here. A financial planner can help evaluate the situation and alternatives. Discuss with your parents the possible combination of government, insurance, community and family resources as financing alternatives.
Getting organized will lay the foundation for making sound financial decisions. Simplifying one’s financials through consolidation, as long as there isn’t a cost, can be very beneficial. Preparing for financial management will help you improve your parents’ quality of life.
Source: Suzanne Wolfson, MBA, CFP, www.ForRetiredOnly.com
Nursing Home Rating Tool Launched
We’ve been following the widespread issue of nursing home abuse for some time. Last year, the former Bush administration finally published the names of 131 of the nation’s worst nursing homes. Now, says the Wall Street Journal, the federal government is increasing efforts to improve nursing home care by implementing an evaluative Web-based tool.
The Centers for Medicare and Medicaid Services (CMS) will initiate the pilot program this summer to track how cash incentives to nursing homes improve care, specifically in nurse staffing and preventable hospitalizations, said the Journal. The agency also flags those listed as the worst, which has increased to about 135, on the Web site. The most problematic facilities are labeled as "Special Focus Facilities," noted the Journal.
In a harrowing example of the widespread problem of elder abuse and negligence, last year, the family of a deceased Norwich, Connecticut man filed what is believed to be the first wrongful death lawsuit against officials at Connecticut’s largest nursing home chain: Haven Healthcare. The suit claimed that misappropriation of Haven funds by Chief Executive Officer Raymond Termini contributed to "deplorable conditions." The family also sought permission to sue the state departments of public health and social services, and Nancy Shaffer, the state’s long-term care ombudsman, for failing to investigate and act on complaints lodged by the family.
The deceased family member was a patient at Haven homes for over two years when he was rushed to a hospital after his wife found him in excruciating pain and his legs gangrenous and in early rigor mortis, allegedly due to an untreated and infected pressure sore on his hip and physical restraints that immobilized him. The man died two days later.
There are roughly 16,400 nursing homes nationwide and taxpayers spend about $72.5 billion annually to subsidize nursing home care. Late last year the CMS began ranking nursing homes "based on government inspection results, staffing data, and quality measures" via the "Nursing Home Compare" system, which is available at medicare.gov/NHCompare, said the Journal.
"We are certainly taking assertive steps to make sure nursing-home residents are adequately protected and to stimulate improvement on the part of various providers," said Thomas Hamilton, CMS’s survey and certification group’s director, quoted the Journal.
The Journal also pointed out that approximately three million Americans require nursing-home care annually. A costly expense, many elderly and disabled patients must pay for such care themselves because they earn too much to qualify or simply don’t qualify for the benefit. If covered, benefits are limited—up to a mere 100 days following a minimum of three-day hospitalization with a doctor ordering care for the same reason as the hospitalization and for specific treatments, such as physical therapy, said the Journal citing the elder care advocacy group the AARP. After 20 days of full benefits, the patient must pay $133.50 daily, and then the full day’s cost each day after the first 100 days, noted the Journal.
When reviewing the Web site, the Journal warns consumers to conduct additional research, such as in-facility visits, speaking to other residents, data review, and state and other source review. Advocacy group, the National Citizens’ Coalition for Nursing Home Reform, warns some nursing home-provided data may contain errors and that consumers should check regularly for monthly updates, said the Journal.
Source: NewsInferno.com
How Parents Can Provide Financially for a Special Needs Child in This Uncertain Economy
Have you ever wondered what would happen to your special needs loved one if you passed away tomorrow? Have you done everything possible to ensure that your loved one with special needs will maintain his or her government benefits and receive an inheritance from you? For many parents with special needs children, whether the children are minors or adults, these questions linger in the back of their minds. Estate planning is always important to do, however, when one of our beneficiaries is a special needs loved one, the planning becomes critical.
When a parent leaves an inheritance over $2,000 to an individual with special needs, then that inheritance is actually a gift to the government because it eliminates that child's qualification for government benefits. Parents and attorneys armed with the basic knowledge, that you cannot have assets in excess of $2,000 and still qualify for government benefits, often think that the only reliable method to protect a special needs loved one is to disinherit them. They believe, or are counseled, that leaving their inheritance to another child or individual who will morally take care of their special needs loved one solves the problem. In most cases, however, this does not solve the problem, but only makes it worse. Leaving everything to your daughter “Susie” if “Johnny” has special needs, would allow Susie's creditors to attach Johnny's money. In addition, if Susie is having a bad year financially, there is nothing to stop her from using the money for herself. Furthermore, if Susie passes away, this money would go on to her beneficiaries and not to Johnny.
Parents can solve all of these problems by creating a Special Needs Trust. A properly drafted Special Needs Trust allows the special needs individual to maintain government benefits and to use the inheritance for everything but food and shelter. The Special Needs Trust is the perfect solution and the only reliable method to make sure that your inheritance benefits your child with special needs. The Special Needs Trust keeps assets in a form that will be available for your child and allows your child to maintain and receive government benefits.
A properly drafted Special Needs Trust will specify that funds from the Trust only supplement and do not replace the government benefits. These funds can be used for extra medical care, personal items, such as t.v.s, radios, computers, vacations, companionship, advocates or any other item or service to enhance your child's self-esteem and situation, anything except food and shelter. With respect to shelter, your child can use the money to purchase a home, but cannot use the money for rent.
Oftentimes, parents who have minor or adult children with Cerebral Palsy wonder what the future will hold for their special loved one. Will they be productive in society, will they need governmental benefits, who will take care of them and be responsible for their financial needs? We have developed a very unique approach to address these questions - the Wait and See Special Needs Trust. A Special Needs Trust would be set up as a vessel for an inheritance to go into, however, a decision would be made by the trustee at the time that the parents pass away whether or not this individual is likely to need government benefits in the future. Specifically the Wait and See Trust requires the trustee to test and have your special needs loved one evaluated educationally, cognitively, rehabilitatively, physically and emotionally. These evaluations also include, but are not limited to, a physical and psychological evaluation, an evaluation of education and training programs, work opportunities and earnings, recreation, leisure time, and social needs. If he or she is not likely to need government benefits, then the Special Needs Trust would not be used and the assets can then be used for basic needs as well as special needs. The benefit of this, of course, is that we have the advantage of planning for an unknown future.
As a parent, not only do you want to provide an inheritance for you child or your children, but when you have a child with special needs, you often are the only one who knows their medical needs i.e. doctors, prescriptions, as well as the child's likes and dislikes. The Special Needs Trust incorporates a Letter of Guidance that addresses all of the information that caregivers so vitally need.
While government agencies recognize Special Needs Trusts, there are strict rules and it is critical that you work with an experienced special needs attorney to draft the Trust. We have reviewed countless Special Needs Trusts that do not comply with Social Security Insurance and Medicaid rules. One wrong word or phrase can make the difference between an inheritance that benefits your child and one that causes your child to lose the many services, assistance and benefits available.
We know that a parent's greatest worry is what will happen after I am gone. One parent shares his experience as follows:
It had been in the back of my mind for years, soon after I found out my son had this lifelong disability. What would the future hold for him when I wasn't there anymore to be his advocate, friend and supporter? It was both a big and little worry. Big, because it gave me a hole in my gut whenever the question crept in. And little, in the sense that I tried not to think about it. I'd think: I'll worry about that tomorrow, next week, when he's older, when I'm older.
Of course, I've done things to prepare for that future he's going to have without me, things like teaching him how to wash clothes and shop. But should I write a Will? Make an estate plan? No, for years, I dodged that one totally.
But you know, it's funny. Now that we're finished setting up our estate and only need periodically to review our plans, I feel like an enormous burden has been lifted up from me. The big, black, scary shadow is gone. Well, not totally gone, I suppose. I still worry about Samuel, what will happen to him in his life. I guess every parent does that. But now I don't worry in the same way. I know I've done all I can do for that part of his future, something that was extremely important to do, and I am very relieved. Now I feel like we can deal fully with the present day and see to the other things that need to be done to prepare our child for life as an adult. And that's very exciting.
Parents of special needs children can solve their greatest worry with a properly drafted Special Needs Trust. If you would like more information on Special Needs Trusts, you can contact The Center for Special Needs Planning at (248) 641-7070 or visit our website at www.thecenterforspecialneedsplanning.com.
Source: Danielle Mayoras and Don Rosenberg,
attorneys from The Center for Special Needs Planning
Celebrity Money Battles
Britney Spears
Britney Spears’ biggest fan may be a lawyer she doesn’t want.
Spears’ life and career have improved since she was 26 and her father, Jamie Spears, became her legal conservator and guardian. Last October, Britney agreed to have her father continue to make decisions for her and to control her extensive finances indefinitely. Case closed, right?
Not so fast. At the beginning of the conservatorship, an attorney named Jon Eardley claimed that Britney, now 27, had asked him over the telephone to help her fight the conservatorship. Britney’s father moved for a restraining order against him. Eardley insisted that if Britney was well enough to go on tour, she could appear in court to help support his defense. Eardley even tried to move the case to Federal Court, arguing Britney was denied a fair trial in the California Superior Court.
None of that worked. Early in March, Eardley was back before the judge in Los Angeles, claiming Britney was being subjected to forced labor similar to what Soviet dissidents endured as described by Aleksandr Solzhenitsyn in his famous book, “The Gulag Archipelago.”
Eardley’s request to have the restraining order preventing him from filing papers on her behalf was denied. And last week, he was also ordered to stay at least 100 yards away from her and her kids for three years.
Whitney Houston
When Whitney Houston’s father died in 2003, Whitney Houston was the beneficiary of his $1 million life insurance policy. Six years later, Whitney’s stepmother, Barbara Houston, sued Whitney, claiming the policy was to be for her own benefit as a widow.
The tale started when Whitney, now 45, was good enough to loan her father $723,000 to buy a condo for himself and his wife. According to Barbara, the life insurance policy was supposed to cover that outlay, and leave enough of a balance for herself.
Although Whitney’s lawyers sent signals back in January they would be attempting to settle the case out of court, Whitney filed a countersuit against Barbara in March, claiming she was entitled to keep not just the life insurance money, but an additional $1.6 million that Barbara owed her.
The counterclaim details that Barbara was a 27-year-old “custodial care services worker” in Newark, New Jersey, when she met Whitney’s father, 67, while cleaning his home. It goes on to explain that Whitney’s father divorced Whitney’s mother to marry Barbara.
Further, it lists Whitney’s payments for everything from cars and gas and air conditioning to furnishings and remodeling at Barbara’s direction.
Airing this much dirty laundry is unnecessary, but not unusual. It’s a sign of understandable bitterness that often leads to prolonged legal adventures.
Marlon Brando
Even before the legendary actor breathed his last in 2004, the Brando trust and estate began wrestling over his legacy. Since then, there have been 26 different lawsuits, including claims of sexual harrassment, forgery, fraud, undue influence and abuse.
Some claim that Brando, who confined himself to his bedroom for months before his death, declined to the point that he wanted his room padlocked after he died to ensure nobody would steal the buttons from his shirt.
With the latest challenge, Brando’s three trustees are battling a Hollywood apartment development that dares feature a “Brando Loft.” Their own Brando-branded enterprise plans an environmentally conscious condo complex in the South Pacific, projected to cost between $50 and $100 million.
With that, even The New York Times weighed in last week.
Anna Nicole Smith
After 14 months of marriage, Anna Nicole Smith’s 90-year-old husband, J. Howard Marshall, died in 1995. His storied career in law, government, and oil left a fortune worth hundreds of millions of dollars. But none of it went to Anna Nicole, who claimed in a series of lawsuits that her stepson, Pierce Marshall, had forged documents and lied to his father to interfere with her inheritance.
In 2006, after a series of complex court cases that included appeals all the way to the United States Supreme Court, Anna Nicole was awarded a total judgment of $88 million dollars in damages from Pierce Marshall, the stepson. He died within months, before she could collect the money. And then, of course, less than a year later, she died as well.
Last month, Howard K. Stern, who was proven not to be the father of Anna Nicole Smith’s daughter, Dannielynn, asked the Supreme Court to allow the money to be paid. His fear was that the Pierce Marshall estate would dispose of its assets and never pay the Anna Nicole Smith estate. His request was denied, until all outstanding legal issues are resolved.
That could take years. And the money could well be gone by the time the case is resolved. By then, Stern could be serving time in jail for the criminal charges he is now facing for providing Anna Nicole with thousands of prescription pills before her final overdose.
Source: Andy Mayoras is an internet-savvy probate lawyer. Besides practicing probate law in the Detroit area, he uses Twitter to announce interesting developments in legal cases. For more information on the cases above, see his Probate Lawyer Family Feud Blog.
The Mess They Left
Many people die with nothing in order. Here's some help sorting it all out.
In the torrent of estate-planning advice out there, one simple but crucial bit of wisdom often gets overlooked: Keep your stuff in order.
Surviving family members can get overwhelmed when loved ones leave behind disorganized financial statements and cluttered homes. Heirs and executors must become de facto investigators, sorting through the junk to figure out where the assets are -- and what should be done with them.
Prevention is, of course, the best solution, such as asking blunt questions about where wills and other important papers are located. Many people, however, avoid the subject or die unexpectedly, leaving survivors with the burden of chaos.
"No one is sitting around while they're alive preparing their items for someone to go through after they die," says Lori Perlman, an estate-planning attorney in New York.
With that in mind, here's advice about untangling some common messes.
A Missing Will
Estate planning is useless if crucial documents are missing after a person's death -- and perhaps most crucial of all is the will.
Safe-deposit boxes are among the most common repositories, says Lawrence C. Wohl, an estate-planning attorney in Princeton, N.J. Many banks allow survivors to search a decedent's deposit box for a will -- but in the presence of a bank employee, to prevent the removal of valuables that should be distributed through the estate. Banks will typically drill open the box if the key is missing, for about $150.
If a search fails, survivors and executors must often track down advisers who helped the decedent during life.
Cathy Curtis, a financial planner in Oakland, Calif., served as executor to an estate with a missing will. Ms. Curtis helped search while emptying the decedent's home, which she says was stuffed to the rafters with clocks, paint cans and power tools.
She and family members reviewed every document in the filing cabinet, looking for professional advisers who may have known about a will. Finally, they called a lawyer whose letterhead they found in the pile. The decedent, they learned, consulted the lawyer for advice, but never executed the will.
Friends and social organizations can also provide information. Matthew A. Lapides, managing director in the wealth-management division of Gibraltar Private Bank & Trust in Coral Gables, Fla., recalls one family that tracked down a couple's advisers through fellow members of a polka-dancing club.
Once you give up, you should ask the local surrogate or register of wills -- a public official -- to appoint an administrator to oversee the distribution of assets. It will often be one of the surviving children.
The estate is then divided up according to state law, as happened in the case Ms. Curtis handled. The process took about a year, she says.
A Tangled Money Trail
But the will is only part of the critical paperwork. If heirs can't find all of a decedent's financial records, they might not be able to trace all of his or her assets. So, they might not get everything they're entitled to, and the unclaimed assets will eventually revert, or "escheat," to the state.
People who die suddenly usually leave behind the most disorganized paperwork, says Daniel Kurtzman, a lawyer in Haddonfield, N.J. "That's when the executor comes in with bags full of papers in total disarray," he says.
There's just one way to start. "You reach in, grab some handfuls of papers and start making notes of what assets you find," says Mr. Kurtzman.
Recent tax returns, which usually include names of financial institutions that paid interest or dividends, may help. Mr. Lapides says institutions and transfer agents can provide additional details, such as account balances and shares of stock.
However, he adds, it's sometimes impossible to identify every asset. Family members should check online services, offered by states free of charge, that list unclaimed assets. You should keep checking the services for at least several years after a relative's death, since it can take that long for the assets to escheat to the state.
But beware of private companies offering to track down missing assets. They usually just search the state databases, then contact family members and offer to retrieve the money for a fee. Family members can retrieve the money themselves, usually for free, by filing a claim, often with the state treasurer.
Another crucial part of the money trail: automated payments. Survivors may not be able to stop online transactions, such as sending life-insurance premiums, if they don't know passwords and user IDs, says Helen Modly, a fee-only financial planner in Middleburg, Va. The executor is typically granted access to password information after being officially appointed through the probate process, which may not occur for weeks after a death. Be prepared to present a death certificate and other documents the institution requires.
Digging Out the House
Wills typically don't provide instructions for distributing personal items. A tangible personal-property memorandum -- an addendum to the will that designates who receives certain personal items -- can prevent family disputes. But many people never draft the document.
And that often makes disposing of possessions time-consuming and emotional. Mundane objects, such as a dilapidated recliner, can evoke memories -- and provoke fights. "These things really tear families apart," says Mr. Lapides.
Ms. Curtis, the Oakland-based financial planner and executor, says the family she aided avoided rifts by drawing numbers. They lined up in order of the numbers chosen, and each selected one item during their respective turns, repeating the process numerous times.
Estate liquidators can sell and remove anything that family members don't want, typically for 30% of the gross. Give any remaining items to charities, and arrange a bulk trash pick-up with your city or town for old, worthless furniture, says Mr. Lapides.
Paying Off Debts
The sour economy is likely to leave people cash-strapped in death as well as in life. Mr. Wohl says declining real-estate values likely mean a growing number of people leave estates with insufficient assets to pay off debts.
If that happens, the executor can try to negotiate lower amounts with creditors. If they can't agree, the executor can ask a court to declare the estate insolvent. Certain types of creditors will then have priority, says Mr. Wohl. For example, state laws may require a secured debt, such as a mortgage, to be paid in full, ahead of a credit card.
Ideally, the executor will know about all existing debts and pay them out of the estate. But if a debt, such as a tax bill, surfaces after the estate is settled and heirs received their money, they won't have to cover the difference out of their own pockets. They're generally responsible for up to the amount they inherited. That's still a problem, however, if the heirs have spent the money. Be sure the executor settles debts in advance, to avoid future hassles. Otherwise, creditors could puruse the estate -- as well as the executor and beneficiaries.
And, in some cases, creditors have a long time to take action. Beneficiaries, by then, have often spent their distributions and can't pay the debt, says Ms. Perlman.
Accounting for Missing Returns
Many people who are chronically ill or dying don't bother to file tax returns. But the estate is still on the hook to the Internal Revenue Service, and the longer it takes the estate to file, the bigger the penalties.
Piecing together unpaid taxes can be a challenge. Usually, the most recently filed return, as well as bank statements, can offer clues about the financial institutions that hold assets, retirement-account distributions and direct deposits. To get a copy of a previous return, executors can file Form 56 with the IRS, which notifies the agency about the executor's fiduciary status. From there, the executor would use Form 4506 to request a copy of a return.
Still, the IRS may show mercy to families dealing with loved ones' unpaid taxes. Linda Gadkowski, a fee-only financial planner in South Easton, Mass., recalls one client whose father didn't file while terminally ill. Ms. Gadkowski sent an apologetic letter to the IRS, along with a death certificate and a doctor's letter. The tax agency waived late-filing penalties, she says.
Patience, whether dealing with taxes, or any other aspect of estate administration, is the key to preventing future hassles, says Ms. Modly. "What really causes messes is when people are in too much of a hurry to settle," she says.
Source: Suzanne Barlyn for the Wall Street Journal
Nursing Home Residents Can Keep $250 Stimulus Payment
Nursing home residents on Medicaid who draw Social Security benefits will be among those receiving the one-time stimulus payment of $250. The American Recovery and Reinvestment Act of 2009 states that the $250 is not considered income and will not be counted as a resource for 10 months (including the month of receipt) in calculating eligibility for, or the amount of, benefits under any federal program or state program with some federal financing. This reference includes Medicaid as well as Medicare Savings Programs and the Medicare Part D low income subsidy. The $250 will also not count as gross income for tax.
According to Gene Coffey, staff attorney with the National Senior Citizens Law Center, Medicaid-enrolled nursing facility residents will be allowed to keep the $250 payment. Because it will not be counted as income, the payment received will not put a Medicaid-eligible resident over the state's income limit. In addition, Coffey notes that the language of the exemption means that a Medicaid nursing facility resident will not have an increase in his or her patient pay for the month it is received.
Source: National Long-Term Care Ombudsman Resource Center
What Every Caregiver Must Know in These Uncertain Financial Times
Introduction to Elder Law for Caregivers
Caregiving for someone with Alzheimer's or a related dementia is one of the most difficult jobs in the world. In addition to making sure that your loved one is safe and their daily needs are met, you are also faced with the fact that there are many financial and legal issues that must be addressed. As if that was not enough, you also are trying to provide the best quality of care at the least cost to the family. Caregiving is expensive and stressful, especially in these uncertain financial times. Hopefully, this article can provide you the financial and legal answers you need to do a better job.
Elder law is not just for senior citizens who are no longer independent or who are about to enter a nursing home. Elder law is for anyone who is middle aged and beyond - and sometimes even younger.
There are now more than 5 million people in the United States living with Alzheimer's. This is a 10% increase from 5 years ago, and clearly supports the long forecasted dementia epidemic. One in eight persons age 65 and over have Alzheimer's disease and nearly half of all persons over the age of 85 have Alzheimer's. Every 72 seconds someone develops Alzheimer's disease; by mid-century someone will develop Alzheimer's every 33 seconds.
You are not alone. There are over 50 million caregivers in this county. Studies show that 12 million people in this country need long term care. Twenty-one percent of American adults provide free caregiving for loved ones. Fifty-nine percent of these caregivers either work outside the home, or have worked outside the home, while providing care. It has been estimated that the value of free services given by caregivers is in excess of $310 billion a year. Additionally, as a result of caregivers, businesses are also effected by the caregiving epidemic. Specifically, over 60% of caregivers work and dedicate on average 18 hours per week to provide care. Family caregivers account for 73% of early departures and late arrivals in the workplace. Caregiving by an employee costs the average employer $2,100 per employee or for all employers as much as $33 billion annually. These services are provided by family members without regard to cost because of the love and respect they have for their loved ones.
These statistics only represent the economic cost of caregiving. It does not even address the emotional and physical toll on caregivers. The fact is that 70% of all caregivers over the age of 70 die first. People generally do not think about the health of the caregiver or plan for the unthinkable -- the caregiver having health problems or passing away before their loved one with dementia. It is for this reason that we approach each situation from the worst case scenario. We plan for the worst and hope for the best, that way our clients are always protected.
We know that age is the biggest risk factor for Alzheimer's and dementia related diseases, however, these diseases do not discriminate. We have helped clients who have loved ones suffering from Alzheimer's and dementia related diseases, some as young as their late 30's. The time to look down the road and make major decisions regarding your health, well-being and finances is now.
It is important to understand the difference between an elder law attorney and an estate planning attorney. While estate planning attorneys are concerned with what happens to your estate upon your death, elder law attorneys ensure that your affairs can be managed in the event of your disability as well as once you pass away. Specifically, an experienced elder law attorney addresses the following tough questions like:
- Who will make my medical decisions when I am no longer able to make them?
- If I am unable to care for myself, how can I achieve the greatest quality of care without bankrupting myself or my family?
- Who will be able to talk to my doctors and the hospital when I require guidance even though I am able to make my own medical decisions?
- Who will make my end of life decisions?
- What happens if I get sick and cannot stay in my home anymore?
- How am I going to pay for it?
For caregivers of loved ones with Alzheimer's and related dementia, information regarding Medicaid and estate planning is a necessity. It is our hope that this guidebook will answer many common legal questions and that it will eliminate the belief that it is never too late to plan.
In these uncertain financial times, the proper long term care planning is more important than ever. Families who seek the proper professional advice will be able to protect significant portions of their assets, possibly all of their assets, in spite of these rocky financial times. However, families who fail to do the proper planning, will rapidly deplete their assets with the rising nursing home costs.
Written by: Danielle B. Mayoras and Don L. Rosenberg
Attorneys and Counselors
Injury, Sure, But Hold the Insult. Facing a Tax Bill on Cancelled Debt? There is a Way Out...
Many folks have lost a job or watched their income plummet during this financial crisis, and that's meant more people defaulting on their credit-card or other loans.
So here you are, in early 2009, having defaulted on your credit card debt and ruined your credit -- and you're staring at a1099-C. After losing so much already, you face the added difficulty of owing taxes on cancellation-of-debt income.
Talk about being in the pit of despair. Where are you going to get the money to pay these taxes when you have absolutely nothing left to tap?
Hold on a second!
You might be able to avoid those extra taxes altogether, said Bill Fleming, a managing director in PricewaterhouseCoopers' Private Company Services Practice.
The rules and computations are complicated, so you may need some help. But the great news is this method does not require you to file bankruptcy.
Insolvency 101
This technique is as old as the hills. There's even a form to use to let IRS know how much cancelled debt doesn't need to be taxed because you are insolvent. See Form 982 on the IRS site (PDF).
Use Line 1b for credit card debt. You can see there are other lines for business real estate and your personal residence. Unfortunately, despite four pages of instructions that come with this form, IRS does not provide a worksheet to help you calculate just how insolvent you are.
Why is that important? You can only exclude cancelled debt from your income up to the amount that you are insolvent before the debt was cancelled, Fleming said. So let's say you get a 1099-C that shows the lender wrote off $50,000 of credit card debt on June 15. You will need to create your own worksheet summarizing your assets and debt, including this $50,000 debt. For this calculation, remember to include the balances in your IRAs and retirement accounts. (According to Fleming, in a bankruptcy, you wouldn't need to takes these funds into account.)
To really simplify the explanation, the amount of your insolvency on that day is the difference between your total debt and your assets. So, suppose that on June 15 your total debt, including mortgages and unpaid taxes, add up to $450,000. Let's say that on that day, the fair market value of your home, savings and retirement accounts, the cash value of your insurance policies, used cars, furniture and personal property all add up to $405,000.
That means, on the date shown on that 1099-C, you were only insolvent up to $45,000 ($450,000 - $405,000). That means you will have to pay tax on $5,000 of the cancelled debt.
You're going to want to do this worksheet on the date that each separate debt was cancelled, Fleming said. That's a twist many people overlook when they do insolvency calculations.
After all, when the debts get cancelled on different dates, you will have a different balance as each successive debt is cancelled. You will also have a different balance of assets and money in the bank on each date.
For instance, suppose you have another $25,000 credit card debt cancelled on Oct. 1. By this time, the value of your retirement portfolio has dropped dramatically (down $30,000), as did the value of your home (down $100,000).
Using the same debts as before, less the $50,000 that was cancelled in June, your new balance of debts will be $400,000.
That is, your new asset balance with those declines in fair market value will be $275,000 ($405,000 less retirement-plan drop of $30,000 and home-value decline of $100,000). On Oct. 1 you are insolvent to the tune of $125,000 ($400,000 - $275,000). As a result, on that day the entire $25,000 cancelled debt is excluded from income. It was worth doing a second calculation, right?
Let's face it, if you're at the point where the credit card companies and other lenders are writing your debt off as uncollectible, you're probably insolvent, even without filing for bankruptcy. It's just a matter of proving it to IRS.
A price for insolvency
Naturally, to take this cheaper, easier, non-bankruptcy option to get out of tax, there's a price. You must have proof of your debt and asset balances at each date. Fleming said that the higher the amount of cancelled debt you exclude from income, the more careful you want to be with your back-up documents. In some instances, it may be worth the price to pay for appraisals showing the value of key assets on the specific dates.
You can get free documentation of some asset values on the Internet. For instance, MarketWatch has a tool to help you get stock values on specific dates.
You can get vehicle values at Kelly Blue Book and Edmunds.com.
You may be able to find the value of other personal assets on eBay.com or even use TurboTax's ItsDeductible tool, which is now free.
Keep copies of loan balances on those dates. Get them from the lenders and put a copy of the documents in your tax file. You don't need to send any of this to IRS. But the larger the excluded balances, the higher your chance of getting audited.
Yet another price
Look back at Form 982. Do you see Part II where it says "Reduction of Tax Attributes"? This is where you're going to take the amount of the excluded debt and reduce a variety of tax benefits you've been carrying over for a while. You'll lose net operating loss carryovers, foreign tax credits, capital loss carryovers and more.
Remember, you still have to report the income from that 1099-C on your tax return. But you will also get to remove the income by following the instructions on Form 982.
Can't do it alone? Get help!
Start with the guidance on the IRS site, which has links to resources to help you with insolvency and the special relief rules for residential real estate from the Mortgage Forgiveness Debt Relief Act of 2007, which we haven't discussed here. See more on IRS.gov.
Folks who want to avoid a lot of tax on this phantom income, be darn sure you get these computations right. Consider investing a little money in a tax professional with experience dealing with insolvency. This is too important to trust to someone who's learning on your dime and your time. You don't want to find out two years from now that you did it all wrong and suddenly have to pay taxes you didn't expect.
Source: Eva Rosenberg of MarketWatch
Driving and Alzheimer’s: When Should Alzheimer's Patients Stop Driving?
Driving demands good judgment, quick reaction times and split-second decision making. For a person with Alzheimer's, driving inevitably becomes difficult, and he or she may become unsafe on the roads.
Families struggle with the decision to limit or stop the person from driving. The person may be upset by the loss of independence and the need to rely on others for going places. This sense of dependence may prevent people with dementia from giving up the car keys.
A diagnosis of Alzheimer's disease alone is not a reason to take away driving privileges. However, caregivers are not always best at determining if it is safe for a person with dementia to continue driving. They may be in denial about the person's impairment or may not be comfortable assessing the person's driving skills.
According to the Quality Standard Subcommittee of the American Academy of Neurology, driving evaluations should be conducted every six months. Some state agencies have special drive tests to determine how well a person sees, judges distance and responds to traffic.
If your state does not offer special testing, private assessments (generally fee-for-service) may be available. Your local Alzheimer's Association may be able to provide a list of these programs.
Warning signs of unsafe driving
Keep a written record of your observations to share with the person, family members and health care professionals.
- Forgetting how to locate familiar places
- Failing to observe traffic signals
- Making slow or poor decisions
- Driving at inappropriate speeds
- Becoming angry and confused while driving
- Hitting curbs
- Poor lane control
- Confusing the brake and gas pedals
- Returning from a routine drive later than usual. The person may be wandering and getting lost in the car.
Learn about your state's driving regulations
In some states, such as California, the physician must report a diagnosis of Alzheimer's to the health department, which then reports it to the department of motor vehicles. That agency then may revoke the person's license. Check with your local Alzheimer's Association for information on driving regulations in your state.
Tips to limit driving
Once it's clear the person with dementia can no longer drive safely, you'll need to get him or her out from behind the wheel as soon as possible. If possible, involve the person with dementia in the decision to stop driving.
Explain your concerns about his or her unsafe driving, giving specific examples, and ask the person to voluntarily stop driving. Assure the person that a ride will be available if he or she needs to go somewhere.
- Transition driving responsibilities to others. Tell the person you can drive, arrange for someone else to drive, or arrange a taxi service or special transportation services for older adults.
- Find ways to reduce the person's need to drive. Have prescription medicines, groceries or meals delivered.
- Ask your doctor to advise the person with dementia not to drive. Involving your doctor in a family conference on driving is probably more effective than trying by yourself to persuade the person not to drive. Ask the doctor to write a letter stating that the person with Alzheimer's must not drive or a prescription that says, "No driving." You can then use the letter or prescription to tell your family member what's been decided.
- Ask a respected family authority figure or your attorney to reinforce the message about not driving. Also ask your insurance agent to provide documentation that the person with dementia will no longer be provided with insurance coverage.
- Experiment with ways to distract the person from driving. Mention that someone else should drive because you're taking a new route, because driving conditions are dangerous, or because he or she is tired and needs to rest. You may also want to arrange for another person to sit in the back seat to distract the person while someone else drives.
- If the person with dementia wanders, he or she can also wander and get lost by car. Be prepared for a wandering incident and enroll the person in MedicAlert® + Alzheimer's Association Safe Return.
- In the later stages, when the person is no longer able to make decisions, substitute his or her driver's license with a photo identification card. Take no chances. Don't assume that taking away a driver's license will discourage driving. The person may not remember that he or she no longer has a license to drive or even that he or she needs a license.
What if the person won't stop driving?
If the person insists on driving, take these steps as a last resort:
- Control access to the car keys. Designate one person who will do all the driving and give that individual exclusive access to the car keys.
- Disable the car. Remove the distributor cap or the battery or starter wire. Ask a mechanic to install a "kill wire" that will prevent the car from starting unless the switch is thrown. Or give the person a set of keys that looks like his or her old set, but that don't work to start the car.
- Consider selling the car. By selling the car, you may be able to save enough in insurance premiums, gas and oil, and maintenance costs to pay for public transportation, including taxicab rides.
- In some states, it might be best to alert the department of motor vehicles. Write a letter directly to the authority and express your concerns, or request that the person's license be revoked. The letter should state that "(the person's full name) is a hazard on the road," and offer the reason (Alzheimer's disease). The state may require a statement form your physician that certifies the person is no longer able to drive.
Source: Alzheimer's Association National Office 225 N. Michigan Ave., Fl. 17, Chicago, IL 60601
Alzheimer's Association is a not-for-profit 501(c)(3) organization
Trust Kit Company Hit With $16 Million Judgment
Few things make good estate planning and probate litigation attorneys angrier than unethical trust kit companies that prey on senior citizens. Many use false statements to encourage them to purchase estate plans, and more, without ever seeing an attorney.
One of these companies is being held accountable. It calls itself "The Estate Plan" and according to the allegations of a class action lawsuit, it ran a scam as fraudulent and devastating as any. It and 11 other defendants are being sued in federal court in Arkansas, on behalf of elderly citizens throughout Texas and Arkansas that have fallen victim. Because the company, The Estate Plan, did not appear to defend itself in the case, the court entered a $16 million default judgment against it. The case continues against the remaining 11 defendants.
According to this article in the Southeast Texas record, the company held seminars and attracted seniors through free lunches and dinners. At these seminars, it scared seniors with misleading illustrations showing how estate taxes and probate costs can rob people of estates, leaving their heirs with next to nothing. It then sold prepacked trust kits, which were purchased by the victims without any consultation with a lawyer. Worse, the company gathered financial information about the trusting elderly people and then sold them annuities and other financial products without disclosing the costs and fees involved.
While this company operated in Texas and Arkansas only, the sad truth is that companies like this peddle these products throughout the country. Here are some of the many problems they create:
- No one should ever -- EVER -- buy a living trust or similar estate planning document without meeting with a qualified estate planning attorney. Trusts are not "one size fits all"; everyone and every family is different. Every living trust should be different too. Any money spent on a prepacked trust is a waste.
- Very few people need living trusts because of estate taxes. The estate tax level in this country is so high that very few people will ever have to worry about it. In 2009, the level is 3.5 million dollars (although this could change). Plus, trusts don't avoid the estate tax; but they can help minimize it for those who qualify, but only if they are done properly. There are many, many good reasons to have living trusts, but unfounded fears of losing estates due to estate taxes are not one of them, for most people.
- The trust kit company in this case, like most, did not help people "fund" their trusts, but instead relied on "pour-over wills", which transfer assets into the trust after death. How do these wills work? By going through probate court. In other words, this company did not even help people minimize probate court costs, which is one of the ways it scared people into buying their trusts. By working with a good estate planning attorney, clients learn how to use trusts the right away and avoid probate court altogether.
- The company also sold variable annuities and other unsuitable investments to seniors, after it had gained their trust and learned their financial information. Sometimes, in the right circumstances, certain annuities can be good investments for seniors. Other times, unscrupulous salesmen -- like those working with this company (according to the lawsuit allegations) -- misrepresent the financial products they sell to trick seniors into buying them. Many of these annuities carry very high surrender fees which lock up the senior's money for 10, 15 or even 20 years. This means that the seniors can't access their own money, often at times when they most need it, without paying huge sums in penalties (which can be as high as 25%).
The moral from this story should be obvious -- don't leave your future and your family's inheritance up to chance. Trust kits are seldom worth the paper they are printed on. Even the less unethical companies ignore the basic rule that only a qualified estate planning lawyer should help seniors (or anyone else) create wills, trusts and other estate planning documents.
And always watch out for annuities sold to seniors. There are too many unsuitable annuities being sold by financial planners who seem reputable, but who don't always let seniors know what they are getting into. If you have an elderly loved one who is considering buying an annuity, look closely, ask lots of questions, and if you have any concerns, have an experienced attorney look over the annuity before it's purchased. This is very important whether the annuity is sold through a trust kit company or elsewhere.
In fact, I and other probate litigation attorneys who have experience with these annuities can help seniors even after they've purchased an unsuitable annuity, if the family doesn't wait too long to get legal help. Usually, it's not too late to undo the damage caused by a shady annuity that a senior citizen never should have bought in the first place.
Source: Probate attorney Andrew W. Mayoras, co-founder and shareholder of The Center for Probate Litigation and The Center for Elder Law in metro-Detroit, Michigan, which concentrate in probate litigation, estate planning, and elder law, among other areas. You can reach him by phone at 248-641-7070 or email at awmayoras@brmmlaw.com.
Top 10 Ways to Keep Your Legal Affairs Organized
- Keep a list of the names and numbers of the professions that you work with as well as your account numbers, securities and insurance information.
- Keep your list from #1 above and your Estate Planning documents together and help your family avoid the Scavenger Hunt.
- Use a fireproof box for those documents that the family has access to in the event of an emergency. Alternatively use a safe deposit box that the family can get into in the event of an emergency.
- Review and update your Estate Planning documents every three to five years.
- Make sure to have alternate designees on your documents.
- Make sure that your documents have a HIPAA representative designated on the Power of Attorney.
- If you have a Revocable Living Trust, make sure that it is funded.
- Make sure to consult with an Elder Law attorney to create a long term care plan in the event that the unexpected happens.
- If you have loved ones with special needs, make sure that you have a properly drafted Special Needs Trust.
- Make certain that your medical attorney-in-fact and patient advocate designee has a copy of your medical documents that he/she can fax to a hospital in the event of an emergency.
Source: Danielle B. Mayoras, Attorney and The Director of Community Education for
The Center for Probate Litigation, The Center for Elder Law, and The Center for Special Needs Planning, divisions of Barron, Rosenberg, Mayoras & Mayoras, PC
Do You Qualify For The New Making Work Pay Tax Credit?
The American Recovery and Reinvestment Act of 2009, signed into law February 17, 2009, created a new refundable personal income tax credit for 2009 and 2010 - the Making Work Pay tax credit. For those who qualify, this credit equals 6.2 percent of earned income, up to $400 ($800 for married couples filing jointly).
Do you qualify? Most working Americans will, but nonresident aliens and individuals who can be claimed as a dependent by someone else aren't eligible (estates and trusts aren't eligible, either). And to claim the credit, you've got to include a valid Social Security number on your tax return; married couples filing jointly have to include at least one valid Social Security number. Assuming that you make it past these initial hurdles, whether you benefit from the credit depends on your income level.
If your modified adjusted gross income (MAGI) is greater than $75,000 ($150,000 if you're married and file a joint return), the credit that you're eligible for is reduced. If your MAGI is $95,000 ($190,000 if you're married and file a joint return) or more, you don't qualify for the credit at all. And there's one more factor - if you receive a $250 economic recovery payment under the American Recovery and Reinvestment Act because you were eligible for Social Security, Railroad Retirement, or veterans benefits, the amount of the Making Work Pay credit you'd otherwise be entitled to is reduced by that amount.
If you qualify for the credit, you don't really have to do anything. The IRS has issued new federal income tax withholding tables that reflect the Making Work Pay credit. When your employer begins using the new tables, you'll see an increase in your take-home pay. Don't expect to see the full amount of the credit in one paycheck, though. The credit is effectively being paid to you evenly over the balance of the year. (If you're self-employed, qualify for the credit, and don't want to wait until you file your federal income tax return, you'll have to adjust your quarterly estimated tax payments.)
One final word of caution - special rules may apply if you live in one of the U.S. possessions, including Puerto Rico and the Northern Mariana Islands.
Source: Forefield Inc and LBF Group CPA & Advisors
The Promises and Pitfalls of Home Ownership for People With Special Needs
People with special needs often require housing that accommodates their lifestyle. In many cases, group living facilities are called for, with the group environment providing stability and support. But in other cases, a person with special needs requires a very specific type of housing, designed particularly for her. Or, it may simply make sense for a person with special needs to have a place of her own. The rental market is clearly not equipped to provide the specific accommodations many individuals with special needs require. Fortunately, there are many ways to provide private housing for a person with special needs without compromising the majority of her means-based government benefits.
The first step when thinking about purchasing a home for a person with special needs is to decide whether the home should be held in trust or given to the resident to own in her own name. Since many people with special needs are perfectly capable of managing their own property, both Supplemental Security Income (SSI) and Medicaid regulations permit beneficiaries to own their own home without it counting as an asset for purposes of qualifying for or maintaining benefits (although there may be specific limits on the value of the home a beneficiary owns, which vary by state). Home ownership also allows increased access to credit, binds a person with special needs with their community, and provides a deep sense of self-worth.
But home ownership comes with many responsibilities, and frequently families choose to place a home into a special needs trust (SNT) instead of giving it to a person with special needs. Putting the home in a trust protects the home from a trust beneficiary's creditors, who may be able to go after the equity in the home if it were owned by the beneficiary outright. Placing the home in trust also allows for flexibility if the home needs to be sold quickly, since the proceeds are retained by the trust. If a homeowner with special needs sells his own home, he would have to quickly purchase a new one for the same price or transfer the proceeds into a different kind of special needs trust (called a "first-party trust," with a government payback provision) in order to maintain access to government benefits. Finally, some people with special needs, especially those suffering from mental illnesses that make it hard for them manage property or make them especially likely to be taken advantage of, should simply not own property in their own name.
Once the decision is made about who owns the home, the next step is determining how the home should be purchased. This decision depends on the finances of those buying the home and the government benefits being received by the resident. When a home is purchased outright (either by a trust or by a beneficiary's family, who then gives the home to the resident), SSI rules dictate that the purchase counts as in-kind support and maintenance for the month of purchase only. Under the complicated restrictions, this means that an SSI beneficiary could lose up to about $244 (in 2009) of her benefit for one month. If the beneficiary's monthly SSI award is reduced to zero by this reduction, she could lose her benefits, and accompanying health care, for the month of the gift. She could then regain eligibility at the conclusion of the month.
On the other hand, if the home is purchased through some combination of a down payment and a mortgage being paid by the trust or by family members, then the resident's SSI award will be reduced by approximately $244 during each month that someone other than the beneficiary pays the mortgage. However, it does not matter if the mortgage payment is very large - the beneficiary still loses approximately $244 monthly. While this amount usually pales in comparison to the benefits of living in a home of one's own, should a beneficiary receive an SSI award that is less than $244 a month before the purchase of the home, he will lose his SSI benefit because his award is reduced to zero by the in-kind mortgage payment. Because the mortgage payments will presumably be ongoing, this loss of SSI and health care benefits could be permanent, unlike the one-time loss of benefits if the home is purchased outright. Since other sources of income can also affect an SSI award, it is extremely important that families work with a qualified special needs planner to make sure that they are not going to compromise important benefits by purchasing the home.
After the home is purchased, maintenance becomes key. Under SSI regulations, payment of many household expenses for a beneficiary counts against her SSI benefit. This applies even if a trust owns the home the beneficiary is living in. For example, if the trust pays for the home's water or electric bill, the SSA will deduct the same (up to) $244 from a beneficiary's award. So if a trust owns the home outright and manages to avoid paying a mortgage, the beneficiary can still incur a penalty should the trust pay for the upkeep of the home, and the same concerns regarding benefits apply. There is one important exception to these restrictions - a trust can pay for home improvements without penalty because these are not typical household expenses expected to be provided by a beneficiary.
The rules governing home ownership may seem complex, but the rewards are many and well worth exploring with the attorneys at The Center for Special Needs Planning.
Source: The Center for Elder Law and The Center for Special Needs Planning.
Trade Life Insurance for Long-Term Care
Time for some good news.
It is getting a bit easier for Americans to purchase long-term care insurance for themselves or their family members.
About time, too: The average cost for nursing home care is now more than $50,000 a year and climbing, according to AARP, and because costs tend to vary widely across the nation, that may be a conservative estimate for your neck of the woods.
Today only a fraction of people who need to pay for extended care actually buy any long term care (LTC) insurance, says AARP. But thanks in part to a pension law that was passed in 2006, which will go into effect next January, people who have built up equity in a life insurance or annuity policy and don't feel they need it anymore (since their children are grown and fending for themselves, for instance), will soon be able to trade in their existing policies for LTC insurance and eliminate taxes they'd otherwise have to pay to realize the cash benefits of their life and annuity programs.
"One of the existing rules under the Pension Protection Act is, you can exchange a life insurance or an annuity policy for a single-premium long term care policy on a tax-free basis," says Certified Financial Planner Michael E. Kitces, director of financial planning with the Pinnacle Advisory Group in Columbia, Md., and co-author of The Annuity Advisor.
According to Kitces, the following is a common client refrain: "'There's a policy I've been paying on for 25 years while I've raised my family. Now, the kids are out of the house, my spouse is working, and if I go after my cash value, the proceeds are taxed as regular income.'"
Turn Life Insurance into LTC and Save
Soon, individuals will be able to use the cash value they have accumulated to purchase LTC coverage, and it'll be "a tax-free exchange." Insurers are still in the process of shaping their LTC strategies in response to the pension law. "This is what's coming down the pike," says Kitces, who expects insurance companies to begin marketing the programs within the next several months.
LTC insurance isn't cheap, with premiums that can range from $1,000 to $8,000 a year depending on how old you are when you buy it, where you live and what kind of features you're after.
In Tennessee, for instance, the premium for a policy that would cover $130 a day for three years of care once deductibles are satisfied would cost about $810 a year including inflation protection at age 50, whereas at 75 the same policy costs $4,500 a year, according to the Tennessee Health Care Association.
How do you make the new law work for you?
For one thing, you'd be buying a LTC program that charges a one-time, instead of annual, fee, Kitces says, and you'd possibly pay a single lump-sum premium of $150,000 for life. And you'd need to have enough cash value. "I suspect we'll see LTC policy options pricing anywhere from $50,000 to $200,000, depending on the benefits chosen," says Kitces.
Some other factors to consider if you're wondering whether this exchange is right for you:
- Do you have a need for LTC coverage? If you're not eligible for Medicaid, and don't have sufficient assets to fund nursing home care and other forms of long-term medical assistance yourself, the answer is most likely a long-term care health event would have a severely adverse financial impact on you and your family.
- Do you have an existing life insurance or annuity program you don't need anymore? You want to be very sure you have sufficient retirement proceeds, be it pensions or 401(k) money or personal investments, to forgo the equity in your life or annuity policy.
- Keep in mind the nature of what you are buying, especially with a single premium policy that lasts as long as you live. Kitces notes that if you die before the policy is used, chances are no one will inherit that money. On the other hand, if your family tends to live well into their late 80s or 90s, and needs long term care, this is probably going to be "a very good deal."
- Not everyone will qualify. As with life insurance, it will be difficult, if not impossible, to purchase LTC coverage with a severe pre-existing condition like late-stage cancer, says Kitces.
Source: Janet Aschkenasy at www.marketstreet.com
New Tax Breaks a Relief to Homeowners
Homeowners found three attractive tax breaks among their holiday presents, thanks to the federal Mortgage Forgiveness Debt Relief Act of 2007, which was enacted in December.
Forgiven debt may be free from income tax. The first tax break concerns forgiveness of debt, which occurs when a lender forgoes repayment of principal and/or interest the borrower owes. Typically, discharged debt is considered ordinary income to the borrower for income tax purposes. The new law allows taxpayers to exclude this amount and thus escape the tax liability.
"When you're worried about making your payments, higher taxes are the last thing you need to worry about. So this bill will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive," President Bush said in his remarks upon signing the law.
3 new tax breaks:
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Homeowners who experience a foreclosure, short sale, deed in lieu of foreclosure or loan modification may be able to exclude lender-forgiven mortgage debt from taxable ordinary income.
- Homeowners may be able to deduct the cost of mortgage insurance.
- A homeowner whose spouse has died may be allowed up to two years to exclude $500,000 of profit from the sale of a principal residence from capital gains tax.
Lenders are required to report forgiveness of debt to the Internal Revenue Service, which means taxpayers likely will need to note the amount and the reason for the exclusion on their tax returns. Consult a qualified tax professional for more information and advice about your situation.
Rules for debt forgiveness:
- The debt must have been discharged by the lender in 2007, 2008 or 2009.
- The amount of debt that can be excluded is limited to $2 million.
- The exclusion can be used only if the loan was taken out to acquire, build or substantially improve a principal residence. Forgiveness of debt on vacation homes, second homes and investment property doesn't qualify.
- Debt forgiven on a cash-out refinance or home equity loan must be apportioned between the amounts used for home acquisition, construction or improvement and amounts used for other purposes such as tuition, travel or repayment of other debts. Only the allowable portion qualifies for the tax break, says John W. Roth, a senior tax analyst at CCH, a provider of tax services, software and information in Riverwoods, Ill.
Exceptions allowed for nonrecourse loans, insolvency, bankruptcy
It's difficult to figure out how many people might qualify, because three existing exemptions already shielded many homeowners from this tax liability, according to Sterling Watkins, mortgage broker and owner of Short Sale Services in Folsom, Calif.
"In my experience, the amount of people who will benefit will be small because most of them, if they qualified for a short sale, didn't have a (tax) problem," he says.
There are three main existing exemptions.
First, in some states, such as California, all purchase-money home loans are required to be "nonrecourse" debt, which means the lender can't pursue the borrower for additional money that's still owed after the property is sold.
A "recourse" loan, on the other hand, means the borrower is personally responsible for the debt and must pay the difference if the sale of the property doesn't pay off the balance that's owed to the lender.
"In Texas, for example, which is one of the recourse states, they have a different attitude about collecting loans. They basically follow you around until they get the money back. They still do short sales and they accept discounts to avoid having to chase someone, but they bargain from a different perspective," Watkins says.
The distinction is crucial because the lender can pursue the debt on a recourse loan even if a foreclosure or short sale occurred; but without recourse, there is no debt to be forgiven and thus no ordinary-income tax liability for the borrower. The new tax break means borrowers who have a recourse loan also can avoid the tax liability.
Second, borrowers who are insolvent are relieved from ordinary income tax liability on forgiveness of debt to the degree of their negative net worth, Watkins explained. For example, an individual whose assets totaled $400,000 and whose debts totaled $500,000 would have a negative net worth of $100,000. Forgiveness of debt on a principal residence acquisition loan up to that amount wouldn't be subject to federal income tax.
Third, forgiveness of debt tax liability is wiped out if the taxpayer files for bankruptcy. That's not a free ride, because bankruptcy is subject to its own costs, hassles and credit implications.
A capital gain that resulted from a foreclosure, short sale or deed in lieu of foreclosure may still be subject to taxation. This situation is rare, since homeowners who experience these events typically owe more than their home is worth and any capital gain might be subject to a separate exclusion.
"Even though you have forgiveness of debt (excluded) as ordinary income, if you do a short sale or foreclosure, that money would be considered part of the proceeds from the sale of the property, so you could theoretically still have some capital gain on a short sale or foreclosure without going into bankruptcy or being insolvent," Roth says.
Mortgage insurance deduction extended the second tax break concerns mortgage insurance, which is paid for by the borrower, but protects the lender if the borrower defaults on the loan.
The new law extends a one-year deduction of mortgage insurance premiums that was effective in 2007 for three more years, 2008, 2009 and 2010. That time frame means the deduction is allowable only for mortgage insurance on loans that were originated after Dec. 31, 2006, and before Jan. 1, 2011, unless the tax break is further extended in the future.
The full deduction is available only to taxpayers whose adjusted gross income is less than $100,000. A partial deduction is allowed for adjusted gross incomes up to $109,000. The deduction is worth $350 for the average taxpayer, according to Mortgage Insurance Companies of America, an industry association.
This deduction is "aimed at people in the subprime loan category because mortgage insurance is only required if (the borrower) puts down less than 20 percent on the purchase of a home. It's targeted at the zero-down, 5 percent down, 10 percent down (borrowers)," Roth says.
Surviving spouses allowed more time to sell. The third tax break concerns capital gains tax on the sale of a principal residence when a person's spouse dies. Federal law allows singles and married couples to exclude $250,000 and $500,000, respectively, of the gain on the sale of their home from capital gains tax if certain tests are met.
The differential treatment on the basis of marital status meant that a person whose spouse died had to sell his or her home in the same tax year as the spouse's death to take advantage of the larger tax break.
"If your spouse died in December, unless you could sell by Dec. 31, you could only exclude $250,000, instead of $500,000, so you could end up with a horrendous tax bill on the sale of the home, whereas if your spouse died in January, you didn't have that problem," Roth says.
The new law allows a surviving spouse to claim the $500,000 if the home is sold within two years after the date of the spouse's death, which eliminates the tax liability on an additional $250,000 of capital gain if the other tests are met as well.
Tax breaks expected to cost U.S. Treasury
Tax breaks are never free, since the government collects less money from taxpayers as a result. The Congressional Budget Office, in a September 2007 report, estimated that the forgiveness of debt exclusion on principal residences would decrease federal tax revenues by $179 million in 2008 and $318 million in 2009. (The retroactive 2007 tax year wasn't included in the analysis.)
The extension of the mortgage insurance tax break is expected to decrease tax collections by $15 million in 2008, $109 million in 2009 and $142 million in 2010. States are likely to forfeit some tax dollars too, because state tax codes typically use federal adjusted gross income to calculate income taxes.
Opinions vary as to whether these tax breaks benefit society and the overall U.S. economy, in addition to individual taxpayers.
Bush says the debt relief act was "a really good piece of legislation" that would "increase the incentive for borrowers and lenders to work together to refinance loans" and "allow American families to secure lower mortgage payments without facing higher taxes."
But the Tax Foundation, a nonprofit, nonpartisan research group in Washington, D.C., says that housing is one of the most preferred asset classes in the tax code. Therefore, the organization says, housing shouldn't be the beneficiary of any more tax breaks.
Still, strapped borrowers will probably welcome any legislation aimed at helping those who are upside down on their homes.
By Marcie Geffner Bankrate.com. Marcie Geffner is a real estate reporter in Los Angeles.
Recorded Telephone Sales Pitches Now Required to Provide Way to Opt-Out
FTC opt-out must work both for consumers who answer the call in person and answering machines.
Dec. 2, 2008 - There are few calls more irritating to most senior citizens than the pre-recorded sales pitch. A new regulation took effect yesterday, however, that should help. Now, any telemarketing call that delivers a prerecorded message must include a quick and easy way to opt-out of receiving future calls.
The opt-out must work both for consumers who answer these calls in person and for those whose answering machines or voicemail services receive the calls.
Prerecorded telemarketing messages are permitted only in limited circumstances - only when the caller has an established business relationship with the consumer being called. Now, additional restrictions on prerecorded messages are going into effect.
Under Do Not Call amendments adopted in August, effective December 1, any permitted prerecorded message must provide the called consumer with an interactive means to opt out of receiving future calls from the seller or fundraiser using the prerecorded message.
Moreover, the consumer must be able to opt out at any time while the message is playing by pressing a particular number or speaking a particular word. Once the consumer has opted out, his or her phone number must be automatically added to the in-house Do Not Call list of the calling seller or fundraiser. Then the call immediately must be disconnected so that the consumer’s line is cleared.
If the prerecorded telemarketing message is left on an answering machine or voicemail service, it must include a toll-free opt-out number that, when called, also connects to an automated voice or keypress opt-out mechanism. This will allow consumers to opt out at any hour of the day or night when they retrieve the message, without having to wait until the next business day to call.
All recorded telemarketing calls subject to the Commission’s Telemarketing Sales Rule (TSR) must comply with the new requirements, including calls to solicit sales of goods or services and calls placed by telemarketers to solicit charitable donations.
Exceptions
Some calls delivering prerecorded messages (such as political calls, bona fide market survey calls, and calls made in-house by banks or telephone companies) are not covered by the new requirement, however, because the Commission lacks the legal authority to regulate them.
In addition, prerecorded healthcare messages covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) are exempt from the new requirement.
More Restrictions to Come
The automated opt-out requirement is the first of two measures provided by the recent TSR amendment to protect consumers’ privacy at home. The second measure prohibits telemarketing calls that deliver prerecorded messages to anyone who has not agreed in advance to receive such calls.
But until September 1, 2009, sellers may continue to use prerecorded messages in calling consumers with whom they have an established business relationship. After that date, sellers may use prerecorded messages only in calls to consumers who have expressly agreed in advance to receive them.
Copies of the prerecorded call amendments to the TSR are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.
File a Complaint
To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant at www.ftccomplaintassistant.gov or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.
Source: FTC
Have Aging Parents? 10 Things You Must Know in An Emergency
Prepare for an emergency by gathering the information you might need should your parent be hurt and unable to respond to doctors' questions. If your aging parents were to have a medical emergency, could you provide the information doctors would need to care for them? Do you know the names of your aging parents' doctors? Is your mom taking any medications? Has your dad ever had any surgery?
While you might not know the answers to some of these questions about your aging parents, it only takes a few minutes to collect and write down this vital information. And it can save precious time in an emergency.
Sometimes a parent isn't able to give medical information when an emergency arises, so emergency medical personnel must rely on the adult children or a spouse for that information. These are things you should know. Just as you fill out those emergency cards for your kids in school, you should have similar information available about your parents.
Below - in order of importance - is a list of 10 things you need to know about your aging parents' health.
- Names of their doctors. If you don't know anything else, this is probably the most important piece of information. Why? Chances are good that your parents' doctors can provide much of the rest of the information needed as well as more details about your parents' specific health histories.
- Birth dates. Often medical records and insurance information are cataloged according to birth date. This can improve communication in an emergency or a crisis.
- List of allergies. This is especially important if one of your parents is allergic to medication - penicillin, for example.
- Advance directives. An advance directive is a legal document that outlines a person's decisions about his or her health care, such as whether or not resuscitation efforts should be made and the use of life-support machines.
- Major medical problems. This includes such conditions as diabetes or heart disease.
- List of medications and supplements. It's especially important that a doctor know if your parent uses blood thinners. It's also important for your doctor to know if your parents take any vitamin or herbal supplements that might interact with medications given in an emergency situation.
- Religious beliefs. This is particularly important in case blood transfusions are needed.
- Insurance information. Know the name of your parents' health insurance provider and their policy numbers.
- Prior surgeries and major medical procedures. List past medical procedures including implanted medical devices such as pacemakers.
- Lifestyle information. Do your parents drink alcohol or use tobacco?
Knowing these 10 things should help you take care of your parents in an emergency.
HIPAA and privacy
During conversations with medical staff, the issue of privacy may come up. Staff may want to make sure they're allowed to speak with you regarding your parent's care. In the United States, patient privacy is governed by rules often referred to as HIPAA, or the Health Insurance Portability and Accountability Act.
HIPAA does not prevent a doctor, nurse or health plan employee from discussing your parent's care with you if it's in the best interest of your parent. For example, if discussing your parent's care would help a doctor take care of your parent in an emergency situation, that's considered in your parent's best interest. Generally, doctors and other health care professionals would consider a situation to be an emergency if your parent cannot answer questions about their health and medical history. This situation might arise if your parent has lost consciousness or has problems with memory.
Source: The Center for Elder Law
Wish You Were Here: Alzheimer's Disease, a Wife's Perspective
I am sitting in the restaurant having lunch with my husband, Howard. But Howard's not here.
We ordered our lunch; Minestrone soup (Howard's favorite), Caesar salad, a nice panini bread, and tea. Howard excused himself, "I have to go to the bathroom Dear."
"Alright," I responded. The soup came; I didn't want to start without Howard, but I was hungry. I finished my soup, still no sign of my husband. The salads arrived, still no Howard. The food items have taken on a secondary importance.
By now, I'm beginning to wonder. I asked our waiter, "Excuse me, would you please check on my husband? He's been in the men's room for a very long time."
The young man complied, and reported back to me, "Your husband says to tell you that he has to wait for his friend. In fact, the two of them are engaged in conversation."
"I don't understand," I replied. "Howard went to the bathroom alone."
By now, the young man could see that I was becoming anxious. With a sigh, he said, "Okay, Madam, I'll check on him once again if you like."
And he did so. When he reported back to me, it was the most confusing and frightening message I have ever received.
"Your husband is talking to his friend in the mirror. He told me to tell you he can't join you for lunch until his friend is ready."
Peggy and Howard met nearly 45 years ago at a University dance. Peggy was studying Nursing, and Howard, Civil Engineering. Peggy said, "I knew I was going to marry that guy, when he offered to take me home from the dance, with a bus ticket he found on the dance floor." They married three years later; two children followed, a son and a daughter.
"Wish You Were Here" is a true story. Howard is in early stage Alzheimer's disease. From the moment of diagnosis, his wife, Peggy, family members and friends are thrown into a state of turmoil, attempting to understand and attach meaning to what is happening to this person, Howard, they once knew.
Alzheimer's disease has no known cause. Alzheimer's disease has no known cure. In 1906, Dr, Alois Alzheimer cared for and documented evidence on Auguste D., a fifty-one year old woman in Frankfurt, Germany. Even he didn't know for sure until he examined the slice of brain tissue under the microscope, identifying the plaques and tangles surrounding the neurons, hallmarking the disease process. This was the very first step in searching for the cure. However, families don’t know for sure it is Alzheimer's disease until autopsy.
There is absolutely nothing uplifting about any of this information for family members and friends caring for a loved one with Alzheimer's disease. They don't understand what is happening. There is a lot of chaos and confusion as they attempt to deal with the activities of daily living and restore once again some form of normalcy to their lives.
The interview with Peggy, the wife follows:
Talk about how it was for you when Howard was diagnosed with Alzheimer's disease.
The first thought I had was fear, but then, as strange as this may sound, the diagnosis almost came as a relief. I now can understand what has been causing Howard's strange behavior. And, to empathize with some of his fears.
Can you offer suggestions for other families who are passing through a similar journey?
The scary part of Alzheimer's disease is I don't know from one day to the next how Howard is going to react to different things. He said to me one day, 'Peg, I can't remember from one minute to the next what I've done and what I haven't done.'
What has really been most helpful is to draw closer with family and friends. We always have been a close knit family and now I feel the children are even closer. I feel blessed to have them. The best thing for us has been to take one day at a time. Some days, Howard is really himself again, and this gives me hope.
Do you communicate with Howard any differently since the diagnosis of Alzheimer's disease?
After 39 years of marriage, Howard and I are sensitive to one another's body language. I know when Howard is happy, sad, glad, mad. I don't talk to him any differently, but I find Howard now communicates with feelings, not words. This happened when we were in the restaurant that day. Howard seemed to be getting agitated as soon as we arrived and needed to excuse himself.
Are there times you have difficulty understanding what Howard is saying?
I find I must be real sensitive to his body language and anticipate his needs. One day Howard wanted a glass of water and couldn't articulate the word glass. This frustrated him a great deal. We played guessing games for a bit until I figured it out. Even that day in the restaurant, he was trying to tell me he didn't want to be there.
How do you make the transition from being the wife of Howard to being his caregiver?
It's difficult. This disease is not about me. I know that, and yet some days I feel, 'hey, my needs aren't being met.' Howard and I have always been very close, and we still are. Alzheimer's disease has changed our lives, but Howard is still Howard and I love him, whatever my role is. I will always be here for him.
What made you choose this particular restaurant to have lunch?
I have been told that the person with Alzheimer's disease needs an environment that is non-threatening, familiar, and simplified. Howard and I have been to this restaurant many times. This visit, he no longer recognized the place or the waiter. I guess that means we are onto the next stage.
Do you find that social situations have become awkward?
Howard and I never have been social butterflies. We have a small circle of friends. However, I do find that we stay at home more now. That day in the restaurant was awkward; I guess because the 'mirror dilemma' was so shocking for me. I had a difficult time encouraging Howard to get to the car. He didn't even eat his lunch.
How did you manage to get Howard to the car?
Good question. As hard as I try not to be embarrassed or humiliated by these 'public scenes,' I am. I know that Howard doesn't function well with noise or outside distractions. I really should have been more sensitive to his body language at that moment. The waiter was terrific and so helpful in encouraging Howard to 'excuse himself from his friend,' and return to the table.
On the car ride home, we found humor in the situation. I find that it works really well to change the subject
Talk about some things in your home environment that you have changed?
Howard is down to basics. I have simplified the environment as much as possible. I find that this eliminates a lot of confusion for him. The fact that Howard was engaged in conversation with 'a friend in the mirror' is an indicator that he no longer recognizes himself or others around him. Interesting that Howard isn't bothered by the mirrors in our home.
When do you pause in your busy day to take care of Peggy?
I only give Howard so much of my time. I take good care of me. I maintain a healthy diet for both of us and we take walks together. I love that Howard still likes to hold hands when we are walking.
Howard loves to garden; he finds great joy in pruning the shrubs. I join him outside and we both enjoy the fresh air and nature.
Talk about how Alzheimer's disease has changed your family relationship and interactions with your children and grandchildren.>
The children focus on Howard, their Dad and their Grampa, and not the tragedy of Alzheimer's disease. Some days, Howard doesn't remember our children's names. This hurts. Never mind; we keep our love strong and our family strong. I do try to keep family gatherings smaller now; Howard enjoys this much more.
What lessons have you learned from caring for your husband?
Alzheimer's disease has robbed Howard of our memories. However, one can still be someone without memories. We can still have a life without our memories.
Howard is lacking in judgment. The other day, he had his best suit jacket on to go out and wash the car. I have resolved that if the behavior isn’t hurting him or others, then I let it go.
Howard gets upset with me when I try to do too much for him. So, I focus on what he still does really well. Howard makes a dynamite pasta sauce, and when we work together in the kitchen, I make sure that I chop the veggies.
I find that Howard lives in the moment. I know that Howard is still in there. And I know Howard is still a beautiful human being.
Gwendolyn de Geest, RN, BSN, MA, is the author of "Wish You Were Here." She has been working in dementia care for over two decades and has witnessed the joys and sorrows of families struggling to maintain a quality of life for themselves and their loved ones. Visit her website, CruiseRespite.com.
Elder Care & Elder Rage: If I Only Knew Then-What I Know Now
(This one is a must read)
For eleven years I begged my obstinate elderly father to allow a caregiver to help him with my ailing mother, but after 55 years of loving her, he adamantly insisted on taking care of her himself. Every caregiver I hired to help him sighed in exasperation, "Jacqueline, I just can't work with your father-his temper is impossible to handle. I don't think you'll be able to get him to accept help until he's on his knees himself."
My father had always been 90 percent wonderful, but boy-oh-boy, that raging temper was a doozy. He'd never turned his temper on me before, but then again, I'd never gone against his wishes either. When my mother nearly died from his inability to care for her, I had to step in and risk his wrath to save her life-having no idea that in the process it would nearly cost me my own.
JEKYLL & HYDE
I spent three months nursing my mother back to relative "health", while my father, who was telling me he loved me one minute, would get mad about some trivial thing, call me nasty names and throw me out of the house the next. I was stunned to see him get so upset over the most ridiculous things, even running the washing machine could cause a tizzy, and there was no way to reason with him. It was so heart wrenching to have my once-adoring father turn against me.
I immediately took him to his doctor and was astonished that he could act completely normal when he needed to. I couldn't believe it when the doctor looked at me like I was the crazy one. She didn't even take me seriously when I reported that my father nearly electrocuted my mother and that he nearly burned the house down. Much later I found out that he'd instructed her not to listen to anything I said, because all I wanted was his money. (Boy do I wish he had some.)
Then things got serious. My father had never laid a hand on me my whole life, but one day he nearly choked me to death with his bare hands for adding HBO to his cable package, even though he had eagerly consented to it just a few days before. Terrified and devastated, I frantically called the police who took him to a psychiatric hospital for evaluation. I was so stunned when they quickly released him, saying they couldn't find anything wrong with him. Similar horrifying incidents occurred four times.
CATCH 22
I couldn't leave my father alone with my mother, because she'd surely die from his inability to care for her. I couldn't get the doctors to believe me, because he was always so darling and competent in front of them. I couldn't get medication to calm him, and even when I did, he refused to take it and flushed it down the toilet. I couldn't get him to accept a caregiver, and even when I did, no one would put up with him for very long. I couldn't place my mother in a nursing home-he'd just take her out. I couldn't put him in a home-he didn't qualify. They both refused any mention of assisted living, and legally I couldn't force them. I became trapped at my parents' home for nearly a year trying to solve the endless crisis, crying rivers daily-and infuriated with an unsympathetic medical system that wasn't helping me appropriately.
WHAT'S WRONG?
You don't need to have a doctorate to know something is wrong, but you do need a doctor who can diagnose and treat it properly. Finally, I stumbled upon a compassionate geriatric dementia specialist who performed a battery of blood, neurological and memory tests, along with P.E.T. scans. First he ruled out the numerous reversible dementias, and then, you should have seen my face drop when he diagnosed Stage One Alzheimer's in BOTH of my parents-something that all of their other doctors missed entirely.
TRAPPED IN OLD HABITS
What I'd been coping with was the beginning of dementia, which is intermittent and appears to come and go. I didn't understand that my father was addicted and trapped in his own bad behavior of a lifetime, and that his old habit of yelling to get his way was coming out over things that were now illogical and irrational... at times. I also didn't understand that demented does not mean stupid, at all, and that he was still socially adjusted to never show his "Hyde" side to anyone outside the family. Even with the beginning of dementia, it was amazing that he could still be extremely manipulative and crafty. On the other hand, my mother was even sweeter and lovelier than she'd always been.
BALANCING BRAIN CHEMISTRY
Alzheimer's is just one type of dementia and there's no stopping the progression nor is there yet a cure. However, if identified early, there are medications that can slow the progression and keep a person in the early stage longer, delaying full-time care. (Ask a dementia specialist about the FDA approved medications: Aricept, Exelon and Reminyl. Also, medication for later stage-Memantine commonly know as Namenda.)
After slowing the dementia, the doctor prescribed a small dose of anti-aggression medication, which smoothed out my father's volatile temper without drugging him out. My parents also received anti-depressants, which made a huge difference in their moods. Once their brain chemistries were properly balanced, I was able to optimize their nutrition and fluid consumption with less resistance. I was also better able to implement behavioral techniques. Instead of logic and reason-I used distraction, redirection and reminiscence. Instead of arguing-I validated their feelings.
Finally, I was able to get my father to accept a caregiver (he'd alienated 40), and with the use of Adult Day Health Care five days a week for them, and a weekly support group for me, everything started to fall into place. It was so wonderful to once again hear my father say, "We love you so much, sweetheart." Then, after several more years of loving each other-my parents passed, just a few months apart, still living in their own home. Even though being responsible for every aspect of their last years was the hardest thing I have ever done-I am proud to say I gave them the best end-of-life I possibly could.
AHHH HINDSIGHT-IT'S ALWAYS 20/20
What is so shocking is that none of the many professionals who treated my parents that first year ever discussed the possibility of Alzheimer's Disease with me. One out of every ten persons by the age of 65, and nearly one out of every two by age 85, gets A.D. Had I simply been shown the "10 Warning Signs of Alzheimer's" I would have realized a year earlier what was happening and gotten my parents the help they so desperately needed. If this rings true for you about someone you love, I urge you to reach out for help from a dementia specialist sooner than later.
TEN WARNING SIGNS OF ALZHEIMER'S
- Recent memory loss that affects job skills
- Difficulty performing familiar tasks
- Problems with language
- Disorientation of time and place
- Poor or decreased judgment
- Problems with abstract thinking
- Misplacing things
- Changes in mood or behavior
- Changes in personality
- Loss of initiative
Source: Jacqueline Marcell is a national speaker on eldercare and the author of, "Elder Rage. For more information visit her web site www.ElderRage.com or contact one of the specialists at The Center for Elder Law. Don Rosenberg, one of the founders of The Center for Elder Law is the Chairman of the Board of Directors of the Michigan Alzheimer's Association - Greater Michigan Chapter and Chair Elect of the State Bar of Michigan Elder Law and Disability Rights Section.
Tax Tips for 2008 Filings
W-2s probably have already arrived or will be arriving soon, and it's not too late to take advantage of many of the tax tips from the IRS. Here are some highlights:
- Recovery Rebate Credit: People who did not qualify for the 2008 economic stimulus payment (tax rebate) or didn't receive the maximum amount may be eligible for a recovery rebate credit when they file their 2008 return.
- Real Estate Tax Deduction: You can get a tax deduction for real estate taxes even if you don't itemize. You can deduct up to $500 for single filers and $1,000 for joint filers.
- Tuition and Fees Deduction: You may be able to deduct up to $4,000 for tuition and fees paid for yourself or your dependents, without itemizing.
- New Children: Your new child, born or adopted in 2008, will count as a dependent on your return if you've gotten the child a social security number.
- Electronic Filing/Direct Deposit of Refunds: If you use electronic filing (e-file) and direct deposit, you may receive your refund in as little as 10 days.
For an overview of tax filing, check out "Doing Your Taxes." For in-depth guidance, take a look at this comprehensive tax guide available for free at IRS.gov. This guide can is 299 pages and is in pdf format. Of particular interest is page 2, "What's new for 2008".
Source: www.irs.gov
Caregiver Agreements Become More Popular: Relatives Can Be Paid To Look After Elderly
Caring for a family member is a responsibility many people bear. It can also be a source of income. So-called "caregiver agreements" - which are formal contracts under which relatives are hired to care for elderly family members - have been around for a while. But with the unprecedented economic times we are experiencing, many more families may be open to entering into such arrangements.
Informal financial transfers between family members are considered gifts under current Medicaid laws. However, compensation made under a caregiver agreement, which is established in accordance with Medicaid law, is generally not considered a gift, an important consideration if an elderly person later hopes to qualify for Medicaid. The contracts can also provide assurance to other family members about the cost and quality of care being delivered and reward caregivers for the long hours they put in. The agreements need to be carefully crafted, and there are tax consequences. The payments one receives under a Caregiver agreement is considered income and is taxable.
To an aging parent, the idea of being cared for by a child/trusted family member may be appealing. Furthermore, in many families the value of the home is looked at as a nest egg that could be used for care or fund entry into an assisted living facility when it was needed. However, under current economic real estate conditions, the home is not worth as much and is very difficult to sell, and therefore, out of necessity, aging parents may not have a choice but to remain in their home.
Many times adult children sacrifice their work schedule, which results in a reduction in income, so they have more time to devote to mom or dad. In these cases caregiver agreements can assist in the loss of income or at least cover expenses they incur in providing care - at a time when many families are struggling.
It is has been our experience that Caregiver agreements can reduce tension among family members. In the absence of such formal arrangements, a parent may decide to pass on a larger slice of their estate to the primary caregiver as a reward. However, in many cases this can lead to the parents planning being contested by siblings who feel slighted. It goes without saying that money issues do strange things to families and it is always best to take as many proactive steps as possible to preserve the family, including the establishing of a Caregiver agreement.
We are seeing that Caregiver agreements are growing in popularity as a Medicaid planning tool because they can reduce the size of an estate. One of the reasons is that laws have changed which extended the look-back period for making gifts to family members to five years from three. If properly set up, transfers made under a caregiver agreement aren't considered gifts but rather compensation because they are payments made in return for a service.
In addition, in order to pass legal muster, caregiver agreements must be arms-length, written contracts that are completed in advance in which the compensation for the services is reasonable as well as supported by a doctor certification. It is critical to understand these agreements can not pay for care services after the fact or for services to be rendered in the future. Payments for care must be paid as the care is delivered.
It's also wise to solicit input from family members, in order to avoid problems later. Recipients of the care should have a comprehensive estate plan in place, including powers of attorney, to ensure their wishes are respected if they become physically or mentally incapacitated.
Contracts should specify duties the caregiver will be expected to perform, such as monitoring medications, preparing and serving meals, running errands, keeping the house clean and tidy, and paying bills, among other things.
Agreements also need to state the cost of the services. Depending on circumstances, compensation is based on the average hourly rate local agencies would charge for the service or at a discount to the market rate. Charges range widely depending on geographic regions. In Michigan it is not uncommon to be charged $18 to $22 an hour for personal-care services, and $60 to $195 an hour for geriatric-care management.
Many caregivers who enter into such agreements are just looking to be compensated for the expenses they incurred, such as money spent on gas and time spent caring for their loved ones, who want to remain in their own home as long as their health permits.
If you would like additional information on Caregiver agreements, you are welcome to contact the author, Don L. Rosenberg at the The Center for Elder Law.
Tax Deductions for Assisted Living Costs
If you or a family member lives in an assisted living facility, you know that assisted living costs continue to rise every year. But did you know some of those costs may be tax deductible? Medical expenses, including some long-term care expenses, are deductible if the expenses are more than 7.5 percent of your adjusted gross income.
In order for assisted living expenses to be tax deductible, the resident must be considered "chronically ill." This means a doctor or nurse has certified that the resident either:
- Cannot perform at least two activities of daily living, such as eating, toileting, transferring, bathing, dressing, or continence; or
- Requires supervision due to a cognitive impairment (such as Alzheimer's disease or another form of dementia).
In addition, to qualify for the deduction, personal care services must be provided according to a plan of care prescribed by a licensed health care provider. This means a doctor, nurse, or social worker must prepare a plan that outlines the specific daily services the resident will receive. Though not required by law, most assisted living facilities prepare care plans for their residents.
Generally, only the medical component of assisted living costs is deductible and ordinary living costs like room and board are not. However, if the resident is chronically ill and in the facility primarily for medical care and the care is being performed according to a certified care plan, then the room and board may be considered part of the medical care and the cost may be deductible, just as it would be in a hospital. If the resident is in the assisted living facility for custodial and not medical care, the costs are deductible only to a limited extent. In any case, the expenses are not deductible if they are reimbursed by insurance or any other programs.
Residents who are not chronically ill may still deduct the portion of their expenses that are attributable to medical care, including entrance or initiation fees. The assisted living facility is responsible for providing residents with information as to what portion of fees is attributable to medical costs.
In some circumstances, adult children may also get a tax deduction if their parents or other immediate family members (including in-laws) live at an assisted living facility and qualify as their dependents. The family member must be a U.S. citizen or legal resident or resident of Canada or Mexico and the adult child must provide more than half of the family member's support for the year. Even if the adult child is not paying more than half the family member's total support for the year, the child may still be eligible for a deduction if he or she contributes to the family member's support according to a "multiple support agreement." The adult child must pay more than 10 percent of an individual's total support for the year, and, with others who also support the resident, collectively contribute to more than half of the resident's support. All those supporting the individual must agree on and sign a Multiple Support Declaration.
Source: The Center for Elder Law. For more information visit our web site at: www.thecenterforelderlaw.com
2009 Moratorium On Distributions From Retirement Accounts
Congress approved legislation that includes a one-year suspension of the required minimum distributions for 2009 for taxpayers who are 70 1/2 and older!
Requirements for 2008 remain unchanged.
While there has been some speculation about regulatory relief for 2008, Congressional tax staff feel that the 2009 RMD waiver provides fair and adequate taxpayer relief. Clearly Congress is attempting to help by not forcing withdrawals from accounts that have declined in these markets. As long as you are over 70 1/2 the new rules apply regardless of how your money is invested (stocks, bonds, CD's etc.). The bottom line: If you do not need the money there is no forced withdrawal (RMD) in 2009. If you need the income you can still make withdrawals. This relief is for only one year - 2009.
Explanation of RMD Provision by Joint Committee on Taxation
Under the provision, no minimum distribution is required for calendar year 2009 from individual retirement plans and employer-provided qualified retirement plans that are defined contribution plans like a 401k (within the meaning of section 414(i)). Thus any annual minimum distribution for 2009 from these plans is not required to be made. The next required minimum distribution would be for calendar year 2010.
In the case of an individual whose required beginning date is April 1, 2010 (e.g., the individual attained age 70 1/2 in 2009), the first year for which a minimum distribution is required under current law is 2009. Under the provision, no distribution is required for 2009 and, thus, no distribution will be required to be made by April 1, 2010.
Effective Date
The provision is effective for calendar years beginning after December 31, 2008.
However, the provision does not apply to any required minimum distribution for 2008 that is permitted to be made in 2009 by reason of an individual's required beginning date being April 1, 2009. IRA rules are among the most complex laws on the books and there are several other rules that are part of this legislation that I have intentionally left out due to their narrow application. I am more that happy to discuss these temporary changes and how they affect your personal situation so do not hesitate to call.
Ticket to Work: A Way to Ease Into the Workforce Without Losing SSDI Benefits
According to the National Collaborative on Workforce and Disability, one-quarter of all adults with disabilities work at either a full- or part-time job. Although some of the remaining three-quarters are unable to work at all due to their disability, many others don't have a job because they lack the skills necessary for gainful employment or fear losing vital government benefits if they do work.
Once a child reaches 18 and receives Social Security Disability Income (SSDI) payments, the Social Security Administration (SSA) offers several programs to encourage her to work. The best-known program, the Ticket to Work Plan, is a somewhat complicated program designed to offer beneficiaries a way to begin a career without having to worry about losing their SSDI benefits.
Through the Ticket to Work Plan's work incentives program, any month that an SSDI beneficiary earns more than $700 counts as a month of "trial work." If during any five-year period an SSDI beneficiary has nine months where he earns more than this $700 limit, the trial period ends. When this happens, the SSDI beneficiary does not receive an SSDI payment in any month where he makes "substantial earnings" of more than $980 (in 2009). For three years after the end of the trial period a beneficiary can immediately regain benefits if he falls below the substantial earnings level and still has a disability.
Also, a beneficiary receiving Medicare because of participation in SSDI can continue to receive free Medicare Part A services for up to four and a half years following the end of the trial period.
While complicated, these rules make an SSDI beneficiary's transition into the workforce slightly less burdensome than if benefits immediately ended. Unfortunately, the rules for Supplemental Security Income (SSI) beneficiaries are much more focused on income and asset levels, which makes it harder for an SSI beneficiary to hold a full time job, even under the Ticket to Work program, and maintain benefits.
Many programs are available for people with special needs to seek employment if they would like to do so, and more programs will be discussed in future articles. Unfortunately, the rules for most of these programs are complicated and the SSA is often not very good at explaining them. Parental attention and planning well before a child turns 18, usually with the assistance of local vocational agencies and qualified attorneys, offers the best chance for successfully navigating the maze of educational and employment opportunities.
For more details on the Ticket to Work program, go to: http://www.ssa.gov/work
Obama, Democrats Plan to Keep Estate Tax
Barack Obama and congressional Democrats plan to retain the estate tax instead of allowing it to expire as scheduled in 2010.
Elimination of the tax on big inheritances was approved by Congress and President George W. Bush in 2001, when there were large projected budget surpluses, with rollbacks phased in gradually and its full elimination to take effect next year.
Under Obama's plan, the tax would be locked in at the rate and exemption levels that took effect this year, according to a front-page story in Monday's Wall Street Journal.
That would exempt estates of $3.5 million - $7 million for couples - from the estate tax. The value of estates above that level would be taxed at a rate of 45 percent.
If the tax were returned to levels before the 2001 action, the tax would exempt only $1 million with the rest taxed at a 55 percent rate.
Democrats who favor retaining the tax argue that the budget deficit is huge, full repeal of the tax would cost the Treasury more than $500 billion over a decade, and the wealthy have already benefited from the Bush tax cuts, the Journal reports.
Advocates of eliminating the estate tax contend that the Obama plan is the wrong move during a recession. Bill Rys, tax counsel for the National Federation of Independent Business, told The Journal that small businesses that are struggling should not have to devote resources to estate planning as they seek ways to minimize taxation.
The Senate rejected GOP efforts to repeal the estate tax in June 2006, with
Republican Bill Frist of Tennessee calling it a "vicious tax." Democratic Sen. Richard Durbin of Illinois called the repeal bill "the most outrageous piece of special interest legislation in modern memory."
Under Obama's plan, only the largest estates - fewer than 2 percent of annual deaths - would be subject to the estate tax.
Source: 2009 Newsmax
Dementia Prevention
A common form of dementia that's often mistaken for Alzheimer's can be prevented with good health habits, a new report says.
Vascular cognitive impairment, the second most common cause of dementia, occurs in up to 4% of Americans over age 65 and up to 20% of those with a form of dementia. Brain damage from multiple small strokes that can occur from narrowing or blocked arteries in the brain, is often the cause.
The report, in the December issue of Mayo Clinic Women's HealthSource, notes that by lowering blood pressure, quitting smoking and keeping diabetes and cholesterol in check, people can reduce their risk.
Source: FreePress Newspaper, January 5, 2009; Kevin McKeever, HealthDay
People Notice Changes in Loved Ones during the Holidays
The holidays may be the only time all year that some families get together. It's not unusual for family members to notice changes in loved ones that were not visible the year before or during phone calls.
Changes can range from clear differences in physical health and appearance to more subtle alterations in mood and cognitive abilities. Sometimes these changes are immediately apparent to a visiting relative or friend. Other times it is a nagging feeling that things are not quite right, causing lingering anxiety for the visitor long after they have returned to their own home.
Increasing longevity has brought with it both benefits and new challenges. The decline of a parent's health or intellectual capacity often requires adult children to become involved in decisions about a parent's life. These decisions are not easy and there are no simple solutions. Each older person and family system is unique. The right answer for one family may be inappropriate for another faced with a similar situation and decision.
If you have noticed memory or cognitive changes - even subtle ones - in older family members, it's important to follow up. Alzheimer's disease is the most common form of dementia, but there are many other factors that can contribute to cognitive changes including other illnesses - such as Huntington's disease, Pick's disease, Parkinson's disease, or vascular dementia - as well as injury, poor nutrition or problems with medication. One option is to discuss your concerns - at no charge - with a Master's level clinician at the Alzheimer's Association. AA Helpline clinicians can help you determine if you should take action and, if so, what next steps might be appropriate, including referral to physician or other health organization. Early detection and action are key to minimizing symptoms through medication, protection from possible neglect/abuse, legal and long-term care planning, and securing resources and assistance needed to continue to live independently.
Source: The Michigan Dementia Coalition. The Coalition is the coordinator of a statewide public awareness campaign focusing on dementia and memory loss. WorriedAboutMemoryLoss.com is an education campaign showcasing the facts of memory loss and dementia and resources available in Michigan for patients and caregivers. For more information online connect to www.WorriedAboutMemoryLoss.com or call 1.800.272.3900 for services in Michigan. For more information on the Michigan Dementia Coalition contact Micki Horst, Michigan Public Health Institute, at 517.324.7318.
Vast Majority of Senior Citizens Do Not Understand Donut Hole in Medicare Drug Program
What's Your Gap? Three simple steps to make the most of your Medicare Part D coverage and delay the Coverage Gap
If you are still confused about the coverage gap - or donut hole - in the Medicare Part D drug program, don't feel dumb or alone. Nearly two-thirds of senior citizens covered by the program don't understand it, although, it is a key part of the program and can lead to devastating unexpected drug costs.
A new national poll titled "What's Your Gap? Seniors Struggling with the Medicare Coverage Gap," has found that 56 percent of the eligible population enrolled in the Medicare Part D program, more than one in four beneficiaries, either don't understand the Coverage Gap at all, or simply don't know what the Coverage Gap is.
"Seniors are in the dark about the Coverage Gap," says Dr. Richard Dupee, president of the Massachusetts Geriatric Society and chief of geriatrics at Tufts Medical Center. "Without knowing how the Coverage Gap works, it's simply impossible to take steps to push off or prevent it."
To address this issue, Medco Health Solutions, Inc., the company that financed the survey, unveiled today a multi-level initiative aimed at educating retirees about the Coverage Gap, and what steps they can take to stave off or even prevent them from falling into the "doughnut hole."
The program, "What's Your Gap?" provides retirees with information about prescription drug savings opportunities, where to look for hidden savings, and clarifies many misconceptions about the Coverage Gap. For example, Part D beneficiaries can save up to 38 percent and delay entering the Coverage Gap by an average of two and a half months by choosing both generics and mail order.
As part of the initiative, Medco has developed a free consumer's guide called "What's Your Gap? Three simple steps to make the most of your Medicare Part D coverage and delay the Coverage Gap."
The free guide presents easy-to-understand information on savings tools that are largely unknown or underutilized by beneficiaries and how to track your drug costs against the Coverage Gap.
The guide is available free to consumers in a downloadable version at http://www.whatsyourgap.com, or by sending a postcard requesting the guide to "What's Your Gap?", PO Box 8007 Parsippany, NJ 07054-8007.
Key findings of the Medco Survey include:
- Gap Hits Those with Chronic Diseases: Among respondents who are already in the Coverage Gap in 2008, more than three out of four regularly take medications to treat more than one chronic condition; among respondents, 43 percent indicated they had reached the Coverage Gap before June of 2008.
- Missing Out on Savings: Nearly 28 percent of survey respondents have not used any lower-cost options to reduce their prescription price tag to delay entering the gap. Furthermore, fewer than one in four (23 percent) enrollees have discussed ways to reduce their prescription drugs costs with their physicians. Only 19 percent of respondents indicated they have used a mail-order pharmacy to reduce their drug costs.
In 2008, once Medicare enrollees spend a total of more than $2,510 on prescription drugs in the initial phase of coverage, they enter the Coverage Gap and become responsible for the full cost of their medications. In 2009, the Coverage Gap shifts to total drug costs exceeding $2,700.
- Beneficiaries Don't Know What Costs Count Toward the Gap:
According to the survey, one of the root causes of confusion is that Medicare beneficiaries simply don't know what parts of a prescription's price count towards the Coverage Gap. Only one-quarter of enrollees polled correctly stated that the total cost of a drug - both their out-of-pocket cost and the health plan's portion of the drug price - count towards the Coverage Gap.
"It's one of the great Medicare myths - that only copays or out-of-pocket costs count towards the doughnut hole," says Dr. Dupee. "This misunderstanding gives many seniors a false sense of security that the Coverage Gap is months away, when in reality, it could hit them with their next refill."
- Bridging the Communication Gap:
Recognizing the significance of educating enrollees about the specifics of the Coverage Gap, Medco has implemented an integrated Coverage Gap communications program that alerts its Prescription Drug Plan (PDP) members and specific health plan beneficiaries through mailings and outbound phone calls of their proximity to the Gap long before they reach it.
Additionally, any time one of these members contacts a customer service representative for any reason, that member can be provided with a real-time Coverage Gap status update. To promote increased use of generics in order to help members delay entry into the Coverage Gap, Medco also offers members prescription forms that they can bring to their physician or will contact the doctor on their behalf to discuss generic alternatives that can lower the patient's medication costs.
Source: http://www.seniorjournal.com and http://www.whatsyourgap.com.
Marriage and Social Security Benefits
Millions of couples blissfully say "I do" each year with perhaps only a fleeting thought of eventually retiring with their beloved. But married couples should pause to consider the array of Social Security options they have that their single counterparts don't.
While both members of a married couple are living, they are entitled to benefits based on their own earning records or a spouse's benefit equal to 50 percent of the higher earner's amount. Olivia Mitchell, a professor of insurance and risk management at the University of Pennsylvania's Wharton School, recommends that you compute your benefits based on your own salary history and then your spouse's. "So I would be entitled to half of my husband's Social Security benefit if it was more than I could get on my own," she says. "If my own benefit is greater than half of his, then I get mine. It would work the other way around too. It's sex neutral."
These benefits are reduced if claimed earlier than the full retirement age. For example, a woman claiming the spouse's benefit at age 62 will receive only 35 percent of her husband's primary insurance amount rather than the 50 percent payable at age 66, according to a recent paper by Alicia Munnell and Mauricio Soto of Boston College's Center for Retirement Research.
Widows and widowers also get a survivor's benefit equal to 100 percent of their spouse's benefits, if it's higher than what they would get on their own. And the longer claiming is delayed up until age 70, the more money the surviving spouse will receive.
So, while it's often best for single men to claim early because of their traditionally shorter life expectancy than women (and for single women to generally claim later), coupledom turns this notion on its head. Because married couples often combine their incomes, they can estimate their life expectancy and strategize about the best age for each to sign up for Social Security to maximize their benefits together as a couple or for the survivor.
"For a traditional couple where the guy is the higher earner, if he takes his benefits earlier, that affects his wife's benefits when she retires and his widow's benefit if he dies," Mitchell says. The optimal strategy for most married couples where the husband is the bigger breadwinner is for wives to claim early and husbands to delay claiming, Munnell found. The best outcomes for the couple were found in most cases when men delayed claiming until age 69.
But the best strategy for any given couple depends on the lower earner's bankroll and the age difference between the spouses, Munnell found. If the wife is entitled to a Social Security benefit equal to 40 percent or more of her husband's, she should claim benefits as early as possible at age 62 and the husband should wait until age 69, regardless of their age difference. The couple can then share her benefit at age 62 and her 35 percent of his benefit when he retires (reduced for her having claimed early). Assuming the husband dies first, the wife will then get 100 percent of his benefit.
For example, if a man is entitled to $1,414 per month at age 62, his wife, who is the same age and entitled to a $1,000 benefit of her own, is likely to receive $164,630 over her lifetime if she begins claiming her benefits at age 62. Her benefit is too high to allow her to claim 50 percent of her husband's earnings, but should her husband die before her, she will get her husband's full survivor's benefit, plus any cost-of-living increases. If she waited until age 66 to claim, she would get only $162,081 over her lifetime (and $150,867 if she waited until age 70), assuming both she and her husband have an average life expectancy.
If the woman is entitled to only $300 a month on her own, she should still claim at age 62, Mahaney and Carlson found, as she could expect to receive $115,486 over her lifetime once she collects her portion of her husband's higher benefit and her survivor's benefits. Delaying until age 66 would net her only $114,591, and further delaying until age 70 would produce just $111,227.
But if the wife is entitled to less than 40 percent of her husband's benefit on her own, age differences come into play. If the spouses are the same age and the wife gets between 30 and 40 percent of her husband's benefit on her own, the wife should wait until her full retirement age (66 for the first wave of baby boomers retiring this year) to maximize the amount of money the couple will receive in retirement, Munnell and Soto found. And if the wife gets less than a third of her husband's benefit but is the same age, the wife should claim early and the husband should claim at his normal retirement age, when she'll get bumped up to receive a portion of his benefit. But if the woman is significantly younger in either case, she should claim early and he late to maximize her survivor's benefit.
Source: Emily Brandon of U.S.News & World Report
Unable to Sell Homes, Elderly Forgo Move to Assisted Living
The housing crisis has kept thousands of older Americans who need support and care from moving into retirement communities or assisted-living centers, effectively stranding them in their own homes.
Without selling their houses or condominiums, many cannot buy into retirement homes that require a payment of $100,000 to $500,000 just to move in. So they are scratching themselves off waiting lists, canceling plans with packing services and staying put, in houses that fit well 30 years ago, but over the years have become lonely, too large or too treacherous to navigate.
"It is part of the hidden problem of the recession," said Larry Minnix, president of the American Association of Homes and Services for the Aging. "Every neighborhood, every family's got them."
Facilities that have watched their waiting lists wither and their occupancy rates fall in the last year are now scrambling to bring people through their doors. Some assisted-living centers have called in real estate agents to teach prospective residents about online advertising and how to clean and preen their homes for showings. Others have set up programs with banks to provide bridge loans to homeowners, or are discounting apartments and offering low-interest loans.
The Cedar Community, which provides a range of housing for the elderly in West Bend, Wis., has seen independent-living occupancy rates drop by 4 percent this year. There were so many people waiting for their homes to sell that the facility decided, in some cases, to let new residents pay month-to-month until they could unload their houses and use the proceeds on the facility's entry deposit.
"We've never done that before," said Tracey MacGregor, a spokeswoman at Cedar Community.
But for people like Ruth Scher, 85, selling their home is a critical first step before moving on, or moving anywhere. Ms. Scher put her two-bedroom condominium in Delray Beach, Fla., on the market last year, but no one has made an offer.
In the 34 years since she moved to South Florida, Ms. Scher's husband has died, the siblings who moved south from New York to join her have died, and her friends have moved away. She is recovering from a fall that broke her clavicle and suffers from arthritis in one shoulder, and she says it is time to move back.
"It's lonesome," Ms. Scher said. "So many other people have passed away or moved away. It's very lonely. The children would love me to come up and I would love to, but I just can't sell."
Ms. Scher hoped to move to a retirement community in Cornwall, N.Y., where she has friends. But in the year her home sat on the market, she could not even find a broker willing to sell the property, she said. She finally de-listed her condominium.
"They tell you, 'We're sorry, we can't get any people to come and look,' " Ms. Scher said. "If I can't sell here, I can't go nowhere."
There is no way to say how many older Americans are in similar straits, as no statistics track how many of America's 4.27 million unsold homes are owned by people 65 or older. But industry groups and administrators at retirement homes call the problem a growing one, which worsened as the financial crisis spread from real estate to lending markets. It has been felt worst in regions hit hardest by the housing bust.
"It remains to be seen whether we have a short-term stress, or whether we're facing a crisis," said Mr. Minnix, of the Association of Homes and Services for the Aging. "We're into brand new territory here. It is deeper and potentially broader."
Across the country, occupancy rates for independent and assisted-living facilities have fallen slightly in the last year, by about 2 percent through the middle of 2008, according to the National Investment Center for the Seniors Housing and Care Industry.
But the problem is playing out acutely in hard-hit areas like Florida, where the vacancy rate at some facilities is up 20 percent to 30 percent over last year, said Paul Williams, director of government relations for the Assisted Living Federation of America. At Luther Manor, a retiree community in Milwaukee, the number of residents moving into independent living has dropped 20 percent this year. In southern Ohio, 65 percent of the people who visited the Bristol Village retirement community this year said they could not buy a unit because their homes were still hanging around their neck.
For these businesses, each occupied room generates thousands of dollars each year. Retirement condos charge monthly fees ranging from a few hundred dollars to $5,000, while the average price for private-pay care in assisted living is $3,013 per month, or $36,156 per year, according to a MetLife study.
At the Crosby Commons assisted-living center in Shelton, Conn., where waiting lists that once ran two years or more have shrunk to six months, some residents who moved before selling their homes are spending through their savings as they wait, said Lois Poultney, the center's director. One resident had to move from Crosby's free-market homes to its subsidized rent-controlled apartments, Ms. Poultney said.
"I'm hearing it over and over again: 'Mom needs to sell her house before she can afford to move in,' " she said.
There are signs some families and retirees are turning to adult day care services as a stopgap. Providers say their business has spiked as people look for an alternative to continuing care or home aides to provide food, companionship and therapeutic services. But Mr. Williams of the Assisted Living Federation said that people who need more day-to-day care, those who have trouble getting up stairs or who need someone to check on them, were taking a risk by staying at home.
"When they're coming in at 85, they're coming in very frail and needing services," he said. "They can't wait this out. They need the care when they need the care. That's the scary part. You have people putting it off when they need care right now."
For Katherine Styberg, 84, that moment of realization came when she slipped on a patch of ice in February and fractured a vertebra. She has to use a cane when she walks now, and she says she has been thinking about how she lives alone, and if she fell in her two-bedroom condominium in Milwaukee, no one could catch her or help her up.
The real estate broker calls Ms. Styberg a day before bringing potential buyers to see her apartment, and a few have come to look around, but no one has made an offer yet.
As parents linger in their homes, they say their children start to worry. Some adult children are even facing financial hardships if they cannot sell their parents' homes.
In April, Ruth Swessel, 84, of Milwaukee, had a stroke that aggravated the effects of her aging, leaving her unable to follow "Meet the Press" or read the political magazines she once loved. Her daughter, Laura Westling, had to put her into skilled care, and the family began the process of selling Ms. Swessel's house to pay for the facility's $60,000 annual cost.
The house has been sitting on the market since the summer, and Ms. Swessel's family has lowered the price twice, to $174,500 from $189,900, but they have not been able to close a deal. Her children are spending her investments to pay for her care, but Ms. Westling said they did not know what they would do once that money ran out.
"It's not easy," she said.
As stock markets have slid in the last year, homes have become a more critical source of wealth for retirees who have watched their mutual funds and 401(k) accounts hollow out. Next to accrued Social Security benefits, housing is the single greatest asset for people 60 to 70 years old, making up 22 percent of their total wealth and outweighing investments and pensions, according to the Center for Retirement Research. For retirees like Herman McHan, who watched the value of his mutual funds fall to $35,000, from $70,000, or Sylvia Merlin, whose portfolio has lost nearly $200,000 of value, owning an interminably on-the-market home compounds the worries of their dwindling investments.
For Ms. Merlin, it is a disconcerting place to be at age 93. She said she and her late husband, Al, had lived modestly to raise their four children, taking one vacation a year, to the Jersey Shore. She is on oxygen now, and finds it harder to get around her fifth-floor apartment outside of Philadelphia. The doorman's wife takes her to the hairdresser on Fridays, but Ms. Merlin said she wanted more consistent care.
"I'm going to be 94, and I need help," she said. "Making the bed is difficult. I need a little help taking a shower. Those things are difficult. I was a great cook, but I really don't cook anymore. I bought the TV dinners, and they're pretty lousy."
No one has made an offer on her condominium, and Ms. Merlin said the retirement home had refunded the $1,000 deposit on the $130,000 unit she hoped to buy. Now, instead of moving, she said she had decided to stay.
"I just couldn't go anywhere until I sold my apartment," she said. "I and a lot of other oldsters are stuck."
Source: New York Times, November 22, 2008
Hope For Homeowners: New Program Will Help Those in Foreclosures or Those Having Trouble Making Mortgage Payments
The HOPE for Homeowners (H4H) program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. H4H is an additional mortgage option designed to keep borrowers in their homes.
The program is effective from October 1, 2008 to September 30, 2011.
As many as 400,000 homeowners could avoid foreclosure through this program over the next three years. If you are having trouble making your mortgage payments, HOPE for Homeowners may be able to help you, by refinancing your loan into a new 30-year fixed-rate loan with lower payments.
Here's how the program works:
Cost: H4H has a built-in mechanism to raise insurance funds to cover foreclosures. Borrowers pay a 3 percent premium up front plus 1.5 percent a year. That's quite a bit pricier than the standard FHA 1.5 percent up front plus 0.5 percent a year premiums.
The initial 3 percent could be rolled in as part of the refinance, but the 1.5 percent a year effectively means that borrowers will end up with an interest rate around 8 percent (assuming the loan itself is at 6.5 percent). The 1.5 percent premium ends when the homeowner accrues a certain level of equity, but in a declining market, that's likely to take a very long time.
"Congress set the fees so high because they anticipated a high default rate," said Bill Glavin, special assistant to the FHA commissioner. "This will help our insurance fund."
No liar loans: All FHA loans must include full documentation of income and employment. Anyone who falsified information to obtain their previous mortgage is supposed to be barred from this program. Won't that exclude the hordes of people who took out "liar loans," swearing they were rolling in dough?
Not necessarily. "It's up to the lender to make that judgment (if a borrower previously lied); all they should focus on is if they're now telling the truth and make $30,000 a year, is whether they can hack the mortgage at $30,000," Glavin said. "They can't get away with falsification of income this time."
Income qualifications: Borrowers can participate only if their total housing costs - principal, interest, taxes and insurance - end up as less than 31 percent of their total income (it rises to 38 percent if they successfully complete a three-month trial at the new rate). Their total debt may not exceed 43 percent of income (or 50 percent after the trial).
Glavin agreed that requirement may disqualify a lot of people.
Harper said he thinks two-income homeowners would have the best chance of meeting the qualifications. Many Bay Area homes may be too pricey for the program but nationwide many homes are now at such low valuations that an H4H refinance will work for them, he said.
Securitization: The big stumbling block for many loan modifications is that the bank that collects payments often doesn't own the mortgage - it acts as a servicer on behalf of investors, who own securitized mortgages that were sliced and diced into packages for sale. Those investors' agreement often is needed to refinance a mortgage. Glavin said it is possible investors will not agree to do it, and that contacting them could prove to be cumbersome.
Dumping toxic loans: What will stop lenders from putting their worst mortgages into this program to get rid of them?
Glavin said the verified income requirement means only qualified borrowers will get a refinance.
"Most lenders, if they're going to originate a new loan, they still don't want to make a bad loan, even if in the end the homeowner defaults and we pay a claim," he said. "It's not as if the lenders will go out and continue to work with a borrower who does not perform well."
Hope for Homeowners plan
How it works
- Lenders write down loan balance to 90% of current appraised value.
- New loan is 30-year fixed at current rates (about 6.5%).
- Borrowers pay 3% up-front insurance premium (can be financed as part of the loan).
- Borrowers pay 1.5% a year as insurance premiums.
- Housing costs can't exceed 31% of borrower's income or 38% if borrower successfully completes 3-month trial period.
- Total debt can't exceed 43% of borrower's income or 50% after three-month trial.
- Second mortgage holders must release their liens.
- New loan is guaranteed by FHA.
Who qualifies
- Owner-occupants who cannot afford their current loan and do not own a second home.
- Borrowers must fully document their income.
- Borrowers must agree to share future appreciation in their home.
How to participate
- Interested borrowers should contact their lender, a HUD counseling agency or the HOPE Now Alliance at (888) 995-HOPE.
- Full details at www.fha.gov
Example
- House was purchased for $450,000 and now appraises at $300,000.
- New loan at 90% of value is $270,000 (lender writes off $180,000 plus the 3% insurance fee)
- New monthly payments are about $2,500 (6.5% interest plus 1.5% insurance plus about $400 a month for taxes and insurance)
- Income to qualify: at 31% debt-to-income: $7,740/month, or $92,900/year
- At 38% DTI: $6,315/month or $75,790/year
Source: Federal Housing Administration
Key Elder Law Numbers for 2009
Below is compilation of Medicaid, Medicare, Social Security and other figures for 2009 that are of interest to the elderly and their families.
Medicaid Spousal Impoverishment Figures for 2009
In 2009, the spouse of a Medicaid recipient living in a nursing home (called the "community spouse") may keep as much as $109,560 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Called the "community spouse resource allowance," this is the most that a state may allow a community spouse to retain without a hearing or a court order. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2009 will be $21,912 .
Meanwhile, the maximum monthly maintenance needs allowance for 2009 will be $2,739. This is the most in monthly income that a community spouse is allowed to have if her own income is not enough to live on and she must take some or all of the institutionalized spouse's income. The minimum monthly maintenance needs allowance of $1,750 took effect July 1, 2008 and will not rise until July 1, 2009.
Annual Gift Tax Exclusion Rises to $13,000
The annual gift tax exclusion will increase from $12,000 to $13,000 effective January 1, 2009, the Internal Revenue Service (IRS) has announced. The gift tax exclusion is the amount the IRS allows a taxpayer to gift to another individual without reporting the gift.
Long-Term Care Premium Deductibility Limits for 2009
The Internal Revenue Service has announced the 2009 limitations on the deductibility of long-term care insurance premiums from taxes. Any premium amounts above these limits are not considered to be a medical expense.
Maximum deduction for attained age before the close of the taxable year:
40 or less - $320
More than 40 but not more than 50 - $600
More than 50 but not more than 60 - $1,190
More than 60 but not more than 70 - $3,180
More than 70 - $3,980
Benefits from per diem or indemnity policies, which pay a predetermined amount each day, are not included in income except amounts that exceed the beneficiary's total qualified long-term care expenses or $280 per day (for 2009), whichever is greater.
Medicare Premiums, Deductibles and Copayments for 2009
- Basic Part B premium: $96.40/month (unchanged)
- Part B deductible: $135 (unchanged)
- Part A deductible: $1,068 (was $1,024)
- Co-payment for hospital stay days 61-90: $267/day (was $256)
- Co-payment for hospital stay days 91 and beyond: $534/day (was $512)
- Skilled nursing facility co-payment, days 21-100: $133.50/day (was $128)
Premiums for higher-income beneficiaries:
- Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 in 2009 will pay a monthly premium of $134.90.
- Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 in 2009 will pay a monthly premium of $192.70.
- Individuals with annual incomes between $160,000 and $213,000 and married couples with annual incomes between $320,000 and $426,000 in 2009 will pay a monthly premium of $250.50.
- Individuals with annual incomes of $213,000 or more and married couples with annual incomes of $426,000 or more in 2009 will pay a monthly premium of $308.30.
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
- Those with incomes between $85,000 and $128,000 will pay a monthly premium of $250.50.
- Those with incomes greater than $128,000 will pay a monthly premium of $308.30.
Social Security Benefit Changes for 2009
- Cost of Living Increase: 5.8 percent
- Estimated Average Monthly Social Security Benefit Payable in January 2009: $1,153
- Maximum Taxable Earnings: $106,800
- Maximum Social Security Benefit: $2,323/mo.
Retirement Earnings Test Exempt Amounts:
- Under full retirement age: $14,160/yr.
- The year an individual reaches full retirement age: $37,680/yr.
SSI Federal Payment Standard:
- Individual: $674/mo.
- Couple: $1,011/mo.
Clock on Medicare's Three-Day Hospitalization Requirement for SNF Coverage Starts at Inpatient Admittance
The Second Circuit Court of Appeals rules that until a patient is formally admitted to a hospital as an inpatient, the clock does not begin to run on Medicare's three-day hospital stay requirement to qualify for skilled nursing facilitycoverage. Estate of Landers v. Leavitt (2nd Cir., No. 06-4921-cv, Oct. 1, 2008).
Marion Landers, along with several other Medicare recipients, brought a class action suit against the Centers for Medicare and Medicaid Services (CMS), alleging that the agency violated her civil rights by denying Medicare coverage for post-hospitalization skilled nursing facility (SNF) care. Specifically, CMS denied coverage because, under its own reading of federal law, it determined that Ms. Landers had not been admitted for inpatient hospital care for three full days before being transferred to the nursing home, a statutory prerequisite for Medicare coverage of nursing home care (colloquially known as the "three-midnights rule"). While Ms. Landers had received care in the hospital for three days, she had spent at least one midnight in the emergency room (ER) without being formally admitted. Ms. Landers claimed that CMS's policy of counting only days spent in the hospital after formal admittance when calculating the three-day requirement violated federal Medicare law and the equal protection clause of the Constitution. Both parties filed for summary judgment, and the district court found in favor of CMS. Ms. Landers appealed.
On appeal, Ms Landers claimed that the definition of an "inpatient" includes all people receiving care from a hospital, not just those formally admitted. Therefore, Ms. Landers argued that the three-day clock should have started running once she began receiving care in the ER, not when she was formally admitted. CMS claimed that the statutory definition of "inpatient" was vague, and therefore its use of the three-midnights rule was entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). In the alternative, CMS argued that its interpretation of the statute was persuasive on its face as outlined in Skidmore v. Swift & Co., 323 U.S. 134 (1944) because the agency had consistently used the rule for years while allowing periodic public comment on the policy.
The Second Circuit Court of Appeals finds in favor of CMS. The court rules that the agency's use of the three-midnights rule is not entitled to Chevron deference because the rule is only part of the CMS manual and does not count as a legislative rule. However, the court finds that because CMS adopted its interpretation of the rule more than 40 years ago and has consistently utilized the interpretation, its interpretation "is entitled to a great deal of persuasive weight." The court says that in "determining whether a Medicare beneficiary has met the statutory three-day hospital stay requirement needed to qualify for post-hospitalization SNF benefits under Part A, the time that the patient spends in the emergency room or on observation status before being formally admitted to the hospital does not count."
Medical Bills You Shouldn't Pay
In a controversial practice known as "balance billing," health-care providers are going after patients for money they don't owe
As health-care costs continue to soar, millions of confused consumers are paying medical bills they don't actually owe. Typically this occurs when an insurance plan covers less than what a doctor, hospital, or lab service wants to be paid. The health-care provider demands the balance from the patient. Uncertain and fearing the calls of a debt collector, the patient pays up.
Most consumers don't realize it, but this common practice, known as balance billing, often is illegal. When doctors or hospitals think an insurer has reimbursed too little, state and federal laws generally bar the medical providers from pressuring patients to pay the difference. Instead, doctors and hospitals should be wrangling directly with insurers. Economists and patient advocates estimate that consumers pay $1 billion or more a year for which they're not responsible.
Yolanda Fil, a 59-year-old McDonald's (MCD) cashier in Maple Shade, N.J., got tangled up with balance billing after gall bladder surgery in 2005. She and her husband, Leon, a retired state transportation worker, have coverage through Horizon Blue Cross Blue Shield of New Jersey. Horizon made payments on Fil's behalf to the hospital, surgeon, and anesthesiologist. Then, in 2006, Vanguard Anesthesia Associates billed Fil for an unpaid balance of $518. Soon, a collection agency hired by Vanguard started calling Fil once a week, she says. Although she thought her co-payment and insurance should have covered the surgery, Fil eventually paid the $518, plus a $20 transaction fee. "I didn't have any choice," she says. "They threatened me with bad credit."
Caught in the Middle
Luckily for Fil, her insurer decided to get tough with Vanguard. In December 2006, Horizon Blue Cross sued the medical practice for balance billing Fil and more than 8,000 other policyholders who received invoices for a total of $4.3 million for service from 2004 to 2006. A New Jersey judge last year ordered Vanguard to stop billing the patients and provide refunds to those who had paid. Fil is awaiting her $538 refund. Vanguard didn't respond to requests for comment.
National statistics aren't available, but there's little doubt that many consumers unwittingly fall victim to balance billing. The California Association of Health Plans, a trade group in Sacramento, estimates that 1.76 million policyholders in that state received such bills in the past two years, totaling $528 million. The group found that 56% paid the bills. "Patients think they owe this money, and it causes tremendous stress and anxiety for people," says Cindy Ehnes, director of the California Managed Health Care Dept. "It is inappropriate to put the patient in the middle of this."
Balance billing most frequently occurs when medical providers participating in a managed-care network believe the plan's insurer is imposing too deep a discount on medical bills or is taking too long to pay. California, New Jersey, and 45 other states ban in-network providers from billing insured patients beyond co-payments or co-insurance required by the plan. Similarly, federal law prohibits providers from billing Medicare patients for unpaid balances.
These laws require medical providers to seek payment only from the insurer for services covered by the plan. Many states also shield insured patients from balance billing by out-of-network hospitals and doctors in emergencies, since patients usually don't control who treats them in those situations. (Bans on balance billing generally don't apply when a patient gets an elective procedure, such as cosmetic surgery, or seeks out-of-network, non-emergency service without a referral.)
Some physicians, hospitals, and labs take advantage of consumer befuddlement, argues Jane Cooper, CEO of Patient Care, a Milwaukee firm that employers hire to help insured workers fight billing mistakes. "Medical providers count on the fact people will pay these bills because they don't have time to figure it out," Cooper says.
Quest Diagnostics, the country's largest lab chain, with revenue last year of $6.7 billion, has faced investigations and lawsuits over allegations of balance billing. A private suit that seeks class-action status in federal court in Newark, N.J., alleges that Quest has balance-billed thousands of patients covered by private insurance and Medicare, turning over many accounts to debt collectors. Quest, based in Madison, N.J., denies any wrongdoing.
In a separate case in 2003, the New York Attorney General's Office alleged that Quest encouraged consumers to overpay or billed them after Quest had already been paid by insurers. The company denied wrongdoing in the New York case and said only five people were due modest refunds. Quest agreed to pay New York $150,000 in legal costs and revise some practices, such as waiting longer to dun patients while a claim is pending with an insurer. A Quest spokeswoman says: "The vast majority of our transactions occur problem-free when correct information is provided by patients, physicians, and payers."
As some authorities get tougher, physicians are trying to overturn prohibitions on balance billing. The American Medical Assn. is lobbying Congress to allow balance billing within the Medicare program, as was allowed until 1991. Two Republican congressmen, Tom Feeney of Florida and Tom Price of Georgia, have sponsored legislation that would accomplish that goal. The AMA cites declining reimbursements from Medicare and private insurers in support of its bid to bill patients directly. AMA member David McKalip, a neurosurgeon in St. Petersburg, Fla., says patients can trust doctors to behave ethically and not gouge the poor: "Doctors will know up front which patients are willing to pay" beyond what the government reimburses.
Fighting Back
Consumers overwhelmed by medical bills might dispute that. Many lack the resources to fight balance billing on their own. With an eye on their legal fees, private attorneys hesitate to take on individual disputes over amounts that usually don't exceed $1,000. Glenn Siglinger is one exception. He fought a lengthy battle against a surgeon all the way to the Connecticut Supreme Court. In 2006 that court upheld a trial verdict awarding the Siglinger family nearly $40,000 in punitive damages from a doctor.
The case began in December 1995, when Siglinger's wife, Laura, and his daughter, Allison, then three, were injured in a car accident. Both were taken to the emergency room at Bridgeport Hospital, where Dr. Charles Gianetti, the plastic surgeon on call, stitched a cut on Allison's face. The Siglingers' insurer paid Gianetti $1,981 under a contract with the family's health plan. Later in 1996, he claimed the Siglingers owed him an unpaid balance of $4,496. The Siglingers refused to pay, and Gianetti sued them. Ruling for the Siglingers, the trial judge ordered Gianetti to pay their legal fees, in addition to the punitive damages. The Siglingers say he hasn't paid them anything.
"It was traumatic enough seeing my daughter go through a serious accident, but then to go through this," says Siglinger, a real estate investor. He and his wife have since divorced; Allison is now 15. "I wonder how many people paid these bills without giving it a second thought," he says. The Siglingers are among 150 patients Gianetti has sued for unpaid balances, according to state records. The Connecticut Attorney General's Office is scheduled to go to trial next year against Gianetti, having accused him in a civil suit of improper billing.
Gianetti, 69, no longer practices medicine, but he continues to pursue former patients in court. He says the state of Connecticut has "nothing on me," declining other comment.
Even routine office visits can lead to balance billing. In Illinois, federal prosecutors say Dr. Janet Despot and Rickey Weir, her husband and office manager at the Cardinal Respiratory medical practice in Springfield, overbilled Medicare, private insurers, and patients by more than $800,000 from 1997 through 2007. Despot, 50, pleaded guilty to a misdemeanor charge of balance-billing Medicare patients in February. She didn't receive jail time, but has paid a $10,000 fine and forfeited $2.5 million that will be used for restitution and additional fines. Federal officials are considering barring her from the Medicare program; the Illinois medical board separately is seeking to discipline her. For now she remains in business.
William Gass, a 41-year-old recycling coordinator, successfully took Despot to small-claims court in 1999 to get $300 in improper bills erased from his credit report. "It's unconscionable to me she can still practice medicine," Gass says.
Despot says her husband, Weir, from whom she is getting divorced, handled all billing. She claims she wasn't aware that patients were being hounded for money they didn't owe. A Medicare ban "would end my career," she says. "I didn't understand medical billing." Weir has pleaded not guilty to fraud charges and awaits trial in November. He declined to comment.
Regulators in most states have been slow to take action in billing disputes. But in July, California officials sued Prime Healthcare Services, seeking to force the 12-hospital chain based in Victorville, Calif., to stop balance billing. Last September, Thomas Lai was rushed to the emergency room at Prime's Huntington Beach Hospital because of severe chest pain. The 51-year-old musician stayed for four days, but doctors didn't find anything seriously wrong.
His wife, Tess, says she asked the hospital staff to transfer Thomas to a hospital covered by his Kaiser Permanente network - but to no avail. She had taken him to the hospital closest to home, which Kaiser advised her to do. Kaiser paid a discounted rate for the hospitalization, and the Lais thought that was the end of it.
They were shocked to receive a bill from Prime in May for more than $16,000. A collection firm threatened to report them to credit agencies. "I'm concerned about our credit report with this huge bill hanging over us," Tess says. Kaiser instructed the Lais not to pay anything while the state case unfolds.
Asked about the state action, Prime said: "This frivolous suit is not about the actions of one provider but the failure of the [state] to do its job to regulate HMOs and provide assistance to providers who have the right to be reimbursed properly for emergency services rendered to HMO enrollees." Prime didn't comment on the Lais.
Cindy Ehnes, the director of California's managed-care department, says her agency isn't taking sides between providers and insurers. It holds insurers accountable for paying promptly, she says. Medical providers should use proper channels to press their claims, such as an independent dispute-resolution system crafted by the state, she adds. "Patients are having their credit destroyed at a time when they are already sick and vulnerable."
Source: Editor's note: For a CBS Evening News report on balance billing that was made in collaboration with
BusinessWeek, go to: www.cbsnews.com/stories/2008/08/29/eveningnews
/main4398133.shtml
Changes to the FDIC Insurance Limit and How Revocable Trusts are Now Treated
How Much are Your Accounts Protected? New Interim Rule Simplifies Calculations
On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009.
Additionally on September 26, 2008, the Federal Deposit Insurance Corporation issued interim final regulations entitled Deposit Insurance Regulations; Living Trust Accounts, as published in the Federal Register, and as announced in FDIC's Press Release, "FDIC Simplifies Coverage Rules for Revocable Trust Accounts" (09/26/08). FDIC Insurance and Revocable Trusts: How Much are Your Accounts Protected?
With the recent rash of bank failures, there's been alot of confusion about the amount of insurance protection offered to bank accounts held in FDIC-insured banks. Coupled with this is the confusing rules that apply to trust accounts. In response, on September 26, 2008, the FDIC Board of Directors issued an interim new rule that applies to coverage offered to "Revocable Trust Accounts." Coupled with this new rule is the temporary increase in coverage from $100,000 to $250,000 per depositor and per beneficiary of a trust that was included in the $700 billion economic bailout package signed into law on October 3, 2008. The increase in coverage is scheduled to continue through December 31, 2009.
FDIC's Definition of "Revocable Trust Account"
The FDIC's definition of "Revocable Trust Account" includes informal trust accounts, including payable on death, or POD accounts, in-trust-for, or ITF, accounts, and Totten Trust accounts, as well as formal accounts that are owned by the Trustee of a traditional Revocable Living Trust.
Summary of the Old Rule
The old rule governing Revocable Trust Accounts provided for the following:
- Accounts were insured up to $100,000 per "qualifying beneficiary" designated by the owner of the account;
- Qualifying beneficiaries were defined as the account owner's spouse, children, grandchildren, parents and siblings;
- Multiple account owners received coverage separately for each owner, per qualifying beneficiary;
- "Per-qualifying beneficiary" coverage was available on Revocable Trust Accounts separately from coverage offered in connection with other accounts held in other ownership capacities (such as in individual or joint names) at the same FDIC-insured bank;
- An account was covered only if met it three requirements: (1) Title had to include the term POD, or ITF, or Revocable Trust, or a similar term indicating an intent that the account would pass to the trust beneficiaries after the owner's death; (2) Each beneficiary had to be a "qualifying beneficiary" as defined above; and, (3) For POD accounts, the beneficiaries had to be specifically listed in the account records, while the beneficiaries of a formal Revocable Living Trust didn't have to be listed;
- In determining coverage, it was necessary to understand each beneficiary's beneficial interest in the Revocable Trust, be it a lump sum bequest, a life estate, or an equal or unequal share of the residuary trust; and
- All funds that a owner held in both formal Revocable Living Trust accounts and POD accounts naming the same beneficiaries were aggregated for FDIC purposes and insured only to the maximum applicable coverage limits.
Summary of the New Rule
The FDIC had several goals with regard to the promulgation of the new interim rule:
- To simplify the rule so that it would be easier for bank employees and consumers alike to understand and apply;
- To eliminate the requirement that a beneficiary be a "qualifying beneficiary";
- To eliminate the requirement to look at the actual beneficial interest of each beneficiary of the Revocable Trust for accounts valued at $500,000 or less; and
- To set reasonable limits on coverage for trust accounts that have more than five different beneficiaries and hold more than $500,000.
As a result, the new interim rule retains all of the features of the old rule listed above with three important exceptions:
- Beneficiaries no longer need to be "qualifying beneficiaries." Instead, any beneficiary named in the Revocable Trust, as long as the beneficiary is a natural person, or a charity or other non-profit organization, is offered coverage;
- For accounts with total balances of $500,000 or less, coverage is determined without the need to ascertain each beneficiary's beneficial interest in the Revocable Trust (including life estates which are given $250,000 of coverage); and
- Coverage is limited for Revocable Trusts that have more than five different beneficiaries and accounts holding more than $1,000,000.
Using the FDIC's "Edie the Estimator" to Determine Your Coverage
Even though the interim new rule does simplify the calculation of coverage for Revocable Trust Accounts in many regards, figuring it all out can still be confusing. To help consumers determine their coverage, the FDIC website has a tool named "Edie the Estimator" that will calculate the coverage you'll receive on individual, trust, and business accounts held in FDIC-insured institutions.
Source: www.fdic.gov and about.com
Are You Sitting Down? Medicare Premium to Remain Unchanged in 2009
For the first time in eight years, Medicare's monthly premium will remain unchanged for most of the program's 44 million beneficiaries. The Centers for Medicare and Medicaid Services (CMS) announced that the Part B premium will remain at its 2008 level of $96.40 for 2009 for individuals earning $85,000 or less or couples earning $170,000 or less. The premium will go up for higher earners (see list below). The Part B deductible will remain at its 2008 level as well.
The monthly premium paid by beneficiaries enrolled in Medicare Part B covers a portion of the cost of physicians' services, outpatient hospital services, certain home health services, durable medical equipment, and other items.
This is only the sixth time since Medicare was created in 1965 that the Part B premium stayed the same for two consecutive years, said Richard Foster, Medicare's chief actuary.
Anticipating concerns, Foster, who has worked for the agency since the early 1970s, said "There is no political manipulation." The premium will hold steady in part because Medicare's reserves have increased, according to a CMS statement. Foster said monthly rates are likely to go up in 2010 as health costs continue to rise.
AARP warned in a statement that "Lawmakers should not use today's announcement as an excuse to rest. The average 73-year-old in Medicare has seen his or her premium double since joining the program. Americans old and young continue to struggle with skyrocketing health-care costs." (For example, a recent analysis found that the average monthly premium for stand-alone Medicare prescription drug coverage will increase by 24 percent to $37 next year.)
While the Part B premium and deductible will not rise, other Medicare deductibles and co-payments will. Here are all the new Medicare figures for 2009:
- Basic Part B premium: $96.40/month (unchanged)
- Part B deductible: $135 (unchanged)
- Part A deductible: $1,068 (was $1,024)
- Co-payment for hospital stay days 61-90: $267/day (was $256)
- Co-payment for hospital stay days 91 and beyond: $534/day (was $512)
- Skilled nursing facility co-payment, days 21-100: $133.50/day (was $128)
As directed by the 2003 Medicare law, higher-income beneficiaries will pay higher Part B premiums. About 5 percent of current Part B enrollees are expected to be subject to the higher premium amounts. Following are those amounts for 2009:
- Individuals with annual incomes between $85,000 and $107,000 and married couples with annual incomes between $170,000 and $214,000 in 2009 will pay a monthly premium of $134.90
- Individuals with annual incomes between $107,000 and $160,000 and married couples with annual incomes between $214,000 and $320,000 in 2009 will pay a monthly premium of $192.70
- Individuals with annual incomes between $160,000 and $213,000 and married couples with annual incomes between $320,000 and $426,000 in 2009 will pay a monthly premium of $250.50
- Individuals with annual incomes of $213,000 or more and married couples with annual incomes of $426,000 or more in 2009 will pay a monthly premium of $308.30
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
- Those with incomes between $85,000 and $128,000 will pay a monthly premium of $250.50
- Those with incomes greater than $128,000 will pay a monthly premium of $308.30
Source: Medicare
Medicare Stops Paying for 10 Reasonably Preventable Medical Errors
On Wednesday October 2nd Medicare began refusing to pay hospitals for additional care resulting from "reasonably preventable" errors, the New York Times reports. The new regulations, which apply to a list of 10 errors, are expected to affect hundreds of thousands of the 12.5 million hospital stays for which Medicare pays annually. Hospitals also will be banned from charging patients directly for care related to medical errors (Sack, New York Times, 10/1).
Under the rule, Medicare no longer will reimburse hospitals for the treatment of certain "conditions that could reasonably have been prevented." The conditions for which Medicare no longer will reimburse hospitals for treatment include: falls; mediastinitis, an infection that can develop after heart surgery; urinary tract infections that result from improper use of catheters; pressure ulcers; and vascular infections that result from improper use of catheters. In addition, the conditions include three "never events": objects left in the body during surgery, air embolisms and blood incompatibility. The rule was proposed by CMS in April 2007 and mandated by a 2005 law (Kaiser Daily Health Policy Report, 8/20/07).
The move is not expected to result in major reductions in expenses - $21 million of the program's $110 billion in annual spending on beneficiary care - but it "carries great symbolism in the administration's efforts to revamp the country's medical payment system," according to the Times. Critics of the current system to reimburse health care providers say it increases costs by rewarding quantity instead of quality of care, the Times reports. Economists anticipate the new rules will help reconfigure the payment system to place greater emphasis on prevention and chronic disease management and also discourage unnecessary treatments.
A Growing Trend
Four state Medicaid programs in the last year have announced that they will not pay hospitals for as many as 28 so-called "never events," or preventable errors. Several large insurers - including WellPoint, Aetna, Cigna and Blue Cross Blue Shield plans in seven states - have issued similar rules. At least 20 states also have passed laws requiring hospitals to report mistakes or preventable infections publicly. In addition, CMS requires that hospitals report on 42 quality measures.
Sources: Kaiser Daily Health Policy Report and New York Times
Drugs for Alzheimer's Disease Found to Slow Cognitive Decline: Benefits Last Years
Sept. 22, 2008 - In what some may call a "game changing" discovery, researchers report today their testing shows that the advance of Alzheimer's disease can be significantly slowed by the extended treatment with available drugs. They have also found a combination therapy with two different classes of drugs is even better at helping patients maintain their ability to perform daily activities.
Extended treatment with Alzheimer's disease drugs can significantly slow the rate at which the disorder advances, and combination therapy with two different classes of drugs is even better at helping patients maintain their ability to perform daily activities.
Results from the first long-term study of the real-world use of Alzheimer's drugs, published by researchers from Massachusetts General Hospital in the July/September issue of Alzheimer Disease and Associated Disorders, support a level of effectiveness that may not be immediately apparent to patients or their family members.
"There has been the impression that these drugs only work for some patients and for a limited amount of time," says Alireza Atri, MD, PhD, of the MGH Department of Neurology, lead author of the current study.
"One of the problems in judging these drugs has been that patients naturally continue to decline, which can make them think the drugs have stopped working. But our study, which has some unique strengths, indicates that treatment does have long-term benefit."
Two types of medications have received FDA approval for Alzheimer's treatment.
- Cholinesterase inhibitors have been available since the mid-1990s and act by inhibiting the breakdown of the neurotransmitter acetylcholine.
- The drug memantine, which received FDA approval in 2003, is the first of a second class of agents that modulate the actions of the amino acid glutamate and is often used in combination with cholinesterase inhibitors (CIs).
"Clinical trials that drug companies conduct for FDA approval only last six months and enroll patients according to very specific criteria," Atri explains.
"Only large-population studies can really tell us how these drugs work for the full range of patients in real-life situations."
The researchers were able to conduct such a study by analyzing data on patients treated at the MGH Memory Disorders Unit since 1990, including:
- 144 who did not receive any pharmaceutical treatment
- 122 treated with a CI alone and
- 116 who received both a CI and memantine
As part of their regular treatment, every six months patients received standardized assessments of both cognitive abilities and how well they carried out daily activities.
The results showed significant differences in the rate of symptom progression among all three groups - with the smallest level of decline in those receiving combination therapy.
While there was an average of two and a half years' worth of data on the study participants, the researchers analyzed the information with a statistical model that predicted probable outcomes for up to four years.
Although the model's projection of future benefits is conservative, it predicted that the longer patients kept receiving combination therapy, the smaller their rate of decline would become, suggesting that treatment might even protect brain cells from further damage, a possibility needing further investigation.
"Finding something that could actually modify the course of the disease is the Holy Grail of Alzheimer's treatment, but we really don't know if that is happening or what the mechanism behind these effects might be," Atri explains.
"What we can say now is that providers should help patients understand that the benefits of these drugs are long term and may not be apparent in the first months of treatment.
Even if a patient's symptoms get worse, that doesn't mean the drug isn't working, since the decline probably would have been much greater without therapy."
Atri is an instructor in Neurology at Harvard Medical School (HMS) and associate director of the Center for Translational Cognitive Neuroscience at the Veterans Administration Hospital in Bedford, Mass.
John Growdon, MD, director of the MGH Memory Disorders Unit, professor of Neurology at HMS, and senior author of the paper, explains, "The results of this study should change the way we treat patients with Alzheimer's disease. Cholinesterase inhibitors are approved for use in mild to moderate dementia, while memantine has been approved for advanced dementia. But it looks like there is an advantage in prescribing both drugs as initial treatment."
Information provided by news sources:
The study was entirely supported by grants from the National Institute on Aging and the Massachusetts Alzheimer's Disease Research Center; there was no involvement or support from the pharmaceutical industry. Massachusetts General Hospital, established in 1811, is the original and largest teaching hospital of Harvard Medical School.
Alert of New Scam
Many of our client's recently have received unsolicited official looking letters suggesting that they should obtain a certified copy of their deed. This is a scam; it is deceptive and not necessary. Here is a copy of a bulletin that has been issued by Lapeer County Register of Deeds. This alert applies to all Counties throughout Michigan.
If you have received a letter from National Deed Service, Inc. or Michigan Document Procurement Service, please be aware of the deceptiveness of its contents. This company is not affiliated with Lapeer County Government (or any County) in any way. This company is using tactics to persuade you to pay an outrageous fee to them and in return they will provide you with a copy of your deed. Please understand this company MUST obtain the Certified Copy from the Lapeer County Register of Deeds. Once they receive the certified document from US, they in turn provide it to you for the $69.50 or $49.50! Don't be fooled! If you need a copy of your deed, please call the Lapeer County Register of Deeds. We will be happy to provide you a certified copy at a low cost of $1.00 per page plus $1.00 for the certification...A MUCH LOWER COST THAN WHAT THIS COMPANY IS ASKING!
To see an example of the actual letter click on this link:
http://www.county.lapeer.org/Deeds/Nat%20Deed%20&%20MI%20Procurement.pdf
Source: Lapeer County Register of Deeds
New Law Brings Big Changes to Reverse Mortgages
Two big changes for reverse mortgages will kick in on October 1st thanks to the Housing and Economic Recovery Act of 2008. Larger loans, smaller fees and more protection for seniors in a bill signed by the President - but many still urge caution.
Reverse mortgages were not part of the problem in the current home financing debacle but Congress decided to make some changes, while they were trying to create a bill to stop the slide of the housing market and collapse of mortgage companies. The government has, among other things, raised the allowable limits on these FHA backed reverse mortgages to $417,000, up from about $362,000. The limit can be increased to $625,000 if the borrower lives in a high housing-cost area.
The Housing and Economic Recovery Act that becomes effective in October "makes it easier and less expensive for seniors to access the cash value of their homes on a tax-free basis through a reverse mortgage, and expands the amount that can be borrowed," writes Terry Savage, who frequently appears in publications and on television as an expert on personal finance.
Savage writes, "A reverse mortgage may be the perfect answer for seniors who want to stay in their homes, but have a cash flow problem. They can get a monthly stream of tax-free income, or a lump sum, and it's tax-free. Their ability to access the equity in their home does not depend on their ability to repay, as in the case of a home equity loan."
"Reverse mortgages were largely created for seniors who are cash-poor and house-rich - meaning they have a lot of equity in their homes but little or no savings," writes Michelle Singletary, a personal finance columnist for The Washington Post.
What Singletary likes best about the new law is that it reduces fees on this type of loan. He also sees new protection for senior citizens in the bill.
New protections for senior citizens
He also points out that "except for title insurance, hazard, flood, or other such products, lenders are prohibited from requiring borrowers to purchase insurance, annuities or other similar products as a condition of getting a reverse mortgage.
"The law also restricts individuals who are originating reverse mortgages from working with, employing or providing incentives to other professionals trying to sell seniors other financial products as part of application process.
"Part of the reason the housing act included a provision for reverse mortgages was out of concern that seniors were inappropriately - and sometimes fraudulently - being sold other financial products."
In the article carried by ProJo.com, he says, "In some cases, seniors have been encouraged to use the proceeds for their reverse mortgage to buy annuities or long-term care insurance. The Financial Industry Regulatory Authority (FINRA), which regulates the securities industry, has issued several warnings about reverse mortgages, particularly cautioning seniors about doing business with financial professionals who want them to obtain a reverse mortgage in order to fund a particular investment product."
Many others, however, are not as enthusiastic as Savage and Singletary.
There are a number of problems
Author Dan Solin says, "While reverse mortgages can be a valuable source of cash for seniors, there are a number of problems with them.
"The fees are very high. Typical fees for a reverse mortgage on a $250,000 home can exceed $25,000," he says. He also points out that interest charges are added every year the loan remains outstanding.
"While you may not care as long as you get your money, you should realize that the diminution in the remaining equity in your home will affect the money you will receive if you sell your house and the amount of money your heirs will receive upon your death," he says.
Solin sees the reverse mortgage is "particularly ill-suited" for those who will only remain in their homes for a "relatively short period of time."
He also cautions that if a seniors financial situation causes them to rely on government programs (like Medicaid), the receipt of proceeds from a reverse mortgage may cause them to fail to continue to qualify for these programs.
He also reminds seniors that a reverse mortgage does not alter your obligation to maintain your home, pay property taxes and insurance.
"Before committing to a reverse mortgage, seek financial counseling," he says. It is required for FHA-insured reverse mortgages, but even if you are considering private reverse mortgages, it is critically important that you understand the full financial ramifications of these loans.
Reverse lenders reignite their marketing programs
Another expert that urges caution on senior citizens is Frank N. Darras. "When the President signed into law a $300 billion housing bill to help homeowners renegotiate their mortgages, reverse mortgage lenders reignited their marketing programs focusing on seniors," says Darras.
Darras says the intrigue of reverse mortgages has been that as you age, you can have "your house pay you." The convincing argument is that reverse mortgages can be used to pay for living expenses, prescription drugs, health care, or to pay off an existing mortgage.
Reverse mortgages are actually, in legal terminology, Home Equity Conversion Mortgages (HECMs) and are insured by the Federal Housing Administration. HECMs allows folks to tap home equity and not have to make monthly payments. The HECM has been limited to the value reflected in a home's appraisal. The range and loan limits were, before the new law, between $200,160 and $362,790, depending on the location of the home.
"Be very careful," warns Darras. "Rising costs on a fixed income can be a dangerous combination. Don't let fear and the lure of an easy solution drive your decision. The new legislation is promising to make it less expensive to borrow but it can cost you in the long run, if you are not careful."
If you are not sure about taking out that reverse mortgage, wait until the new law comes into affect in October and more protections are in place to protect you.
"These days, the rest of your life can be 30-40 years, so make your decisions carefully, regardless of great marketing, fancy brochures and short-term fixes," says Darras.
Source: http://www.seniorjournal.com/NEWS/ReverseMortgage/2008/20080811-NewHousingBill.htm
So, You've Been Appointed Trustee of a Trust? Here Are 9 Do's and 1 Don't
Whether it's an honor or a burden (or both), you have been appointed trustee of a trust. What responsibilities have been thrust upon you? How can you successfully carry them out?
Here are nine do's and one don't to get you started:
- Do read the trust document. It sets out the rules under which you will operate, so you need to understand it completely.
- Do create a checking account for the trust. All income and expenses should go through this account. While you can and should invest the money, a checking account will enable you to make distributions and payments and keep track of them.
- Do keep the best interests of the beneficiaries in mind at all times. You have what's called a "fiduciary" duty to them, which is an extremely high standard.
- Don't have any personal financial dealings with the trust. For instance, you cannot borrow money from the trust or lend the trust money to anyone, without consulting competent counsel.
- Do provide the beneficiaries and anyone else indicated in the trust with an annual account of trust activity. This can be a copy of the checking and investment account statements or a more formal trust account prepared by an accountant or attorney.
- Do invest the trust funds prudently and productively. You can't put them all into a promising new company. You need to diversify the trust portfolio among stocks and fixed income securities. It is wise to get professional investment advice. Besides, consulting a professional investment advisor will insulate you from liability.
- Do keep in regular contact with the beneficiaries to understand their needs.
- Do be aware of any public benefits the beneficiaries may be receiving and make sure you do not jeopardize the beneficiaries' eligibility.
- Do file annual income tax returns for the trust.
- Don't fly solo. Get professional advice to make sure you are correctly fulfilling your role. Seek the assistance of a competent attorney specializing in trusts and an accountant who understands trust fiduciary accounting and returns.
Source: elderlawanswers.com
Eight Steps to Make Life Easier for Your Heirs
Many people devote a significant amount of time planning how and to whom they will leave their assets. However, they often skip some very basic steps that can cause hassles for their heirs, hitting right at a time of great stress.
Here are eight basic steps you can take at any age to try to make life easier for those you leave behind.
Write a Trust and/or a Will and keep it updated
A Trust and a Will are legal documents that define how your assets/estate will be distributed when you die. The difference between a will and a trust is a will is an instruction to the probate court and a trust is a living private agreement that provides for you during your disability and upon your death what happens to the assets. In both documents someone is named to be responsible to carry out your instructions. In the will, you name an executor also know as a personal representative who will be responsible for carrying out the terms of your will and in a trust you name a trustee. If you have children under the age of 18, the will or a special appointment should name a guardian. You should keep your documents updated and have multiple copies stored in more than one place.
Compile important information in a notebook
This notebook will be the "go to" resource that helps your family and your estate lawyer make important decisions quickly and efficiently. Make certain that your executor knows its location.
Key items to include:
- A net worth statement that lists your assets and liabilities
- A list of important contacts
- Your last wishes including the type of burial and any religious requests
- A list of key documents - such as wills, trust documents, deeds, and titles - and where to find them
Review your beneficiaries
Most people choose their beneficiaries when they first buy insurance, open an investment account or start a new job. But decades later, life may have changed and old choices may need to be reconsidered. For example, there may have been a divorce, the birth of new children, or the addition of grandchildren.
Assets such as insurance policies, retirement plans, and individual retirement accounts require you to name a beneficiary. Simply contact the companies who manage your investments to make changes.
Make stock and bond certificates easy to find
Don't keep original stock or bond certificates in your home or in a safe-deposit box. Instead, have your investment adviser or fund company hold them. This will keep assets from being overlooked when your estate is settled, and save time and effort for your beneficiaries.
Set aside cash to pay debts
In the wake of a death, it can be difficult for executors to access accounts quickly. Regular monthly bills will still need to be paid, so it's important to have a money market or checking account funded with enough cash to cover two to three months of costs.
Write an ethical will or family letter
This may be the single most valuable possession you leave to your children. Ethical wills can take many different forms - you can tell your personal or family history, explain your estate planning decisions, or express your feelings to close family members.
Keep your home market-ready
Don't let clutter accumulate in your home. If your children are grown, encourage them to remove their childhood possessions from your house once they have space to store it themselves.
Talk to your family now
Remember that it's far easier to have these difficult discussions while everyone is in good health. Try to hold a family meeting at least once every five years that includes everyone significantly involved in your estate.
Regardless of your age, taking these steps will provide peace of mind and help you feel more prepared for whatever comes next. Your heirs will appreciate it long after you are gone.
Source: Deborah Levenson, Braver Wealth Management, The Boston Globe http://www.boston.com/business/personalfinance/gallery/helpyourheirs
An Often Misunderstood Option - Medicare Part A Certified Home Care
The call comes - the one every adult child of an elderly parent dreads. Mom has fallen and can't get up. Amusing when on a TV advertisement but in reality, it is a fear realized for both of you. Now that she is back home and okay what next? Is there anything that will help keep her safe and enable her to live in her own home for even just a little while longer? One underutilized and often misunderstood option is Part A Medicare certified home care. Even the doctors who prescribe it may not fully understand what a great alternative it truly is for the patients who make use of it.
Medicare beneficiaries qualify for the Part A Home Care Benefit by meeting four very simple eligibility criteria. 1) They must be homebound. Medicare language is vague on this topic so that the patient requires "considerable and taxing effort" to leave their home or does so with the "assistance of another". 2) The need for intermittent skilled services must exist. The services of a nurse, physical, occupational or speech therapist are required to achieve goals set on an initial visit with patient and caregiver input. 3) When ordering home care, physicians must establish and certify a plan of care for the patient's services. The patient has to stay under the doctor's care and remain complaint with what the nursing or rehabilitation professionals recommend. 4) The homecare services have to be provided by a Medicare certified agency. Many such agencies exist. How does one know what can be done for Mom and what will it cost?
The great news about Part A Medicare certified home care services is that they are 100% covered. Mom (or Dad in many cases) worked their whole lives paying into the Medicare system and after 65, meeting the above criteria, are able to receive the services now need. Agency staff will be able to verify their Medicare status and at the initial visit, paperwork will be provided that assures that no bill for services will go out to the beneficiary if they are indeed eligible. Unlike Part B therapy services which can also be provided in a patient's home, there are no co-pay or insurance premiums to be paid and no outpatient cap on therapy services.
Upon an initial visit by either a nurse or physical therapist, a comprehensive assessment of the home, Mom's physical condition, and her need for services is made. Caregivers are often included in developing the plans of care. Services will be provided on a short-term, transitional basis (usually less than 2 months) with a focus on teaching both patient and caregiver how to address those identified needs, instead of fostering dependency. Subsequent disciplines will evaluate Mom and set goals with her functional independence and safety as the primary objective. Each service will continue to visit her at home at a frequency (often 2-3 times /week) agreed upon while she progresses.
An agency's home care professionals provide many services to their patients. Nurses are able to provide teaching about newly prescribed medications, heal wounds, and provide education about disease management and safety. Therapists address functional limitations by teaching exercises that improve strength, balance, and coordination. They may recommend additional home modifications or equipment to ensure that Mom is as independent as possible while safe in taking care of herself in her own home. Compromised daily living skills such as bathing or dressing that are so vital to being able to care for herself are addressed by therapy services and may even require a brief period of home health aide service while she is not able to do them for herself. Getting up from a chair or the toilet, walking across the room or apartment complex, or up and down a flight of stairs are very common goals that a physical therapist will focus on in their care plan. Preventing that call from reoccurring - keeping Mom safe and in her own home, where she wants and you need her to be - is the most important objective for all.
About the author: Teri N. Thompson, MPT is the Interim Administrator of Allegiance Home Health Care, Inc. in Troy, MI, a Medicare certified home health agency servicing the Oakland, Macomb and Wayne counties. She is also a physical therapist with more than 15 years home care experience with a clinical focus on geriatric rehabilitation. She can be contacted at tthompson@allegiancecare.com with any questions.
Are My Veterans Benefits Taxable? It Depends!
Military Retirement pay is taxable income like all other similar retirement income. Military retirement pay is paid through the Department of Defense, Defense Finance and Accounting Services (DFAS). The pay stub will have DFAS in the address of the payor. This type of payment is also frequently called an "annuity." This is a payment for the rest of the veteran's life and is taxable.
Payments made through the Veteran's Administration are generally not taxable. The two primary payment types are (1) Compensation and (2) Pension.
Compensation is payment to a service member for an injury or disease that occurred during service or was due to being in the service. This type of benefit is the military's version of worker's compensation. The payment is based on the veteran's disability rating. Disability compensation is not taxable income.
Pension is payment to a prior service member who served in the military during a war time period, is 65 or older or is disabled, and has limited income and resources. This is the VA's version of Supplemental Security Income (SSI). When a prior war time veteran has a disability and meets the criteria listed above in this paragraph, then the VA will pay an amount of money to the veteran to bring the Veteran's income up to a certain level. This income is not taxable income.
When a veteran needs the aid and attendance of another person to assist with walking, bathing, dressing, going to the rest room, medication monitoring, etc., then the veteran may also be able to obtain pension with aid and attendance. This additional income, aid and attendance, is not taxable income.
Compensation and/or pension benefits can be extremely beneficial for prior service members who need long term care and have high health care costs. Not only will the additional income help, but the fact that it is not taxable means the veteran gets to keep all of it.
Both non-taxable compensation and pension benefits may also be available for widowed spouses and children of veterans.
If you know a veteran who has a service related injury or served in the military during a war time period, refer them to an Elder Care Attorney who is accredited with the VA, or to the local Veteran Service Organization.
Source: Victoria Collier, Esq. of the Elder and Disability Law Firm of Victoria Collier of Decatur, Georgia
The SPIC - What you Need to Know about Your Money's Security
The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency of the United States government that was created in 1933 to promote public confidence and stability in the nation's banking system. The FDIC protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC deposit insurance covers the balance of each depositor's account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank's closing.
The FDIC insures depositors of an insured bank for up to a total of $100,000, which includes principal and accrued interest. Deposits in separate branches of an insured bank are not separately insured. However, deposits maintained in different categories of legal ownership at the same bank can be separately insured. Additionally, deposits in one insured bank are insured separately from deposits in another insured bank.
In the event of a bank failure the FDIC notifies each depositor in writing, using the depositor's address on record with the bank. This notification is mailed immediately after the bank closes. Additionally, when a failed bank is acquired by another bank; the assuming bank also notifies the depositors.
In the event of a bank failure where there is no bank acquirer for the deposits, federal law requires the FDIC to make payments of insured deposits "as soon as possible" upon the failure of the insured institution. It is the FDIC's goal to make deposit insurance payments within two business days of the failure.
If there is an acquiring bank, it will accept the checks and deposits slips of the failed bank for a short time. You will receive information about new checks and deposit slips from the acquiring bank.
If you have more than $100,000 in a closed bank and you are paid $100,000 by the FDIC, you will be given a "Receiver's Certificate" for the balance in the account and you would then receive payments on the balance of the account as the assets of the bank are liquidated.
Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore it is possible to have deposits of more than $100,000 at one insured bank and still be fully insured.
The categories of legal ownership are as follows:
- Single Accounts
- Certain Retirement Accounts
- Joint Accounts
- Revocable Trust Accounts
- Irrevocable Trust Accounts
- Employee Benefit Plan Accounts
- Corporation/Partnership/Unincorporated Association Accounts
- Government Accounts
The most common ownership categories are Single Accounts, Self-Directed Retirement Accounts, Joint Accounts, and Revocable Trust Accounts. The following paragraphs provide details on these more common legal ownership categories.
Single Accounts - a single account is a deposit owned by one person. All single accounts owned by the same person at the same insured bank are added together and the total is insured up to $100,000. Single accounts include:
- Accounts held in one person's name alone
- Accounts established for one person by an agent, nominee, guardian, custodian, or conservator, including Uniform Transfers to Minors Act accounts, escrow accounts, and brokered deposit accounts
- Accounts held in the name of a business that is a sole proprietorship
- Accounts established for a decedent's estate
Certain Retirement Accounts - these are deposits owned by one person and titled in the name of that person's retirement account. Certain Retirement Accounts are added together and the total is insured up to $250,000. Certain Retirement accounts include:
- All types of IRA's, including, Traditional IRA's, Roth IRA's, Simplified Employee Pension (SEP) IRA's, and SIMPLE IRA's
- All Section 457 deferred compensation plan accounts
- Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed defined contribution money purchase plans, and self-directed defined contribution profit-sharing plans
- Self-directed Keogh plan accounts
The FDIC defines the term "self-directed" to mean that plan participants have the right to direct how the money is invested, including the ability to direct that the deposits be placed at an FDIC-insured bank.
Note - Naming beneficiaries on a retirement account does not increase deposit insurance coverage.
Joint Account - a joint account is a deposit owned by two or more people. To qualify for insurance under this ownership category, all of the following requirements must be met:
- All co-owners must be people. Legal entities such as corporations, trusts, estates, or partnerships are not eligible for joint account coverage
- All co-owners must have equal rights to withdraw funds from the account
- All co-owners must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor or conservator
If all of these requirements are met, each co-owner's share of every account that is jointly held at the same insured bank is added together with the co-owner's other shares, and the total is insured up to $100,000.
Revocable Trust Accounts - A revocable trust account is a deposit owned by one or more people that indicates an intention that the deposits will belong to one or more named beneficiaries upon the death of the owner(s). A revocable trust account can be revoked or terminated at the discretion of the owner. A revocable trust account includes "payable-on-death" (POD) accounts and "in trust for" (ITF) accounts. The beneficiaries of these accounts must be "qualifying," meaning that the beneficiaries must be the owner's spouse, child, grandchild, parent, or sibling. Adopted and step children, grandchildren, parents, and siblings also qualify. In-laws, cousins, nieces and nephews, friends, charitable organizations, and trusts do not qualify.
Deposit insurance coverage is based on each owner's trust relationship with each qualifying beneficiary. Each owner of a revocable trust may be entitled to insurance coverage up to $100,000 for each qualifying beneficiary that the account owner designates in the revocable trust account. If all of the beneficiaries are qualifying and have equal interests, the insurance coverage for each owner is calculated by multiplying $100,000 times the number of qualifying beneficiaries. In addition, if the trust specifies different interest for the beneficiaries, the owner is insured only up to each beneficiary's actual interest in the trust.
All funds attributable to non-qualifying beneficiaries are aggregated and insured up to $100,000 as the single account funds of the trust owner.
Irrevocable Trust Accounts - Irrevocable trust accounts are deposits held by a trust established by statute or a written trust agreement in which the grantor (creator) contributes deposits or other property and gives up all power to cancel or change the trust. An irrevocable trust may also come into existence upon the death of an owner of a revocable trust.
The interests of a beneficiary in all deposit accounts established by the same grantor and held at the same insured bank under an irrevocable trust are added together and insured up to $100,000 only if all of the following requirements are met:
- The insured bank's deposit account records must disclose the existence of the trust
- The beneficiaries and their interests in the trust must be identifiable from the bank's deposit account records or from the trustee's
- The amount of each beneficiary's interest must not be contingent as defined by FDIC
- The trust must be valid under state law
A beneficiary does not have to be related to the grantor to obtain insurance coverage under the irrevocable trust account category.
The following are situations where an irrevocable trust would not be insured on a per beneficiary basis, resulting in the trust as a whole qualifying for only $100,000 in insurance coverage:
- The trust agreement does not name the beneficiaries or provide any means of identifying the beneficiaries
- The trust agreement provides that a beneficiary will receive no assets unless certain conditions are satisfied
- If the trust provides that a trustee may invade the principal of the trust with the result that the assets available for the other beneficiaries may be reduced or eliminated
- The trust agreement provides that a trustee or particular beneficiary my exercise discretion in allocating assets among the beneficiaries, with the result that the future distribution to each beneficiary is impossible to predict
Since irrevocable trusts often contain conditions that affect the interests of the beneficiaries or provide a trustee or a beneficiary with the authority to invade the principal. For this reason, deposit insurance for an irrevocable trust account is usually limited to a total of $100,000.
The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if they were bought from an insured bank.
The FDIC also does not insure U.S. Treasury bills, bonds, or notes, but those are backed by the full faith and credit of the United States government.
For more information on the FDIC, go to www.fdic.gov or call 1-877-275-3342.
Separate from the FDIC is the Securities Investor Protection Corporation (SIPC). In the event of a brokerage firm failure, the SIPC offers some protection; however, the SIPC is different from the FDIC. Where the FDIC insures all depositors at an FDIC-insured institution up to a certain dollar limit, the SIPC does not bail out investors when the value of their stocks, bonds and other investments fall for any reason. Instead, the SIPC restores funds to investors with assets in the hands of bankrupt and otherwise financially troubled brokerage firms.
When a brokerage firm fails, the SIPC steps in and works to return cash, stocks, and other securities to the customers. This process can take from one to three months. Some investments that are not protected include commodity futures contracts, currency, and investment contracts, such as limited partnerships, that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.
Customers of a failed brokerage firm get back all securities (such as stocks and bonds) that already are registered in their name or are in the process of being registered. After this first step, the firm's remaining customer assets are then divided on a pro rata basis with funds shared in proportion to the size of claims. If sufficient funds are not available in the firm's customer accounts to satisfy claims within these limits, the reserve funds of SIPC are used to supplement the distribution, up to a ceiling of $500,000 per customer, including a maximum of $100,000 for cash claims. Additional funds may be available to satisfy the remainder of customer claims after the cost of liquidating the brokerage firm is taken into account.
Source: MSW Group, PLC, CPA's of Farmington Hills, MI. www.mswplc.com.
For more information on the SIPC, go to www.sipc.org.
What I Wish I'd Done Differently
by Jane Gross of the New York Times
July 7, 2008, 10:37 am
Given the crisis in supply and demand - too many old people and too few geriatricians - I may not have succeeded. But if I had, many of our crises might have been avoided. Those include unnecessary trips to the emergency room that left her in worse shape than she had been beforehand. It also includes surgery to remove a benign tumor from the outside of her spinal cord after it had already done the worst of its damage and with no regard for her advanced age.
It was after that surgery that she took a precipitous nosedive, moving to a nursing home and suffering a series of T.I.A.'s, or very small strokes, which eventually left her paralyzed, incontinent, unable to speak and barely able to swallow. Later, both Dr. Roseanne Leipzig at Mount Sinai Medical Center in New York City and Dr. Dennis McCullough at Dartmouth-Hitchcock Medical Center in Lebanon, N.H., told me that no doctor familiar with the physiology and psychology of the elderly would have operated on her without at least a discussion of the special risks to the aged.
My second biggest mistake was accepting the conventional wisdom that nursing homes are terrible places, to be avoided under any and all circumstances, and that assisted-living communities, with their pleasant apartments and other amenities, could accommodate my mother's needs until the end of her life. Assisted-living facilities do offer an ever more expensive list of add-on services, including private duty, around-the-clock assistance. But too often they cannot meet the needs of deteriorating patients, forcing a series of relocations, each more destabilizing than the last.
State licensing regulations are wildly inconsistent in terms of how much additional help must be available in an assisted-living facility, even for those willing and able to pay for it. And any reputable facility will admit, sometimes only under stiff questioning of the director rather than the sales staff, that without an on-site skilled nursing facility or a dementia unit, many residents will wind up too ill, too frail or too cognitively impaired to live out their lives there.
If I had it to do all over again, I would plan for the worst and seek out a not-for-profit nursing home that met my standards. Many have assisted-living apartments on site, less attractive than those at for-profit chains like Sunrise and Atria, but offering a smoother transition if and when skilled nursing becomes essential.
My third mistake was being gleeful when my mother, then in her mid-70s, chose to sell her house on Long Island, flee the snow and the need to drive, and move to a retirement complex in Florida. Now when she didn't answer the phone, I assumed, there would be someone to check up on her. She would have grab bars in the shower and a pull cord for emergencies. I wouldn't be so frightened all the time.
What never occurred to me is that once my mother no longer had a home, we lost the option of setting her up with home care. Eventually too incapacitated to live out her days in assisted living and unwilling to move in with either of her children, a nursing home was her only choice - a happy one, as it turned out, but not in the early going, for any of us.
My fourth mistake was not understanding the limits of a long-term care insurance policy that had cost us about $7,000 a year because of my mother's advanced age when we purchased it. It would have paid for retrofitting her own home, or even mine. It would have paid for 24/7 home health attendants. But it was virtually useless in an assisted-living apartment, and once my mother was in a nursing home, the policy benefit wasn't ours to spend.
As long as my mother still had assets and could pay for her $14,000 a month room, the insurance benefit went to the nursing home and reduced her bill accordingly. When she ran out of money, in fairly short order, she was eligible for Medicaid, not because she was old but because she was impoverished. Then the insurance benefit went to the federal government.
All of these mistakes would have mattered less if the trajectory of my mother's decline had been different. But that trajectory, alas, is unknown and unknowable but for its certain ending. So every decision we made - residential, medical, financial - was a crapshoot that changed the landscape for the next decision, usually by limiting options I didn't even realize we had. There's no way around this uncertainty, no way of knowing what's going to happen next so you can plan accordingly. But physicians, social workers, case managers, lawyers and financial advisers with expertise in old age are the best guides. And haste, often the result of panic, is the enemy.
Source: Jane Gross of the New York Times
Challenges Involving Joint Assets, Wills and Trusts
This is the last in the series of articles on "When the Family Cannot Get
Along" by Andrew Mayoras, Partner, Barron, Rosenberg, Mayoras & Mayoras,
and The Center for Probate Litigation
Last week's article discussed theft and exploitation. What do you do when
you discover financial exploitation in a way that is not as overt as theft?
For example, what do you do when your father with Alzheimer's or dementia
has added his second wife's name to a bank account that was always meant for
the family, or your mother changed her will or trust to omit you in favor of
your brother or sister? Or even worse, what happens if a caregiver or
"friend" ends up receiving everything and the family gets the short end
of
the stick?
All of these can be successfully challenged in court under the right
circumstances, with the help of an experienced probate litigation attorney,
but only if the help is sought before it is too late. It is usually not too
late even after the exploited senior passes away. Joint assets, including
bank accounts and real estate, along with will and trust changes, and
outright gifts can be set aside and undone on the basis of incompetence,
undue influence, fraud and other reasons. But these legal challenged can
only succeed if timely action is taken with the help of a good lawyer.
Incompetence - The test for mental competency varies depending on the
document challenged, but for every situation, the crucial factor in the test
is whether the individual reasonably understood the nature of the document
or transaction when it was signed. For someone with Alzheimer's or dementia,
who has good days and bad, this is not always a bright-line test with an
easy answer. Medical records are often the best way to determine if a
person was considered competent at the time. Independent witnesses are also
a great source of information and help. However, the law presumes that a
will, trust or asset designation is valid, and it is up to the person
challenging it to convince the court otherwise.
Undue Influence - When a person is improperly influenced to change documents
or give away assets, to the point that the change is not what the person
would have freely chosen to do, then the change can be undone through a
successful undue influence claim. Undue influence can occur through
threats, flattery, excessive persuasion, or physical or emotional coercion.
In fact, the law presumes undue influence has occurred when the beneficiary
was acting as the Power-of-Attorney, or otherwise occupied a position of
confidence and trust, such as a caregiver. This presumption is useful in
many cases, but is not definitive and can be rebutted.
Fraud - Even when competent, vulnerable adults with Alzheimer's or dementia
can be tricked into transferring assets or changing bank accounts or estate
planning documents based on material statements of fact that are false.
When someone relies on a false representation, such as a false promise or
another type of lie, the transaction or document can be set aside as
invalid.
Accounts of Convenience - For joint bank accounts in particular, and
sometimes other joint assets (even including real estate), a loved one with
Alzheimer's or dementia may add the name of a child or other trusted
relative as a convenience to help with bill paying, financial management or
as a "poor man's will" to save costs. If the person did not intend
the
joint owner to keep the asset on death, but instead only added the joint
name as a convenience, then courts can and do order the asset to be turned
over to the estate and shared with the other beneficiaries. This also
applies to brokerage accounts, stocks, and other investments. The key is
always the intent of the person who added the name at the time it was
created, not afterwards.
Deciding whether or not to contest the joint nature of an asset, or an
unfavorable estate planning document, is not always an easy one, and
certainly should not be made lightly. Court battles seeking to set aside
documents or transactions can be costly and time-consuming. They can also
tear families apart.
Of course, many times the family is already broken beyond repair. Honoring
the true wishes of an elderly loved one is often worth the fight. How to
know when is the time to fight or not? You must set aside emotions, act
with logic, and consult an experienced probate litigation attorney.
And what about those times when you decide not to challenge a will or trust?
Does that mean you have no rights? No. All will and trust beneficiaries
have rights. Challenging the actions of an executor or trustee is not the
same as attacking the will or trust as invalid. Every decision made by a
trustee or personal representative, from distributing items of personal
property, to cashing in large investments and selling real estate can be
questioned. Why?
The answer is simple. Every person who is charged with the responsibility
of administering an estate or a trust has a fiduciary obligation to protect
the rights of all beneficiaries. This means they must make decisions that
are in the best interests of everyone, not themselves.
This duty includes the responsibility to share information, including what's
in the estate and trust, and what has been done with the property. Every
beneficiary in Michigan has a legal right to receive an inventory explaining
what is in the trust or estate, and an accounting, which documents what has
been down with the trust or estate property. Beneficiaries can request and
receive supporting documentation (such as checks, account statements, bills,
etc.). Finally, they can also challenge, through probate court proceedings,
anything that they believe is not fair, accurate or right. This can be
anything from blatant self-dealing to negligence in handing investments.
Not sure if something is right? It's time to talk to an experienced
attorney.
Conclusion
Family feuds and other legal challenges make caring for an elderly loved one
much more difficult. When a loved one passes, no one wants their memories
marred by a court battle. Unfortunately, legal proceedings cannot always be
avoided, especially when someone takes advantage of a vulnerable senior
citizen. Knowing your legal rights is the first step. Hiring an
experienced and qualified attorney, like those at The Center for Probate
Litigation, can make all the difference in the world.
Ethical Wills - Bequeath Your Values Along with Your Valuables
To my son, I leave my passion for knowledge...
You may have already drafted a Last Will and created an estate plan that transfers your worldly possessions. Your estate plan should not end there. What steps have you taken to ensure that you also pass on your values, ideas and beliefs? What wisdom and life lessons do you want to share with those you care about? Do you want to be remembered for your values rather than for the possessions you have left behind? If so, you may want to consider drafting an ethical will. As the name suggests, ethical wills are the spiritual counterparts to "traditional" Wills that distribute wealth. Ethical wills pass on intangible assets such as blessings, life lessons, dreams and hopes as opposed to tangible possessions. While ethical wills are not binding legal documents, they can be an invaluable gift to friends, family members and loved ones.
Preparing to draft an ethical will often involves serious consideration of your values and morals, important lessons learned, hopes and dreams for the future, advice to loved ones, invaluable memories and important events in your life. You may also contemplate themes, such as regrets and forgiveness, personal love, mentors and teachers, cultural beliefs, ancestry or how you would like to be remembered by others.
Although writing an ethical will is a serious endeavor, it does not need to be a complicated process. Unlike "traditional" Wills that are bound by statutory constraints, there is no set form or procedure for creating an ethical will. An ethical will can be a letter to loved ones or to grandchildren not yet born. An ethical will may also be a set of instructions regarding the family business or a detailed account of a life journey. An ethical will may choose to develop and impart a family mission statement or provide blessings for future generations. Additionally, an ethical will does not need to be limited to writing. It may incorporate multimedia messages, such as photos, drawings, music or videos. Your personal preferences are the only constraints.
Bequeath more than your valuables. Create an ethical will and bequeath your values too.
Source: Gina M. Barry,
Esquire of the law firm of Bacon Wilson
New Data Added to Government's Hospital Compare Website that is Already Booming
More than 2.5 million visitors per month attracted to features like deaths by hospital and hospital care ratings by consumers
The Website maintained by the Centers for Medicare & Medicaid Services to provide comparative hospital information for consumers - Medicare beneficiaries and their caregivers in particular - has been attracting over 2.5 million visitors per month, but it is certain to get a big boost this week with the additional of new information, including more information on death rates at each hospital.
The latest improvements include the addition of a mortality measure for pneumonia and, for the first time on Hospital Compare, publicly reported measures for hospital care of children. Previously, Hospital Compare had provided only quality information based on hospitalizations of adult patients.
Since its inception in March 2005 Hospital Compare has become a popular tool for consumers and their care givers in making health care decisions.
CMS is an agency of the U.S. Department of Health and Human Services (HHS) and it maintains the Hospital Compare consumer Web site
(http://www.hospitalcompare.hhs.gov) that gives consumers better insight into the quality of care provided by their local hospitals.
The addition of patient experience data and Medicare payment and volume information in March 2008 caused the number of page views to jump from an average of 600,000 per month to more than 2.5 million per month. Page views for this year to date have totaled more than 20 million.
"Reporting quality data on the care provided hospital patients is a key to our continuing effort to provide better, value-based health care for all Americans," HHS Secretary Mike Leavitt said.
"Expanding the scope of measures is making Hospital Compare a more valuable tool for all health care consumers."
Earlier this year, Medicare added patient satisfaction information to the Web site.
Today's additions bring the total to 26 process of care measures, three outcome of care measures, two children's asthma care measures, and 10 patient experience of care measures.
Hospital Compare also contains information about the number of certain elective hospital procedures provided to patients and what Medicare pays for those services.
"CMS' goal for updating and enhancing the Hospital Compare Web site is to provide usable and accurate information about hospital performance to providers and communities that will encourage hospitals to excel in the quality of care they provide," said CMS Acting Administrator Kerry Weems. "With these new enhancements, consumers and health care providers will be able to look at individual hospital mortality scores. We hope that this new information will cement the Web site's role as a key driver in improving the quality and reliability of care in the nation's hospitals."
The Hospital Compare website can be accessed at http://www.hospitalcompare.hhs.gov
Short cut URL to mortality information (Minitool): http://www.hospitalcompare.hhs.gov/hospital/mortalitytool/index.asp
Interesting Reading: George Washington's Will Included Arbitration Clause
Arbitration has been used extensively throughout America's history to resolve issues such as the ownership of colonies, the ownership of particular pieces of territory, the recovery of money owed by one state to another, and all sorts of religious matters. In the specific context of wills, no less a personage than the father of our country, George Washington, included an arbitration clause in his will.
For no reason other than I find this bit of historical/T&E crossover trivia interesting, here's a copy of the arbitration clause contained in George Washington's Will:
But having endeavoured to be plain, and explicit in all Devises- even at the expence of prolixity, perhaps of tautology, I hope, and trust, that no disputes will arise concerning them; but if, contrary to expectation, the case should be otherwise from the want of legal expression, or the usual technical terms, or because too much or too little has been said on any of the Devises to be consonant with law, My Will and direction expressly is, that all disputes (if unhappily any should arise) shall be decided by three impartial and intelligent men, known for their probity and good understanding; two to be chosen by the disputants - each having the choice of one - and the third by those two. Which three men thus chosen, shall, unfettered by Law, or legal constructions, declare their sense of the Testators intention; and such decision is, to all intents and purposes to be as binding on the Parties as if it had been given in the Supreme Court of the United States.
Source: Various blogs over the Internet
Theft and Exploitation of Assets
Court disputes are not always about a person's physical and mental well-being. Often they are also necessary to help prevent a loved one from losing assets. This can happen in many different ways, some overt and some more difficult to spot. The easier ones include theft or exploitation by a greedy family member or caregiver. Taking money, convincing the elderly person to sign over deeds or bank accounts, or other clear signs of financial abuse can be revealed just by reading over the person's financial documents such as bank statements.
Sometimes more challenging to spot is the mismanagement of affairs due to disability or reduced competence, including forgetting to pay bills or buying expensive things that are not needed. This may not seem too alarming, but these seniors are the ones targeted most often by those looking for opportunities to exploit.
The most difficult one to spot is the sale of unsuitable investments by an unsavory annuity salesman or tricky reverse mortgages. These are discussed in more detail below.
Knowing when to intervene or not is not always easy. Many seniors suffering from Alzheimer's, dementia or other conditions do not want to admit they need help with their financial decisions. Often, their children do not want to insult them by asking too many questions. But when you have a loved one diagnosed with dementia or Alzheimer's, or who otherwise exhibits signs of confusion or memory loss, you owe it to them to probe. Make sure their investments are secure and appropriate, and their assets are protected.
In doing so, pay attention to the warning signs. The National Center on Elder Abuse lists many warning signs of exploitation, including:
- Sudden changes in bank account or banking practice, including an unexplained withdrawal of large sums of money,
- The inclusion of additional names on a bank signature card; unauthorized withdrawal of the elder's funds using the elder's ATM card;
- Abrupt changes in a will or other financial documents;
- Unexplained disappearance of funds or valuable possessions;
- Substandard care being provided or bills unpaid despite the availability of adequate financial resources;
- Discovery of an elder's signature being forged for financial transactions or for the titles of his/her possessions;
- Sudden appearance of previously uninvolved relatives claiming their rights to an elder's affairs and possessions;
- Unexplained sudden transfer of assets to a family member or someone outside the family;
- The provision of services that are not necessary; and
- An elder's report of financial exploitation.
If you discover any of these warning signs, talk to an elder law attorney knowledgeable in financial matters immediately. Often, children or other trusted family members are the ones exploiting or even stealing money from someone suffering from Alzheimer's or dementia. In other cases, there are greedy financial planners or mortgage brokers who target vulnerable adults with high-commission, inappropriate investments or mortgages.
Be especially careful of annuities and similar risky investments. This is not to say that all annuities are risky or inappropriate. Quite the contrary, there are many fixed-rate annuities that are very safe. In fact, even more aggressive investments are suitable in the right circumstances.
But there are many annuity salespeople who love to target older adults with confusing equity indexed annuities that sound great at first blush, but when examined closely, have no business being in an elderly person's portfolio except in rare cases. In fact, the NASD and SEC have both issued warning bulletins of these exact investments due to concerns that they are being marketed to seniors who do not need or understand them.
These types of annuities are usually sold through promises that they are safe, but also have the ability to share in the market when it goes up. Sounds great, right? Enjoy the market upswings but have no danger of losing money in the downswings.
The problem is that equity-indexed annuities do not live up to these lofty promises. In fact, they are considered long-term investments. How many senior citizens have a need for long-term investments? Some do, if they have other significant assets and want to leave a portion of their funds for beneficiaries down the road. Sadly, many who buy these annuities do not have other assets.
The catch with these annuities is that they are very complex and difficult to understand, carry hidden costs and charges, and typically have large surrender fees that last for 15 to 20 years or more. These surrender fees mean that the investor cannot take their money out, even in case of emergency, without paying a large penalty.
If the elderly investor has placed substantially all of her savings into such an annuity, she often realizes that she is trapped between a rock and a hard place. If his happens to you or someone you care about, call an experienced attorney immediately.
Reverse mortgages can also be tricky. Sometimes they are a legitimate and appropriate way for seniors to receive cash for equity in their home. But sometimes, these are merely scams targeted at depriving senior citizens of their most valuable asset. Other times, the elderly person simply did not understand what he signed.
In more overt cases of theft, adult protective services can sometimes be of benefit. But exercise caution - the caseworkers are sometimes able to help, and sometimes not. And other times, calling in adult protective services can result in court proceedings that are not wanted.
Criminal charges can also be brought against someone who steals or exploits money from a vulnerable adult. Michigan has a law in place for exactly that purpose. The problem is that convincing police or prosecutors to pursue someone criminally for financial abuse of an elderly person is often very difficult for a variety of reasons, including lack of resources and difficulty in establishing proof when the primary witness has poor memory.
The best way to stop financial elder abuse is awareness and prevention. By speaking with your loved ones about their finances, offering assistance, and probing when you become concerned, you can usually prevent theft, financial abuse, and unsuitable annuities and reverse mortgages.
Zero Percent Capital Gain, Is It True? Yes, It's True!
In 2008 a zero percent capital gain rate is making its first appearance, but that does not mean all capital gain will be taxed at zero percent. Notice there will be a zero percent rate; which does not mean that the capital gain rate is zero!
What's the difference? For most sales of capital assets (stocks, bonds, mutual funds, etc.) held long-term there are two capital gain rates that apply. "Long-term" means that the stock or other property must have been held longer than one year before being sold. From May 6, 2003, through December 31, 2007, those rates have been 5% and 15%. And for 2008-2010, the 5% capital gain rate is reduced to 0%.
Why are there two rates? The idea is that long-term capital gain rates are more favorable than ordinary income tax rates-the rates that apply to wages, self-employment income, alimony, and other types of ordinary income. Currently, the ordinary rates range from 10% to 35%. So, if someone is in one of the higher brackets (25%-35%), a 15% rate that is applied to capital gain is certainly a tax benefit., however, if someone is in the 10% or 15% bracket, a 15% capital gain rate would clearly not be very helpful. So, a lower capital gain rate is available to the extent a taxpayer is in one of the lower brackets.
So the 0% rate applies to the extent an individual is in one of the lower brackets. What exactly does "to the extent" mean? Essentially, it means that if all taxable income (ordinary income plus capital gain income) falls within the 10% or 15% tax bracket for an individual's filing status, any long-term capital gain on the return will be taxed at 0%.
If some of the individual's taxable income is in the 15% or higher tax bracket, some or all of the long-term capital gain on the return will be taxed at 15%. The amount of long-term capital gain taxed at 15% is computed as follows:
Your taxable income
- Endpoint of 15% tax bracket for your filing status
= Maximum long-term capital gain subject to 15% tax rate.
Confusing? We agree. For example: Let's assume Mack, a single taxpayer, has 2008 taxable income of $38,000, including $10,000 of long-term capital gain. For 2008, the 15% tax bracket for a single filer like Mack ends at $32,550. Based on the calculation above, $5,450 ($38,000 - $32,550) of his capital gain will be taxed at 15%, and the remaining $4,550 will be taxed at 0%.
Now assume that Mack's taxable income is $50,000. In this case, up to $17,450 ($50,000 - $32,500) of long-term capital gain could be taxed at 15%. Thus, all of Mack's $10,000 long-term capital gain will be taxed at 15%.
Anything else? Here is a great strategy. While lower-income individuals aren't typical investors, this tax benefit could help out folks such as retirees who have little or no taxable income. And the children of older individuals could combine the annual gift exclusion ($12,000 in 2008) with this capital gains break and give appreciated long-term assets to their older parents. The children could give appreciated assets to the parents or parents could give appreciated assets to the children. Mom and Dad or the children then could sell the assets tax-free.
Don't worry about that holding-period requirement, either. In the case of a gift, the tax law says the recipient's holding period is the same as the donor's. A person could turn around and sell it the next day and get the long-term capital gains rate which would be zero.
Source: www.bankrate.com, www.csmonitor.com,
www.forbes.com
Coming Soon: Five-Star Rating System for Nursing Homes
You can eat at a five-star restaurant or stay at a five-star hotel. By year's end, you'll also be able to select a five-star nursing home.
The Centers for Medicare & Medicaid Services (CMS) has announced plans to implement a one- to five-star rating system for nursing homes to help consumers evaluate a nursing home's quality when selecting a facility. The ratings would appear on the agency's Nursing Home Compare web site.
CMS will base the ratings on government inspection results, as well as staffing data and quality measures. Yet to be determined is whether the ratings will include other information, such as whether nursing homes treat patients with dementia or those on ventilators.
"We know the public is hungry for information," said acting CMS Administrator Kerry Weems. He said lower ratings "will likely put" nursing homes "on the path to improvement . . . I don't think we're going to see many people who are very anxious to put a loved one in a one-star home."
But the new rating system was criticized both by consumer advocates and the nursing home industry, for different reasons.
Toby Edelman, senior policy attorney with the Center for Medicare Advocacy, said that two of three criteria CMS plans to use for the ratings - staffing data and quality measures - are "self-reported by nursing facilities and are inaccurate." Edelman said, "Relying on nursing homes to describe accurately how well they are doing . . . just doesn't make sense."
Meanwhile, Bruce Yarwood, president of the American Health Care Association, a long-term care industry trade group, criticized CMS's use of government inspection results as criteria for the ratings and said CMS should consider consumer and staff satisfaction. Yarwood said, "We do not believe that an index which relies on a broken survey system is an accurate way to measure quality."
For a Detroit News article on the new rating system, click here.
Exercise 'slows down Alzheimer's'
Being physically fit could hold back the advance of Alzheimer's disease, US researchers have suggested. A study by Dr Jeffrey Burns, from the University of Kansas School of Medicine published in the journal Neurology, looked at 121 people aged over 60, around half of them in the early stages of the disease.
Those with Alzheimer's who were less fit had four times more signs of brain shrinkage than those who were fit. The Alzheimer's Research Trust said other research showed exercise reduced the risk of dementia.
Some 700,000 people in the UK are living with dementia, with this number predicted to grow quickly over the next two decades, as the proportion of older people in the population increases.
Other studies looking at the relationship between dementia and exercise tend to focus on whether being active can reduce the risk of the condition developing in the first place.
Dr Jeffrey Burns, from the University of Kansas School of Medicine, said his was one of the first to look at whether exercise could affect the progress of the illness.
His volunteers underwent a treadmill test to see how fit they were and then their brains were scanned for shrinkage, which is one way of measuring the severity of their Alzheimer's.
Brain volume
While there was no relationship between brain size and exercise in people tested who did not have Alzheimer's, Dr Burns said the four-fold difference in those who did was evidence that exercise might help.
He said: "People with early Alzheimer's disease may be able to preserve their brain function for a longer period of time by exercising regularly and potentially reducing the amount of brain volume lost.
"Evidence shows decreasing brain volume is tied to poorer cognitive performance, so preserving more brain volume may translate into better cognitive performance."
Susanne Sorensen, head of research at the Alzheimer's Society, said: "Exercise increases blood flow to the brain, delivering oxygen and nutrients to brain cells.
"This is one possible explanation why dementia progresses slower in people who are physically fit.
"Exercise also reduces your risk of developing dementia so it's important to take regular exercise. A healthy heart means a healthy brain."
Rebecca Wood, chief executive of the Alzheimer's Research Trust, said: "This adds to previous research showing that exercise helps reduce the risk of dementia and slows down its onset.
"A balanced diet and regular exercise can improve the quality of life of older people with dementia, as well as those who do not have the condition."
Source:
news.bbc.co.uk/2/hi/health/7505091.stm
Guardianship & Conservatorship Disputes
What do you do when you discover an invalid Power of Attorney or Patient Advocate Designation? What happens when an Attorney-in-Fact is not acting in the best interests of your vulnerable loved one? How do you help your parent with Alzheimer's or dementia when he or she refuses to acknowledge needing help, even when it is obvious to you that the situation is becoming dangerous?
In any of these cases, the only safe way to protect a vulnerable adult is through guardianship and/or conservatorship proceedings.
Both proceedings are handled in probate court and involve someone asking for a decision-maker to be appointed because the person in need of protection is unable to make or communicate informed decisions. Guardians make medical, placement and other decisions, while Conservators handle the finances. One person often serves in both roles at the same time, but courts can appoint different people as well.
First, what if your parent, or someone else in the family, disagrees that a guardian or conservator is necessary? Judges will examine whatever records you can present them with, including medical and financial records, as well as listen to family members and others who give testimony about why the person needs help making decisions. Sometimes courts will even appoint an independent physician to examine the person and file a written report.
Judges do not take this decision lightly; they have to find clear and convincing evidence to take away someone's legal right to make their own decisions. But Judges do worry about whether the person is making safe choices. The best interest of the vulnerable person is most important.
Often, whether a guardian or conservator is needed is the easy part. Who gets appointed in these roles? Typically, it is a family member or other loved one of the person to be protected, or ward. And, the ward's choice does matter! This is especially true for someone with early stages Alzheimer's or dementia who still retains some decision-making ability but requires assistance. Even an incompetent person's choice will carry great weight if it was expressed through a Power of Attorney or Patient Advocate signed when the person was still competent.
In fact, Michigan law requires probate judges to honor the ward's preference in most cases, and if not, the judge must follow a list of people required by statute. This list includes a spouse, adult child, or other relative, and certain others (in that order). A person can only be skipped over for someone lower on the list of priorities only if he or she is unwilling or unsuitable to serve.
This choice is not set in stone however. Probate judges do have a large amount of discretion in making this important choice, and will usually decide based on what is in the best interests of the protected person.
How does the judge decide when the family fights about who is most suitable? Often siblings both feel they would be the best choice. Second marriages present significant difficulties when the spouse of the incompetent person does not get along well with the children from the prior marriage. Sometimes, there is even a fight between the ward and his or her own children.
Because probate judges make the decision, and their choices are almost never overturned by appellate judges, family members vying for appointment must do everything they can to convince the judge that they are most suitable, and that their opponent is not suitable. This process is not fun for anyone who participates, but sometimes is necessary. Compromise is usually the best solution, but when it simply is not possible, then the judge will decide. Sometimes the decision is one that neither side is happy with - such as the selection of an outsider, such as an independent attorney or guardianship company.
The best way to protect yourself - and more important, protect your elderly loved one - is to have an experienced probate litigation attorney represent you in court. Knowing what to say, and how to present your case in the best light to the particular judge assigned, can make all the difference. Judges are human beings too; experienced attorneys who know the tendencies of your particular judge are a great benefit.
Once the Guardian and/or Conservator is appointed, the person or persons appointed serve with similar fiduciary obligations as an Attorney-in-Fact (discussed in last week's article). Again, they have the strictest of duties to act in the best interests of the ward they are required to protect.
Unlike in a Power-of-Attorney situation, they have the additional requirement of reporting to the probate court. Each year, every guardian and conservator must file a detailed report, so that the probate court can make sure that the ward is properly protected. Probate courts often also require bonds to be posted when the protected person has significant assets.
Guardians and Conservators are also subject to removal petitions, where someone asks the court to replace them or terminate the guardianship/conservatorship altogether. These can be filed by anyone interested in the ward's welfare. In fact, even the protected person can seek this relief by writing a simple letter to the judge.
Certainly, no one should choose to initiate a guardianship or conservatorship proceeding unless they have no other good choice. But when diplomacy has failed, or when a loved one's Alzheimer's, dementia or other condition causes them to be too stubborn to admit that they need help making decisions, this path is the only safe choice. With an experienced attorney guiding the family, protective proceedings through probate court help many people sleep at night knowing their loved one is safe.
Senior Citizens that Bring Companions to Medical Visits are More Satisfied with Care
Companions are a valuable quality of care resource that could enhance the experience for millions of vulnerable Americans
July 14, 2008 - Almost two out of every five Medicare patients age 65 or older appear for their medical visits accompanied by family members or companions, which seems to contribute to a greater satisfaction with their doctor and about everything else associated with the visit. The report in today's Archives of Internal Medicine, one of the JAMA/Archives journals, says this is especially true among those in poor health.
Families are increasingly understood to be important to patient care, according to background information in the article. However, little is known about which specific attributes of their involvement are most helpful to patients or result in the greatest improvements in quality of care.
Jennifer L. Wolff, Ph.D., and Debra L. Roter, Dr. P.H., M.P.H., of the Johns Hopkins Bloomberg School of Public Health, Baltimore, and colleagues studied a sample of 12,018 Medicare beneficiaries 65 years or older who participated in a 2004 survey. These older adults were representative of approximately 30 million Medicare beneficiaries living in the community.
The researchers found that:
- 38.6 percent of participants reported regularly being accompanied to medical visits
- Companions included spouses (53.3 percent); adult children (31.9 percent); other relatives (6.8 percent); roommates, friends or neighbors (5.2 percent); non-relatives (2.8 percent); or nurses, nurse aides or legal or financial officers (less than 1 percent)
- 63.8 percent of companions helped with communication, including 44.1 percent who recorded physician comments and instructions, 41.5 percent who communicated information about the patient's medical condition to the physician, 41 percent who asked questions, 29.7 percent who explained physician's instructions and 3.3 percent who translated the English language
- 28.4 percent of companions were reported to be present for company and moral support, 52.3 percent to assist with transportation, 16.6 percent to help schedule appointments and 8.4 percent to provide physical assistance
Beneficiaries with regular companions were more highly satisfied with their physician's technical skills, information-giving and interpersonal skills.
Those whose companions more actively helped with communication rated their physicians' information-giving and interpersonal skills more favorably.
This relationship was stronger among patients who reported themselves to be in worse health.
"Findings establish that visit companions, most often spouses and adult children, are commonly present in older adults' routine medical encounters, actively engaged in the exchange of health information between patients and their physicians and influential in patients' perceptions of physician interpersonal rapport and information giving," the authors write.
"Moreover, visit companions tend to accompany patients who are especially vulnerable; in this study, accompanied patients were older, less educated and in worse health than their unaccompanied counterparts."
"Results presented in this article suggest that patients' visit companions, hidden, but in plain sight, are a valuable quality of care resource whose efforts, if further optimized, could enhance the experience of care for millions of vulnerable Americans," they conclude.
Source: Jennifer L. Wolff, Ph.D., and Debra L. Roter, Dr. P.H., M.P.H., of the Johns Hopkins Bloomberg
School of Public Health, Baltimore
Drink More Red Wine - it is Good for You. Red Wine May Improve Heart Health in Old Age.
June 4, 2008 - Scientists have long maintained senior citizens can extend their lives by strict adherence to a diet that rigidly restricts calorie intake. Now, scientists may have discovered how to accomplish this without starving yourself. It is a choice most seniors will gladly choose over severe calorie restriction - drinking red wine. A new study says low doses of the resveratrol in red wine may achieve the same longevity results as starvation dieting.
How do the French get away with a clean bill of heart health despite a diet loaded with saturated fats?
Scientists have long suspected that the answer to the so-called "French paradox" lies in red wine. Now, the results of this new study bring them closer to understanding why.
Writing this week in the online, open-access journal Public Library of Science (PLoS) ONE, researchers from industry and academia, including the University of Wisconsin-Madison and the University of Florida, report that low doses of resveratrol - a natural constituent of grapes, pomegranates, red wine and other foods - can potentially boost the quality of life by improving heart health in old age.
The scientists included small amounts of resveratrol in the diets of middle-aged mice and found that the compound has a widespread influence on the genetic causes of aging.
Specifically, the researchers found that low doses of resveratrol mimic the heart-healthy effects of what is known as caloric restriction, diets with 20 to 30 percent fewer calories than a typical diet.
The new study is important because it suggests that resveratrol and caloric restriction, which has been widely studied in animals from spiders to humans, may govern the same master genetic pathways related to aging.
"Caloric restriction is highly effective in extending life in many species. If you provide species with less food, the regulated cellular stress response of this healthy habit actually makes them live longer," says study author Christiaan Leeuwenburgh, chief of the division of biology of aging at UF's Institute on Aging.
"In this study, the effects of low doses of resveratrol (on genes) were comparable to caloric restriction, the hallmark for life extension."
Previous research has shown that high doses of resveratrol extend life in invertebrates and prevent early death in mice given a high-fat diet. The new study extends those findings, showing that resveratrol in low doses, beginning in middle age, can elicit many of the same benefits as a reduced-calorie diet.
"Resveratrol is active in much lower doses than previously thought," said Tomas Prolla, a UW professor of genetics and a senior author of the new report.
The group explored the agent's influence on the heart, muscle and brain by looking to see which genes were switched on and off during the aging process.
In the new study - which compared the genetic responses of animals to either restricted diets or normal diets including small doses of resveratrol - the similarities were remarkable, explains lead author Jamie Barger of Madison, Wis.-based LifeGen Technologies, who spearheaded the research.
In the heart, for example, there are at least 1,029 genes whose functions change with age. In animals on restricted diets, 90 percent of those heart genes experienced alterations in gene expression, while low doses of resveratrol thwarted age-related change in 92 percent. The new findings, say the study's authors, reveal how red wine's special ingredient helps keep the heart young.
In short, the authors note that a glass of wine or food or supplements containing even small doses of resveratrol are likely to help stave off cardiac aging.
That finding, may also explain the remarkable heart health of people who live in some regions of France where diets are soaked in saturated fats but the incidence of heart disease, a major cause of mortality in the United States, is low. In France, meals are traditionally complemented with a glass of red wine.
"There must be a few master biochemical pathways activated in response to caloric restriction, which in turn activate many other pathways," explained Prolla. "And resveratrol seems to activate some of these master pathways as well."
Resveratrol is currently sold over-the-counter as a nutritional supplement with supposed anti-cancer, anti-viral, anti-inflammatory and anti-aging benefits, although few scientific studies have verified these claims in humans. That may soon change: Researchers at the University of Florida hope to explore the effects of resveratrol on older people in a phase 1 clinical trial, set to begin this summer.
The study will assess the supplement's effects on memory, physical performance, inflammation and oxidative damage, according to Steve Anton, a principal investigator of the upcoming trial and an assistant professor of aging and geriatrics in the UF College of Medicine.
Mitochondria, the tiny power plants that keep a cell functioning, are especially vulnerable to the oxidative damage that accumulates during the aging process.
"In animal studies, (resveratrol) seems to promote mitochondrial health," said Todd Manini, also a principal investigator of the upcoming trial and an assistant professor of aging and geriatrics in the UF College of Medicine. "Mitochondria are everywhere: They're in the brain, in the muscle, the liver. So it could have kind of a global impact on many different organ systems."
Source: www.seniorjournal.com
Senior Citizens Learning to Fall Like a Skydiver Can Reduce Hip Fractures by 70 Percent
Parachutist's landing best reduces hip impact whether you jumped from an airplane or tripped on a curb
July 7, 2008 - Senior citizens could reduce their risk of hip fracture by nearly 70 percent if they learn to fall like skydivers, new research from the University of Michigan suggests.
In the first study to examine the effectiveness of different sideways fall strategies, computer simulations showed that the parachutist's landing method best reduces hip impact whether you jumped from an airplane or tripped on a curb.
The parachutist's strategy involves crouching, leaning so that the outside of your lower leg hits first and then rolling onto your backside. In the simulations, landing in this position subjected the hip to just 25 percent of the force necessary to break it.
"A hip fracture can mark the beginning of a downward spiral. If you fall and break a hip and you're over 65, you have a 20 percent chance of not surviving another year and another 20 percent chance of not regaining your mobility," said James Ashton-Miller, a professor in the departments of Biomedical Engineering and Mechanical Engineering. Ashton-Miller is an author of a paper on the research published in the Journal of Biomechanics.
"In this study, we asked whether it matters what you do in the air after you start to fall.
We found that a parachutist's landing style reduces your risk of injury, and you can land a fall safely with or without your hands," he said.
A hip fracture often occurs when a person trips and lands on his or her side, Ashton-Miller said. The study showed that the typical reduction in muscle strength that occurs with age does not impair an individual's ability to accomplish the safest strategy.
The study also found that reaction time is as important as the body's position during a fall. A delay of more than two-tenths of a second in deploying the parachutist's strategy increased the impact force of the fall by at least 70 percent.
Falling on a non-slippery surface, you have seven-tenths of a second from stumble to impact, Ashton-Miller said. Typical reaction time is two-tenths of a second. That leaves five-tenths of a second to put the fall strategy into practice. So it's best to know how to fall in advance.
Click to view UM video
"When you start to fall, you need to know what to do. You can't hang around trying to decide what to do. What people tend to think is that there's no time to do anything, and that's absolutely not true," said Ashton-Miller, who says he learned this firsthand as an avid skier.
The researchers tested four fall strategies. The "broomstick" strategy involved keeping the body stiff. This was the control. The "hip lateral flexion" strategy allowed the hips to swivel by 30 degrees but the other joints remained stiff. The "spine and hip" strategy confined the knees to a maximum bend of 20 degrees, but other joints could operate normally. And the "free" strategy allowed all joints to move freely.
When a computer simulation of a man falling was given these constraints, it identified the free strategy as the least likely to break a hip. And it pinpointed the parachutist's style as the best way to allow the joints to move so the muscles dissipate energy and thereby lower the impact force. Ashton-Miller said future experiments and simulations will study women falling as well, and he expects the results to be similar.
Strategies were tested with and without the use of an arm to help break the fall. And time delays of one-, two- and three-tenths of a second were simulated, along with the effects of age on muscle strength.
Source: This research was funded by the U.S. Department of Health and Human Services.
The paper is called "Effect of pre-impact movement strategies on the impact forces resulting from a lateral fall."
Ashton-Miller is a research professor
in the Institute of Gerontology and in Internal Medicine at the U-M Health System.
What Happens When The Family Can't Get Along?
Dealing with a loved one with Alzheimer's disease, dementia or another condition causing loss of competence is difficult enough. The problem becomes even more troublesome when the condition acts as a spark to ignite family conflict. Sibling rivalries, second marriages, the refusal to accept reduced competency, and simple greed are but some of the situations that add fuel to the fire and foster dramatic family feuds. Often the fire grows so great that families become torn in half, spending months - or even years - battling in probate court. Sadly, many families are never able to repair the damage, emotionally or financially.
No one wants to end up in probate court fighting in a public family squabble. What can be done to avoid it? Sometimes nothing. If someone else is determined to steal from, cheat, take advantage of, or improperly care for someone suffering from Alzheimer's or dementia, you may have no choice but to go to court. Other times, however, messy and expensive probate court battles can be prevented, or at least minimized. How? Two ways: Know when to call an experienced probate litigation attorney, and know your legal rights.
The first one is easy. Anytime you suspect that someone is not acting properly towards an elderly loved one in a way that will either jeopardize that persons' care or well-being, or may result in a loss of assets, then you should call an attorney who regularly represents clients in contested probate matters. Many such attorneys offer a low-cost or even free consultation. For example, the experienced attorneys at The Center for Probate Litigation will provide a free consultation to discuss your specific situation and let you know whether action is required. Too many families regret waiting and doing nothing - when in doubt, call an expert.
The second way to protect your family and often avoid drawn out court proceedings is to become educated about your legal rights. The Center for Elder Law and The Center for Probate Litigation will be issuing a series of articles for families of a loved one with Alzheimer's disease or dementia to educate about what they may face when a family dispute or conflict threatens to surface. These articles will be included in upcoming E-Letters, on the following topics:
- Challenging a Power of Attorney or Patient Advocate Designation
- Guardianship & Conservatorship Disputes
- Theft and Loss of Assets
- Challenging Changes to a Joint Asset, Will or Trust
By Andrew Mayoras, The Center for Probate Litigation
Medicare News: End-of-Life Options for Medicare Patients Detailed in New Regulation
June 5, 2008 - Medicare beneficiaries with terminal illnesses have their right to determine how they receive end-of-life care outlined for the first time in a new regulation to be published today by the Centers for Medicare & Medicaid Services.
Specifically, the rule says, patients who choose hospice, or palliative care, over curative treatment are entitled to such things as participation in their treatment plan; the right to effective pain management, the right to refuse treatment and the right to choose his or her own physician.
In the first overhaul of regulations governing the hospice industry since 1983, the new Medicare Conditions of Participation (CoP), include explicit language on patient rights that had not existed under the previous regulations.
Although many hospice patients are already active in their own treatment plans, this regulation is the first to set out a detailed list of patient rights.
"As more patients and their families come to understand and select hospice care, we felt it was critical to outline what rights patients have to control the care they receive in their final days," said Kerry Weems, acting administrator of CMS.
"End-of-life care has changed markedly in the past 25 years and it is time to update our regulations to reflect advances in medicine and hospice industry practices as well as patient rights," Weems added.
Electing hospice care is a decision those with terminal illnesses can make when they wish to forego further curative treatment in favor of care designed to ease pain and other symptoms. Hospice services provide comfort care to the patient and can include services for family members. Hospice services can be provided in the patient's home or in an inpatient setting. Currently there are nearly one million Medicare beneficiaries receiving care from over 3,000 Medicare-approved hospices nationwide.
The rule reflects comments received since the publication of the proposed rule in May 2005. In addition to the new patient rights' section, final regulation also includes:
- A requirement that patient needs be initially assessed within 48 hours of electing the hospice benefit. The rule also requires that a comprehensive assessment occur within five days of electing the hospice and that updated assessments be done at least every 15 days thereafter.
- A requirement that each patient receive a full drug profile that examines issues ranging from the effectiveness of current drug therapies to potential drug interactions to drug side effects. A treatment team will consult with a qualified individual, such as a pharmacist, to ensure that drugs meet the needs of every hospice patient.
- A provision allowing a hospice to contract with another Medicare-certified hospice for nursing, medical social services, and counseling services under extraordinary or other non-routine circumstances, including travel of a patient outside of the hospice's service area.
- Removal of a provision requiring an inpatient facility only providing respite care to have an RN on duty 24 hours a day. The patient's needs, acuity and plan of care will drive the nursing and staffing requirements.
The regulation, to be in the Federal Register on June 5, can be viewed at www.cms.hhs.gov/CFCsAndCoPs/05_Hospice.asp
Man's Best Friend: Study Shows Lonely Seniors Prefer Playtime With Pooch Over Human Interaction
A Saint Louis University study shows there is some truth in the old cliche that describes a dog as "man's best friend."
"Or at least a less aggravating friend," said study author William A. Banks, M.D., professor of geriatrics in the department of internal medicine and professor of pharmacological and physiological sciences at Saint Louis University School of Medicine.
Nursing home residents felt much less lonely after spending time alone with a dog than they did when they visited with a dog and other people. The research was published in the March 2006 issue of Anthrozoos 18(4).
"It was a strange finding," said Banks, who also is a staff physician at Veterans Affairs Medical Center in St. Louis. "We had thought that the dog acts as a social lubricant and increases the interaction between the residents. We expected the group dog visits were going to work better, but they didn't.
"The residents found a little quiet time with the pooch is a lot nicer than spending time with a dog and other people," he said.
Thirty-seven nursing home residents who scored high on a loneliness scale said they wanted to receive weekly, 30-minute visits from dogs. Half spent time alone with the dog, and the other half spent time with one to three other nursing home residents and the dog. While both groups felt less lonely, the group that had one-on-one quality time with the dog experienced a much more significant decrease in loneliness after five to six weeks of visits.
The main way pets reduce loneliness in nursing homes is simply by being with people, not by enhancing socialization between people - for instance, giving nursing home residents something to talk about or an experience to share, Banks said.
"There is no need for a dog to be a social lubricant or icebreaker in a nursing home. Residents live with each other, eat breakfast, lunch and dinner with each other, play bingo with each other," Banks says. "The study also found that the loneliest individuals benefited the most from visits with dogs."
Source: www.sciencedaily.com
Hidden Social Security Option
Did you elect to take Social Security benefits before your full retirement age? If you did and are now looking for extra income, there may be an answer. Once you reach full retirement age, you can pay back the money you have received and reapply for full retirement benefits.
Although you can collect Social Security benefits between age 62 and your full retirement age, if you do, your benefits will be lower. For example, if you were born in 1944 and decide to retire at age 62, four years before your full retirement age of 66, your total benefit reduction is 25 percent. If your full benefit was to be $1,000 a month, your reduced benefit will be $750.
A little-known provision of Social Security allows you to withdraw your application for early benefits and reapply for your full benefits. The catch is that you must be able to pay back all the money you received so far. However, because you do not have to pay any interest on the benefits you received, if you can find the money to repay the benefits, it may be worth it. You could think of it as an interest-free loan.
Articles on the potential benefits of withdrawing your early Social Security benefit from
USA Today and
MSN have examples of how it works.
Click here to download the withdrawal of application form.
All You Need to Know about Identity Theft
Take steps to respond to and recover from identity theft as soon as you suspect it.
The following questions are answered below:
- What are the steps I should take if I'm a victim of identity theft?
- What is a fraud alert?
- What is a credit freeze?
- What is an identity theft report?
- What do I do if the police only take reports about identity theft over the Internet or telephone?
- What do I do if the local police won't take a report?
- How do I prove that I'm an identity theft victim?
- Should I apply for a new Social Security number?
WHAT ARE THE STEPS I SHOULD TAKE IF I'M A VICTIM OF IDENTITY THEFT?
If you are a victim of identity theft, take the following four steps as soon as possible, and keep a record with the details of your conversations and copies of all correspondence.
- Place a fraud alert on your credit reports, and review your credit reports.
Fraud alerts can help prevent an identity thief from opening any more accounts in your name. Contact the toll-free fraud number of any of the three consumer reporting companies below to place a fraud alert on your credit report. You only need to contact one of the three companies to place an alert. The company you call is required to contact the other two, which will place an alert on their versions of your report, too. If you do not receive a confirmation from a company, you should contact that company directly to place a fraud alert.
Equifax: 1-800-525-6285; www.equifax.com; P.O. Box 740241, Atlanta, GA 30374-0241
Experian: 1-888-EXPERIAN (397-3742); www.experian.com ; P.O. Box 9532, Allen, TX 75013
TransUnion: 1-800-680-7289; www.transunion.com ; Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92834-6790
Once you place the fraud alert in your file, you're entitled to order one free copy of your credit report from each of the three consumer reporting companies, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports. Once you get your credit reports, review them carefully. Look for inquiries from companies you haven't contacted, accounts you didn't open, and debts on your accounts that you can't explain. Check that information, like your Social Security number, address(es), name or initials, and employers are correct. If you find fraudulent or inaccurate information, get it removed. See Correcting Fraudulent Information in Credit Reports to learn how. When you correct your credit report, use an Identity Theft Report with a cover letter explaining your request, to get the fastest and most complete results.
Continue to check your credit reports periodically, especially for the first year after you discover the identity theft, to make sure no new fraudulent activity has occurred.
- Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
Call and speak with someone in the security or fraud department of each company. Follow up in writing, and include copies (NOT originals) of supporting documents. It's important to notify credit card companies and banks in writing. Send your letters by certified mail, return receipt requested, so you can document what the company received and when. Keep a file of your correspondence and enclosures.
When you open new accounts, use new Personal Identification Numbers (PINs) and passwords. Avoid using easily available information like your mother's maiden name, your birth date, the last four digits of your Social Security number or your phone number, or a series of consecutive numbers.
If the identity thief has made charges or debits on your accounts, or has fraudulently opened accounts, ask the company for the forms to dispute those transactions:
- For charges and debits on existing accounts, ask the representative to send you the company's fraud dispute forms. If the company doesn't have special forms, use the sample letter to dispute the fraudulent charges or debits. In either case, write to the company at the address given for "billing inquiries," NOT the address for sending your payments.
- For new unauthorized accounts, you can either file a dispute directly with the company or file a report with the police and provide a copy, called an "Identity Theft Report," to the company.
- If you want to file a dispute directly with the company, and do not want to file a report with the police, ask if the company accepts the FTC's ID Theft Affidavit (PDF, 56 KB). If it does not, ask the representative to send you the company's fraud dispute forms.
- However, filing a report with the police and then providing the company with an Identity Theft Report will give you greater protection. For example, if the company has already reported these unauthorized accounts or debts on your credit report, an Identity Theft Report will require them to stop reporting that fraudulent information. Use the cover letter to explain to the company the rights you have by using the Identity Theft Report. More information about getting and using an Identity Theft Report can be found here.
Once you have resolved your identity theft dispute with the company, ask for a letter stating that the company has closed the disputed accounts and has discharged the fraudulent debts. This letter is your best proof if errors relating to this account reappear on your credit report or you are contacted again about the fraudulent debt.
- File a complaint with the Federal Trade Commission.
You can file a complaint with the FTC using the online complaint form; or call the FTC's Identity Theft Hotline, toll-free: 1-877-ID-THEFT (438-4338); TTY: 1-866-653-4261; or write Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580. Be sure to call the Hotline to update your complaint if you have any additional information or problems.
By sharing your identity theft complaint with the FTC, you will provide important information that can help law enforcement officials across the nation track down identity thieves and stop them. The FTC can refer victims' complaints to other government agencies and companies for further action, as well as investigate companies for violations of laws the agency enforces.
Additionally, you can provide a printed copy of your online Complaint form to the police to incorporate into their police report. The printed FTC ID Theft Complaint, in conjunction with the police report, can constitute an Identity Theft Report and entitle you to certain protections. This Identity Theft Report can be used to (1) permanently block fraudulent information from appearing on your credit report; (2) ensure that debts do not reappear on your credit report; (3) prevent a company from continuing to collect debts that result from identity theft; and (4) place an extended fraud alert on your credit report.
- File a report with your local police or the police in the community where the identity theft took place.
Call your local police department and tell them that you want to file a report about your identity theft. Ask them if you can file the report in person. If you cannot, ask if you can file a report over the Internet or telephone. See below for information about Automated Reports.
If the police are reluctant to take your report, ask to file a "Miscellaneous Incident" report, or try another jurisdiction, like your state police. You also can check with your state Attorney General's office to find out if state law requires the police to take reports for identity theft. Check the Blue Pages of your telephone directory for the phone number or check www.naag.org for a list of state Attorneys General.
When you go to your local police department to file your report, bring a printed copy of your FTC ID Theft Complaint form, your cover letter, and your supporting documentation. The cover letter explains why a police report and an ID Theft Complaint are so important to victims.
Ask the officer to attach or incorporate the ID Theft Complaint into their police report. Tell them that you need a copy of the Identity Theft Report (the police report with your ID Theft Complaint attached or incorporated) to dispute the fraudulent accounts and debts created by the identity thief. (In some jurisdictions the officer will not be able to give you a copy of the official police report, but should be able to sign your Complaint and write the police report number in the "Law Enforcement Report" section.)
WHAT IS A FRAUD ALERT?
There are two types of fraud alerts: an initial alert, and an extended alert.
- An initial fraud alert stays on your credit report for at least 90 days. You may ask that an initial fraud alert be placed on your credit report if you suspect you have been, or are about to be, a victim of identity theft. An initial alert is appropriate if your wallet has been stolen or if you've been taken in by a "phishing" scam. With an initial fraud alert, potential creditors must use what the law refers to as "reasonable policies and procedures" to verify your identity before issuing credit in your name. However, the steps potential creditors take to verify your identity may not always alert them that the applicant is not you. When you place an initial fraud alert on your credit report, you're entitled to order one free credit report from each of the three nationwide consumer reporting companies, and, if you ask, only the last four digits of your Social Security number will appear on your credit reports.
- An extended fraud alert stays on your credit report for seven years. You can have an extended alert placed on your credit report if you've been a victim of identity theft and you provide the consumer reporting company with an Identity Theft Report. An automated Identity Theft Report, such as the printed ID Theft Complaint available from this Web site, should be sufficient to obtain an extended fraud alert. With an extended fraud alert, potential creditors must actually contact you, or meet with you in person, before they issue you credit. When you place an extended alert on your credit report, you're entitled to two free credit reports within twelve months from each of the three nationwide consumer reporting companies. In addition, the consumer reporting companies will remove your name from marketing lists for pre-screened credit offers for five years unless you ask them to put your name back on the list before then.
To place either of these alerts on your credit report, or to have them removed, you will be required to provide appropriate proof of your identity: that may include your Social Security number, name, address and other personal information requested by the consumer reporting company.
As mentioned, depending on the type of fraud alert you place, potential creditors must either contact you or take reasonable steps to verify your identity. This may cause some delays if you're trying to obtain credit. To compensate for possible delays, you may wish to include a cell phone number, where you can be reached easily, in your alert. Remember to keep all contact information in your alert current.
What does a fraud alert not do?
While a fraud alert can help keep an identity thief from opening new accounts in your name, it's not a solution to all types of identity theft. It will not protect you from an identity thief using your existing credit cards or other accounts. It also will not protect you from an identity thief opening new accounts in your name that do not require a credit check - such as a telephone, wireless, or bank account. And, if there's identity theft already going on when you place the fraud alert, the fraud alert alone won't stop it. A fraud alert, however, can be extremely useful in stopping identity theft that involves opening a new line of credit.
WHAT IS A CREDIT FREEZE?
Many states have laws that let consumers "freeze" their credit - in other words, letting a consumer restrict access to his or her credit report. If you place a credit freeze, potential creditors and other third parties will not be able to get access to your credit report unless you temporarily lift the freeze. This means that it's unlikely that an identity thief would be able to open a new account in your name. Placing a credit freeze does not affect your credit score - nor does it keep you from getting your free annual credit report, or from buying your credit report or score.
Credit freeze laws vary from state to state. In some states, anyone can freeze their credit file, while in other states, only identity theft victims can. The cost of placing, temporarily lifting, and removing a credit freeze also varies. Many states make credit freezes free for identity theft victims, while other consumers pay a fee - typically $10. It's also important to know that these costs are for each of the credit reporting agencies. If you want to freeze your credit, it would mean placing the freeze with each of three credit reporting agencies, and paying the fee to each one.
You can find more information about credit freeze laws specific to your state by clicking here, including information on how to place one.
Who can access my credit report if I place a credit freeze?
If you place a credit freeze, you will continue to have access to your free annual credit report. You'll also be able to buy your credit report and credit score even after placing a credit freeze. Companies that you do business with will still have access to your credit report - for example, your mortgage, credit card, or cell phone company - as would collection agencies that are working for one of those companies. Companies will also still be able to offer you prescreened credit. Those are the credit offers you receive in the mail that you have not applied for. Additionally, in some states, potential employers, insurance companies, landlords, and other non-creditors can still get access to your credit report with a credit freeze in place.
Can I temporarily lift my credit freeze if I need to let someone check my credit report?
If you want to apply for a loan or credit card, or otherwise need to give someone access to your credit report and that person is not covered by an exception to the credit freeze law, you would need to temporarily lift the credit freeze. You would do that by using a PIN that each credit reporting agency would send once you placed the credit freeze. In most states, you'd have to pay a fee to lift the credit freeze. Most states currently give the credit reporting agencies three days to lift the credit freeze. This might keep you from getting "instant" credit, which may be something to weigh when considering a credit freeze.
What does a credit freeze not do?
While a credit freeze can help keep an identity thief from opening most new accounts in your name, it's not a solution to all types of identity theft. It will not protect you, for example, from an identity thief who uses your existing credit cards or other accounts. There are also new accounts, such as telephone, wireless, and bank accounts, which an ID thief could open without a credit check. In addition, some creditors might open an account without first getting your credit report. And, if there's identity theft already going on when you place the credit freeze, the freeze itself won't be able to stop it. While a credit freeze may not protect you in these kinds of cases, it can protect you from the vast majority of identity theft that involves opening a new line of credit.
What's the difference between a credit freeze and a fraud alert?
A fraud alert is another tool for people who've had their ID stolen - or who suspect it may have been stolen. With a fraud alert in place, businesses may still check your credit report. Depending on whether you place an initial 90-day fraud alert or an extended fraud alert, potential creditors must either contact you or use what the law refers to as "reasonable policies and procedures" to verify your identity before issuing credit in your name. However, the steps potential creditors take to verify your identity may not always alert them that the applicant is not you.
A credit freeze, on the other hand, will prevent potential creditors and other third parties from accessing your credit report at all, unless you lift the freeze or already have a relationship with the company. Some consumers use credit freezes because they feel they give more protection. As with credit freezes, fraud alerts are mainly effective against new credit accounts being opened in your name, but will likely not stop thieves from using your existing accounts, or opening new accounts such as new telephone or wireless accounts, where credit is often not checked. Also, only people who've had their ID stolen - or who suspect it may have been stolen, may place fraud alerts. In some states, anyone can place a credit freeze.
WHAT IS AN IDENTITY THEFT REPORT?
An Identity Theft Report is a police report with more than the usual amount of detail. The Identity Theft Report includes enough detail about the crime for the credit reporting companies and the businesses involved to verify that you are a victim - and to know which accounts and inaccurate information came from identity theft. Normal police reports often don't have many details about the accounts that were opened or misused by identity thieves.
The printed copy of your ID Theft Complaint Form can provide additional details for the police report. The police are not legally required to use the FTC's ID Theft Complaint Form as part of their report. Your police department may have another way to incorporate the details of your crime. In these cases, the police report by itself may serve as an Identity Theft Report.
When you file your Identity Theft Report, the credit reporting companies will permanently block fraudulent information from appearing on your credit report. Filing an Identity Theft Report with the credit reporting companies or with the companies where the thief used your information should ensure that these debts do not reappear on your credit report. An Identity Theft Report can prevent a company from continuing to try to collect debts that result from identity theft, or sell those debts to others for collection. It also allows you to place an extended fraud alert on your credit report. The credit reporting companies may decline your Identity Theft Report if it does not contain enough detail for them to verify that you are a victim of identity theft. In that case, the credit reporting companies have certain timeframes for responding to your Identity Theft Report with requests for additional information.
Creating and using an Identity Theft Report may require two steps:
Step One begins with filing your report with a local, state, or federal law enforcement agency. These agencies may include your local police department, your State Attorney General, the FBI, the U.S. Secret Service, the FTC, or the U.S. Postal Inspection Service. Some state laws require local police departments to take reports, but there is no law requiring federal agencies to take a report.
In your report, you should give as much information as you can about the crime, including anything you know about the dates of the identity theft, the fraudulent accounts opened and the alleged identity thief. It may help you give the necessary level of detail if you file an online complaint with the FTC, and then ask your local police department to incorporate a copy of the printed ID Theft Complaint into its police report.
Step Two begins when you send the businesses involved and the credit reporting companies a copy of your Identity Theft Report, which you should do by certified mail, return receipt requested. The companies may ask you to give them more information or documentation to help them verify your identity theft. They have to make their request within 15 days of receiving your Identity Theft Report. The credit reporting company or business then has 15 more days to work with you to make sure your Identity Theft Report contains everything they need. They are also entitled to five days to review any information you give them. For example, if you give them information 11 days after they request it, they have until day 16 to make a final decision.
How do I get an Identity Theft Report?
The officer taking your police report can attach or incorporate your ID Theft Complaint into their police report to add more detail. Ask the officer to give you a copy of the official police report that incorporates or attaches your ID Theft Complaint. In some places the officer will not be able to give you a copy of the official police report, but should be able to sign a copy of your ID Theft Complaint and write the police report number in the "Law Enforcement Report" section. Be sure to keep a copy of the police report number
The police are not legally required to use the FTC's ID Theft Complaint Form as part of their report. Your police department may have another way to include all the details of your identity theft information in their police report. In these cases, the police report by itself may serve as an Identity Theft Report.
Because the detailed Identity Theft Report is required for you to get many important protections, you may wish to use the Law Enforcement Cover Letter to explain to the police department how important it is for you to get a police report - as well as the legal protections that a detailed Identity Theft Report gives you.
How do I submit my Identity Theft Report to the credit reporting companies, or to businesses where the thief used my information?
When you send a copy of your Identity Theft Report to the fraud departments of the three major credit reporting companies, include a copy of the credit reporting company cover letter, along with copies of your supporting documentation. Send your information by certified mail with return receipt requested. The mailing addresses for sending Identity Theft Reports to the three major credit reporting companies are on the cover letter.
When writing to the fraud departments of each of the companies where the identity thief has committed fraud using your personal information, include copies of the Identity Theft Report, your supporting documentation, and the appropriate cover letter: for fraud on your existing accounts, or for fraud on new accounts. Always send this information by certified mail, with a return receipt requested.
The credit reporting companies have certain timeframes for responding to your Identity Theft Report with requests for additional information.
WHAT DO I DO IF THE POLICE ONLY TAKE REPORTS ABOUT IDENTITY THEFT OVER THE INTERNET OR TELEPHONE?
The FTC ID Theft Complaint has a special section for police reports that are not filed face-to-face, to help you use it to supplement an automated police report. If you file a police report online or over the phone, complete the "Automated Report Information" block of the ID Theft Complaint. Attach a copy of any filing confirmation received from the police.
If you have a choice, however, you should file your police report in person and not use an automated report. It is more difficult for the consumer reporting company and information provider to verify the information in an automated report, and they will likely require additional information and/or documentation.
WHAT DO I DO IF THE LOCAL POLICE WON'T TAKE A REPORT?
There are efforts at the federal, state and local level to ensure that local law enforcement agencies understand identity theft, its impact on victims, and the importance of taking a police report. However, we still hear that some departments are not taking reports. The following tips may help you to get a report if you're having difficulties:
- Provide the officer with a copy of the Law Enforcement Cover Letter that explains why the police report and the Identity Theft Report are so important to both victims and industry.
- Furnish as much documentation as you can to prove your case. Debt collection letters, credit reports, a copy of your printed ID Theft Complaint, and other evidence of fraudulent activity can help demonstrate the legitimacy of your case. Provide the police a copy of "Remedying the Effects of Identity Theft," which shows that police reports are necessary to secure your rights.
- Be persistent if local authorities tell you that they can't take a report. Stress the importance of a police report; many creditors require one to resolve your dispute. Remind them that consumer reporting companies will automatically block the fraudulent accounts and bad debts from appearing on your credit report, but only if you can give them a copy of the police report. In addition, a police report may be needed to obtain the fraudulent application and other records the company has.
- If you're told that identity theft is not a crime under your state law, ask to file a Miscellaneous Incident Report instead.
- If you can't get the local police to take a report, try your county police. If that doesn't work, try your state police.
Some states require the police to take reports for identity theft. Check with the office of your State Attorney General, which can be found at www.naag.org, to find out if your state has this law.
HOW DO I PROVE THAT I'M AN IDENTITY THEFT VICTIM?
Applications or other transaction records related to the theft of your identity may help you prove that you are a victim. For example, you may be able to show that the signature on an application is not yours. These documents also may contain information about the identity thief that is valuable to law enforcement. By law, companies must give you a copy of the application or other business transaction records relating to your identity theft if you submit your request in writing, accompanied by a police report. Read more about getting information from businesses, and use this model letter to request this information.
SHOULD I APPLY FOR A NEW SOCIAL SECURITY NUMBER?
Under certain circumstances, the Social Security Administration may issue you a new Social Security number - at your request - if, after trying to resolve the problems brought on by identity theft, you continue to experience problems. Consider this option carefully. A new Social Security number may not resolve your identity theft problems, and may actually create new problems. For example, a new Social Security number does not necessarily ensure a new credit record because credit bureaus may combine the credit records from your old Social Security number with those from your new Social Security number. Even when the old credit information is not associated with your new Social Security number, the absence of any credit history under your new Social Security number may make it more difficult for you to get credit. And finally, there's no guarantee that a new Social Security number wouldn't also be misused by an identity thief.
Source: Federal Trade Commission
Your Credit: Tips to Score Big
A credit score is an extremely important financial tool. It provides access to the financing you need in order to buy a car, a home, or pay for college tuition, among other things. Since higher scores equate to lower costs and vice versa, it’s vital to understand the factors involved in calculating your score. Here are the five elements that make up a credit score, in order of importance:
Payment History: 35% impact. Paying debt on time and in full has a positive impact. Late payments, judgments, and charge-offs have a negative impact. Missing a high payment has a more serious impact than missing a low payment. Delinquencies that have occurred in the last two years carry more weight than older items.
When applying for a mortgage, every point in your credit score can make a big difference. So don’t make any major financial or credit decisions – even paying off an old debt or delinquency – without first discussing it with your mortgage professional.
Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding balance and available credit. Ideally, consumers should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home.
Credit History: 15% impact. This marks the length of time since a particular credit line was established. A seasoned borrower is stronger in this area.
Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt from credit cards alone.
Inquiries: 10% impact. This quantifies the number of inquiries (or requests for credit) that have been made on a consumer's credit history within a six month period. Each individual inquiry can cost from 2 to 50 points on a credit score, but the maximum number of inquiries that will reduce the score is 10. In other words, don’t start the loan process until you’re ready to act. Otherwise each individual credit inquiry could cost you. However, scoring models have now been adjusted to count multiple "hard" inquiries within a 14-day period as a single request. So, when you’re ready, your credit will be too.
Rebuilding Credit
It’s true, negative credit items can remain on your credit report for up to 7 years (up to 10 years for a bankruptcy). But this doesn’t mean that you have to wait 7 to 10 years to begin reestablishing a good credit rating. Because credit scoring models typically lend more weight to your recent activity than to the mistakes you might’ve made in the past, you can change your habits right now and begin reestablishing yourself as a good credit risk for a home loan or mortgage refinance in just 6 to 12 months.
The following are a few Do's and Don'ts when it comes to rebuilding your credit:
- Three months prior to securing your mortgage, DON’T apply for, close, or pay off any credit cards, loans, or other kinds of credit without speaking to your mortgage professional first. Any one of these actions, as innocent as they might seem, could seriously affect your credit score, adding significant costs to your mortgage should your score suddenly drop.
- If you have a credit card account with an excellent credit history, DO use it – but use it strategically. In other words, use it only for small purchases that you can easily pay off completely at the end of the month. Remember, creditors like to see evidence of stability, so the goal here is to keep the good reports coming month to month without falling into the same financial traps that led to credit challenges in the past.
- If you don’t have a credit card, DO get a secured credit card. This is a great way to rebuild or establish credit quickly. Because this account is secured by funds that you deposit (typically between $100 and $400) you’re not seen as a great risk to the card issuer because of your initial investment. Again, use this card strategically to build a strong credit history. Pay your bill on time every month, and it won’t be long before you qualify for an unsecured credit account.
- Finally, DO monitor your credit. Ask your mortgage professional to refer you to a professional credit repair company you can trust. Having an experienced professional on your side will allow you to focus on your long-term credit goals without having to make reestablishing your credit a second career.
Source: Emil Izrailov, Certified Mortgage Planner of Kaye Financial
A Coffee A Day Keeps Alzheimer's Away
A daily dose of caffeine blocks the disruptive effects of high cholesterol that scientists have linked to Alzheimer's disease. A study in the open access publication, Journal of Neuroinflammation revealed that caffeine equivalent to just one cup of coffee a day could protect the blood-brain barrier (BBB) from damage that occurred with a high-fat diet.
The BBB protects the central nervous system from the rest of the body's circulation, providing the brain with its own regulated microenvironment. Previous studies have shown that high levels of cholesterol break down the BBB which can then no longer protect the central nervous system from the damage caused by blood borne contamination. BBB leakage occurs in a variety of neurological disorders such as Alzheimer's disease.
In this study, researchers from the University of North Dakota School of Medicine and Health Sciences gave rabbits 3 mg caffeine each day - the equivalent of a daily cup of coffee for an average-sized person. The rabbits were fed a cholesterol-enriched diet during this time.
After 12 weeks a number of laboratory tests showed that the BBB was significantly more intact in rabbits receiving a daily dose of caffeine.
"Caffeine appears to block several of the disruptive effects of cholesterol that make the blood-brain barrier leaky," says Jonathan Geiger, University of North Dakota School of Medicine and Health Sciences. "High levels of cholesterol are a risk factor for Alzheimer's disease, perhaps by compromising the protective nature of the blood-brain barrier. For the first time we have shown that chronic ingestion of caffeine protects the BBB from cholesterol-induced leakage."
Caffeine appears to protect BBB breakdown by maintaining the expression levels of tight junction proteins. These proteins bind the cells of the BBB tightly to each other to stop unwanted molecules crossing into the central nervous system.
The findings confirm and extend results from other studies showing that caffeine intake protects against memory loss in aging and in Alzheimer's disease.
"Caffeine is a safe and readily available drug and its ability to stabilise the blood-brain barrier means it could have an important part to play in therapies against neurological disorders," says Geiger.
Source: Journal of Neuroinflammation
The Best Kept Secret: Improved Pension Benefits for Veterans and Surviving Spouses
For most veterans, the idea of collecting a pension benefit from the military does not seem like a real possibility, unless the veteran suffered a service connected disability. However, there is a veterans pension benefit program available to all veterans, and their families, which is available to pay for home health and assisted living care. The pension benefit program is referred as the "Aid and Attendance Program" (AA).
Eligibility for the AA Program
In order to be eligible for the AA Program, a veteran must have served 90 days on active duty (the requirement is longer for more recent veterans), with at least one day during a wartime, and must have been discharged under conditions other than dishonorable. Additionally, the veteran must be "permanently and totally disabled" because of a non-service connected condition.
Periods of Wartime Service
- WWI: April 6, 1917 to November 11, 1918
- WWII: December 7, 1941 to December 31, 1946
- Korean Conflict: June 27, 1950 to January 31, 1955
- Vietnam Era: August 5, 1964 (February 28, 1961, for veterans who served "in country" before August 4, 1964) to May 7, 1975
- Gulf War: August 2, 1990 - TBA
Permanently and Totally Disabled
The term "permanently and totally disabled" means that a veteran must require "care or assistance on a regular basis," which protects him or her from dangers of a daily living environment. The term can be established by showing one, or more, of the following conditions:
- The veteran is blind or has a visual impairment of 5/200 or less in both eyes or concentric contraction of the visual field to five degrees or less
- The veteran is a patient in a nursing home or hospice facility because of mental or physical incapacity
- The veteran is unable to dress or undress or keep himself or herself clean and presentable
- The veteran needs adjustments to any special prosthetic, orthopedic appliance, or is not able to attend to the wants or nature of the prosthetic, or appliance
- The veteran has a physical or mental incapacity that requires assistance on a regular basis to protect the veteran from the hazards of his or her environment
Furthermore, it is generally presumed that a veteran who is residing in an assisted living facility does meet one, or more, of the aforementioned conditions. However, a letter from the veteran's personal physician substantiating the veteran's disability will greatly enhance the benefits process.
Current AA Monthly Pension Benefits
The current approximate maximum monthly AA pension benefits are as follows:
- Veteran & Spouse: $1,800.00
- Veteran: $1,500.00
- Surviving Spouse: $975.00
However, the actual AA monthly pension benefit amount to be received by the veteran, and/or his or her spouse, is as follows:
- The maximum monthly AA pension benefit which is applicable to the case is reduced dollar for dollar by the following formula
- The total monthly income of the veteran and/or the veteran's spouse, less the total monthly cost of un-reimbursed medical expenses
Un-Reimbursed Medical Expenses
Un-reimbursed medical expenses are generally defined to include the costs associated to health and Medicare insurance premiums, prescriptions drugs, dental and vision care, and expenses related to an assisted living facility, and in-home care aid, and/or adult day care.
Net Worth Valuation
Finally, assuming a veteran, and/or his or her spouse, has tentatively qualified for the AA monthly pension benefit, the final test to fulfill the qualification process related to the net worth of the applicant. With the exception of the applicant's home, an automobile, traditional household furnishings and personal property, which are treated as non-countable, attorneys who advise clients on veterans benefits are allowing the applicants to maintain no more than one of the following cash asset levels without jeopardizing his or her opportunity to collect the maximum monthly AA pension benefit:
- Couple: $80,000.00
- Individual: $50,000.00
AA Pre-Planning
Lastly, with the Veterans Administration only looking at the applicant's net worth at the time of the actual AA application, and with there being no penalty period for the transfer of assets prior to the time of the application, it is fair to conclude that with proper planning, just about any veteran, and/or his or her spouse, can qualify for a monthly AA pension benefit.
Medicaid Benefits
With the Medicaid program having stricter rules and regulations regarding asset transfers than the Veterans AA Program, it is very important that clients engage a qualified elder law attorney when developing a Long-Term Care Plan. For instance, transferring assets to qualify for AA Benefits could result in a 5 year ineligibility for Medicaid benefits.
To learn more about the AA Program, and its applicability to the Medicaid Program, please contact
The Center for Elder Law at 248.641.PLAN (7526) or visit our
website.
National Health Care Decisions Day 2008
Your Decisions Matter: On April 16, 2008, Talk about your future healthcare decisions and complete your advance directive!
Two Legal Papers You Shouldn't Live Without
You may not need a trust, an elaborate estate plan or even a will. But unless you want a stranger making important decisions for you and your family, there are some things you do need.
Most Americans don't have wills, but that's not the crisis many in the estate-planning industry would have you believe. With a few exceptions - which we'll talk about below - most people's quality of life won't be much improved by a will.
That's because your state already has a basic plan for distributing your stuff when you die. You're dead, so what do you care? If who got your CD player and your comic book collection wasn't important enough for you to bother with a will while you were alive, it certainly won't matter to you after you're gone.
What your state doesn't have, though, is an efficient way to take care of you if you're still breathing but unable to make your own decisions because of incapacitating illness or injury.
So if you get in a car accident and die, your estate will be distributed more or less efficiently. Get in a car accident and end up in a coma, and you could be in a world of hurt.
Your critical decisions made by a stranger?
Who would be authorized to pay your bills or wrangle with insurance companies about your care? Who would decide whether to sue that driver who hit you - or shut off the respirator that's keeping you going?
The state will eventually find someone to fill these roles, after a potentially costly and time-consuming court hearing. But it might not be the person you would want. So at a time when you're most vulnerable, life-and-death decisions could be made for you by a stranger - or an estranged, distant or greedy relative.
That's why you need the following documents:
- A durable power of attorney for health care/Patient Designation, which lets you name who will make day-to-day medical decisions, as well as lets you decide now what type of care you do and don't want to receive if you're terminally ill and incapacitated.
- A durable power of attorney for finances, which designates who will handle money decisions.
Fortunately, you can get these documents - plus a basic will - drawn up by an attorney for about $500, give or take a little in most areas. Our point is, just do it. If you need more convincing, consider the cases of Robert Wendland and Michael Martin. Robert Wendland who was severely injured in a 1993 car crash at age 42, sparking a gut-wrenching court battle between his wife and his mother that ended up before the California Supreme Court. Or Michael Martin, who was severely injured in an auto-train accident resulting in a long court battle also between his wife and mother which ended up before the Michigan Supreme Court.
Fight over removing the feeding tubes
Wendland was in a coma for 16 months before recovering what doctors called "minimal consciousness." He could catch a ball and play with infant toys, but couldn't speak, eat, walk, recognize his family or comprehend a Saturday morning cartoon. Doctors said his condition was not terminal but would never improve. Wendland's wife Rose, whom a court had appointed as his conservator, decided he wouldn't have wanted to live as he was and asked doctors to remove his feeding and hydration tubes. Wendland's mother, Florence, went to court to keep him alive. Eventually, California's top court sided with the mother - a few weeks after Robert died of pneumonia after surviving on life support for eight years.
Martin suffered a closed head injury which left him unable to walk or talk, and rendered him dependent on a colostomy and a feeding tube for nutrition. Even though there was testimony (oral) that he didn't want to be kept alive under life sustaining circumstances, the lower court and higher courts differed as to whether there was enough evidence to permit the withdrawal of life support without anything in writing. The Supreme Court stated "after painstaking review of the facts of this case, we reverse the Court of Appeals decision because we conclude that there is not clear and convincing proof that Michael made a firm and deliberative decision, while competent, to decline medical treatment in these circumstances." The Court further stated, "we are mindful that the paramount goal of our decision is to honor, respect, and fulfill the decisions of the patient, regardless of whether the patient is currently competent. The decision to accept or reject life-sustaining treatment has no equal. To err either way has incalculable ramifications. To end the life of a patient who still derives meaning and enjoyment from life or to condemn persons to lives from which they cry out for release is nothing short of barbaric. If we are to err, however, we must err in preserving life." The accident happened in 1987 and Michael Martin passed away in a Michigan Nursing Home in 2001.
A right to direct your own medical care
Had Wendland and Martin created durable powers of attorney or any other paperwork detailing how and whether life support was to be used and when, the court battle may have been prevented, legal experts said. That's because the U.S. Supreme Court has ruled that every individual has a right to direct his or her own medical care, even if loved ones disagree with those directions.
Thinking about these issues is not fun, which is probably why most people avoid it. You have to ponder some of the grimmest circumstances imaginable. Do I want to be on a respirator if I'm conscious? If I'm unconscious? Do I want food and water withheld? How about pain medication?
Decisions about health care, money
You also have to figure out whom to name as your so-called "attorney in fact," or proxy, to help implement these decisions for you. You don't have to name the same person for both powers of attorney. In fact, many people find that the people they trust to make health-care decisions are different from the ones they want handling their finances.
That said, if you're married or in a committed partnership, that person is a logical choice to fill both roles. But you'll still need backups in case he or she is injured or killed in an accident with you. For the health-care directive, you'll probably want people who are nearby or at least willing to travel to the hospital to be with you, perhaps for an extended time.
The person handling your finances may be able to do so remotely, although you may still prefer to name someone who lives relatively close for convenience sake. In addition to paying your bills and handling insurance claims, the person handling your finances may also need to sell your home or make other complicated moves that require more proximity.
You owe it to yourself and family
No matter how icky you feel about planning for your own demise, you owe it to your kids to spare them the potentially ugly and drawn-out custody battle that could ensue if you don't make these decisions now.
So go make that appointment with an attorney. A small investment of your time could spare you and your loved ones a lot of grief.
Source: The Center for Elder Law
Top Ten Things Seniors Should Know if Considering a Reverse Mortgage
Department of Housing and Urban Development (HUD) explains program
March 28, 2009 - Reverse Mortgages - the government insured program that allows older Americans to use their home equity - are becoming increasingly popular. The Department of Housing and Urban Development (HUD), which insures these loans through its Federal Housing Administration, has issued a list of ten key things older Americans should know about this program.
HUD's Reverse Mortgage is a federally-insured private loan, and the agency says it is "a safe plan that can give older Americans greater financial security."
"Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements, and more," according to HUD.
"Since your home is probably your largest single investment, it's smart to know more about reverse mortgages, and decide if one is right for you."
Following are the ten things to know as prepared by HUD.
- What is a reverse mortgage?
A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you.
But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well.
- Can I qualify for a HUD reverse mortgage?
To be eligible for a HUD reverse mortgage, HUD's Federal Housing Administration (FHA) requires that the borrower is -
- A homeowner,
- 62 years of age or older;
- Own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and
- Must live in the home.
You are further required to receive consumer information from HUD-approved counseling sources prior to obtaining the loan. You can contact the Housing Counseling Clearinghouse on 1-800-569-4287 to obtain the name and telephone number of a HUD-approved counseling agency and a list of FHA approved lenders within your area.
- Can I apply if I didn't buy my present house with FHA mortgage insurance?
Yes. It doesn't matter if you didn't buy it with an FHA-insured mortgage. Your new HUD reverse mortgage will be a new FHA-insured mortgage loan.
- What types of homes are eligible?
Your home must be a single family dwelling or a two-to-four unit property that you own and occupy. Townhouses, detached homes, units in condominiums and some manufactured homes are eligible. Condominiums must be FHA-approved. It is possible for individual condominiums units to qualify under the Spot Loan program.
- What's the difference between a reverse mortgage and a bank home equity loan?
With a traditional second mortgage, or a home equity line of credit, you must have sufficient income versus debt ratio to qualify for the loan, and you are required to make monthly mortgage payments.
The reverse mortgage is different in that it pays you, and is available regardless of your current income. The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less.
Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow. You don't make payments, because the loan is not due as long as the house is your principal residence.
Like all homeowners, you still are required to pay your real estate taxes and other conventional payments like utilities, but with an FHA-insured HUD Reverse Mortgage, you cannot be foreclosed or forced to vacate your house because you "missed your mortgage payment."
- Can the lender take my home away if I outlive the loan?
No! You do not need to repay the loan as long as you or one of the borrowers continues to live in the house and keeps the taxes and insurance current. You can never owe more than your home's value.
- Will I still have an estate that I can leave to my heirs?
When you sell your home or no longer use it for your primary residence, you or your estate will repay the cash you received from the reverse mortgage, plus interest and other fees, to the lender.
The remaining equity in your home, if any, belongs to you or to your heirs. None of your other assets will be affected by HUD's reverse mortgage loan. This debt will never be passed along to the estate or heirs.
- How much money can I get from my home?
The amount you can borrow depends on your age, the current interest rate, and the appraised value of your home or FHA's mortgage limits for your area, whichever is less. Generally, the more valuable your home is, the older you are, the lower the interest, the more you can borrow.
- Should I use an estate planning service to find a reverse mortgage?
I've been contacted by a firm that will give me the name of a lender for a "small percentage" of the loan? HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.
- How do I receive my payments?
You have five options:
- Tenure - equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
- Term - equal monthly payments for a fixed period of months selected.
- Line of Credit - unscheduled payments or in installments, at times and in amounts of borrower's choosing until the line of credit is exhausted.
- Modified Tenure - combination of line of credit with monthly payments for as long as the borrower remains in the home.
- Modified Term - combination of line of credit with monthly payments for a fixed period of months selected by the borrower.
For more information, visit HUD at www.hud.gov/buying/rvrsmort.cfm
IRS to Publish New Proposed Regulations for 529 Plans
The IRS has announced that it will soon propose new regulations governing 529 College Savings Plans, which will (I) contain an anti-abuse rule (to prevent using 529 Plans to skirt gift tax rules); (II) determine the estate, gift and GST tax results of contributions, transfers and withdrawals; and (III) create rules for making the 5 year election, address certain income tax issues, and create new record keeping requirements.
Here's the example the IRS gives as an abuse - quite a clever technique!:
Grandparents want to gift $1 million to a child without using any of their $1 million lifetime exclusion. So, the grandparents establish 529 Plan accounts for each of their 10 grandchildren, placing $120,000 in each (the $12,000 annual exclusion, times 2 for 2 grandparents, times 5 to use the 5 year averaging rule) times the number of grandchildren, and naming the child as the account owner. After the 5 years, the child designates a new beneficiary for each account, naming himself. Since Section 529 provides that no gift occurs if the new beneficiary is in the same family and at the same or a higher generational level, the grandparents have succeeded in giving the child $1.2 million without using any of their applicable exclusion.
The child would have to pay income tax and a penalty on any growth when withdrawals are used for non-educational expenses, but overall it would save the family a lot of tax.
Source: North Carolina Estate Planning Blog and IRS' new proposed regulations governing 529 College Savings Plans
Mild Alzheimer's Lowers Financial Acumen - Empasizing the Need for Planning ASAP
New research shows that patients with mild Alzheimer's disease (AD) have a dramatic decline in their ability to make financial decisions over a one year period. The discovery has strong implications for caregivers and health care providers in the areas of estate planning and fraud prevention.
The finding, from UAB (University of Alabama at Birmingham) researchers is published online in the American Journal of Geriatric Psychiatry.
The UAB team compared 55 patients with mild AD against 63 healthy older adults and followed them for one year. At the beginning of the trial, the mild AD group already showed a 20 percent decline in overall financial ability compared to the control group. By the end of the year, the AD group had dropped another 10 percent.
"After just one year, the mild AD group had dropped to 70 percent of the financial capacity demonstrated by the healthy older adult group, a significant decline," said Daniel Marson, J.D., Ph.D., director of the UAB Alzheimer's Disease Center in the Department of Neurology and the study's lead author.
Patients were assessed on a variety of financial skills, including basic monetary skills, checkbook management, bill payment and understanding a bank statement. Tasks varied from simple ones such as identifying specific coins and currency to complex ones such as preparing bills, checks and envelopes for mailing.
Assessments were done using the Financial Capacity Instrument, (FCI-9), an instrument developed by Marson's group. The FCI-9 measures 18 different financial tasks within nine domains and has two overall scores.
The AD group showed substantial declines in overall financial capacity, on eight of the nine financial domains and on 12 of the 18 financial tasks. Of particular concern was decline in the ability to recognize telephone or mail fraud.
"Elder fraud is a serious problem and our findings suggest that even patients with mild Alzheimer's are at significantly increased risk for becoming victims of fraud," said Marson.
Overall the study found that impairment in financial skills occurs early in AD and progresses relatively rapidly over time, and includes declines in basic judgment and monetary calculation skills. The findings underscore the importance, at the time of diagnosis, of patients with mild AD and their families promptly pursuing financial planning and transfer of financial responsibilities, Marson said.
Proactive steps by families include finalizing trust and estate arrangements, delegating financial decision-making powers, planning for eventual financial incapacity, and providing increased supervision of existing financial activities.
This research was supported by grants from the National Institute on Aging (NIA) and the National Institute of Mental Health (NIMH), part of the National Institutes of Health (NIH).
Source: University of Alabama at Birmingham
Humor: Estate Planning 101 - The Lighter Side
When Dan found out he was going to inherit a fortune when his sickly father died, he decided he needed a woman to enjoy it with. So, one evening he went to a singles bar where he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away.
"I may look like just an ordinary man," he said as he walked up to her, "but in just a week or two, my father will die, and I'll inherit 20 million dollars." Impressed, the woman went home with him that evening and, three days later, she became his stepmother.
Study Reveals that Half of Caregivers are Spending 10 Percent of Their Income to Care for an Older Loved One
Summary
To pay for these out-of-pocket caregiving expenses, 34 percent of the respondents had used some of their own personal savings, while 23 percent said they had cut back on their own healthcare spending.
The caregivers said money was not their most significant sacrifice - their loss of time was. However, most of the caregivers saw their caregiving as a labor of love and one they did willingly.
Article
A joint study by Evercare and the National Alliance for Caregiving Study has revealed that half of those caring for a loved one 50 years or older are spending on average more than 10 percent of their annual income on caregiving expenses and often sacrifice their own long-term financial and personal well-being to do so. The Evercare/NAC Study of Caregivers - What They Spend, What They Sacrifice finds that family caregivers, who have annual median income of $43,026, spend an average $5,531 a year on caregiving, an amount that is $400 more than the average American household spends each year on health care and entertainment combined, according to the Bureau of Labor Statistics. Further, the Study found that at lower income levels the annual average costs remained about $5,500 - making their financial burden even heavier.
The Study also uncovered that one in three respondents (34 percent) had used some of their savings to cover the cost of caregiving and one-quarter (23 percent) said they had cut back on their own health care spending. But, according to the respondents, the most significant sacrifice was their own time spent caring for an older loved one. Importantly, most of the caregivers from the Study still saw their caregiving role as a labor of love and one they do willingly.
The comprehensive study was undertaken by Evercare, one of the nation's leading health care coordination programs, in collaboration with the National Alliance for Caregiving (NAC), the leading national research authority on caregiving. It builds on data uncovered in a 2004 NAC/AARP study, which found that 34 million people care for a loved one 50 years or older, and that there are out-of-pocket costs associated with caregiving. The study provides the first in-depth look at the financial and other "personal costs" of caregiving, and indicates that as many as 17 million people, or 51 percent of the 34 million caring for a loved one 50 years or older, are spending on average more than 10 percent of their annual income on caregiving expenses. The study also uncovered significantly higher costs related to caregiving - in fact, more than twice as much as previously reported.
"Caregivers play a vital - and under-recognized - role in ensuring the health and well-being of our aging population, but in doing so they are neglecting their own futures," says John Mach, M.D., a geriatrician and CEO of Evercare. "We need to put in place support systems and plans now to help ensure today's caregivers can be properly cared for tomorrow - and that our society and our health care system are ready to meet their needs."
"We knew that the costs associated with caregiving needed a closer look, but to find that more than half of the caregivers are spending more than 10 percent of their income on average sheds new light on the incredible financial burden of those we're relying on to care for our aging population," said Gail Hunt, president of the NAC. "The Study points to a Catch-22 for these caregivers. By spending today, they risk being unable to meet their own needs tomorrow."
Other caregiving studies have looked at the costs to employers or the economic impact on society. A 2004 study by NAC/AARP showed that 21 percent of U.S. households contain at least one caregiver. According to the U.S. Census Bureau, that number is expected to surge as today's Baby Boomers age and the number of Americans over the age of 65-35 million now-doubles over the next 10-15 years.
What Caregivers Spend - Where the Dollars Go
According to the 2006 U.S. Census Bureau information, the median annual income of U.S. households is $59,894. In the Evercare/NAC Study, of the 1,000 caregivers who participated in the telephone survey, the median household income was $43,026, with the income breakout of the respondents as follows: 22 percent at less than $25,000, 29 percent between $25,000 - $50,000, 16 percent between $50,000 - $75,000, 10 percent between $75,000 - $100,000, 8 percent at $100,000 or more and 15 percent who didn't know or refused to provide that data.
The Study found the most common caregiving expenses respondents cited were:
- Household goods, food and meals (42 percent)
- Travel and transportation costs (40 percent)
- Medical co-pays and pharmaceuticals (31 percent)
- Medical equipment and supplies (22 percent)
- Clothing (21 percent).
The Study also looked at the difference in costs for varying caregiving situations. Long-distance caregivers had the highest average annual expenses ($8,728), followed by co-resident caregivers ($5,885) and those who cared for someone living less than an hour away ($4,570).
Providing a qualitative look at caregiver costs, Evercare and NAC also asked 41 respondents to keep a detailed diary of their expenses for 30 days. The diarists spent an average of $1,029 on caregiving over the one-month period. Extrapolating this cost over a year shows that the diarists were spending twice the average of the other respondents - $12,348 annually. One diarist said, "I have gotten so far behind on all of my bills - It's hard to say 'no' to my dad." The Study did not assess whether the diarists had more complex caregiving situations than average or whether the telephonic survey respondents had possibly underestimated their costs.
What Caregivers Sacrifice - It's Not Just Money, But Also Time
More than half of the Study respondents (53 percent) did not work while 37 percent of the respondents said they had quit their job or reduced their work hours. The respondents also reported they were spending on average 35.4 hours a week caring for their loved one with 19 percent providing care for more than three years and 32 percent caregiving for more than five years.
To accommodate the caregiving time and expenses they had, Study respondents were making the following sacrifices:
- Cutting back on leisure activities (49 percent) and vacations (47 percent)
- Saving less or not at all for their children's future (38 percent)
- Using their savings (34 percent)
- Cutting back on basics such as clothing, utilities or transportation (27 percent) and groceries (25 percent)
- Cutting back on personal medical or dental expenses (23 percent)
"Time is the most expensive commodity I provide - but it has no price tag", one caregiver among the diarists commented. Despite the sacrifice, caregivers also said it was a commitment they made willingly. Another diarist said, "It is a way to spend quality time - my siblings who aren't around won't know them or appreciate them as much as I do because of this."
While the survey focused on the personal financial costs of caregiving, it also revealed a ripple effect: respondents felt their out-of-pocket costs carried an emotional and physical price. Study respondents reported on the personal and emotional impact which includes heightened stress or anxiety (65 percent), difficulty sleeping (49 percent), increased financial worries (43 percent), depression or hopelessness (37 percent), and new or worsening health problems (26 percent). This is consistent with findings from last year's Evercare/NAC Study, Caregivers in Decline (2006), which focused on health risks of caregiving.
The Importance of Supporting the Caregivers
The care provided by family caregivers is an integral part of America's health care system. Yet, alarmingly, statistics from a 2005 brief provided by the Commonwealth Fund show that caregivers are twice as likely as the general population to develop multiple chronic illnesses. People with chronic illnesses also are among the heaviest users of medical care in the nation; people with five or more chronic conditions make up just 20 percent of Americans age 65 and older, but account for 68 percent of all Medicare spending according to a 2004 report by the Partnership for Solutions.
70% of All Caregivers Over the Age of 70 Die First.
Is Caregiver Syndrome a REAL Medical Diagnosis?
Do you take care of someone in your family with a chronic medical illness or dementia? Have you felt depression, anger or guilt? Has your health deteriorated since taking on the responsibility of caregiving? If your answer is yes to any one of these, you may be suffering from caregiver stress.
This condition is increasingly being referred to as "caregiver syndrome" by the medical community because of its numerous consistent signs and symptoms. In the pamphlet, "Caring for Persons with Dementia," Dr. Jean Posner, a neuropsychiatrist in Baltimore, Maryland, referred to caregiver syndrome as, "a debilitating condition brought on by unrelieved, constant caring for a person with a chronic illness or dementia."
An increasing number of Americans are finding themselves taking care of someone who's aging or ill or both. According to the American Academy of Geriatric Psychiatrists, one out of every four American families cares for someone over the age of 50. As America's population ages, that number is expected to skyrocket. In 2000, the Census Bureau reported, just under 35 million Americans were 65 or over; by 2030, the number is projected to more than double, to more than 71 million.
Many exhausted, ill caregivers today don't seek help because they don't realize that they have a recognizable condition. According to a report from the National Consensus Development Conference on Caregiving, the most common psychological symptoms of caregiver syndrome are depression, anxiety and anger. Peter Vitaliano, a professor of geriatric psychiatry at the University of Washington and an expert on caregiving, said that the chronic stress of caring for someone can lead to high blood pressure, diabetes and a compromised immune system. In severe cases, caregivers can take on the symptoms of the person that they care for, he said. For example, a person caring for someone with dementia may develop progressive memory loss. Worse still, this syndrome can lead to death. Elderly caregivers are at a 63 percent higher risk of mortality than noncaregivers in the same age group, according to a study by University of Pittsburgh researchers Richard Schulz and Scott Beach reported in the Journal of the American Medical Association in December 1999.
Vitaliano suggests that the physical symptoms are a result of a prolonged and elevated level of stress hormones circulating in the body. He likened exhausted caregivers' stress hormone levels to those suffering from post traumatic stress disorder.
Caregivers are usually so immersed in their role that they neglect their own care, said Vitaliano. The stress is not only related to the daunting work of caregiving, but also the grief associated with the decline in the health of their loved ones. The majority of caregivers go through a period of shock followed by a major adjustment in their roles. Such emotions are reflected in online discussions among caregivers such as one at the Alzheimer's Association Online Community. A number of spouses described their role slowly evolving from partnership into a nurse-patient relationship. The caregivers described the difficulty of the change and talked about feeling anger, resentment and guilt. They also suggested that in such an emotional state, it's difficult to provide high-quality care to their loved ones.
Physicians, too, are not always certain how to approach the issues raised by long-term caregiving. Although the term "caregiver syndrome" is widely used among allied health professionals such as hospice workers and nursing home assistants, the syndrome is not yet recognized in American medical literature. Without that official validation, it's not surprising that this problem is not addressed more by physicians. A survey in the American Academy of Family Physicians found that fewer than half of caregivers were asked by their doctors whether they had caregiver stress. Vitaliano believes that more research should be done to help spread awareness.
But Vitaliano isn't sure giving caregiver syndrome the status of an official diagnosis would be a good thing. He argues that if "caregiver syndrome" were listed in the Diagnostic and Statistical Manual of Mental Disorders (a text published by the American Psychiatric Association that defines all mental health disorders) it could stigmatize those that have it. "Caregiver stress is directly related to the way our society views the elderly and the people who care for them," Vitaliano says. Today, caregiving is viewed largely as a burden in this country. If it were viewed as more of a societal expectation and people were willing to offer more support, fewer caregivers would suffer in isolation, he says.
Others think giving caregiver syndrome an official name would be helpful. Kathryn Anderson, a researcher in families and chronic illness at Florida International University, argues that caregiver stress should be named a syndrome because it would help caregivers seek the help and resources they need. Naming it a syndrome would encourage health professionals to develop better treatment strategies and require health insurers to pay for treatment, she believes.
For now, the American Academy of Family Physicians and the National Center on Caregiving call for every caregiver to be screened for stress and depression. Caregivers who show signs of hostility, anxiety and a loss of interest in activities they used to enjoy are urged to talk to their doctors.
Experts agree that expanding the caregiver support system, finding sources of help for caregiver tasks and educating caregivers can significantly decrease the occurrence of this syndrome.
Source: CNN, article by Andree LeRoy, M.D.
Delays in Social Security Disability Cases
at Record Highs
Summary
The Social Security Administration faces a record - and rapidly growing - backlog of appeals by people who claim they are too disabled to work. Through June, it had just over 745,000 cases pending, and the wait for a hearing averaged 17 months, also a record.
Article
The Social Security Administration faces a record - and rapidly growing - backlog of appeals by people who claim they are too disabled to work. Through June, it had just over 745,000 cases pending, and the wait for a hearing averaged 17 months, also a record.
Claimants in some parts of the country must wait up to 31 months, according to the agency. "People have died waiting for a hearing," Social Security Commissioner Michael Astrue says.
The agency says the backlog doubled in six years and could reach 1 million by 2010.
Feeling Pain
For instance the shortest wait is 276 days in Harrisburg, Pa. and the longest is 932 days in Atlanta, Ga. (Michigan also has very long waits, such as in Lansing, of 726 days and in Flint, of 719 days.)
Astrue is trying to reduce the waits, but Congress has provided nearly $1 billion less than President Bush sought over the past six years. Field offices have lost more than 2,300 workers in less than two years, leaving the agency with its lowest staffing level since the early 1970s. The agency froze staffing levels for nine months last year after threatening furloughs.
"We don't have enough staff members to answer the phones," says Richard Warsinskey, president of the National Council of Social Security Management Associations, which represents 3,500 field office managers. District offices handle 110 million calls and visitors a year. As the baby boom ages, he foresees "almost a tsunami of additional people coming on to the rolls."
This year, Bush proposed a 3% increase in funding for the program; House and Senate bills would make that 4% to 5%.
The aging of baby boomers has added to the ranks of the disabled. As workers age, they are more prone to injury and disease. The number of people collecting disability benefits, 15.3 million, has risen by about 24% in the past five years, agency figures show.
"It's a combination of two demographic trends - the population getting larger and the population getting older," Astrue says.
Under a system set up a half-century ago, state agencies first review disability claims, a process that takes three to four months on average. Of the 2.5 million people who file disability claims each year, about 65% are initially denied. Those who appeal go to federal hearings before administrative law judges. Eventually, 62% of the appeals are approved.
The average wait for a federal hearing varies from nine months in Harrisburg, Pa., to 31 months in Atlanta, mostly due to staffing differences. "It really is a continuing disaster, financially and emotionally, for millions of people," says Tom Affleck, an Atlanta attorney who works on such cases.
The agency also has reduced the number of approved cases it periodically reviews. As a result, "people are getting paid benefits that they're not entitled to, just because we don't have the staff to review their cases," says Witold Skwierczynski, president of the National Council of Social Security Administration Field Operations Locals.
Astrue is pursuing changes, from making "compassionate" early decisions to holding more hearings electronically, so geographic disparities are lessened. But "I can't look the Congress in the eye right now and say we're doing our job as well as we can do it."
Source: Richard Wolf, USA Today
A Legal and Financial Checklist to Help Build the Financial Future of Your Child With Special Needs
If you're a parent raising a child with a disability, your child's health and comfort typically come first and foremost. But it's just as important to prepare for your child's financial future to help ensure a safe, secure and independent life ahead.
With more than 3.6 million U.S. children between the ages of 5 to 15 with a disability, financial experts say it is crucial for many parents to recognize they can take a few simple steps now to help ensure security for their child in later years. MassMutual and Easter Seals today issued a set of guidelines - 10 questions and answers people should consider to help lay the groundwork for a secure financial future for their child with special needs.
"When caring for a child with a disability, families often become so focused on day-to-day needs that they often lose sight of the larger financial issues that loom ahead," says Joanne Gruszkos, director of the SpecialCare program at MassMutual, a coordinated program of future care planning, financial and legal strategies for people with disabilities and other special needs and their families. "Clearly, many parents need to start early and take a long-term view when preparing financially for their child's financial future, and we've assembled this checklist to help them get started."
In teaming up with MassMutual to provide parents with this critical information, James J. Williams, Jr., president and CEO, Easter Seals, says it is crucial for families to be fully prepared for the financial realities their children will face later in life.
"Each day, in communities across the country, Easter Seals provides the exceptional services necessary to give people with disabilities equal opportunities to live, learn, work and play," said Mr. Williams. "We want the children with disabilities and families we serve to gain greater independence, and having the right information and support to make critical, long-term financial decisions can make all the difference."
MassMutual and Easter Seals urge parents of children with special needs to ask themselves the following questions:
- Am I getting the right advice? Since laws affecting people with disabilities change frequently and require specific expertise, it's helpful to seek the expertise of a financial representative and an attorney who specialize in estate planning for families with special needs children. Consider asking other parents for references or check with local advocacy groups before embarking on your selection.
- How should I develop an estate plan? Developing a detailed estate plan that best fits your family's situation is essential to ensure your child's long-term needs are met after you have passed away. Your estate plan - which can include wills, trusts, durable powers of attorney, health care proxies, and other documents - will outline how you would like your financial affairs handled and identify a guardian or guardians who will care for your child after you die. Consult an attorney and financial services professional who have a thorough understanding of your state's disability laws to develop a comprehensive plan for the future.
- What kind of government benefits is my family eligible for? Be sure you're aware of any federal programs that may assist your family. Your child may be eligible for benefits under Medicaid, Medicare, the State Children's Health Insurance Program (SCHIP), or the Children with Special Health Care Needs (CSHCN) provision of the Social Security Act. Visit the Web sites for these entities to check eligibility requirements.
- Am I making the right choices with my health plan? Raising a child with a disability means you may incur high health care costs, so it's important to understand and maximize benefits under your health insurance coverage. Know which services and procedures are covered, which are not covered and how to appeal if a claim is denied. If you and your spouse both work, compare health plans and select the one that's best for your child.
- Have I communicated my life care plan to close family members and friends? While the generosity of friends and family members is welcomed, a well-meaning friend or relative may inadvertently disqualify your child for benefits if he or she gives a gift or bequest that exceeds state limits. Once your estate plan is complete, notify close friends and relatives of your life care plan. If your friends or relatives want to include your child in their wills, your attorney can assist.
- What are the financial needs of my child's guardians? When you name a guardian for your child, ask yourself: Would the guardian need additional income to care for your child if you died? Would special funding be required for home renovations, specially equipped vehicles or in-home health aides? Should you plan for childcare services if, for example, your guardian worked full-time? If the answer to any of these questions is "yes," discuss these needs with your financial representative or attorney.
- If I die unexpectedly, how will my child's guardian know what to do? A letter of intent, written by you, would provide detailed information about your child and instructions to assist those who will care for your child upon your death. Information typically includes emergency contacts, medical history, preferred living arrangements, education or work arrangements, recreational preferences and behavioral challenges.
- When should I apply for guardianship as my child becomes older? Many parents assume they will retain guardianship of their child, regardless of age. However, once your child reaches age of majority (typically at age 18 or 21, depending in which state you live), you must file for legal guardianship. In many cases, the guardianship process is merely a formality. But it's important to remember that guardianship is a court appointed procedure.
- Where do I want my child to live in the future? When your child reaches adulthood, he or she will have the option of living in an apartment, house, condo, or an assisted-living environment. Whatever option is chosen, it's important to begin thinking about this when your child is still young, as early as 10 or 11. Waiting times for placements in assisted living facilities can be as long as 10 years for the best facilities. If your child wants to live independently, he or she will need the financial resources and money management skills to do so.
- What other long-term issues do I need to consider? While housing is a primary long-term issue, there are a number of other matters that must be addressed, including: education, work opportunities, recreational programs, lifestyle, daily transportation, medical costs and custodial care. Projections for each of these factors should be accounted for when determining your child's financial needs in your child's life care plan.
Source: MassMutual, Easter Seals
A Critical Need: Funerals - Preventing Misunderstandings and Respecting Your Wishes
In recent past, two public figures died leaving their affairs rather in disorder. One was Ted Williams and the other was Anna Nicole Smith. In both situations, their family members argued over the final disposition of the body, and this held up burial.
This situation would have been an unlikely occurrence if each individual had left specific instructions relative to his or her disposition, including burial, cremation, or cryogenics.
This language should be discussed with your family and then you should provide written instructions. Do not place these with your will or estate planning documents as by the time they are located, read and distributed to your family members, your funeral may have already occurred, without respecting your funeral instructions.
In addition, if you have specific desires, they should be addressed with your chosen funeral director while you are alive and competent. This will assure that all your intentions receive proper attention, including requested clergy, songs, readings and any other specific desires you have. Since there will be very little left to question, whether or not your family agrees, they have a legal as well as moral obligation to carry out your wishes.
As more and more people are opting to pre-plan and often pre-pay their funeral during their lifetimes, these issues should become less frequent, but sometimes disgruntled family members object or attempt to cause problems.
Issues often occur when there is a second marriage and the children from the first marriage do not agree with the second spouse. There have been situations that necessitated two wakes, separate visiting hours for different sides of the family and sometimes even two separate funeral services, since all related family members could not agree or even be in the same room at the same time.
This is indeed unfortunate, and a funeral director and lawyer must often fill the roles of social workers and mediators in an attempt to facilitate funeral arrangements with disgruntled family members. When such matters become severely contested, a judge has to make decisions on a fairly immediate basis in order to allow the matter to proceed. In some cases, the family may not agree with the judge, and they then appeal, which also takes significant time.
A further complication sometimes occurs when a person who has remarried dies, and his or her former spouse has already passed away. The surviving family members may not know whether their parent should be buried with their former spouse or with the second spouse, and certainly, the surviving spouse may have his or her own opinion as to what the now dearly departed would have wanted.
You can never provide too much detail and information prior to your death regarding your post-death instructions and funeral arrangements. That’s the only way you can be assured that your wishes will be carried out rather than those of your family, and even more importantly, prevent a judge from deciding for you.
Secrets of Successful Time Management
Select five to seven of the following time management ideas that you feel will provide you the greatest value in managing your own professional and personal time. Consider these ideas as support structures for your use with your colleagues.
- The 80/20 rule always applies - List two to four of your activities that produce the greatest results and eight to ten that produce minimal results. (Share with the group.)
- Determine your hourly value to achieve your annual income goals.
- Break projects down into monthly, weekly, daily, and hourly income goals.
- Plan the next day in advance before you leave your office.
- Think geographically and avoid excessive travel time between appointments. Use drive time to learn or use a “Bluetooth” device to talk with key people. How else can you think geographically?
- Confirm all appointments to avoid dead time.
- Work on your relationship skills. Great relationship skills produce great results. Can you prove this?
- Where is your time going? Do a time log on a daily, weekly, and perhaps a monthly basis. Write it down exactly so you can find the real time-wasters. Awareness of your actual situation is critical.
- Create a new daily routine - 90% of all human behavior is habitual. “If you keep doing what you are doing, you will keep getting what you are getting.” “When patterns are broken new worlds will emerge.”
- Prioritize and stay focused. What one or two items on your list must absolutely be finished? What are your priorities today, this week, and this month at home and at work?
- Reduce interruptions by creating stronger boundaries. What are your ideas regarding the establishment of boundaries?
- Don’t take work home. Staying a little later or arriving earlier is better. Set time limits for yourself.
- Structure your telephone time. Set up times to accept, initiate, and return calls. The best time to accept incoming calls is just prior to lunch or at the end of the workday. The other person will not want to waste time. Initiate or return calls early in the morning, just before or after lunch, or at the end of the day to contact difficult-to-reach individuals. Consider scheduling all, if not most of your important calls. Consider a phone call a mini-meeting, so be prepared with an agenda and all you will need to be successful.
- “Eat That Frog” - Do the most unpleasant task first.
- Be aware of what you promise. Under-promise and over-deliver.
- Scheduling down time in your day helps to recover your mental and physical energy.
- Scheduling meetings with yourself is a good way to accomplish key objectives. How can this help you be more effective with your use of time?
- Work with your body’s natural biological rhythm. Are you a night owl or a morning person? If you wear out in the mid afternoon, consider a quick nap to recharge your battery. Have an air mattress in your office.
- Get rid of toxic people in your life. They drain you and waste your time. Who are the toxic people in your life? How could you limit their impact on your time?
- Get plenty of sleep and exercise, and eat quality foods. Develop a project action plan with a scoreboard to track your results.
- Use the power of momentum. Objects in motion stay in motion. Starting and stopping often breaks up your momentum. Grouping “like activities” back to back takes advantage of momentum. (Strategic Coach - Dan Sullivan)
- Consider a news and media fast. Stop reading the newspaper and watching the news for at least a week and see what happens. Important news still will find its way to you. What else can you eliminate from your daily life that would not be missed?
- Improve your communication skills so you reduce the need to repeat yourself.
- Learn to say “NO” in an appropriate way. You may be pleasing others at your own expense.
- Consider delegating more tasks to co-workers or family members. Jobs that you are currently doing may actually be developmental opportunities for others. Select at least two items at work and one item at home that you will delegate. Next week, select more.
- Consider effectiveness over efficiency. Whom do you know that accomplishes more in 8 hours than others do in 10 or 12?
- Discard some of the stuff in your life. Stuff has to be maintained, and this takes time. What stuff in your life requires too much maintenance?
- Let others work for you. If your time is worth $250 per hour, how many services could you hire out for just one hour of your time? Buy prepared food, have supplies delivered, shop via catalog, pay bills online, stop doing errands, have someone “clean out” your junk mail and your spam e-mail, hire a housecleaner, a driver, and a personal organizer, etc. Choose one or two and put this support structure into place by the end of the week.
- Set artificial deadlines for yourself. “The task expands to fit the time available.” Look at how much you can accomplish when you’re preparing to go on vacation.
- Make a list of 10 things you do each week that you hate. Brainstorm ways to remove at least half of these items from your list in the next week.
- Have a family meeting to discuss roles and responsibilities around the home. Distribute duties accordingly.
- Cut your appointment time by one third. Each one-hour meeting will now be only forty minutes. Schedule phone meetings that will last only five to fifteen minutes. You will be surprised by the fact that you can actually accomplish your objectives in this limited time. List two to three current meetings in which you will try this strategy.
- Produce greater results through others by mastering your Leadership, Management, and Coaching skills.
- Use a contact/time management system like Outlook, ACT, Franklin, or Goldmine to organize your activities and keep your mind free to think creatively. What are some ways you currently use these systems to save time?
- Hire a business, personal, or technology coach to help you put the necessary support structures in place to create new sustainable habits.
- Limit interruptions and distractions by communicating new guidelines for gaining your attention. Appropriately using a closed door and/or a “do not disturb” button on the phone or simply scheduling your open-door times work well. What are some other ways you can limit such interruptions?
- Stephen Covey uses the phrase, “Sharpen the Saw” as a way of investing in the preparatory activities necessary to be most effective. Training, planning, and organizing are examples of ways to sharpen the saw. What are some others?
- Striving for progress versus “perfection” is a way to free up tremendous time and energy. What does this statement mean to you?
- Conduct “standing meetings.” When someone enters your office, consider conducting your meeting in a standing position. This will let the person know that you have very limited time. Also, consider conducting a “walking meeting,” in which issues are discussed while walking.
- Learn the difference between the “urgent” and the “important” and make time for the latter. What are two or three important areas of your life that you never seem to have time for?
- Let your actions spring from your personal goals and values.
- Eat your “elephant” one bite at a time. Break up your big projects into little projects.
- Rewarding yourself for reaching a particular goal will help reinforce the behaviors you are developing.
- Handle papers that cross your desk only once. Reviewing your mail next to a trash can is an example of this enabling behavior.
Source: Thank you to Barry Demp for sharing this article. Barry Demp is a business coach and often referred to as the “coach’s coach”. For more information visit: www.dempcoaching.com. Stay tuned for additional secrets in next month’s newsletter.
Congress Closes Kiddie Tax Loophole
Sometimes the best-laid plans go awry - and this time, you can blame Congress. If part of your tax planning included giving appreciated stocks, mutual funds or other assets to your teen or college student so he or she could sell them tax-free next year, it's time for plan B.
Some wealthy families were eagerly awaiting the effective date of a new law that wipes out capital-gains taxes for those in the two lowest income-tax brackets (often children and the elderly) in 2008, 2009 and 2010. But now Congress has effectively dismantled that income-shifting strategy with its latest expansion of the “kiddie tax” -- the second change in just over a year. However, if you have kids who are 18 to 23 years old by the end of the year, you still have time to act before the latest change kicks in on January 1.
Who's a kid?
Currently, the law that taxes certain investment income of children at their parents' higher rate applies to kids under 18. (Before 2006, it applied to children under 14.) In 2007, the first $850 of a child's investment income is tax free and the next $850 is taxed at his or her own rate. But any unearned income in excess of $1,700 in 2007 is taxed at the parents' presumably higher tax rate. (These limits are adjusted for inflation and will be slightly higher next year.)
Starting in 2008, the kiddie tax will be expanded to include dependents under 19 and dependent full-time students under 24. Children who provide more than half of their own support are not affected by the kiddie-tax change.
What does that mean for you? If your children are 18 through 23 by the end of the year, they can still take advantage of the 5% rate on long-term capital gains that's available to taxpayers in the two lowest brackets, says Bob Scharin, senior tax analyst for Thomson Tax & Accounting. Higher-income taxpayers pay a maximum capital-gains tax of 15% on both qualified dividends and profits on investments that are held longer than one year. Interest income, and profits on short-term investments held less than one year, are taxed at ordinary income-tax rates ranging from 10% to 35%.
Savor the sweet spot
Mitchell Graham falls into the kiddie-tax sweet spot. His parents, Terri and Jeff, who live in Deerfield, Ill., have been saving for Mitchell's college expenses in a variety of ways, using a custodial account, a 529 college-savings plan and their own assets. Because Mitchell turns 18 this summer, he is exempt from the current kiddie tax. But he'll be covered by the new, expanded version next year. So if he sells assets in his account by December 31, he'll benefit from the lowest tax rates to help pay his tuition when he enters Carroll College in Waukesha, Wis., as a freshman this fall.
You might also consider giving appreciated assets to children 18 or older to sell before the end of the year, either to pay for college or to minimize your family's tax bill. An individual can give each recipient up to $12,000 this year without triggering the gift tax. (Married couples can jointly give up to $24,000 per recipient.)
As an example, let's say you and your spouse gave your child $24,000 worth of appreciated stock, of which $12,000 represented profit when sold. Shifting from your 15% capital-gains rate to your child's 5% rate would save $1,200 in taxes.
The latest change in the kiddie-tax rules makes saving for education expenses through a 529 plan more attractive than ever, says Scharin. As long as the money is used for qualified college expenses, withdrawals from 529 plans are tax-free and avoid the kiddie-tax issue altogether.
Source: Mary Beth Franklin. Mary Beth Franklin is a senior editor of Kiplinger's Personal Financ magazine. She covers retirement planning, tax planning, Social Security issues and long-term-care insurance. Previously, she was co-editor of Kiplinger's Retirement Report.
How to Talk to Mom and Dad About Moving
The time has finally come to start talking with your mom, dad or senior loved one about moving out of their home. Perhaps the family home has so much deferred maintenance it's no longer safe to live in, perhaps there was a recent fall, or the stove was left on over night. No matter what the reason, it's very common for the initial conversations to be met with “I don't need to leave my home!” or “I don't want to go live with a bunch of old people.” This is when most of us feel the need to PROVE that we're right and the time IS right to move. Instead of digging in your heels and starting a win-lose situation with your elder. I'd like to suggest a different approach.
Start a conversation.
Ask questions that address different reasons to move. The answers to these questions are your lead-in to ask how your elder would like things to be different. Here are some conversation starters:
Loneliness
- When was the last time you say (enter name here).
- How do you spend your time during the day?
- Who do call if you need help with something? How far away do they live? What other commitments does that person have (job, family?)
- Any other questions you can think of that will help you measure your elder's satisfaction with social interactions.
Nutrition
- How are you getting to the grocery store?
- What did you have for dinner (or breakfast or lunch)?
- Any other questions you can think of that measure the kind of nutrition your elder is getting.
House Maintenance
- When was the last time the gutters, stove, or windows were cleaned?
- When was the last time the furnace (or boiler) was serviced or checked for safety?
- Who will be taking care of the lawn or snow shoveling? How much does that cost per week? Are you happy with the service, are they reliable?
- Any other questions you can think of that will measure your elder's ability to keep up with the house maintenance.
When your elder starts to infer they wish things were different, encourage this conversation. This will give you an idea of the kind of community they'd like for their next home.
We hope this article will help you with one of the most difficult decisions one may face with their loved one.
Source: This article was found on one of the many blogs in cyberspace. Whoever authored this we thank you.
Paperless World Can Leave Heirs in the Dark
As people increasingly go “paperless” -- using the online features of banks and brokerages to manage their accounts -- it's complicating the process of helping your heirs sort out your finances once you're gone.
The problem: If you don't keep careful records, your family might not even know where to start looking for accounts. In a worst-case scenario, some assets may never be found.
But at the same time, you don't want to recklessly list all your private financial-account passwords somewhere for a bad guy to find. That would be an invitation to theft.
There are several smart steps to take to build a roadmap to your assets. The five key components: information about your assets, names of advisers, details about safe-deposit boxes, your estate-planning documents, and a few other important documents.
For starters, provide details about banking and brokerage accounts, insurance policies, real-estate and retirement plans, and list account numbers.
Explain where to find your will, trust, power of attorney and other estate documents. If you have a safe-deposit box, give the bank's name and address, and where you keep the keys. If you have a life-insurance policy, provide the name and phone number of the agent, and a copy of the policy or its number.
Consider listing all the people your heirs will need to contact, including lawyers, accountants, executors or guardians you've named to care for any minor children.
Here's what not to include: Your passwords to online accounts. Listing all your passwords in one place -- no matter where it's stored -- is risky. And anyway, your heirs won't need them. For instance, with some assets like bank accounts, heirs can sometimes gain access by showing a copy of a death certificate and proof of designated beneficiaries.
Another important, but often overlooked, item to include: computer passwords, if you keep back copies of potentially important financial paperwork (like old tax returns) on your PC.
Your financial planner or estate-planning attorney can provide additional guidance in putting together a file meeting your particular needs. For instance, Fidelity Investments offers its brokerage clients an online tool, My Estate Plan Organizer, that guides you through the process of putting together a complete document.
Lastly, think carefully about how to store the list. Heirs need to be able to locate it when needed (and you need to be able to update it with a minimum of hassle) but it shouldn't be generally accessible. One option: a fire-resistant home safe, where you should also be keeping, say, your passport or other items you may need to access more quickly than things in a safe-deposit box. You might also give a copy to your lawyer to keep with other estate-planning documents.
As a general rule, don't keep a copy on your computer. But if it is kept there, make sure your computer is as safe as possible from hackers, and is password-protected.
After all, you can't take it with you -- but you wouldn't want someone else to take it from you.
Source: Associated Press By Kaja Whitehouse (The Wall Street Journal) May 21, 2007
BEWARE: Illegal Provision in Nursing Home Contracts
Many nursing homes follow standard operating procedures that are illegal. You might think that admission agreements would be compliant with law, given the combined efforts of the nursing home’s management and legal advisers. You would be wrong. Admission agreements frequently misstate the law in a way that is designed to disadvantage residents.
An analysis of approximately 200 admission agreements collected from nursing homes across Missouri give a good sample of the types of illegal and improper provisions that are seen in admission agreements across the country.
Visitors
The area of visitation rights is perhaps the best example of the disconnect between the Nursing Home Reform Law and the nursing home status quo. A nursing home resident has the right to be visited by a family member at any time. But posted visiting hours are common in most nursing homes, and family members are accustomed to apologizing and hustling out when they’ve stayed beyond an 8 p.m. (for example) close of visiting hours.
Some examples of illegal provisions are: “Regular daily visiting hours for the facility have been established and posted. The facility reserves the right to limit any or all visitors.” “Posted hours apply. Facility retains right to limit any/all visitors. Relatives, on request, with doctor’s consent, can see critically ill resident anytime.” “Regular daily visiting hours for the facility have been established and posted. The facility reserves the right to limit any or all visitors. Relatives or guardians and clergy, if requested by the resident or family, will be allowed to see critically ill residents at any time in keeping with the orders of the physician.”
Access to Resident’s Income
A nursing home “may not require residents to deposit their personal funds with the facility.” Regardless, some admission agreements require a resident under certain circumstances have his income directly deposited to the facility. One admission agreement stated: “I authorize Facility to request and be named Payor on my Social Security checks.” Similarly, another admission agreement gave notification that “it is the policy of the facility to complete a Representative Payee form to the Social Security Administration requesting the resident’s Social Security income be directly sent to the facility.”
In one admission agreement, direct deposit was contingent on a resident’s failure to pay timely. However, slowness in paying does not waive the federal law referenced above. As a creditor, a nursing home has the right to give a nonpaying resident a transfer/discharge notice and/or to file a collection action. The nursing home cannot, however, require that it become the resident’s financial agent.
Financial Guarantors
The Nursing Home Reform Law prohibits a nursing home from requiring a third party guarantor as a condition of a resident’s admission or continued stay. Absent this provision, a nursing home could force a resident’s relative or friend to become liable for potentially devastating expenses. For example, a resident’s next door neighbor could find himself liable for a ten thousand dollar debt if, for whatever reason, the resident’s Medicaid application had been mishandled and denied. For example, a man who attended the same church as the resident, and found himself sued by the nursing home because he (the church member) had signed the admission agreement as a financially liable “responsible party.”
Like other provisions of the Nursing Home Reform Law, this guarantor prohibition applies to all residents of any nursing home that accepts Medicare and/or Medicaid. Thus, if a nursing home accepts either Medicare or Medicaid, this law applies whether the resident is eligible for Medicare or Medicaid payment, or pays personally for her nursing home care.
The examined admission agreements ran afoul of the law in several ways – by requiring a financial guarantee, by claiming that a “responsible party” was “volunteering” to become financially liable, or by holding the responsible party liable to the extent that he handled to the resident’s money
Regarding purportedly voluntary guarantee agreements, one representative admission agreement required a “Responsible Party to be fully responsible for all financial obligations,” and defined a Responsible Party as “[a]n individual who voluntarily agrees to become obligated for the care and treatment of the Resident.”
In the real world, of course, no one “volunteers” to become financially liable for nursing home expenses. A resident’s family member or friend signs as “responsible party” not because she is gratuitously offering to become financially liable, but because she feels that signing is a routine part of the admission process.
A “voluntary” guarantee is illegal and unenforceable for at least one of three reasons. First, the nursing home may be requiring the guarantee. The admission coordinator likely will be directing family members and friends to sign as responsible party. Second, the term “responsible party” is deceptive, because it suggests that a “responsible party” is the person who should be called in case of an emergency. As a result, a family member or friend might sign as a “responsible party” without understanding that she purportedly is becoming financially liable for all nursing home bills. The deceptiveness of the agreement is a reason for its invalidation under state consumer protection law.
Finally, these “responsible party” provisions are unenforceable because they provide no benefit to either a resident or a “responsible party.” In other words, the contract is invalid due to a lack of consideration. A “responsible party” signature cannot facilitate a resident’s admission – after all, the Nursing Home Reform Law prohibits a nursing home from requiring a guarantor as a condition of admission. Indeed, by its terms a “responsible party” signature provides no benefit to either a resident or a “responsible party”: the admission agreement itself generally states that the “responsible party” is volunteering.
Guarantees Based on Access to Resident’s Money
A typical admission agreement held a resident’s friend or family member liable only “to the extent of the resident funds received.” These types of provisions should generally be unenforceable against a responsible party since, absent tortuous behavior, an agent is not liable for the principal’s debts.
In summary, the no guarantee provision is likely to be determinative when asserted by a family member or friend who has not misappropriated the resident’s money. However, a court will be inclined to rule against a family member or friend who has used the resident’s money for personal purposes while leaving the nursing home unpaid.
Other miscellaneous improper provisions
“The Facility provides general duty nursing care. If the Resident is in such condition as to need continuous special duty nursing care, it is agreed that such must be arranged by the Resident or his/her legal representative or physician and that the Facility shall in no way be responsible for failure to provide the same and is hereby released from any and all liability arising from the fact that said Resident is not provided with such additional care.”
Also, the agreements characterize falling, choking, and other traumatic events as an inevitable part of nursing home life: “The parties hereto agree that the services provided by [facility] and others within this facility are not designed to somehow protect the Resident from everyday, normal risks and responsibilities of living, including, but not limited to, such general accidents and situations such as falling, choking and weight loss and/or dehydration resulting from a Resident’s failure to partake of food and drink.”
Although perhaps not inevitable, assault is presented as something that is part of everyday life: “We strive to hire and employ only people who have high ethical and moral standards and a compassion for others. However, the nursing home simply cannot read the minds and consciences of all its employees. … Think about going to the store, for example. There is the risk of physical or verbal assault, neglect by store employees and theft, among others. These same risks exist in any [group] environment, including the nursing home. We believe that the risk is small. But before moving your loved one into a nursing home you should understand and accept fully the risk.”
All of these provisions are invalid due to their inconsistency with the federal Nursing Home Reform Law and relevant state law. The Reform Law, for example, broadly requires a facility to provide the care necessary for a resident to “attain or maintain the highest practicable physical, mental, and psychosocial well being.”
Summary
How can nursing home practices (including admission agreements) be so frequently noncompliant with federal nursing home law? A big part of the answer rests with consumers’ unfamiliarity with both nursing home laws and nursing home life more generally. If consumers don’t know what to expect and/or are afraid to complain, it is small wonder that so many nursing homes get away with illegal practices.
Source: Eric Carlson is an attorney for the National Senior Citizens Law Center. He is the author of (among other things) The Baby Boomer’s Guide to Nursing Home Care (with co author Katharine Hsiao), and 20 Common Nursing Home Problems – and How to Resolve Them. The publications are available at www.nsclc.org.
When Your Parents Are Not Down the Street
You live here. They live there. The best ways to help your aging parents when they're not down the street.
When Allison Gage gave birth to her first child three years ago in Minneapolis, it should have been a joyful moment. Instead, she was worried sick about her elderly parents, Baldwin and Linda Yeung. The couple live 2,000 miles away in Sonoma, Calif. and hadn't returned any of her phone calls.
As it turns out, the Yeungs had decided to spend the night at a relative's house because they were simply too tired to drive home. The experience, however, was an eye-opener for Allison, who realized that she had no way of finding out if her parents - both in their 70's- were in trouble. “It's just as important to know that they're safe as to know that they're not safe,” she says. “The worst part was not knowing.”
In recent years, more adult children are finding themselves hundreds or even thousands of miles away from their aging parents - and struggling to manage the geographic gap. More than 5 million caregivers, defined as anyone providing unpaid care or support to an adult, live at least an hour from the person they're assisting, according to a 2004 survey by the National Alliance for Caregiving and AARP. And experts predict that the number will increase substantially as baby boomers age.
“People are very mobile these days,” says Chip Simon, a Poughkeepsie, N.Y. certified financial planner. “Families are living at a distance, and before you say, 'I need you to move out of your house and closer to me,' the intermediary step is managing things from afar.”
If Mom and Dad are in West Palm Beach and you're in Chicago, it can be tough to make sure everything's okay. You have a career and a home of your own to tend to, and popping by is out of the question. But that doesn't mean you can't be involved and even help them out substantially from wherever you are. Here's how to make it work.
Have the talk. It's a tough topic to broach, but experts agree: Don't wait for a crisis. “If you ask any attorney or C.P.A. for the saddest cases, they'll talk about the clients who run into their office when there's an emergency,” Simon says. “Assuming some of the responsibility for an aging parent is a process, not an event.”
The easiest way to start the conversation: Take advantage of a comment or complaint. Are they starting to talk about the house being a burden? Ask if you can help them take care of some things.
Once you've cleared that delicate hurdle, you can tackle trickier matters - such as their finances. Ask if they'd like some help paying their bills. Blame the hard-to-read fine print, blame their busy lives, but offer a hand.
If you can't visit often, try calling a geriatric-care manager, usually a professional such as a nurse or social worker who specializes in elder care. He or she can drop by your parents' house and see what kind of help they might need.
If you think your parents might be resistant, shift the perspective. “You can say, 'Mom, I'm worried about you, and it would really help me if you'd consider having this person come over and check on you,' “ says Nina Herndon, a geriatric-care manager in San Francisco. “That way the parent is doing something to help the child, rather than acquiescing to care they don't think they need.”
Find someone near your parents' home, the Web site of the National Association of Professional Geriatric Care Managers is a good place to start.
Help them automate. The more of your parents' finances you can put on autopilot, the better. Make sure their Social Security and pension checks are being deposited directly into their bank account. Have utility-bill balances billed to a credit card each month (if possible) to take advantage of the card's built-in consumer- protection features.
If your parents are comfortable with the idea, monitor their bank and credit-card accounts online (get their user names and passwords) so you know where their money is going. You'll be better equipped to spot trouble before it escalates.
Create a safety net. Get to know the services available to your parents where they live. When you visit, introduce yourself to your folks' neighbors and friends so they know who you are. Get names, phone numbers and e-mail addresses so you'll know who to call if, say, you need someone to run over and check on Mom.
It also pays to track down the local agency on aging, which can be a great resource. Visit eldercare.gov to find one in your parents' city.
Also, come up with an emergency contact plan. Consider getting your parents a cell phone with large buttons they can see and program emergency numbers - including yours - into the speed-dial slots.
And since any telephone is both a lifeline and a source of scams, have your parents' phone number delisted from telemarketing directories by visiting donotcall.gov.
Put powers in place. If you're going to help your parents with their financial affairs, you should, if possible, be empowered to act on their behalf. Talk to them about establishing a durable power of attorney. You want one that goes into effect the moment it's signed - as opposed to the “springing” type, which applies only after a doctor declares your parents incapacitated.
“There's that gray area between health and incapacitation, where they just need a little bit of assistance,” says John Peelle, a certified financial planner in San Diego. “Durable power of attorney is the way to go.”
There's also something called a medical power of attorney, which enables you to make decisions about your parents' health care. You'll be able to talk to doctors on their behalf and get medical information about them, something that can be extremely difficult under current patient-privacy laws. If you have siblings, consider splitting financial and medical powers of attorney between you, so no one bears the whole burden.
Get help. If you can't be with your parents frequently, be prepared to lean on professionals. For her parents, Allison found a local financial adviser who speaks Chinese, their native language, because she couldn't always be available for their requests for advice. She helped the adviser set up her parents' portfolio and has copies of their financial statements mailed to her.
The important thing is to get started, and recognize that it might take a while to get the ball rolling. “The biggest mistake people make is doing too much too fast,” says Lancaster, Pa. certified financial planner Rick Rodgers. “You want to be perceived as helping, rather than coming in and taking over. That really frightens older people.”
Fortunately for Allison and her parents, the process has been a welcome one. “Having someone you trust oversee such an important aspect of life, such as our finances, especially in retirement is invaluable,” says Allison's mother Linda Yeung. “It's such an important aspect of life. And there's nobody we trust more than our own daughter.”
Source: Kate Ashford, Money Magazine staff reporter, May 2007
You Are Not Alone: The Caregiving Epedemic
Studies show that 12 million people in this country need long-term care. Mercifully, 21% of American adults give of themselves to provide free caregiving for loved ones. Specifically, 44.4 million people are caregivers - those who provide unpaid care to another adult. 59% of these caregivers either work, or have worked, while providing care. 62% made adjustments to their work life by taking time away or leaving their jobs entirely.
"We learn from the report that with the shortage of healthcare workers in the U.S., and the high cost of care, caregivers represent the backbone of the way care is delivered," said Sibyl Jacobson, president and CEO of MetLife Foundation, a supporter of Alzheimer's research and aging programs. "It directs attention to a growing health concern - the well-being of caregivers."
Some of the key highlights of the 2005 study conducted by the National Alliance for Caregiving include:
- More caregivers are women (61%) than men (39%), and 60% of them are working full-time.
- The "typical" caregiver is a 46-year-old woman with some college education who works and spends more than 20 hours per week caring for her mother.
- Many caregivers work either full or part-time while providing care (59%). More than six in ten (62%) working caregivers say they have had to make some adjustments to their work life as a result of their caregiving responsibilities.
- Male caregivers are more likely to be working full or part-time (66%) than female caregivers (55%).
- On average, caregivers provide 21 hours of care per week. Nearly half (48%) of all caregivers say they provide eight hours or less of care per week and one in five (17%) says they provide more than 40 hours of care per week. The average length of care is 4.3 years.
- Overall, female caregivers are providing more hours of care and a higher level of care than male caregivers.
- Because female caregivers give more care, it is not surprising that women are more likely to report experiencing emotional stress as a result of caregiving than men (40% vs. 26% in the highest levels of stress rating).
- Among caregivers who care for someone other than a spouse, the most burdened caregivers say they make an average monthly financial contribution of $347.
- Caregivers age 50 and older, who tend to care for mothers and grandmothers, are among those most likely to have provided care for 20 years or more.
- Seventy-nine percent of people needing care are age 50 or older. Caregivers say the main health problems for care recipients over 50 are heart disease, cancer, diabetes, Alzheimer's or other dementia. Caregivers say younger recipients (ages 18-49) suffer mainly from mental illness and depression.
As these figures suggest, there is a fundamental realignment going on in our culture as Baby Boomers deal with the day-to-day life-management problems of their parents.
The "Me Generation" and Gen X-ers, who were once looked at as shortsighted self-satisfiers, have assumed responsibilities in record numbers, caring for their parents in a compassionate and loving manner. Such a responsibility requires a delicate balance of caring for parents and providing for their own family, the true sandwich generation. Families taking care of families fills a void that has developed as medical science extends longevity but society fails to address the realities of elders' quality of life.
Thousands of Baby Boomers spend every weekend at a parent's home, giving care as well as taking them to doctors and helping them with other needs. They are consumed with trying to make private elder care the best it can be, and pay thousands of out-of-pocket dollars for aides, so that they can hold down a job.
It's been estimated that the value of free services given by caregivers totals $306 billion a year. These services are provided by family members without regard to cost because of love and respect for their elders. If as a society we applaud family values, we have to accept that the nuclear family of 2007 includes not only parents and children, but also parents of parents - elderly family members with rights to a quality of life that befits their immeasurable contributions to our world.
Source: The Center for Elder Law
The Seven Stages of Alzheimer's
More than 5 million Americans are living with Alzheimer's disease, a 10% increase since the last Alzheimer's Association estimate five years ago - and a count that supports the long forecast dementia epidemic as the population grays.
Age is the biggest risk factor, and the nation is on track for skyrocketing Alzheimer's once the baby boomers start turning 65 in 2011. Already, one in eight people 65 and older have the mind destroying illness, and nearly one in two people over 85.
Staging systems provide useful frames of reference for understanding how the disease may unfold and for making future plans. But it is important to note that not everyone will experience the same symptoms or progress at the same rate. People with Alzheimer’s live an average of 8 years after diagnosis, but may survive anywhere from 3 to 20 years.
The framework for this section is a system that outlines key symptoms characterizing seven stages ranging from unimpaired function to very severe cognitive decline. This framework is based on a system developed by Barry Reisberg, M.D., Clinical Director of the New York University School of Medicine’s Silberstein Aging and Dementia Research Center.
Within this framework, we have noted which stages correspond to the widely used concepts of mild, moderate, moderately severe and severe Alzheimer’s disease. We have also noted which stages fall within the more general divisions of early stage, mid stage and late stage categories.
Stage 1: No impairment
(Normal function)
Unimpaired individuals experience no memory problems and none are evident to a health care professional during a medical interview.
Stage 2: Very mild cognitive decline
(May be normal age related changes or earliest signs of Alzheimer's disease)
Individuals may feel as if they have memory lapses, especially in forgetting familiar words or names or the location of keys, eyeglasses or other everyday objects. But these problems are not evident during a medical examination or apparent to friends, family or co workers.
Stage 3: Mild cognitive decline
Early stage Alzheimer's can be diagnosed in some, but not all, individuals with these symptoms:
- Friends, family or co workers begin to notice deficiencies. Problems with memory or concentration may be measurable in clinical testing or discernible during a detailed medical interview. Common difficulties include:
- Word or name finding problems noticeable to family or close associates.
- Decreased ability to remember names when introduced to new people.
- Performance issues in social or work settings noticeable to family, friends or co workers.
- Reading a passage and retaining little material.
- Losing or misplacing a valuable object.
- Decline in ability to plan or organize.
Stage 4: Moderate cognitive decline
(Mild or early stage Alzheimer's disease)
At this stage, a careful medical interview detects clear cut deficiencies in the following areas:
- Decreased knowledge of recent occasions or current events.
- Impaired ability to perform challenging mental arithmetic for example, to count backward from 75 by 7s.
- Decreased capacity to perform complex tasks, such as planning dinner for guests, paying bills and managing finances.
- Reduced memory of personal history.
- The affected individual may seem subdued and withdrawn, especially in socially or mentally challenging situations.
Stage 5: Moderately severe cognitive decline
(Moderate or mid stage Alzheimer's disease)
Major gaps in memory and deficits in cognitive function emerge. Some assistance with day to day activities becomes essential. At this stage, individuals may:
- Be unable during a medical interview to recall such important details as their current address, their telephone number or the name of the college or high school from which they graduated.
- Become confused about where they are or about the date, day of the week or season.
- Have trouble with less challenging mental arithmetic; for example, counting backward from 40 by 4s or from 20 by 2s.
- Need help choosing proper clothing for the season or the occasion.
- Usually retain substantial knowledge about themselves and know their own name and the names of their spouse or children.
- Usually require no assistance with eating or using the toilet.
Stage 6: Severe cognitive decline
(Moderately severe or mid stage Alzheimer's disease)
Memory difficulties continue to worsen, significant personality changes may emerge and affected individuals need extensive help with customary daily activities. At this stage, individuals may:
- Lose most awareness of recent experiences and events as well as of their surroundings.
- Recollect their personal history imperfectly, although they generally recall their own name.
- Occasionally forget the name of their spouse or primary caregiver but generally can distinguish familiar from unfamiliar faces.
- Need help getting dressed properly; without supervision, may make such errors as putting pajamas over daytime clothes or shoes on wrong feet.
- Experience disruption of their normal sleep/waking cycle.
- Need help with handling details of toileting (flushing toilet, wiping and disposing of tissue properly).
- Have increasing episodes of urinary or fecal incontinence.
- Experience significant personality changes and behavioral symptoms, including suspiciousness and delusions (for example, believing that their caregiver is an impostor); hallucinations (seeing or hearing things that are not really there); or compulsive, repetitive behaviors such as hand wringing or tissue shredding.
- Tend to wander and become lost.
Stage 7: Very severe cognitive decline
(Severe or late stage Alzheimer's disease)
This is the final stage of the disease when individuals lose the ability to respond to their environment, the ability to speak and, ultimately, the ability to control movement:
- Frequently individuals lose their capacity for recognizable speech, although words or phrases may occasionally be uttered.
- Individuals need help with eating and toileting and there is general incontinence of urine.
- Individuals lose the ability to walk without assistance, then the ability to sit without support, the ability to smile, and the ability to hold their head up. Reflexes become abnormal and muscles grow rigid. Swallowing is impaired.
Source: Alzheimer’s Association
Nursing Homes Can't Just Transfer Patients
The threat of transfer or discharge from a nursing home can be both frightening and stressful for residents and their families. Too often, a facility may respond to resident’s difficulties or increasing need for care or repeated questions or complaints from family members by transferring or discharging the resident. The Nursing Home Reform Law of 1987 protects residents from involuntary transfer and discharge. Contact the Long Term Care Ombudsman in your area for more information about the protections it offers and for assistance with negotiating with the facility.
Transfer and Discharge
Transfer is movement from a certified institution to another institutional setting that assumes legal responsibility for the resident’s care. Discharge is movement from a certified institutional setting to a non-institutional setting. After discharge, the facility is no longer legally responsible for the resident’s care.
What The Law Says About Involuntary Transfer/Discharge:
The Nursing Home Reform Law of 1987 prohibits nursing homes from transferring or discharging a resident unless it can establish that one of the permissible reasons for transfer/discharge exist. Those reasons are:
- The nursing home cannot provide adequate care for the resident.
- The resident’s health has improved to the point that he or she no longer needs nursing home care.
- Safety of individuals in the facility is endangered.
- The health of others in the facility would otherwise be endangered.
- The resident has failed, after reasonable and appropriate notice, to pay for care (although the facility cannot evict a resident who is waiting for Medicaid eligibility and should work with other state agencies to obtain payment if the resident’s money is being held by a family member or other individual).
- The facility ceases to operate.
Before proposing a transfer/discharge, a facility must identify and try to meet the resident’s individual medical, nursing, and psychosocial needs, by formulating and implementing an individualized care plan designed to meet those needs. Many of the permissible reasons for transfer or discharge can be addressed through assessment and care planning, making transfer or discharge unnecessary. Because most nursing homes provide fairly complex care for sick residents, it is rare that the facility cannot find a way to provide adequate care for the resident or to keep the resident and others safe with the use of a good assessment and care plan. Furthermore, universal health precautions should be in place in every nursing home that protect the health of residents and others and prevent the spread of infection. The nursing home assesses the care needs of prospective residents upon initial admission. Once a resident has been accepted by the nursing home, the nursing home should find ways to provide safe and appropriate care.
Notification
If a facility wishes to transfer or discharge a resident, it must record the reason for transfer in the resident’s clinical record, and notify the resident and the resident’s family member, guardian, or legal representative in writing. The statement must include:
- The reason for the transfer or discharge.
- The location the resident will be moved to.
- The date of transfer or discharge.
Information about the resident’s right to appeal to the state concerning the transfer or discharge, with the name, address, and telephone number of the state long term care ombudsman.
- The location the resident will be moved to must be specific, appropriate, available, and agreeable to taking the resident. The facility can and should be cited for neglect if they fail to make safe transfer arrangements.
Time Limits
The law requires that a nursing home must inform the resident and the resident’s family member, guardian or legal representative about a transfer or discharge at least 30 days in advance. This part of the law applies to all residents, even those who have resided in the facility for less than 30 days.
Preparation Before Transfer or Discharge
The nursing home must provide discharge planning and sufficient preparation and orientation to residents being transferred/discharged. The law guarantees the right of the resident (and/or family member) to participate in planning care and treatment, which should include choosing a new place to live. The nursing home should also prepare an orientation, such as a visit to the new home. It should tell the resident where he or she is going, and assure a safe arrival. The facility should also inform the new residence about the resident’s habits. Lastly, the nursing home should ensure possessions aren’t lost in the moving process, and any personal funds are given to the resident or transferred to a new account.
Bed Hold And Readmission
The Nursing Home Reform Law gives Medicaid recipients the right to return to their facility after they have been out of the facility due to hospitalization or therapeutic leave. Some states will pay to hold a bed for Medicaid residents who are temporarily absent. If a Medicaid recipient loses a bed - either because the state does not pay to hold the bed, or they have exceeded the state’s bed hold period, readmission rights permit him or her to return to the next available bed in a semi-private room in the nursing home. Residents are entitled to notice about bed-hold and readmission rights twice - upon admission and at the time of transfer. A facility’s bed hold policy must be consistent with state regulations.
Additional Rights
The Nursing Home Resident Protection Amendment of 1999 requires that nursing homes continue to provide care for Medicaid residents already living in the facility even if the nursing home chooses to cease participation in Medicaid.
- A resident has the right to participate in planning care and treatment or changes in care and treatment.
- A resident and their family member or legal representative must receive notice before the resident’s room or roommate in the facility is changed.
- A resident can refuse transfer from a portion of the nursing home that is certified at one level of care to another portion with different certification.
Complaints and Appeals
A resident has the right to appeal the facility’s decision to transfer/discharge him or her. The transfer or discharge notice must include information about how to request a hearing, the resident’s right to use legal counsel or other spokesman at the hearing, and the mailing address and telephone number of the State long-term care ombudsman. A complaint may also be filed with the state survey agency.
Source: National Citizens’ Coalition for Nursing Home Reform
Do It Yourself Estate Planning Is Like Do It Yourself Brain Surgery
Some people think that estate planning is easy. They think they can use a computer program, fill in the forms, and write their own will and related estate-planning documents, and their good intentions will translate into legal documents that will be what they want and what their families will later need.
There are several computer programs that tout the "it's easy" misconception, but the real question you need to answer is whether you and your family's security is worth the uncertainty of prefabricated documents. Do it yourself estate planning is like do it yourself brain surgery.
Much is at risk when you do estate planning. You are risking your financial security, your family's financial security and the peace of mind of everyone involved. If you are not an experienced estate planning attorney, you are not likely to know and understand the issues you should address, much less how to actually address them.
For example, often people decide to make gifts of specific assets to individuals. This can work out, but the estate planning documents may not become effective for years into the future. What happens when you sell the stock that was going to Bill? Or the home that was going to Mary? What if the stock becomes worthless and the home triples in value? Will Bill get a little, and Mary quite a lot? If there are expenses and taxes to pay at your death, should Bill and Mary pay part of them, or should they receive their bequests free of expenses and taxes - and let their heirs bear the burden of these costs? Additionally, should you treat your unequal children equally? Should you take into consideration your children’s respective abilities, capabilities, strength of relationship and level of responsibility and maturity? Frankly, a do it yourself computer program or form that uses a one size fits all approach will not work.
A qualified estate-planning attorney will know how to spot the issues that are important to you, and how to address them. There are many practical issues and technical legal and tax issues that you will not recognize on your own. If you use a "do it yourself" estate planning program, these issues may only come to light when 1) you are disabled and your named agents are not able to do what you wanted them to be able to do, because the documents you prepared are inadequate; or 2) you die and your heirs are fighting because the language of your documents is not clear, or because your heirs do not receive what you had intended; or 3) the IRS ends up with more of your estate than you expected. Estate planning is not a dress rehearsal, you need to get it right the first time.
While we all might like to believe we can do anything on our own, we can often get ourselves into trouble by not consulting an expert. An experienced estate-planning attorney is a vital, perceptive guide who can help you identify and achieve your goals. There are family, emotional and financial issues as well as long-term care that come into play. Regardless of where you are in your journey through life, the guidance of the right estate planning attorney can help you reach your goals and those you have for the ones you love. Do yourself a favor: do not do it yourself!
Source: The Center for Elder Law
Top 10 Must-Dos for IRAs
It’s vitally important to make sure that the proper beneficiaries are designated for your IRAs and other retirement accounts, since the beneficiary designation controls what happens to the account, regardless of what your will, trust, divorce settlement, or any other agreement says.
The following is based on IRA expert Ed Slott’s “IRA New Year’s Resolutions:”
- Obtain a copy of the beneficiary form for each IRA you own.
- Make sure you have named a primary beneficiary and a secondary (contingent) beneficiary for each IRA you own. Secondary beneficiaries are less important for IRAs payable to trusts. However, before you name your trust as a beneficiary you must consult your estate planning attorney.
- If there are multiple beneficiaries on one IRA, make sure that each beneficiary’s share is clearly identified with a fraction, percentage or the word “equally,” if applicable.
- Make sure that the financial institution holding the IRA has your beneficiary designations on file and that their records agree with yours.
- Keep a copy of all your IRA beneficiary forms and give copies to your financial advisor, attorney, and CPA.
- Let your beneficiaries know where to locate your IRA beneficiary forms.
- Review your IRA beneficiary forms at least once a year to make sure they are correct and reflect any changes during the year due to new tax laws or major life events such as death, birth, adoption, marriage, divorce, etc.
- Check the IRA custodial document for every financial institution that holds an IRA account for you. Make sure that the document allows the provisions that are important to you and your beneficiaries. All IRAs are not created equal!
- Do not name your estate as beneficiary.
- If your IRA is large enough consider a Standalone IRA Trust to obtain maximum stretch-out and protection of your IRAs for younger beneficiaries.
Source: Anonymous blog post.
Special Needs Planning
Solving Your Greatest Worry
Have you ever wondered what would happen to your special needs loved one if you passed away tomorrow? Have you done everything possible to ensure that your loved one with special needs will maintain his or her government benefits and receive an inheritance from you? For many parents with special needs children, whether the children are minors or adults, these questions linger in the back of their minds. Estate planning is always important to do, however, when one of our beneficiaries is a special needs loved one, the planning becomes critical.
When a parent leaves an inheritance over $2,000 to an individual with special needs, then that inheritance is actually a gift to the government because it eliminates that child’s qualification for government benefits. Parents and attorneys armed with the basic knowledge, that you cannot have assets in excess of $2,000 and still qualify for government benefits, often think that the only reliable method to protect a special needs loved one is to disinherit them. They believe, or are counseled, that leaving their inheritance to another child or individual who will morally take care of their special needs loved one solves the problem. In most cases, however, this does not solve the problem, but only makes it worse. Leaving everything to your daughter “Susie” if “Johnny” has special needs, would allow Susie’s creditors to attach Johnny’s money. In addition, if Susie is having a bad year financially, there is nothing to stop her from using the money for herself. Furthermore, if Susie passes away, this money would go on to her beneficiaries and not to Johnny.
Parents can solve all of these problems by creating a Special Needs Trust. A properly drafted Special Needs Trust allows the special needs individual to maintain government benefits and to use the inheritance for everything but food and shelter. The Special Needs Trust is the perfect solution and the only reliable method to make sure that your inheritance benefits your child with special needs. The Special Needs Trust keeps assets in a form that will be available for your child and allows your child to maintain and receive government benefits.
A properly drafted Special Needs Trust will specify that funds from the Trust only supplement and do not replace the government benefits. These funds can be used for extra medical care, personal items, such as t.v.s, radios, computers, vacations, companionship, advocates or any other item or service to enhance your child’s self-esteem and situation, anything except food and shelter. With respect to shelter, your child can use the money to purchase a home, but cannot use the money for rent.
Oftentimes, parents who have minor or adult children with Cerebral Palsy wonder what the future will hold for their special loved one. Will they be productive in society, will they need governmental benefits, who will take care of them and be responsible for their financial needs? We have developed a very unique approach to address these questions - the Wait and See Special Needs Trust. A Special Needs Trust would be set up as a vessel for an inheritance to go into, however, a decision would be made by the trustee at the time that the parents pass away whether or not this individual is likely to need government benefits in the future. Specifically the Wait and See Trust requires the trustee to test and have your special needs loved one evaluated educationally, cognitively, rehabilitatively, physically and emotionally. These evaluations also include, but are not limited to, a physical and psychological evaluation, an evaluation of education and training programs, work opportunities and earnings, recreation, leisure time, and social needs. If he or she is not likely to need government benefits, then the Special Needs Trust would not be used and the assets can then be used for basic needs as well as special needs. The benefit of this, of course, is that we have the advantage of planning for an unknown future.
As a parent, not only do you want to provide an inheritance for you child or your children, but when you have a child with special needs, you often are the only one who knows their medical needs i.e. doctors, prescriptions, as well as the child’s likes and dislikes. The Special Needs Trust incorporates a Letter of Guidance that addresses all of the information that caregivers so vitally need.
While government agencies recognize Special Needs Trusts, there are strict rules and it is critical that you work with an experienced special needs attorney to draft the Trust. We have reviewed countless Special Needs Trusts that do not comply with Social Security Insurance and Medicaid rules. One wrong word or phrase can make the difference between an inheritance that benefits your child and one that causes your child to lose the many services, assistance and benefits available.
We know that a parent’s greatest worry is what will happen after I am gone. One parent shares his experience as follows:
It had been in the back of my mind for years, soon after I found out my son had this lifelong disability. What would the future hold for him when I wasn’t there anymore to be his advocate, friend and supporter? It was both a big and little worry. Big, because it gave me a hole in my gut whenever the question crept in. And little, in the sense that I tried not to think about it. I’d think: I’ll worry about that tomorrow, next week, when he’s older, when I’m older.
Of course, I’ve done things to prepare for that future he’s going to have without me, things like teaching him how to wash clothes and shop. But should I write a Will? Make an estate plan? No, for years, I dodged that one totally.
But you know, it’s funny. Now that we’re finished setting up our estate and only need periodically to review our plans, I feel like an enormous burden has been lifted up from me. The big, black, scary shadow is gone. Well, not totally gone, I suppose. I still worry about Samuel, what will happen to him in his life. I guess every parent does that. But now I don’t worry in the same way. I know I’ve done all I can do for that part of his future, something that was extremely important to do, and I am very relieved. Now I feel like we can deal fully with the present day and see to the other things that need to be done to prepare our child for life as an adult. And that’s very exciting.
Parents of special needs children can solve their greatest worry with a properly drafted Special Needs Trust. If you would like more information on Special Needs Trusts, you can contact The Center for Special Needs Planning at 248.641.7070 or visit our website at www.thecenterforspecialneedsplanning.com.
Source: Danielle Mayoras and Don Rosenberg
Attorneys from The Center for Special Needs Planning
By Failing to Prepare You Are Preparing to Fail
How many of us plan adequately for a lifetime disability? Leaving your planning to chance and unforeseen circumstances will only breed disaster. If you are unable to handle your own affairs (business, financial and personal) who will do so for you? Chances are before we die that we will all suffer a debilitating illness such as a stroke, injury, accident, Alzheimer’s or old age.
Did you know that if you do become incapacitated you will become subject to a LIVING PROBATE? In Michigan a probate proceeding for your health care and personal decisions is called a Guardianship and a probate proceeding for your financial decisions is called a Conservatorship. Here we will use the term "Guardianship" to cover both probate proceedings. It is a common misunderstanding to believe that your spouse, child or relative can act for you during a disability. The truth is, if you cannot make your own decisions or sign your name, a court will.
A guardianship is designed to protect people who cannot protect themselves. The Guardianship process is a product of a court system that is as efficient as the Post Office, has the compassion of the IRS and is as cost effective as the Pentagon. Sally Hurme, a lawyer for the AARP said, "Guardianship is a drastic remedy, a cannon used to swat a fly." Frankly, a Guardianship is not necessary. In fact, the probate process , whether it is a "Living or Death" Probate is optional. It is your choice.
What can be done to protect yourself in the event of a lifetime disability? There are three alternatives. The first is doing nothing and subjecting yourself to probate. The second is to establish a Revocable Living Trust. This will be the subject of a future article. The third is to create a DURABLE POWER OF ATTORNEY. This is the cornerstone of all planning.
The word "Durable" means that it is different from an ordinary Power of Attorney in that it is not affected by a person disability or incapacity. Once you grant a Durable Power of Attorney, as long as you are competent you can revoke it. The only time a Durable Power of Attorney terminates is upon death, voluntary revocation or by Court order. Simply put, a Durable Power of Attorney is a legal document that allows you to delegate your personal health care and financial responsibilities to an agent. An agent is a person in whom you have confidence and trust, so that later, if you become mentally or physically disabled, a Guardianship proceeding will be unnecessary.
The authority you give your agent can be as broad or narrow as you choose. The authority can be effective only when you become disabled as you define or effective immediately. For example, any or all of the following can be authorized: protecting your assets in the event that you need long term care (including nursing care), banking transactions, dealing with real estate and personal property, handling legal claims, entry into a safety deposit box, preparing tax returns, contracting for services and consenting to medical care and decisions.
As Elder Law attorneys we usually draft Medical Durable Power of Attorneys to address end of life and mental health decisions when one is unable to participate (incapacitated) in their decisions. However, in light of federal privacy acts such as HIPAA and the need to be involved in one’s care before a crisis we address day to day medical decisions to be effective immediately.
It is very simple. Instead of dealing with the emotional trauma, financial costs and the delay of Probate - Guardianship, you will be able to devote your efforts to caring for your loved ones during their incapacity.
A Durable Power of Attorney is not only for the elderly - everyone over the age of 18 should have one. Anyone, no matter their age can be involved in a car accident, hospitalized or unable to handle their affairs for lengthy periods. This is why you should plan NOW!
No one wants to think about their own mortality or incapacity. Do yourself a favor and stop procrastinating. Plan NOW for yourself and if not for yourself, for your loved ones. Remember what a wise man once said, "By failing to prepare you are preparing to fail." That man was Benjamin Franklin.
- Don L. Rosenberg, The Center for Elder Law
The Best Kept Secret: Improved Pension Benefits
for Veterans and Surviving Spouses
For most veterans, the idea of collecting a pension benefit from the military does not seem like a real possibility, unless the veteran suffered a service connected disability. However, there is a veterans pension benefit program available to all veterans, and their families, which is available to pay for home health and assisted living care. The pension benefit program is referred as the “Aid and Attendance Program” (“AA”).
Eligibility for the AA Program
In order to be eligible for the AA Program, a veteran must have served 90 days on active duty (the requirement is longer for more recent veterans), with at least one day during a wartime, and must have been discharged under conditions other than dishonorable. Additionally, the veteran must be “permanently and totally disabled” because of a non-service connected condition.
Periods of Wartime Service
- WWI: April 6, 1917 to November 11, 1918
- WWII: December 7, 1941 to December 31, 1946
- Korean Conflict: June 27, 1950 to January 31, 1955
- Vietnam Era: August 5, 1964 (February 28, 1961, for veterans who served “in country” before August 4, 1964) to May 7, 1975
- Gulf War: August 2, 1990 - TBA
Permanently and Totally Disabled
The term “permanently and totally disabled” means that a veteran must require “care or assistance on a regular basis,” which protects him or her from dangers of a daily living environment. The term can be established by showing one, or more, of the following conditions:
- The veteran is blind or has a visual impairment of 5/200 or less in both eyes or concentric contraction of the visual field to five degrees or less
- The veteran is a patient in a nursing home or hospice facility because of mental or physical incapacity
- The veteran is unable to dress or undress or keep himself or herself clean and presentable
- The veteran needs adjustments to any special prosthetic, orthopedic appliance, or is not able to attend to the wants or nature of the prosthetic, or appliance
- The veteran has a physical or mental incapacity that requires assistance on a regular basis to protect the veteran from the hazards of his or her environment
Furthermore, it is generally presumed that a veteran who is residing in an assisted living facility does meet one, or more, of the aforementioned conditions. However, a letter from the veteran’s personal physician substantiating the veteran’s disability will greatly enhance the benefits process.
Current AA Monthly Pension Benefits
The current maximum monthly AA pension benefits are as follows:
- Veteran & Spouse: $1,742.00
- Veteran: $1,470.00
- Surviving Spouse: $944.00
However, the actual AA monthly pension benefit amount to be received by the veteran, and/or his or her spouse, is as follows:
- The maximum monthly AA pension benefit which is applicable to the case is reduced dollar for dollar by the following formula
- The total monthly income of the veteran and/or the veteran’s spouse, less the total monthly cost of un-reimbursed medical expenses.
Un-Reimbursed Medical Expenses
Un-reimbursed medical expenses are generally defined to include the costs associated to health and Medicare insurance premiums, prescriptions drugs, dental and vision care, and expenses related to an assisted living facility, and in-home care aid, and/or adult day care.
Net Worth Valuation
Finally, assuming a veteran, and/or his or her spouse, has tentatively qualified for the AA monthly pension benefit, the final test to fulfill the qualification process related to the net worth of the applicant. With the exception of the applicant’s home, an automobile, traditional household furnishings and personal property, which are treated as non-countable, attorneys who advise clients on veterans benefits are allowing the applicants to maintain no more than one of the following cash asset levels without jeopardizing his or her opportunity to collect the maximum monthly AA pension benefit:
- Couple: $80,000.00
- Individual: $50,000.00
AA Pre-Planning
Lastly, with the Veterans Administration only looking at the applicant’s net worth at the time of the actual AA application, and with there being no penalty period for the transfer of assets prior to the time of the application, it is fair to conclude that with proper planning, just about any veteran, and/or his or her spouse, can qualify for a monthly AA pension benefit.
Medicaid Benefits
With the Medicaid program having stricter rules and regulations regarding asset transfers than the Veterans AA Program, it is very important that clients engage a qualified elder law attorney when developing a Long-Term Care Plan. For instance, transferring assets to qualify for AA Benefits could result in a 5 year ineligibility for Medicaid benefits.
To learn more about the AA Program, and its applicability to the Medicaid Program, please contact The Center for Elder Law at 248.641.PLAN (7526) or visit our website.
A special thanks to Dale Krause, a Wisconsin Elder Law Attorney, for providing this article.
5 Myths You Should Know
Before Choosing Elder Care
Myths associated with selecting quality nursing home care suggest quick and easy ways to identify quality care. In fact, relying on these myths can lead to disastrous results. I have identified a few of the most common myths in hopes of helping you avoid some of the problems commonly found in many nursing homes.
1. The Smell Test
You've heard it repeatedly: "The best way to determine the quality of care a nursing home provides is to be alert to bad odors when you visit the home."
It seldom, if ever, works. Why? Nursing home administrators have heard the very same advice. As a result, they are particularly sensitive to unpleasant odors in any area that might receive visitors. Almost all will do their best to remove offensive odors as quickly as possible, even when it means avoiding their primary responsibility to their residents.
2. The Personal Recommendation
Recently, I heard a guest on a radio talk show state that the very best way to find great nursing home care is to get recommendations from a friend. Like other myths, there is a grain of truth here, but you must check whether your friend has had extensive interactions with the nursing home recommended. Often that is not the case.
Last weekend I dealt with an emergency call from Jim, a friend who had placed his mother in a nursing home recommended by a friend. Although she was recuperating from a stroke, no nurse or aide checked on her condition for more than 14 hours. Jim discovered her in the morning with many cuts and bruises, her bedsheets soaked in blood. He was astonished that anyone would recommend such a poor care facility.
"My friend said her grandmother was in this particular nursing home," he reported. "So, I thought it would be good care."
"How often does your friend visit her grandmother?" I asked him.
"I didn't think to ask," he responded.
"And did you check the latest survey for that nursing home?"
"No," he answered. "I thought a personal recommendation was all I needed."
Jim's mother is now back in an area hospital. No one knows yet how much damage this experience caused to her recovery.
3. You Get What You Pay For
Nowhere is this statement less applicable than in nursing home care. In fact, I'd replace it with another shibboleth - "Buyer Beware." Our own research, encompassing more than 6,000 nursing homes and more than 100 assisted living facilities shows no relationship between cost and quality of care. You may find quality care in an expensive facility, or you may not! Similarly, the fact that a facility is low-cost does not indicate whether you'll get poor, average, or quality care. You have to do your homework. Relying on price as the sole indicator of quality care can lead to disastrous results.
4. Adequate Staffing Equals Quality Care
A recent report by the Senate's Special Committee on Aging indicated that quality care for a single nursing home resident requires more than three hours each day of nursing and nursing aide time. However, statistical analysis of the latest federal database on nursing home deficiencies indicates no relationship between quality of care and staffing levels. This finding is consistent with a number of university studies.
What should you look for, then, in nursing home staffing levels?
There is a level below which nursing homes are so understaffed that quality care cannot be provided. I'd suggest that you not consider any home providing a level less than two hours per day per resident. For levels greater than this, I'd focus not on the number of hours available for care but on the motivation of staff available to provide care. Those who are motivated to care for the elderly will do so. Those who are motivated only by a paycheck will probably provide shoddy care regardless of their numbers.
5. A Well-Known Chain Will Provide the Best Care
This is another myth that can lead to tragedy. Sometimes, well-known companies do provide top-quality care. In other instances, however, a quick review of newspapers and magazines will show you other companies with long records of legal troubles stemming from accusations of neglect and abuse. One such company has been sued simultaneously by several states' attorneys general.
How will you know? The company is not likely to tell you, so you won't know unless you take the time to look into the company's historical performance.
There you have it - 5 myths exploded!
What does work? There is no substitute for your own personal investigation. With a little research, with personal visits to nursing homes before you sign anything, you can avoid many of the difficulties that have come to those who relied on such myths.
This article was reproduced with permission from the author, Phyllis Staff, Ph.D. Dr. Staff is an experimental psychologist and the CEO of The Best Is Yet.Net, and the author of How to Find Great Senior Housing: A Roadmap for Elders and Those Who Love Them (2002). Visit her website.
Stay at Home Insurance
Many people assume long-term care insurance is for nursing home care, and it often is, but that's not all it's for. It can also cover at-home care. Basically, it's there to help you if you're having at least a certain amount of trouble performing "daily living" activities such as bathing, dressing, eating, transferring in or out of a bed or chair, and using the toilet. To a lesser degree, it can also aid in activities such as managing money, doing heavy or light housework, taking medications, shopping, preparing meals, and using the telephone. It will typically pay a certain amount per day, which may cover all or part of your needs.
Long-term care insurance can cover expenses related to home care, adult day care, assisted living and nursing care. We at The Center for Elder Law prefer to call long-term care insurance as "STAY AT HOME INSURANCE."
Another misperception about long-term care insurance is that it's for old people. Remember that even young people can become temporarily or permanently incapacitated because of illness or accident. In many cases, disability insurance can cover these risks. But if you're young, you might still want to look into long-term care insurance and what it can offer you. A bonus is that premiums are low for young people, and some policies permit you to pay for a number of years in your youth and will then cover you for the rest of your life. A little exploration can turn up some valuable coverage. The lifetime cost of long-term care insurance premiums usually will not equal the cost of a years care in a nursing home. We believe that if you are healthy enough to buy it, and can afford it without effecting your lifestyle then you should explore it.
If you would like to learn more about long-term care insurance please call The Center for Elder Law at 248.641.PLAN (7526).
The Motley Fool
www.thecenterforelderlaw.com
Research Indicates Vitamin D Reduces Falls
According to a study published in the February 2007 issue of the Journal of the American Geriatrics Society, a high daily dose of vitamin D was found to reduce falls among seniors by 72 percent compared to those taking a placebo. For five months researchers observed 124 seniors with an average age of 89, dividing them into five groups that were given either a placebo or a 200, 400, 600 or 800 IU dose of a vitamin D supplement daily. The only group with a significant difference in fall rates from the placebo group was the 800 IU dose group. Study authors Kerry Broe and Douglas Kiel stated that "Past studies have shown that vitamin D could help prevent falls in seniors, and may be due to a possible strengthening effect the vitamin has on the musculoskeletal system. Until now, we didn't know what dosage amount would be effective." The 800 IU dose is higher than that typically prescribed to seniors.
www.medicalnewstoday.com
You Can Sue Telemarketers
When André-Tascha Lammé was granted a judgment of $3,500 last month in a Sacramento, Calif., small claims court, he heard gasps.
“You could hear people in the courtroom saying, ‘You can sue telemarketers?’” he said. You can. In fact, you can make some decent cash for your trouble.
Lammé started getting pelted with calls from mortgage brokers last year, just as his adjustable rate mortgage was about to reset. Like many consumers, he quickly reached the boiling point over the frequent interruptions. But unlike many consumers, the computer programmer took the time to educate himself – perhaps owing to the spirit of his grandmother, a lawyer for several decades – and quickly discovered the Telephone Consumer Protection Act.
“It specifically deals with unwanted calls,” he said. “For each violation, there is a $500 penalty.” Who gets that money? The call recipient. Lammé read on and found he didn’t have to hire a high-priced attorney to pursue the penalty fees – he could file the case himself.
So far, Lammé has won $6,000 in judgments against telemarketers in three cases. He's not a lawyer, but by filing in small claims court, he's spent no more than $100 in court fees and scarcely more than an hour of his time on any case. Now he wants you to do it, too.
The Telephone Consumer Protection Act of 1991, signed into law by George Bush the elder, led to creation of the ragingly popular Do Not Call List. But tucked away in the bill was another important provision that entitles consumers to take what's called a "private right of action." For each violation of the act, consumers can sue for a $500 penalty. Violations include calling after a consumer has told a company to stop, or failing to provide the consumer with a copy of the firm’s Do Not Call policy.
In his most recent case, heard in January in Sacramento, Lammé was awarded $3,500 for seven violations allegedly committed by Country Club Mortgage Inc. of Visalia. David Mitchell, vice president of Country Club Mortgage, said he couldn’t comment on the litigation.
Suing a telemarketing firm might sound like a paperwork headache beyond the means of most people, but it’s not, said Lammé. Small claims court papers are easy to file, he said. In Sacramento County, he doesn't even have to walk down to the courthouse. He can file online.
"It only took me five or 10 minutes to file," he said. "No more than a half-hour total."
In two prior cases, Lammé didn't even have to go to court. Two other companies settled with him for about $2,500 after he filed his case.
Web-filing streamlines the process
Suing telemarketers is not new, but Web-based court forms have made it much easier. Electronic filing is slowly becoming standard at small claims courts across the country, said Emily Doskow, editor of "Everybody's Guide to Small Claims Court.”
"It's very consumer friendly," she said. "It's been growing in popularity for the last five years."
Despite Lammé’s success, Davids don’t typically triumph over Goliaths in the venue, said Stuart Rossman, director of litigation at the National Consumer Law Center in Boston.
Consumers who pursue a small claims case after frustrating fights with their cable provider, cell phone company or a retail electronics store are in for a rude awakening, he said. In almost all those situations, they long ago waived their right to sue by agreeing to mandatory binding arbitration for disputes.
Don't remember doing that? Well, you did, virtually any time you signed a contract with a service provider, used your credit card or even opened a shrink-wrapped piece of software you purchased at an electronics store. Binding arbitration agreements are everywhere, and they virtually eliminate a consumers' ability to bring small claims court cases.
"Courts will say, ‘You have agreed to arbitration, we can't get involved,’" said attorney Ed Rapacki, who is challenging arbitration clauses in several cases around the country. "At small claims, (the defendant) will file a motion to dismiss or to compel arbitration. They'll say, ‘Here's the contract, here's the arbitration clause.’ And the judge will order you to proceed to arbitration."
The legal basis for mandatory arbitration dates all the way back to the Federal Arbitration Act of 1925, which was designed to allow two parties to streamline court proceedings.
But Rossman said arbitration has turned into a one-sided arrangement that nearly always favors the corporation and forces consumers to unknowingly surrender their rights to use the traditional court system.
"There are a number of things that organizations like banks are doing to protect themselves in those (contracts)," he said. "Mandatory arbitration prevents individuals from bringing claims ... and they are difficult to defeat."
An organization named StopBMA (binding mandatatory arbitration) has been trying to call attention to the issue of arbitration agreements. More information is available at GiveMeBackMyRights.org.
Lammé is a lucky litigant for two reasons: Congress made it clear that penalties awarded under the Telephone Consumer Protection Act should go to consumers, and he is suing companies with which he has no contractual relationship, and therefore can’t have signed arbitration agreements.
How to file
If you are interested in pursuing a small claims case against a telemarketer, Lammé has set up a Web site with instructions at KillTheCalls.com. It includes a handy list of links to various small claims court instruction pages all around the Internet.
In most cases, your small claims court will be located at the county courthouse in the same building as your superior court.
The real trick to successful small claims cases is adequately serving the defendant with a summons indicating they've been sued and must appear in court. That means you'll have to provide the court with a viable address and preferably the name of a corporate executive or officer. That's sometimes easier said than done, but often you can find the information on the state Secretary of State’s Web site.
On court day, it's important to bring supporting paperwork organized in an easy-to-read format. Lammé always brings a copy of the Telephone Consumer Protection Act to hand to the judge. The trials are informal, so you won't need to learn any legal jargon to plead your case. You might feel nervous or intimidated, but acting as your own lawyer is not as hard as it seems, Lammé said. He recommends going to court a day or two before your case just to become familiar with the courtroom procedures.
"Small claims judges are ... sympathetic," to the legally uninitiated, he said. "The judges give the benefit of the plaintiffs. "
You only get one shot to make your case. By filing in small claims as a plaintiff, you waive your right to appeal the verdict or file in any other court.
One other bit of bad news: If you win a judgment, you will likely have a tough time collecting, particularly if your defendant resides in another state. You'll no doubt have to pay additional court fees in an attempt to collect. But you will have time on your side -- in New York and Massachusetts, for example, you have 20 years.
Because Lammé has sued firms that can't disappear overnight, he has been able to collect on his lawsuits. But he's not in it for the money, he said. He thinks consumers’ lawsuits are the best way to end unwanted phone calls.
"If you sue these people, they're going to get the message," he said.
www.redtape.msnbc.com
Top Ten Reasons for Not Getting an Estate Plan
HUMOR: With tongue in cheek, here are the top ten reasons to not have a trust, will or plan. We hope you enjoy this and not take it too seriously.
10. You can help to support many poor attorneys by paying them huge fees to probate your estate.
9. You can be sure to give a lot of your money to an heir who spends it on cool cars and extravagant vacations.
8. You can give 4 - 10 percent of your estate to support the lifestyles of the employees at the probate court.
7. You can keep your heirs from using your money for things like a silly heart operation by having all your assets frozen by the probate court for years.
6. You don't need peace of mind; who needs all that sleep anyway?
5. Because you'll have to be filing many documents in probate court you can help to keep the paper makers in business and thin out the unsightly forests.
4. If you have jointly held property with someone you trust you can help them pay their debts when a collection agency attaches it.
3. All your personal information can become pubic record and will be read and gossiped about by your friends and neighbors for many years to come.
2. It will give your loved ones something to do for years to come driving back and forth to probate court for hearings.
And finally, the number one reason for not getting an estate plan...
1. Your loved ones will be brought closer together as they fight over your personal property, like your recliner, cheap jewelry and complete collection of Doris Day records.
Remember: If you don't have an estate plan, the state has a plan for you!
Special thanks to Ohio attorney Marc Stolarsky for his humorous article.
Drama Over Mama: Tensions Rise As Families Have To Make The Tough Decisions
The tension rose as a brother and his two sisters sorted through their mother's possessions before her move to an assisted-living facility.
He was annoyed that his sisters wanted to reminisce about every photo and book. He wanted to hurry up and finish the job. "Because I was the one who had to do the moving, cleaning, selling, closing, etc., I knew I had to play the heavy," he said.
Eventually, his oldest sister - fed up with her brother's pressuring - walked out. Big sisters, little brothers, black sheep, Dad's favorite - all the old roles resurface when a parent's health is failing and decisions must be made.
With about 20 million Americans providing care for a parent or in-law, such family dramas - often with financial questions lurking unsaid - are common, said Bonnie Lawrence, spokeswoman for the Family Caregiver Alliance. Eighty percent of long-term care is provided by families, not institutions. Even families that don't provide care, though, are choosing a nursing home or making medical decisions about a dying parent.
But getting stuck in an old squabble can sabotage wise decisions, said researchers. To help, some states offer free consulting to families making decisions about elders, and a new school of professional mediation has sprung up to help baby boomers stop fighting with their siblings and refocus on what's best for Mom or Dad. Such services still are rare, though, leaving most families to cope on their own.
Old family dynamics come back like a boomerang during anxiety-producing conversations about aging or ailing parents, said Brian Carpenter of Washington University in St. Louis, who has studied sibling issues. "One person takes charge, the other is more submissive; one sibling is the joker, smoothing over disagreements with humor, while another sibling is the serious one, all efficiency and business," Carpenter said. Sometimes the roles help, because the family originally may have developed them to take advantage of individual strengths, he said.
"In other cases, however, when those roles have never been really helpful, they get in the way of making parent-care decisions, just as they probably got in the way of lots of family decisions throughout life," Carpenter said.
Sisters tend to criticize their brothers for not doing enough, while brothers don't take enough credit for what they do, said Sarah Matthews, a professor of sociology at Cleveland State University, who has conducted research on siblings with aging parents. Her interviews with 149 pairs of siblings found that women and men have different expectations.
Sisters saw their siblings as a team. They expected cooperation. They wanted communication about what each sibling was doing for the parent. Sisters also felt they knew more about what needed to be done.
Brothers, on the other hand, acted independently and expected to negotiate directly with their parent without keeping their sisters informed. The eldest son holds sway in families from some cultural backgrounds, said Dr. Gail Gazelle of Palliative Care Associates in Brookline, Mass. "No matter how bad the parent's relationship has been with that son and how derelict he has been in his caregiving duties, he will be deferred to in decision-making in those families," Gazelle said, "much to the chagrin of the daughters who've been giving care for years."
Focus on parents
Gazelle advises siblings to stay focused on what their parents would want, and to remember that their relationships with siblings will endure long after their parents' deaths.
Among firms offering mediation of such issues is Elder Decisions in Lexington, Mass. Among clients were a sister and her five siblings. Two years ago, the siblings couldn't agree on whether their 80 something parents, both suffering dementia, should remain at home or move to an assisted-living facility. Some of the siblings also felt unappreciated, which clouded their decision-making. The siblings met for mediation - a brother in Israel participated by speaker phone and found common ground. They decided to hire caregivers so their parents could stay at home.
"The act of coming together was a kind of a bonding experience," said one of the sisters. "We realized we really could work through a lot of decisions and challenges."
They did it for their parents. "Our parents raised us. They did the best they could," she said. "We owe them."
The Indianapolis Star
www.indystar.com
For more information on Mediation services contact
The Center for Elder Law at 248.641.7526 or e-mail.
Two Legal Papers You Shouldn't Live Without
You may not need a trust, an elaborate estate plan or even a will. But unless you want a stranger making important decisions for you and your family, there are some things you do need.
Most Americans don't have wills, but that's not the crisis many in the estate-planning industry would have you believe. With a few exceptions - which we'll talk about below - most people's quality of life won't be much improved by a will.
That's because your state already has a basic plan for distributing your stuff when you die. You're dead, so what do you care? If who got your CD player and your comic book collection wasn't important enough for you to bother with a will while you were alive, it certainly won't matter to you after you're gone.
What your state doesn't have, though, is an efficient way to take care of you if you're still breathing but unable to make your own decisions because of incapacitating illness or injury.
So if you get in a car accident and die, your estate will be distributed more or less efficiently. Get in a car accident and end up in a coma, and you could be in a world of hurt.
Your critical decisions made by a stranger?
Who would be authorized to pay your bills or wrangle with insurance companies about your care? Who would decide whether to sue that driver who hit you - or shut off the respirator that's keeping you going?
The state will eventually find someone to fill these roles, after a potentially costly and time-consuming court hearing. But it might not be the person you would want. So at a time when you're most vulnerable, life-and-death decisions could be made for you by a stranger - or an estranged, distant or greedy relative.
That's why you need the following documents:
- A durable power of attorney for health care/Patient Designation, which lets you name who will make day-to-day medical decisions, as well as lets you decide now what type of care you do and don't want to receive if you're terminally ill and incapacitated.
- A durable power of attorney for finances, which designates who will handle money decisions.
Fortunately, you can get these documents - plus a basic will - drawn up by an attorney for about $500, give or take a little in most areas. Our point is, just do it. If you need more convincing, consider the cases of Robert Wendland and Michael Martin. Robert Wendland who was severely injured in a 1993 car crash at age 42, sparking a gut-wrenching court battle between his wife and his mother that ended up before the California Supreme Court. Michael Martin was severely injured in an auto-train accident resulting in a long court battle also between his wife and mother which ended up before the Michigan Supreme Court.
Fight over removing the feeding tubes
Wendland was in a coma for 16 months before recovering what doctors called "minimal consciousness." He could catch a ball and play with infant toys, but couldn't speak, eat, walk, recognize his family or comprehend a Saturday morning cartoon. Doctors said his condition was not terminal but would never improve. Wendland's wife Rose, whom a court had appointed as his conservator, decided he wouldn't have wanted to live as he was and asked doctors to remove his feeding and hydration tubes. Wendland's mother, Florence, went to court to keep him alive. Eventually, California's top court sided with the mother - a few weeks after Robert died of pneumonia after surviving on life support for eight years.
Martin suffered a closed head injury which left him unable to walk or talk, and rendered him dependent on a colostomy and a feeding tube for nutrition. Even though there was testimony (oral) that he didn’t want to be kept alive under life sustaining circumstances, the lower court and higher courts differed as to whether there was enough evidence to permit the withdrawal of life support without a writing. The Supreme Court stated “after painstaking review of the facts of this case, we reverse the Court of Appeals decision because we conclude that there is not clear and convincing proof that Michael made a firm and deliberative decision, while competent, to decline medical treatment in these circumstances.” The Court further stated, “we are mindful that the paramount goal of our decision is to honor, respect, and fulfill the decisions of the patient, regardless of whether the patient is currently competent. The decision to accept or reject life-sustaining treatment has no equal. To err either way has incalculable ramifications. To end the life of a patient who still derives meaning and enjoyment from life or to condemn persons to lives from which they cry out for release is nothing short of barbaric. If we are to err, however, we must err in preserving life.” The accident happened in 1987 and Michael Martin passed away in a Michigan Nursing Home in 2001.
A right to direct your own medical care
Had Wendland and Martin created durable powers of attorney or any other paperwork detailing how and whether life support was to be used and when, the court battle may have been prevented, legal experts said. That's because the U.S. Supreme Court has ruled that every individual has a right to direct his or her own medical care, even if loved ones disagree with those directions.
Thinking about these issues is not fun, which is probably why most people avoid it. You have to ponder some of the grimmest circumstances imaginable. Do I want to be on a respirator if I'm conscious? If I'm unconscious? Do I want food and water withheld? How about pain medication?
Decisions about health care, money
You also have to figure out whom to name as your so-called "attorney in fact," or proxy, to help implement these decisions for you. You don't have to name the same person for both powers of attorney. In fact, many people find that the people they trust to make health-care decisions are different from the ones they want handling their finances.
That said, if you're married or in a committed partnership, that person is a logical choice to fill both roles. But you'll still need backups in case he or she is injured or killed in an accident with you. For the health-care directive, you'll probably want people who are nearby or at least willing to travel to the hospital to be with you, perhaps for an extended time.
The person handling your finances may be able to do so remotely, although you may still prefer to name someone who lives relatively close for convenience sake. In addition to paying your bills and handling insurance claims, the person handling your finances may also need to sell your home or make other complicated moves that require more proximity.
You owe it to yourself and family
No matter how icky you feel about planning for your own demise, you owe it to your kids to spare them the potentially ugly and drawn-out custody battle that could ensue if you don't make these decisions now.
So go make that appointment with an attorney. A small investment of your time could spare you and your loved ones a lot of grief.
Authored by The Center for Elder Law
What to Do if You Inherit an IRA
As more and more people open individual retirement accounts (IRAs) it becomes more and more likely that some of those account will pass from the IRA owners to their beneficiaries. Here’s what you need to know if you “inherit” a traditional IRA:
Options for Surviving Spouses
If you are the sole beneficiary of your spouse’s IRA these are your options:
- Leave the IRA as it is. You can delay annual distributions of a minimum amount (which you have to pay income taxes on) until your spouse would have turned 70½. You can also withdraw funds from the account without penalty (but you will still have to pay the resulting tax).
- Roll over the IRA into a new IRA in your name or treat the IRA as your own. You can now delay annual distributions until after you reach the age of 70½ and you can name your own beneficiaries. However, unless you are over the age of 59½, you will not be able to make withdrawals without incurring penalties.
Options for Nonspouses
If you inherit an IRA from someone other than your spouse these are your options:
- Leave the IRA as it is. You will be required to take minimum annual distributions (and pay the resulting income tax on them) spread over your life expectancy.
- Roll over the IRA into a new IRA in your name. This is a new option available in 2007. You will still be required to begin taking annual distributions (and paying taxes on them), but you will be able to name your own beneficiaries.
Highlights of the Veterans' Benefits Improvement Act of 2006
In December 2006, Congress approved new legislation to help veterans and their families. Some provisions include:
- Increased support for those suffering from blindness, Parkinson’s disease and multiple sclerosis, as well as homelessness
- Approval of $600 million for the repair or replacement of facilities damaged by Hurricane Katrina
- Twenty-two major construction projects in 15 states
- Improved outreach to rural veterans, including tele-health
- More access to long-term care, including a program to allow community hospitals to become eligible for state veterans’ home per diem payments
- Expansion of the veterans’ home loan guarantee program to include cooperative housing units
- A new provision allowing veterans to hire an attorney to help file disability claims and to represent them if a notice of disagreement has been filed
Additionally, in reaction to the May 2006 theft of a VA employee’s laptop containing personal data of over 25 million veterans, the legislation also increased funding to improve the VA’s information security and to better protect veterans’ personal information.
The Herald Journal, December 11, 2006
www.thehj.com
Marine Corps Times, December 11, 2006
www.marinetimes.com
Peace of Mind for $750 a Month
Are you worried about your senior-aged parents living alone? Would you feel better if there was a computer system monitoring their vital signs and sending that information to a nurse every day? Would you pay $750 a month for that peace of mind? A company in Needham, Massachusetts believes that at least some of you will.
Dovetail Health is one of the newest entrants in the growing field of remote monitoring. The company is currently testing a service in ten homes that tracks the health of seniors via a computer hooked up to their phone line. Every morning the seniors weigh themselves and take their blood pressure. The computer sends the information to the company’s headquarters where the numbers are reviewed and a nurse is on call if anything is out of the ordinary.
In the four months since testing began they found one client taking twice as many pills as prescribed, advised one client on how to rearrange her home to make falls less likely, and for a third client, found a local aide who could help her chop vegetables.
Dovetail charges $750 per month for this service, which includes a medication consultant, occasional nurse visits and 24-hour phone help. Medicare and most insurers won’t cover home-health monitoring for healthy seniors, offering only flat fees to patients recuperating from hospitalization.
That hasn’t discouraged the company, who believe that healthy seniors will be willing to pay to keep themselves out of a nursing home, while their children will pay for peace of mind. Still, the cost is high for some families. A researcher at MIT believes the concept is “an interesting idea for the higher end” but that in providing security, it is also taking away independence.
The Boston Globe, December 1, 2006
www.boston.com
Baby Boomers Lose Savings
Paying for Parents’ Care
According to a recent study by the AARP, most Americans believe that Medicare will pay for their parents’ long-term care. This is simply not true. Medicare only covers acute episodes such as heart attack, cancer or repairing broken hips.
That leaves families to pay for the costs of assisted living (average $35,000/year), nursing homes (average $74,000/year) or in-home help, as well as housing, medical supplies and equipment, clothing, home repairs, cellular telephones and other miscellaneous items. These costs can really add up.
A recent article by The New York Times highlighted the experiences and expenses of several Baby Boomers with ailing parents. One borrowed against her 401(k) retirement plan, sold her home and depleted 20 years of savings. Another wiped out her savings account and fell $5,000 into debt flying across the country to care for her mother after she slipped and fell. A third accumulated $20,000 in debt before finally having her line of credit cut off.
One family even flew their nanny to Florida to look after their parents and have been contributing $1,000 per month for the parent’s care, despite the fact that the parents still own a home and have considerable assets.
Although well meaning, this type of spending isn’t sound financial planning. Instead, families should pay all expenses from the parents’ money first, which if depleted would then entitle them to Medicaid. An experience elder law professional can help, allowing Boomers to keep their hard-earned savings.
The New York Times, December 30, 2006
www.nytimes.com
Estate Planning: Deciding Who Gets What
There is a common misperception that only the truly wealthy need to have an estate plan. However, if you own anything worth more than $18,000 (in the state of Michigan), from property to personal items, you need an estate plan to avoid having the state decide who gets whatever there is, from property to investments to even trivial items, such as a cherished family photo album. And the state doesn’t do this for free – your family will have to pay court costs, inheritance and estate taxes, just to have strangers decide who is entitled to your assets.
You can avoid these problems by preparing the proper legal documents. Estate planning is simply deciding on who gets what and having legal papers that document it. A qualified estate planning attorney can guide you through the process, which can be relatively quick or take several months depending on your financial situation and assets. And as long as you have your wits, you can change this document as often as you wish.
Some questions to discuss with your estate planner include:
- Who will be the administrator of my estate?
- How can I provide for my estate after I am gone?
- What fees and costs can I avoid through proper estate planning?
- Who is best qualified to make the decisions when I no longer can?
Although these are all questions many of us do not like to think about, the sooner you take care of it, the sooner you can move on and forget about it. With the beginning of the New Year, it may be a good time to make estate planning one of your New Year’s Resolutions.
Fairfield County Business Journal, December 12, 2006
www.fairfieldcbj.com
Seven Money-Saving Ideas for 2007
It’s the New Year and if you made a resolution to become fiscally fit below are the recommendations of a team of financial advisers to start 2007 on sound footing:
1. Don’t Skimp on Disability and Long-Term Care Insurance
Regardless of how much you earn or the value of your assets, financial planners recommend disability insurance. Consider a policy that allows an increased benefit as income increases as well as one that offers long-term care coverage, if available. A long-term disability could be very expensive, and Social Security disability generally does not provide adequate coverage.
2. Get a Life Insurance Policy
Many retirees cancel their life insurance policy when they leave the workforce, a bad idea according to financial advisers. Instead, insure a large portion of your estate with a one-time deposit in a universal life policy. The investment can grow tax-deferred inside a policy designed to have cash value. If you need the money in the future you can withdraw it without penalty.
3. Save for College
If you have a young child the time to start saving for college is now. If your child is six months old and you begin investing $200 per month in a 529 college savings plan that earns an 8% annual return it would be worth $97,000 when your child reaches the age of 18. However, if you wait until your child is 9 years old to begin investing, that same plan will only yield $32,000 by the time your child is ready to begin college.
Financial planners also recommend starting a 529 plan if you yourself plan to return to school. If you don’t use all the savings on school, you can change the beneficiary to one of your children. For more information on 529 plans, go to www.SavingForCollege.com.
4. Put Your 401(k) Back on Track
Beginning in 2007 you can contribute up to $15,500 ($21,000 if you are age 50 or older) to a 401(k) at work. If you can’t afford that much, make sure you contribute at least enough to qualify for the full company match, which is essentially free money.
Study your investment selections carefully, as companies change investment options frequently and not all funds are top performers in their respective peer investment category. Also, compare your plan to your spouse’s, drawing on the strengths of each to create a more complete portfolio.
If you don’t have a retirement plan at work, consider opening an IRA, Roth IRA or SEP plan. For investors with lower incomes, financial experts recommend the new Roth 401(k) as an excellent alternative to the traditional 401(k) as it enables more value from tax-free distributions.
5. Make Your Cash Work
Check the return on your cash savings account. If it’s not at least 5% then start looking elsewhere. One financial adviser recommends Internet banks, which are FDIC-insured, pay over 5% and have no minimum or time requirements. For other high-yielding accounts, go to bankrate.com.
6. Get Your Estate in Order
You may think estate planning is only for older couples with considerable assets to protect, however, experts say you should think again. A younger family with small children should create a will and designate a guardian for their children. A single individual needs a plan that designates health-care directives and, if you choose to donate your assets to charity, a will or living trust containing those directives as well.
7. Free Up Your Credit
Start the New Year off right by reviewing your credit report. You are entitled to one free report per year from each of the three main credit bureaus. Experts recommend you review one now and then monitor your credit by reviewing the others every four months. For more information go to www.annualcreditreport.com.
msnbc.com, January 2, 2007
www.msnbc.msn.com
What To Do if Your Social Security
Benefit Statement is Incorrect
Every year after the age of 40, you should receive a Social Security benefit statement about two months before your birthday. Study this document carefully, there’s a lot riding on it – the Social Security Administration uses that data to calculate your Social Security benefits, such as retirement, dependent and survivor benefits. What may seem like a minor error to you, such as a few years that have no record of earnings, can make a major difference in the amount of benefits you receive once you retire. In the worst case scenario, you could lose up to $200 a month.
If you notice that your benefit statement has errors, you should correct them as soon as possible. Start by gathering all the documents you have, such as old W-2s, tax returns or pay stubs. If you have these, the error should be corrected fairly quickly.
But what if you don’t have these documents and you no longer work for that employer? What if that employer has been bought by another company, or worse, gone out of business? That makes resolving the error more difficult, but not impossible. Again, start by gathering all the information you may have, no matter how informal, such as:
- The name of the employer, where they were located and when you worked there
- The names and contact information of any former co-workers or supervisors that you may have
- An estimate of you how much you had earned for the missing period
- If your name has changed since that time (due to marriage or divorce), provide the full name that you worked under
Now it’s time to contact the Social Security Administration to discuss the situation. You can call their help line (800.772.1213, Monday through Friday 7 a.m. – 7 p.m.) or stop by your local Social Security office to discuss the situation with someone face-to-face. For quicker service, it’s recommended to call early in the morning and later in the week or month. Whether you call or visit in person be prepared to wait. Depending on how much paperwork you have (or don’t have) and how long ago the mistake occurred, it could take several months to resolve.
Patience is key. Although the process may seem cumbersome, once the error is corrected, you may see a significant increase in overall benefits throughout your lifetime.
Bankrate.com, December 11, 2006
www.bankrate.com
Winter is Heart-Attack Season
Everyone knows that winter is cold and flu season, but did you know that it is also the riskiest time of the year for your heart? A recent study found that the risk of heart-attack was twice as great in January than in July, with 53% more heart-attacks occurring in winter than in summer.
And it’s not just from cold temperatures and shoveling snow. Studies show that heart attack risk in winter is greater even in warmer climates such as Hawaii and Los Angeles. There are several reasons for this increased risk and what you can do to prevent it:
- Falling temperatures – when you’re cold, the body reacts by constricting blood vessels. For those with clogged arteries, this could cause a blockage and trigger a heart-attack. To keep your blood flowing freely, bundle up – always wear a warm jacket, gloves, scarves and hats.
- Shoveling snow – lifting heavy shovels of snow combined with a lack of upper body exercise throughout the year can cause blood pressure to rise. Combined with the cold temperature, heart-attack risk rises. If you must shovel, stay warm and take frequent breaks. Experts recommend that men over age 50 and women over age 60 skip shoveling altogether, and instead buy a snowblower or enlist the help of a teenager.
- Holidays meals & alcohol – For many people the Holidays are a time of excess, when they indulge in richer, higher fat foods and are more likely to binge on alcohol. However, for someone at risk for heart disease, even one high-fat meal could be dangerous, as it can interfere with the lining of the arteries and the chemicals related to blood flow. And increased consumption of alcohol can damage the heart and cause abnormal heartrates. Reduce these risks by sticking to a healthy eating and drinking regime that you follow throughout the year.
- Increased smoke exposure – Holiday time is often party time, when you’re more likely to be exposed to second hand smoke, which has a similar affect as high-fat foods and can interfere with blood flow. If you’re a smoker you may be tempted to smoke more, further increasing your risk of developing a heart-attack. Avoid smoke-filled rooms and if you smoke, quit.
- Cold & flu – Respiratory infections can increase blood clotting and raise heart-attack risk. Recent research has shown that those who have received a flu shot have a lower risk. Start the season right by getting a flu shot.
The Wall Street Journal (Eastern edition), December 11, 2006, pg. R.8
www.wsj.com
Medicare to Reward Doctors Who
Spend More Time with Patients
In an attempt to optimize patient care, a Medicare change to be enacted in 2007 will increase the reimbursement to doctors who spend more time with patients and their families. Specifically, Medicare will pay more to physicians who discuss their patient’s overall health, how to maintain it and how to improve it. Although there is no guarantee that this will have a meaningful effect on patient care, doctors and patient advocates applaud the move.
Medicare covers people age 65 and older and those under age 65 with certain disabilities. These patients typically experience more health problems and require more medications, all of which requires more time with their physician. But the current Medicare fee schedules don’t recognize the need for these patients to have longer visits. Furthermore, Medicare doesn’t reimburse doctors as much as private insurers do, all of which is causing some primary care physicians to no longer see Medicare patients.
Others are more skeptical that the new "reward for face time" incentive will be effective, believing that the length of time a physician spends with a patient depends on the individual physician and how his or her practice is run. In addition, Medicare plans to reduce payments by 5% next year, and it is not known if the reward program will survive after these cuts.
A survey by the American Medical Association found that if the 5% cut is enacted, nearly half of the physicians polled would no longer accept Medicare patients. Medicare says it must make these cuts to offset the increase in the volume of care patients are given.
Fort Wayne Journal Gazette, December 10, 2006
www.fortwayne.com
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