Elder Law Articles

Many movies and television shows include a scene where a family gathers around a big table after a relative has died to listen to the reading of the will. While this makes for great drama, things don’t usually happen this way in the real world. In fact, there is no requirement that a will be read out loud to anyone.

So what does happen with the will?

Once the will is located, it should be given to the estate’s attorney. Instead of reading the will aloud, the estate’s attorney sends copies to anyone who may have an interest in it. This includes:

• The executor or personal representative, who is in charge of applying for probate, managing the decedent’s property, and making sure the instructions in the will are carried out. [Read more...]

Many people use the terms “Alzheimer’s disease” and “dementia” interchangeably, but the two have different meanings, and it can be very important to know the difference.

Dementia is a general term for memory loss that is severe enough to interfere with daily life. The signs of dementia may include forgetfulness; difficulty making plans, thinking ahead, or using language; and a change in character traits, among other symptoms.

Alzheimer’s disease is a partially hereditary disease that causes a loss of brain cells. The symptoms start out mild, but grow progressively worse over time. An early symptom of Alzheimer’s is difficulty learning new information. [Read more...]

Nearly 10 million adults age 50 and over are now caring for an aging parent, according to a new study published by MetLife.

There has been a dramatic rise in the number of men and women providing parental care over the past decade and a half, the study notes. In 1994, only 9 percent of women and 3 percent of men in that age group were providing care to parents. By 2008, the percentage of female caregivers had more than tripled to 28 percent, while the figure for males had quintupled to 17 percent.

Daughters are more likely to provide help with personal activities such as dressing, eating and bathing, while sons are more likely to provide financial assistance, the study found. [Read more...]

IRAs are popular investment vehicles for retirement. But if you don’t need all the assets in your IRA to support yourself after you retire, they can also be an excellent tool for estate planning.

Handled properly, an IRA can provide tax-sheltered growth for your heirs for many years to come. But you need to be careful, because it can be easy to make costly mistakes.

An IRA, or Individual Retirement Account, is a personal savings plan that allows you to set aside money for retirement. The advantage of an IRA is that you may be able to deduct some or all of your contributions from your taxes. [Read more...]

Everyone has heard the terms “will” and “trust,” but not everyone knows the differences between the two. Both are useful estate planning devices that serve different purposes, and both can work together to create a complete estate plan. One main difference is that a will goes into effect only after you die, whereas a trust can take effect as soon as you create it. A will is a document that directs who will receive your property at your death and appoints a legal representative to carry out your wishes. By contrast, a trust can be used to distribute property before death, at death, or afterwards.

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for the benefit of another person, called a “beneficiary.” A trust often has two types of beneficiaries – one set that receives income from the trust during their lives, and another set that receives whatever is left over after the first set of beneficiaries dies. [Read more...]

When choosing a beneficiary for a retirement plan, it’s important to understand how your spouse will be treated under the plan. Surviving spouses are treated differently under 401(k)s and IRAs. In general, 401(k) plans provide protections for surviving spouses that IRAs don’t. 401(k) plans are governed by a federal law known as ERISA. Under this law, a surviving spouse is the automatic beneficiary of a retirement plan. If an employee wants to name someone other than a spouse as a beneficiary, the spouse must consent to this in writing. (There are some exceptions; for example, the spouse may have to be married to the employee for a certain amount of time). IRAs are not governed by ERISA, however, so they don’t include the same protections for spouses. Importantly, this is true even if a 401(k) is rolled into an IRA.

In a recent legal case, a husband rolled his 401(k) into an IRA after he retired. He named his children as the IRA’s beneficiaries. After he died, his wife claimed that she was entitled to the account funds as his surviving spouse. She argued that because her husband had rolled his 401(k) into the IRA, she should receive the same protections that the 401(k) had given her. But a federal appeals court in California disagreed, deciding that IRAs aren’t governed by the ERISA rules even if the funds originated in a 401(k). [Read more...]

The new health reform law that took effect on January 1, 2011 includes free preventive services for Medicare recipients. Under the law, people with regular Medicare will no longer have to pay a co-pay, coinsurance or deductible to receive preventive services that are highly recommended by the U.S. Preventive Services Task Force – including screenings for breast cancer, colon cancer, diabetes and heart disease, as well as smoking cessation counseling. Private Medicare plans (known as Medicare Advantage plans) may still charge for these services, but many do not.

Also under the new law, Medicare Part B beneficiaries can now receive an annual wellness visit free of charge. During this yearly visit, your doctor or other health practitioner recognized by Medicare (such as a nurse practitioner) will update your medical history and current prescriptions; measure your height, weight, blood pressure and body mass index; create a schedule over the next 5 to 10 years to screen for diseases; and screen for cognitive issues as well.

And Medicare now pays in full, without co-pays or deductibles, for the initial “Welcome to Medicare” program that Medicare has offered since 2005 to beneficiaries within 12 months of their becoming covered under Part B. For a detailed list from the Medicare Rights Center of preventive services that will no longer require out-of-pocket payments, go to: http://bit.ly/a5gVTV.

A new product is making “reverse mortgages” more affordable. Reverse mortgages typically have high fees, but the new “Saver” reverse mortgage allows borrowers to dramatically lower their upfront costs – as long as they’re willing to borrow a smaller amount.

A reverse mortgage allows homeowners who are at least 62 years old to transform the equity in their home into liquid cash without having to move or make regular loan repayments. The homeowner receives a sum of money from the lender, usually a bank, based on the value of the home, the age of the borrower, and current interest rates. The loan doesn’t have to be repaid until the last surviving borrower dies, sells the home, or permanently moves out. [Read more...]

The first of the 78 million baby boomers turned 65 on January 1, 2011, and about 10,000 boomers a day will be reaching that age between now and 2030. If you’re among those about to turn 65, then it’s time to think about Medicare.
You become eligible for Medicare as soon as you turn 65, and delaying your enrollment can result in penalties.
Medicare consists of four major programs:
• Part A covers hospital stays.
• Part B covers doctors’ fees.
• Part C allows you to receive additional types of coverage such as vision and dental insurance.
• Part D covers prescription drugs. [Read more...]

The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2011.

Generally, you can deduct part of your premiums if the premiums, together with your other unreimbursed medical expenses, amount to more than 7.5 percent of your adjusted gross income.

The maximum amount of premiums you can deduct each year depends on your age at the end of the year:

For policies issued in 1997 or later, the premiums are deductible so long as the policies meet certain requirements. For instance, they must give you the option of “inflation protection” and “non-forfeiture protection.” (You don’t have to choose these options, but the policy has to offer them.)

For policies issued before 1997, the premiums are deductible if the policies were approved by the state insurance commissioner. The rules for deductibility are different if you’re self-employed. In that case, you can generally take the deduction as long as you made a net profit, even if your medical expenses don’t exceed 7.5 percent of your income.

Nursing home and assisted living costs increased much faster than the rate of inflation from 2009 to 2010, according to a survey by MetLife. The average cost of a private room in a nursing home rose 4.6 percent to $83,585 a year – or $229 a day. The average cost of an assisted living facility climbed 5.2 percent, to $39,516 a year or $3,293 a month.

The average charges for home health care aides and adult day care were unchanged, after both jumped about 5 percent the year before. Home care aides average $21 per hour and adult day care services average $67 per day. [Read more...]

The federal estate tax is back in effect as of January 1, 2011. Originally, the tax was to apply to all estates over $1 million, at a rate of 55%.

The exact details have been in flux. By the time you read this, there might be a deal in Congress that would raise the limit and lower the rate. However, any such deal is likely to be temporary – which means that the $1 million limit and the 55% rate will be scheduled to return in a couple of years or so. And this means that it’s important for many people to begin to plan for the estate tax now, if they haven’t already done so. [Read more...]

A growing number of Medicare beneficiaries who are transferred from a hospital to a nursing home are discovering that Medicare won’t pay for the first 20 days of their nursing home stay.

Ordinarily, Medicare covers nursing home stays entirely for the first 20 days as long as the patient was first admitted to a hospital as an inpatient for at least three days. But here’s the problem: A lot of people are discovering that there were never actually “admitted” to the hospital for three days, but rather were in the hospital only under “observation.” [Read more...]

A new U.S. government report warns that a number of “continuing care retirement communities” are facing financial problems, while regulation of these facilities is spotty. Continuing-care communities offer an entire continuum of care – from independent housing to assisted living to round-the-clock nursing services – in a single facility, with the goal of allowing residents to age in place. [Read more...]

Moving can be stressful for anyone, but it’s particularly stressful for seniors. On top of hiring movers, packing, and setting up a new home, there is the emotional toll of leaving a house the senior may have lived in for decades. If a move seems overwhelming, a “senior move manager” may be able to help. [Read more...]

Have you considered your pets when planning your estate? If not, you should, according to the Humane Society of the United States, the nation’s largest animal protection organization. “Since pets have shorter life spans, people don’t think to include them in their estate plans,” says Anne Culver, Director of Disaster Services for the Society. “But animals left homeless when an owner has failed to make adequate provisions for their care are distressingly common in animal shelters around the country.” [Read more...]

Even if you have paid off your mortgage, you still have to keep on top of property taxes. Most people who have a mortgage don’t pay their property taxes directly. Instead, a little of each mortgage payment is put into an escrow account, and the lender pays the taxes from the funds in the account. Thus, when many older people pay off a mortgage, and begin having to pay property taxes directly, they aren’t used to it, and they may miss their payments. [Read more...]

If you intend to leave your children equal shares of your estate, don’t forget to consider any money or property held jointly with a child. If you have recently added a child to a bank account, own property jointly with one of your children, or have set up a payable-on-death account with a child as the beneficiary, you might want to revise your will. [Read more...]

Taking care of an aging parent can be a full-time job. Adult children may have to give up paying jobs in order to provide care. Even if they don’t, they may still devote hundreds of hours of their time and make sacrifices in many other ways.

Often, aging parents want to find ways to compensate their caregiver children. Unfortunately, this is more complicated than it seems, because many techniques have tax or other consequences that aren’t obvious at first glance. For instance:

• Gifts to children. You can compensate your children directly through gifts of money. However, you’ll need to be aware that gifts of more than $13,000 in a calendar year can make you subject to a large gift tax, and even smaller gifts can complicate financial or Medicaid planning. There are often ways around this, but you’ll want to talk with an attorney to determine the best method. [Read more...]

While there is no way to guarantee that nothing will go wrong in a nursing home, some careful research and planning can help reassure you or your loved ones that you’ve made a good choice. Here are some things to consider when looking for a facility:

Location. No single factor is more important to the quality of care and quality of life of a nursing home resident than visits by family members. Care is often better if the facility knows someone is watching and cares. Moreover, visits can be the high point of the day or week for the nursing home resident. So make it as easy as possible for family members and friends to visit. [Read more...]

Long-term care insurance is expensive. One way that some people reduce the cost is to buy a policy that will cover care only for a limited period of time (such as three years), as opposed to a policy that covers care indefinitely.

Last year, almost a third of individual buyers purchased a three-year policy, according to the American Association for Long-Term Care Insurance.

But is that sufficient coverage? To answer that question, the Association recently published a report on the statistical likelihood that three years of coverage will be enough. [Read more...]

If you’re over age 65 and you’re preparing to move to another state – or even to another county – you’ll need to make sure your Medicare plan will still be in effect after you move.

Whether your policy will still be valid depends in part on whether you have original Medicare or Medicare Advantage. If you have original Medicare, moving shouldn’t affect your benefits. Your Medicare plan will still be valid when you move. However, if you have a Medigap policy as well, you’ll need to check with your insurer. While the insurance company will most likely continue to renew the policy as long as you continue to pay your premiums, it might be able to change the amount of the premiums based on your new area of residence. [Read more...]

The power of attorney is one of the most important estate planning documents you can have. It allows you to appoint someone to act for you as your agent if you become incapacitated. Without such a document, your loved ones won’t be able to make decisions for you or manage your finances. They’ll have to ask a court to appoint a guardian or conservator – an expensive and time-consuming process that could result in someone making decisions for you that you wouldn’t agree with.

Although “do-it-yourself” power of attorney forms are readily available, it’s much better to have an attorney draft the document for you. There are many issues to consider, and this is a case where one size definitely does not fit all. For instance:

•  What can your agent do? The power of attorney document sets out what an agent can and cannot do. Powers typically include buying and selling property, managing a business, paying debts, borrowing and investing money, engaging in legal proceedings, cashing checks, and collecting debts. They may also include the power to consent to medical treatment. [Read more...]

While Medicare covers nursing home stays, exactly what it covers is complicated and in some cases it can be much more limited than people think. If you or a loved one might need a stay in a nursing home, it’s very smart to understand the rules ahead of time, so you can be prepared and not have an unpleasant surprise.

Medicare covers up to 100 days of “skilled nursing care” per illness. However, in order for the care to be covered, the patient must enter a nursing home (or a Medicare-approved “skilled nursing facility”) within 30 days of a hospital stay, and the hospital stay must have lasted at least three days. The care in the nursing home must be for the same condition as the hospital stay. In addition, the patient must need “skilled care.” This means that a doctor must order the treatment, and the treatment must be provided daily by a registered nurse, physical therapist, or licensed practical nurse. [Read more...]

You can generally begin claiming Social Security benefits at any age between 62 and 70. Most married men begin claiming benefits at 62 or 63 – despite the fact that their family’s overall expected lifetime income from Social Security would be much greater if they waited a few years, because the amount you get from Social Security each year increases the longer you wait to start receiving it.

The people who are most affected are wives who outlive their husbands. While men who claim benefits at age 62 lose an average of 4 percent of their lifetime expected income as a result of claiming early, if they die before their wife, the wife will typically receive a survivor’s benefit that is 20% less than she would if her husband had waited a few years. That can make a big difference! [Read more...]

When two or more people own property – whether it’s a home, a condominium, or a piece of land – the relationship between the owners is known as a “tenancy.” There are a number of different kinds of tenancy. Understanding the differences is important, because different kinds of tenancy can mean different rules for whether an interest in the property will pass at an owner’s death outside of probate and whether creditors can claim the property.

Tenancy comes in three main forms: tenancy in common, joint tenancy, and tenancy by the entirety. Each form has advantages and disadvantages, and must be properly specified in the deed or conveyance. If the form isn’t properly specified, then state default rules will determine which form of tenancy applies – which might result in an outcome you’d rather avoid.  [Read more...]

A number of changes are coming to health insurance plans that supplement Medicare’s coverage, which are commonly known as “Medigap” plans.

Medicare doesn’t cover all medical expenses – even if you have Medicare, you’re still responsible for co-payments, deductibles, and items that are excluded from coverage. To supplement Medicare’s coverage, you can purchase a Medigap policy from a private insurer.

There are currently 12 different Medigap plans available, identified by the letters A through L. Each plan offers a different combination of benefits, allowing you to choose the combination that is right for you. [Read more...]

The federal estate tax expired at the end of 2009, and this has created a serious problem for many people who haven’t revised their wills in a while.

The tax applied in 2009 to estates of more than $3.5 million. It is slated to come back in 2011, and apply to estates of more than $1 million. Most people expected that Congress would “fix” the estate tax before it expired, and there would be a new exemption amount, such as $3.5 million, for 2010 and beyond.

However, Congress has done nothing so far – at least as of when this newsletter was written. And while it might seem great if there is no estate tax in 2010, it’s actually a problem in many cases…even for people whose estates aren’t anywhere near $3.5 million. [Read more...]

As people get older, they often hire people to perform services for them, such as housekeeping, cooking, driving, paying bills and personal care.

But what’s new is that a lot of seniors are hiring their own children. They’re signing contracts with the children specifying what services will be performed and how much the children will be paid. [Read more...]

Inflation may be low and the economy may be struggling, but the cost of elder care is continuing to increase, according to a new Metlife survey.

The average cost of a private room in a nursing home rose 3.3 percent in 2009 to $79,935 a year – or $219 a day. The average cost of an assisted living facility also climbed 3.3 percent, to $37,572 a year or $3,131 a month. [Read more...]

The amount you can deduct on your taxes as a result of buying long-term care insurance has been increased by the IRS for 2010.

Generally, you can deduct part of your premiums if the premiums, together with your other unreimbursed medical expenses, amount to more than 7.5 percent of your adjusted gross income. [Read more...]

Tax-free college savings plans and prepaid tuition programs – known as “529 plans” – can be used to buy computer equipment and Internet services for students during 2010. This change was part of the stimulus bill enacted by Congress last year.

Many grandparents and other relatives set up 529 plans (named for section 529 of the federal tax code) to help young people with college expenses. Family members can contribute up to $13,000 a year to these plans ($26,000 for a couple) without incurring gift tax. The money can then grow in the account tax-free. Family members who want to quickly get money out of their estate for tax reasons can “front-load” their contributions and give $65,000 right away (or $130,000 for a couple), as long as they don’t make any other contributions for five years. [Read more...]

Once you’ve written a will and created an estate plan, you need to figure out what to do with the will itself. Obviously, it’s very important to keep track of the location of your current will – as well as any old wills.
The safest place to keep the original copy of your will is in a bank safe deposit box, but it might not always be the most practical. If the will is in a safe deposit box, it might be difficult for your family to access the box after you die.

Another option is to keep it at home in a fire-proof safe – as long as your family members know how to open the safe.

You can also ask your attorney to keep the original copy of the will. If you do so, be sure to provide your attorney with updated contact information if you move. [Read more...]

The criminal conviction this past October of the son of New York society matron Brooke Astor on charges of taking advantage of her while she suffered from Alzheimer’s disease could lead to more prosecutions for financial abuse of the elderly…and this includes ordinary families, not just wealthy socialites.

As many as a million older people are taken advantage of financially each year, according to a study by MetLife. In most cases, the culprits are family members or caregivers. [Read more...]

Sometimes a nursing home wants to get rid of a particular resident. It might think the resident (or the resident’s family) is “difficult.” The resident might require more expensive or demanding care than others. Or the resident might be a Medicaid recipient, and the nursing home could make more money by replacing him or her with a private-pay individual.

The usual way that nursing homes get rid of residents is to transfer them to a hospital, then refuse to let them back in. This can obviously be very traumatic for the resident. However, it’s sometimes possible for residents to fight back and challenge such discharges legally. [Read more...]

If for any reason you become unhappy with the person you’ve appointed to make decisions for you under a durable power of attorney, you can revoke the power of attorney at any time. But you must take a few steps to ensure that the document is properly revoked.

First, you should put the revocation in writing. This revocation should include your name, a statement that you are of sound mind, and your wish to revoke the power of attorney. You should also specify the date the original power of attorney was executed and the person who was selected as your agent. Sign the document and send it to your current agent as well as to any institutions or agencies that have a copy of the power of attorney. [Read more...]

Although you can begin receiving Social Security benefits anytime after age 62, the longer you wait, the higher the benefit you will receive. Of course, many people need money right away and can’t afford to delay. But if you’re married, there is a strategy that might allow you to claim some benefits immediately and then claim more benefits later.

First, a little background: You have three options for when to begin taking your Social Security retirement benefits: You may begin taking benefits between age 62 and your full retirement age, you can wait until your full retirement age (which varies depending on your age), or you can delay benefits and take them anytime up until you reach age 70. [Read more...]

Most people can’t afford to buy a gold-plated long-term care insurance policy that offers a large daily benefit and that will continue paying indefinitely. If premiums for this type of Cadillac plan are not in your budget, what should you cut – the daily benefit amount or the number of years of coverage?

Most financial experts advise cutting the length of coverage. This is because if you don’t use the full daily benefit, you don’t lose it. In fact, it can be used to lengthen your period of coverage. [Read more...]

 One of the major benefits of Medicare is its coverage of hospitalization. Medicare covers 90 days of hospitalization per illness (plus a 60-day “lifetime reserve”). However, if you’re admitted to a hospital as a Medicare patient, the hospital might try to discharge you before you are ready. While the hospital can’t force you to leave, it can begin charging you for services. Therefore, it’s important to know your rights and how to appeal. Even if you don’t win your appeal, appealing can buy you crucial extra days of Medicare coverage. [Read more...]