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The Talk

No, we are not talking about the birds and the bees and how to have a conversation with your young son or daughter.  We are talking about the conversation with your parents as they age and what are their wishes in regards to caregiving, long-term care, death, and the planning associated with it.  Most families shy away from these conversations and essentially treat them as faux pas conversations and avoid them at all costs. While avoiding the conversation can make it seem like it’s going away and make it seem like everything is okay inevitably that decision will blow up and will become a very painful situation for those involved.

 

As an estate planning and elder law attorney, I cannot begin to tell you how many families avoided this conversation with their parents and regretted it later.  I have never had a family come back to me after I have suggested that they sit down and have “The Talk” and told me that they regretted it and wished they would’ve waited.  They all say that it was great to get everything out on the table.  

 

Most parents don’t talk about it with their children mainly because they don’t think that their children want to discuss it.  We often hear parents saying that my kid clams up or my kid gets very nervous and just doesn’t want to talk about me or my spouse dying.  Therefore it’s easier just not to have the conversation.  Believe it or not, most parents are open to having the conversation because they are dealing with it on a daily basis and they understand that it’s better to have the conversation or at least to think about it ahead of time.

 

Our advice is to try to start the conversation to understand what your parent’s wishes are for their golden years. Where do they want to live as they age?  Do they have an idea as to how they would like to be treated if they were ever to be in an end-of-life situation?  Where would they like to be buried?  Do they have their financial affairs in order and do they have professionals that they are working with that you could contact if something happened to them?  What is going to happen when if they have to go into a nursing home how can you assist them with their planning?  What happens when they die?

 

These are often great conversation starters.  An estate planning and elder law attorney could also assist you with filling in the details and understanding how to put these answers in legal documents to make them binding in the future.  Don’t underestimate having your parents go to a workshop on estate planning and elder law, it will get them thinking and may also provide the opportunity for the conversation to occur.

 

The holidays and times that families together often end up being the time that people get to discuss these topics and we encourage that you have “The Talk” not only for your parents but for you and your family as well.  As much as your parents will thank you for wanting to have the discussion to figure all of the information out you will also be relieved to know that they have thought a lot about it and have a lot of strong opinions and beliefs and now you know that you can carry out their wishes.  One thing that I have found is that people always want to do what’s best for mom and dad and oftentimes want to do what mom and dad intended.  If you have had the conversation and have documents in place everyone will be on the same page and no one has to speculate or argue about what was intended.

If you are interested in learning more about Medicaid crisis planning, please call our office at 717-845-5390, or click here to RSVP to our upcoming workshops.

 

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To Marry Or Not To Marry, But To Plan Accordingly Either Way / York, PA

Happy-old-coupleLawyers urge unmarried clients to draw up agreements specifying which partner is responsible for expenses and who will inherit assets. Many couples ignore the advice and share expenses informally. But the loose arrangements can result in messy legal problems if the couple splits or one partner dies suddenly.

It has been said that marriage is a young persons’ game, but love isn’t. These days, more and more Americans are meeting new loves or (finally) their true loves later in life. These later-in-life marriages can be tricky. On the other hand, even if you leave marriage to the young and idealistic, there is some planning that really has to be in place.

The sociology of later-in-life marriage is fascinating, both in thinking about the recent jump in numbers and the more recent decrease. Either with or without tying the knot it is also a practical issue with legal ramifications, and for those later-in-life loves not destined for marriage there is some practical advice to be gleaned in a recent article on the subject in The New York Times titled “Welcoming Love at an Older Age, but Not Necessarily Marriage.

The article has the voice of several experts and more than a few horror stories to share. You see, marriage is an emotional union, but it is also an economic and legal one. This may come far more naturally to 20-somethings than boomers. It seems the older you get the more you have and the more you have to think about.

If you are to marry, then the separate pasts, lives, and families have to account for it all and mesh together, which is a tricky enterprise when everything from college financial aid for children/grandchildren to Medicare or Medicaid benefits may instantly be affected.

To not marry doesn’t necessarily make all of those issues go away, but it might add new ones. For example, how will you legally care for one another and how will you own assets like the home. And of course, there is always the possibility of a split – even this late in life – and the question then of how protected your assets comes to the forefront.

Do take a look at the original article, especially if marriage is not the end-goal, and be sure to structure this new stage in life so that it might also be a happy one.

For more information about planning accordingly, please visit my estate planning website.

Reference: The New York Times (April 25, 2014) “Welcoming Love at an Older Age, but Not Necessarily Marriage

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Handing Down a Headache and Not a Home: Pitfalls of the Reverse Mortgage / York, PA

MP900442233Similar scenes are being played out throughout an aging America, where the children of elderly borrowers are learning that their parents’ reverse mortgages are now threatening their own inheritances.

The reverse mortgage has its benefits, especially for many retirees needing some additional cash to make ends meet in the current interest rate environment. However, as the financial community has been quick to point out, there are also some serious drawbacks to consider.

The biggest drawback to bear in mind is that your heirs and loved ones may bear the brunt of the burden when it comes to those drawbacks. It is important to know how reverse mortgages work before you sign up for them. While you are at it, make you’re your heirs and other inheritors know what to expect.

The issue of reverse mortgages and inheritances is not a new difficulty. Nevertheless, it does seem to be a new sour spot between borrower families and lenders. The New York Times recently reported on the situation as more and more baby boomers are finding themselves discovering that the “Pitfalls of Reverse Mortgages May Pass to Borrower’s Heirs.” Whether you are the one with a reverse mortgage (or considering taking one out) or one of those on the inheriting end, this article is worth reading.

Ideally, a reverse mortgage is supposed to assist an elderly person or couple by providing a “loan” against the value of their home. The home equity serves as the security for the loan. The loan is really only expected to be dealt with at the time of their passing (or, earlier should they move). The home is likely their most valuable and yet entirely non-liquid asset, after all. Following the death of the elderly person or last surviving spouse, the lender either forecloses on the house to secure repayment of the reverse mortgage or, by law, the family/inheritors are allowed to pay off the balance or some lesser settlement amount.

Apparently, more and more lenders are playing hard ball. They are hiding the pay-off options, the settlement options, and even moving straight to foreclosure proceedings within weeks of the passing of the borrower. This means that many baby-boomers finally inheriting the home either will not inherit the home at all or end up fighting against a bureaucracy.

Even if it’s not intentional on the part of lenders, it’s still a very real problem for even diligent heirs to face. It’s important to know the difficulties that may be inherited, whether you are set to leave the house behind or whether you’re set to inherit it and want to keep it in the family.

For more information about pitfalls of a reverse mortgage, please visit my estate planning website.

Reference: The New York Times (March 26, 2014) “Pitfalls of Reverse Mortgages May Pass to Borrower’s Heirs

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Long-Term Care Lapse Logistics / York, PA

In the meantime, cases like this demonstrate anew how vigilant families need to be. If your older relative has a long-term care policy, photocopy the page listing the company, policy number and claims contact information. Keep the insurance company updated on new addresses, yours (if you are the third-party designee) and your relative’s. It wouldn’t hurt, if the policyholder is becoming forgetful, to check bank statements or call the company to be sure premiums are paid.

Do your elderly loved ones have a long-term care insurance policy or something similar? If yes, then they likely are relying on it to cover the potentially catastrophic financial risk that is long-term care. If yes, then what happens if they forget to pay the premiums?

Do I have your attention now? If yes, then you will want to read a recent horror story in The New York Times – The New Old Age Blog titled “The Policy Lapsed, but No One Knew.

Generally speaking, any form of “insurance” exists to help minimize various financial risk exposures to the insured. In essence, you pay a premium you can afford (and the insurance company will accept) to cover a risk you cannot afford. Once insured, you really only need to think about the much easier task of remaining insured, which usually means making timely premium payments.

Unfortunately for some families, remaining insured can sometimes present a few challenges uniquely associated with old age itself. What happens when the loved one begins to develop dementia and simply stops making the premium payments on the policy? Dementia is rather subtle before it becomes fairly dramatic. Accordingly, you may need to implement some financial safety precautions.

The terrible lesson coming out of the original article is how the caregiver/son was diligent, but a mistake by his father at the bank snowballed into missed payments and a lapsed policy. The worst part of the horror story is that the cancellation notice from the insurer was never received – and the family was unaware of the policy lapse until they went to claim its benefits.

MP900439295Ultimately, the burden of proof was not on the insurer regarding whether the premium notice had been sent and received.

Will there be a legislative reaction to stories like these? It seems this case will not go anywhere soon, but there may be more like it across the country.

For more information about Long Term Care Lapse Logistics, please visit my estate planning website.

Reference: The New York Times – The New Old Age (January 31, 2014) “The Policy Lapsed, but No One Knew

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Medicare Rehab Requirements Relaxed? York, PA

MP900407553What does this mean? Imagine you have a severe stroke. Before Jimmo, most people thought Medicare would pay for physical therapy only as long as that PT was helping you get better. For instance, Medicare would pay if therapy helped increase the number of steps you could walk without assistance. Now, Medicare will pay for PT even if it only helps you maintain your current ability to walk.

Whenever the rules for receiving Medicare benefits change it has a real impact on real beneficiaries and patients. Sometimes legal changes occur literally overnight, while at other times the changes are more subtle. After a landmark lawsuit a year ago, there may be some tangible effects to the system – for the better. This is especially the case when an elderly loved one requires skilled nursing or physical therapy.

The landmark case was Jimmo v. Sebelius. Recently, Forbes explored the legal evolution Jimmo sparked in an article titled “When Medicare Will Pay for Skilled Nursing or Physical Therapy.

The salient change concerns one of the guiding principles of Medicare, or at least what has been the common wisdom for years. This principle is the so-called “improvement standard.” The idea was that Medicare would pay for skilled nursing care or physical therapy only when the patient’s health had the potential to improve. Accordingly, the payments would cease when there was no more improvement to be had.

Problem: skilled nursing and physical therapy are not necessarily just for curing a problem, but for managing it, especially among the elderly. Jimmo, however, provides that payment for these services will be made if they are “reasonable and necessary to prevent or slow further deterioration” and that benefits “cannot be denied based on the absence of potential for improvement or restoration.”

Real changes have been slow as providers test the waters, and all the other rules regarding skilled care are in place. Nonetheless, an apparent misunderstanding has been put to rest and an entire class of real beneficiaries and patients can now be assured of receiving benefits. Those previously denied benefits may even have the option of having their coverage re-reviewed.

For more information about Skilled Nursing & Medicare, please visit my estate planning website.

Reference: Forbes (January 31, 2014) “When Medicare Will Pay for Skilled Nursing or Physical Therapy