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Partner Howard S. Krooks, Esq., CELA was recently honored at the National Academy of Elder Law Attorneys (NAELA) Annual Conference, in Washington D.C. Mr. Krooks was bestowed the organization's highest honor of becoming a NAELA Fellow. NAELA Fellows are attorneys who have distinguished themselves both by making exceptional contributions to meeting the needs of older Americans and by demonstrating a commitment to NAELA. Election as a Fellow signifies that peers recognize the lawyer as a model for others, and an exceptional lawyer and leader. Mr. Krooks is proud to be honored in the limited elite group of 76 attorneys who hold this title throughout the United States.
 The NAELA conference focused on legislative advocacy and laws affecting the elderly. The key issues discussed were the Elder Justice Act, pooled trust changes and long-term care issues. While in Washington, Mr. Krooks met with staff from the White House, Senator Bill Nelson's office and Senator Mel Martinez's office to discuss long term care issues and how federal lawmaking affects seniors and people with disabilities in the State of Florida.
 We are proud to report that we have raised $2,550 to date for the Alzheimer's Association Southeast Florida Chapter Memory Walk which was held on April 4th in West Palm Beach. It is not too late to support our team! Donations collected up to May 31 will be counted toward our team's total. Help us reach our goal of $5,000. Please click here to visit our team web page and help in our efforts to support this worthy cause by making a donation. We provide The Elder Law Update to our clients and our colleagues who make up a wide range of service providers for seniors and people with disabilities to facilitate the dissemination of helpful and accurate information. We thank you for letting us share our knowledge with you. We continue to welcome your comments and questions. You may send them to Info@ElderLawAssociates.com. |
Financial Downturn Coupled With Changing Estate Tax Rules Mean It's Time to Review Your Estate Plans
 The financial crisis, coupled with possible changes in the estate tax law, make now a good time to review your estate plan. The future of the estate tax will likely be up for debate in Congress soon because one of the priorities of the Obama administration is making the estate tax permanent. Given the uncertain climate, it is important to make sure your estate plan does what you want it to do. Under current law, the estate tax rate is 45 percent for 2009, but the estate tax will be eliminated in 2010. The tax is scheduled to return in 2011 at a rate of 55 percent. The amount of an estate that is exempt from taxes also changes under current law. It is now $3.5 million, but will drop to $1 million when the law is reinstated in 2011. The Obama administration would like to eliminate the one-year repeal of the estate tax. It isn't clear what the permanent rate would be, but according to an article in the New York Times, most tax experts believe the exemption will be kept at $3.5 million and the rate will stay at 45 percent.
The Times article identifies several things to consider when reviewing your estate plan:
- Formula clauses in wills. Wills that give specific amounts to trusts can be problematic given the change in the estate tax. Instead of naming a specific sum to go into a trust, your will could name a percentage of whatever limit is currently in place.
- Bypass or credit shelter trusts. Bypass trusts allow you to put any money up to the exemption amount into a trust. Your spouse would receive income from the trust and the remainder would go to other family members after your spouse dies. The problem with this is that with the exemption being so large, most of your estate could go into a trust, thereby limiting your spouse's inheritance. You may need to make sure the trust is structured in a way that allows your spouse access to the funds.
- State estate tax. States have different exemption amounts that may be less than the federal amount. You may put more money in the bypass trust to avoid paying federal estate taxes, but end up still having to pay state estate taxes. Consult with a lawyer to determine a way to provide your executor with flexibility to deal with this issue.
- Grantor retained annuity trust (GRAT) . A GRAT is a way to avoid gift tax for lifetime gifts of more than $1 million. You put appreciating assets in a short-term (two-year) trust and keep the right to an income stream for the life of the trust. If assets appreciate above a rate set by the IRS, your family members will receive the appreciation. Current law allows you to set up a GRAT that will result in little or no gift tax, but Congress is considering changing the law, so setting up a GRAT now may be especially appealing.
- Family limited partnerships. Family limited partnerships are another giving technique. You can put assets like securities, real estate, or businesses into a such a partnership. Then you can give away shares of the partnership to family members. Because these shares can't be sold to non-family members, the price is discounted. Congress is considering ending the discount, so if you want to establish one of these partnerships, you should act soon.
- Beneficiary designation forms. Money from a retirement account usually passes outside an estate to the person you designate on your beneficiary designation form. With all the consolidation in the financial industry, you should make sure your 401(k) or other retirement account has the correct beneficiary designation form.
To read the entire New York Times article, click here. For a related Times article, click here. |
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What the Stimulus Bill Does for the Elderly
 The American Recovery and Reinvestment Act of 2009, the $787 billion stimulus package that President Barack Obama signed into law February 17, 2009, includes a number of provisions that help the elderly in need as well as the economy. Here are the highlights:
- A one-time payment of $250 in the form of a tax rebate to Social Security recipients, Supplemental Security Income recipients, and veterans receiving disability and pensions. For details, click here;
- $87 billion to temporarily increase the federal Medicaid match to states (FMAP), which could help many adults who receive long-term care services through Medicaid. For details, click here;
- An increase in the reverse mortgage loan limit to $625,500, from the former limit of $417,000, for the rest of 2009. For details, click here;
- An extension until December 2010 for the Qualified Individual (QI) program that pays Medicare Part B premiums for certain low-income Medicare beneficiaries. For details, click here;
- $100 million for grants to states for elderly nutrition services, including Meals on Wheels and Congregate Meals;
- For a link to the full text of American Recovery and Reinvestment Act of 2009, which is more than 1,000 pages long, go to: http://www.opencongress.org/bill/111-s1/show
Con artists have wasted no time in figuring out how to use the stimulus package to bilk Americans out of what little money they may have left. For a Los Angeles Times article, "Don't get taken by these stimulus scams," click here. |
Book Review: 'Who Moved My Dentures?' 13 False (Teeth) Truths About Long-Term Care and Aging in America
 Anthony Cirillo. "Who Moved My Dentures?" 13 False (Teeth) Truths About Long-Term Care and Aging in America. Warren Publishing. Cornelius, NC. 2003. 164 pages.
$14.95 from Amazon (click on book to order).
The general perception of long-term care facilities is of places to be avoided at all costs. This book is intended to dispel that perception. "Who Moved My Dentures?" is written by entertainer and health care consultant Anthony Cirillo, who travels around the country performing for seniors at nursing homes and other venues.
Cirillo highlights the positive aspects of long-term care facilities. Using human interest stories of people he has met through his work, Cirillo shows that these often-dreaded facilities are full of life, including romance, friendships, and activities. He contends that they build resiliency, which in turn leads to longer life.
While Cirillo acknowledges there are problems, he believes that the majority of long-term care facilities have few troubles. In addition, he dispels myths that most long-term care facility residents are mentally ill or suffer from dementia, and instead presents a picture of residents who are active and engaged in the world around them.
Cirillo doesn't discuss nursing home rights and regulations, but he does offer some information on paying for long-term care and tips for how to judge a good facility. "Who Moved My Dentures?" is easy to read, with many heartwarming stories, and presents a different perspective from the one found in most other nursing home-related books.
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Reevaluate Insurance Needs When You Retire
 Along with many other changes, your insurance needs change when you retire. It is a good idea to look at your insurance options and figure out what you need or don't need and where you might be able to achieve some savings.
- Life Insurance. Once you retire, you may no longer need life insurance. If your spouse or other dependents won't lose any income when you die, life insurance isn't necessary. However, sometimes life insurance can be used as part of an estate plan to help pay estate taxes. Consult with your attorney to determine if you need life insurance for that purpose.
- Homeowner's Insurance. As long as you aren't selling your home, you will still need homeowner's insurance, but check with your insurance company to find out if you are entitled to any discounts. You may be eligible for a discount because the house will be occupied more often. If you have enough cash to pay a bigger deductible, you might want to consider raising your deductible in order to save money on the premiums.
- Auto Insurance. Check with your insurance company to see if you are entitled to any discounts. Many insurance companies offer discounts to drivers between the ages of 55 and 70. In addition, you may be able to save on premiums if you are no longer commuting every day.
- Health Insurance. If you retire before Medicare kicks in at age 65 and your employer doesn't offer retiree health benefits, you will need to buy health insurance. You may be able to stay on your company's policy for up to 18 months through COBRA, but after that you will have to find an individual policy. Check with your state insurance department because some states provide assistance with purchasing policies. In addition, some professional organizations offer health insurance. Health insurance premiums are often expensive, but you may be able to save money with a high-deductible plan. (If you plan on retiring after age 65, click here for information on coordinating employer coverage with Medicare.)
- Long-Term Care Insurance. Long-term care insurance can be a good investment to help cover nursing home or other long-term care expenses if the need arises. While the policies are expensive, the younger you are when you buy a policy, the cheaper the premiums. For more information, click here.
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New Study Finds Financial Abuse of Elderly Is Costly and Vastly Underreported
Elder  financial abuse costs older Americans more than $2.6 billion a year and is most often perpetrated by family members and caregivers, according to a new report released by the MetLife Mature Market Institute entitled, Broken Trust: Elders, Family and Finances.
The 40-page report notes that for each case of abuse reported, there are at least four that go unreported. In addition, the economic downturn may increase vulnerability.
The report, which is accompanied by tip sheets for older adults and families on how to prevent elder financial abuse, states that up to one million older Americans may be targeted yearly. Family members and caregivers are the culprits in 55 percent of cases, although financial losses are higher with investment fraud scams.
The National Adult Protective Services Association (NAPSA) suggests that the "typical" victim of elder financial abuse is between the ages of 70 and 89, white, female, frail and cognitively impaired. She is trusting of others and may be lonely or isolated, although reports show that there is a very diverse population of victims.
"Elder financial abuse has been called the 'crime of the 21st century,' " said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. "With the present state of the economy, older Americans are at a greater risk than ever of having their financial security threatened. And, for every dollar lost to theft and abuse, there are still more related costs associated with stress and health care and the intervention of social service, investigative and legal entities.
"This is also a growing problem made greater by the increase in the number of older Americans as targets, the relative wealth of this group, a change in family structure and the availability of technology that may make such abuse somewhat easier," said Timmermann.
Sixty percent of substantiated Adult Protective Services cases of elder abuse involve an adult child, the report found. Sons are 2.5 times more likely than other family members to take advantage of parents. Signs of abuse include indications of intimidation by or fear of a caregiver, isolation from family and friends, disheveled appearance, anxiety about finances, new "best friends" and missing belongings.
"One trait perpetrators of elder financial abuse have in common is that they exhibit excellent persuasion skills," says the report. "They are very good at cultivating relationships and convincing older adults that they are worthy of their trust and money. In general, perpetrators are not bound by conventional norms or business ethics, and rationalize their criminal and abusive behavior."
According to the report, elder financial abuse can be prevented by the following:
Education about one's rights and about the various types of consumer fraud and scams;
Financial conservatorship and/or power of attorney for those who are vulnerable;
Assignment of responsibility to a trusted outside person, if children are a concern;
Additional media attention for this issue;
Training financial professionals to properly assist older customers;
Assistance from social services, medical/nursing personnel, government agencies;
Reporting suspected cases of financial abuse to local authorities.
To read the full report, click here.
For the ElderLawAnswers article, "Elder Abuse Web Site Offers Resources and Contacts," click here. For the article, "Identifying and Dealing With Financial Abuse of the Elderly," click here. |
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Elder Law Associates PA is a boutique elder law firm that practices exclusively in Medicaid and long term care planning including long term care insurance, Medicaid applications, home and community-based Medicaid waiver services, diversion program benefits, nursing home benefits, spousal refusal applications, and Medicaid fair hearings and appeals; nursing home and assisted living facility residents' rights litigation; asset preservation planning with a special focus on planning in light of the Deficit Reduction Act of 2005, including personal service agreements, the purchase of life estates, income producing real estate and spenddown planning; disability planning, including special needs trusts and guardianship; estate planning, including wills and trusts and advance directives; and probate, which encompasses estate and trust administration as well as litigation.
We assist clients in planning for the possibility of disability, incapacity, home health care, assisted living and/or nursing home placement. Our firm enables clients to avoid impoverishment caused by the escalating cost of long term care, to maintain their right to make health care decisions and to avoid unnecessary medical treatment.
We hope you have enjoyed The Elder Law Update. If you have questions about something you read, elder law matters or issues concerning persons with disabilities, we would be delighted to hear from you. We serve as an elder law resource to many professionals and organizations and want to become your elder law resource as well. You can reach us at Info@ElderLawAssociates.com.
Warm regards,
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Ellen S. Morris, Esq. & Howard S. Krooks, Esq., CELA
Elder Law Associates PA
phone: (561) 750-3850 / (800) 353-3752
fax: (561) 750-4069
This publication is intended for general information purposes only. It is not intended to constitute individual legal advice to any specific client. |
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