Posts Tagged ‘elder law’
Wednesday, August 17th, 2011 by Moore McLaughlin
As nursing home and long-term care costs continue to rise, recent legislation has made it more difficult to qualify for Medicaid to pay for nursing home costs. Long-term care insurance can help cover expenses, but long term care insurance contracts are notoriously confusing. How do you figure out what is right for you? Elderlaw attorney Jill E. Sugarman provides the following tips to help you sort through all the different options.
Find a strong insurance company. The first step is to choose a solid insurance company. Because it is likely you won’t be using the policy for many years, you want to make sure the company will still be around when you need it. Make certain that the insurer is rated in the top two categories by one of the services that rates insurance companies.
What is covered. Policies may cover nursing home care, home health care, assisted living, hospice care, or adult day care, or some combination of these. The more comprehensive the policy, the better. A policy that covers multiple types of care will give you more flexibility in choosing the care that is right for you.
Waiting period. Most long-term care insurance policies have a waiting period before benefits begin to kick in. This waiting period can be between 0 and 90 days, or even longer. You will have to cover all expenses during the waiting period, so choose a time period that you think you can afford to cover. A longer waiting period can mean lower premiums, but you need to be careful if you are getting home care. Look for a policy that bases the waiting period on calendar days. For some insurance companies, the waiting period is not based on calendar days, but on days of reimbursable service, which can be very complicated. Some policies may have different waiting periods for home health care and nursing home care, and some companies waive the waiting period for home health care altogether.
Daily benefit. The daily benefit is the amount the insurance pays per day toward long-term care expenses. If your daily benefit doesn’t cover your expenses, you will have to cover any additional costs. Purchasing the maximum daily benefit will assure you have the most coverage available. If you want to lower your premiums, you may consider covering a portion of the care yourself. You can then insure for the maximum daily benefit minus the amount you are covering. The lower daily benefit will mean a lower premium.
It is important to determine how the daily benefit is calculated. It can be each day’s actual charges (called daily reimbursement) or the daily average, calculated each month (called monthly reimbursement). The latter is better for home health care because a home care worker might come for a full day, one day, and then only part of the day, the next day.
Benefit period. When you purchase a policy, you need to choose how long you want your coverage to last. In general, you do not need to purchase a lifetime policy three to five years worth of coverage should be enough. In fact a new study from the American Association of Long-term Care Insurance shows that a three-year benefit policy is sufficient for most people. According to the study of in-force long-term care policies, only 8 percent of people needed coverage for more than three years. So, unless you have a family history of a chronic illness, you aren’t likely to need more coverage. If you are buying insurance as part of a Medicaid planning strategy, however, you will need to purchase at least enough insurance to cover the five-year lookback period. That way you can transfer assets to your children or grandchildren before you enter the nursing home, use the long-term care coverage to wait out Medicaid’s new five-year look-back period, and after those five years have passed apply for Medicaid to pay your nursing home costs (provided the assets remaining in your name do not exceed Medicaid’s limits).
If you do have a history of a chronic disease in your family, you may want to purchase more coverage. Coverage for 10 years may be enough and would still be less expensive than purchasing a lifetime policy.
Inflation protection. As nursing home costs continue to rise, your daily benefit will cover less and less of your expenses. Most insurance policies offer inflation protection of 5 percent a year, which is designed to increase your daily benefit along with the long-term care inflation rate of 5.6 percent a year. Although inflation protection can significantly increase your premium, it is strongly recommended. There are two main types of inflation protection: compound interest increases or simple interest increases. If you are purchasing a long-term care policy and are younger than age 62 or 63, you will need to purchase compound inflation protection. This can, however, more than double your premium. If you purchase a policy after age 62 or 63, some experts believe that simple inflation increases should be enough, and you will save on premium costs.
For more information on long-term care insurance, contact Jill E. Sugarman, Esq. at 401-421-5115 ext 215 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: asset protection, Asset Protection Planning, assisted living facilities, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, insurance, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care expenses, long-term care insurance, Medicaid, Medicaid planning, Medicare, nurses, nursing homes, Providence, Rhode Island, seniors, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Monday, August 1st, 2011 by Moore McLaughlin
Taking care of an elderly loved one, whether due to dementia or illness, can be exhausting and stressful. Often due to the lack of outside help, a devotion to the person needing care, or the tunnel vision that can accompany exhaustion, caretakers don’t take care of themselves.
But they must. Failure to do so can lead to burnout, injury or illness. If you are the caregiver, any of these results will harm your ability to care for your loved one.
Here are some ways to take care of yourself and make sure you can take care of your loved one. The list is adapted from New York Times columnist Jane Brody’s excellent Nov. 17, 2008, column, “Caring for Family, Caring for Yourself.”
- Take a break every day. Make sure you have some down time to relax, whether it’s watching television, reading the newspaper, or calling a friend. Make sure you do at least one thing for yourself every day.
- Take a break every week. If possible, get out of the house at least once a week to do something you want to do — go to the movies, have dinner with friends, whatever works for you. If you cannot get someone to cover for you, have friends over to your house.
- Get respite. Take a break of at least a week at least once a year. You can hire help in the house or arrange for a respite stay at an assisted living facility or nursing home.
- Get regular exercise. It’s necessary for your health and to moderate any stress you may be feeling. If you can’t get out of the house to exercise, buy or rent a stationary bicycle or other exercise equipment.
- Eat well. Make sure you stay healthy and have sufficient energy to do what you need to for your loved one.
- Get enough sleep. Lack of sleep will sap your patience and reserves, making it more difficult for you to provide the care you would like to give your loved one.
- Join a support group. While you may or may not be in this alone, you’re not the only one in this situation. Others are going through similar experiences. Here are sources for finding support groups: the National Family Caregivers Association (www.nfcacares.org) and its Community Action Network (www.thefamilycaregiver.org), and the Family Caregiver Alliance and its online support group (www.caregiver.org).
- Hire a geriatric care manager. An experienced geriatric care manager can help you determine whether your loved one is receiving the most appropriate care and what resources in the community are available to assist you. For more on geriatric care managers, click here.
- Consult with an elder law attorney. In order to access many of the programs recommended by the geriatric care manager, your loved one will have to qualify financially. An elder law attorney can help you qualify for these benefits. In addition, make sure you don’t get hit with a double financial whammy of losing years of earnings while you’re caring for your family member and losing his or her assets due to squabbles with other family members or Medicaid estate recovery. Also, you may be entitled to some pay by the state for the care you are providing. To speak with a qualified elder law attorney, contact Jill E. Sugarman, Esq. at 401-421-5115 ext 217 or by e-mail at JSugarman@McLaughlinQuinn.com.
- Lotsa Helping Hands. Check out www.lotsahelpinghands.com as a resource for getting volunteer help in your community and coordinating the help your family and friends already provide.In short, think of the care you are providing as a marathon, not a sprint. You need to pace yourself and conserve your energy for the long-term. Too much stress and exhaustion won’t help your loved one.
In short, think of the care you are providing as a marathon, not a sprint. You need to pace yourself and conserve your energy for the long-term. Too much stress and exhaustion won’t help your loved one.
Tags: asset protection, Asset Protection Planning, assisted living facilities, caregiver, dementia, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Family Caregiver Alliance, geriatric care manager, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, National Family Caregivers Association, nurses, nursing homes, Providence, Rhode Island, seniors, social security, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Thursday, July 28th, 2011 by Moore McLaughlin
Long-term care can be very expensive, but many long-term care expenses can be deducted from your taxes. Two important recent decisions by the U.S. Tax Court provide guidance on when caregiving services are deductible. In one decision, the court ruled that payments to non-medical caregivers are still deductible as medical expenses; in the other, the court held that a written agreement is required in order for a deceased woman’s estate to deduct more than $1 million in care that her son allegedly provided her.
In the first case, Estate of Lillian Baral v. Commissioner, Lillian Baral suffered from dementia and her doctor recommended that she get 24-hour-a-day care. Her brother hired caregivers to assist Ms. Baral with daily activities. On her tax return, Ms. Baral included a deduction for medical expenses for the payments to the caregivers. The IRS said the expenses were not deductible and asked for more money. Following Ms. Baral’s death, her estate appealed the matter to the U.S. Tax Court.
Under tax law, expenses for medical care may be claimed as an itemized deduction if they exceed 7.5 percent of adjusted gross income. (Note that this threshold will rise to 10 percent of adjusted gross income in 2012.) The definition of medical expenses includes the cost of long-term care if a doctor has determined you are chronically ill. “Chronically ill” means you need help with activities like eating, going to the bathroom, bathing, and dressing, or you require substantial supervision due to a severe cognitive impairment.
The Tax Court agreed with Ms. Baral that the payments to the caregivers for assisting and supervising Ms. Baral are deductible medical expenses. The expenses qualified as long-term care services even though the caregivers were not medical personnel because a doctor had found that the services provided to Ms. Baral were necessary due to her dementia.
In the second case, Estate of Olivio v. Commissioner, New Jersey resident Anthony Olivo provided nearly full-time care to his mother from 1994 to 2003, during which time he largely abandoned his practice as an attorney. After his mother died, Mr. Olivo became administrator of her estate.
Mr. Olivo filed a tax return for the estate and claimed a deduction of $1.24 million as a debt he said the estate owed him for the care he had provided his mother over the years. He claimed he had an oral agreement with his mother that after she died she would compensate him for his services. The IRS disallowed the deduction and Mr. Olivo filed a petition with the Tax Court.
The U.S. Tax Court agreed with the IRS that the estate is not entitled to the deduction. Applying the law in New Jersey, which presumes that services to a family member living in the same household are given for free (many states have similar laws), the court ruled that without a written agreement between Ms. Olivo and her son, it must assume that Mr. Olivo provided the services without any expectation he would be repaid.
Check with your CPA to determine if your long-term care expenses are deductible.
Tags: asset protection, Asset Protection Planning, assisted living facilities, chronically ill, deduction, dementia, elder law, elderlaw, Elderlaw/Law For Life, Estate of Lillian Baral, Estate of Olivio, Estate Planning, income tax, internal revenue code, Internal Revenue Service, IRS, itemized deduction, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care expenses, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, medical expenses, Moore McLaughlin, nursing homes, Providence, Rhode Island, seniors, Tax Court, U.S. Tax Court, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, IRS and state tax collections, Tax Current Events and News, Tax planning
Monday, July 18th, 2011 by Moore McLaughlin
Funerals rank among the most expensive purchases many consumers will ever make. A traditional funeral costs about $6,000, although “extras” like flowers, obituary notices, acknowledgment cards and limousines can bring the total to well over $10,000. Moreover, people often “overspend” on a funeral or burial because they think of it as a reflection of their feelings for the deceased.
To help relieve their families of some of these decisions, an increasing number of people are planning their own funerals, designating their funeral preferences, and sometimes even paying for them in advance. In fact, many elder law attorneys advise prepayment as a way to invest in assets that will not be countable by Medicaid or SSI.
However, consumers lose millions of dollars every year when pre-need funeral funds are misspent or misappropriated. A funeral provider could mishandle, mismanage or embezzle the funds. Some go out of business before the need for the pre-paid funeral arises. Others sell policies that are virtually worthless.
Consumers received some protection from unscrupulous funeral providers with the creation of the Funeral Rule in 1984. This rule, administered by the Federal Trade Commission (FTC), requires funeral providers to give consumers accurate, itemized price information and other specific disclosures about funeral goods and services. Unfortunately, the Funeral Rule does not apply to many of the features of pre-need contracts, which are governed solely by state law. Every state except Alabama has laws covering pre-need contracts, but protections vary widely from state to state. Some state laws require the funeral home or cemetery to place a percentage of the prepayment in a state-regulated trust or to purchase a life insurance policy with the death benefits assigned to the funeral home or cemetery. Other states, however, offer buyers of pre-need plans little or no effective protection.
Following are some questions that the FTC recommends asking before signing up for a pre-need funeral arrangement. The questions are from the FTC’s excellent “Funerals: A Consumer Guide.”
- What happens to the money you’ve prepaid? States have different requirements for handling funds paid for prearranged funeral services.
- What happens to the interest income on money that is prepaid and put into a trust account?
- Are you protected if the firm you dealt with goes out of business?
- Can you cancel the contract and get a full refund if you change your mind?
- What happens if you move to a different area or die while away from home? Some prepaid funeral plans can be transferred, but often at an added cost.
In addition, find out exactly what you are paying for and compare with other funeral providers. And make sure the price is locked in and additional money won’t be required at the time of death.
These pitfalls can be avoided, of course, by making decisions about your arrangements in advance, but not paying for them in advance. Be sure to tell your family about the plans you’ve made; let them know where the documents are filed. If your family isn’t aware that you’ve made plans, your wishes may not be carried out. You may wish to consult an attorney on the best way to ensure that your wishes are followed.
One way to ensure there is money available to pay for the funeral is to set up a payable-on-death account (POD) with your bank. Make the person who will be handling your funeral arrangements the beneficiary (and make sure they know your plans). You will maintain control of your money while you are alive, but when you die it is available immediately, without having to go through probate.
Sometimes it’s more convenient and less stressful to “price shop” funeral homes by telephone. The Funeral Rule requires funeral directors to provide price information over the phone to any caller who asks for it.
If you run into problems or have questions about your state’s laws, most states have a licensing board that regulates the funeral industry. Or, contact Attorney Jill E. Sugarman at 401-421-5115 ext 217 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: asset protection, Asset Protection Planning, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Federal Trade Commission, funeral, Funerals: A Consumer Guide, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, nursing homes, payable-on-death account, pre-need funeral funds, pre-paid funeral, prearranged funeral services, Providence, Rhode Island, seniors, social security
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Tuesday, June 28th, 2011 by Moore McLaughlin
More and more seniors are living together without getting married. According to U.S. Census data, the number of cohabiting seniors nearly doubled between 1989 and 2000. For some seniors, marriage isn’t financially worth it‚ they don’t want to lose their former spouses’ military, pension, or Social Security benefits. Other seniors don’t want to have to pay their partners’ medical expenses or deal with the objections of children worried about their inheritance.
There are risks to cohabiting without marriage, however. You have no rights with regard to your partner’s health care decisions. In addition, you may be considered “common law” married by a court after you die, possibly causing a dispute between your partner and your children. If you and your partner plan to live together without getting married, you can take a number of steps to ensure that you are protected and your wishes are followed.
- Sign a cohabitation agreement. If you live in a state that recognizes common law marriage or even if you don’t (some courts have recognized the rights of unmarried partners who lived together in non-common law states), you may want to enter into a cohabitation agreement with your partner. The agreement can state your intentions not to marry or to make any claims against each other. It can also specify the division of household expenses and what will happen to your house in the case of death or breakup. You should consult a lawyer for assistance in drawing up an agreement.
- Provide access to health care decision making. If you are not married, you have no right to participate in your partner’s health care decisions or even, in some circumstances, to visit your partner at the hospital. To avoid this situation, you need several documents. You can sign a Health Insurance Portability and Accountability Act (HIPAA) medical release to allow each other access to the other’s medical information. In addition, you should have a health care proxy and/or a durable power of attorney for health care, naming your partner as your agent to make health care decisions. For more information on medical directives, contact attorney Jill E. Sugarman at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com.
- Sign a durable power of attorney. A power of attorney allows your partner, or whomever you appoint, to make financial decisions for you if you become incapacitated. Without a power of attorney, the court will have to appoint a conservator or guardian to make those decisions and the judge may not choose the person you would prefer.
- Update your will. Your will should be clear about what happens to your possessions when you die, including your house and its contents. It is particularly important to specify what will happen to your house if it is owned by only one partner.
- Think about the tax consequences of gifts. Married couples can leave each other as much as they want without paying estate taxes; unmarried couples cannot. If you want to leave money to your partner, consult an estate planning attorney or tax expert to find ways to limit estate taxes. For more on estate planning, contact attorney Jill E. Sugarman at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com.
- Look into registering as domestic partners. Some cities and states have domestic partnership laws, which may allow unmarried couples to take advantage of their partners’ health insurance or to participate in health care decisions.
Tags: asset protection, Asset Protection Planning, assisted living facilities, cohabitation, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, Massachusetts, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, nurses, nursing homes, Providence, Rhode Island, seniors, social security
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Tuesday, June 28th, 2011 by Moore McLaughlin
Americans who take time off work to care for their aging parents are losing an estimated $3 trillion dollars in wages, pension and Social Security benefits, according to a new MetLife study. Meanwhile, the percentage of adult children providing basic care for their parents has skyrocketed in recent years.
Nearly 10 million adults age 50 and over care for an aging parent, MetLife says. For the individual female caregiver, the cost impact of caregiving on in terms of lost wages, pension and Social Security benefits averages $324,044. For male caregivers, the figure is $283,716.
The study also identified a dramatic rise in the share of men and women providing basic parental care over the past decade and a half. In 1994, only 9 percent of women and 3 percent of men and were providing care. By 2008, the percentage of women caregivers had more than tripled to 28 percent, while the figure for men had quintupled to 17 percent. “Basic care” is defined as help with personal activities like dressing, feeding, and bathing. Daughters are more likely to provide basic care and sons are more likely to provide financial assistance, the study found.
“Undoubtedly, the impact of the aging population has resulted in increased need within families for family caregiving support,” the study notes.
At the same time, MetLife found that adult children age 50 and over who work and provide care to a parent are more likely to have fair or poor health than those who do not provide care to their parents.
The study was based on an analysis of data from the 2008 National Health and Retirement Study (HRS).
The findings have implications for individuals, employers and policymakers, MetLife concludes. Individuals, it says, should consider their own health when caregiving and should prepare financially for their own retirement. Employers can provide retirement planning and stress management information and assist employees with accommodations like flex-time and family leave.
On the policy side, although only a few states mandate paid family and medical leave, “clearly this policy would benefit working caregivers who need to take leave to care for an aging parent,” the study notes. MetLife also notes that the CLASS Act, a voluntary long-term care insurance program that is part of the new federal health reform law, will provide some coverage for long-term care needs as well as raise public awareness of the issue.
For more on the study, “The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents,” click here.
For more information on estate planning and long-term care options, please contact Jill E. Sugarman, Esq. at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: asset protection, Asset Protection Planning, assisted living facilities, caregiver, caregivers, CLASS Act, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, MetLife, Moore McLaughlin, nurses, nursing home care, nursing homes, Providence, Rhode Island, seniors, social security
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning
Monday, June 20th, 2011 by Moore McLaughlin
Many movies and television shows have 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 is a great dramatic scene, it doesn’t usually happen like that in the real world. 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 out loud, the estate’s attorney sends copies of the will to anyone who may have an interest in it. Obviously the person who is named as executor or personal representative is entitled to a copy of the will. He or she is in charge of applying for probate, managing the decedent’s property, and making sure the instructions in the will get carried out.
The estate attorney will also send a copy of the will to anyone who is named as a beneficiary. If any minor children or incapacitated individuals are named as beneficiaries, then their guardians should receive a copy of the will. In addition, if there is the possibility of a legal challenge to the will, the attorney may want to send a copy to any legal heirs, close family relatives, or previous beneficiaries who aren’t included in the will, so that they have notice. This will limit the time frame for them to file a will contest.
Another person who may be entitled to a copy of the will is the estate’s accountant, and if the estate is taxable, then the IRS may get a copy of the will as well. If the will funds a revocable trust, then the successor trustee of the trust is entitled to a copy of the will. Note that once a will is probated, it is available to the public and anyone can read it.
For more information on estate administration, contact Attorney Jill E. Sugarman at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com.
Tags: asset protection, Asset Protection Planning, assisted living facilities, elder law, Elderlaw/Law For Life, Estate Planning, internal revenue code, Internal Revenue Service, IRS, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Providence, Rhode Island, seniors
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Monday, June 20th, 2011 by Moore McLaughlin
In the recent economic downturn, many homes have lost considerable value and stock portfolios have plummeted. If this is the case for you, do you need to change your will? What if your income and assets have increased significantly? If your finances have changed markedly since you wrote your will, you should check your estate plan to see if you need to make any changes.
If your will or estate plan divides your estate into percentages for beneficiaries, then changes in value won’t affect how your estate is distributed. However, if you include specific bequests in your will, a fall or rise in your estate could have consequences. For example, if your estate plan gives $50,000 to your favorite charity and the rest of your estate to your children, a reduction in the value of your estate could mean your children won’t get as much as you intended.
A change in value of assets could also affect your estate plan if you intended to treat your children equally by giving them assets of equal value. For example, suppose your will gives your house worth $500,000 to your daughter and your stock worth $500,000 to your son. If the value of either the house or the stock portfolio increases or decreases significantly in value, your children will no longer receive equal gifts. It is also important to update your estate plan if the overall nature of your assets has changed. For example, if you sold the stock and bought real estate instead, this will affect the distributions to your children.
In addition, if your estate has significantly increased in value, it is important to reassess whether your estate will be subject to estate taxes. In 2008, estates worth more than $2 million are subject to federal estate taxes. In 2009, estates subject to federal taxes must be worth more than $3.5 million. After that, it isn’t clear what the estate tax will be, so it is important to be prepared for any eventuality.
Contact Attorney Jill E. Sugarman at 401-421-5115 or by e-mail at JSugarman@McLaughlinQuinn.com for more information.
Tags: asset protection, Asset Protection Planning, assisted living facilities, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, income tax, Internal Revenue Service, IRS, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Moore McLaughlin, Providence, Rhode Island, seniors
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Wednesday, April 20th, 2011 by Moore McLaughlin
Having power of attorney over a family member is a big responsibility and sometimes it makes sense to share that responsibility with someone else. But when two people are named co-agents under a power of attorney, conflicts can arise. Unfortunately, if the conflict can’t be resolved, it may be necessary to get a court involved.
A power of attorney allows a person to appoint someone called an “agent or “attorney-in-fact” — to act in his or her place for financial purposes when and if the person ever becomes incapacitated. A power of attorney can name one agent or it can require two or more agents to act together.
If you are acting as a co-agent under a power of attorney, but you and your fellow agent disagree on a course of action or one party has stopped participating in decision making, what can you do? The first thing is to check the wording of the power of attorney document to see if it sets up a procedure for resolving disputes. If the power of attorney itself doesn’t help, you should contact an elder law attorney. The attorney can tell you if your state’s power of attorney laws offer any guidance. There may be a state statute that deals with disputes.
If the dispute still cannot be resolved, the final step may be to file a petition in probate court to let the court decide it. Or if the court finds that one of the agents is not acting according to the incapacitated person’s best interests, it can revoke the agent’s authority. Unfortunately, taking the matter to court takes time and money.
If you are creating a power of attorney and want more than one agent to share responsibility, but want to minimize conflict, you can name two agents and let the agents act separately. Naming more than two agents can get cumbersome and make communication difficult. An alternative to naming co-agents is for the power of attorney document to name agents in sequence. The first-named agent acts alone, but if she cannot serve for some reason, the next person on the list will serve.
Tags: asset protection, Asset Protection Planning, attorney-in-fact, co-agents, durable power of attorney, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, health care power of attorney, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, nursing homes, power of attorney, Providence, Rhode Island, seniors, social security, veterans
Posted in Asset Protection Planning, Elderlaw/Law For Life, Estate Planning, Tax planning
Wednesday, April 20th, 2011 by Moore McLaughlin
The number of seniors facing credit card debt has been growing. The average credit-card debt for consumers over 65 more than doubled from 1992 to 2004, to $4,907. Credit card debt can be especially problematic for seniors, who typically have a fixed income. If you or someone you love is having trouble making credit card payments, there are several options:
- Try negotiating. A credit counseling agency or attorney may be able to negotiate with the credit card company for lower fees or interest rates. If the debtor is relying solely on Social Security for income, it may even be possible to have the debt forgiven. Note, however, that if the debt is forgiven it can count as income, which may create tax consequences or affect Social Security payments.
- Reverse mortgage. If the debtor owns a house and is over 62 years old, a reverse mortgage may provide enough money to pay off debt. With a reverse mortgage, instead of paying the bank money to build up equity, homeowners use the equity in their homes to take out loans. The loan does not have to be paid back until the house is sold or the homeowner dies. While reverse mortgages may look like no-lose propositions on the surface, they also have some significant downsides.
- Tap into life insurance. Permanent life insurance policies build a cash value, which can be used as collateral for a loan or withdrawn from the account. This money can be used for any purpose, including paying down credit card debt. Keep in mind, however, that loans or withdrawals will reduce the death benefit.
- Bankruptcy. Filing for bankruptcy is not an easy solution. In 2005, a tough bankruptcy law went in to effect, making it much more difficult to get bankruptcy protection. For example, bankruptcy is available only to individuals whose income is below a certain level, and the homestead exemption, which allows you to protect all or some of the equity in your home, is stricter. Before filing for bankruptcy be sure to discuss your options with an attorney.
- Do nothing. It may sound crazy, but one option is to do nothing and let the credit card companies sue the debtor. If the debtor owns a house, the court may put a lien on it. If not, the debt may be written off or reduced. An attorney can tell you if this is the right step for you take.
Regardless of what steps the debtor takes, debtors have the right not to be harassed by credit card companies. The Fair Debt Collection Act prohibits certain conduct by credit agencies attempting to collect debts. For example, creditors may contact debtors only between the hours of 8am and 9pm, may not use abusive or profane language, and must stop contacting debtors if the debtors request it in writing.
Tags: asset protection, Asset Protection Planning, assisted living facilities, credit cards, elder law, elderlaw, Elderlaw/Law For Life, Estate Planning, Fair Debt Collection Act, Jill E. Sugarman, Jill Sugarman, Long-term care, long-term care insurance, mclaughlin & quinn, Medicaid, Medicaid planning, Moore McLaughlin, nursing homes, Providence, Rhode Island, seniors
Posted in Asset Protection Planning, Bankruptcy, Elderlaw/Law For Life, Estate Planning, Financial workout
