Problems With Guardianship System Is Focus of John Oliver Show

John Oliver recently highlighted problems with the guardianship system on his HBO show, Last Week Tonight with John Oliver. The comedian provided a scary and funny explanation of how guardianship works, ending with a public service announcement by William Shatner, Lily Tomlin and others explaining steps you can take to avoid the guardianship.

The show focuses on the abuses of a professional guardian in Las Vegas, April Parks, previously reported on by ElderLawAnswers. She is clearly at the far end of guardianship exploitation and is currently facing prosecution on more than 200 charges. But Oliver does a good job of explaining how guardianship takes away rights without providing oversight of the people appointed to handle personal and financial decisions for people who can no longer make decisions for themselves.

He explains how courts do not have the resources necessary to provide proper oversight, reporting that only 12 states certify professional guardians. In addition, according to an investigation by the Government Accountability Office, states don't even do credit or criminal background checks on candidates for guardianship.

Nevertheless, the reality is that guardianship and conservatorship actually work in most cases. Family members seek the legal authority they need to make personal, financial and legal decisions for loved ones who have lost the capacity to do so for themselves. In many cases, these non-professional guardians don't follow through with the court reporting required by law, not because they have anything to hide but because they don't know that they have the obligation or don't know how to provide the reporting. More robust follow up by the probate court could seek to enforce the reporting rules, but also could result in much more red tape without much more protection for the people under guardianship or conservatorship.

In any event, the best approach is to avoid the need for guardianship and conservatorship by putting durable powers of attorney and health care proxies in place ahead of time when you can choose who you would like to make decisions for you when necessary. Even if you're not at risk of exploitation because your children or grandchildren would step in, the need for court intervention causes otherwise unnecessary expense and delay.

This is what estate planners counsel their clients all the time. But William Shatner, Lily Tomlin, Rita Moreno, Fred Willard, and Cloris Leachman do it so much better. With some side discussions about hippos, they recommend executing a durable power of attorney and health care proxy naming someone you trust to make decisions for you if you can't for yourself. They all agree that the person they most trust for this role is Tom Hanks.

To watch the clip from the show, click here. (Warning: The clip contains occasional profanity.)

For more information about guardianships, click here

Medicare coverage for nursing homes

The Medicare standard for coverage of skilled care in a nursing facility has long been understood to continue only until the patient is no longer improving. Usually, this is about 20 to 100 days maximum. At that point in time, Medicare a coverage ceases. However, the case of Jimmo v Sebelius decided that this improvement standard was not a correct interpretation of the law. That case was concluded in 2013 with CMS following up with regulatory changes in 2014. Yet we still see determinations using the improvement standard when patients should be getting continuing Medicare coverage in some situations. For more information see
http://www.medicareadvocacy.org/new-fact-sheet-skilled-nursing-facility-coverage-and-jimmo-v-sebelius/

New Brokerage Account Safeguards Aim to Protect Seniors From Financial Scams

New rules have been put in place to protect seniors with brokerage accounts from financial scams that could drain the accounts before anyone notices.

As the population ages, elder financial abuse is a mounting problem. Vulnerable seniors can become victims of scammers who convince them to empty their investment accounts. According to the Financial Industry Regulatory Authority (FINRA), the organization that regulates firms and professionals selling securities in the United States, its Securities Helpline for Seniors has received more than 12,000 calls and recovered more than $5.3 million for seniors whose investment funds were illegally or inappropriately distributed since the helpline opened in April 2015.

Now, FINRA has issued two new rules designed to help investment brokers or advisors better protect seniors’ accounts from financial exploitation. The rules, which went into effect in February 2018, apply when opening a brokerage account or updating information for an existing account.

First, the broker or investment advisor must ask the investor for the name of a trusted contact person. This is someone the broker can contact if there are questions about the account. The trusted contact is intended to be a resource for the broker to address possible financial exploitation and to obtain the customer’s current contact information and health status or learn about any legal guardian, executor, trustee or holder of a power of attorney.

The second rule allows a broker to place a temporary hold on disbursements from an account if those disbursements seem suspicious. This rule applies to accounts belonging to investors age 65 and older or investors with mental or physical impairments that the broker reasonably believes make it difficult for the investor to protect his or her own financial interests. Before disbursing the funds, the brokerage firm will be able to investigate the disbursement by reaching out to the investor, the trusted contact, or law enforcement.

Prior to the new rules, issues of privacy prevented a broker from contacting family members when suspicious activity was detected, and under previous FINRA rules brokerage firms risked liability for halting suspicious transactions.

To read more about the new rules, click here.

For Frequently Asked Questions about the new rules, click here.

Be on the Lookout for New Medicare Cards (and New Card-Related Scams)

The federal government is issuing new Medicare cards to all Medicare beneficiaries. To prevent fraud and fight identity theft, the new cards will no longer have beneficiaries’ Social Security numbers on them.

The Centers for Medicare and Medicaid Services (CMS) is replacing each beneficiary’s Social Security number with a unique identification number, called a Medicare Beneficiary Identifier (MBI). Each MBI will consist of a combination of 11 randomly generated numbers and upper case letters. The characters are “non-intelligent,” which means they don’t have any hidden or special meaning. The MBI is confidential like the Social Security number and should be kept similarly private.

The CMS will begin mailing the cards in April 2018 in phases based on the state the beneficiary lives in. The new cards should be completely distributed by April 2019. If your mailing address is not up to date, call 800-772-1213, visit www.ssa.gov, or go to a local Social Security office to update it.

The changeover is attracting scammers who are using the introduction of the new cards as a fresh opportunity to separate Medicare beneficiaries from their money. According to Kaiser Health News, the scams to look out for include phone calls with callers:

  • claiming to be from Medicare looking for your direct deposit number and using the new cards as an excuse,
  • asking for your Social Security number to verify information,
  • claiming Medicare recipients need to pay money to receive a temporary card, or
  • threatening to cancel your insurance if you don’t give out your card number.

There is no cost for the new cards. It is important to know that Medicare will never call, email or visit you unless you ask them to, nor will they ask you for money or for your Medicare number. If you receive any calls that seem suspicious, don’t give out any personal information and hang up. You should call 1-800-MEDICARE to report the activity or you can contact your local Senior Medicare Patrol (SMP). To contact your SMP, call 877-808-2468 or visit www.smpresource.org.

For more information about the new cards, click here and here.

World’s Oldest Person

I saw in the news that the world’s oldest person just passed away at the age of 117. https://www.cbsnews.com/news/nabi-tajima-dead-worlds-oldest-person-117/ I am always amazed to hear the stories of people who live this long. They have lived through monumental changes in our society. Whatever lessons they have learned through their long life would certainly be worth hearing. Some of these stories are collected in a book called: Earth’s Elders: The Wisdom of the World’s Oldest People, Jerry Friedman.

Long-Term Care Insurance Policyholder Wins Suit Against Company for Hiking Premiums

A long-term care policyholder has successfully sued her insurance company for breach of contract after the company raised her premiums.

At age 56, Margery Newman bought a long-term care insurance policy from Metropolitan Life Insurance Company. She chose an option called “Reduced-Pay at 65” in which she paid higher premiums until she reached age 65, when the premium would drop to half the original amount. The long-term care insurance contract set out the terms of the reduced-pay option. It also stated that the company could increase premiums on policyholders in the same “class.” When Ms. Newman was 67 years old, the company notified her that it was doubling her premium.

Ms. Newman sued MetLife for breach of contract and fraudulent and deceptive business practices, among other things. In its defense, the company argued that the increase was imposed on a class-wide basis and applied to all long-term care policyholders over the age of 65, including reduced-pay policyholders. A federal district court dismissed Ms. Newman’s suit, ruling that the contract permitted MetLife to raise her premium. Ms. Newman appealed.

The U.S. Court of Appeals for the Seventh Circuit reversed the lower court's decision and held that MetLife breached its contract when it raised Ms. Newman's premium (Newman v. Metropolitan Life Insurance Company, U.S. Ct. App., 7th Cir., No. 17-1844, Feb. 6, 2018). According to the court, reasonable people would believe that signing up for the reduced-pay option meant that they were not at risk of having their premiums increased. The court also allowed Ms. Newman's fraudulent and deceptive business practices claim to proceed, ruling that she showed evidence that the company's marketing of the policy was deceptive and unfair.

To read the court's decision, click here.

A Guidebook to Planning for Old Age

Joy Loverde. Who Will Take Care of Me When I’m Old? Plan Now to Safeguard Your Health and Happiness in Old Age. New York, NY: Da Capo Press, 2017. 313 pages. Click here to order book via IndieBound.org

Millions of Americans are facing old age essentially alone.  One in three baby boomers is single or no longer part of a couple due to divorce or death.  Others may be in a relationship where chronic illness has struck both partners simultaneously. Children may live too far away or lack the resources to offer a parent meaningful help.

But there is no reason why circumstances like these should bar anyone from a quality old age.  It just takes planning, which is where this empowering book comes in. Full of helpful checklists and worksheets, Who Will Take Care of Me When I’m Old? is an essential guide to preparing for and navigating the inevitable losses that aging entails – the loss of functioning, the loss of loved ones and friends, and the loss of income.

Joy Loverde, a consultant and speaker on aging issues and the author of The Complete Eldercare Planner, has written a self-help book that offers both emotional and practical advice.  The first chapters address overcoming the psychological barriers to planning.  After all, the prospect of growing old and needing care is something most people would prefer not to think about, much less plan for.  One early section suggests ways to avoid self-sabotaging thoughts.  Other section headings include “Lessen the Grip of Guilt” and “Motivate Yourself.”

The book then turns to the planning work at hand.  An early chapter deals with how to stay afloat financially.  Near the top of the list are getting one’s legal affairs in order, including consulting with an elder law attorney.  Loverde suggests ways to create an income stream in retirement and lists scores of job possibilities.  She even has recommendations for lowering grocery bills.

Succeeding chapters present ideas and resources for successfully aging in place alone, exploring housing options both in the U.S. and abroad, coping with widowhood, “foraging for a family,” staying connected with those you know and making new friends, and evaluating medical providers.  One chapter is devoted to considerations in adopting a pet.

The final chapters deal with strategies for coping when old age becomes seriously challenging.  Loverde covers “the game changer” of chronic illness, including how to effectively advocate for yourself or find a professional to advocate for you.   A chapter titled “‘Just Shoot Me’ Is Not a Plan” maps strategies for ensuring quality care at the end of life.  There is even a list of resources for those considering “suicide tourism.”

Throughout the book, Loverde provides names of helpful organizations, and one fun feature is that each chapter ends with one recommended book, YouTube video, movie, song and TED Talk on that chapter’s topic.  Near the end Loverde includes a multi-page goldmine of useful websites (ElderLawAnswers among them).

This is not the kind of book anyone looks forward to reading, but it is a book that is essential reading for anyone who wants to start laying the groundwork now for the best possible old age.

To read more about Who Will Take Care of Me When I’m Old?, click here.

 

 

 

 

Estate Planning and Retirement Considerations for Late-in-Life Parents

Older parents are becoming more common, driven in part by changing cultural mores and surrogate motherhood. Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at age 50. But later-in-life parents have some special estate planning and retirement considerations.

The first consideration is to make sure you have an estate plan and that the estate plan is up to date. One of the most important functions of an estate plan is to name a guardian for your children in your will, and this goes double for a parent having children late in life. If you don't name someone to act as guardian, the court will choose the guardian. Because the court doesn't know your kids like you do, the person they choose may not be ideal.

In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is the product of a second marriage, a trust may be particularly important. A trust can give your spouse rights, but allow someone else — the trustee — the power to manage the property and protect it for the next generation. If you have older children, a trust could, for example, provide for a younger child's college education and then divide the remaining amount among all the children.

Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement. One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.

When to take Social Security is another consideration. Children can receive benefits on a parent’s work record if the parent is receiving benefits too. To be eligible, the child must be under age 18, under age 19 but still in elementary school or high school, or over age 18 but have become mentally or physically disabled prior to age 22. Children generally receive an amount equal to one-half of the parent's primary insurance amount (PIA), up to a “family maximum” benefit. You will need to calculate whether the child's benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.

Costs of Some New Long-Term Care Insurance Policies Going Down in 2018

While long-term care insurance costs are up in general, some policies are going down in 2018, according to the 2018 Long Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance (AALTCI), an industry group.

A married couple who are both 60 years old would pay an average of $3,490 a year combined for a total of $333,000 of long-term care insurance coverage when they reach age 85. This is down from 2017, when the association reported that a couple could expect to pay $3,790 for the same level of coverage. Jesse Slome, the AALTCI’s director, cites two reasons for the change: “There are fewer insurers offering traditional long-term care insurance policies currently and some of the higher priced insurers sell so few policies that we excluded them from this year’s study as they really were not representative of the market conditions.”

Rates for single men and women have gone up in 2018, however. A single 55-year-old man can expect to pay an average of $1,870 a year for $164,000 worth of coverage, up from $1,665 in 2017. The same policy for a single woman averages $2,965 a year, up from $2,600 in 2017. Overall, women still pay more than men.

One thing that remains the same year to year is the importance of shopping around. The survey shows that costs for virtually identical policy coverage vary significantly from one insurer to the next.

This year’s index compares policies sold in Illinois and was conducted in January 2018.

For the association's 2018 index showing average prices for common scenarios, go here: http://www.aaltci.org/news/wp-content/uploads/2018/01/2018-Price-Index-LTC.pdf

 

Planning for a Child with Special Needs

Americans are living longer than they did in years past, including those with disabilities. According to one count, 730,000 people with developmental disabilities living with caregivers who are 60 or older. This figure does not include adult children with other forms of disability nor those who live separately, but still depend on their families for vital support.

When these caregivers can no longer care for their children due to their own disability or death, the responsibility often falls on siblings, other family members, and the community. In many cases, expenses increase dramatically when care and guidance provided by parents must instead be provided by a professional for a fee.

Planning by parents can make all the difference in the life of the child with a disability, as well as that of his or her siblings who may be left with the responsibility for caretaking (on top of their own careers and caring for their own families and, possibly, ailing parents). Any plan should include the following components:

  • A plan of care that carefully establishes where the child with special needs will live, who will be responsible for assisting the person with special needs with decision making and who will monitor the person with special needs’ care.  It will help everyone involved if the parents create a written statement of their wishes for their child’s care. They know him better than anyone else. They can explain what helps, what hurts, what scares their child (who, of course, is an adult), and what reassures him. When the parents are gone, their knowledge will go with them unless they pass it on.
  • At least one type of special needs trust.  In almost all cases where a parent will leave funds at death to a disabled child, this should be done in the form of a trust. Trusts set up for the care of a disabled child generally are called “supplemental” or “special” needs trusts.  Trusts designed to aid a person with special needs are commonly known as “special needs trusts”.  There are three main types of special needs trusts: the first-party trust, the third-party trust, and the pooled trust. All three name the person with special needs as the beneficiary, but they differ in several significant ways, and each type of trust can be useful in its own way.  Choosing a trustee is also an important issue in supplemental needs trusts. Most people do not have the expertise to manage a trust, even if they are family members, and so a professional trustee may be a wise choice. For those who may be uncomfortable with the idea of an outsider managing a loved one’s affairs, it is possible to simultaneously appoint a trust “protector,” who has the power to review accounts and to hire and fire trustees, and a trust “advisor,” who instructs the trustee on the beneficiary’s needs.
  • Life insurance.  A parent with a child with special needs should consider buying life insurance to fund the supplemental needs trust set up for the child’s support. What may look like a substantial sum to leave in trust today may run out after several years of paying for care that the parent had previously provided. The more resources available, the better the support that can be provided the child. And if both parents are alive, the cost of “second-to-die” insurance–payable only when the second of the two parents passes away–can be surprisingly low.

For more on special needs trusts and special needs planning, visit our SpecialNeedsAnswers Web site at www.specialneedsanswers.com. While some ElderLawAnswers attorneys practice in this area of the law, all attorneys listed on SpecialNeedsAnswers devote a significant part of their practices to working with individuals with special needs and with their families to plan for the future.