Gainesville Florida Estate Planning & Elder Law Blog

A change in Florida law that goes into effect October 1 will have a significant impact on the concept and designation of healthcare surrogates in the state.

Prior to this change, a determination of incapacity has to be made before the healthcare surrogate can act.  Because a person may regain capacity and in some instances, especially with the elderly, may vacillate in and out of capacity, a redetermination of incapacity is frequently necessary to provide ongoing authorization for the healthcare surrogate to act. This process can make it more challenging for a surrogate to provide effective and timely assistance. Further, some competent persons want the help of a healthcare surrogate with the sometimes complex task of understanding healthcare treatments and procedures and with making healthcare decisions.

The changes to the law allow a person to designate a healthcare surrogate, who may act at any time, including while an adult is still competent and able to make his or her own decisions. While competent, the decisions of the principal control over any contrary decision of the surrogate.

Another change to the law creates the ability to designate a healthcare surrogate for the benefit of a minor when the parents, legal custodian, or legal guardian of the minor cannot be timely contacted by a healthcare provider or are unable to provide consent for medical treatment.

A new Guardianship Law that will do a better job of protecting the elderly and improving the guardianship system went into effect July 1.

The system that had been in place was designed to protect incapacitated elders from exploitation, but it was not as effective as hoped. People often found seniors forced into guardianships that took away their ability to run their own affairs and often created challenging legal expenses. As wards of the guardianship system, these elders can see their assets sold or depleted to pay for care, nursing homes, attorneys' fees and more.

The new law tightens guardianship statutes, clarifies the duties of state-appointed guardians, includes criminal penalties for exploitation or abuse of a ward, requires more notice of emergency temporary guardianship proceedings and makes it harder to suspend a family member's power of attorney during the litigation process, according to the Florida Bar.

While guardianship services are often necessary when people present a danger to themselves or others, there's a risk that less charitable motives can influence the push for guardianship. Failure to properly inform the ward, or relatives, of the legal process can hurt an individual's right to challenge a guardian's actions.

It’s too easy to exploit the elderly. This new law is a great step in eliminating, or at least limiting that exploitation.

The Charitable Remainder Unitrust (CRUT) is coming back into favor with families looking for ways to bypass some of the taxation issues facing traditional IRAs. 

If you are not familiar with it, a CRUT is an irrevocable trust created under the authority of Internal Revenue Code. This special, irrevocable trust features two primary characteristics: (1) once established, the CRUT distributes a fixed percentage of the value of its assets (on an annual or more frequent basis) to a non-charitable beneficiary; and (2) at the expiration of a specified time (usually the death of the settlor), the remaining balance of the CRUTs assets are distributed to charity. The trustee determines the fair market value of the CRUT's assets at the time of contribution and thereafter on the applicable valuation date.

Distributions from a traditional IRA are taxed at regular income tax rates. Families could stretch an IRA to get years of tax-deferred growth, but people often do not appreciate the tax issues and it is human nature to want to cash out. 

A CRUT can solve many of the problems that come up with traditional IRAs. A person should include a provision for a “testamentary” CRUT in their will and then name the CRUT as the beneficiary on their IRA form. The CRUT will make annual payments to the designated heir or heirs for a fixed number of years, with the listed charity receiving the remainder. 

It sounds complicated, but your estate planning attorney should be able to use the CRUT as an effective tool for your family.

We often encourage our clients to plan for the future, but is this important ideal diminishing among the younger generations? 

According to Bank of America and Merrill Edge, from a survey of more than 1,000 Americans, 38% of retirees worked on retirement goals with an adviser before quitting work, while 24% of non-retirees are currently working with an adviser. Saving for retirement is easier when people start earlier, so when retirement does come there will be less stress and more relaxation.

The report also states that around 67% of Millennials (defined by the study as ages 18 to 34), and 74% Gen Xers (35 to 49) who were still working, were most likely to believe they'll be financially stressed in retirement based on how they are currently putting money away. Compared to 59% of current retirees who say they aren't worried about money because of how they saved.

This could partially be due to the fact that retirees are aware of how much money they need now, while the younger generations are unclear as to how much money they will really need in the future.

Despite age, one concern was popular amongst all individuals, the increase in health care costs. Around 65% of all those surveyed said that unexpected medical costs would strain their finances in retirement. Followed by a lack of Social Security benefits with about 38%. As people are living longer, the younger generations are worried about how they are going to have enough funds to support themselves as they age.

Millennials see their family and friends as a way to help tide them over into their retirement. Around 43% said they are counting on some financial help from loved ones if they need it in retirement. While only 4% of baby boomers said they are counting on help from loved ones.

The best way to ensure financial security into retirement is to have a savings plan. It is not too late for Millennials to identify how much money they can save by assessing their financial foundation or their income and expenses and their assets and debts. Saving early in your working years is the best way to ensure a solid future.

In what has to be considered good news and an important step, the U.S. House Labor, Health and Human Services (Labor-HHS) Appropriations Subcommittee this week proposed a $300 million increase for Alzheimer’s research at the National Institutes of Health (NIH). If this historic step increase becomes law, it will be the largest annual increase ever in federal Alzheimer’s research funding. And it is not a minute too soon.

Credit for this sorely needed proposed increase in funding goes to the Alzheimer’s Association, the Alzheimer’s Impact Movement (AIM) and advocates across the country. Back in March more than 1,000 advocated went to Washington to ask for the $300 million increase. Some of them testified about this critical need to members of the subcommittee.

While this is a significant first step, it is part of a year-long appropriations process that will only end successfully with a bill passed by Congress and signed into law. So advocacy must continue.

Challenges are numerous for people with disabilities. Most of them that we work with are looking for way to be productive. And now Google is stepping up to help people with disabilities be just that by supporting technology trends that will help them overcome some of these daily challenges. 

Google.org, the company’s global giving arm, recently unveiled The Google Impact Challenge: Disabilities, a plan to donate $20 million dollars to nonprofits worldwide that are using technology designed with the intent of giving more independence to people with disabilities.

Google has already committed funds to two groups. The Enable Community Foundation gives people prosthetics at no cost by connecting them with volunteers who have 3D printers. World Wide Hearing will use the funds to develop a low-cost kit to detect hearing loss using smartphone technology.

As a leader in technology, Google plans to increase the accessibility of its own products and is in the process of developing new projects to benefit people with disabilities. Google is working on self-driving cars and Liftware, a utensil created to help people with hand tremors have a better eating experience.

Google is committed to tackling the major what-if questions for the disabled community by reaching out to nonprofit groups and investing in solutions to these questions.  

In a first-ever effort the federal Consumer Financial Protection Bureau recently announced a new program called ROADS to Financial Independence. The goal of the program is to provide hands-on assistance to help people with disabilities so they can become more financially independent.

Starting as a pilot program using local partners in six communities across the country, individuals with disabilities who are currently working or transitioning into the workforce will be offered access to financial counseling as well as employment, independent living and other more traditional support services.

Research suggests that many people with disabilities have no savings for emergencies and they are more likely to rely on alternative financial services like payday loans and check cashing.

Those participating in the new program will be given an assessment and then paired with a financial counselor who will help them open a bank account, create a budget and set and achieve goals. Over five years, officials said they expect to assist 14,000 individuals with disabilities.

The Consumer Financial Protection Bureau said it will focus on establishing best practices for helping people with disabilities improve their financial situation that can then be expanded on to other communities. The initial programs will be in Austin, Texas; Birmingham, Ala.; the Finger Lakes region in New York; Seattle, Wash.; the state of Delaware and in the Washington, DC metro area.

There may be nothing more mind boggling when it comes to U.S. government documents than the tax code. There were 73,608 pages of federal tax rules in 2012. By comparison, the first federal income tax code back in 1913 was 27 pages.

While the number of pages is significant, the number of changes is even more complex. According to reports there have been approximately 4,680 changes to the tax code since 2001, an average of more than one a day. And that does not include the 154 pages of the American Taxpayer Relief Act of 2012 that was enacted on January 2, 2013.

And since tax reform in 1986, Congress has passed 14,400 amendments to the tax code. That's an average of 2.9 changes for every single working day for the last 19 years.

There are a lot more staggering numbers related to the tax code, and all those numbers mean lots of changes – far too many changes for anyone who is not an expert to understand. So it takes two professionals to guide the average family through these changes – a qualified CPA and a legal expert in estate planning. Don’t assume you can go it alone.

A recent USA Today story told about an increase in scams involving medical alert devices. Elderly consumers across the country are being bullied and duped into paying hundreds of dollars for medical alert devices they never ordered. This is all according to federal regulators.

Those being victimized are generally 70 or older and generally live alone. According to the report they were being scared into paying for something they did not want or need. The report said fear is a major factor in scams involving medical alert devices, IRS impostor phone calls, fake debt collectors, magazine scams, and others. Older people, especially those with dementia likely do not realize the significance of reading their credit card or bank account information to someone pressuring them on the phone, according to regulators.

In the case of the medical alerts telemarketers often prey on a fear of falling and not being found. And in some cases they implied that a relative had already ordered it for them, and now they need to pay.

Be very careful before giving bank or credit card information to anyone over the phone. If they persist, the best thing to do is hang up.

The IRS recently changed its rules regarding family members who are paid through a waiver program to provide care for a developmentally disabled or elderly loved one. No longer will they have to pay federal tax on the money earned from the waiver, depending on their overall tax status.

As an example, a parent providing personal care and companion services for a child living with him or her, who receives payments through a Med Waiver program, would likely be exempt from federal tax on the amount paid to them through the Med Waiver program.

However, there may be other factors. Like many tax rules there are often other circumstances and complications. It’s safest to confirm your status with an appropriate professional.

National Elder Law Month

May is National Elder Law Month. Last year I was honored to accept recognitions from the Alachua County and city of Gainesville commissions recognizing this important milestone on our calendar.  This year, I thought it would be worthwhile to share this series of questions and answers from the National Association of Elder Law Attorneys (NAELA). You should be familiar with this list before contacting me or any other elder law attorney.

Questions & Answers When Looking For an Elder and Special Needs Law Attorney

What Is Elder and Special Needs Law? 

Legal issues that affect people as they age and people with special needs are growing in number. Our laws and regulations are becoming more complex, and each state has different laws. Actions taken with regard to a single matter may have unintended legal effects. It is important for attorneys working with seniors, people with special needs, and their families, to have a broad understanding of the laws that may have an impact on a given situation to avoid future problems.

Elder and Special Needs Law encompasses many different fields of law. Some of these include:

• Preservation/transfer of assets seeking to avoid spousal impoverishment when one spouse enters a nursing home
• Medicare claims and appeals
• Social Security and disability claims and appeals
• Supplemental and long-term health insurance issues
• Tax planning
• Disability planning, including use of durable powers of attorney, living trusts, “living wills” for financial management and health care decisions, and other means of delegating management and decision-making to another in case of incompetency or incapacity
• Access to health care in a managed care environment
• Conservatorships and guardianships
• Estate planning, including planning for the management of one’s estate during life and its disposition on death through the use of trusts, wills, and other planning documents
• Probate and administration of estates
• Administration and management of trusts
• Long-term care placements in nursing home and life-care communities
• Nursing home issues, including questions of patients’ rights and nursing home quality
• Elder abuse and fraud recovery cases
• Housing issues, including discrimination and home equity conversions
• Age discrimination in employment
• Retirement, including public and private retirement benefits, survivor benefits, and pension benefits
• Health law
• Mental health law

Most attorneys do not specialize in every one of these areas. So when an attorney says he or she practices Elder or Special Needs Law, find out which of these matters the attorney handles. You will want to hire the attorney who regularly handles matters in the area of law of concern to your particular case and who will know enough about the other fields to question whether the action being taken might be affected by laws in any of the other areas of law. For example, if you are going to rewrite your will and your spouse is ill, the attorney needs to know enough about Medicaid to know whether there are legal issues with regard to your spouse’s inheritance.

Attorneys who primarily work with seniors and people with special needs appreciate the complex financial and social decisions their clients face. Elder and Special Needs Law attorneys bring to their practice a knowledge of their clients that allows them and their staff to ignore the myths relating to aging and the competence of seniors and people with disabilities. At the same time, they will take into account and empathize with some of the true physical and mental difficulties that often accompany the aging process. They are tied into a formal or informal system of social workers, geriatric care managers, psychologists, and other professionals who may be of assistance to you or your loved one.

Finding an Elder or Special Needs Law Attorney

Your first question may be: How do I find an Elder or Special Needs Law attorney? Before making the effort, step back a moment and try to determine whether you actually have a legal problem in which an attorney needs to be involved. If you’re not sure, ask your clergy, your financial advisor, a social worker, or a trusted friend to help you decide whether this is a legal issue rather than a medical or a social services issue. Legal expertise is expensive and it serves you well to know that you actually need legal assistance before seeking an attorney.

There are many places to find an attorney in your city or state who specializes in working with the problems facing people as they age and people with special needs. Check with local agencies to obtain good quality local referrals. Some of the groups you may want to contact include:

• Alzheimer’s Association
• American Association of Retired Persons
• Area Agency (or Council) on Aging
• Children of Aging Parents
• National Academy of Elder Law Attorneys
• National Citizen’s Coalition for Nursing Home Reform
• Older Women’s League
• Social Security Administration
• State or local bar association
• Support groups for specific diseases
• Hospital or nursing home social services

If you know any attorneys, ask them for a referral to an Elder or Special Needs Law attorney. An attorney is in a good position to know who handles such issues and whether that person is a good attorney. Such persons are often the best and safest sources of referrals.

Take the time to interview prospective attorneys. Not every attorney is right for each client. The attorney/client relationship must be built on mutual trust and understanding. Ask questions about fees and services.

Ask Questions First

Ask lots of questions before selecting an Elder or Special Needs Law attorney. You don’t want to end up in the office of an attorney who can’t help you. Start with the initial phone call. It is not unusual to speak only to a secretary, receptionist, or office manager during an initial call or before actually meeting with the attorney. If so, ask this person your questions.

• How long has the attorney been in practice?
• Does his or her practice emphasize a particular area of law?
• How long has he or she been in this field?
• What percentage of his or her practice is devoted to Elder or Special Needs Law?
• Is there a fee for the first consultation, and if so how much is it?
• Given the nature of your problem, what information should you bring with you to the initial consultation?

The answers to your questions will assist you in determining whether that particular attorney has the qualifications that are important to you for a successful attorney/client relationship. If you have a specific legal issue that requires immediate attention, be sure to inform the office of this during the initial telephone conversation

Once You Have Found an Elder or Special Needs Law Attorney 

When you have found an appropriate attorney, make an appointment to see him or her. During the initial consultation, you will be asked to give the attorney an overview of the reason you are seeking assistance, so be sure to organize and bring all the information pertinent to your situation. After you have explained your situation, ask:

• What will it take to resolve it?
• Are there any alternate courses of action
• What are the advantages and disadvantages of each possibility?
• How many attorneys are in the office?
• Who will handle your case?
• Has that attorney handled matters of this kind in the past?
• If a trial may be involved, does the attorney do trial work? If not, who does the trial work? If so, how many trials has he or she handled?
• Is that attorney a member of the local bar association, a health advocacy committee, or trust and estates committee?
• How are fees computed?
• What is the estimate of the cost to resolve your problem and how long will it take?

Discussing Fees 

There are many different ways of charging fees and each attorney will choose to work differently. Be aware of how your attorney charges. You will also want to know how often you will be billed. Some attorneys bill weekly, some bill monthly, some bill upon completion of work. Ask about these matters at the initial conference, so there will be no surprises. If you don’t understand, ask again. If you need clarification, say so. It is very important that you feel comfortable in this area.

Some attorneys charge by the hour with different hourly rates for work performed by attorneys, paralegals, and secretaries. If this is the case, find out what the rates are. Other attorneys charge a flat fee for all or part of the services. This is not unusual, for example, if you are having documents prepared. Your attorney might use a combination of these billing methods.

In addition to fees, most attorneys will charge you out-of-pocket expenses. Out-of-pocket expenses typically include charges for copies, postage, messenger fees, court fees, deposition fees, long-distance telephone calls, and other such costs. Find out if there will be any other incidental costs.

The attorney may ask for a retainer. This is money paid before the attorney starts working on your case. It is usually placed in a trust account and each time the attorney bills you, he or she is paid out of that account. Expenses may be paid directly from the trust account. The size of the retainer may range from a small percentage of the estimated cost to the full amount. In many cases, the total fee will be higher than the retainer.

Get It in Writing 

Once you decide to hire the attorney, ask that your arrangement be put in writing. The writing can be a letter or a formal contract. It should spell out what services the attorney will perform for you and what the fee and expense arrangement will be. Remember — even if your agreement remains oral and is not put in writing, you have made a contract and are responsible for all charges for work done by the attorney and his or her staff.

Make It a Good Experience 

A positive and open relationship between an attorney and a client benefits everyone. The key is communication. The communication starts with asking the kinds of questions suggested in this brochure. Use the answers to the questions as a guide not only to the attorney’s qualifications, but also as a way of determining whether you can comfortably work with this person. If your concerns are given short shrift, if you don’t like the answers to the questions, if you don’t like the attorney’s reaction to being asked all those questions, or if you simply do not feel relaxed with this particular person, do not hire that person. Only if you are satisfied with the attorney you have hired from the very start will you trust him or her to do the best job for you. Only if you have established a relationship of open communication will you be able to resolve any difficulties that may arise between the two of you. If you take the time to make sure that you are happy right at the beginning, you can make this a productive experience for both you and the attorney. You will thank yourself, and your attorney will thank you.

About the National Academy of Elder Law Attorneys (NAELA)

NAELA, founded in 1987, is a national association of Elder and Special Needs Law attorneys devoted to the education and training of attorneys who can meet the needs of seniors and people with special needs, and who advocate for the needs of such individuals.

While NAELA Elder and Special Needs Law attorneys work one-on-one with clients in their local areas, NAELA also examines and advocates on national public policy issues facing seniors and people with special needs in America, including long-term health care; planning for retirement; estate planning and probate; guardianship and conservatorship; health care decision making; and elder abuse and neglect.

This informational brochure is provided as a public service and is not intended as legal advice. Such advice should be obtained from a qualified Elder or Special Needs Law attorney.