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Gainesville Florida Estate Planning & Elder Law Blog

Monday, April 28, 2014

Hybrid Long-Term Care Policies May Be the Answer

New hybrid long-term care policies may be the answer for people wrestling with the issues related to traditional policies for these services.

Among the most significant and attractive features of the new policies is their greater affordability. In fact, it may be possible for you to convert an already existing annuity or life insurance policy to a new policy with a long-term care rider without any additional expense.

Long-term care has become a critical need, and it has staggering costs. According to the 2014 Genworth Cost of Care survey, the median annual cost for a private room in a nursing home in Florida is now $91,615.00, and a semi-private room is not much better at $83,950.00. Long-term care insurance may be the best answer if you don’t want to wipe out all your savings.

The other option is to simply assume you won’t need long-term care. But the odds are against you. The U.S. Department of Health and Human Services has determined that someone turning 65 today has an almost 70% chance of needing some type of long-term care services and supports in their remaining years. Women need care longer (3.7 years) than men (2.3 years). One-third of today's 65-year-olds may never need long-term-care support, but one fifth will need it for longer than five years.

With traditional long-term-care policies you pay an annual premium, either in a lump sum or in installments, and you continue to pay the premiums to keep the policy in force until you either file a claim (assuming you have a waiver of premium clause in the policy), or until you pass away. If you fail to pay premiums, the policy is forfeited. There are no refunds. You receive no benefit from the premiums you already paid. The insurance company can raise premiums at any time by seeking approval from the State Insurance Commissioner.

The new hybrid policies fall into two types: annuity-type policies and life insurance policies with a long-term-care rider.

All the annuity-type policies and most of the life insurance-type policies call for a single lump-sum payment when you take it out. You do not have to pay anything beyond that. The premium and benefits are fixed and can never be altered by the insurance company. If you never file a claim, depending on the policy, you may be entitled to a return of most of the premium on an annuity-type policy, or a death benefit greater than the premium on a life insurance-type policy. If you wish to cancel a policy of either type, you may be entitled to a substantial return.

Also, if you have an existing life insurance policy or annuity, you may be able to exchange it for a hybrid policy tax-free, without having to pay anything for an additional benefit. You will have to pass a physical exam. The life insurance policy may offer a lower death benefit than the existing policy, but a substantial long-term care benefit.


Monday, April 28, 2014

Do-It-Yourself Wills

If you’re considering creating a do-it-yourself will to save a few bucks, please think again. The result may be anguish and conflict for your family. And the money you save may just be gobbled up in lawyer and court fees.

A recent case heard by the Florida Supreme Court, Aldrich v. Basile, demonstrates the disadvantages of do-it-yourself estate planning.

Florida resident Ann Aldrich wrote her will using an E-Z Legal Form in 2004. She wrote in the will that at her death, her possessions were to go to her sister, Mary Jane Eaton. If her sister predeceased her, those assets were to go to her brother, James Michael Aldrich. Her will also had a hand-written list of specific assets – several bank accounts, her home and its contents, an IRA, a vehicle and a life insurance policy. The will was properly signed and witnessed.

But she did not state what should happen to any assets she acquired after the execution of her will. In other words, there was no residuary clause. That’s probably because the form did not have a pre-printed residuary clause or guidance for including one.

Eaton died in 2007, predeceasing Aldrich and leaving her a Fidelity account and property in Putnam County. Since this happened after Aldrich wrote her will, these assets were not included. To try and fix it, Aldrich hand wrote an addendum to her will in 2008 reiterating that all her worldly possessions now go to her brother. Unfortunately the note did not conform to the requirements of Florida law because there were no impartial witnesses. The only witness who signed the note was Sandra Schuh, daughter of James Aldrich.

The result was a family dispute that naturally ended up in court and ultimately making its way to the Florida Supreme Court. James, the brother, argued that all of his late sister's assets should go to him. But two nieces (the daughters of another of Aldrich's deceased siblings) argued that the assets Aldrich inherited from Eaton should pass according to Florida intestacy law since (1) her will neither mentioned those assets nor contained a residuary clause and (2) Aldrich's addendum was legally invalid. Therefore, they argued, as constitutional heirs at law they were entitled to a piece of the assets Aldrich had inherited when Eaton passed away.

Ultimately the court decided in favor of the nieces, concluding that the assets Aldrich inherited from Eaton could not pass under Aldrich's will, although the judges pointed out that it all could have been avoided if the will was done properly and effectively in the first place. Good advice.


Monday, April 21, 2014

City and County Issuing Proclamations for Elder Law Month

May is Elder Law Month and in recognition of that, the Alachua County and City of Gainesville commissions will be issuing proclamations. I will be receiving the proclamation, along with Shannon Miller. The county is issuing its proclamation Tuesday at 5 p.m., and the city is doing its on May 1.

While it may be fitting that Shannon and I receive the proclamations, since I am the immediate past president and Shannon is the current president of the Academy of Florida Elder Law Attorneys (AFELA), it is much more important that the issue of elder law be recognized here and in communities across the country.

Elder law is one of the most complex areas of the legal system, and our seniors and their families are often lost in that system. As elder law attorneys, we focus on the legal needs of the elderly, protecting them and their families.

If nothing else happens because of this recognition by the city and county, residents of this community should, at the very least, take the appropriate steps to protect our seniors. If you look through my website, you will see a great deal of information about how you can do just that.


Friday, April 18, 2014

Are You a Caregiver?

Not sure if you’re a caregiver? If you help care for a family member, friend or neighbor of any age, you are probably a caregiver. While some caregivers are paid professionals, many are family members who simply find themselves in a position where they are left to care for loved ones.  Their job is demanding and includes food shopping and cooking, house cleaning, giving medicine, helping with bathing and dressing, paying bills and providing emotional support.

Approximately 65.7 million people are considered caregivers in the United States – around 29% of the population. Of that number, 43.5 million adult family caregivers tend to someone over the age of 50, and 14.9 million care for someone who has Alzheimer’s disease or dementia.

Caregiver services were valued at $450 billion in 2009 – up from $375 billion in 2007.  Although caregiving services have substantial economic value, unpaid family caregivers will probably continue to be the largest source of long-term care services in America.

Unfortunately, 70% of working caregivers suffer from work-related difficulties.  Many caregivers are on-call 24 hours a day, 7 days a week. Many deal with enormous stress. In numerous cases, caregivers must make various sacrifices in order to take care of their loved ones.

  • 69% have to rearrange their work schedule, decrease their hours or take an unpaid leave in order to meet their caregiving responsibilities.
  • 5% turned down a promotion
  • 4% chose early retirement
  • 6% gave up working entirely

Caregivers can also suffer loss of wages, health insurance and other job benefits, retirement saving or investing and Social Security benefits. Around 10 million caregivers above the age of 50 who take care of their parents lose an estimated $3 trillion from lost wages, pensions, retirement funds and benefits.  The 2008 economic recession worsened matters for many caregivers.

Unfortunately, women caregivers in this group tend to see worse monetary losses than their male counterparts. They are more likely than men to have made alternative work arrangements, take a less-demanding job or give up work entirely in order to care for their parents.


Friday, April 18, 2014

Retirement Mistakes

If you’re getting ready for retirement and you haven’t planned for it yet, you may be in for a rude awakening. The only good news is you may not be alone. In a recent USA Today article, Matthew Shafer, economist and author of The Future of Your Wealth shared some common mistakes made by couples preparing for the next stage of life.

First, Shafer says not too feel bad because retirement is very complicated. But here are his seven big mistakes.

  1. The couple never talked about what they expected retirement to be. Besides the financial changes, retirement likely means spending a lot more time together.
  2. Couples in second and third marriages didn't think to plan for their potentially unique problems. Blended families can create significant issues.
  3. They didn't do proper financial planning. Very few retirees have a financial plan, so they don’t really know what they have and what to expect.
  4. They haven't planned for emergencies. Things may look fine at the start but an emergency can be devastating.
  5. The couple didn't consider the costs of health care or long-term care. Few people have long-term-care insurance but there is a strong likelihood they will need it.
  6. Only one partner is handling financial matters. This is all too common and an obvious and very big mistake.
  7. Do not assume that just because you're married you can automatically act for each other in business and health care decision-making. You need to make sure that the proper legal documents are completed.

Go through this list carefully to see if you’re ready for retirement. Most problems occur simply because you didn’t plan.


Wednesday, April 2, 2014

Have the Dreaded Talk Before It's Too Late

Seventy percent of seniors 65 or older will need long-term care service. The problems arise when the elders don’t talk to their children early and plan for a health crisis.

Many equate this conversation about long-term care with the conversation parents must have with young children about where babies come from. The similarity is that they are both conversations that are widely dreaded.

The concept of talking about aging is very difficult for the majority of people because it’s uncomfortable, it’s hard to acknowledge the facts of life and it’s hard to face losing control. It is an essential conversation though, which will encourage you to discuss the many issues and decisions that may confront you and your family in upcoming years.

It is encouraged to have this conversation with your adult children while you are still physically and mentally capable. It is important to discuss how you will pay for the help you may need, which oftentimes is extremely expensive. On average, it will cost $19 an hour for a licensed home health-care aide. Additionally, discuss where you will live if you need to move out of your home for declining health reasons. This is also a time when you should designate an individual or family member to advocate for your medical needs. While this last topic may be the hardest, it is essential you discuss any end-of-life instructions you want followed if ever faced with a sudden or serious illness.

While parents care for their children until they feel as if they are prepared to protect themselves, one day your child will mature they will become your caretakers and advocates. Prepare for this time and read more about what to discuss with your children at http://www.washingtonpost.com/business/having-the-other-talk-with-your-kids--not-storks-but-aging/2014/03/27/8cc15a44-b3b1-11e3-8cb6-284052554d74_story.html


Wednesday, March 26, 2014

Advantages of Setting up Your Child’s Special Needs Trust Right Now

If you have a special needs child at home you understand the importance of establishing a Special Needs Trust. But what you may not realize is that the sooner you set one up, the better. You don’t need to wait until the child is 18 years old. You also don’t need to have the funds to put in the trust upon setting one up.

Once you as the parent set up the SNT, you can name the trust as one (or sole) death beneficiary of his/her life insurance policy and other assets, such as a pension. Of course, you can also transfer funds into the trust while they are alive. You are able to name themselves as trustees, and name successor trustees for when you can no longer serve due to death or incapacity.

Other family members, such as the grandparents of that child, may also like to contribute to the child's present and future welfare and maintenance. Rather than each relative having to set up his/her own SNT for the child, the one SNT the parent creates can be the one legal depository to which everyone can contribute.


Wednesday, March 26, 2014

Are Two Heads Better Than One?

If you are unfit to handle your own financial affairs it is wise to have a Durable Power of Attorney. For those who are unaware of what being named Durable Power of Attorney does; it gives someone the legal authority to manage your financial affairs on your behalf. But should you choose multiple people for this task?

Say you have two or more adult children. They could serve simultaneously and to make decisions unanimously. The arrangement allows your co-agents to assist and support one another, and serves as a checks-and-balances system. This sounds like a good idea in theory.

There are a few potential downsides to having co-agents who are required to make unanimous decisions. For one, different people, regardless of family relation have different opinions, especially on a sensitive topic as money.

If you lack confidence that your children can act together, or if you believe it would be cumbersome to require them to act unanimously, you should name one person as the agent and another as the backup agent in the event the first one cannot or will not serve. 


Tuesday, March 4, 2014

Seniors May Receive Financial Restitution for Telephone Scam

The Florida Attorney General's (AG) office wants your assistance in getting the word out about a recovery available to seniors financially exploited in a telephone scam.

The AG's office settled a case involving unauthorized charges to landline (home) bills by CenturyLink. More than 1,200 individuals ages 80-99 were victimized. In many instances, these consumers may not even know their telephone bills were inappropriately charged. Seniors were often billed for months, and even years, without their knowledge or consent. Claims in this scam may amount to $2.3 million.

Seniors victimized by this scam may be entitled to a refund. The average refund is estimated at $134.00 and may be as high as $700.00, depending on the circumstances. Claim forms were mailed to more than 1,700 people. However, these victims may be reluctant to file a claim or not understand 1) how they were victimized and 2) that they can financially recover some of their loss.

Details are available by clicking here or calling Citizen Services at (866) 483-0379. Please reach out to your community and family members to alert them to this scam and their possible recovery. Some suggested target sites to notify might be the following places who have contact with the elderly with landlines.


Consumers must file claims by April 12, 2014.


Wednesday, February 19, 2014

Savvy Caregiver Training

The Savvy Caregiver Training Program is a free and unique six-week program, designed for family caregivers who regularly assist individuals with Alzheimer’s or dementia. Through this program, caregivers have the opportunity to learn and develop strategies they can use to accomplish their goals as caregivers, regarding their individual situation. I truly believe this in an invaluable program that offers caregivers an amazing opportunity to increase their skills. The program gathers ideas and concepts from many disciplines and presents them to the caregivers. A few benefits of completing this course are the increase in skills, knowledge, confidence, outlook and understanding as a caregiver.

The number of people with Alzheimer’s is continuing to rise each year. The families of these individuals primarily assume the care. The family members now have this unexpected profession or caring for an ill individual, and normally have no training or preparation. Savvy caregiving enables the caregiver to develop control over the situation and reduce the stress associated with this.

The classes meet for two hours each week, for six consecutive weeks. The participants will learn about the inevitable progression of Alzheimer’s and how to offer support through the different stages. These efforts will also be linked to those affected by dementia. By the end of the six weeks, caregivers will gain the confidence and knowledge to master their caregiving skills.

There is a range of program options in a variety of areas in North/Central Florida. Please follow the links below for exact dates, times and locations for the upcoming program start dates and for a week-to-week course description!

Savvy Caregiver Dates, Times and Locations

Week to Week Course Description

 

The Savvy Caregiver Training is offered by Elder Options, the Mid Florida Area Agency on Aging. For more information on the training, or to register for a program, contact the trainer, Tom Rinkoski, at Elder Options at 352-378-6649 or rinkoskit@agingresources.org


Tuesday, February 18, 2014

“It’s on the tip of my tongue!”

The Florida Council on Aging Board of Trustees has dedicated time each month to debunk a common myth about aging. Recently the topic for discussion was does forgetfulness mean cognitive impairment?

You have surely heard the expression “it’s on the tip of my tongue,” from an elder. Sometimes it is assumed to be associated with progressive cognitive disorders like Alzheimer’s disease. While there is a possibility of Alzheimer’s disease and other dementias, it is more likely that forgetting words or ideas has more to do with accumulating knowledge throughout a lifetime. It is natural for the brain to begin to slow down processing information.

I like using the analogy of a new computer to one that has been filled with completed documents and files. The newer computer runs much more efficiently than the computer with all of the data stored on it. The same goes for our brains, children soak up and react to situations much more quickly than an elderly person.

The message to take away from this is that we must not always jump to severe conclusions when an elder loved one starts to forget things. If you have any doubt about the symptoms of Alzheimer’s contact your medical professional.

For more information on the myth of forgetfulness please refer to the websites below:

http://www.apa.org/pi/aging/resources/guides/older.aspx

http://www.alz.org


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