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Gainesville Florida Estate Planning & Elder Law Blog

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


Tuesday, February 18, 2014

Myths Regarding Caregiver Stress

I came across this article on the Florida Counseling on Aging website and thought I would share it with you.  For those of you who do not know, a caregiver is anyone who provides help to someone else who is in need on a daily basis.  Informal caregiver and family caregiver are terms that refer to unpaid individuals such as family members, friends, and neighbors.  Formal caregivers are volunteers or paid care providers associated with a service system.  Many FCOA members are currently providing care for a loved one.  Let’s look at some myths as well as facts about this burgeoning caregiver population.

MYTH:  Less than 10% of American households are involved in caregiving to persons age 50 or over.

FACT:  There are approximately 22.4 million households, or 23% who are caregiving loved ones.  More than one quarter of the adult population has provided care for a chronically ill, disabled, or aged family member or friend during the past year.

MYTH:  There are an equal number of males and females who are caregivers.

FACT:  Approximately 75% of those providing care to older family members and friends are female-most likely a daughter.

MYTH:  A caregiver spends about 5 hours a week providing care to older adults.

FACT:  Caregivers spend an average of 20 hours per week providing care to older adults.  They also spend an average of 4.5 years providing this care.

MYTH:  The average age of caregivers is 40.

FACT:  The average age of caregivers is 60 with a range from ages 19-98.  Of those working, 18% quit their jobs and another 42% reduce their work hours.  This causes great financial strain in an already stressed family system.

MYTH:  Less than 10% of caregivers are clinically depressed.

FACT:  46-59% of caregivers are clinically depressed.  Caregivers use prescription drugs for depression, anxiety, and insomnia 2 to 3 times more than the general population.

It is critical that caregivers receive support for this profound, life-changing experience.  Caregiver support groups are an excellent venue for caregivers to share their experiences and receive help and guidance as they navigate the challenges faced on a daily basis.  Alzheimer’s Resource Centers, Senior Centers, Hospice organizations, Community Mental Health Centers, Churches, as well as local psychologists and social workers are excellent resources that provide the tools necessary to assist caregivers with their caregiver journey.

FCOA would like to thank Christine Cauffield, PhD, FCOA Trustee for this Myth-Information submission.


Monday, February 10, 2014

Avoiding Estate Fights

Eighty-six percent of baby boomers and 74 percent of Americans 72 and older said keeping their family history alive through stories and keepsakes is the most important piece of their legacy. Baby boomers agree that family tradition is more important than money being left behind for them by their parents. Possessions and keepsakes are what make a family memorable and unique, not their monetary value.

Even though many agree that in order to keep their family tradition alive families must pass down mementos and personal possessions, this often causes conflict after a relative dies on who shall inherit what. Additionally, families often fail to accurately record their histories so many stories die with the elder family member.

To avoid problems, families should start talking early about which family members might life certain keepsakes. This conversation could happen while discussing an estate plan. While many parents might think it’s easiest to group keepsakes together and have your children share them, this is what causes families to split apart after a loved one dies. Another tip would be to sit with older relatives and label family photos, so future generations can understand their lineage.

Furthermore, when the estate plan is developed it should include a will, a trust, a power of attorney, a health care power of attorney and a living will. You should also create a memorandum that goes into detail on how you wish your personal possessions to be divided up. This document should be specific and may cause less conflict between family members. A common approach to this is that the oldest member in the room is allowed to pick one item in the room and this continues by age.

Although every family inevitably has favorite members, during this process you should treat all family members equally to avoid discord.

However, you will also have to choose your estate’s executor, which is ultimately giving power to one family member. This person may need to appear is court to sign documents. The executor gets complicated in the case of remarriages because a stepsibling’s actions may be questioned by the previous or later marriage. In this case, it is common to hire a corporate fiduciary as executor through your bank or trust company.

An ethical will gives you the opportunity to share family values and life stories in a one-page document, or even a bound book. These are often difficult to write, but always worth it for your family left behind.


Monday, February 10, 2014

Probate vs. Non-Probate

It is extremely important to understand the difference between probate and non-probate assets. Probate refers to the process of how a court determines how to distribute your property after you pass away. Probate assets are distributed to family members by the court, while non-probate assets are assets that go directly to your beneficiaries, bypassing the court process.

In the probate process, you must file a will and appoint and executor, collect assets, pay bills, file taxes, distribute property and file the final account. Since the probate process can be time-consuming and expensive, people often try to avoid it and have non-probate assets.

Probate assets are any assets owned only by the decedent. This can include real property, personal property, bank accounts, an interest in partnership or any life insurance policy.

Non-probate assets include property held in joint tenancy, bank or broker accounts in joint tenancy, property held in a trust, life insurance listing someone else’s name and retirement accounts.


Wednesday, January 29, 2014

Changes in Reverse Mortgage Regulations Create New Opportunities

A few weeks ago we wrote here about a federal court decision that will protect surviving spouses of reverse mortgage holders. That was certainly good news, and now here is some more.

While reverse mortgages were historically viewed with caution and trepidation, that may now be starting to change thanks to regulatory changes making them more understandable and applicable to retirees. 

Historically, there were generally two primary reserve mortgage options: the traditional reverse mortgage, known as a Home Equity Conversion Mortgage (“HECM”), and the HECM Saver, which had a lower payout of equity but fewer upfront fees. But those options became outdated last year. Moving forward, all new mortgages will have to conform to regulations which will provide better clarity and flexibility to retirees.

New reverse mortgages will use a contract structure similar to a purchase money mortgage. Seniors will face a much tighter standard principal limit factor – the amount of equity one can withdraw from a residence. Under old regulations, people could remove the entire equity in a home, but now the limit is 70% of existing equity. 

That means reverse mortgages may no longer serve as well in a financial emergency. However, new reverse mortgages will have flexibility of payment. Specifically, one can take a partial withdrawal of equity one year, for example when the stock market is high and capital gains would be detrimental, without being required to take additional payments in the future unless desired. In easier-to-understand terms, the new reverse mortgage is similar to a home equity line of credit.

There remain many other factors in considering a reverse mortgage – not the least of which is what impact it may have on any aid you may already be receiving. At Boone Law, we deal with these kinds of issues daily. If you’re uncertain about what steps to take, please talk to us before you do anything.


Friday, January 24, 2014

Myth Information: Economic Impact of Elders

It is a myth that Florida elders are a drain on our economy. Florida has one of the greatest percentages of older adults when compared to other states – leading with approximately 18% over the age of 65 and 24% over the age of 60. Older Florida residents contribute a large portion of total tax revenue.

Florida residents age 65 and over own more than 30% of the homes in the state. Their homes are usually more valuable which contributes to a higher property tax percentage. Furthermore, Floridians who are 65 or older typically use fewer of the educational and police/correctional resources because they rarely have children living at home and they are less likely to be incarcerated.

The average person age 18-64 costs the state approximately $800 per person while, on average, Florida retirees produce more than $2,000 per person in net benefits to the state. Older Floridians are also active members of the community. Annually, they contribute 154 million volunteer hours and roughly 25% of Florida residents 65 and over are working. Despite common myths, Florida’s elders are not a drain on the state economy; they provide our state with an economic boost. 


Thursday, January 2, 2014

Court Rules Surviving Spouses of Reverse Mortgage Holders Cannot Lose Homes

In what can only be considered as very good news, a federal court has ruled that banks can’t foreclose on surviving spouses of reverse mortgage holders when the spouses can’t pay off the mortgage. The ruling should lead to regulatory changes that will help surviving spouses stay in their homes even if their names aren’t on the reverse mortgage.

Historically, the surviving spouse has been required to either pay for the house outright or move out if the spouse who dies is the only one named on a reverse mortgage. The most common occurrence of this would be when one spouse is under age 62 and ineligible to sign the mortgage.

But because of the housing downturn, many homes are now worth less than the balance due on the reverse mortgage, meaning that the non-signing spouse cannot repay the loan and faces eviction.

AARP sued the Department of Housing and Urban Development (HUD) on behalf of three surviving spouses who faced imminent foreclosure and eviction from their homes. The case involved the spouses of individuals who took out Home Equity Conversion Mortgage (HECM), which are the most widely available reverse mortgage and are administered by HUD. AARP charged that in not protecting spouses from foreclosure, HUD was violating federal law.  

In a decision that came down in late September of last year, the U.S. District Court for the District of Columbia agreed with AARP and told HUD to find a way to shield surviving spouses from foreclosure and eviction.

It’s not clear yet how HUD will correct the problem. One possibility is that the agency may take over affected loans from the banks that hold them. But experts stress that the ruling does not mean that couples can safely take out a reverse mortgage and leave one spouse off the loan. AARP still strongly discourages taking out a reverse mortgage with only one spouse signing, and that’s good advice.


Thursday, January 2, 2014

Staying Eligible for Medicaid after the Death of a Spouse

When one member of a couple moves to a nursing home, it is generally assumed that spouse will be the first to die. But what happens if a Medicaid recipient's spouse dies first? It’s important to plan for that possibility, otherwise it could impact the nursing home resident's assets and eligibility for Medicaid.

In order to be eligible for Medicaid benefits in most states, a nursing home resident may have no more than $2,000 in assets. The Medicaid applicant's spouse, the community spouse, can keep more assets. In general, using 2013 standards, the community spouse may keep one-half of the couple's total countable assets up to a maximum of $115,920, depending on the state. Often when one spouse seeks to qualify for Medicaid, he or she transfers assets to the community spouse.

The death of a Medicaid recipient's spouse can affect the amount of assets the Medicaid recipient has, and therefore his or her Medicaid eligibility. A common example involves the community spouse leaving his or her estate to the spouse in a nursing home and receiving Medicaid. The additional assets will make that spouse ineligible for Medicaid. Even if the community spouse's will did not leave anything to the other spouse most states allow a spouse to claim a share of the estate. Medicaid can assess a penalty even if the surviving spouse does not claim his share.

The couple's house can also become a problem. Most spouses own property jointly. If the community spouse dies, the Medicaid recipient will own the house. Depending on the state, the nursing home resident may have to prove either an intention to return home or a likelihood of returning home in order for the house not to count as an asset. If the resident sells the house, the proceeds from the sale will make the resident ineligible for Medicaid.

To prevent a community spouse's death from impacting the institutionalized spouse’s Medicaid eligibility, it is important that the community spouse update his or her estate plan. There are steps the community spouse can take to protect the spouse in the nursing home, including setting up a trust. That’s something with which we can help.


Thursday, January 2, 2014

Is an Electronic Will Valid?

With tablets all the rage, an interesting legal issue has arisen. Is a will created on a tablet computer valid? An Ohio judge recently answered that question in the affirmative, but most states have not addressed the issue. As electronic devices become more commonplace, this question will inevitably arise more frequently.

The Ohio case came as a result of a man in the hospital wanting to draft a will. With no paper available, he used a tablet. He signed using the stylus, and his brothers signed as witnesses. After his death, his family printed out the will and submitted it to probate. The judge admitted the will to probate, finding that it met the requirements of Ohio law, which are that a will be in writing, signed by the testator, and witnessed. If the will had not been approved, his estate would have passed to his parents under state law, not to the people and organizations designated under the will.

Although the judge approved the will, he noted that the legislature needs to update the law to address electronic wills. Currently, Nevada is the only state that specifically provides guidelines for creating a valid electronic will. While electronic wills are convenient, they raise concerns about authentication and forgery. In some states, electronic wills aren't allowed. For example, Arizona and North Carolina accept only wills that are executed using paper.


Thursday, December 12, 2013

Merck Study to Look at Alzheimer’s

One of the most common of illnesses we face as families with our elders is Alzheimer’s, which in many ways remains a mystery to the medical community. Now, Merck & Co. (MRK) is putting the prevailing theory on the cause of Alzheimer’s to a test with two studies in thousands of people that may, once and for all, determine whether the amyloid tangles that grow in the brain spur the disease or are simply an outgrowth. To learn more about the effort by Merck, click here: http://bloom.bg/1hNX4kq.


Tuesday, December 10, 2013

Sam Boone Honored at AFELA Meeting

Sam Boone was honored recently at the AFELA (Academy of Florida Elder Law Attorneys) Annual Meeting and UnProgram for completing a highly successful year as president of the organization. Among the goals achieved under Sam’s watch was a redesign of the AFELA website, making it much more user friendly and valuable to attorneys, the media and the public in general. Also, at the same meeting, Sam delivered a well-received presentation on QSNT (Qualified Special Needs Trusts).


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