Estate Planning Bits

Caregiver education and health care authorization

On January 14, 2009 the Governor signed into law “An Act Relative to Caregiver Education and Health Care Authorization.” The law went into effect on April 14, 2009. This law creates a statutory mechanism for a parent or parents to authorize another adult to exercise concurrent parental rights and responsibilities relative to a minor’s education and health care. Therefore, if you are a caregiver, a parent may give you permission to make medical and educational decisions for the child. A caregiver is defined as a person who lives with a child but who is not a parent.

By executing a duly prepared Caregiver Authorization Affidavit, a parent can convey the authority to make education and health care decisions regarding a minor in the absence of the parent or on behalf of the parent. Once the Affidavit is signed by the parent, witnessed and notarized, it is effective, however, there is very specific language that is statutorily required and must be included in the documents. The form is not filed with a Court, but a copy of this form should be delivered to the child’s school, doctor, and dentist.

You are advised to keep a list of everyone who received the form, in the event you must notify someone about the changes. Naturally, the original should be maintained in a safe place with your other estate planning documents.

Parents should feel comfortable executing this Affidavit, and they can revoke it at any time and in the event that they disagree with the caregiver. The parent’s decision shall remain final. The use of the Caregiver Authorization Affidavit may provide some families with an alternative to filing for Guardianship of a Minor. The Affidavit is valid for two years and will need to be executed again at its expiration.

by: Julie A. Dialessi-Lafley

Health and medical records with the Obama stimulus plan

In 2004, President George W. Bush established the goal of creating electronic health records for most Americans within ten years. Today, funding provided in the Obama Stimulus plan could make it happen. Specifically, as much as $21 billion dollars has been earmarked in the bill.

As part of the stimulus plan, $21 billion dollars will be used to accelerate the use of electronic health records. As planned, all of our health records would be linked together for easy access by all the patient’s health care providers. The new system will likely improve the quality of care and reduce the costs of cumbersome paper records by allowing every person’s doctor to have access to the patient’s complete health care file.

However, having electronic medical records at your fingertips, which can easily be transferred to a hospital or other provider, it is not without critics. There is a major potential for abuse because critics fear that in spite of privacy laws in force to protect the public, employers might inappropriately obtain the medical records of a job applicant and determine that the applicant is too expensive to insure. Moreover, critics also provide that too many administrative burdens would impede the use of electronic records and interfere with the coordination of care.

Prior to the recent stimulus plan, complying with the 2014 goal has been looking like a significant challenge. The percentage of United States doctor offices currently adopting electronic records systems is estimated to be in the single digits. The biggest hurdle has been providing funds to help health care providers buy and implement these IT systems, which are costly and difficult to install. The money earmarked for electronic medical records in the stimulus plan should facilitate President Bush’s 2004 goal. Let’s hope that Congress can balance the above critics’ concerns for the sake of consumers of health care services.

By: Todd C. Ratner, Esq.

More updates on Long-Term Care Insurance

Typically, every day either myself or one of the other attorneys in my office are consulted as to whether a client should purchase long term care insurance. Many of the individuals requesting this information could be considered “old,” and therefore, they either cannot afford to purchase the insurance, or they are not healthy enough to acquire it, as they are not insurable by standards of insurance companies.

Many people also believe that Medicare will cover chronic care, but this is not the case.

So how do you determine whether you should purchase insurance, and when? It is estimated that the cost of long-term care insurance doubles if you obtains it at the age of sixty-five vs. fifty-five. So is it better to pay an additional ten years for the coverage or risk becoming uninsurable when you want to purchase it? While deciding, here is a list of factors that you should consider:

• The amount of the benefit
• The length of time for coverage
• The period for paying out of pocket (deductible)
• Inflation protection (if so, simple or compounded)
• Provisions to continue to pay for care even if the insured stops paying premiums

You should always consider the implications of not purchasing coverage, such as whether you can afford to self-insure until funds are diminished to the extent that Medicaid will cover your care either at home or in an institution. If you have sufficient income to cover care, such as retirement benefits, pensions, social security, etc., then you don’t need to insure 100% of the cost of care, but merely the difference. However, if you don’t want to pay for any of your own care out of pocket, you may need to purchase coverage to preserve income and assets.

You should also review the homecare benefit to determine whether the policy will cover both licensed and unlicensed caregivers and also pay for community programs such as adult day care if and when necessary.

It is important to review all options before you buy in order to make an intelligent and educated decision.

by: Hyman G. Darling, Esq.

Retirement changes in 2009

The Worker, Retiree, and Employer Recovery Act of 2008 provides for several alternatives for individuals in 2009. Due to the fact that the financial markets have dramatically reduced their values in the last quarter of 2008, the government felt it would be unfair to require individuals to take the minimum distribution in 2009 based on the value as of 12/31/08. Therefore, they have suspended the requirement that a distribution has to be made if a person is 70-½ as previously required.

In this manner, a person may allow the normal withdrawal to remain in the IRA so that it will hopefully come back in value and continue to build the account rather than have it be reduced. In prior years, if you did not take a distribution which was at least the minimum distribution required, the amount that you did not withdraw was taxed at an exorbitant rate of 50%.

The law that suspends the required minimum distribution in 2009 applies to all defined benefit plans: 401k plans, 403b plans, 457b plans, and IRA plans.

A second option is that a person may continue to withdraw funds from their IRA (not 401k or other qualified plans) and make charitable deductions directly from the IRA to the charity. The owner of the fund must be over 70-½, but the distribution that is being made may count towards the minimum required distribution.

Therefore, if a person had an interest in making charitable contributions or had pledged certain amounts to various charities, it would make considerable sense to have these funds from the IRA used to pay the charitable contribution rather than other liquid assets. However, the funds must be paid directly from the holder of the funds to the charity, and the funds may not pass through the hands of the account owner. This contribution may be made at any time during the year, so it may require a thoughtful decision as to when the contribution should be made based on when a person may feel the account will either increase or decrease in value.

Naturally, with any tax related matter, it is important to obtain advice in advance prior to the decision being made as these options are irreversible once made.

By: Hyman G. Darling, Esq.

2009 estate planning changes that may impact you

Please refer the the chart here to review basic 2009 gift, estate and income tax figures.

by: Hyman G. Darling

Green burials explained

Lately, there has been a movement to educate consumers of alternative burials. One such movement asks consumers to consider a “green burial.” A green burial is aptly named because it aims to provide ecological soundness.

A conventional burial in the United States typically involves embalming, a casket made of hardwood or steel, and a concrete grave liner or vault.

A green burial in contrast, usually entails a biodegradable wrapper and no embalming. The grave is typically marked by a flat memorial stone or other grave marker such as a tree or other planting. Computer mapping such as a GPS is often used to locate the grave. Advocates of a green burial argue that this technique conserves resources, protects groundwater and returns bodily nutrients back to the land. The cost of green burials is significantly lower than conventional burials. One estimate puts the cost of green burial at under $3,000.00 whereas the average funeral nationwide costs approximately $6,500.00.

The proper document to provide your burial instructions, which may include a conventional burial, cremation or green burial, is the Health Care Proxy. A experienced estate planning and elder law attorney can prepare this document accordingly so that your burial instructions are carried out properly.

By: Todd C. Ratner, Esq.

Estate planning with Alzheimer’s disease – start ASAP

The University of Alabama at Birmingham (UAB) released new research, which was published in the American Journal of Geriatric Psychiatry, providing that patients with mild Alzheimer’s disease (AD) have a dramatic decline in their ability to make financial decisions over a one-year period. The findings of the report strongly suggest that caregivers, health care providers, and other family members should seek estate planning options and fraud prevention measures immediately on behalf of those suffering with Alzheimer’s disease.

Dementia is a general term for the loss of memory, decision-making and other intellectual abilities serious enough to interfere with daily life. Alzheimer’s disease is the most common form of dementia.

The recent UAB report provides that “[a]fter just one year, the mild AD group had dropped to 70 percent of the financial capacity demonstrated by the healthy older adult group.” As such, the sooner estate planning can begin, the more the person with Alzheimer’s may be able to participate. Daniel Marson, director of the UAB Alzheimer’s Disease Center in the Department of Neurology, and the study’s leading author, said that “[t]he findings underscore the importance, at the time of diagnosis, of patients with mild AD and their families promptly pursuing financial planning and transfer of financial responsibilities.”

Therefore, a person diagnosed with Alzheimer’s should run, not walk, to an experienced estate planning attorney to discuss key issues such as options for health care decision-making, options for managing the person’s property and possible coverage of long-term care services, including what is provided by Medicare and other health insurance and government assistance programs. And, to locate the Alzheimer’s Association office nearest you, call 1.800.677.1116 for additional information and resources.

By: Todd C. Ratner, Esq.

Update on reverse mortgages

Several years ago, a new product was introduced called the reverse mortgage. This allows a senior to access the equity in their home without ever having to pay it back, under most circumstances. Until this product was introduced, a person could only get a basic conventional mortgage or a home equity loan, but these required payback during one’s lifetime.

A reverse mortgage allows funds to be withdrawn when needed in either a lump sum, over time, or in amounts that are fixed over the course of time until the limit of withdrawals has been reached. In any event, a person need not sell their home to make the payments to the bank unless they leave the home.

There are eligibility rules for reverse mortgages, such as the person must be at least 62 years old and must occupy the home as their principal residence for the majority of the year. Therefore, a second home, which is not the principal residence, would not qualify for the reverse mortgage.

Recently, a new law was passed that allows for greater limits to be accessed for the home valuation to determine what percent of the house may be utilized for liquid cash for the mortgage. These new limits are beneficial in most cases, but should not be used for everyone in all circumstances. Each person must be advised specifically as to the pros and cons of obtaining these reverse mortgages, since the fees are often significant when obtaining them, although many times, the fees are paid from the mortgage and not from funds held by the individual homeowner themselves.

In addition, although you may see recognizable television or movie stars promoting these mortgages in a TV ad, a person must be counseled privately before obtaining a reverse mortgage, so that they will totally understand the nature of the product and the costs involved. Many times, if a person is not 100% competent, their power of attorney or guardian may also be able to access the funds through the reverse mortgage, sometimes only after court approval.

Nevertheless, these types of mortgages are not credit based, and therefore, income and credit history are not necessary for the person to obtain the mortgage. The criteria would be solely home ownership, age, and capacity to contract to obtain the mortgage. However, a reverse mortgage is not right for everybody. Specific and timely advice should be obtained before taking out a reverse mortgage, since once it is obtained, it remains as an outstanding debt and liability. If the house is sold, it will have to be paid off. Not every financial institution provides for reverse mortgages, and one should “shop around” to ensure that they are getting the best deal on interest rate, fees, and accessibility before obtaining this special type of mortgage.

By: Hyman G. Darling, Esq.

Green burials – what are they and what are their advantages?

Lately, there has been a movement to educate consumers of alternative burials. One such movement asks consumers to consider a “green burial.” A green burial is aptly named because it aims to provide ecological soundness.

A conventional burial in the United States typically involves embalming, a casket made of hardwood or steel, and a concrete grave liner or vault. A green burial in contrast, usually entails a biodegradable wrapper and no embalming. The grave is typically marked by a flat memorial stone or other grave marker such as a tree or other planting. Computer mapping such as a GPS is often used to locate the grave. Advocates of a green burial argue that this technique conserves resources, protects groundwater and returns bodily nutrients back to the land. The cost of green burials is significantly lower than conventional burials. One estimate puts the cost of green burial at under $3,000.00 whereas the average funeral nationwide costs approximately $6,500.00.

The proper document to provide your burial instructions, which may include a conventional burial, cremation or green burial, is the Health Care Proxy. An experienced estate planning and elder law attorney can prepare this document accordingly so that your burial instructions are carried out properly.



By: Todd C. Ratner, Esq.

Victory for the Down Syndrome community

In late September of 2008, after approximately three years of advocacy, a victory occurred when the Senate and House passed a unanimous law called the Prenatally and Postnatally Diagnosed Conditions Awareness Act. This law will ensure that pregnant women who receive a positive prenatal test result and parents who receive the postnatal diagnosis will be more likely to receive up to date scientific information about life expectancy, clinical course, intellectual and functional development, and prenatal and postnatal treatment options.

Within the Act, there are provisions that offer referrals to support services such as hotlines, websites, adoption registries, and parent support networks and programs. In the past, much of the information provided was outdated and inaccurate. Many treatment options and opportunities were not provided, and there were decades-old stereotypes still persisting.

Under this new law, families and society will receive knowledge and information about individuals with Down Syndrome. This is a major victory, as it is hardly a routine occurrence with unanimous consent.

Senators Edward Kennedy (D-MA) and Sam Brownback (R-KS) were the original co-sponsors of the Bill, and they led this through the Congress for the ultimate benefit of all families and their children. It is hopeful that many of the myths and stereotypes will be dismissed, and that the future for these families and people will be better served. If you need for further information please contact the National Down Syndrome Society or the National Down Syndrome Congress.


By: Hyman G. Darling, Esq.