Posts By: Gene Osofsky

In our last post we wrote about what matters most when choosing a long-term care living situation, suggesting that it’s not always the place that matters most, but the mind-set of the elderly person who will be living there, and how involved that person is in the decision-making process. However, this does not mean that the quality of each living place doesn’t matter at all. In fact, according to the Wall Street Journal great care should still be taken when selecting a long-term care living situation… especially if you’re considering a Continuing Care Retirement Community (CCRC).

If you are considering a CCRC for yourself or an elderly loved one, you may want to read this article in the WSJ, which mentions that although more and more older Americans are drawn to the benefits offered by a Continuing Care Retirement Community, those benefits “often come at a steep price and ‘considerable risk.’”

The article goes on to mention that “So-called CCRCs—which typically offer fine dining, health clubs and on-site long-term care—have grown in popularity along with the aging of the population, particularly among the upper-middle class and affluent,” but that “the economic downturn is making it tougher for potential new residents to sell their existing homes and fill openings in new and expanded communities, which are generally regulated by state governments. As a result, low occupancy levels are challenging the industry’s financial models.”

We mention this because many of our clients are at a time in their lives when they or their elderly parents are looking into long-term care living situations, and we see how difficult it is to sort through all the choices and find a place that fits. Not only is quality of life an important factor (maybe the most important factor), but for many people the cost of the place they choose may mean the difference between leaving their children an inheritance and dying penniless.

We urge any of our readers who are in the market for long-term care living arrangements to look carefully at all their options; ask questions, do the research, and don’t be afraid to ask for help or a second opinion.

Posts By: Gene Osofsky

Elderly people and their families can spend months—sometimes years—looking for the perfect long-term care living arrangement. Most families try to avoid the nursing home option to the very end, believing that assisted living or small residential care homes provide a better quality of life. But is this fact or fiction?

Paula Span in her article on the NY Times New Old Age Blog suggests that “what variety of facility an older person lives in may matter less than we’ve assumed. And that the characteristics adult children look for when they begin the search aren’t necessarily what makes a difference to the people who move in.”

Span’s suggestion is based on (among other things) a recent study published in The Journal of Applied Gerontology, which found that among 150 Connecticut residents living in various long-term care situations (assisted living, nursing homes, residential care homes), the type of living situation itself made little difference in the resident’s emotional well-being. Rather, happiness and contentment was more a matter of “the characteristics of the specific environment they’re in, combined with their own personal characteristics — how healthy they feel they are, their age and marital status.”

Logically enough, a resident of a long-term care facility of any kind is more likely to report satisfaction and comfort if they had a hand in choosing their living situation, if they were part of the decision making process. In fact, it is the process itself—researching options, visiting facilities, considering current and future social and physical needs and how they will be met—that is the beginning of acclimatization.

Whatever your choice, you’ll want to know that you have options for paying for your long-term care living situation. Medicare.gov has published a chart summarizing and comparing the various options for long-term care financing. We find that the chart falls short, however, in the way it outlines the features of  “Medicaid”, called Medi-Cal in California, as it does not address planning options that are currently available to qualify for the subsidy and protect your home and other assets.  For more on this topic, see our “Consumer’s Guide to Medi-Cal Planning”.

Posts By: Gene Osofsky

Many clients are shocked when they see the sheer volume of paper in a truly well-done estate plan. A trust by itself can be hundreds of pages, not to mention the other 6 to 16 documents you may or may not have—depending on your family situation. You may find that the “simple” estate plan you thought you were getting has turned into something of a size that would rival War and Peace!

It didn’t always used to be this way. The last will and testament of the great Jane Austen, for example, was only one paragraph long:

I Jane Austen of the Parish of Chawton do by this my last will I testament give and bequeath to my dearest sister Cassandra Elizabeth everything of which I may die possessed, or which may be hereafter due to me, subject to the payment of my Funeral expences, & to a Legacy of £50. to my Brother Henry, & £50 to Mde de Bigeon – which I request may be paid as soon as convenient. And I appoint my said dear sister the executrix of this my last will & testament.

Jane Austen

April 27 1817

Although this simplicity may have worked in 1817 England, it isn’t practical in the here and now. Things just aren’t that simple anymore. First of all, although Austen appoints her sister Cassandra as the executrix of her will, the will itself neglects to specify what powers are included in that appointment, leaving Cassandra effectively unable to carry out Austen’s wishes. Secondly, the will neglects to make alternative provisions—what if Cassandra had unexpectedly died before Jane? Also notably lacking (from our contemporary perspective) are any provisions for estate taxes. And finally, discerning readers may notice that the will does not include the signatures of any witnesses, something which would have been required if her will had been type-written.  Likely, it was only because her will was written entirely in her own hand, and her hand-writing was later authenticated by witnesses who authenticated her hand-writing, was the will upheld as valid.  In California, a type-written will must always be signed by at least two witnesses; the only exception  to this requirement is a “holographic” will, which is a will that is completely handwritten by the testator. 

We all may long for simpler times, especially when it comes to something most people think will only benefit their heirs and not themselves; but many of the rules and regulations that are dismissively thought of as “hoops to jump through” are there for your best interest. They exist to protect your heirs and your legacy from fraud, misuse, greed and neglect. Far from being a chore, creating a thoughtful and legally valid will these days is actually an act of love… One might even say it’s a matter of sense and sensibility.

Posts By: Gene Osofsky

Many adult children of an aging parent get to a point in their parent’s care where they feel they have only two options: move their parent in with them so that they (or their spouse) can provide around-the-clock care, or move their parent into a nursing home. Reaching this point can be a very emotional time for both parent and child; with the parent feeling anger and frustration at the loss of independence, and the child feeling that they have somehow failed their parent.

Improving technology may never be able to remove the need for this decision entirely, but it may be able to postpone it a little. A recent article in the New York Times describes some new technologies that help adult children monitor their aging parent right inside the home, therefore removing the need (or at least delaying the need) for physical around-the-clock supervision.

One of the new technologies mentioned in the article (called GrandCare) “allows families to place movement sensors throughout a house. Information — about when doors were opened, what time a person got into and out of bed, whether there’s been any movement in a room for a certain time period — is sent out via e-mail, text message or voice mail.” It is this kind of in-home monitoring that may allow seniors to remain in their homes longer.

Some seniors have reservations about these new technologies, however, something that they consider to be an invasion of privacy. Nancy Schlossberg is quoted in the article as comparing these new technologies to nanny-cams, “Big Brother is watching you — there’s something about it that’s very offensive.” Some seniors may agree with her, but if it comes down to a choice between technological monitoring or moving to a nursing home they may find that “Big Brother” is the lesser of two evils.

Posts By: Gene Osofsky

If you have been reading our blog then you know that this year—the year without a federal estate tax—is an important year, and that next year—when the estate tax returns—will be an even more important year for planning and reviewing your estate. You know this… but do your parents?

Kimberly Palmer, author of this article in U.S. News and World Report says that “bringing up the estate tax with your aging parents can be as awkward as inquiring after their sex life.” Talking about any kind of estate planning with your parents can indeed be awkward, but as Palmer points out it is extremely important… especially now when the repeal and reinstatement of the estate tax means that “ignoring the issue could mean giving Uncle Sam a big chunk of one’s estate inadvertently.”

So how can you bring up the topic of estate planning with your parents without them thinking that you’re more interested in your inheritance than your parents’ well-being? The article mentioned above has a few ideas, including:

  • Talk about your own estate planning experience and how relieved you are that everything is in place.
  • Talk about recent celebrity deaths that have been in the news: George Steinbrenner, Michael Jackson, etc.
  • Mention how concerned you are about the uncertain estate tax situation.

Of course, the best policy is to just be honest. Tell your parents truthfully that you are concerned about their financial stability, about keeping the family peace, about your grasping uncle Mickey taking the antique dining set you’ve loved since you were a child. Explain that you only want to help… but remember that the choice is ultimately theirs. As author Deborah Jacobs says in the article, “if they don’t want to talk about money, then you need to drop it and accept that this is not something you should pursue… If you have tense times towards the end of your parents’ life because you’re talking about estate planning, it will stay with you forever, and it’s just not worth it.”

Posts By: Gene Osofsky

Part of creating an estate plan is talking to your spouse, your family—and yes, your attorney—about your end-of-life wishes. A living will or healthcare directive is an essential part of any estate plan. This is the document in which you nominate the person or people who will make healthcare decisions for you when you are unable. It is also in this document that you specify what treatment you would (or would not) like to have at the end of your life. It is in this document that many people specify their do not resuscitate (DNR) orders; and once they’ve created and signed this document they think they’re all done.

Not quite.

Studies have shown that even with perfectly executed healthcare directives many patients receive treatment they specifically did not want; this is because their wishes are unclear or have not been communicated to medical providers. Some states have found a way to prevent this miscommunication… with a program called Physician Orders for Life-Sustaining Treatment, or POLST. “The program involves an innovative medical form that is signed by a doctor, allowing patients to specify what kind of care they want at the end of life, such as feeding tubes and other medical interventions.”

The key here is that the medical form is signed by the patient’s doctor. This requires patients to include their primary care physician in their decisions regarding end-of-life care—or at the very least notify their physician of these wishes—with excellent results. A study published in the Journal of the American Geriatrics Society found that “patients with the Physician Orders for Life-Sustaining Treatment forms had much less unwanted hospitalization and medical interventions.”

This is wonderful news if you’re in a state like California or Oregon, which already has the POLST program in place. But it doesn’t mean you’re out of luck if you happen to reside in a non-POLST state. Even without the official POLST program, the key to having your end-of-life wishes respected is communication; communication with your doctor, with your family, and with the nursing or caregiving staff most likely to be attending you in an emergency situation.

If you are concerned about having your wishes followed, don’t hesitate to talk to your doctor and/or nursing staff about your living will or healthcare directive. Even have them read and sign off on it if necessary. After all, a healthcare directive is a wonderful tool, but it doesn’t do much good gathering dust in your filing cabinet. Make sure your family and medical staff are aware of your end-of-life wishes.

Posts By: Gene Osofsky

Anyone who has been following our blog knows that the expiring Bush tax cuts (including the repeal of the estate tax this year and the tax’s reinstatement next year) have given lawmakers no end of trouble as they struggle and debate—and debate and struggle—to agree on new tax legislation moving forward. In fact, The Wall Street Journal calls the issue “a ticking time bomb,” while the New York Times warns that “an epic fight is brewing.” It seems that the only thing everyone does agree on is that something has to be done before December 31, 2010.

Unfortunately, according to both news sources, politics takes precedence over legislation. “The tax fight will serve as a proxy for the bigger political clashes of the year, including the size of government and the best way of handling the tepid economic recovery,” warns David M. Herszenhorn of the NY Times, “’…this is code for the role of the federal government, the debate over the size of government and the priorities of the nation.’”

According to David Wessel of the WSJ party lines are clearly drawn. “The Obama administration is pressing to extend the Bush tax cuts for everyone with an income under $250,000 a year and to raise taxes on those above. A recent Pew/National Journal poll found that only 11% of Democrats favor extending all the Bush tax cuts.” Meanwhile, “Republicans are happily staking out the no-new-taxes turf, playing to their traditional constituency. Pew says 52% of Republicans favor extending all the Bush tax cuts.”

It would certainly give taxpayers some comfort if legislation could be passed quickly and decisively, but Herszenhorn warns that it’s not likely to happen, “Given the partisan gridlock of recent months, there is a chance that the battle could go down to the last minute, or even — in the face of a stalemate — that the tax cuts could be allowed to expire completely, a development that… lawmakers in both parties say could be the worst outcome.”

Either way, the best advice we can give our readers is to be prepared. Just because lawmakers keep putting off a decision doesn’t mean you should. Talk to your attorney about the best way for your family to weather the coming storm. Be aware of changes to tax laws and update your estate plan accordingly.

Posts By: Gene Osofsky

Everybody thinks it won’t happen to them. Or rather, everybody knows it’s going to happen to them eventually, but nobody thinks it’s going to happen tomorrow, or next week, or even next year. The “it” of which I speak is, of course, death. It is this perceived immortality that allows so many people to put off their estate planning until it is too late.

But today’s blog post is not a cautionary tale about a family who put off their planning and regretted it, today’s post is about the peace and relief that forethought and planning brings not just to your family, but to you as the person making the plan.

In this article in Market Watch Chuck Jaffe tells the moving story of his brother Rob, who insisted 2 years ago on creating an estate plan even though he and his wife were both healthy. As Jaffe puts it, “While not pleasant subject matter, it was not morbid… you’d rather be drinking lemonade on the veranda, but it wasn’t a sharp stick in the eye.” However, when Rob became unexpectedly ill in May of this year the estate plan turned out to be a comfort to Rob and his family—such a comfort, according to Jaffe, that Rob “made me [Chuck] promise that I would write about him… when his time was up, because his story would help others.”

“People need to understand… how big a blessing it is to know — when their time comes — that they have everything in order, that they don’t need to stress or worry about how things they worked their whole life for are going to turn out. … I would not want to waste a minute of my life now having to do estate planning or worrying that I live long enough to get documents filed or whatever garbage comes with it… Focusing on death and dying while you are living, that’s easy; having to focus on death when you are dying, that would be unimaginable.”

In our business we frequently see how much easier it is for people to create a plan when they’re healthy, as opposed to the stress that comes with creating a plan when they are sick. Thank you Mr. Jaffe for sharing your brother’s moving story. We hope that your (and your brother’s) words will help motivate others to take comfort in planning ahead.

Posts By: Gene Osofsky

Estate planning can be a pretty involved affair, even for people whose lives are fairly straightforward; but if you are an ex-patriot, have dual citizenship, or plan to leave assets to family members in another country the estate planning process can by downright mind-boggling. This is because each country is going to have its own laws regarding heirs and distribution, while some governments (according to this article in the New York Times) will even “require their citizens or residents to pass assets on to people other than those whom they would choose.”

The United States has avoided these “forced-heirship” laws (although your state’s laws regarding distribution of assets in the absence of a will or estate plan may feel like forced-heirship), but these laws “are prevalent in many parts of the world, notably the Middle East, where Islamic law predominates, and continental Europe.” If you are a United States citizen residing in one of these “forced-heirship” countries—or if you are a citizen of one of these countries residing in the United States—you will definitely want to talk to your attorney about how best to protect your family and your assets.

Just how you will go about building your web of protection will depend on a number of variables, including your citizenship, your country of residence, and in which country the assets were acquired or are held. Most estate planners agree that a trust is generally the best way to go about protecting your assets, but a trust may not work in every situation. “The legal systems that have forced-heirship rules tend not to recognize trusts.” You may find that you’ll have to set up a will or estate plan in two places: one in your country of origin and one in your country of residence.

And of course international estate planning is not all about heirs and distribution—especially if you have young children. International guardianship documents should be carefully drafted and should include provisions for temporary guardians, travel arrangements, and medical powers of attorney for minors.

Living in a global community has its pros and its cons—the best way to successfully span two countries or cultures is to be flexible… and be prepared!

Posts By: Gene Osofsky

Our country may be facing a simultaneous growth and recession… unfortunately, according to journalist John Leland, the two seem to be at odds. What we are referring to is the growth of the elderly population and the recession of funds available to help this aging community pay for the care they need.

The economic downturn of the past few years has hit the elderly with a double-whammy. Many of them lost close to all of their savings when the stock market bottomed out, and now budget cuts to state-funded home-care services threaten to force many of them out of their homes and into hospitals or nursing facilities.

“’I’m not getting a cost-of-living adjustment, and now I’m not getting food,’ said Joyce Plennert, 83, who is on a waiting list for Meals on Wheels in Palatine, Ill. ‘Now I’m worried my home services will be cut. Without that, I’d be in a nursing home, if I could find one with room.’”

According to the above-mentioned NY Times article, a number of states have already made cuts to home-care services, including Alabama, Arizona, California, Colorado, Florida, Kansas, Mississippi, Missouri, Nevada, New Jersey, New York and Texas. “The situation is grim, and it’s safe to say that present trends are expected to continue,”

These budget cuts impact more than just senior citizens—they affect the professional caregivers and home aides who lose their jobs when state programs are cancelled, as well as the families of the elderly. When these seniors lose their ability to live at home it’s their families who will have to pick up the slack either by contributing to the costs of care or more often by becoming the caregivers themselves.

If you or a loved one is facing a loss of benefits due to budget cuts don’t be afraid to explore your options. Geriatric care managers can help families through confusing times, and other advisors such as elder lawyers, estate planners, financial planners and others can offer valuable advice when creating your plan for the future.