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Below you will find the January issue of The Elder
Law Report, a monthly e-newsletter full of the latest
legal developments and other trends of vital interest
to seniors and their advocates. Your friends, family
and colleagues will thank you for passing along the
helpful articles we have complied for you.
We are pleased to share with you that Howard
Krooks, a partner of Elder Law Associates PA,
was recently featured in Kiplinger’s Retirement
Report in the Estate Planning column. Howard
was quoted in reference to a $38,000,000 estate
administration matter involving the improper
appointment of non-blood and non-resident
individuals as co-Personal Representatives of the
estate.
Click here to read the
article.
Please continue to send your comments and
questions to
Info@ElderLawAssociates.com. We love hearing
from you and would like to include your question in
an upcoming Reader Questions & Comments column.
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Is It Time for a Life Insurance Audit?
Have you owned the same life insurance policy for a number of years? If it’s a whole life policy or a term policy that can be converted to whole life, and the answer is “yes,” it’s time to have that policy reviewed. Here are a few reasons why:
- The life insurance companies have changed the tables they use in determining the life expectancy of customers. This means that even though you bought your current policy when you were younger, you may now be able to get the same coverage at lower rates.
- If you no longer need the life insurance coverage, you may be able to sell the policy for substantially more than its cash surrender value. In recent years, a robust market has developed for so-called “life settlements.” In general, buyers are looking for policies with death benefits of at least $100,000.
- If you have a “second-to-die” policy – insurance to be paid when the second of a husband and wife passes away – and one of the other insured individuals has already passed away, you may be able to trade in the policy for a new one on your life alone at favorable rates.
Finally, if your net worth is high, a new market has developed that can get you free life insurance for two years. Known as “premium financed” life insurance, it’s complicated and not available to everyone. You have to be at least 70 years old and in good health. Some companies require you to have a net worth of at least $3.5 million, while others will go as low as $1 million. In either case, for as long as it lasts it offers the possibility of getting something for nothing, or at least nothing other than going through the process of a medical exam.
If you fit within any of the four categories above, it’s time for an insurance review. Contact your insurance agent or attorney, who can put you in touch with the right insurance professional.
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Law Enacted Offering Caregivers Some Relief
Before adjourning, the 109th Congress unanimously approved a bill that will provide a measure of relief for the millions of Americans currently providing unpaid care in their homes to the elderly or those with special needs. President Bush has signed the bill into law.
The Lifespan Respite Care Act (HR 3248) authorizes nearly $300 million in grants to states over the next five years to help families hire temporary help to relieve primary caregivers. Building on programs in states like North Carolina, the new federal law will provide respite services regardless of age, income level or condition severity.
Starting in 2007, the new federal law will give states money to provide respite care services for family caregivers caring for children or adults, to train and recruit respite care workers and volunteers, and to provide information to caregivers about available respite and support services. States will make proposals to the federal government on how to spend the money and will compete for grants, so every state's program will be somewhat different. No doubt demand will outstrip available services. Thousands of families are on a waiting list for North Carolina's current program.
"The new law . . . is part of a growing effort by the federal government to encourage home care as a way of saving money in other programs, especially Medicaid, for the high cost of nursing homes," wrote The Wall Street Journal. The Journal points out that if respite care delayed every senior's institutionalization by one month, it could save the government as much as $1.12 billion a year.
National Respite Coalition chairwoman Jill Kagan said that "in the short term, [the new law] will ease the burden on Medicaid and Medicare. But in the long term, it won't avoid nursing home placement, but it will be cost saving."
For information on the development of programs in your state, check with your Department of Health and Human Services (or the equivalent agency).
To read the new law, go to http://thomas.loc.gov, enter Bill Number "HR 3248" and then select version four, "Enrolled as Agreed to or Passed by Both House and Senate."
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Understanding Tenancy: The Different Ways to Co-Own Property
When two or more individuals own property -- whether it's a condominium, a home, or a piece of land – the relationship between the owners is known as “tenancy.” There are a number of possible ways that tenancy can be structured, and how it is done will determine such important considerations as whether an interest in the property will pass freely at an owner’s death and whether creditors can claim the property.
Tenancy comes in three main forms: tenancy in common, joint tenancy and tenancy by the entirety. Each has advantages and disadvantages and must be properly drafted in the deed or conveyance to accomplish its intended purpose. Otherwise, state "default" rules will determine which form of tenancy applies, perhaps imposing unwanted results.
Tenancy in common allows an owner the greatest flexibility to transfer the property as she wants. Each co-tenant in a tenancy in common has an interest in the property and is free to transfer this interest during life or through a will. The co-tenants can have different ownership interests; for example, three owners could own 5 percent, 35 percent and 60 percent of the property, respectively, as tenants in common. Each tenant can sever her relationship with the other tenants by conveying her interest to another party. This third party then becomes a tenant in common with the other owners.
Joint tenants, on the other hand, must have equal ownership interests in the property. So, three owners would each have a one-third interest in the property. If one of the joint tenants dies, his interest immediately ceases to exist and the remaining joint tenants own the entire property. The advantage to joint tenancy is that it avoids having an owner's interest probated upon his death.
A disadvantage to both joint tenancy and tenancy in common, however, is that creditors can attach the tenant’s property to satisfy a debt. So, for example, if a co-tenant defaults on debts, his creditors can sue in a "partition proceeding" to have the property interests divided and the property sold, even over the other owners’ objections.
A third form of tenancy that is allowed in several states, tenancy by the entirety, avoids this problem, but it is available only to married or, where applicable, civilly united couples. Tenancy by the entirety is based on the societal value of protecting the family. One tenant cannot convey her interest on her own, unlike with the other tenancies. Upon the death of one spouse, his interest automatically passes to the other spouse, as with joint tenancy, and the creditors of one spouse cannot attach the property or force its sale to recover debts unless both spouses consent.
Creditors may place a lien on property held in tenancy by the entirety, but they are out of luck if the debtor dies before the other spouse, who will take ownership of the property free and clear of the debt. This is why both husband and wife are required to sign the mortgage on their property for the mortgage to be valid. Unmarried couples who buy property and subsequently marry each other should re-title the deed as tenants by the entirety to avail themselves of the greater protections this form of tenancy offers.
In most states, if the form of tenancy that the tenants intended is ambiguous, the tenancy will be assumed to be a tenancy in common.
Your elder law attorney can tell you which form of ownership is the right one for your circumstances.
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Elder Law Associates PA is a boutique elder law firm
that practices exclusively in Medicaid and long term
care planning; home and community-based waiver
services; Medicaid applications; nursing home
residents’ rights litigation; asset preservation
planning with a special focus on planning in light of
the Deficit Reduction Act of 2005, including
promissory notes and personal care agreements;
disability planning, including special needs trusts and
guardianship; estate planning, including wills and
trusts; long term care insurance; advanced
directives; and probate, which encompasses estate
and trust administration. We assist clients in planning
for the possibility of disability, incapacity, home
health care, assisted living and/or nursing home
placement. Our firm enables clients to avoid
impoverishment caused by the escalating cost of
long term care, to maintain their right to make health
care decisions and to avoid unnecessary medical
treatment.
We hope you have enjoyed The Elder Law
Report. If you have questions about something
you read, elder law matters or
issues concerning persons with disabilities, we would
be delighted to hear from you. We serve as an elder
law resource to many professionals and organizations
and want to become your elder law resource as well.
You can reach us at
Info@ElderLawAssociates.com.
Feel free to share The Elder Law Report
with others who will benefit from our insights - just
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Warm regards,
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On January 1st of each calendar year, adjustments
are made to some of the public benefits numbers in
accordance with adjustments in the cost of living
index. The following Medicaid numbers reflect the
2007 levels (effective January 1, 2007):
If a transfer is made to... 
Most Americans are unaware of the costs of long-term care and overestimate the amount that government programs like Medicare will pay for this care, according to a new research report by AARP.
