Lambros Law Office LLC

Planning for Long-Term Care Before It’s Too Late

Starting to plan for elder care should happen when you are in your 50s or 60s. By the time you are 70, it may be too late. With the national median annual cost of a private room in a nursing facility coming in at more than $100,000, not having a plan can become one of the most expensive mistakes of your financial life. The article “Four steps you can take to safeguard your retirement savings from this risk” from CNBC says that even if care is provided in your own home, the annual median national cost of in-home skilled nursing is $87.50 per visit.

There are fewer and fewer insurance companies that offer long-term care insurance policies, and even with a policy, there are many out-of-pocket costs that also have to be paid. People often fail to prepare for the indirect cost of caregiving, which primarily impacts women who are taking care of older, infirm male spouses and aging parents.

More than 34 million Americans provided unpaid care to older adults in 2015, with an economic value of $522 billion per year.

That’s not including the stress of caring for loved ones, watching them decline and needing increasingly more help from other sources.

The best time to start planning for the later years is around age 60. That’s when most people have experienced their parent’s aging and understand that planning and conversations with loved ones need to take place.

Living Transitions. Do you want to remain at home as long as is practicable, or would you rather move to a continuing care retirement community? If you are planning on aging in place in your home, what changes will need to be made to your home to ensure that you can live there safely? How will you protect yourself from loneliness, if you plan on staying at home?

Driving Transitions. Knowing when to turn in your car keys is a big issue for seniors. How will you get around, if and when you are no longer able to drive safely? What transportation alternatives are there in your community?

Financial Caretaking. Cognitive decline can start as early as age 53, leading people to make mistakes that cost them dearly. Forgetting to pay bills, paying some bills twice, or forgetting accounts, are signs that you may need some help with your financial affairs. Simplify things by having one checking, one savings account and three credit cards: one for public use, one for automatic bill-paying and a third for online purchases.

Healthcare Transitions. If you don’t already have an advance directive, you need to have one created, as part of your overall estate plan. This provides an opportunity for you to state how you want to receive care, if you are not able to communicate your wishes. Not having this document may mean that you are kept alive on a respirator, when your preference is to be allowed to die naturally. You’ll also need a Health Care Power of Attorney, a person you name to make medical decisions on your behalf when you cannot do so. This person does not have to be a spouse or an adult child—sometimes it’s best to have a trusted friend who you will be sure will follow your directions. Make sure this person is willing to serve, even when your documented wishes may be challenged.

Reference: CNBC (Jan. 31, 2020) “Four steps you can take to safeguard your retirement savings from this risk”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Financial Elder Abuse Is Growing

Financial elder abuse is defined as the “fraudulent or otherwise illegal, unauthorized or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit or gain, that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings or assets.” That’s from The Older Americans Act of 2006.

Consumers Digest estimates that there are at least five million cases of financial elder abuse in America every year. An article titled “Population ages, financial abuse rises” from the Reading Eagle wisely notes that seniors are not just being targeted, they are the bull’s eye.

One of the reasons is because many older Americans live in isolation. A person who spends most of their time alone will welcome any simple human interaction, including talking to anyone who calls on the phone, unknown neighbors introducing themselves, marketing mail or interactions on the internet. This desire for company makes seniors more likely to ignore warning signs and to hand over money and control of their assets.

Do you wonder what kind of person would hand over their power of attorney to a stranger? The plain truth is that most financial elder abuse is committed by people who are closest to the senior. Family members are far more likely to prey on seniors than a stranger.

One financial advisor notes an instance where a scammer forged a check for $25,000 in a senior’s name, then kept doing it until she had stolen up to $75,000. She did it repeatedly, because she knew that she could get away with it.

The key to prevention is planning. First, seniors should simplify their financial and legal matters. Surrounding yourself with trusted advisors and family members who serve as checks and balances for each other is a good idea. It’s sometimes hard to know who to trust sometimes, especially family members. An estate planning attorney should be part of your team, and everyone should work together.

If you become suspicious that financial fraud is happening to you or a loved one, you may want to reach out to the Adult Protective Services office in your community. They will be able to advocate on behalf of the senior.

Treat everything and everyone with a degree of suspicion. If someone knocks on the front door and says they can offer you a discount on tree removal or roof repair because they are in the neighborhood, don’t believe them. You should also have an estate plan in place that protects your assets, so they are less vulnerable to a scammer.

Reference: Reading Eagle (Feb. 9, 2020) “Population ages, financial abuse rises”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Inheriting a House? What You Need to Know

There are choices when someone inherits a house. However, they depend on several factors. Are there other siblings who also have inherited portions of the ownership of the house? Is there another owner who needs to be bought out? Can the heir afford to take on the responsibilities and expenses of a home? These are all questions presented in the article “What to do when inheriting a house” from The Mercury.

There’s a tax issue to consider, for starters. Property that was titled in the name of the decedent at the time of death and then inherited, receives what is called a “step-up” in basis. This means that there is no federal tax due on the appreciation in value from the time the person purchased the home to the time that the person died.

Let’s say the person bought the home for $100,000 and it’s now worth $300,000. The federal government will not tax the $200,000 difference between the original value and the DOD (Day of Death) value of the home. If the heir obtains an appraisal shortly after the death of the home owner and then moves in or if you already live there and the house is transferred into your name, the “clock” starts running again for another tax break, which is an additional $250,000 exclusion from capital gains on resale after you have lived there for two years.

This all assumes that any other beneficiaries have been satisfied as to the ownership of the house. A good elder law estate attorney will be able to help with the details, including the transfer of title.

Another issue: is there a mortgage on the house? If so, the new owner may need to satisfy the lender and refinance. If the heir has enough money to meet monthly payments, a strong credit rating to be able to get a mortgage and enough income to maintain the home, then it should be a relatively simple transaction.

Have the home inspected before moving in. Is the house in good shape? If repairs need to be done, are they budget-friendly, or will they make the inheritance too expensive to be financially viable?

Property maintenance is another consideration. If the estate can carry costs associated with the property until the property is sold and if the estate can pay for repairs, upgrades and maintenance so the house can be sold for a good price, then that is a reasonable approach to take. If there are other beneficiaries, they should all part of a discussion about how much money is worth investing in the house and what the return on investment will be.

Finally, if the language of the will says “equally to my three children” or language similar to that and one sibling wants to buy out the other two, then an agreement on the value of the house and a plan for working out timing of the sale will need to be created. An estate planning elder law attorney will be able to help create a family settlement agreement that will include an informal accounting, whereby all of the heirs receive their fair share of the inheritance and all sign off that they have agreed to the transaction.

Reference: The Mercury (Jan. 15, 2020) “What to do when inheriting a house”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Protecting Adult Children with Disabilities

One in four Americans has some kind of disability, and an increasing number of children are being diagnosed with some form of autism. The life expectancy for people with Down syndrome has increased from living to age 12 in the 1940s to nearly 60 today. Most children born with cerebral palsy live into their thirties. For parents of these children, it is more important than ever to create a plan and a community, says the article “How to build support system for adult children with disabilities” from The San Diego Union-Tribune.

Financial resources and support services need to be put into place, for when parents are no longer able to provide care. Here are the key points to address:

Preserving the child’s eligibility for government assistance programs, including Supplemental Security Income (SSI) and Medicaid, through the use of a Special Needs trust. Any amount of money can be placed in the trust, and the funds don’t count when determining eligibility. If parents leave money directly to a child, they will lose their ability to get SSI and Medicaid benefits.

Start early. A Third-Party Special Needs trust should be set up before the child turns 18. It doesn’t need to be funded, but it needs to be created.

Be a stickler for the rules. If the child receives SSI, money from the trust may not be used for food and housing, but it can be used for other costs, like therapies that are not covered by Medicaid, or even extras, like a cellphone or vacation. An experienced elder law attorney will be able to help the family with planning and learning the intricacies of these rules.

Name a trustee and a successor trustee. Selecting someone to manage the trust on behalf of the child is a critical decision, and not always an easy one. The trustee should be someone responsible who cares about your child’s well-being. It could be a sibling, if the relationship is good, or a family member. The person should be younger than the parents, so they will be around after the parents have passed.

Open an ABLE Account—Achieving a Better Life Experience account. These are accounts that work in much the same way as a 529 account. They can be established for a disabled person at any time, but the child must have the qualifying disability before age 26. Money from a Special Needs trust can be moved into an ABLE account, and the beneficiary can use it for any qualified disability expense.

Prepare a letter of intent or guidance. This is not a legally binding document, but rather a way of sharing information with others about your child: their preferences, routines, comfort levels and wishes. It can also be used to provide information about caregivers, medical providers and others who are a good fit with your child. You may also wish to share information about what and who they don’t like. Update the letter every year or two.

Power of Attorney. Having a power of attorney for a disabled individual is far more flexible and less costly than a conservatorship or guardianship.

Housing options. Where will your child live? That depends on what kind of disability the child has and the family’s financial resources. Ideally, the child can transition from the family home to another place while the parents are still living. If feasible, the parents could leave the family home to the child in the Special Needs trust, but they’ll also need to leave enough money for ongoing expenses and maintenance of the house. Some disabled adults live in group home settings, where counselors and other staffers help residents live on their own.

An elder care lawyer will be able to connect the family with many different resources and help with creating a Special Needs trust.

Reference: The San Diego Union Tribune (Jan. 9, 2020) “How to build support system for adult children with disabilities”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Is It a Call from Social Security or a Scam?

If you get a call allegedly from the Social Security Administration, the chances are good that it’s a scam. Prior to disclosing any information or money, there are some steps you want to take.

CNBC’s recent article entitled “Social Security scams have caused millions of dollars in losses in 2019 alone. How you can avoid becoming a victim” explains that it’s common for an unknown caller to say that your Social Security number has been suspended or canceled.

This is the latest version of a robocall scam that the IRS warned people about in early 2019.

Other criminals attempt to convince people to pay up with cash or gift cards, in order to avoid getting arrested.

In the first six months of 2019, people filed 73,000 reports about Social Security fraud, according to the Federal Trade Commission. The losses from these calls was more than $17 million.

However, Congress is trying to stop these practices.

The House of Representatives passed a bill in early December to restrict robocalls by requiring carriers to block the numbers, without charging consumers extra money. The Senate passed a similar bill earlier this year.

Several lawmakers also asked the Social Security Administration to review scam calls purporting to come from the agency.

“While SSA has taken steps in recent months to prevent and raise public awareness about these imposter calls, we are alarmed that the scams continue to be widespread and severe,” the congressmen wrote in a letter to Andrew Saul, commissioner of the Social Security Administration.

The Social Security Administration also won’t send you an email with a “click here” link.

It is important to limit when you give out your Social Security number. You should think twice before revealing that information on healthcare forms, for example, where that information is usually unnecessary.

Reference: CNBC (Dec. 16, 2019) “Social Security scams have caused millions of dollars in losses in 2019 alone. How you can avoid becoming a victim”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

What are the Red Flags that Aging Parents Need Help?

A visit to a beloved family members’ home is an opportunity to evaluate how they are doing, and if they need some help in daily living or managing their affairs. This article from AARP, “5 Signs Your Loved One May Need Caregiving Support,” offers some good pointers for children and family members.

1. Falls and safety. Look for things like unsafe indoor or outdoor stairs, especially without railings or poor lighting, along with loose rugs, clutter, or a laundry room that makes your mom or dad carry laundry baskets up and down stairs. You should evaluate fall hazards with a certified aging in place specialist (CAPS), an aging life care specialist, or a physical or occupational therapist. They can help evaluate your parent's needs, abilities and the home environment. Consider installing safety measures such as ramps, handrails on both sides of stairs, grab bars in the bathroom, or a walk-in shower.

2. Unfinished business. If you see a lot of unopened mail and unpaid bills, or key financial, home or legal documents that haven't been addressed, your mom may be cognitively, physically, or emotionally unable to handle them. You may want to help your parent simplify her affairs or engage a financial manager. You can also volunteer to assist with the more complicated matters while she continues handling day-to-day household and personal finances. You should also be sure that your parent has advanced directives and other legal documents in place, so you are able to help manage her affairs in an emergency.

3. Auto accidents and moving violations. When you see multiple accidents—even minor fender benders—or several warnings or citations, scrapes, or dents on the car, it's time to discuss driving. You can ride along and observe any health issues causing problems like vision, hearing or cognitive changes. You can suggest that he refresh his driving skills by taking a driver safety course, or if it's time to stop driving, give him other viable transportation options.

4. Isolation. Does your mom appear to be disconnected from friends, family and community? If her support system seems to be deteriorating, her physical and mental well-being are at risk. Discover with whom she regularly interacts. Ask if she feels lonely. Look for some activities she’d enjoy and help make arrangements for ongoing participation and transportation. Regular phone calls can help her connect, as well as using technology, including video chat, online communities and social media.

5. A change in appearance. If you notice a change in your mom’s appearance, like a big gain or loss of weight, wearing the same clothes every day, or lack of personal hygiene, or if she appears sad, anxious, and distressed or has sleep issues—something is not right. Propose a complete medical and psychological evaluation to determine what’s normal for her, because there may be several reasons for these changes. Depression or anxiety may call for treatment.

Have a conversation with her pharmacist and see if having a pill organizer will be helpful. You may need to stop by weekly to set it up. Ask about how she’s shopping and cooking for herself. If shopping and cooking are a challenge, she may need home-delivered meals.

Most estate planning attorneys have relationships with a network of social workers, geriatric care managers and others who can help.

Talk with your aging parent about your concerns for their well-being, and the resources that are available to help her remain at home and maintain her independence, while enjoying a safe and healthy life.

Reference: AARP (December 12, 2019) “5 Signs Your Loved One May Need Caregiving Support”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

How Does a “Senior Freeze” Work?

In some families, a decision is made to transfer the parent’s home to their children through the use of a life estate. It’s used to help parents become eligible for certain government benefits, among other estate planning purposes. However, this could cause parents to lose their ability to receive the Senior Freeze, which reimburses eligible seniors and disabled people for increases to property tax or mobile home park site fees.

As far as property with a life estate, nj.com’s recent article, “Will I get the Senior Freeze if I have a life estate for my home?” explains that it’s important to determine who remains the owner of the property. The article says that the Senior Freeze program is a bit of a misnomer, because the benefit doesn’t actually “freeze” property taxes. The program actually reimburses eligible individuals for any property tax increases incurred, once an individual qualifies for the benefit.

An eligible person gets the difference between the property tax amount in the first year of eligibility—the “base year”—and the current year’s property tax amount, presuming it is higher. For example, in New Jersey, a person has to have two consecutive years of eligibility before applying and satisfy the following requirements:

• The applicant or his/her spouse are at least 65 or receiving Social Security disability benefits;
• The applicant lived in the state continuously since Dec. 31, 2007, or earlier, as a homeowner or renter;
• The applicant owned and lived in his/her home since Dec. 14, 2014 or earlier (and still owns and lives in the home);
• He or she has paid the full amount of the property taxes due; and
• The applicant meets the income limit (currently $89,013 in NJ).

The program typically doesn’t apply to vacation homes, second homes, rental properties, or properties that have more than four units.

It’s not uncommon for seniors to transfer a home to a trust for a variety of purposes, including government benefit planning. However, conveying your home entirely may disqualify you from the Senior Freeze program. An applicant is considered the owner of the property, if she retains a life estate in the property, which must be evidenced in the deed or other legal document showing the applicant’s right to occupy the property.

Before transferring any real estate or making any large gifts, talk with an estate planning elder law attorney. While the retention of a life estate may let an applicant qualify for the Senior Freeze if other qualifications are met, it may have a bigger impact on other benefits.

Reference: nj.com (December 11, 2019) “Will I get the Senior Freeze if I have a life estate for my home?”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

Can I Really Protect My Aging Parents from Scams?

Adult children of elderly parents need to keep their eyes open on their parent’s behalf, because the scammers are increasingly sophisticated and compelling.

The number and types of scams focused on separating the elderly from their money is growing by leaps and bounds. If you’re 65 and older, you’re a target and vulnerable. The FINRA Investor Education Foundation reports that more than 8 in 10 seniors are solicited for likely fraudulent offers.

Kiplinger’s recent article, “Defrauding the Elderly: Watch for These Danger Signs,” explains that advancing age can have some impact on an individual’s emotional and physical health that may lower their defenses against abuse and fraud. Let’s look at some common frauds.

Wire transfer scams: A retired 80-year-old businessman contacted by fraudsters who said they wanted to do business with him. He wired them $400,000, and when he found out he’d been defrauded, he complained to the scammers. They had him contact some new crooks who said they could get his money back if he would wire them $400,000—which he did.

Gift card scams: These can be used to launder money without even having to physically send the cards anywhere. A scammer convinces the elderly victim to get several cards and load them with money. They then have the victim scratch off a protective strip on the back of the card to reveal its code number, take a picture of the number, and then text the picture to a cellphone number.

Computer-hacking scams: A common scam designed to victimize seniors is a contact from someone who says they’re a Microsoft employee. The scammer says the senior’s computer has a virus or some other problem, which they’re happy to fix. The senior just has to click on an email link or download an attachment the rep sends them and pay a fee. The scammer thus gets control of the victim’s computer.

Door-to-door scams: A scammer knocks on a senior’s door and says her trees need to be trimmed or gutters need to be cleaned. There are numerous cases where seniors have paid upwards of $30,000 to trim the hedges at their house. There are no service rendered: the crooks just wait and reappear to help the elderly person write a check for their services.

Family member financial abuse: Financial fraud in a family can be hard to resolve. It’s hard to know if an elderly parent voluntarily gives gifts to a family member, or if fraud is involved.

The best prevention is through education. Make sure that you or your parents are aware of these scams and prepared to say no to thieves. Be non-judgmental, and make sure your parents know that if they think they’ve been scammed, they can come to you for help and support. Get ready for a battle, if your parent thinks that you are trying to stop them from making a lot of money. If things get really dodgy, you may need to think about guardianship and conservatorship. Talk with an elder law attorney about these issues and what steps may be next.

Reference: Kiplinger (October 24, 2019) “Defrauding the Elderly: Watch for These Danger Signs”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

“Blue Water” Benefits for Vietnam Veterans

After waiting decades for “blue water” disability benefits, there’s a real concern among lawmakers in the House that the VA won’t be able to start distributing these benefits.

Military Times reported in its recent article that asks “Will VA be ready to process new ‘blue water’ Vietnam veterans benefits next year?” VA officials have promised that they will start processing cases in January 2020. However, critics and veterans’ advocates want that to happen more quickly. Advocates have also demanded that the White House speed up the timeline for the benefits.

“These people have waited too long, and we finally have the legislation in place,” said Rep. Mike Bost, R-Ill., ranking member on the House Veterans’ Affairs committee’s panel on disability assistance. “We need to get it done.”

Last summer, President Trump signed into law a bill that finalized presumptive benefits status for “blue water” veterans who served on vessels off the coast of Vietnam during the war.

Under Veterans Administration regulations, vets who served on land in the war are presumed to have toxic exposure related to spraying of the defoliant known as Agent Orange during the Vietnam War. However, sailors on ships off the coast of Vietnam weren’t given the same concession.

However, the new law will see as many as 90,000 veterans become eligible for the new presumptive status, which will mean thousands of dollars in disability benefits each month.

This legislation let VA officials delay processing those cases until the beginning of 2020, even though some cases were already being considered, due to a federal court ruling earlier in this year.

Advocates and some members of Congress have complained that the delay has put another unfortunate burden on veterans, who have suffered from Agent Orange exposure for decades.

In an update hearing before the committee, Veterans Affairs Deputy Under Secretary for Field Operations, Willie Clark emphasized that the delay was required to get department systems prepared for the anticipated onslaught of blue water claims.

Other lawmakers said they were concerned that the VA is not including veterans who were on submarines, despite evidence that sailors on board would also have been susceptible to the same toxic exposures.

Reference: Military Times (October 31, 2019) “Will VA be ready to process new ‘blue water’ Vietnam veterans benefits next year?”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899

How Does a Special Needs Trust Work?

Special needs or disabled people count on government-funded programs, like Supplemental Security Income and Medicaid, to provide financial support and services. However, there are restrictive income and resource limitations to ensure that those in need, are the ones receiving these benefits.

That’s why many families ask elder law and estate planning attorneys about the two types of special needs trusts.

Moberly Monitor’s recent article, “Things to know, things to do when considering a special needs trust,” explains that with planning and opening a special needs trust, family members can hold assets for the benefit of a family member, without risking critical benefits and services.

If properly thought out, families can continue to support their loved one with a disability long after they’ve passed away.

After meeting the needs of their disabled family member, the resources are kept for further distribution within the family. Distributions from a special needs trust can be made to help with living and health care needs.

To establish a special needs trust, meet with an attorney with experience in this area of law. They work with clients to set up individualized special needs trusts frequently.

Pooled trust organizations can provide another option, especially in serving lower to more moderate-income families, where assets may be less and yet still affect eligibility for vital governmental benefits and services.

An elder law attorney who has experience working with Special Needs families will be able to review your family member’s situation and determine what the best way is to protect your family members and ensure that he or she receives the benefits and serves they need, in conjunction with a Special Needs Trust. There may be other options for your family, depending on your situation.

Reference: Moberly Monitor (October 27, 2019) “Things to know, things to do when considering a special needs trust”

∗ For more information about this and other similar topics, please visit: www.LambrosLawLLC.com or call us at: (401) 383-9899