Michigan Estate Planning Blog

ESTATE PLANNING / POWER OF ATTORNEY

Some people who thought they had covered all their bases and acted responsibly to care for loved ones in the event of a debilitating illness or incapacity are finding their plans un-done by strict banking policies. Bank of America recently updated their online security procedures, and no longer accepts a power of attorney for online banking. As Bernard Krooks wrote last week for Forbes, this strict policy came to light when Chicago resident Eva Kripke was blocked from accessing her husband’s Bank of America account. According to Krooks, Mrs. Kripke had been handling her husband Sidney’s bank accounts as agent under a power of attorney ever since he was diagnosed with Lew body dementia four years ago. Suddenly now, however, she is denied access under the bank’s updated security procedures. The bank suggested she to go to her local branch and get a printout of her husband’s account information. Unfortunately, Mrs. Kripke felt this was unacceptable because her husband’s health status requires close financial oversight. Perhaps more unfortunate, her options are limited because her husband’s illness has rendered him incompetent. Rules such as these are becoming increasingly prevalent and significant as more people are called upon to care for an aging population and their attendant disabilities. An experienced elder law attorney can provide guidance in situations where powers of attorney are limited. You can learn more about powers of attorney in the Fundamental Estate Planning Practice Center on our website. Reference: Forbes – Bernard A. Krooks (July 7, 2011) “Power of Attorney Does Not Grant Access to Online Banking, Says Bank of America”

ELDER LAW / ELDER CARE

If you, your parent, or an elderly loved one is reaching the point where living alone is no longer an option – for medical reasons or otherwise – it may be time to consider some time of assisted living, whether nursing home or retirement community Increasingly, many families are looking at the “Continuing Care Retirement Community” or CCRC option. Even though the CCRC may be the pricier option, a little-known tax strategy recently explained in Smart Money could make it more financially attractive.. What is a CCRC? As SmartMoney explains: As opposed to a traditional nursing home where you simply pay a monthly fee, residents enter into a long-term contract with a CCRC. In exchange for a one-time entry fee and ongoing monthly charges, the CCRC provides housing and a range of on-site services. When a resident's health and personal care needs become more acute, the level of service can be increased to include assisted living, long-term care and skilled nursing care. The big advantage is that the resident doesn't have to move as his or her needs change. Interestingly, there is another advantage: a potential tax savings. Because part of the upfront and ongoing fees is to provide medical services – whether the resident uses them or not – a medical tax deduction may be available. This strategy was upheld in the 2004 Tax Court case, Delbert L. Baker v. Commissioner (122 TC 143, 2004). Of course, medical expenses must exceed 7.5% of adjusted gross income in order to claim the deduction. However, if you are considering a CCRC, it’s quite possible that your applicable expenses will exceed this threshold, since their fees, including the upfront buy-in, are usually quite high. Remember, too, that the percentage of costs that qualify as medical is determined by the aggregated spending of the facility itself, rather than the individual and their level of received care. The CCRC management should be able to give you estimates of the percentages, though you may have to ask for them. Also of note, remember that if you will pay some or all of your parent’s CCRC fees, you can claim the applicable percentage of the charges as a medical expense on your return – if you provide more than half of your parent’s support. Also, the IRS says these tax breaks apply only if the person enters into a CCRC-like contractual lifetime care arrangement, not just any retirement facility or nursing home. You can learn more about long-term care planning on our website. Also, be sure to sign up for our free monthly e-newsletter for regular updates

Reference: SmartMoney (June 15, 2011) “A Tax Break for Retirement Community Costs”

ESTATE PLANNING / HEALTH CARE DOCUMENTS

National Health Care Decisions Day is set for April 16. According to their website, this initiative is a collaborative effort of national, state and community organizations committed to ensuring that all adults with decision-making capacity in the United States have the information and opportunity to communicate and document their healthcare decisions.

 Link: http://www.nhdd.org/

 From National Health Care Decisions Day (April 16, 2011)

ELDER LAW / PRIVATE HEALTH CARE ADVOCATE

When a medical issue strikes you or your family, the world starts spinning a bit faster and begins to bear down hard. Even the best of us can’t always keep our heads above the rising tide of bureaucracy, legal snares, and other issues that can arise in the event of a medical-billings problem or an insurance coverage denial. A private health care advocate might be an option worth exploring, according to a recent article in the Wall Street Journal’s MarketWatch. An advocate cannot offer medical advice or address legal issues (like malpractice lawsuits) but they can help resolve medical billing problems, fight insurance-coverage denials, aid in complex medical decision-making and find the right specialist or hospital for a particular condition. Some even accompany patients to doctors’ offices and other care settings. Many are or were nurses or social workers – and can help push through a problem when you really need assistance or guidance. Most hospitals employ similar representatives that can help during your stay, but private advocates are often small businesses that can be called upon in far more circumstances. Advocates typically charge $50 to $200 an hour, says Joanna Smith, president of the National Association of Healthcare Advocacy Consultants (NAHAC), a professional group in Berkeley, CA. If you are looking to hire a health-care advocate, you should expect a written estimate of costs and services, and feel comfortable with the advocate’s style, experience and expertise before signing on. The NAHAC has designed a code of ethics, which you can find on their website. Be sure to ask about those when interviewing an advocate

Link: http://www.marketwatch.com/story/private-health-care-advocates-offer-other-options-2011-04-18

 From MarketWatch (April 17, 2011) “Private Health-Care Advocates Offer Other Options”

ELDER LAW / NON-FAMILY CAREGIVERS

As it turns out, Sophia, Blanche, Dorothy and Rose were ahead of their time! Yes, those Golden Girls of the 1980s were on to something that has become a growing trend of aging baby boomers. When the four savvy women decided to move in together and build a sort of ad-hoc “family,” they were simply doing (more than three decades ago) what an increasing number of seniors are doing, or considering doing, today.

Sociologists and popular social critics alike have been discussing the erosion of the nuclear family for years but here is a new twist: what is to become of those seniors who aging outside the nuclear family? Bernard Krooks of Forbes  recently offered some valuable insight, and food for thought.

The baby-boomers are just starting to enter retirement and they are far more likely than previous generations to have remained childless throughout life. Many never actually married, and others have already lost their spouses. What will happen to these people if they become disabled, incapacitated, or develop a chronic illness?

Most in-home care for the elderly is performed by family members. Hospital stays are getting shorter, driven by cost-saving initiatives, making it even more likely that these seniors will need outside help at some point in their lives.

Without family, seniors can only turn to friends, paid caregivers, or government-sponsored social services. Of course, paid caregivers are difficult for many seniors to afford, and government-programs present their own challenges, especially in light of recent budget cuts.

Unfortunately, friends are not currently accorded the same status as family members by a legal system that has always made the assumption of a nuclear family. There is an emerging movement, though, that seeks to change that. Some legal scholars are espousing the establishment of “friendship law,” which would confer certain rights upon “designated friends” who play a significant caregiver role – including hospital visitation, tax breaks and claims to an estate if no will has been established.

One thing we never saw the Golden Girls do was consult an attorney about their various “rights” to caring for one another. There was one episode, though, when Rose suffered a heart attack and the girls were not allowed to visit her in the hospital because they were not actual family members. A good elder law attorney might have helped the girls sort through some of those legal issues in advance.

By the way, you can watch portions of Rose’s “Heart Attack” episode on YouTube: http://youtu.be/xx3CMHpBLu8.

Link: http://blogs.forbes.com/bernardkrooks/2011/04/11/aging-outside-the-nuclear-family/

 From Forbes.com (April 11, 2011) “Aging Outside the Nuclear Family”

SMALL BUSINESS / HEALTH REPORT

If you’re a small business owner, you probably already know that things are not exactly hunky-dory in the business world, but that they are starting to get better. You know this from your own experience, and perhaps a few discussions with your accountant or tax advisor. However, it may be comforting to know that your instincts are probably right, and verified by a couple of recently released key research reports. The National Small Business Association (NSBA) released their 2010 Year-End Economic Report this month and – as you probably already guessed – the news is mixed. Small business owners seem a little more optimistic than they were six months ago. Almost two-thirds of them expect economic growth to be flat this year, and only 13 percent say they anticipate a double-dip recession. Two-thirds express confidence in their own firms and 15 percent say they are growing now. A whopping 40 percent are reporting increased revenues, and for the first time since 2008, a majority of small business owners (54 percent) expect their revenues to improve this year. The Small Business Association (SBA) also this month released their report on Small Business Lending in the U.S. Small business lending fell 6.2 percent last year, while large firm lending declined by 8.9 percent. I bet these numbers aren’t surprising to most small business owners. Overall, the numbers report a mixed economic bag for small business owners across the board. Again, probably not earth-shattering news for business owners, but rather confirmation of what you likely are experiencing on a day-to-day basis. And, since it’s Friday, perhaps a good enough reason to celebrate!

Link: http://www.businessinsider.com/latest-small-business-research-the-news-is-not-too-bad-2011-3

 From Business Insider (March 10, 2011) “Latest Small Business Research: The News is Not Too Bad”

ESTATE PLANNING / HEALTH CARE DOCUMENTS

National Health Care Decisions Day is set for April 16. According to their website, this initiative is a collaborative effort of national, state and community organizations committed to ensuring that all adults with decision-making capacity in the United States have the information and opportunity to communicate and document their healthcare decisions. You also can learn more on their Facebook Page. You can learn more about Health Care Documents – also known as advance directives or health care proxies – on our website.

Link: http://www.nhdd.org/

 From National Health Care Decisions Day (April 16, 2011)

ESTATE PLANNING / HEALTH CARE DOCUMENTS

From National Health Care Decisions Day (April 16, 2011) National Health Care Decisions Day is set for April 16. According to their website, this initiative is a collaborative effort of national, state and community organizations committed to ensuring that all adults with decision-making capacity in the United States have the information and opportunity to communicate and document their healthcare decisions. You also can learn more on their Facebook Page. You can learn more about Health Care Documents – also known as advance directives or health care proxies – on our website.

 Link: http://www.nhdd.org/

 

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