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Long Island's Elder Law, Special Needs & Estate Planning Firm

Thursday, November 29, 2007

Buffet Testifies Against Estate Tax Repeal Which Appears Dead

Billionaire Warren Buffett urged Congress to preserve the estate tax, saying that plans to repeal it would benefit a handful of the richest American families and turn the country into a "plutocracy."
Buffett, the chairman of Berkshire Hathaway and the second-richest man in America after Bill Gates, according to Forbes magazine, testified before the Senate Finance Committee on Nov. 14, 2007. He told the panel, which is exploring ways to replace the ever-changing rules of the current estate tax system, that advocates of repeal are "dead wrong" to call the tax a "death tax."
Buffett said it would be more appropriate to call it a "death present" because heirs get to calculate their capital gains on inherited assets based on the price when they inherited them rather than when the decedent originally bought them.
Buffett noted that so few Americans are subject to the estate tax that "you would have to be at 200 funerals to attend one where the decedent paid the tax."
"Dynastic wealth, the enemy of a meritocracy, is on the rise," he went on. "Equality of opportunity has been on the decline. . . . We ought to do more for [low-income Americans] and take more out of the hides of people like me."
Those who support repeal claim that the estate tax sometimes forces the heirs of family businesses and farms to sell pieces of the business just to pay the tax bill. Testifying in favor of repeal was Dean Rhoads, a rancher and state senator from Nevada, who said when his in-laws died, the family had to sell land to pay the estate taxes and are now paying $18,000 in taxes, plus interest, every year. "We have had to borrow money to make these payments," Rhoads said.
Currently, only estates worth more than $2 million are taxed by the federal government. The threshold is scheduled to rise to $3.5 million in 2009. For the year 2010, estates will be entirely free from federal taxation. However, the law that includes this provision expires at the end of 2010. Thus, unless Congress acts in the interim, the estate tax exemption will then revert to $1 million.
Buffett said he would raise the amount of estate assets exempt from the estate tax to $4 million. He also said he might include an exemption for small family-owned businesses.
Senators on both sides of the aisle agreed that complete repeal of the estate tax is not in the cards now. "I think everyone in this room knows we're not going to repeal the estate tax. It's not going to happen in the foreseeable future," said Committee Chairman Max Baucus (D-MT).
"We can't get [repeal] done," said Sen. Jim Bunning (R-KY). "We ought to be able to come to a compromise."
Source: www.elderlawanswers.com

Friday, November 2, 2007

Transfer Penalty no longer applies for Lombardi Program!

On September 24, 2007, the New York Office of Health Insurance Programs issued a directive stating that the penalty period for gifts will no longer apply to applicants for the Lombardi program. "Effective immediately: if an individual applies for Medicaid coverage of home and community-based waiver services, the applicant is only required to provide documentation of his/her current resources. The individual is not subject to a transfer of assets look-back period nor is the individual subject to a transfer penalty period. Spousal impoverishment budgeting continues to apply to a waiver A/R who has a community spouse."

The Long Term Home Health Care Program (LTHHCP), also known as "The Lombardi Program" or "Nursing Home without Walls" provides eligible patients and their families with a popular alternative to institutional care. Based on an individualized plan of care, a comprehensive package of coordinated services is designed to meet the specific needs of eligible patients in their homes. The program serves chronically ill and disabled persons over the age of 18 who have ongoing health care needs. The hallmark of this program is case management by a Registered Nurse. An interdisciplinary team of health care professionals provides assessments, visits and delivery of ongoing quality care in the home. Services may include but are not limited to Nursing Care; Physical, Occupational and Speech Therapy; Personal Care Aides; Transportation; PERS, etc.

The elimination of the penalty period for the Lombardi Medicaid program is a brand new development. In recommending transfers prior to application for the Lombardi program, there still remains the concern that a recipient of the Lombarid program may need nursing home care in the future. Gifts will be reviewed and possibly penalized for the nursing home applicant even though they were not considered in the Lombardi application. Therefore, prior to planning for and applying for the Lombardi program, legal advice from a certified elder law attorney should be sought.

Friday, October 26, 2007

Voters Want Long Term Care included in Presidential Candidates' Healthcare Proposals

Genworth Financial, Inc. convened a national symposium of noted experts from the healthcare industry, seniors organizations, government and academia on Capitol Hill to discuss the future of long term care in America. It also released the results of a new poll on the importance of long term care in the 2008 elections and a new book on the future of long term care in America.

Representatives from organizations such as AARP, the American Association for Homes Services for the Aging (AAHSA), the American Health Care Association(AHCA), the Alzheimer’s Association and the National Alliance of Caregivers (NAC) participated in an exchange of ideas and solutions aimed at addressing the looming crisis America faces amid rising long term care costs and a lack of sufficient planning at the national, state and individual levels.

“It is estimated that 60% of those over the age 65 will require a form of long term care at some point,” said Buck Stinson, president of Genworth Financial’s long term care insurance division. “With the first of the 78 million baby boomers turning 62 next year, we need to be both realistic and prepared for the healthcare demands many of these Americans will have, which is precisely why the discussion we’re having today is so important.”

According to the new bi-partisan national survey, nearly seven in ten Americans have not made any plans for their own, a spouse’s or another relative’s long term care needs. Yet, over half those surveyed have had a loved one who needed some form of long term care. The poll also found that close to 80 percent of the respondents want to see long term care included in the healthcare proposals offered by the presidential candidates. More than 80 percent of those surveyed also said that positions on long term care funding will be an important factor in deciding who to vote for in the 2008 election.

The polling also showed that Americans are willing to bear part of the responsibility to develop a national long term care program, whether through tax incentives for the purchase of private long term care insurance or through a universal healthcare initiative that include long term care coverage. Sixty percent of voters surveyed supported new taxes or payroll deductions to subsidize a long term care program. Sixty-eight percent of those who supported new taxes or payroll deductions also indicated a willingness to pay between $25 monthly and upwards of $50 per month.

The release of a new publication, The Future of Long Term Care in America: Views and Recommendations by Prominent Experts, was a focal point of the symposium. The book’s purpose is to inform policy makers, academics, financial advisors and consumers about the challenges of long term care. It will be available on Amazon.com. It is comprised of ten chapters, each written by a different author such as AARP CEO, Bill Novelli, and former Congressional Budget Office Director, Douglas Holtz-Eakin. It covers a wide range of long term care issues including the role of technology in future care, Alzheimer’s disease, independent living, public funding for long term care programs, the growing demand and delivery (home-based and facility-based) of long term care services and other relevant topics. More information about the book, including a full list of chapters and their authors, can be found at Genworth.com.

Source: CNNMoney.com; 10/11/07

Tuesday, October 16, 2007

New Medicare Premium, Decuctible & Coinsurance Charges for 2008

The Centers for Medicare and Medicaid Services (CMS) has announced the new Medicare premiums, deductibles, and coinsurances. The standard Medicare Part B premium is increasing by 3.1 percent to $96.40 a month, the smallest increase since 2001.
The increase is lower than previously expected in part due to the correction of an accounting error. Money for certain hospice benefits had been inadvertently drawn from the Part B trust fund rather than the fund that pays hospital costs. In addition, the lower premium assumes that physicians will take a 10 percent cut in their reimbursement rates. It is expected that Congress will act to offset some of or all of that pay cut, meaning that future-year premiums will reflect the additional expense.
Here are all the new Medicare figures:
Part B premium: $96.40/month (was $93.50)
Part B deductible: $135 (was $131)
Part A deductible: $1,024 (was $992)
Co-payment for hospital stay days 61-90: $256/day (was $248)
Co-payment for hospital stay days 91 and beyond: $512/day (was $496)
Skilled nursing facility co-payment, days 21-100: $128/day (was $124)
As directed by the 2003 Medicare law, for the first time, higher income beneficiaries will pay higher Part B premiums. Following are the higher premium rates:
Individuals with annual incomes between $82,000 and $102,000 and married couples with annual incomes between $164,000 and $204,000 in 2008 will pay a monthly premium of $122.20.
Individuals with annual incomes between $102,000 and $153,000 and married couples with annual incomes between $204,000 and $306,000 in 2008 will pay a monthly premium of $160.90.
Individuals with annual incomes between $153,000 and $205,000 and married couples with annual incomes between $306,000 and $410,000 in 2008 will pay a monthly premium of $199.70.
Individuals with annual incomes of $205,000 or more and married couples with annual incomes of $410,000 or more in 2008 will pay a monthly premium of $238.40.
Rates differ for beneficiaries who are married but file a separate tax return from their spouse:
Those with incomes between $82,000 and $123,000 will pay a monthly premium of $199.70.
Those with incomes greater than $123,000 will pay a monthly premium of $238.40.
Source: www.elderlawanswers.com

Tuesday, September 18, 2007

Insurance Gaps & Unexpected Tragedies Leave Many Facing Impossible Choices

Many Americans retire early prior to reaching age 65 and receiving Medicare coverage. If they do not plan carefully, they will not have health care coverage before they can be covered by Medicare.

Many Americans retire early prior to reaching age 65 and receiving Medicare coverage. If they do not plan carefully, they will not have health care coverage before they can be covered by Medicare. Others become disabled, but have to wait 25 months prior to receiving Medicare coverage. Others are simply the victims of bad luck.

Consider the following:

A 59-year-old man falls from a second-story balcony and sustains severe injuries including brain damage. Unfortunately, he is without health insurance because he decided to retire before he was 65 in order to care for his wife who is stricken with Alzheimer's. How will he pay for his various medical bills?

A 48-year-old woman with two children suffers a stroke. Her employer's health care insurance includes an annual $50,000 benefit cap. How will she pay for her hospital stay and doctors' bills?

A 23-year-old woman is stricken with a brain aneurysm. She had just changed jobs following a cross-country move. Her recent job change has left her without the necessary insurance to pay for this care.

Many Americans suffer "gaps" in their health insurance coverage. A hospital stay or medical care for cancer or other similar diseases wreaks financial havoc for these families. Unfortunately, many learn too late that they have no health insurance, inadequate health insurance or very low caps on their insurance benefits. Some of them mistakenly think that Medicare will cover them if they are over the age of 65.

Most of these individuals have been self-supportive and typically paid into either a private health care insurance program or have been involved in an employer-sponsored plan. Their needs are not typically classified as long-term care needs. Often times, hospital/rehabilitation stays exceed $20,000 per month. According to the U.S. Agency for Healthcare Research and Quality, after adjusting for inflation, the average hospital charge increased by 24 percent from $13,900 in 1997 to $17,300 in 2002. Many of these individuals will be able to return to their homes and even to their jobs. Sadly, their lack of health care coverage or caps on benefits leave them in a near bankrupt position. In some cases, they may even be forced to end long-term marriages due to the financial hardship and strain placed on their families. These cases also adversely affect the dependent children of those without coverage.

These cases involve very common people with very uncommon injuries or illnesses. The result will shield companies from liability and shift the cost of care to the state Medicaid programs.

Elder law attorneys regularly recommend the purchase of health insurance for individuals who are considering early retirement or who are not covered by a group health care insurance policy. Many people do not plan ahead and purchase private disability insurance or exercise their COBRA rights to continue their employer sponsored health care insurance. Only if they suffer from an unexpected illness or are involved in an accident do they realize they were uninsured or underinsured.

A recently released U.S. Census Bureau report shows the number of uninsured people rose from 44.8 million in 2005 to 47 million in 2006. A report last year by the Robert Wood Foundation shows one in six adults between the ages of 50-64 are uninsured.

Elder law attorneys assist individuals in identifying current or future insurance coverage gaps. Elder law attorneys guide older adults, people with disabilities and families through an assessment of resources, needs and goals, so that they can cope with unexpected tragedies or plan ahead to access health care whenever it is needed.

For more information about elder law attorneys and the National Academy of Elder Law Attorneys, visit www.naela.org

Source: NAELA, Eye on Elder Issues, September 2007, Vol. 4, Issue 4.

Friday, September 7, 2007

Providing for Children with Disabilities

One of the major concerns for parents with children with disabilities is how to provide for their financial future. Here are some legal tips:

Buy enough life insurance. A parent is irreplaceable, but someone will have to fill in. In all likelihood, that person or family will have to pay for at least some services the parent or parents had provided when able. If the estate is not large enough for this purpose, it can be made large enough through life insurance proceeds. Premiums for second-to-die insurance (which pays off only when the second of two parents passes away) can be surprisingly low.

Set up a trust. Any funds left for a disabled child, whether from an estate or the proceeds of a life insurance policy, should be held in trust for his or her benefit. Leaving money for anyone with a disability jeopardizes public benefits. Many people with disabilities cannot manage funds – especially large amounts. Some families disinherit disabled children, relying on their siblings to care for them. This approach is fraught with potential problems. Siblings can be sued, get divorced, disagree on their responsibilities, or run off with the funds. It can also cause tax problems for siblings. The best approach is a trust fund set aside for the disabled child.

Will/appointment of guardian. While a will and the appointment of a guardian is important for anyone with minor children, it is doubly so if the child is disabled. Finding the right guardian can be difficult. In some cases, the care needs of the child may be so demanding that he or she will need a different guardian from his or her siblings. The parents need to make these determinations while they can. The will is the vehicle for the appointment of a guardian.
An adult child may also require a guardian when the parent can no longer serve in this role (whether officially appointed or not). It will probably not be legally possible to officially appoint a successor guardian. So, it may make sense to begin making the transition to a new guardian while the parent is able to assist in the process. This can be done in the form of a co-guardianship, or passing the baton to a successor guardian.

Care plan. All parents caring for disabled children should write down what any successor caregiver would need to know about the child and what the parent’s wishes are for his or her care. For example, should the child be in a group home, live with a parent, be on his or her own? Usually, the parent knows best, but needs to pass on the information. The memo or letter can be kept in the attorney’s files with the parent’s estate plan.

Coordination with other family members. Even a carefully developed plan can be sabotaged by a well-meaning relative who leaves money directly to the child with a disability. If a trust is created for the benefit of the child, grandparents and other family members should be told about it so that they can direct any bequest they may like to leave to that child through the trust.

Source: www.elderlawanswers.com; 9/6/07

Thursday, August 23, 2007

What is Required of an Executor?

Being the executor of an estate is not a task to take lightly. An executor is the person responsible for managing the administration of a deceased individual's estate. Although the time and effort involved will vary with the size of the estate, even if you are the executor of a small estate you will have important duties that must be performed correctly or you may be liable to the estate or the beneficiaries.

The executor is either named in the will or if there is no will, appointed by the court. You do not have to accept the position of executor even if you are named in the will.

The average estate administration takes one year, though you won't need to work full time on it. Following are some of the duties you may have to perform as executor:

Locate documents. If there is a will, but you don't already know where the will is or the will hasn't already been brought to court, you may need to find it among the deceased's belongings. If all you have is a copy of the will, you may need to get the original from the lawyer who drafted it. You will also need to get a copy of the death certificate.
Hire an attorney. You are not required to hire an attorney, but mistakes can cost you money. You may be personally liable if something goes wrong with the estate or the payment of taxes. An attorney can help you make sure all the proper steps are taken and deadlines met. To find a qualified elder law attorney near you, click here.
Apply for probate. If there is a will, the court will grant you letters testamentary. If there is no will, you will receive letters of administration. This will officially begin your work as the executor.
Notify interested parties. Notify the beneficiaries of the will, if there is a will, as well as any potential heirs (such as children, siblings, or parents who may or may not be named in a will). In addition, you will have to place an advertisement for potential creditors in a newspaper near where the deceased lived.
Manage the deceased's property. You will need to prepare a list of the deceased's assets and liabilities, and you may need to collect any property in the hands of other people. One of the executor's jobs is to protect the property from loss, so you will need to assure the property is kept safe. You will also need to hire an appraiser to find out how much any property is worth. In addition, if the estate includes a business, you may have to make sure the business continues to run.
Pay valid claims by creditors. Once the creditors are determined, you will need to pay the deceased's debts from the estate's funds. The executor is not personally liable for deceased's debts. The estate usually pays any reasonable funeral expenses first. Other debts include probate and administration fees and taxes as well as any valid claims filed by creditors.
File tax returns. You need to make sure the tax forms are filed within the time frame set under the law. Taxes will include estate taxes and income taxes.
Distribute the assets to the beneficiaries. Once the creditors' claims are clear, the executor is responsible for making sure the beneficiaries get what they are entitled to under the will or under the law, if there is no will. You may be required to sell property in order to fulfill legacies in a will. In addition, you may have to set up any trusts required by the will.
Keep accurate records. It is very important to keep accurate records of everything you do. You will need to create a final accounting, which the beneficiaries must review before the distribution of the estate can be finalized. The accounting should include any distributions and expenses as well as any income earned by the estate since the deceased died.
File the final accounting with the court. Once the final accounting is approved by the beneficiaries and the court, the court will close the estate. File a final report with the court and close the estate.
All this can be a lot of work, but remember that the executor is entitled to compensation, subject to approval by the court. Keep in mind that the compensation is counted as income, so you will need to declare it on your income taxes.

Source: www.elderlawanswers.com; 8/20/07

Thursday, July 26, 2007

Seniors Often Must Fight for Medicare Home Health Benefits

Medicare is mandated to cover your home health benefits with no limit on the time you are covered. Unfortunately, few Medicare beneficiaries get the level of service they are entitled to and many find their services cut off prematurely. Getting these benefits can be critically important. Medicare home health care benefits can mean the difference between being able to stay at home with a difficult medical problem or ending up in the hospital or a nursing home.

As a Medicare recipient, you are entitled to full home health benefits if you meet the following requirements:

You must be confined to your home – meaning that leaving it to receive services would be a "considerable and taxing effort."
Your doctor must have ordered home health services for you.
At least some element of the services must be skilled – skilled nursing care, physical therapy, or speech therapy.
You must receive the services from a certified home health agency.
Requiring an element of skilled care also will entitle you to Medicare coverage of social services, home health aide services, and the necessary medical supplies and equipment. You won't have to pay anything for the home health benefits, but you will have to pay 20 percent of the supplies and equipment.

Under the law, you are entitled to 35 hours of service a week, but few Medicare beneficiaries who meet the home health care criteria actually get this level of service. If your services are terminated prematurely, you will need to appeal. If you have to appeal, the good news is that most people win their cases. In fact, 81 percent are successful on appeal to an administrative law judge.

If you can you should continue to pay privately for the care during the process. Remember – the issue you are appealing is not the termination of service, but the denial of Medicare payment for the service.

In order to mount a successful campaign to get your services back, you should:

Ask your home health agency to explain the cutback and write the information down.
Ask your physician to call the agency urging them not to cut back the services and, then have the physician send a letter detailing the level of care you need.
Consult with a Medicare assistance agency or your attorney to determine the likelihood of a successful appeal.
If you decide to appeal, do so immediately and make sure you make arrangements to pay privately pending the result of the appeal.

Source: Elderlawanswers.com, 7/16/07

Thursday, July 12, 2007

Should you sign a Nursing Home Admission Agreement?

Admitting a loved one to a nursing home can be very stressful. In addition to dealing with a sick family member and managing all the details involved with the move, you must decide whether to sign all the papers the nursing home is giving you. Nursing home admission agreements can be complicated and confusing, so what do you do?

It is important not to rush, but rather to read. Read the agreement carefully because it could contain illegal or misleading provisions. If possible, try not to sign the agreement until after the resident has moved into the facility. Once a resident has moved in, you will have much more leverage. But even if you have to sign the agreement before the resident moves in, you should still request that the nursing home delete any illegal or unfair terms.

Two items commonly found in these agreements that you need to pay close attention to are a requirement that you be liable for the resident's expenses and a binding arbitration agreement.

Responsible party

A nursing home may try to get you to sign the agreement as the "responsible party." It is very important that you do not agree to this. Nursing homes are prohibited from requiring third parties to guarantee payment of nursing home bills, but many try to get family members to voluntarily agree to pay the bills.

If possible, the resident should sign the agreement him- or herself. If the resident is incapacitated, you may sign the agreement, but be clear you are signing as the resident's agent. Signing the agreement as a responsible party may obligate you to pay the nursing home if the nursing resident is unable to. Look over the agreement for the term "responsible party," "guarantor," "financial agent," or anything similar. Before signing, cross out any terms that indicate you will be responsible for payment and clearly indicate that you are only agreeing to use the resident's income and resources to pay.

Arbitration provision

Many nursing home admission agreements contain a provision stating that all disputes regarding the resident's care will be decided through arbitration. An arbitration provision is not illegal, but by signing it, you are giving up your right to go to court to resolve a dispute with the facility. The nursing home cannot require you to sign an arbitration provision, and you should cross out the arbitration language before signing.

Other provisions

The following are some other provisions to look out for in a nursing home admission agreement.

Private pay requirement. It is illegal for the nursing home to require a Medicare or Medicaid recipient to pay the private rate for a period of time. The nursing home also cannot require a resident to affirm that he or she is not eligible for Medicare or Medicaid.
Eviction procedures. It is illegal for the nursing home to authorize eviction for any reason other than the following: the nursing home cannot meet the resident's needs, the resident's heath has improved, the resident's presence is endangering other residents, the resident has not paid, or the nursing home is ceasing operations.
Waiver of rights. Any provision that waives the nursing home's liability for lost or stolen personal items is illegal. It is also illegal for the nursing home to waive liability for the resident's health.

A certified elder law attorney can clarify all of your options.

Source: www.elderlawanswers.com

Tuesday, May 22, 2007

Congress Approves Resolution Fixing Estate Exemption at $3.5M

The House and Senate have approved a $2.9 trillion budget resolution that would keep the estate tax at where it will be in 2009 under the current law. This means that the per-person estate tax exemption would be $3.5 million ($7 million for a married couple) and the top tax rate would be 45 percent.

Congress's vote for the nonbinding budget blueprint sets guidelines for it to follow when writing tax and spending legislation later this year. The House passed the measure by a 214-209 vote without a single Republican voting for it. The Senate vote was 52-40 in favor, with Republicans Olympia Snowe and Susan Collins of Maine joining Democrats in voting yes. The budget doesn't have the force of law and any changes to the estate tax would have to be made through subsequent legislation, but it is a clear sign of congressional sentiment.

The estate tax is set to expire in 2010, followed in 2011 by a return to 2001 levels, with an individual exemption of $1 million and a top tax rate of 55 percent. In the last Congress, Senate Republicans fell four votes short of a measure that would have increased the estate tax exemption to the first $5 million of an individual's estate and would have lowered the top estate tax rate to 35 percent.

Monday, May 14, 2007

Estate Tax Rules for the Future

Facing expiration of the estate tax in 2010, the U.S. Senate voted 51-41 to reaffirm its support for a budget resolution that establishes the current-law 2009 estate tax rules through 2012. In 2009 the per-person estate tax exemption will be $3.5 million and the top tax rate will be 45 percent.

Under the Economic Growth and Tax Reconciliation Act of 2001, the estate tax will expire in 2010, followed in 2011 by an individual exemption of $1 million and a top tax rate of 55 percent. The Senate vote was part of its efforts to develop instructions for House and Senate conferees who will be working on the next five-year budget resolution.

In the last Congress, Senate Republicans fell four votes short of a measure that would have increased the estate tax exemption to the first $5 million of an individual's estate and would have lowered the top estate tax rate to 35 percent. In the new Democratic-controlled Congress there appears to be bipartisan support for continuing the estate tax rate at 2009 levels starting in 2010. In fact, support has increased since March 23, when senators voted 51-48 in favor of preserving the 2009 levels.

Budget resolutions are important because appropriations bills that follow budget resolution guidelines can pass with a simply majority rather than the 60 votes generally needed. The House and Senate have each passed their own budget resolutions and once their conferees agree on a compromise resolution, the final version must be approved by both the House and Senate. The House version of the budget resolution does not address the estate tax issue.

Friday, April 13, 2007

7 Sane Steps for Estate Planning

Try these practical tips to avoid feuds and spare feelings.

1. Spell things out. Ask your parents to figure out who gets what, right down to the Christmas tree lights. Some people put stickers with names on the bottoms; others leave a list. Just as important, make sure your parents let everyone know - - if Mom really liked you better and leaves you all the Waterford, wouldn’t you like your sister to be mad at her, not you?

2. Resist the temptation to avoid the depressing details. Big fights can erupt when planning the funeral - - remember the brouhaha when Ted Williams died? - - and spill over to estate issues. So ask your parents what kind of service they want, whether they want to be cremated or buried.

3. Don’t hesitate, mediate. If you sense battle lines being drawn, mediation and arbitration can provide a lower-cost alternative to taking one another to court. In mediation, a neutral third party helps all sides reach an agreement. Usually, mediation isn’t binding. (The specifics of both mediation and arbitration are governed by state law and the Federal Arbitration Act.) Often, a judge will order warring siblings into mediation, and many wills contain a clause stipulating arbitration - - say, if parents’ personal effects cannot be divided by the children within 30 days. In general, fees for either mediation or arbitration are significantly lower than those of lawyers in a lawsuit. Note: However, in New York State, all estate matters are handled by the Surrogate Court.

4. Draft a will with the personal touch. A heartfelt letter attached to a will can soothe the anger of grief-stricken children. In Illinois, attorney Jim Nash’s favorite: a man gave his children and grandchildren a reading list of his favorite books. The University of Minnesota’s Marlene Stum knows of a case where the matriarch called her adult children around her and started holding up objects, explaining each one’s history and then asking who wanted it.

5. Make an end run around stubborn parents. If they refuse to talk about their plans, start paving the way for clear channels of communication with your siblings now. Hard as it may be, the initial “Have Mom and Dad ever talked to you about what they want to happen to their stuff when they die?” Conversation is even more critical for siblings who don’t get along well.

6. Once you begin settling the estate, talk face-to-face. Nash is a big fan of Kinko’s videoconferencing for far-flung siblings. IF everyone is in the loop, it’s harder to escalate to those tense “You threw the birdhouse I built in eighth grade in the trash” exchanges. Above all, advises mediator Olivia Boyce-Abel, be cautious with e-mail. “Something that sounds fine to you when you write it at midnight can come across very differently when your brother gets home from a hard day at the office.”

7. Vow that this is one more time you won’t be like your mother. Call your ELDER LAW ATTORNEY and make sure your own will is current, and that your heirs know what is - - and isn’t - - coming to them.

Written by Sarah Mahoney, contributor to More magazine. Reprinted from More.com, 3/20/07.

Tuesday, March 27, 2007

Medicare Advantage Open Enrollment Period Ends March 31, 2007

The Open Enrollment Period (OEP) during which Medicare beneficiaries can make one election to change in certain kinds of plans, ends on March 31, 2007. The Open Enrollment Period applies to individuals who are changing Medicare Advantage (MA) plans or enrolling in or disenrolling from MA plans.

During the OEP, beneficiaries may switch from:
-a medicare Advantage prescription drug plan (MA-PD) to another MA-PD or original Medicare with a Prescription Drug Plan (PDP);
-one MA-only plan (no prescription drug coverage) to another MA only plan or original Medicare with no drug coverage;
-original Medicare with a PDP to a MA-PD; or
-original Medicare with no drug coverage to a MA-only plan.

A beneficiary may make only one of these changes during an OEP. For a visual representation of the options, see the Health Assistance Partnership’s chart at www.hapnetwork.org/assets/pdfs/2007-MA-OEP-chart.pdf.

An OEP cannot be used to enroll in prescription drug coverage for the first time or to drop prescription drug coverage entirely; it also cannot be used to switch from one (non-Medicare Advantage) prescription drug plan to another (non-Medicare Advantage) prescription drug plan. In short, one cannot use the OEP to switch from a PDP to another PDP.

Medicaid beneficiaries have a continuous Special Enrollment Period that allows them to switch into or out of Medicare Advantage plans (including plans with Part D coverage) at anytime.

The landscape of enrollment options and limitations for Medicare beneficiaries, particularly with respect to prescription drug benefit coverage, is complex. Aggressive marketing by plans can add to the confusion and lead to mistakes and problems.

Source: Washington Weekly, volume XXXIII, Issue No. 11, March 16, 2007.

Wednesday, March 14, 2007

Davidow Announcements

We have planned our next two elder law and estate planning seminars! Learn how to PLAN NOW, not later, in order to protect everything you’ve worked a lifetime to acquire. Come and discover the answers to crucial and timely questions at either The Venetian Yacht Club in Babylon Village on Thursday, April 26th at 10am or Villa Lombardi’s in Holbrook on Wednesday, May 2nd at 10am. The seminar is FREE, but reservations are required. Call 631-234-3030 to reserve your seat.

Last year alone, Friends of Karen, Inc. helped more than 600 sick children and an additional 800 of their brothers and sisters with the enormous strain that is put upon a family when a child is diagnosed with cancer or any life-threatening illness. This year, a team is being organized to join the RUN FOR FRIENDS OF KAREN at the Long Island Marathon, Festival of Races on Sunday, May 6th, 2007 at Eisenhower Park. Proceeds from the Run will help this important organization in their continuing efforts to provide emotional, financial and advocacy support to these very special families.

For information and an application on the RUN FOR FRIENDS OF KAREN, please call 631-473-1768. We encourage your assistance in helping this wonderful organization!

Friday, March 2, 2007

Crabby Old Man

The following story and poem made its way around our office and we felt compelled to share it in an effort to remind everyone what quite possibly is going through the minds of our elderly loved ones.

When an old man died in the geriatric ward of a small hospital near Tampa, Florida, it was believed that he had nothing left of any value.

Later, when the nurses were going through his meager possessions, they found this poem. Its quality and content so impressed the staff that copies were made and distributed to every nurse in the hospital.

One nurse took her copy to Missouri . The old man's sole bequest to posterity has since appeared in the Christmas edition of the News Magazine of the St. Louis Association for Mental Health. A slide presentation has also been made based on his simple, but eloquent, poem.

And this little old man, with nothing left to give to the world, is now the author of this "anonymous" poem winging across the Internet.

Crabby Old Man

What do you see nurses? .......What do you see?
What are you thinking......when you're looking at me?
A crabby old man, ....not very wise,
Uncertain of habit ........with faraway eyes?

Who dribbles his food.......and makes no reply.
When you say in a loud voice....."I do wish you'd try!"
Who seems not to notice ....the things that you do
And forever is losing .............. a sock or shoe?

Who, resisting or not...........lets you do as you will,
With bathing and feeding ....... the long day to fill?
Is that what you're thinking? Is that what you see?
Then open your eyes, nurse......you're not looking at me.

I'll tell you who I am ....... as I sit here so still,
As I do at your bidding, ...... as I eat at your will.
I'm a small child of Ten......with a father and mother,
Brothers and sisters .......who love one another

A young boy of Sixteen ...........with wings on his feet
Dreaming that soon now. ..........a lover he'll meet.
A groom soon at Twenty .........my heart gives a leap.
Remembering, the vows........that I promised to keep.
At Twenty-Five, now .......... I have young of my own.
Who need me to guide ....... and a secure happy home.
A man of Thirty ......... my young now grown fast,
Bound to each other ........ with ties that should last.

At Forty, my young sons ........have grown and are gone,
But my woman's beside me........to see I don't mourn.
At Fifty, once more, .......... babies play 'round my knee,
Again, we know children ......... my loved one and me

Dark days are upon me .......... my wife is now dead.
I look at the future ............I shudder with dread.
For my young are all rearing ........young of their own.
And I think of the years...... and the love that I've known.

I'm now an old man........and nature is cruel.
Tis jest to make old age .......look like a fool.
The body, it crumbles..........grace and vigor, depart.
There is now a stone........where I once had a heart.

But inside this old carcass ...... a young guy still dwells,
And now and again ........my battered heart swells.
I remember the joys.............. I remember the pain.
And I'm loving and living.............life over again.

I think of the years ....all too few......gone too fast.
And accept the stark fact........that nothing can last.
So open your eyes, people ..........open and see..
Not a crabby old man. Look closer....see........ME!!
1. Remember this poem when you next meet an older person who you might brush aside without looking at the young soul within.....we will all, one day, be there, too!

Thursday, February 1, 2007

House Passes Medicare Drug Price Negotiation Bill

The new Democrat-controlled House passed a Medicare drug bill, H.R. 4, on January 12, 2007 despite threats of a presidential veto from the White House. The bill would require Health and Human Services Secretary Michael Leavitt to conduct negotiations with pharmaceutical manufacturers to obtain lower prices for Medicare beneficiaries. It is, however, widely anticipated that the bill’s journey through the Senate will not be quite so smooth.

The vote in the House was 255-170, with 24 Republicans joining the Democrats in voting for government negotiation. The measure would overturn a provision of the 2003 Medicare law, pushed through by a then Republican-controlled Congress. The provision prohibits negotiations by the government and instead leaves drug-price negotiations in the hands of private drug plans. The bill would also require the Secretary every six months to regularly report to Congress on the progress of negotiations, and prices and discounts achieved by the negotiations. Requiring the Secretary to negotiate drug prices on behalf of Medicare beneficiaries is widely seen as an important step towards making the prescription drug benefit more simple, affordable and reliable for seniors and individuals with disabilities.

If the measure becomes law, the federal government would be required to use its bargaining power against the drug companies to obtain lower prices. The Department of Veterans Affairs secures much lower prices for its beneficiaries precisely because of its ability to negotiate. Republicans argue that the current system allows for competitive market forces to drive down prices and government negotiation will only hamper the efforts of private insurers.

Source: Washington Weekly, Volume XXXIII, Issue No. 4, January 26, 2007.

Saturday, January 27, 2007

Elder-Care Costs Deplete Savings of a Generation

We'd like to share the following article in an attempt to impress upon you the crucial need for advance planning with a certified elder law attorney. Now, more than ever, planning is a necessity.

December 30, 2006 - The New York Times

To care for her ailing 97-year-old father over the past three years, Elizabeth Rodriguez, a vice president at the Federal Reserve Bank in New York, has borrowed against her 401(k) retirement plan, sold her house on Staten Island and depleted nearly 20 years of savings.

The money has gone to lawyers' fees ($50,000) to win a contested guardianship. It has gone for home-care equipment like the mattress for his hospital bed (about $3,000 in all) and for a food service to deliver meals ($400 a month).

It has gone for a two-bedroom rental apartment big enough for herself, her dad and a home aide ($1,600 a month more than a one-bedroom apartment in the same building), and for a wheelchair-accessible van to get him to doctors' appointments ($330 a trip).

Asked to tally the costs, Ms. Rodriguez, 58, said she had no idea how much she was spending. "A shower chair, body cream with no alcohol, new shoes," she said. "You don't stop and calculate. You just buy what you have to buy."

Ms. Rodriguez is among the legion of adult children - more than 15 million, according to various calculations - who take care of their aging parents, a responsibility that often includes paying for all or part of their housing, medical supplies and incidental expenses. Many costs are out of pocket and largely unnoticed: clothing, home repair, a cellular telephone.

Adult children with the largest out-of-pocket expenses are those supervising care long distance, those who hire in-home help and those whose parents have too much money to qualify for government-subsidized Medicaid but not enough to pay for what could be a decade of frailty and dependence.

The burden is compounded by ignorance, according to a study by AARP, released in mid-December, which found that most Americans have no idea how much long-term care costs and believe that Medicare pays for it, when it does not.

Families have always looked after their elderly loved ones. But never has old age lasted so long or been so costly, compromising the retirement of baby boomers who were expecting inheritances rather than the shock of depleted savings.

"There is a myth out there that families abandon their frail elders," said Dr. Robert L. Kane, a geriatrician at the University of Minnesota School of Public Health. "Instead, across the income spectrum, children are sacrificing to care for their parents to the limit of their means and sometimes beyond."

Researchers have documented the time spent by adult children, and others, caring for ailing  elatives. But data is woefully inadequate on how much they actually spend, health economists say, because most people do not keep itemized entries as they write checks, use their credit cards or pocket money to meet the demands of the day.

"When you're in the middle of the forest, with so many things coming at you, you can't really see the trees," Ms. Rodriguez said. "But each one of those trees has actual dollars connected to it."

Costs are astronomical for long-term, low-tech care, the sort most often needed by those who linger with Alzheimer's disease or are too frail to get around on their own. Medicare is of almost no help, since it covers only acute episodes like a heart attack, cancer or repair of a broken hip.

That means the elderly and their families are left to pay for assisted living (which averages $35,000 a year), nursing homes ($74,000) or home health aides. Only the very poor receive Medicaid, which pays nursing-home bills nationwide but home care in only a few states (New York among them), and nothing toward assisted-living rent.

Nor does Medicare cover equipment like grab bars for the shower and incontinence supplies, which alone can run $2,000 a year, or travel expenses for an adult child responding to medical emergencies.

Marilyn de Leo, for instance, has made two trips from New York City to Los Angeles since September, when her mother fell in the bathroom and broke her neck and both ankles. Ms. de Leo, 62, an associate director in the development office of Mount Sinai Medical Center, spent $800 on
airfare for the first frantic trip , plus $50 a day on taxis, since she had left her eyeglasses behind in a mad dash to the airport and therefore could not rent a car. Ms. de Leo has no savings left, and is $5,000 in debt. When asked about her own future, she said, "I'll have to work till I drop."

Only one authoritative survey, in 2004, has even asked adult children how much they contribute to their parents' support. Half said they did, and the average monthly expenditure was $200.  espondents who looked after their parents at least 40 hours a week said they spent an average of $324 a month.

But those figures were based on "quick, top-of-the-head estimates," said Gail Hunt, president of the National Alliance for Caregiving, which conducted the survey.

Knowing the extent of these expenses might inform public policy, some experts say, calling attention to a gap in the government safety net for the elderly.

"Should this burden fall solely on the individual and the family?" asked Judy Feder, dean of the Public Policy Institute at Georgetown University. "And can we really expect this arrangement to keep doing the job as a larger and larger population comes to grips with it?"

Congress recently passed a poorly financed bill that would help family members who need a break to pay for substitute care of an ailing loved one. But the Bush administration, to date, has preferred a private sector solution, recommending long-term insurance and reverse mortgages.

For spouses, most expenses are tax-deductible if they exceed 7.5 percent of adjusted gross income. But children cannot claim parental expenses unless they pay more than half of a parent's support, which is often not the case when the parents are on Medicaid, likeMs. Rodriguez's father, or have savings, like the Schoengood family.

The elder Schoengoods, both 86, own a home in Yonkers and a condominium in Florida and have assets enough for round-the-clock care, which can cost $100,000 a year. Still, their son, Matthew G. Schoengood, 49, vice president of student affairs at the Graduate Center at the City University of New York, has kicked in at least $1,000 a month since 2005, when his mother had the first of two strokes.

Mr. Schoengood flew his family nanny to Florida, for example, to look after his father. Now that his parents are permanently up north, Mr. Schoengood orders their groceries online along with his own. "As a child, it's just something you do," he said. "Mostly you don't even
think about it."

His father makes a half-hearted effort to pay him back, but Mr. Schoengood always says, jokingly, "I'll put it on your tab, Dad." Typical of their generation, his parents fret about every penny. His father asks, incessantly, "Do we have enough?" Mr. Schoengood tells him not to worry.

For sure, he hopes his own children will do for him what he is doing for his parents, but he cringes at the prospect of burdening them - one reason long-term care insurance is becoming attractive.

Mr. Schoengood's out-of-pocket spending is not sensible, elder-care experts say, but the result of the awkward minuet of preserving a parent's pride.

If families behaved logically, said Steven Schurkman, an elder-care lawyer in White Plains, all expenses would be paid from the parents' money, which if depleted would entitle them to Medicaid. "What most of us do isn't sound financial planning," Mr. Schurkman said. "But it's healthy for the family dynamic."

Carol Levine, director of the Families and Health Care Project at the United Hospital Fund in Manhattan, said that paying for her mother's needs required delicacy, even subterfuge. When Ms. Levine went shopping, her mother would say, "Take $5 out of my purse." Her daughter would return with 10 bags of groceries, and both would pretend that was all she had spent.

Both Mr. Schoengood and Ms. Rodriguez say their out-of-pocket expenses will not ruin them. Others are not so lucky.

Take Patrice B., 47, who returned to her childhood home in Jacksonville, Fla., seven years ago to move in with her mother, 84, who has Alzheimer's disease, and her father, 86, who has congestive heart failure. (They requested that the family's last name be omitted so neighbors would not know their plight.)

In their African-American culture, Ms. B. said, putting her parents in a nursing home would have been shameful. Plus, they could pay for some home care out of pensions as well as military disability checks. She, on the other hand, after years of sporadic part-time work and untallied
out-of-pocket expenses, is broke.

She has catastrophic health insurance, but it will not pay for the hysterectomy she needs. She has lost her credit cards after accumulating $20,000 in debt. "Honestly," Ms. B. said, "I've got nothing anymore. I go from very angry to very depressed."

Kate Mesmer, a single mother in Northern California who had always worked for nonprofit organizations, was living paycheck to paycheck when her mother had a stroke in 2001. Ms. Mesmer took a tenant into her house so she could contribute to her mother's $6,000-a-month rent at an
assisted living center.

Then Ms. Mesmer lost her job and had to move her mother to a board-and-care home. A second stroke forced her mother into a nursing home, where she qualified for Medicaid. That is where she died last year, with nothing left but an $18,000 I.R.A. The State of California is seeking that, contending the $18,000 should have gone toward nursing-home fees.

Given what she learned in the final years of her mother's life, Ms. Mesmer said: "I have a panic attack at least once a day. It's frightening to think about our generation and what's going to happen to us."

Friday, January 5, 2007

2007 Medicaid Rates

The following is a listing of the 2007 Medicaid regional rates which must be used to determine a transfer of assets penalty period when applying for Medicaid. You must refer to the rate for the region in which the facility is located. These rates are based on average nursing home costs in each of the seven regions in the State.

Central New York: $6506

Long Island: $10,123

New York City: $9,375

Northeastern New York: $7,189

Northern Metropolitan Area: $9,074

Rochester: $8,002

Western New York: $6,820

In addition, due to an increase in the consumer price index, the federal maximum community spouse resource allowance (CSRA) increases to $101,640 effective January 1, 2007. The State’s minimum CSRA will remain unchanged at $74,820. Therefore, in determining the community spouse resource allowance on and after January 1, 2007, the community spouse is permitted to retain resources in an amount equal to the greater of the following amounts:

1. $74,820 (the State minimum community spouse resource allowance); or
2. The amount of the spousal share up to $101,640 (the new federal maximum).

“Spousal Share” is the amount equal to one-half of the total value of the countable resources of the couple as of the beginning of the most recent continuous period of institutionalization of the institutionalized spouse on or after September 30, 1989.

Also effective January 1, 2007, the community spouse minimum monthly maintenance needs allowance (MMMNA) increases to $2,541. The increased MMMNA, family member allowance, federal maximum CSRA, and State minimum CSRA must be used when completing an assessment of a couple’s resources and income.