Currently on The Swinton Law Firm Radio: A Case of Neglect

Barbara Salerno and her family thought their decision to send their 80-year-old father, Albert Salerno, to a nursing home would mean he would be safe and cared for--but they were wrong. Barbara tells the story of how her family was helpless in saving their father even though they visited him nearly every day. Nursing home staff minimized and explained away a sharp downturn in Mr. Salerno's condition. By the time he finally received medical attention; Mr. Salerno was in acute renal failure, had advanced pneumonia and was malnourished. He died a few days later.

Adult Children Losing $3 Trillion in Caring for Aging Parents

Americans who take time off work to care for their aging parents are losing an estimated $3 trillion dollars in wages, pension and Social Security benefits, according to a new MetLife study. 

Meanwhile, the percentage of adult children providing basic care for their parents has skyrocketed in recent years. 

Nearly 10 million adults age 50 and over care for an aging parent, MetLife says. For the individual female caregiver, the cost impact of caregiving on in terms of lost wages, pension and Social Security benefits averages $324,044. For male caregivers, the figure is $283,716. 

The study also identified a dramatic rise in the share of men and women providing basic parental care over the past decade and a half. In 1994, only 9 percent of women and 3 percent of men and were providing care. By 2008, the percentage of women caregivers had more than tripled to 28 percent, while the figure for men had quintupled to 17 percent. "Basic care" is defined as help with personal activities like dressing, feeding, and bathing. Daughters are more likely to provide basic care and sons are more likely to provide financial assistance, the study found. 

"Undoubtedly, the impact of the aging population has resulted in increased need within families for family caregiving support," the study notes. 

At the same time, MetLife found that adult children age 50 and over who work and provide care to a parent are more likely to have fair or poor health than those who do not provide care to their parents. 

The study was based on an analysis of data from the 2008 National Health and Retirement Study (HRS). 

The findings have implications for individuals, employers and policymakers, MetLife concludes. Individuals, it says, should consider their own health when caregiving and should prepare financially for their own retirement. Employers can provide retirement planning and stress management information and assist employees with accommodations like flex-time and family leave. 

On the policy side, although only a few states mandate paid family and medical leave, "clearly this policy would benefit working caregivers who need to take leave to care for an aging parent," the study notes. MetLife also notes that the CLASS Act, a voluntary long-term care insurance program that is part of the new federal health reform law, will provide some coverage for long-term care needs as well as raise public awareness of the issue. 

For more on the study, "The MetLife Study of Caregiving Costs to Working Caregivers: Double Jeopardy for Baby Boomers Caring for Their Parents," click here.

Why You Need to Plan for Long-Term Care

Thinking about a time when you will need help taking care of yourself is not fun. That is why most people put off discussing long-term care until it can't be ignored. But it is better to start long-term care planning early. Here are some reasons to start planning now:

• People are living longer and are more likely to need long-term care. Life expectancies keep increasing, which means you are more likely to need help at some point. At least 70 percent of people over age 65 will require some long-term care services at some point in their lives, according to the U.S. Department of Health and Human Services.
• Care expenses are high. Whether you receive care in a nursing home or at home, expenses are rising. According to the 2010 MetLife Market Survey of Long-Term Care Costs, in 2010 the average cost of a room in a nursing home was $83,585 a year and home care aides averaged $21 per hour. Those figures aren't going to start going down.
• Family caregivers may not be available. In more and more households, both partners work. In addition, children often move far away from their parents. This means that your adult children may not be able to easily take of you when the time comes.
• The earlier you plan, the better. By planning ahead, you may be able to preserve your assets instead of using them all up paying for long-term care. In addition, if you plan early, you may have more options for care.

To start planning for long-term care, talk to your elder law attorney. Planning steps may include executing advance directives and a power of attorney, putting assets in a trust, purchasing long-term care insurance, getting a reverse mortgage, creating a caregiver contract with an adult child, or transferring a house to children. Your attorney can help you figure out the best plan for you.
For more information on the importance of long-term care planning, click here.

What To Do When a Loved One Passes Away

Whether your spouse has just passed away or you've lost your mom or dad, the emotional trauma of losing a loved one often comes with a bewildering array of financial and legal issues demanding attention.

Those issues can wait.  It is more important to take care of your loved ones and yourself first.  When you are ready, the legal issues can be dealt with.

You should meet with an attorney to review the steps necessary to administer the decedent's estate. While the exact rules of estate administration differ from state to state, the key actions include:

• File the will in probate court in order to be appointed executor.
• Collect the assets. This means that you need to find out about everything the deceased owned.
• Pay the bills and taxes. The final income tax return should be filed.  If an estate tax return is due, it must be filed within nine months of the date of death.
• Provide an informal or formal accounting to the heirs and obtain their approval which is then filed.
• Finally, make the final distributions of the remainder of the estate to the heirs.

Estate administration also involves transferring assets that are not controlled by a will.  The distribution of these assets may be controlled by trusts, joint ownership or beneficiary designations. 

For more details on steps surviving family members should take, click here.

A Trip to the Hospital May Put Assisted Living Residents on Medicaid at Risk of Eviction

Assisted living facility residents covered by Medicaid are at risk of being evicted if they leave the facility, even for a temporary hospitalization, the National Senior Citizen's Law Center (NSCLC) warns in a recently released White Paper on the problem. Ironically, Medicaid officials in most states have the power to prevent these evictions but in most cases are not exercising it.  Most state Medicaid programs pay for services not just in nursing homes but in assisted living facilities, which are meant to provide a home-like alternative to nursing homes. But there is a crucial difference between nursing homes and assisted living facilities. The Nursing Home Reform Law authorizes Medicaid to pay a nursing home to hold a room for a Medicaid recipient who is temporarily absent due to hospitalization and entitles the resident to return to the first-available room.  In contrast, Medicaid does not make similar payments on behalf of residents of assisted living facilities and the facilities are not required to give admission priority to returning residents. This difference in treatment, the NSCLC asserts in its report, "Medicaid Payment for Assisted Living: Residents Have a Right to Return After Hospitalization," diminishes the value of assisted living facilities as a community-based alternative to nursing home care. If assisted living facilities truly seek to offer "home or community-based" services, says the advocacy group, residents should have the peace of mind of knowing that they won't be evicted if they are absent for a few days or weeks.  The NSCLC points out that in most cases states could remedy the situation. Most states pay for assisted living care though a Medicaid waiver program. In 2000, the federal Centers for Medicare and Medicaid Services (CMS) advised states that it would authorize the issuance of "retainer payments" to Medicaid waiver home and community based service providers during a Medicaid recipient's temporary absence, such as for hospitalization. The guidance described the retainer payments as being comparable to room-hold payments for nursing home residents. However, it appears that most of the states either do not understand the federal guidance or have not implemented it. Exceptions include Georgia, Illinois, Montana and Washington, all of which make retainer payments to assisted living facilities on behalf of residents who are temporarily absent. The NSCLC makes a number of recommendations: CMS should clarify that Medicaid-funded retainer payments are available for temporary absences from an assisted living facility; State governments should authorize retainer payments up to the federally allowed maximum; Federal Medicaid law should be changed to entitle residents of assisted living facilities to room holds, room-hold payments and readmission to the next available room after temporary absences; Room holds should apply regardless of the reason for an absence. To view NSCLC's White Paper and other materials on the issue, including a News Release and a Policy Brief, click here.

A Brief Overview of a Trustee's Dutie

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary." If you have been appointed the trustee of a trust, this is a strong vote of confidence in your judgment and probity. Unfortunately, it is also a major responsibility. Following is a brief overview of your duties: Fiduciary Responsibility. As a trustee, you stand in a "fiduciary" role with respect to the beneficiaries of the trust, both the current beneficiaries and any "remaindermen" named to receive trust assets upon the death of those entitled to income or principal now. As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts. The Trust's Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries. For instance, you may have a current beneficiary who is entitled to income from the trust. He or she would be best off in most cases if you invested the trust funds to generate as much income as possible. However, this may be detrimental to the interest of later beneficiaries who would be happiest if you invested for growth. In addition to balancing the interests of the various beneficiaries, you must consider their future financial needs. Does a trust beneficiary anticipate buying a house or going to school? Will she be depending on the trust income for retirement in 15 years? All of these questions need to be considered in determining an investment plan for the trust. Only then can you start considering the propriety of individual investments. Distributions. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. And all of these considerations must be made in light of the size of the trust. Often the most important role of a trustee is the ability to say "no" and set limits on the use of the trust assets. This can be difficult when the need for current assistance is readily apparent. Accounting. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure. In strict trust accounting, you must keep track of and report on principal and income separately. Taxes. Depending on whether the trust is revocable or irrevocable and whether it is considered a "grantor" trust for tax purposes, the trustee will have to file an annual tax return and may have to pay taxes. In many cases, the trust will act as a pass through with the income being taxed to the beneficiary. In any event, if you keep good records and turn this over to an accountant to prepare, this should not be a big problem. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation. With such professional assistance, the job of trustee need not be difficult. However, you still need to communicate with those you hire and make any discretionary decisions, such as when to make distributions of principal from the trust to one or more beneficiaries. Fees. Trustees are entitled to reasonable fees for their services. Family members often do not accept fees, though that can depend on the work involved in a particular case, the relationship of the family member, and whether the family member trustee has been chosen due to his or her professional expertise. Determining what is reasonable can be difficult. Banks, trust companies, and law firms typically charge a percentage of the funds under management. Others may charge for their time. In general, what's reasonable depends on the work involved, the amount of funds in the trust, other expenses paid out by the trust, the professional experience of the trustee, and the overall expenses for administering the trust. For instance, if the trustee has hired an outside firm for investment purposes, that expense would argue for the trustee taking a somewhat smaller fee. In any case, it makes sense to consult with a professional experienced with trust work who can guide you on what would be normal fees considering all of the circumstances. In short, acting as trustee gives you a wonderful opportunity to provide a great service to the trust's beneficiaries. The work can be very gratifying. Just keep an eye on the responsibilities described above to make sure everything is in order so no one has grounds to question your actions at a later date.

AARP Sues Government Over Reverse Mortgage Foreclosures

Charging that reverse mortgage borrowers were caught in what amounts to a regulatory bait and switch, the AARP's legal arm is suing the Department of Housing and Urban Development (HUD) on behalf of three now-deceased borrowers' surviving spouses who are facing imminent foreclosure and eviction from their homes. 

The case involves the spouses of individuals who took out Home Equity Conversion Mortgage (HECM), which are the most widely available reverse mortgage and are administered by HUD. A reverse mortgage allows homeowners who are at least 62 years old to borrow money on their houses. The loans do not have to be repaid until the last surviving borrower dies, sells the home, or permanently moves out. 

The borrowers in the AARP case all died, leaving their spouses, who were not listed on the loan documents, living in the mortgaged homes. Because of the housing downturn, the homes are now worth less than the balance due on the reverse mortgage. None of the three spouses -- residents of Indiana, New York and Maryland -- can obtain loans for more than their homes are worth and so are facing eviction. 

Since 1989, HUD rules governing reverse mortgages have stated that a borrower or heirs would never owe more than the home was worth at the time of repayment. But at the end 2008, the Bush administration abruptly changed this policy and said that an heir -- including a surviving spouse who was not named on the mortgage -- must pay the full mortgage balance to keep the home, even it if exceeds the value of the property. This, AARP says, violates existing contracts between reverse mortgage borrowers and lenders. 

"HUD has illegally and without notice changed the rules in the middle of the game at the expense of vulnerable older people," said Jean Constantine-Davis, a senior lawyer with the AARP Foundation, the organization's charitable unit. 

A spouse might not be named on the mortgage for a number of reasons: one spouse may have taken out the reverse mortgage before the marriage, or one spouse may be under age 62 and ineligible, or, more likely, lenders often encourage the younger spouse not to be named as a borrower because then the loan amount can be bigger. AARP notes that, perversely, under HUDs current rule a stranger can purchase the property for its current appraised value, but a surviving spouse cannot. The policy also negates a key purpose for which borrowers pay for insurance, AARP adds, pointing out that reverse mortgage borrowers have always paid insurance premiums to protect against going "underwater" -- owing more than their homes are worth. 

The suit charges that HUD is ignoring another provision of the HECM program that protects a surviving spouse from being arbitrarily displaced from the home upon the death of the borrower. 

"This is shameful and we intend to make HUD honor the representations and promises they made to borrowers when they signed up for these government-insured loans," Steven A. Skalet, of Mehri & Skalet, the law firm pursuing the case for the AARP Foundation. The case was filed in Federal District Court for the District of Columbia. HUD had no comment on the pending litigation. 

Nearly one-quarter of all mortgaged homes are underwater, according to CoreLogic, a housing data firm.
For AARP's news release on the lawsuit, click here.
For a New York Times article on the case, click here. For excellent analyses by the Times and Reuters, click here and here.
For more on reverse mortgages, click here.