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You buy a dilapidated house and in the course of renovations
you find a huge amount of money hidden in the walls. The cash is yours,
right? Not according to an Arizona appeals court, which recently ruled
that $500,000 found in the walls of a house belongs to the heirs of the
man who put it there, not to the house’s current owners.
Robert A. Spann had a habit of hiding cash and other
valuables in unusual places in the homes he lived in. His two daughters
knew of his pattern, and for seven years after he died in 2001 they
found stocks and bonds, as well as hundreds of military-style green
ammunition cans, some of which contained gold or cash, hidden throughout
his Paradise Valley, Arizona, home.
In 2008, the daughters sold the rundown house “as is” to a
couple. The couple did some remodeling, in the course of which a worker
for the contracting company found two ammunition cans full of cash in
the kitchen wall and another two inside the framing of an upstairs
bathroom. The cash totaled $500,000. After the worker
reported the find to his boss, the boss took the cans but did not tell
the couple who owned the house about them. The worker, however,
eventually informed the couple of the discovery and the police
ultimately took control of the $500,000.
The couple and the contractor sued each other for the money.
In the meantime, Robert Spann’s daughter Karen Grande, who was the
personal representative of his estate, filed a petition in probate court
on behalf of the estate to recover the money. The two cases were
consolidated in June 2009.
The trial court ruled that the money belonged to the estate and
the couple appealed, claiming that Mr. Spann’s family had abandoned the
cash by leaving it in the house when it was sold “as is.”
In a May 31, 2012, ruling, the Court of Appeals of Arizona
agrees with the trial court. The court rules that while “finders
keepers” may work on the schoolyard, in Arizona in order to abandon
personal property, “one must voluntarily and intentionally give up a
known right.” The court finds that because there is no evidence
that Mr. Spann’s estate intended to relinquish any valuable items in the
house, the money is more properly characterized as “mislaid” and still
belongs to the estate.
To read the full text of the Arizona appeals court’s decision in the case, Grande v. Jennings, click here.
Interestingly, an Oregon appeals court came to a different conclusion in a very similar case four years ago. For details, click here.
(Reprinted with the permission of ElderLawAnswers.com)
Friday, June 22, 2012
Wednesday, June 20, 2012
A Letter of Instruction Can Spare Your Heirs Great Stress
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While it is important to have an updated estate plan, there is a lot of information that your heirs should know that doesn't necessarily fit into a will, trust or other components of an estate plan. The solution is a letter of instruction, which can provide your heirs with guidance if you die or become incapacitated.
A letter of instruction is a legally non-binding document that gives your heirs information crucial to helping them tie up your affairs. Without such a letter, it can be easy for heirs to miss important items or become overwhelmed trying to sort through all the documents you left behind.
The following are some items that can be included in a letter:
(Reprinted with the permission of ElderLawAnswers)
While it is important to have an updated estate plan, there is a lot of information that your heirs should know that doesn't necessarily fit into a will, trust or other components of an estate plan. The solution is a letter of instruction, which can provide your heirs with guidance if you die or become incapacitated.
A letter of instruction is a legally non-binding document that gives your heirs information crucial to helping them tie up your affairs. Without such a letter, it can be easy for heirs to miss important items or become overwhelmed trying to sort through all the documents you left behind.
The following are some items that can be included in a letter:
- A list of people to contact when you die and a list of beneficiaries of your estate plan
- The location of important documents, such as your will, insurance policies, financial statements, deeds, and birth certificate
- A list of assets, such as bank accounts, investment accounts, insurance policies, real estate holdings, and military benefits
- Passwords and PIN numbers for online accounts
- The location of any safe deposit boxes
- A list of contact information for lawyers, financial planners, brokers, tax preparers, and insurance agents
- A list of credit card accounts and other debts
- A list of organizations that you belong to that should be notified in the event of your death (for example, professional organizations or boards)
- Instructions for a funeral or memorial service
- Instructions for distribution of sentimental personal items
- A personal message to family members
(Reprinted with the permission of ElderLawAnswers)
Monday, June 11, 2012
Low Interest Rates Force Long-Term Care Insurance Prices Up
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Prices for long-term care insurance policies jumped between 6 and 17 percent in the past year, according to an industry survey.
A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2,700 a year (combined) for about $340,000 of current benefits, according to the 2012 Long-Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance. The same coverage would have cost the couple $2,350 in 2011.
The steep price rise is primarily due to historic low interest rates and yields on fixed-income investments, explained Jesse Slome, the Association’s executive director, in a press release. Between 40 and 60 percent of the dollars an insurer accumulates to pay future claims comes from investment returns, Slome said, noting that for every one-half percent drop in interest rates an insurer needs about a 15 percent premium increase to maintain the projected net profit.
The Association annually analyzes what consumers will pay for the most popular policies offered by ten leading long-term care insurance carriers. The study found that the average cost for a 55-year-old single individual who qualified for preferred health discounts is $1,720 for between $165,000 and $200,000 of current coverage. In 2011, the same coverage would have cost an average of $1,480 annually.
The policies the Association priced all include a 3 percent compound inflation growth factor, meaning that a 60-year-old couple buying $340,000 of current coverage today would see their benefit pool grow to $610,000 when they reach age 80. According to the report, the couple could expect to pay about $3,335 a year if both spouses qualified for preferred health discounts.
The study suggests that it’s more important than ever to shop around for coverage because the range between the lowest-cost and the highest-cost policy has increased compared to the prior year. "For the 55-year-old single policy applicant the highest-priced policy cost almost 80 percent more than the lowest-priced policy," Slome noted. "For some categories, the difference was as much as 132 percent and no single company always had the lowest nor the highest rate, which is why we stress the importance of comparison shopping." Nearly three-quarters of buyers opt for a 3- to 5-year benefit period, the Association reports.
Policyholders can experience rate rises after they purchase, although long-term care insurers are allowed to raise prices only on a class of policyholders, not on individuals ones, and they must receive state approval for the rate hike.
The complete 2012 Price Index will be published in the Association's 2012 Long-Term Care Insurance Sourcebook. For more information, visit the American Association for Long-Term Care Insurance's Web site.
For an article on how to cope with long-term care insurance rate hikes, click here.
For more on how to reduce long-term care insurance costs, click here.
For more on long-term care insurance, click here.
(This article is reprinted with the permission of ElderLawAnswers.com)
Prices for long-term care insurance policies jumped between 6 and 17 percent in the past year, according to an industry survey.
A 55-year-old couple purchasing long-term care insurance protection can expect to pay $2,700 a year (combined) for about $340,000 of current benefits, according to the 2012 Long-Term Care Insurance Price Index, an annual report from the American Association for Long-Term Care Insurance. The same coverage would have cost the couple $2,350 in 2011.
The steep price rise is primarily due to historic low interest rates and yields on fixed-income investments, explained Jesse Slome, the Association’s executive director, in a press release. Between 40 and 60 percent of the dollars an insurer accumulates to pay future claims comes from investment returns, Slome said, noting that for every one-half percent drop in interest rates an insurer needs about a 15 percent premium increase to maintain the projected net profit.
The Association annually analyzes what consumers will pay for the most popular policies offered by ten leading long-term care insurance carriers. The study found that the average cost for a 55-year-old single individual who qualified for preferred health discounts is $1,720 for between $165,000 and $200,000 of current coverage. In 2011, the same coverage would have cost an average of $1,480 annually.
The policies the Association priced all include a 3 percent compound inflation growth factor, meaning that a 60-year-old couple buying $340,000 of current coverage today would see their benefit pool grow to $610,000 when they reach age 80. According to the report, the couple could expect to pay about $3,335 a year if both spouses qualified for preferred health discounts.
The study suggests that it’s more important than ever to shop around for coverage because the range between the lowest-cost and the highest-cost policy has increased compared to the prior year. "For the 55-year-old single policy applicant the highest-priced policy cost almost 80 percent more than the lowest-priced policy," Slome noted. "For some categories, the difference was as much as 132 percent and no single company always had the lowest nor the highest rate, which is why we stress the importance of comparison shopping." Nearly three-quarters of buyers opt for a 3- to 5-year benefit period, the Association reports.
Policyholders can experience rate rises after they purchase, although long-term care insurers are allowed to raise prices only on a class of policyholders, not on individuals ones, and they must receive state approval for the rate hike.
The complete 2012 Price Index will be published in the Association's 2012 Long-Term Care Insurance Sourcebook. For more information, visit the American Association for Long-Term Care Insurance's Web site.
For an article on how to cope with long-term care insurance rate hikes, click here.
For more on how to reduce long-term care insurance costs, click here.
For more on long-term care insurance, click here.
(This article is reprinted with the permission of ElderLawAnswers.com)
Wednesday, May 23, 2012
Son Liable for Mom's $93,000 Nursing Home Bill Under 'Filial Responsibility' Law
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Some 30 states currently have laws making adult children responsible for their parents if their parents can't afford to take care of themselves. These “filial responsibility” laws have rarely been enforced, but six years ago when federal rules made it more difficult to qualify for Medicaid long-term care coverage, some elder law attorneys predicted that nursing homes would start using the laws as a way to get care paid for.
It looks like this is starting to happen. This week, a Pennsylvania appeals court found a son liable for his mother's $93,000 nursing home bill under the state's filial responsibility law. Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012).
Facts of the Case
John Pittas' mother entered a nursing home for rehabilitation following a car crash. She later left the nursing home and moved to Greece, and a large portion of her bill at the nursing home went unpaid. Mr. Pittas' mother applied to Medicaid to cover her care, but that application is still pending.
Meanwhile, the nursing home sued Mr. Pittas for nearly $93,000 under the state's filial responsibility law, which requires a child to provide support for an indigent parent. The trial court ruled in favor of the nursing home, and Mr. Pittas appealed. Mr. Pittas argued in part that the court should have considered alternate forms of payment, such as Medicaid or going after his mother's husband and her two other adult children.
The Pennsylvania Superior Court, an appeals court, agreed with the trial court that Mr. Pittas is liable for his mother's nursing home debt. The court held that the law does not require it to consider other sources of income or to wait until Mrs. Pittas’s Medicaid claim is resolved. It also said that the nursing home had every right to choose which family members to pursue for the money owed.
First of a ‘Wave of Lawsuits’?
The Deficit Reduction Act of 2005 made it much more difficult for the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. With enactment of the law, advocates for the elderly said that nursing homes would likely be flooded with residents who need care but have no way to pay for it, and that in states that have filial responsibility laws, the nursing homes might seek reimbursement from the residents' children.
After Pennsylvania re-enacted its filial support law in the mid-2000s, Williamsport ElderLawAnswers member attorney Jeffrey A. Marshall forecast that the new Medicaid law would trigger a wave of lawsuits involving adult children.
"Litigation between nursing homes and children is likely to flourish," Marshall wrote in the January 20, 2006, issue of his firm's Elder Care Law Alert. (To read Marshall’s recent blog post on the Pittas ruling, click here.)
In 2005, the National Center for Policy Analysis, a conservative policy group, released an issue brief proposing that states begin enforcing filial responsibility laws in order to reduce long-term care costs.
_______________________________
For the full text of the Pennsylvania court’s decision in the Pittas case, go to: http://www.pacourts.us/OpPosting/Superior/out/A36025_11.pdf
For more on filial responsibility laws. click here.
For more on the changes to Medicaid's transfer laws, click here.
Reprinted with the permission of ElderLawAnswers.com
Some 30 states currently have laws making adult children responsible for their parents if their parents can't afford to take care of themselves. These “filial responsibility” laws have rarely been enforced, but six years ago when federal rules made it more difficult to qualify for Medicaid long-term care coverage, some elder law attorneys predicted that nursing homes would start using the laws as a way to get care paid for.
It looks like this is starting to happen. This week, a Pennsylvania appeals court found a son liable for his mother's $93,000 nursing home bill under the state's filial responsibility law. Health Care & Retirement Corporation of America v. Pittas (Pa. Super. Ct., No. 536 EDA 2011, May 7, 2012).
Facts of the Case
John Pittas' mother entered a nursing home for rehabilitation following a car crash. She later left the nursing home and moved to Greece, and a large portion of her bill at the nursing home went unpaid. Mr. Pittas' mother applied to Medicaid to cover her care, but that application is still pending.
Meanwhile, the nursing home sued Mr. Pittas for nearly $93,000 under the state's filial responsibility law, which requires a child to provide support for an indigent parent. The trial court ruled in favor of the nursing home, and Mr. Pittas appealed. Mr. Pittas argued in part that the court should have considered alternate forms of payment, such as Medicaid or going after his mother's husband and her two other adult children.
The Pennsylvania Superior Court, an appeals court, agreed with the trial court that Mr. Pittas is liable for his mother's nursing home debt. The court held that the law does not require it to consider other sources of income or to wait until Mrs. Pittas’s Medicaid claim is resolved. It also said that the nursing home had every right to choose which family members to pursue for the money owed.
First of a ‘Wave of Lawsuits’?
The Deficit Reduction Act of 2005 made it much more difficult for the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. With enactment of the law, advocates for the elderly said that nursing homes would likely be flooded with residents who need care but have no way to pay for it, and that in states that have filial responsibility laws, the nursing homes might seek reimbursement from the residents' children.
After Pennsylvania re-enacted its filial support law in the mid-2000s, Williamsport ElderLawAnswers member attorney Jeffrey A. Marshall forecast that the new Medicaid law would trigger a wave of lawsuits involving adult children.
"Litigation between nursing homes and children is likely to flourish," Marshall wrote in the January 20, 2006, issue of his firm's Elder Care Law Alert. (To read Marshall’s recent blog post on the Pittas ruling, click here.)
In 2005, the National Center for Policy Analysis, a conservative policy group, released an issue brief proposing that states begin enforcing filial responsibility laws in order to reduce long-term care costs.
_______________________________
For the full text of the Pennsylvania court’s decision in the Pittas case, go to: http://www.pacourts.us/OpPosting/Superior/out/A36025_11.pdf
For more on filial responsibility laws. click here.
For more on the changes to Medicaid's transfer laws, click here.
Reprinted with the permission of ElderLawAnswers.com
Monday, May 7, 2012
Alzheimer's Facts and Figures
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Here is a link to a quick video about the facts and figures of Alzheimer's disease.
http://www.youtube.com/watch?v=In1IJocVor8
Here is a link to a quick video about the facts and figures of Alzheimer's disease.
http://www.youtube.com/watch?v=In1IJocVor8
Quick facts
- 5.4 million Americans are living with Alzheimer's disease.
- One in eight older Americans has Alzheimer's disease.
- Alzheimer's disease is the sixth-leading cause of death in the United States and the only cause of death among the top 10 in the United States that cannot be prevented, cured or even slowed.
- More than 15 million Americans provide unpaid care valued at $210 billion for persons with Alzheimer's and other dementias.
- Payments for care are estimated to be $200 billion in the United States in 2012.
Thursday, April 26, 2012
What Is Asset Protection Planning?
Asset protection planning is about protecting your assets from creditors -- and it is not just for the super-wealthy.
Anyone can get sued. Lawsuits can stem from car accidents, credit card debt, bank foreclosures, or unhappy customers, among many other things. If someone wins a monetary judgment against you, your family could become bankrupt trying to pay it off.
To keep your assets away from creditors, you need to move them somewhere where creditors can't reach them. Asset protection techniques include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling various assets, or using limited liability companies or family limited partnerships.
To develop an asset protection plan, you need to talk to your attorney. Your attorney can discuss your short- and long-term financial goals and help you create a plan that will work for you.
It is important to note that asset protection planning only works if you act before you are sued. Under the law, you may not defraud current creditors. If you are already being sued or if you know you are going to be sued and you transfer assets so that creditors can't reach them, the court will reverse the transfer. That is why it is a good idea to put a plan into place now -- before it is too late.
For more information on asset protection planning, click here.
Anyone can get sued. Lawsuits can stem from car accidents, credit card debt, bank foreclosures, or unhappy customers, among many other things. If someone wins a monetary judgment against you, your family could become bankrupt trying to pay it off.
To keep your assets away from creditors, you need to move them somewhere where creditors can't reach them. Asset protection techniques include maximizing contributions to IRAs, moving funds to an irrevocable trust, retitling various assets, or using limited liability companies or family limited partnerships.
To develop an asset protection plan, you need to talk to your attorney. Your attorney can discuss your short- and long-term financial goals and help you create a plan that will work for you.
It is important to note that asset protection planning only works if you act before you are sued. Under the law, you may not defraud current creditors. If you are already being sued or if you know you are going to be sued and you transfer assets so that creditors can't reach them, the court will reverse the transfer. That is why it is a good idea to put a plan into place now -- before it is too late.
For more information on asset protection planning, click here.
Friday, March 9, 2012
When Should You Update Your Estate Plan?
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Once you've created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events.
Marriage
Whether it is your first or a later marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. Depending on state law, your spouse may have to share your estate with other relatives. You need a will to spell out how much you wish your spouse to get.
Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property.
Even if you don't have children, there may be family heirlooms or mementos that you want to keep in your family. For more information on estate planning before remarrying, click here.
Children
Once you have children, it is important to name a guardian for your children in your will. If you don't name someone to act as guardian, the court will choose the guardian. Because the court doesn't know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older.
Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.
Divorce or Death of a Spouse
If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan -- for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.
Increase or Decrease in Assets
One part of estate planning is estate tax planning. When your estate is small, you don't usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. For example, the New Jersey estate tax is due on estates as small as $675,000. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things. For more information about estate taxes, click here.
Other
Other reasons to have your estate plan updated could include:
Once you've created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events.
Marriage
Whether it is your first or a later marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. Depending on state law, your spouse may have to share your estate with other relatives. You need a will to spell out how much you wish your spouse to get.
Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property.
Even if you don't have children, there may be family heirlooms or mementos that you want to keep in your family. For more information on estate planning before remarrying, click here.
Children
Once you have children, it is important to name a guardian for your children in your will. If you don't name someone to act as guardian, the court will choose the guardian. Because the court doesn't know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older.
Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.
Divorce or Death of a Spouse
If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan -- for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.
Increase or Decrease in Assets
One part of estate planning is estate tax planning. When your estate is small, you don't usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. For example, the New Jersey estate tax is due on estates as small as $675,000. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things. For more information about estate taxes, click here.
Other
Other reasons to have your estate plan updated could include:
- You move to another state
- Federal or state estate tax laws have changed
- A guardian, executor, or trustee is no longer able to serve
- You wish to change your beneficiaries
- It has been more than 5 years since the plan has been reviewed by an attorney
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