Beware Lapse of Insurance for Vacated Rental Property- A Cautionary Tale about the Demise of the Trusted Professional Adviser

Elder Abuse and Exploitation Rampant

New research from Cornell University's medical college suggests that the incidence of elder abuse and exploitation is far greater than experts had expected.

The study, which is not available online, compared the number of cases reported to law enforcement  agencies that serve the aging and other authorities with those mentioned in 4,000 random phone surveys of people 60 and older.  One would expect that some cases would go unreported, and thus it is generally understood that such offenses are unreported.

The extent of  unreported offenses was, however, shocking.  According to the study, for every elder abuse case reported to a mandated enforcement agency, the survey found, 23.5 unreported cases actually occurred. What's more, for each case of financial abuse of elders reported to authorities, 43.9 actually occurred.  Finally for each reported case of neglect of an elderly person, 57.2 cases of neglect actually occurred. One can only be shocked that such a vast array of offenses against the elderly go completely unreported.

The extent of unreported cases helps to explain why abuse, financial fraud, and neglect are so prevalent among the elderly. Aside from what may be a natural vulnerability among some segments of the elderly population, it is obvious that perpetrators can repeat offend with relative impunity.  Imagine for a second how prevalent convenience store robberies would be if only one out of every 57 store owners  victimized even reported the crime! 

Read more: http://www.sacbee.com/2010/12/31/3291158/fraction-of-elder-abuse-cases.html#ixzz1AHH0aMqp

Thirty Thousand Seniors To Get Default Notices from Reverse Mortgage Lenders

About 30,000 seniors will receive tough "dun" letters from their reverse mortgage lenders. This largest batch of mortgage delinquency notices in U.S. history will demand payments in 30 days and threaten foreclosures of the homes.

These 30,000 homeowners over age 62 are behind on property taxes or have not paid homeowners' insurance. Both overdue items violate terms of the reverse mortgages and trigger foreclosure.

Lenders are required to mail the letters to the seniors between now and April 29, 2011. The massive collection effort was ordered by the Federal Housing Administration (FHA) which insures most reverse mortgages under its "HECM" program - Home Equity Conversion Mortgage.

Estate Tax Uncertaintly Continues

The most common question I have been asked as we start the year 2011, is whether the new tax law ends the uncertainty regarding estate taxes.  Unfortunately, despite the new law reducing the federal estate tax, uncertainty continues as a planning variable. 

For most of the year 2010, we expected 2011 to usher in a fifty-five percent (55%)  federal estate tax on all assets over one million dollars. Toward the end of 2010, President Obama signed legislation reducing this exorbitantly high death tax to thirty-five percent (35%) on assets exceeding five million dollars in value.  However, the reduction only applies for the years 2011 and 2012.

If you plan on dying in the next two years, you are probably relieved. If you plan on living well past 2012, uncertainty regarding the marginal rate and exemption amount remains.   Unless changes are made to the law,  the estate tax rate for 2013 will revert to fifty five percent (55%), with only a one million exemption amount.

When planning, although we hope for the best, we must plan for the worst.  The worst case planning scenario, then, would assume that you survive until January 1, 2013, at which time you pass and realize a fifty-five percent (55%) tax on all assets (including the value of life insurance payable as a consequence of your death), in excess of one million dollars in value. 

So, here are my rules of thumb (my thumb, my rules :-)).   I generally recommend that my clients consider setting up an Irrevocable Life Insurance Trust (ILIT) for all life insurance policies over two hundred and fifty thousand dollars ($250,000.00) and consider setting up a Bypass or Credit Shelter Trust for all marital estates that exceed one million dollars. A fifty-five percent (55%) tax means a substantial loss of wealth, and a substantially reduced inheritance.  Most people will want to plan to reduce that tax burden as much as possible. 

As the estate laws change, I will continue to update you so that you may better serve your clients and protect yourself and your family.

GAO reports on Guardianship Abuse

When an individual, often a senior, becomes unable to manage his or her finances and personal decisions, and has not created a legal structure for trusted surrogates to take over decision-making (through a power of attorney, health care directive and a trust) a state court may appoint a guardian or conservator (depending on the state law and the powers to be granted) to step in and take care of the incapacitated person.  In most cases, this responsibility falls on a family member who has the relative’s best interest at heart.   These court-appointed guardians are bound by law to act in the best interest of their ward, so even if the responsibility falls upon a person that is not a family member who has the best interest of the ward at heart, the guardian is supposed to behave as if he or she does does.

But, a recently-issued report by the Government Accountability Office (GAO) suggest that this is not always the case.  The report, surveying selected guardianship cases over a twenty year period, disclosed finding instances where family and non-family members alike have been appointed by courts, and subsequently abused or neglected the persons they were appointed to protect.  The GAO identified hundreds of allegations of physical abuse, neglect and financial exploitation by guardians in 45 states and the District of Columbia between 1990 and 2010.

PainSAFE™ to aid in Pain Management and Care

Medical professionals and caregivers working with chronic pain patients, and chronic pain sufferers have a new tool. The American Pain Foundation (APF) today announced the launch of PainSAFE™ (Pain Safety and Access for Everyone), a new educational initiative designed for people with pain and health care professionals. The mission of PainSAFE is to provide education surrounding the appropriate and safe use of pain management therapies for people affected by pain and health care professionals, thereby, helping to reduce risk and improve access to quality pain care.

PainSAFE is a web-based program that provides up-to-date information, programming and practical resources and tools to help educate consumers about pain treatment options and their use.  PainSAFE also provides health care providers with a central hub of evidence-based information and practice-based tools to focus on safety and reduce the risks associated with various pain treatments.

For the Family Caregiver, the Perfect Holiday is a State of Mind

The holidays are always a wonderful time of year for family gatherings, reflection on what we have and the spirit of giving. The television is packed with specials showing relationships and families coming together for the holidays.

But the holidays can also be a time of stress and sadness for those who are caring for family members that are struggling with health problems, frailty, dementia, disability, or recent loss. Those who care for these individuals may feel overwhelmed, frustrated, depressed or resentful as they watch “perfect” families enjoying the holidays. There are many surveys and studies suggesting that caregivers are highly susceptible to such feelings. If you are a caregiver, there are measures you can take to avoid succumbing to these feelings and emotions.

PBS's "Frontline" Confronts End-of-Life Planning

A recent edition of PBS's FRONTLINE online, and an accompanying web page, discuss the hard choices we face regarding health care near the end of life.  The synopsis of the program is chilling and profound:  "How far would you go to sustain the life of someone you love, or your own? When the moment comes, and you're confronted with the prospect of "pulling the plug," do you know how you'll respond?"

In "Facing Death," FRONTLINE gains extraordinary access to The Mount Sinai Medical Center, one of New York's biggest hospitals, to take a closer measure of today's complicated end-of-life decisions. In this intimate, groundbreaking film, doctors, patients and families speak with remarkable candor about the increasingly difficult choices people are making at the end of life: when to remove a breathing tube in the ICU; when to continue treatment for patients with aggressive blood cancers; when to perform a surgery; and when to call for hospice."

"What modern medicine is capable of doing is what 20 years ago was considered science fiction," Dr. David Muller, dean of medical education at Mount Sinai, tells FRONTLINE. "You can keep their lungs breathing and keep their heart beating and keep their blood pressure up and keep their blood flowing. ... That suspended animation [can go] on forever. [So] the decisions at the end of life have become much more complicated for everyone involved."

"There are clinical situations where the odds are so overwhelming that someone can['t] survive the hospitalization in a condition that they would find acceptable, then using this technology doesn't make sense," says Dr. Judith Nelson, an ICU doctor at Mount Sinai. "And yet, in my clinical experience, for almost everybody involved, it feels much more difficult to stop something that's already been started." Dr. Nelson continues: "Nobody wants to die. And at the same time, nobody wants to die badly. And that is my job. My job is to try to prevent people from dying if there's a possible way to do it that will preserve a quality of life that's acceptable to them, but if they can't go on, to try to make the death a good death."

At every turn in the program, the importance of advance planning is obvious and palpable.  The educational materials accompanying the program explain:

Business Succession Planning Neglected

Transitioning a business to the next generation or to new ownership is a reality that affects most business owners.  Ideally, business owners should begin developing a succession plan five to ten  years before exiting the business.  Of course, one cannot know for sure when succession will take place.  Those that plan for business succession, often plan only for retirement.

Health concerns, however, can compel succession earlier than expected.  A business owner's incapacity, incompetency, or disability may render the owner incapable of transitioning a business to a successor.  But, death is unquestionably the most severe of the reasons compelling succession of a business. Given the risk that a poorly planned succession might rob the business owner's heirs of a substantial inheritance, and risk otherwise guaranteed inheritance by burdening an estate and heirs with debts and obligations, one would assume that most business owners consider carefully succession of their business. 

Many, however, aren't thinking about it at all.

Young Adults to Have Expanded Health Insurance Access

An Ohio law that allows unmarried children or stepchildren up to age twenty-eight (28) to remain or be added to their parent’s insurance coverage becomes effective July 1, 2010.   As a result of the new law, parents should evaluate the opportunity and the cost of this new coverage.  The Director of the Ohio Department of Insurance, Mary Jo Hudson, wrote in a release that [a]n estimated 20,000 additional young adults, who are more likely than any other age group to be uninsured, will now be eligible for coverage."  The statement continued: “These changes, combined with our work to implement the recently passed federal reforms, are granting more Ohioans access to coverage and decreasing the number of uninsured Ohioans." The state reform will work in tandem with the federal law dependent age change that becomes effective September 23, 2010. Previously, only dependents up to age 19, or up to 23 years old if they were still in school, were eligible to receive coverage under their parents’ policies.