Groups Charge That New HUD Policy Gives Little Relief to Surviving Spouses of Reverse Mortgage Holders

Consumer advocacy groups are denouncing the U.S. Department of Housing and Urban Development’s (HUD) latest attempt to protect the spouses of reverse mortgage holders from being forced out of their homes when the mortgage holder dies. 

HUD’s plan, outlined in Mortgagee Letter 2015-03, “will not protect surviving spouses from displacement and will lead to more foreclosures,” the National Consumer Law Center charges in comments on the new policy filed on behalf of its low-income clients and five other advocacy groups.

As I previously reported, couples often fail to put both spouses on the reverse mortgage loan, either because one spouse is under age 62 or they are urged to do so by aggressive lenders in order to get a bigger loan. Few couples are aware of the potentially catastrophic implications.  In the past, if only one spouse's name was on the mortgage and that spouse died, the surviving spouse would be required to either repay the loan in full or face eviction.  

In 2013 a U.S. district court ruled that in not protecting spouses from foreclosure, HUD was violating the reverse mortgage statute, and the court ordered that the agency find a way to shield surviving spouses from foreclosure and eviction.  In response, HUD began by issuing a new rule in 2014 to help protect spouses left off loans written after August 4 of that year.  But the rule did nothing for non-borrowing spouses on loans that had been written before that date.

Mortgagee Letter 2015-03, issued in January 2015, was aimed at this group.  Under the new policy, when the borrowing spouse dies reverse mortgage lenders have the option of assigning the loan to HUD, a move that would allow an eligible surviving spouse to remain in the home.  However, the consumer groups charge that HUD’s guidance is so unclear that most lenders will choose the safer alternative of foreclosure, and that even if lenders do opt for the assignment route, few surviving spouses will qualify for it.  This is because the spouses will have to come up with a large sum of money to quickly pay down the loan in order to pass a HUD-prescribed loan limit test, a feat that will prove “impossible for many newly widowed non-borrowing spouses.”

The National Consumer Law Center and the other groups recommend alternative options that they say will provide true relief to non-borrowing spouses facing foreclosure while protecting the integrity of the insurance funds.

To read the Center's comments on the new HUD policy, click here. 

Inherited IRA Not Part of New Jersey Resident's Bankruptcy Estate

A U.S. bankruptcy court determined recently that, at least under New Jersey law, an inherited IRA is not part of the bankruptcy estate, notwithstanding the recent U.S. Supreme Court ruling in Clark v. Rameker. In re: Andolino, (Bankr. D. N.J., No. 13-17238, Feb. 25, 2015).

Christopher Andolino inherited an IRA worth $120,000 from his mother. He later filed for Chapter 13 bankruptcy, and claimed the IRA was an exempt asset.

The bankruptcy trustee objected to Mr. Andolino's bankruptcy plan, asserting that under the Supreme Court's decision in Clark v. Rameker (U.S., No. 13-299, June 13, 2014), inherited IRAs are property of the estate.  To read my previous article on the decision in Clark v. Rameker, click here.

The U.S. Bankruptcy Court, District of New Jersey, held that the inherited IRA is not property of the estate. According to the court, "whereas the inherited IRA at issue in Clark was determined to be an asset of the bankruptcy estate pursuant to nonbankruptcy law, i.e., Wisconsin law, this Court first must apply relevant New Jersey law to determine whether [Mr. Andolino's] inherited IRA is property of the bankruptcy estate." The court determined that under New Jersey law, an inherited IRA does not lose "qualified trust" status, so it is exempt from the bankruptcy estate under federal bankruptcy law.

For the full text of this decision, click here.

Early Onset Alzheimer's Information and Assistance from the ADEAR Center (Alzheimer’s Disease Education and Referral Center)

Early-onset Alzheimer's disease, occurring in people age 30 to 60, is rare but complicated. People living with early-onset Alzheimer’s (like Julianne Moore’s character in the movie “Still Alice”) may face particular challenges in dealing with work, raising children, and finding the right support groups.

A new online resource list from the National Institute on Aging’s Alzheimer’s Disease Education and Referral Center may assist younger people with Alzheimer’s, their families, and caregivers to find information and help. Topics include:

• Living with early-onset Alzheimer’s
• Legal and financial planning
• Caregiving
• Clinical trials and studies

All of the resources on this list are free and accessible online.

Visit the ADEAR Center website for other resources like free publications, caregiving resources, and more information about Alzheimer’s.

Share this resource via social media with the following message:

New resource list for people living w/ early-onset #Alzheimers & their #caregivers from @Alzheimers_NIH  http://1.usa.gov/1CiQi0Y

Proposed VA Regs Would Create Transfer Penalties for Pension Applicants

The Department of Veterans Affairs (VA) is proposing regulations that would establish an asset limit, a look-back period and asset transfer penalties for claimants applying for VA needs-based benefits.  Currently, there is no prohibition on transferring assets prior to applying for needs-based benefits, such as Aid and Attendance. 

In its explanation of the new regulations in the January 23, 2015 Federal Register, the VA says the changes are a response to a 2012 Government Accountability Office (GAO) report, which it states recommended changes to “to maintain the integrity of VA’s needs-based benefit programs.” The VA also offers as a reason for the new rules to “reduce opportunities for attorneys and financial advisors to take advantage of pension claimants.”

The proposed rules would establish a 36-month look-back period and a penalty period of up to 10 years for those who dispose of assets to qualify for a VA pension. The penalty period would be calculated based on the total assets transferred during the look-back period to the extent they would have exceeded a new net worth limit that the rules also establish.  The proposed net worth limit would be equal to Medicaid’s maximum community spouse resource allowance (CSRA) prevailing at the time the final rule is published and would be indexed for inflation as the CSRA is.

The amount of a claimant’s net worth would be determined by adding the claimant’s annual income to his or her assets. The VA would not consider a claimant’s primary residence, including a residential lot area not to exceed two acres, as an asset.  But if the residence is sold, proceeds from the sale would be assets unless used to purchase another residence within the calendar year of the sale. Any penalty period would begin the first day of the month that follows the last asset transfer, and the divisor would be the applicable maximum annual pension rate in effect as of the date of the pension claim.

The proposed rule also defines and clarifies what the VA considers to be a deductible medical expense for all of its needs-based benefits, and proposes statutory changes pertaining to pension beneficiaries who receive Medicaid-covered nursing home care.

The proposed rules appear to be an effort to circumvent Congress, where legislation similar to that proposed in the new regulations has been languishing for the past two years.

The proposed rules are also quite harsh when compared to the five year look-back used for Medicaid.  Although there is no explanation for the need for a longer look-back period, the fact that there is no resource recovery available to the VA may explain the longer period.  Of course, it is also possible that the government is signalling a willingness to use more strenuous measures in determining eligibility for government benefits generally, which may later translate to a similarly longer look-back for Medicaid purposes.  

Of course, more stringent regulation of eligibility may also serve the interest in the federal government seeing states enforce, and if necessary, adopt filial responsibility laws.  For more information, see my previous articles here, here, here, and here.

To read the proposed rules in 80 Federal Register 3840-3864 (23 Jan 2015), click here.  Comments must be received on or before March 24, 2015.

Value of Assets That Spouses of Medicaid Recipients May Keep Rises for 2015

Medicaid law provides special protections for the spouse of a Medicaid applicant to ensure the spouse has the minimum support needed to continue to live in the community while the the Medicaid recipient receives long-term care benefits, usually in a nursing home.

One of the most important protections is the "community spouse resource allowance" or CSRA. In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in assets (the amount may be somewhat higher in some states). In general, the community spouse may keep one-half of the couple's total "countable"assets up to a maximum that changes each year. This is the “maximum CSRA,” the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is called the “minimum CSRA.”

The federal government just announced the new spousal impoverishment figures for 2015, which include the minimum and maximum CSRA:

• Minimum Community Spouse Resource Allowance: $23,844
• Maximum Community Spouse Resource Allowance: $119,220

Here's an example of how the CSRA might work:

If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple's assets have been reduced to a combined figure of $52,000 -- $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $119,220 (in 2015), regardless of whether or not this represents half the couple's assets. For example, if the couple had $100,000 in countable assets, the community spouse could keep the entire amount, instead of being limited to half.

For more about the CSRA, click here.

For more about Medicaid's protections for the healthy spouse, click here.

For more about Medicaid's treatment of assets, including what is "non-countable," click here.

Ohio Forced to Embrace Compliant Annuities in Medicaid Planning

Medicaid compliant annuities are useful tools in long-term care planning for many married clients.  A married couple typically purchases a Medicaid compliant annuity if the two spouses are in unequal health positions to ensure that the healthy spouse—known as the “community” spouse—has sufficient income, while allowing the second, less healthy spouse to qualify for Medicaid assistance in paying for long-term care expenses, typically within a nursing home.  

Because a Medicaid compliant annuity is often the only means by which a healthy client is able to secure a stable income stream once his or her spouse requires state-sponsored Medicaid assistance, state-imposed restrictions in this area can force a Medicaid-reliant client into poverty.  Nonetheless, in recent years, restrictive state and local policies have often prevented clients from fully taking advantage of these federally regulated products.  Historically, Ohio has been peculiarly aggressive, sometimes bending the federal and state rules to erect substantial roadblocks to these planning alternatives.  

Federal law would appear to protect the use of Medicaid compliant annuities.  Rather than treating the purchase of the annuity as an impermissible asset transfer effected in order to meet Medicaid’s means-tested eligibility requirements, if certain requirements are satisfied, the federal Deficit Reduction Act (DRA) treats the purchase as a permissible exempt investment, and the annuity payout stream is shielded as the community spouse’s income.  

In order to qualify as a Medicaid compliant annuity under the DRA, the terms of the annuity contract must satisfy certain criteria. The income from the annuity contract must be payable to the community spouse, the contract must be irrevocable and the payment term must be based on the life expectancy of the community spouse.  Further, the state must be named as the remainder beneficiary on the contract, allowing it to receive up to the amount that it has paid for the institutionalized spouse’s long-term care.
The speed with which Ohio complied with the injunction and reversed the denied applications isa step in the right direction for Medicaid-reliant clients.

Notwithstanding the federal rules, in three separate instances, a community spouse in Ohio had purchased a Medicaid compliant annuity so that his spouse, a nursing home resident, could qualify for Medicaid. Several Ohio counties, however, decided to treat Medicaid compliant annuities as impermissible asset transfers even if those annuities satisfied the strict federally mandated criteria.  he Medicaid applications were denied.

The immediate annuities purchased in the Ohio case satisfied federal criteria, but, because Ohio found that they did not satisfy state standards, the state found that the healthy spouses were required to use those funds to pay for the unhealthy spouses’ nursing home care, despite the fact that the funds were now invested in irrevocable annuities.

A federal court, however, recently stepped in to issue an injunction against Ohio.  The federal judge disagreed with Ohio's interpretation of the rules, and, because the institutionalized spouses were at risk of eviction from the nursing home, issued an injunction ordering the state to reverse its decision and treat the annuities as permissible, or risk disqualifying Ohio from the federal Medicaid program entirely.

The state quickly complied.  

In Ohio, a community spouse is entitled to retain half of the couple’s assets, up to a maximum dollar amount of around $ 119,220 (eff. 1/1/2015). The unhealthy spouse is required to spend down the remainder of the couple’s assets until only $1,500 remains. In order to accomplish this, the couple is permitted to buy certain types of immediate annuities without jeopardizing Medicaid eligibility.

There are Many Life Insurance Options in Estate and Financial Planning

Estate planning will always involve consideration of life insurance.  Life insurance can, among other objectives, create liquidity to pay estate taxes and settlement expenses, replace lost income for spouses and dependents, and protect an estate against loss. There are two main types of insurance: term and permanent. These two main alternatives differ on how long there is coverage and whether or not the policy includes a cash value.

Term Life Insurance

Term life insurance is the simplest, and probably the most common type of insurance. The purchase of insurance is for a set number of years, and the policy owner has coverage only for those years. In general, premiums remain level for the term. If the insured dies during the term, the beneficiaries receive a death benefit. Once the term ends, however, coverage ends. Some policies are "guaranteed renewable,"  meaning the owner can renew the policy for another term without having another medical exam, but premiums typically  increase. Some term policies also allow you to convert a term policy into permanent insurance.

Term insurance is usually purchased to cover a short- to medium-term need, such as a mortgage or a dependent's education costs.  Level term insurance keeps the premiums and death benefit the same over the policy term,  but there are other options. If the need for insurance will decrease over time, deceasing term insurance offers a reducing death benefit  over the term. Most consumers encounter these when buying a home or car, to ensure payment of the debt at death.  Conversely, if your need for insurance will increase over time, you can purchase increasing term insurance in which your premiums and death benefit rise over the term.

Permanent Life Insurance 

There are many different types of permanent life insurance (also called cash value insurance), but the four main types are whole life, universal life, variable life, and universal variable life. All permanent life insurance policies provide coverage for life (or for as long as you pay premiums). The other feature of permanent insurance is that in addition to paying a death benefit, the policy builds a cash value, which can be used as collateral for a loan or withdrawn from the account. A portion of the premium payments goes into a separate cash account that grows over time. Loans or withdrawals reduce the death benefit, but offer liquidity option in estate and financial planning. Many of these policies offer the option to add the cash value to the death benefit upon the death of the insuredfor an additional cost.  Each types of permanent life insurance has its own specific features and variations:

• Whole life insurance. With whole life insurance, the owner pays a set premium and receive a set death benefit. In addition, the cash value is guaranteed. Whole life insurance is a good option if an owner  is seeking stable premium payments, cash value, and a death benefit.

• Universal life insurance. Universal life insurance offers flexible premiums, cash value, and death benefit. The main feature of universal life insurance is the ability to use accumulated cash value to pay premiums. A policy may lapse, however, if the cash value does not grow sufficiently to support premium payments. Universal life also offers the option to change the death benefit, although, depending upon the policy, the insured may have to go through the underwriting process again. Universal life insurance is a good option if an owner is worried about the ability to pay premiums in the future and wants the ability to change premiums and  death benefit amounts as circumstances change.

• Variable life insurance. Variable life insurance offers the ability to invest cash value. The premium payments are usually  level, but an owner can direct the cash value payments into subaccounts that are similar to mutual funds. The cash value and  death benefit will vary depending on the performance of the accounts, although some policies may contain a guaranteed minimum for each. Variable life insurance is appropriate if an owner is using the policy as an investment and wants to control investment options. Variable life is better for younger buyers who can afford to take more risks.

• Variable universal life insurance. As the name suggests, variable universal life insurance combines the flexible premiums of universal life insurance with the investment choices of variable life insurance. There is no guaranteed minimum cash value, but most policies have a minimum guaranteed death benefit provided the premiums are paid for a set number of years. Like universal life insurance, the owner may be able to change the death benefit, but again the insured might have to go through the underwriting process again. Variable universal life insurance is a good option for young purchasers who want an investment option and flexibility with premium payments.

Autism Patients Share Common Pattern Of Brain Inflammation

From Sarah Klein, Senior Editor, Health and Fitness, for the Huffington Post;

While science has yet to pinpoint the exact cause of autism, a new study reveals that the brains of people with the disorder share a common pattern of inflammation from an overactive immune response. 

Johns Hopkins and University of Alabama at Birmingham researchers analyzed data from autopsied brains of 72 people, 32 of whom had autism. In the brains of people with autism, they found genes for inflammation permanently activated in certain cells. The study, published in the online journal Nature Communications on Dec. 10, is the largest so far of gene expression in autism. 

"There are many different ways of getting autism, but we found that they all have the same downstream effect," Dan Arking, Ph.D., an associate professor in the McKusick-Nathans Institute for Genetic Medicine at the Johns Hopkins University School of Medicine said in a statement. "What we don't know is whether this immune response is making things better in the short term and worse in the long term." 

Inflammation is not likely a root cause of autism, but a consequence of a gene mutation, Arking stressed. To better understand inflammation's effects, researchers will want to find out whether treating it makes autism symptoms any better, he said.

Go here to read the rest of the article.  

Nursing Home Worker Faces Homicide Charges in Violent Death of Resident

An alleged physical altercation between a New York nursing home aide and a resident has reportedly resulted in the resident's death.  Cherrylee Young, 41, now faces negligent homicide charges and is scheduled to appear before a grand jury.  According to authorities the physical altercation caused the resident to fall and fatally impale himself on part of a table. 

According to the New York Times, the fight broke at the 46-bed University Nursing Home in the Bronx on December 8th, allegedly after 77-year-old Frank Mercado repeatedly set off his bed alarm.  Workers reportedly found Young and Mercado on the floor, with Young repeatedly punching the resident.

The Medical Examiner determined that a table was knocked over during the altercation, and a rod attached to the table  tore the resident's rectum, causing fatal internal bleeding. According to the Daily News, Police claimed that it took hours for nursing home staff to notice Mercado's deteriorating health and send him to the hospital.

Young, arrested Dec. 9, appeared Monday in Bronx Criminal Court, claiming that Mercado attacked her and that she acted in self-defense. She agreed to testify before a grand jury, but said she will plead not guilty if indicted for negligent homicide. The charges could change depending on the grand jury's findings, according to Bronx Assistant District Attorney Nancy Borko.

University Nursing Home released a statement expressing “profound regret” over the incident, and offering condolences to the family of Mercado, a four-year resident.  "The University Nursing Home, which has a five-star rating from Medicare.gov and an exemplary healthcare history, is assisting the NYPD and the medical examiner in their investigation of this matter," the statement read. 

Advocates Seek Better Notification for Those Nearing Medicare Eligibility

Forty-four organizations, including the Medicare Rights Center, urged the Department of Health and Human Services, the Department of Labor and the Social Security Administration to implement a system for notifying individuals approaching Medicare eligibility to inform them of their rights and obligation as they near enrollment.

The organizations asked that the agencies to ensure that all individuals nearing Medicare eligibility receive timely and complete notice about Medicare enrollment. According to the letter, such a system will ensure that fewer people new to the Medicare program are saddled with higher health care costs or go without needed health care services due to gaps in coverage and late enrollment penalties resulting from missing enrollment windows.

In particular, the letter suggests the following:

• Provide notice about nearing Medicare eligibility to all individuals turning age 65;

• Ensure that notices include key messages about coordination of benefits and delaying enrollment;

• Carefully engage other messengers, including health plans, employers and states;

• Strengthen notice for those who are auto-enrolled into Medicare; and

• Develop notices and educational materials in additional languages and alternate formats.

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.  Click here to read the letter.

A Holiday Gift from an ABLE Congress!

Sara Wolff (center) calling on Congress to allow disabled
 Americans to save and still receive benefits like
 Social Security Disability Insurance payments and Medicaid

The following is a reprint from the blog of Michael Morris, the Executive Director of the National Disability Institute (NDI) in Washington:

Last night, the U.S. Senate overwhelmingly passed (76-16) the Achieving Better Life Experience (ABLE) Act. The bill now goes to President Obama for signing into law. Not since the passage of the Americans with Disabilities Act (ADA) in 1990 has Congress moved forward with a change in public policy as important and unprecedented as ABLE. The ABLE Act represents the first time there is clear recognition and sensitivity to the extra costs of living with a disability for children and adults with significant disabilities and their families. Every day, all across America, parents raising a child with a disability are confronted with costs not covered by insurance and various public assistance or benefits. The costs are as varied as modifying a home to be more accessible to using adaptive equipment and assistive technology that enhances learning, mobility, hearing and the ability to use a computer, all which improve quality of life experience. 

For adults with significant disabilities, extra costs can also include additional hours of personal assistance support to get out of bed, help with cooking and other daily living needs, as well as accessible transportation, housing and employment supports. 

The ABLE Act responds to these significant daily and weekly out-of-pocket expenses by creating, for the first time, a tax-advantaged savings account (an ABLE account). This account would cover the extra costs of living with a significant disability without adversely affecting continued eligibility for government benefits such as Supplemental Security Income (SSI) and Medicaid (health care). 

No piece of legislation before this Congress had more cosponsors – 380 House Members and 74 Senators – or received more bipartisan support across both the Democratic and Republican parties. ABLE is, above all, about fairness. Families raising children with significant disabilities do not want a handout and public assistance that comes with a life sentence in poverty. The disability community wants a hand up so they can be included in the economic mainstream as productive and valued members of inclusive workplaces and communities. ABLE offers, for some individuals and families (eligibility is limited to age of onset of disability by 26 years of age), an opportunity to plan for the future by setting aside up to $100,000 for expenses that may accrue over a lifetime, without the interest being taxed when the funds are removed. For some five million plus individuals and families who are likely to establish an ABLE account in the future, it is truly an early holiday present.

Thank you to Congress for passing the ABLE Act and improving the financial security of millions of Americans with significant disabilities and their families.

The National Disability Institute is a national not for profit corporation that is dedicated to "changing thinking and behavior that advance the financial stability and economic strength of persons with disabilities across the country.  Leveraging public and private resources, NDI is uniquely and singularly focused on promoting REAL ECONOMIC IMPACT for persons across the full spectrum of disabilities."  NDI's Real Economic Impact Blog is just one part of that mission.

Let us all join in the growing chorus of voices thanking Congress for this holiday gift.  You can read more about the ABLE Act here.  This blog will later carry a final description of the law as signed by the President.

Hasbro Creates Online Program for Children With Disabilities

Hasbro, Inc.,  creator of Mr. Potato Head, Play-Doh, Monopoly, and Connect 4, is releasing a series of online videos and other tools to help children with disabilities effectively engage with both toys  and other children.

The project, “ToyBox Tools”, “is designed to help kids learn what each toy is all about, how to put the item together and presents children with alternative ways to engage independently or with peers,” according to an article on DisabilityScoop.com. According to the Hasbro website:

"Hasbro’s fundamental mission is to bring joy and play to children and their families around the world. But for some children play can be challenging. For children with a developmental disability, play isn’t always accessible out of the box, relegating countless toys to the back of the closet or the donation bin. More importantly, the joy and benefits that play can bring, the connection between peers, siblings and other generations may be lost.” 

The initiative, “emerged from employees at Hasbro concerned that kids with developmental disabilities were losing out on valuable opportunities to connect with others through play, the company said.” “Believing that we could do more, a passionate group of Hasbro employees from across the Company, came together to team up with Autism Project – a long term philanthropic partner of the Hasbro Children’s Fund, to figure out a way to help,” said Hasbro’s site. The team, Hasbro said, “learned that many classic Hasbro toys were being widely used by teachers and occupational therapists working in the field and that they were creating their own supportive play tools which provided structure that is critical to the way certain children manipulate concepts to help them understand play.” The program is available online for free, and “Hasbro officials described the effort as a pilot program and said they will continue to refine the tools.” 

See more here. 

Nearly Forty Percent of Elderly Suffer At Least One Disability

Download Percentage of  County Population Age 65
 and Over with a Disability: 2008-2012

Nearly 40 percent of people age 65 and older had at least one disability, according to a U.S. Census Bureau report that covered the period 2008 to 2012. Of those 15.7 million people, two-thirds of them say they had difficulty in walking or climbing.

Difficulty with independent living, such as visiting a doctor’s office or shopping, was the second-most cited disability, followed by serious difficulty in hearing, cognitive difficulty, difficulty bathing or dressing, and serious difficulty seeing.

While populous states such as California, Florida, New York and Texas had the largest number of older people with a disability, high disability rates were seen in Southern counties, especially in central Appalachia and the Mississippi Delta.

Older Americans With a Disability: 2008-2012, a report based on data collected during the American Community Survey, examines disability status by age, sex and selected socio-economic characteristics, such as marital status, living arrangement, educational attainment and poverty status.

“The statistics provided in this report can help anticipate future disability prevalence in the older population,” said Wan He, a demographer from the Census Bureau’s Population Division. “The figures can be used to help the older population with a disability, their families, and society at-large plan strategies and prepare for daily life tasks and old-age care.”

The following are some of the statistical highlights gleaned from the report:

• More than half (54.4 percent) of the older population who had not graduated from high school had a disability, twice the rate of those with a bachelor’s degree or higher (26.0 percent). This inverse relationship between educational attainment and likelihood of having a disability was found across age, sex, race and Hispanic origin.

• More than one-third of those 85 and older with a disability lived alone, compared with one-fourth of those age 65 to 74.

• About 13 percent of the older household population with a disability lived in poverty; in contrast, 7 percent of those without a disability were in poverty.

• The older population with a disability was disproportionately concentrated among those 85 and older. This group represented 13.6 percent of the total older population but accounted for 25.4 percent of the older population with a disability.

• Women 65 and older were more likely than men 65 and older to have five of the six types of disability included in the American Community Survey, especially ambulatory difficulty. Older women’s higher rates for disability are, in part, because women live longer.

• Older men’s higher likelihood for having a hearing disability may reflect the lifelong occupational differentials between men and women, where men may be more likely to have worked in industries that cause noise-induced hearing loss.

• Disability rates were lower for married older people than for those widowed or in other categories of marital status.

Most long term care insurance policies and benefits require that the insured be unable to perform without assistance two Activities of Daily Living (ADL's), such as transferring, toileting, bathing, continence, dressing and eating. If you have such a policy you should retain a copy of the actual policy in order to see for yourself how the benefit "triggers" and what ADL limitation is described.  A single disability may or may not impair more than one ADL.

The Division of Behavioral and Social Research at the National Institute on Aging of the National Institutes of Health commissioned this report and also supports other Census Bureau reports on aging research.

Long Term Care Facilities Must Recognize and Respect Same Sex Marriages Under Proposed Rule

Long-term care facilities are required to recognize certain same-sex marriages in order to participate in Medicare and Medicaid under a recently proposed rule.

The rule would also apply to hospices and other types of providers and suppliers. The 26-page rule and policy statement was drafted in response to the 2013 United States v. Windsor Supreme Court ruling, which struck down portions of the Defense of Marriage Act and paved the way for gay married couples to be recognized under federal law.

Among the conditions of participation related to long-term care is a section on resident rights, including rights to communicate with and have access to people “inside and outside a facility.” A proposed addition to this section would specify that a same-sex spouse has the same rights as opposite-gender spouses, if the same-sex marriage was valid in the jurisdiction where it took place.

A proposed revision for hospices would ensure that a same-sex spouse can make the decision to terminate care for an incapacitated person.

“Our goal is to provide equal treatment to spouses, regardless of their sex, whenever the marriage was valid in the jurisdiction in which it was entered into, without regard to whether the marriage is also recognized in the state of residence or the jurisdiction in which the healthcare provider or supplier is located,” the Centers for Medicare & Medicaid Services writes in the proposed rule.

The proposed rule is available here. It is scheduled for publication in the Federal Register. Comments can be submitted through Feb. 10.

Questions to Ask Before Serving as Trustee

Being asked to serve as the trustee of the trust of a family member is a great honor. It means that the family member trusts your judgment and is willing to put the welfare of the beneficiary or beneficiaries in your hands. 

But being a trustee is also a great responsibility. You need to accept your responsibility fully informed and with your eyes wide open. Here are six questions to ask before saying "yes":

• May I read the trust? The trust document is your instruction manual. It tells you what you should do with the funds or other property you will be entrusted to manage. Make sure you read it and understand it. Ask the drafting attorney any questions you may have.

• What are the goals of the grantor (the person creating the trust)? Unfortunately, many trusts say little or nothing about their purpose. They give the trustee considerable discretion about how to spend trust funds with little or no guidance. Often the trusts say that the trustee may distribute principal for the benefit of the surviving spouse or children for their "health, education, maintenance and support." Is this a limitation, meaning you can't pay for a yacht (despite arguments from the son that he needs it for his mental health)? Or is it a mandate that you pay to support the surviving spouse even if he could work and it means depleting the funds before they pass to the next generation? How are you to balance the needs of current and future beneficiaries? It is important that you ask the grantor while you can. It may even be useful if the trust’s creator can put her intentions in writing in the form of a letter or memorandum addressed to you.

• How much help will I receive? As trustee, will you be on your own or working with a co-trustee? If working with one or more co-trustees, how will you divide up the duties? If the co-trustee is a professional or an institution, such as a bank or trust company, will it take responsibility for investments, accounting and tax issues, and simply consult with you on questions about distributions? If you do not have a professional co-trustee, can you hire attorneys, accountants and investment advisors as needed to make sure you operate the trust properly?

• How long will my responsibilities last? Are you being asked to take this duty on until the youngest minor child reaches age 25, in other words for a clearly limited amount of time, or for an indefinite period that could last the rest of your life? In either case, under what terms can you resign? Do you name your successor, does the trust  or does someone else?

• What is my liability? Generally trustees are relieved of liability in the trust document unless they are grossly negligent or intentionally violate their responsibilities. In addition, professional trustees are generally held to a higher standard than family members or friends. What this means is that you won't be held liable if for instance you get professional help with the trust investments and the investments happen to drop in value. However, if you use your neighbor who is a financial planner as your adviser without checking to see if he has run afoul of the applicable licensing agencies, and he pockets the trust funds, you may be held liable. A well-respected Massachusetts attorney who served as trustee on many trusts used a friend as an investment adviser who put the trust funds in risky investments just before the 2008-2009 stock market crash. The attorney was held personally liable and suspended from the practice of law. So, be careful and read what the trust says in terms of relieving you of personal liability.

• Will I be compensated? Often family members and friends choose to serve as trustees without compensation. If the duties are especially demanding, however, it is appropriate for trustees to be paid for service. The question, then, is how much. Professionals generally charge an annual fee of 1 to 2 percent of assets in the trust. So, the annual fee for a trust holding $1 million would be $10,000. Institutions and professionals generally charge a higher percentage for  smaller trusts and a lower percentage for larger trusts. If you are performing all of the work for a trust, including investments, distributions and accounting, it would be inappropriate to charge a similar fee. If, however, you are paying others to perform these functions or are acting as co-trustee with a professional trustee, charging this much may be seen as inappropriate. A typical fee in such a case is a quarter of what the professional trustee charges, or .25 percent (often referred to by financial professionals as 25 basis points). In any case, it's important for you to read what the trust says about trustee compensation and discuss the issue with the grantor.

If after getting answers to all these questions you feel comfortable serving as trustee, you should accept the role. It is an honor to be asked and you will provide a great service to the grantor and beneficiaries.

For a list of things to do after being appointed a trustee, click here.

For more on the different kinds of trusts, click here.

COPD Patients Discharged to a Skilled Nursing Have Two Times the Risk of Death Within Year Compared to Those Who Go Home

According to a study recently reported in McNight's, patients who go to a skilled nursing facility after being hospitalized for chronic obstructive pulmonary disease (COPD) are about twice as likely to die within a year: 

"The probability of death within 180 days was nearly 34% for COPD patients discharged to a SNF, versus roughly 16% for those who were sent home, the investigators determined. These numbers were 46.5% and 24%, respectively, at a year after hospital discharge. These statistics are for patients hospitalized with a diagnosis-related group (DRG) code of 190, but DRGs of 191 and 192 had similarly high rates."

Patients who go to a SNF likely have more severe COPD, multiple chronic conditions and poorer overall physical functioning, the study authors acknowledged. Still, the authors suggest, based upon the findings, that more robust interventions might improve the mortality of this group. Further research could determine which patients are likely to benefit from more intensive management and which might be candidates for hospice and palliative care.

The investigators analyzed Centers for Medicare & Medicaid Services data for about 500,000 patients in Ohio during 2008 and 2009. They are affiliated with not-for-profit hospital group OhioHealth, and presented their findings last week.

You can read more about the study here. 

Man Can't Challenge Discharge of Brother's Debt for Mom's Care under Filial Responsibility Law

A bankruptcy court has ruled that a man does not have standing to prevent the discharge of his brother's debt owed to their mother's assisted living facility under the state's filial responsibility law. In re: Skinner (Bankr. E. D. Pa., No. 13-13318-MDC, Oct. 8, 2014).

Dorothy Skinner lived in an assisted living facility until she was evicted for non-payment. The facility sued Ms. Skinner's sons, Thomas and William, under Pennsylvania's filial responsibility law. The court entered a default judgment against Thomas for $32,224.56. Thomas filed for bankruptcy and sought to discharge the debt.

William filed a claim in the bankruptcy court, arguing that Thomas's debt is non-dischargeable because it resulted from fraud and embezzlement. William argued that Thomas used their mother's assets for his personal expenses, so if William is liable to the assisted living facility, he is entitled to be reimbursed by Thomas.

The U.S. Bankruptcy Court, Eastern District of Pennsylvania, dismissed the claim, holding that William does not have standing because he is not a creditor of the debtor. According to the court, even if Thomas's actions injured Mrs. Skinner, that conduct was directed at Mrs. Skinner and her property, not at William. The court rules that William "may not invoke a cause of action that belongs to his [m]other to remedy the [Thomas's] liability for the Support Claim."  

Of course, underlying this case of one sibling fighting another is the liability created by filial responsibility; the siblings are jointly and severally liable.  Joint and several liability means that the creditor, in this case the assisted living facility, can enforce and collect the debt from the siblings jointly, or any one or more of the siblings severally.  If one sibling is unable to pay, the full debt falls to the other(s).  The assisted living facility can collect the full debt from any one of the siblings who is most likely to pay quickly.  Hence, one sibling seeks to stop a bankruptcy court from exonerating the other, leaving the sibling that does not file for bankruptcy solely responsible for the debt.  

Filial responsibility will only create more instances of familial discord and conflict as circumstances cast these obligations to fall inequitably among family members. Moreover, the court suggested that the Pennsylvania law does not allow for an action for contribution or reimbursement; if one family member is held responsible and another is not, the responsible family member may not be able to do anything about it.  Bottom line: parents' efforts to treat children equally or equitably will likely be sacrificed on the altar of Medicaid resource recovery in a filial responsible world. 

To read more about filial responsibility, click here, here, here, here, and here.  

Hapatitis Infection Risk in Nursing Homes Up 50%; Infection Risk Across the Board Increases

The rate of nursing home infections increased during a recent five-year period, with especially dramatic surges in multi-drug resistant organisms and viral hepatitis, according to recently published findings from Columbia University School of Nursing and the RAND Corporation, and reported in McNight's.

The prevalence of viral hepatitis in nursing homes increased 48% between 2006 and 2010, the investigators determined.  Outbreaks of Hepatitis C are common, including a recent outbreak in North Dakota involving ManorCare.  MDRO (multi-drug resistant organisms) prevalence increased by 18% and pneumonia by 11% during the same period. The rates of urinary tract infections, septicemia and wound infections also rose.

“Infections are a leading cause of deaths and complications for nursing home residents, and with the exception of tuberculosis we found a significant increase in infection rates across the board,” said lead study author Carolyn Herzig, MS, project director of the Prevention of Nosocomial Infections & Cost Effectiveness in Nursing Homes study at Columbia School of Nursing in New York City.

According to the authors, further research is needed to determine the cause of this troubling trend. They emphasized that potential residents and their families should look for facilities with strong infection control practices, including protocols to limit catheterization, easy access to hand sanitizers and isolation rooms for infected residents.

The results came from an analysis of data that nursing homes self-reported to the Centers for Medicare & Medicaid Services, and the study was supported by the National Institute of Nursing Research. 

Infection control has emerged as a top priority both for providers and the government. The White House recently launched a nationwide effort to reign in MDROs related to antibiotic prescribing practices.