NAELA Says the VA Could Be Sued If Proposed Transfer Regs Are Enacted

In its response to the Department of Veterans Affairs’ proposed regulations that would establish a look-back period and asset transfer penalties for pension claimants, the National Academy of Elder Law Attorneys’ (NAELA) raises the prospect that the VA could be sued if the rules take effect.  

As previously reported, proposed Section § 3.276 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. Currently, there is no prohibition on transferring assets prior to applying for needs-based benefits, such as Aid and Attendance. 

“[W]e express the serious concern that the proposed rule’s 3-year look-back period and transfer of assets penalty exceed statutory authority, opening up VA to future litigation and causing additional uncertainty for Veterans and their families,” write Bradley J. Frigon, NAELA’s president, and Victoria Collier, Chair of NAELA’s VA Task Force, in March 17, 2015, comments on the proposed rules.

Frigon and Collier argue that the proposed rules do not meet the standard of either an explicit or implicit delegation by congressional statute that the U.S. Supreme Court set forth in Chevron USA, Inc. v. NRDC, Inc., 467 U.S. 837 (1984).  They point out that Congress had the opportunity from 2012 to 2014 to create Medicaid-like transfer rules but that each proposal died in session.

NAELA’s comments also maintain that the proposed transfer penalties exception is too narrow.  “Veterans and their surviving spouses will be unjustly penalized for prior transfers that had absolutely nothing to do with VA pension eligibility," Frigon and Collier write. “Gifts to children at holidays and birthdays will be penalized. Donations to places of worship will be penalized. Contributions to charities will be penalized. All because there is a presumption that the transfer was made for the purpose of qualifying for VA pension. . . . The final rule should require that transfers only made for the sole purpose of qualifying for VA pension be penalized.”

The 27-page comments highlight a number of other flaws in the proposed regulation, including that it should allow for partial cures, that the time allowed to cure transfers should be expanded, that the rule disproportionately harms surviving spouses of veterans, and that the proposed net worth limits are harsher than Medicaid’s limits.

Alimony Obligation May Require Involuntary VA Admission

Victor Rizzolo and Barbara Jones divorced when Mr. Rizzolo was 84 years old. The court ordered Mr. Rizzolo to pay Ms. Jones alimony. Five years later, Mr. Rizzolo's health began to fail, so he moved in with son, who hired a caregiver for him.

Mr. Rizzolo asked the court to end the alimony payments, arguing that his income -- which was limited to VA disability payments and Social Security -- was needed to pay the caregiver. The trial court ruled against Mr. Rizzolo, finding that he had not done all that he could to meet his alimony obligations; if he entered a VA facility, the court found that he would be able to receive care and pay the alimony.  Because the court did not end the alimony obligation, Mr. Rizzolo appealed.  Perhaps he wishes he had not appealed, because, although the appeals court ruled in his favor, the court remanded the case describing an ominous potential outcome- his involuntary institutionalization in order to preserve his income for payment of alimony. 

The New Jersery Superior Court, Appellate Division, reversed, holding that the trial court did not hear evidence about whether entering a VA facility was really appropriate. According to the court, "although the [trial] court may on remand conclude that it is equitable to require [Mr. Rizzolo] to enter a VA facility against his wishes in order to use his limited income to continue to pay alimony, allowing [Ms. Jones] to preserve her assets until [Mr. Rizzolo's] death makes alimony no longer available, it may only do so upon consideration of competent evidence and a qualitative analysis of both parties' circumstances."

The court ruled that the trial court must first consider all the evidence before it can order an 89-year-old veteran in failing health to enter a Veteran's Administration (VA) facility against his will in order to ensure he had enough assets to pay alimony. Sometimes one can only exclaim, "wow!"  See, Rizzolo v. Jones (N.J. Super. Ct., App. Div., No. A-1800-13T2, March 2, 2015).  

Hopefully, his son will seek to introduce evidence regarding the relative quality of care available at home versus that available in an institution, and the court will consider carefully his quality of life concerns vis-a-vis his financial obligations. See, for example my articles, "One-Third of Nursing Home Residents Harmed In Treatment," Hapatitis Infection Risk in Nursing Homes Up 50%; Infection Risk Across the Board Increases, and "Most Terminal Dementia Patients in Nursing Homes Given Pointless and Potentially Dangerous Drugs"

For the full text of this decision, go to:
http://njlaw.rutgers.edu/collections/courts/appellate/a1800-13.opn.html

White House Proposes New Rules to Protect Investors Saving for Retirement

You might think that the top priority of the broker or financial adviser managing your retirement funds is to maximize your returns, but that’s not always the case.  Some steer their clients to bad retirement investments with high fees and low returns because they get higher commissions or other incentives to do so.  And there’s nothing currently in the law that requires advisers to put their clients’ interests first.

The Obama Administration has proposed new rules to change this and require financial advisers to act in the best interests of their clients. The move is designed to increase the amount investors receive in retirement.

Americans may lose as much as $17 billion every year because of bad financial advice from advisors with conflicts of interest, according to a report by the President's Council of Economic Advisors. Many financial advisors have a sales incentive to steer clients into investments that offer higher payments to the advisor but are not necessarily the best option for the client. According to the report, a retiree getting advice from an advisor with a conflict of interest when rolling over a 401(k) balance at retirement can lose an estimated 12 percent of the value of his or her savings.

To confront this problem, President Obama has directed the Department of Labor to promulgate new rules that require financial advisors to act like fiduciaries. This means they must put their clients' interests above their own. The new rules would prevent brokers and financial advisers from rolling over retirement accounts unnecessarily or putting clients' savings into investments with high fees and low returns when there are better options.

The Department of Labor will publish the new rules and then hold a hearing on the rules and accept public comments. The financial industry is fighting the proposed rules, arguing that they will disadvantage small savers by increasing costs. 

“What they are saying,” says business columnist Darrell Delamaide writing in USA Today, “is that they are currently willing to offer their services to the low-income bracket because they will reap even higher profit from hidden costs and fees. Their opposition to the rule is virtually proof that it is necessary.”

For more information about the new rules, click here and here. 

To read the report from the Council of Economic Advisors, click here. 

Retiring Abroad with a Long-Term Care Insurance Policy

As more people consider retiring abroad, questions arise regarding how an overseas retirement will affect long-term care insurance benefits. If you are planning to relocate out of the country and want to purchase or already have long-term care insurance, the first and best advice is to read carefully the fine print on your policy.

Not all long-term care insurance policies cover care in other countries.  Even if care is covered, the benefits are often severely limited. Some companies pay benefits overseas, but the benefit is less than the amount an insured getting care in the U.S. receives. For example, one insurer pays up to 50 percent of the nursing home benefit purchased for care received outside the United States. Other companies provide  a full benefit amount, but for a limited time (for example, one year).  Once you reach the limit, you will be required to move back to the U.S. to continue your remaining coverage. Still other companies limit both the benefit and the time covered, or they may cover you only if you relocate to an English-speaking country.

To find out whether your policy covers long-term care in other countries, first look at the exclusions. Next look for a section called "international benefits" or "out of country coverage." If your policy does limit care overseas, you should not cancel it immediately because it can be hard to get coverage again. Talk to your insurance agent, attorney or financial advisor first. Instead of cancelling, it may make sense to lower your premium by reducing your benefits.

For more information on what to consider before moving to another country, click here. 

For more about long-term care insurance, click here.

Scientists have found that non-invasive ultrasound technology can be used to treat Alzheimer's disease and restore memory. Researchers discovered that the innovative drug-free approach breaks apart the neurotoxic amyloid plaques that result in memory loss and cognitive decline.  The Report was published  in Science Translational Medicine,  Vol. 7, Issue 278, pp. 278ra33 (March 11,  2015), and reported in Science Daily.

Art Collector's Estate Claims Attorney's Drafting Error Cost It $25 Million

The estate of a prominent art collector has sued the attorney who drafted the art collector's will for legal malpractice. The lawsuit, filed in the New York Supreme Court, claims the attorney's error will cost the estate $25 million in taxes.

Collector Robert Ellsworth, whom The New York Times once called “the king of Ming” for his renowned collection of Asian art, hired attorney George Bischof to draft his will. In 2010, Bischof drafted a will that left Ellsworth's estate outright to his friend, Masahiro Hashiguchi, with six charities as contingent beneficiaries. In 2013, Ellsworth changed his will to name Bischof as the sole trustee of a residuary trust. Under the new will, the residue of the estate was left to a discretionary trust that benefited Hashiguchi during his life and then the remainder of the trust was left to charity.

The lawsuit alleges that Bischof drafted the will in a manner that did not allow the trust to qualify as a charitable remainder trust and therefore meet the criteria for the federal estate tax charitable deduction. According to the lawsuit, because of the "negligently and carelessly" drafted trust, the estate will have to pay $25 million in estate taxes that it wouldn't have had to pay if the trust had been properly drafted.

For more about this case from artnet, click here. 

Some Senior Living Facilities Discriminating on the Basis of Disability

Continuing Care Retirement Communities (CCRCs) sound like a great idea, and in many ways they are.  They offer residents access to the entire residential continuum -- from independent housing to assisted living to round-the-clock nursing services -- under one "roof."  Residents pay an entry fee and an adjustable monthly rent in return for the guarantee of care for the rest of their life.

But while the transition from one level of care to another may be advertised as seamless, anyone considering a CCRC should be aware that moving to a higher level of care could mean losing access to privileges and amenities they once enjoyed and took for granted.  Depending on its policies, a CCRC may mandate separate facilities and activities for those requiring different levels of care. Although such restrictions may be illegal, they are not uncommon.

For example, the New York Times recently reported on the case of Ann Clinton, a resident of a CCRC in Huntsville, Alabama, who found herself barred from her cherished bingo games when she moved to the facility’s nursing unit while rehabilitating after back surgery. 

Clinton and her husband moved to the CCRC in 2012, paying a deposit of $351,424, and about $4,600 a month in fees.  Mr. Clinton shifted to the assisted facility unit and then to the nursing unit, where he died in September 2014. Through it all, Ms. Clinton, 80, looked forward to her weekly bingo game with friends and other residents of the CCRC’s independent living unit.

After her back surgery, Ms. Clinton was still able to attend the games using her motorized scooter.  But to her shock and surprise, she was eventually barred from them because she was living in the nursing unit.  

This isn’t the first time the Times reported on such a policy. In 2011 it covered the controversy that erupted when a CCRC in Norfolk, Virginia, declared that a popular waterfront dining room was off-limits to those in the assisted living and nursing units, and could be used only by independent living residents.  Suddenly longtime friends and even some married couples could no longer eat together because they lived in separate parts of the facility.  After residents contacted a lawyer and the news media, the CCRC reversed its policy.

The same thing had happened to the Clintons, according to the Times.  After Mr. Clinton moved to the CCRC’s assisted living wing, he was denied admission to the main dining room to eat with his wife, who was still in the independent living section.  The facility eventually changed its policy, allowing assisted living residents to use the dining room if independent living residents invited them.  

The CCRC has since suspended the bingo game that Ms. Clinton was barred from attending.  Ms. Clinton’s son says he plans to file a lawsuit on his mother’s behalf and is looking for a lawyer.

Attorneys who advocate for the elderly believe that excluding residents based on the level of care they require violates anti-discrimination laws like the Fair Housing Act and the Americans With Disabilities Act.  Admittedly, CCRCs may be trying to segregate residents in the belief that some residents would prefer not to have contact with those who are more incapacitated. 

“But that’s why we have anti-discrimination laws,” Eric Carlson, an attorney with the National Senior Citizens Law Center, told the Times. “You don’t want to capitulate to people’s prejudices.”

For more about CCRCs, click here. 

For more about senior living options, click here.

Daughter Who Signed as Trustee Has Authority to Bind Mother to Nursing Home Agreement

A Kentucky appeals court recently held that a daughter who signed a nursing home's financial agreement in her capacity as trustee of her mother's irrevocable trust has authority to bind her mother to the agreement. King v. Butler Rest Home (Ky. Ct. App., No. 2012-CA-000789-MR, March 13, 2015).

When Geneva King entered a nursing home, her daughter, Diana Livengood, signed the financial agreement as trustee of Ms. King's trust. Ms. King initially paid privately for her care, but when she decided to apply for Medicaid, she stopped making payments to the nursing home. The state subsequently denied Ms. King's Medicaid application.

The nursing home sued Ms. King and Ms. Livengood in her representative capacity, seeking payment of the outstanding balance. Ms. Livengood responded that Ms. King hadn’t signed the contract and that Ms. Livengood did not have authority to bind her. The trial court granted summary judgment to the nursing home and ordered Ms. King and Ms. Livengood to pay $87,413.32. 

One of the important aspects of this decision is that Livengood seems to have been arguing that only the trust could be held responsible, and not her mother's larger non-trust estate. The court rejected the argument.

The Kentucky Court of Appeals affirmed, holding that Ms. Livengood has the capacity to bind her mother to the financial agreement. The court notes that the signature line on the financial agreement that Ms. Livengood signed referred to the signer as the responsible party. According to the court, by signing the agreement in this way, "[Ms.] Livengood represented that she had the capacity to bind her mother. [The nursing home] admitted [Ms.] King in reliance upon this signature."

For the full text of this decision, click here. 

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.