Chubb Insurance Offers Free Home Accessibility Consutation Service

A new survey from Chubb finds that the majority of homeowners are underestimating the likelihood of disability, especially during retirement years, and the impact it can have on their everyday life. Despite the fact that the Centers for Disease Control and Prevention reports that one in four U.S. adults lives with a disability, Chubb's "Home Accessibility" survey found that close to half of homeowners (44%) say they are not prepared to care for themselves or loved ones with a serious illness, disability, or simply aging in place. Among their top concerns, more than a third (38%) of homeowners are worried about the need for home renovations in the event they or their family member becomes disabled, whether due to accident, illness, injury or another cause.

Chubb's "Home Accessibility" survey analyzed individual preparedness for disability and aging in place, potential future disability concerns, personal retirement preferences as well as attitudes on home renovations pertaining to accessibility and design. The nationwide survey was fielded between March 20, 2019 and March 30, 2019 and conducted by Research Now. The results are based on 1,201 responses, of which a quarter (25%) of respondents each came from the middle class ($50,000-$99,999 in annual household income), upper middle class ($100,000-$499,999), mass affluent ($500,000-$999,999) and high-net-worth ($1,000,000 or more). Fifty four percent of respondents were male and forty six percent were female.

Recognizing this growing need, and timed in conjunction with Global Accessibility Awareness Day, Chubb launched a new complimentary accessibility consultation service intended to give existing Chubb homeowner clients advice on how to make their homes more accessible, without compromising structural integrity or diminishing the fair market value of the home. This consultation service provides a homeowner an independent opportunity to assess and evaluate the advisability of modifications to the home.

"Our team of national risk consultants has been trained by some of the leading accessibility experts in the country, including specialized architects," says Jennifer Naughton, executive vice president at Chubb Personal Risk Services. "Leveraging their expertise in design and accessibility, our risk consultants can advise clients on home design elements that might impede accessibility and how to retrofit accordingly."

"Coupled with the fact that 10,000 Baby Boomers turn 65 each day and that Chubb's survey found 72% of homeowners want to remain in their home as they age, addressing existing home design elements that might hinder long-term accessibility is paramount," added Naughton.

Fortunately, many homeowners are starting to recognize such hurdles and the importance of related improvements, but they have a way to go. The vast majority—81% and 82%—of homeowners would need to make changes to their home to accommodate caring for a loved one with a disability or to support aging in place, respectively. However, Chubb Masterpiece^® homeowner clients have access to vetted, trusted professionals, such as architects, designers, and licensed contractors, who can assist them with making their home more accessible and beautifully designed.  

In addition to consulting with clients, trained risk consultants will work with independent agents and brokers. "Accessible design renovations may require meaningful financial investments from clients. Our risk consultants can assist agent and broker partners to help them understand the exact replacement cost value of their clients' investments to ensure they are fully protected," said Naughton.

To help agents and brokers learn about the market need and opportunity as well as key principles and design considerations of universal residential construction, Chubb is launching a new resource center that includes "rich multimedia marketing materials such as videos, infographics and collateral," some of which have been produced in partnership with the Cerebral Palsy Foundation. Agents and brokers can access the resource center at: www.chubb.com/accessibilityisbeautiful.

Tortious Interference With Contractual Relationship Claim Most Recent Possible Remedy Nursing Homes can Employ Against Children of Nursing Home Residents

Even in the absence of filial responsibility laws, nursing homes have employed an array of legal actions against resident family members for unpaid nursing home bills, and state courts have, by and large, accommodated the nursing homes in their efforts.  In an example of the most recent effort, a New Jersey court of appeals has approved a nursing home making a tortious interference with contractual relationship claim against a discharged resident's son after the son refused to move his mother out of the nursing home or allow her to discuss her removal with nursing home staff. See, The Orchards at Bartley Assisted Living v. Schleck (N.J. Super. Ct., App. Div., No. A-3481-17T1, March 13, 2019).

 Patrick Schleck, was agent  under a power of attorney for his mother Patricia Schleck. Ms. Schleck entered a nursing home and signed a resident agreement that stated that if she did not have sufficient funds to pay the nursing home fees, the nursing home could discharge her. Ms. Schleck applied for Medicaid benefits. While the application was pending, the nursing home issued a discharge notice to Ms. Schleck for unpaid charges. Mr. Schleck refused to move his mother out of the facility and allegedly told her not to participate in discussions with the nursing home staff about her discharge. Ms. Schleck eventually qualified for Medicaid, but the nursing home did not accept Ms. Schleck as a Medicaid resident, and she was forced to leave the facility.

The nursing home sued Mr. Schleck for breach of fiduciary duty and tortious interference with contractual relationship, seeking to recover fees that were not covered by Medicaid. Mr. Schleck filed a motion to dismiss, which the trial court granted. The trial court reasoned that even if Mr. Schleck engaged in the behavior alleged, it didn't satisfy the improper and unjustified elements of the breach of fiduciary duty or tortious interference claims. The nursing home appealed.

The New Jersey Superior Court, Appellate Division, affirmed the dismissal of the breach of fiduciary duty claim, but allowed the tortious interference with contractual relationship claim to continue. The court noted that there is a balancing test to determine whether someone "intentionally and improperly interferes with another's prospective contractual relationship." The court ruled that Mr. Schleck's behavior in refusing to move his mother and discouraging her from discussing removal with the nursing home "may satisfy the unjustified element under this balancing test." According to the court, "Mr. Schleck's conduct may have been intended to benefit Mr. Schleck and to injure [the nursing home]."

Of course, it is possible that the nursing home won't prevail on its claim.  One assumes that the Mr. Schleck will argue that his action was justified, and that he never considered the nursing home in trying to protect his mother's care and residence.  Regardless, the nursing homes have yet another arrow in their quiver of possible legal remedies against family members of senior residents when Medicaid does not fully compensate the nursing home for care.  

Ohio Makes Trust Contests More Difficult

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A new law, commonly referred to as HB 595, has made significant changes to Ohio probate law that could affect your will or trust. The law is far-reaching, and contains much more information than can be addressed in a single blog post, but there are many developments that could  impact you, your loved ones, or your or their estate plans. 

One of the important developments is that HB 595 changes the law dealing with some legal challenges to a revocable trust made irrevocable by the death of the creator (grantor/settlor) of the trust. The actions involved include:

• Contesting the validity of the trust;
• Contesting the validity of an amendment to the trust made during the settlor's lifetime;
• Contesting a revocation of the trust during the settlor's lifetime; or
• Contesting the validity of a transfer made to the trust during the settlor's lifetime.

Under the new law, a person seeking to file a legal action contesting the trust in any of the foregoing ways MUST do so within the EARLIER of:

• The date that is two years after the settlor's death, OR
• The date that is six months from the date on which the trustee sent the person filing the action a copy of the trust instrument and notice of the trust's existence, along with the trustee's name and address and time allowed for beginning an action.

HB 595 also establishes that no person may contest the validity of a trust as to facts already decided.  If the settlor submitted the trust to probate court during his or her lifetime, and the court declared the trust valid under Ohio law, the trust is effectively incontestible, at least as to the parties that were notified.  Under the new law,  a person may still contest the validity of the trust as to those particular facts, if the person should have been named as a defendant to the action to declare validity and was not, or was not properly served.

What does this mean for you? If you are the settlor of a trust, it means you have more tools available to ensure that a trust you create will not be challenged. If you are an heir or a beneficiary  a trust, it means you may have a much harder time challenging the validity of a trust, or of an amendment to, revocation of, or transfer to that trust.  If you are a successor trustee of a trust made irrevocable by the death of the creator, you should provide an initial notification to beneficiaries that will start the six month limitation as soon as possible.   

Family Conflict is Biggest Threat to Your Estate Plan

For the second consecutive year, family conflict is considered by professionals as the leading threat to estate planning. The three greatest threats to estate planning are family conflict, market volatility, and tax reform.  These conclusions represent the consensus of estate planning experts, at least according to a recent survey conducted by TD Wealth.

The survey included 105 respondents who attended the 53rd Annual Heckerling Institute on Estate Planning in January, including attorneys, trust officers, accountants, charitable giving professionals, insurance advisers, elder law specialists, wealth management professionals, educators and nonprofit advisers.  Nearly half of these estate planning experts identified family conflict as the biggest threat to estate planning in 2019. 

The survey explored the various causes of family conflict when engaging in estate planning, citing the designation of beneficiaries as the most common cause of conflict. Other leading factors included not communicating the plan with family members and working with blended families.

“Family dynamics have always played a critical role in estate planning. As we start to see more blended families, we expect these conversations to become even more prevalent and challenging,” said Ray Radigan, head of private trust at TD Wealth . “Estate planning comes with the responsibility of motivating families to communicate through difficult times, which requires regular dialogue and complete transparency. To minimize risk, we encourage families to invite everyone to the table to participate in open and honest conversation about their shared goals and objectives.”

Fortunately for Ohio residents, recent law changes make arbitration clauses in trusts more powerful, discouraging expensive and protracted contests.  Moreover, when combined with in terrorem ("no contest") clauses, a trust can be a powerful tool to eliminate the cost and expense of what may be unavoidable family conflict and disagreement.     

Market volatility was also identified  as a threat by respondents in 2019, with nearly a quarter of respondents identifying volatile markets as the biggest threat to estate planning this year. This was up from 12% in 2018.  According to Radigan, this is not surprising because many clients view lifetime gifting as an important component to their estate plan.

“These gifts, however, should only be made if enough assets are retained to provide support during retirement years,” Radigan said in a statement. “While market fluctuations are certainly worth watching and can cause concern for potential gift givers, we encourage our clients to keep a long-term view when investing and remember that short-term market movements are no match for a robust estate plan and a well-balanced portfolio.”

The sweeping tax overhaul enacted in 2017 is making a broad impact on estate planning, according to the survey.  Following the increase in the federal gift and estate tax exemption, estate planners are introducing various strategies to allow clients to take advantage of the exemption. About one-third of respondents propose clients consider creating trusts to protect assets, while 26% suggest clients plan to minimize future capital gains tax consequences and 21% agree to gift now while the exemption is high.

“Estate planners are now emphasizing the importance of creating trusts for the benefit of their loved ones so that assets can be protected from future claims,” Radigan said in a statement. “For example, rather than provide a child with an outright gift or bequest, many parents are creating trusts as a means of protecting assets from future divorce claims. Additionally, these trusts can be used to ultimately protect loved ones from themselves or other loved ones.”

Additionally, 40 percent of planners believe clients will continue to give the same amount to charities as they did in 2018, and 21 percent expect clients to donate more.  That is good news for charities, and welcome news to those who might be considering charitable giving since it means a consensus of planners agree that charitable giving can accomplish at least one objective in  an estate plan.  

Washington State May Be First Sate With Payroll-Funded Long Term Care Insurance Benefit.

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Numerous states are considering proposals to create a long-term care insurance programs, many funded by a payroll tax. Washington may be the first to actually enact a plan. Both the Washington State House and Senate have passed legislation, so all that’s required is a House re-vote on a Senate package that differs slightly from the House version. 

The Senate tweaked a few aspects of a proposal passed earlier by the House, so approval appears all but assured. The governor, provider associations and many others have  supported the measure, which would cap the lifetime benefit maximum at $36,500 per person. The governor has promised to sign the bill when presented. 

MyNorthwest reported in an article the sponsor's statements supporting the legislation:

"Democratic State Rep. Laurie Jinkins has introduced the Long Term Care Trust Act, which she says would work similarly to unemployment.  'What we do is create, essentially an insurance program where folks pay a premium of 0.58 of a percent, so 58 cents of every hundred dollars they earn would go into the trust. In return, any time they needed long-term care they’d be able to draw on that,' Jinkins explained. 

Workers of all ages would pay into the program, at a cost of around $24 a month for someone earning $50,000 a year.

That creates a benefit of roughly $37,000 over a person’s lifetime they could take in units of $100.

“That amount of money, for example, would pay for 25 hours a week of in-home care over the course of a year, respite care for one of your family members who was getting care; it would pay for that for maybe five years. So, it’s a pretty significant benefit for people,” Jinkins said.

Providers could start collecting payment from the program beginning in January 2025. The measure covers traditional long-term care services for people needing help with at least three activities of daily living (ADLs), as well as things like in-home care and meal delivery, rides to the doctor, home modifications such as wheelchair ramps, and reimbursements to unpaid family caregivers.  Washington defines more broadly ADLs than does private insurance, which usually triggers benefits when someone requires help with two ADLs. The state would reimburse providers directly. Family caregivers could be paid, though they first would have to go through a training program. 

Premiums of 0.58% of wages would begin being withheld from employees’ checks starting in 2022. Someone earning $50,000 per year would pay a premium of about $24 per month, or $288 per year. Under the Senate version, individuals holding long-term care insurance policies would be exempt.

A participant must work and pay the premium/payroll tax for at least 10 years, with at least five uninterrupted, or three of the last six years. Thus, most current retirees would be ineligible for the program.  

Provider and consumer groups testified in favor of The Long Term Care Trust Act, and nobody testified against it, at a House Health & Wellness Committee hearing in January. Experts say 60 percent of us will need long-term care or support of some sort after we hit 65.

In a House committee hearing,  Dan Murphy, executive director of the Northwest Regional Council explained who the insurance would benefit:

“People need long-term care when they can no longer do basic things themselves. Things like bathing, dressing, getting out of a chair, a bed getting into a car, managing their medications or just even standing, walking around. That’s what we’re really talking about in the assistance lift, when folks can’t any longer do things for themselves.”

An outside study authorized by the Legislature back in 2015 found there is a significant need, with seven of 10 people over 65 years old expected to need this type of care.

Of course the program also benefits the State of Washington.  An outside study found the program would lead to big savings for Medicaid over time, close to $900 million in the 2051-53 biennium.

According to an article in Forbes, although Washington is the first state in the US to enact a public long-term care insurance program other states are considering similar legislation.  "Hawaii has provided a public cash benefit for family caregivers of frail older adults, though it is not really an insurance program. California is considering a ballot initiative on a public long-term care financing program, Michigan and Illinois are studying public programs for those not on Medicaid, and Minnesota has proposed two alternative private financing options for long-term care."  Forbes notes,  though, that the "idea is not universally popular, however. Last year, Maine voters rejected a public plan to help fund home care."

According to Forbes, Washington State is choosing a "front-end insurance model that could begin to cover benefits as soon as participants have a need. It would cover the most people, though its benefit would pay only a small fraction of the costs for someone who needs several years of care."  An alternative model, "called a catastrophic or back-end design, would require participants to pay for the first years of care, but provide lifetime coverage after that.  It would cover fewer people than a front-end plan but would focus on those with the greatest need."

The Forbes article concludes that "[t]he Washington State model would be an important experiment, and it could create momentum for other states to adopt long-term care insurance programs."