Legal and Financial Considerations for Nontraditional Relationships part 2

 

Last night I attended the monthly meeting of the Women’s Estate Planning Council , and as usual – we had a very informative speaker.  Bradley L. Kolstoe  presented “Savvy Social Security Planning,” about understanding the importance of Social Security.  I have to say that I would use the term “understanding” from my perspective here rather loosely.  It reminds me of P.L. Travers’, the author of Mary Poppins (yes, she’s still around – she recently battled Voldemort at the London Olympics!) description of the term as “standing under.”  There was a downpour of information and a lot of  it rolled right off me!  Luckily, we can visit Brad’s website here, and it has several helpful articles

So what about Social Security and nontraditional relationships?  Well, social security retirement is the biggest federal benefit regime and it only applies to individuals and married couples (I’m leaving out minor children and others intentionally here).  What are the implications for couples who are co-habiting but not in a marital relationship?  Huge!  I think it is part of the many details that couples who could otherwise be married typically overlook.  I’m talking here about opposite sex couples, because federal benefits only apply to them as long as the Defense of Marriage Act Defense of Marriage Act (DOMA, Pub.L. 104-199, 110 Stat. 2419, enacted September 21, 1996, 1 U.S.C. § 7 and 28 U.S.C. § 1738C) is in force – which may not be much longer. . .

So what’s the point I’m making here?  I recently published a book review in The Colorado Lawyer  of Professor Cynthia Grant Bowman’s 2010 Oxford University book “Unmarried Couples, Law and Public Policy.”  This book covers the marriage debate (cohabitation), but not the “marriage equality” (for same sex couples) debate.  With the decreasing number of people getting married, and divorces among folks over 50 going up considerably ,retirement planning and factoring in social security benefits are getting more complicated all the time!  The bigger issue that concerns me is for the unmarried couples who tend to underestimate the value of social security to financial stability in retirement years.

As Bowman points out in her book, cohabitation in the U.S. is problematic at best.  Unlike nearly all European countries, which have adopted some national laws  aimed at addressing the cohabitation phenomenon, the U.S. is still “on the fence” about some pretty basic issues.  What we have in this country, is a patchwork crazy quilt of local, sometimes statewide recognition of certain limited rights in particular states.  There is no standard for these rights, they are typically determined on a case-by-case basis, based on particular facts of each case brought to a court’s attention.  Cohabiting couples either have to forge their own agreements about important financial and legal considerations, or see what happens as a result of legal action.  There is no legal proceeding for “termination of cohabitation,” so the type of legal rights sought to be enforced really depends on the particular couple.

This can be a big problem, particularly for those vulnerable persons in a cohabiting relationship – who tend to be (but this is changing to some extent) women and children.  Bowman recommends providing legal remedies to cohabitants including:

(1) domestic partners who have been together two years or more and have a child together should be treated as though they were married;

(2) the ability to “opt out” contractually of these obligations should be easily available for couples not wishing to be treated as married; and

(3) a system for registration as domestic partners should be provided, accompanied by all the benefits and burdens of marriage unless the partners opt out with their own contractual arrangement delimiting their rights.

Bowman at 223.  I think as a country we might be some distance away  from providing such protections to cohabitants, so in the meantime it’s best to protect yourself by knowing what rights you have and what rights you don’t have when you are in a cohabiting relationship.  Bottom line is – don’t make assumptions based on your lifestyle.  Just because you feel like you’re married doesn’t mean the law won’t treat you like “legal strangers!”  Make sure you know what your future looks like if you are in an unmarried (cohabiting) relationship.

 ©Barbara Cashman, LLC   www.DenverElderLaw.org

Mistakes People Make with Medicaid and Long Term Care

  1. Thinking it’s too late to plan.

There is a lot of information about Medicaid  for long term care of the elderly – rules, eligibility,  etc. available to the public, (FAQs from Colorado Dept. Health Care Policy & Financing ) and many people suffer from information overload in this regard.  Sometimes this results in reacting to a situation without a plan, which can add to the stress of uncertainty.  People considering future Medicaid application are often in a downward health spiral that creates stress and anxiety for family members who are helping and providing for care.  This is a difficult mix!  Before you jump to conclusions about whether it’s too late or too early to start planning for Medicaid qualification – inform yourself.  It’s never too late to have a strategy – especially if you want to manage stress effectively during difficult times or the end stages of an elder loved one’s life.

2. Giving away assets too soon.

 Many of us hear from people who want to “avoid paying the nursing homes” for what is perceived to be overpriced health care.  The fact is, most long term care for elders is provided by family members on an unpaid basis.  Fewer people (as a percentage of the elder population) are living in nursing homes (or SNFs – short for skilled nursing facilities) but there is a point when the medical care needed to sustain a person may require placement at a SNF.  Placement in a SNF may be a cheaper alternative to home care for many frail elders and is often a necessity.  Medicaid is the national health care program for poor and low income Americans and is the safety net for long term care and Medicare covers less than 9% of SNF care.

3. Ignoring important safe harbors created by Congress.

This is some of the Medicaid fine print! Certain transfers are allowable without jeopardizing Medicaid eligibility. These include: transfers to disabled children, caretaker children, certain siblings and to a trust: for a disabled person under age 65; a transfer to a “pay-back” trust if under age 65; and a transfer to a pooled disability trust at any age.

4. Failing to take advantage of protections for the spouse of a nursing home resident.

Several protections are afforded the noninstitutionalized  “community spouse.” These protections include the purchase of an immediate annuity, petitioning for an increased community spouse resource allowance, and in some instances petitioning for an increased income allowance or refusing to cooperate with the nursing home spouse’s Medicaid application.

5. Applying for Medicaid too early or too late.

Doing either of these can result in a longer period of ineligibility in some instances, so it is important to try for “the golden mean” in terms of timing.

7. Confusing IRS tax rules with Medicaid rules.

The rules regarding income, estate and gift taxes are completely separate from Medicaid. While it is important to be mindful of the tax consequences of any type of asset planning, confusing these two different systems can lead to disaster.

8. Not getting expert help.

This is a complicated field that most people deal with only once in their lives. There is lots of money at stake, and the information can be overwhelming.  For many people, it makes sense from a peace of mind investment perspective to consult with persons who make their living guiding and counseling people about these issues.

©Barbara Cashman, LLC  www.DenverElderLaw.org

 

Drawbacks of the Do-it-Yourself Estate Plan

I was inspired to write this post by Brenda Speer, a solo colleague and fellow blogger in Colorado Springs who practices intellectual property law.  Read her post “The Perils of DIY Legal” here.   I agree with Brenda about not doing things yourself – even if you think you can and it will save you some money.   I’ve had the opportunity to be my own counsel a couple times in the last few years, and I have declined representation both times!  DIY for lawyers can also be problematic! Check out “Train Wrecks of Estate Planning” here.  This article highlights what happened to U.S. Supreme Court Chief Justice Burger’s will .

According to a recent article, “Half of Americans with Kids Set to Die Without a Will,”  but what surprised me was that it was estimated at only 50%, which I thought might have been higher (remember it’s an estimate).  Is this a conscious or unconscious decision on people’s parts?  As a parent, I think it is more of a conscious decision to not have some plan in place in the event something happens to you or you die (yes, unexpectedly).  So that of course brings us to the next question – if you choose not to make a will, do you know how the law of intestacy in Colorado works to divide your estate?  Hmm. . . .

How Hard Can It Be To Write a Will – Can’t I Do it Myself?

Okay, you decide to write a will.  Do you know what you don’t know?  I liked Bernard Krooks’ article “Is Do-It Yourself Estate Planning a Valid Option?” in Forbes.  He makes the observation that there is no book Home Surgery for Dummies and that some things are better left to the professionals.

How can you sort through the information you find on the internet?  It’s just a form right? I know I’ve filled out the wrong form before, thinking it was the right one . . . and people doing DIY estate planning can do the same thing.  What the forms available through Nolo and LegalZoom don’t do is ask any questions about YOUR situation.  Isn’t that why you want a will, power of attorney, or other legal document in the first place?  Otherwise you can leave it up to the “wait and see” approach that so many people take, and hope that there isn’t a really terrible mess to clean up (legal, financial or emotional) afterward.  I also liked this article.

If you use a legal document service – how do you know which document is right for you and whether the form  is consistent with Colorado law?  The only way to get an appropriate and up-to-date form, reflective of current state law, is to hire an attorney who is familiar with the field of law and current legal developments.  Each state has its own probate code and case law, and whether you are concerned with disability planning (powers of attorney, living trusts) or estate planning (wills, testamentary trusts), the law of the state in which you reside is specific and unique.  Document assembly services don’t explain this to people because they might expect you to already know that!  Your best defense is to be a well-informed consumer.

So here are four pointers to keep in mind –

      1. It’s too easy to make mistakes if you don’t know what you’re doing
      2. No legal advice is given with document services – so you don’t know whether you’re getting the right documents with the correct language
      3. State laws applicable to powers of attorney, estate planning and estate administration are unique to the particular state and they are subject to change
      4. Correcting mistakes can be expensive – sometimes the “inexpensive” forms can lead to results that are costly

What if I already have a will and just want to change it myself – how hard can that be? Well, Robert Fleming’s article “don’t try this at home” has a good cautionary tale about the importance of amending your will (the legal term is “codicil”) so that it is done correctly and will be upheld.

Keep in mind as well that it is often legal issues that are bound with financial, medical and emotional issues as well – as modern disability (life or longevity) and estate planning involves other people, relying on others to help make decisions in the event of incapacity.

Why is this such a big deal? In Colorado, attorneys are not allowed to say we “specialize” in elder or estate law because Colorado does not have certifications that many others states use.  If you are looking for an attorney who has a lot of experience in the field of estate and elder law, do your research and look for someone who “focuses” their practice in this area.  Elder law is in many respects a general practice field that is made specific by the client served.  There are many legal issues that our legal system and our society have not faced before because we have never had this many 80 and 90 year olds on the face of the planet!

So – tell me again – why talk to an attorney? 

Consulting with an attorney has the benefit of talking with an actual human.  I am not simply a purveyor of legal documents, I’m not a legal document preparation service –  I’m a person with a law license and years of experience.  I may not be able to compete with the legal form generating websites on price, but that’s because I offer something different: I am licensed to practice law in Colorado, and I spend time talking with clients to find out what their concerns and unique situations are so that I can recommend a strategy, including the preparation of legal documents, that fits their needs.   I suggest that before deciding that a document preparation service is the less expensive alternative, a person should look into what it is they are getting, and what they are not getting.  . . . And be sure to call an attorney to see what they have to offer.

©Barbara Cashman, LLC  www.DenverElderLaw.org

Difficult Conversations About End of Life – DNR vs. Health Care Power of Attorney

What many people don’t want to consider – is the prospect of when a person’s DNR/DNI (do not resuscitate/do not intubate) directions may come into conflict with what an agent under a health care power of attorney decides. When a surrogate overrides the patient’s stated wishes (for example, where the children’s interests in “saying goodbye” override a mother’s DNR wishes) Check out this very powerful video of two daughters recounting the difficult decisions they made regarding their mother’s health care.

This video highlights the slippery slope of medical intervention and not knowing when the intervention will end and a daughter’s grief about going against her mother’s wishes.  She poignantly describes her mother’s searching eyes which seemed to ask “why are you doing this to me?”  This is an excellent reminder for all of us, especially those who work with older people who are facing health challenges: have the conversation with your kids or other surrogate decision makers and make your wishes explicit!  It is also useful to note the ongoing need for what the medical document known as a DNR means –it doesn’t mean “no medical care” – it means do not resuscitate.

Between the short periods of time a doctor may spend (if any time is spent at all) explaining to an older person or one who has a medical condition or disease which would make a DNR, and the reluctance that most people have to talk to their loved ones about these difficult situation, these conversations are hard, but worth the effort according to all the people I’ve spoken to about it.  I always encourage my clients, and sometimes also participate in family meetings around this issue of facilitating a specific conversation about identifying a older adult’s wishes, talking about particular scenarios and using specifics where appropriate to illustrate how wishes might be carried out.

Daughter who decided, when asked by the doctor whether she would give permission to put her mother on ventilator decided that she would have done things differently and would have declined intubation.  Daughters could see the pain their mother went through and finally asked mother to respond by blinking to their question “do you want to be taken off the ventilator?”  Very powerful video I strongly recommend.  This is why I think it is important to take time with clients, who are willing and interested in getting real about the difficult end-of-life choice, to discuss with them and often with their adult children the difficult but inevitable prospect of “letting go.”

Along similar lines is an article by Sally Mauk in The Missoulian entitled “Doctor Says Advances Prolong Life, Make Dying Harder,”   The article pinpoints several of the difficult facts that we baby boomers must face in light of the experience of many of our parents’ deaths as well as medical and economic realities that have dramatically changed in recent years.  Mauk’s article is primarily about Dr. Ira Byock, a past president of the American Academy of Hospice and Palliative Medicine.  Byock’s website is www.dyingwell.org and his book Dying Well, published by Riverhead in 1997, is on my office bookshelf, and his newest book “The Best Care Possible: A Physician’s Quest to Transform Care Through the End of Life,”  is a book I’ll be reading soon.  It is best to take the time to start thinking about these issues so that a conversation with loved ones will be more likely and probably less stressful – start with your doctor and don’t forget to consider how the medical and legal documents can work together to support your goals.

Dying is Part of Life

Dying is part of life – so why is talking about it so difficult?  Many reasons for that unanswerable question, but now – more than ever is the time we can start reflecting.  Never have we had so many octogenarians and nonagenarians on the fact of the planet.  Many are living longer more productive lives than they ever dreamed possible.  Some, many of them women, are running out of money.  As the life-extending reach of medical technology continues, it forces many questions, some of which are very uncomfortable.  I just read Judith Johnson’s fourth installment in the series of posts about making peace with death.  You can read it here.

Not all of us are afraid of death (which is one thing) or afraid of the process (quite another for many of us).  The Woody Allen quip comes to mind: “I’m not afraid of dying, I just don’t want to be there when it happens.”  Why does the dying process have such a bad rap?  Is it the uncertainty of what is happening, where someone is going (or not) that makes so many of us turn away?  It is a taboo based on fear and avoidance, how odd that it is avoidance of the inevitable.  How does that turning away from dying get unpacked into steps you can try if you want to be “present” and make peace with death?  Johnson offers five practical steps:  (1) see death as normal (part of life); (2) don’t try to run away or avoid it – this is the biggest tip in my opinion because she touches on the recognition that “death is a great teacher of how to embrace and honor life more deeply;” (3) focus on being of service to those involved in the process; (4) be authentic and express yourself in loving ways; and (5) allow yourself to experience the full range of grief and sorrow that are all parts of dying, death and grief.

I ran across another article about a new course being offered on Gabriola Island in Canada called “Nothing Left Unsaid.”  It looks to be an extension of the hospice conversation and all the services it offers for those not necessarily in the end stages of an illness.  I found the article’s reference to grief perhaps being classified as a mental illness in the next DSM (Diagnostic and Statistical Manual), and that reminded me of another article about that very topic – “Should Grief Be a Mental Illness?” by Joseph Nowinski, Ph.D.  It seems this fear that grief will be classified as a mental illness originated in a January 25, 2012 article entitled “Grief Could Join List of Disorders” and announces that, based on a new report, the criteria for depression are being reviewed by the American Psychiatric Association and could be expanded to include grief in the DSM-V.  Where does this leave those of us who are challenging the death-denying traditions and practices in our own ways? I think it is life-denying, because death is part of life.

The mental health implications of removing the grief exclusion from the definition of depression in the DSM-V are controversial, to say the least. Most of old age, along with many aspects (behaviors) of childhood are now “disorders” or fall within some arguable definition of a mental illness.  What does this say about our culture and its views towards aging, the dying process and death?  It is more of the death denial in our culture.  According to many longevity seekers, death is not necessarily inevitable or the result of natural consequences, rather it is more like a disease to be overcome, a challenge to be bested.  This reminds me of Dr. Sherwin Nuland, author of “How We Die,” and several other insightful books  A recurrent theme in his books is forthright talk about aging, dying and many other life topics that tend to make us uncomfortable.  Next time I’ll write about another favorite doctor/author of mine.