August 6th Interactive Gathering on The Conversation Project

 

denver elder law

DBG Japanese Garden Stream

 

I recently received an invitation for an event at The Denver Hospice (at their corporate headquarters) and wanted to share it with the community.  I have blogged previously about the importance of having a conversation about end of life wishes (and also the need for documents based on that conversation – like a health care power of attorney and advance directives) as well as The Conversation Project and so this cause is near and dear to me.  I won’t be able to attend this event, but know it will be well facilitated by Laurel Okasaki-Cardos, community educator at the Life Quality Institute.  If you are interested in participating, please email Laurel at lokasaki@lifequalityinstitute.org to get more information or RSVP.  You can also call her at 303-398-6259.

In case you can’t attend the gathering at the Denver Hospice on the 6th, Laurel offers these interactive gatherings for groups of seven or more people – free of charge – if you are interested in organizing one for your community.  Be sure to get in touch with her if you want more information.

©Barbara Cashman 2014     www.DenverElderLaw.org

The Insurance Industry’s Response to our Unprecedented Longevity

Denver Elder Law

Monet Garden Pond with Chihuly Glass sculpture, DBG July 2014

 

This post is about the insurance industry’s response to our unprecedented longevity.  Hmmm. . . . puzzling over the title of this one?  Well, a couple interesting insurance developments have made it onto my radar screen recently and so I thought I’d write a post about them.  I’ll focus on two in particular:

  1.  Flexible long-term care insurance

We used to have a much larger number of companies offering long-term care insurance in this country, about 100+ ten years ago and now it seems we’re hovering around a dozen or so companies offering the policies.  But it is important to note that there are still many misconceptions about long-term care insurance.  Many people still mistakenly think that Medicare will cover this (it doesn’t) and that there will be plenty of Medicaid beds and service providers if they need care (the Medicaid coffers are still shrinking and doesn’t coordinate well with Medicare).  I recently read about the prediction that the Medicare trust fund for hospital benefits will be depleted by 2026.  Ouch! if I’m lucky enough to still be here, I will be eligible for social security benefits the following year.   For a variety of reasons, long term care insurance has never really “caught on” in this country, at least in part due to the misconceptions that someone else will be able to pay for it if we are unable to pay and in need of such care.  It also has to do with the fact that paying for these premiums is for providing the care that we hope we will never need to receive.  But bottom line, it is about not being a burden on your family members – from a financial, medical or emotional perspective.

There are many different types of LTC policies available, with more variety than ever.  This makes it even more important to understand and know what kind of policy it is you are purchasing and that it is the right one for your situation.   As the number of old elders (80+) continues to grow, Long term care insurance still has hurdles in selling to the baby boomers.  What happens if you pay all those years for coverage and then can’t afford the premiums anymore?  What happens if you pay all those years and then die without ever having used any benefits?  These and many other questions are now answered in new and interesting ways thanks to new and varied option for LTC.  A standard feature of most of the new policies is that they provide coverage for home care, which can be more expensive than staying in a facility – so it’s not just “nursing home insurance” anymore.  There are a number of different products available, so be sure to start with some good information about the basics  of how these policies work.   It is a good idea to remember that health care in this country is not cheap, and Medicare and “Medigap” only get you so far.  And in case you’re wondering whether I am trying to “sell” LTC, I’m not – there are still plenty of risks involved in both purchasing the policies and investing in the companies offering those policies.

Bottom line is, the best way to ensure that unforeseen medical consequences do not decimate your financial well-being or that of you spouse as a result of the need for long term care – is to carefully consider your options now so that when you decide to make a choice, it will be a considered one and not made under the duress of crisis.  Thinking about these matters now lessens the burden on your family members or loved ones in dealing with difficulties in the event they arise in an uncertain future.

  1. Longevity Insurance

Where did this new product come from?  Changes in tax rules!  This kind of insurance is essentially protection against running out of money in our ever-lengthening old age.  Since none of us knows how long we will live, whether we will have saved enough for retirement, along with a few other life-altering details along those lines . . .  this insurance looks to have big potential.  Couple that with the emotional attractiveness of annuities, and we’re off to the races!  Check out this recent NY Times article about some of the rules for these policies as retirement tools.  What makes these policies “new?”  The article considers the previous prohibition against using these annuities within retirement plans due to required minimum distribution rules.  With the rule change “workers can now satisfy those rules if they use a portion of their retirement money to buy the annuities and begin collecting the income by age 85.”

But keep in mind that the sky is not the limit here and retirement plan participants can use no more than 25 percent of their total account balances, or $125,000, to buy the annuity, whichever is less.  If you are considering these, you will want to carefully read all the fine print concerning these new vehicles.  What is helpful to know is that, for the Americans that have saved some money for retirement (sadly, only about one-half of American households have a retirement account beyond social security), there are more options available.

©Barbara Cashman  2014   www.DenverElderLaw.org

 

 

The Colorado Probate Code: Compensation and Cost Recovery Act

Swallowtail at Chatfield

Swallowtail at Chatfield

 

Last week I attended the quarterly meeting of the Colorado Guardianship Association, of which I am a member. The CGA is a nonprofit that is a multidisciplinary group of attorneys, professional fiduciaries (like the folks who serve as trustee, agent under a financial power of attorney, agent under medical power of attorney, etc.), professional guardians, as well as others involved in the provision of services for elders and disabled adults.  We have had some good programs and attorneys receive continuing legal education credit for attending, in addition to meeting with other professional with whom we have much in common and where we can discuss best practices.

The presentation was given by the Hon. C. Jean Stewart, the retired judge of the Denver Probate Court and the current president of the National College of Probate Judges.  It was a great topic (even if it might sound technical) and Judge Stewart is an excellent presenter.

Since I am rather fond of Rudyard Kipling’s “six serving men” (from The Elephant’s Child, one of the Just So Stories) – also sometimes referred to as the “five W’s” (one man short obviously) I will use them to illustrate the components of the statute.   The first serving man is “what.”  In case you’re wondering, the cite for the statute is Colo. Rev. Stat. §15-10-601.   Part six is titled Compensation and Cost Recovery.

Second, I’ll look at “where” – this is in the Colorado probate code,  and so it concerns fiduciaries (the “who”) serving in proceedings in probate court including estates of decedents, trusts, protected persons, principals (makers of powers of attorney) and others under the Colorado Probate Code (CPC).  So that is where we consider the context for this act among the components of what might be identified as “who:” it concerns an  “estate” (whether a decedent’s estate, trust, or another person whose affairs are subject to the CPC); in which a “fiduciary” is the recognized actor on behalf of the entity or person (estate); and finally, section 601 goes on to define by way of illustration what a “governing instrument” for purposes of this section might be. These definitions really reflect both the who and the where – in what type of proceeding is the fiduciary acting.

So, to cut to the chase, this statute essentially addresses HOW fiduciaries are paid. Helpful to note here is the new JDF form for use in trusts & estates filings in the Colorado Judicial system which pertains to the application for probate, like the JDF 910 for example, which now has two separate inquiries regarding compensation – one for compensation of the personal representative and for the counsel of the personal representative.

Next up is the “why” – which was one of the most important messages of Judge Stewart’s presentation.  The reason why attorneys and fiduciaries need to be familiar with this statute: to establish and maintain transparency so people know how much things are going to costs; and to give a baseline for how to determine reasonableness.  Section 603 of the statute addresses quite a few relevant factors in determining the reasonableness of compensation and costs charged to or paid by an estate.  What struck me about the message regarding transparency was that it could ease many of the concerns around our system of simplified probate in which sometimes persons take advantage of the lack of judicial supervision.  In fact, some of us who represent fiduciaries in our practice (say for example, a client who is personal representative of an estate) include language in our engagement letters regarding fiduciary malfeasance and its consequences on our continued representation.

Finally, I’ll wrap up with the last serving man here – “when.”  This involves among other things a consideration of when a family member fiduciary can expect to be paid for his or her work for an estate.  This concerns the concept of providing a benefit to the estate – which is an idea that applies to both professional and nonprofessional (family member) fiduciaries.  What I found particularly interesting here was our presenter’s assumption that family member fiduciaries are presumed to be performing their work as fiduciaries for the love and affection of/for the family member.  This had interesting implications for several of us as there seems to be a shifting consensus regarding the payment of family members for their work.

What I particularly enjoyed about the presentation was that it pointed out there are no easy answers with this statute and that if we are to assess the value of another person’s work we need to consider the previously mentioned transparency along with the importance of clarifying expectations by having a conversation or setting forth processes which will be followed.

©Barbara Cashman  2014   www.DenverElderLaw.org

Elderhood as a Life Stage: The Power of Naming (part 3)

Denver Tea Room

Denver Tea Room

Elderhood and naming, misnaming and un-naming. This will most likely be the last installment on this philosophical theme.  In thinking about how to prevent elder abuse and exploitation as well as the new mandatory reporting effective July 1, 2014 in our state for persons aged seventy and older, aren’t we also looking at our own fears about what we see happening now to our family and community members as we also consider what might happen to each of us if we find ourselves in difficult circumstances?

We cannot solve our problems with the same thinking we used when we created them.

Albert Einstein

But will our thinking  about our elderhood and its challenges be big enough and deep enough to get us there – to some solution?  I think of a quote from the late literary critic and essayist Northrop Frye, based on lectures he gave when he was in his later years  – or eighth stage:

The cultural aura, or whatever it is, that insulates us from nature consists among other things of words, and the verbal part of it is what I call a mythology, or the total structure of human creation conveyed by words, with literature at its centre.  Such a mythology belongs to the mirror, not the window.

Northrop Frye, Creation and Recreation

What is a mirror for? Why, reflection of course.  If you’re not sure about the importance of reflection, Teilhard de Chardin, the paleontologist and theologian, considered the birth of reflection as a major contributing factor to the phylogenesis of the human evolution.  See Teilhard de Chardin, The Human Phenomenon (2003: S. Appleton-Weber, transl.) at 171.  In case you might be wondering whether I am saying that only human beings have that power of reflection, I would have to admit that no, I think there are many other animal beings that possess the ability to reflect.  Our notion of social justice is evolving to reflect this.

One of the side effects of our recently acquired longevity is the side effect of dementia and incapacity.  Perhaps before declaring a “war on Alzheimer’s” we might first examine our thinking about it – dementia as a “side effect” of longevity.  Are we looking in the mirror or through the window here?  I would suggest that this story is one which belongs to the mirror and is therefore part of our story, a myth as suggested above.  What we lack is a big-enough thinking, a mythology for what is happening to us in this new old age.  The call for the war on Alzheimer’s is indicative of our desire for a quick fix, to maybe find a pill to take so we can “manage” it.

So is it the remembering or the forgetting that is the challenge?  Disappointment, disintegration and resulting dystonia, and of course depression are accompanying many of us as we pass through the eighth and ninth stages of life.  All this “dis” reminds me of William Blake, the English poet of the 19th century.  Kathleen Raine, the late poet, author and interpreter of Blake, caused me to wonder about reversing the polarity in the final (ninth) stage of our lives and consider that:

Experience was not a learning but a forgetting, a loss of vision, a narrowing of consciousness, or as Blake puts it, a falling into the deadly sleep of materialism, to become oblivious to that beauty seen with the eyes of innocence.

K. Raine, “A Sense of Beauty,” in The Underlying Order and Other Essays (2008: Temenos Academy ) at 67.

    So in the context of the life cycle, as some movement from an origin, a progression and evolution (if we’re successful) we might end up at some place of return in the ninth stage as described by Joan Erickson – the gerotranscendance.  Perhaps the stages themselves mark time as well – chronologically of course, but also in terms of kairos, the quality of time.  The Egyptians originated the solar year, the Zuni people referred to months as the steps of the years, and so the regeneration of time, in its cyclical aspects has been a part of the human phenomenon for all of our known history.

So what is it to which we return – a forgetting or a remembering?  Perhaps in order to be able to manage that return, we must dis-assemble ourselves somehow.  That is one aspect of transcendence.  Maybe it is also that perhaps forgetting all that accumulated experience is needed in order to clear away the debris, so that we can truly remember, as described by Raine and Blake.  I don’t pretend to have any answers, I am merely proposing we open the doorway a bit wider before we determine the path forward.

There are many ways to look at dementia and incapacity, but when we focus exclusively on the individual and on the objective, measurable parts of a person’s identity, it can only ever be about loss.  I am merely suggesting that the group focus is at this time much too narrow and there are other ways of viewing old age, and it challenges beyond the checklist formulated by our brain and identity-centric material order-obsessed version of objective reality.  Moving away from “I am X” toward simply “I am” is what I’m talking about.

Remember the quote I started this series with?

With great power comes great responsibility.

Voltaire (1694-1778), Spiderman (2002)

   I will close this series with an exercise with a bit of music.  I think a big part of our problems with thinking, both as individuals and collectively as a society, has to do with our neglected sense of wonder.  So here goes: try this link of an inspiring song by Lisa Gerrard (you might recognize it from a movie soundtrack) and while you are looking at the beautiful pictures of our cosmic neighbors, try stretching your arms wide as you sit or stand, as if you are spreading your wings or are about to receive a welcoming embrace.  Do this for two minutes and see what it does for your sense of feeling confident and powerful as well as your sense of wonder and beauty that is the world of which we are part.

So to conclude this series which revisits common themes of other posts: darkness and depth and exile and return, I will employ my favorite poetic device, haiku.

How can it be known –

to distinguish between them,

the two darknesses?

 

Only the compass

Rose of the heart can measure

Luminosity.

©Barbara Cashman 2013     www.DenverElderLaw.org

Will I Inherit My Parent’s Debts?

 

Denver Elder Law

Summer at Hudson Gardens

Here’s a picture from a bird walk I did with a group at Hudson Gardens last weekend.  No there aren’t any birds in this one, so don’t look for the red-winged blackbird that was nearby.  On that beautiful summer morning I saw a number of birds: a blue heron taking flight from the bank of the South Platte; a cowbird perched at the top of a large cottonwood; a mud swallow in her nest: a brilliantly plumed yellow warbler (yes, warbling while perched in a tree); a cute little chickadee-dee-dee; and a couple hawks flying above us – a red-tailed and a Swainson’s hawk.  Now, down to business. . .

Sometime back I featured a blog post which was written by my friend and colleague Ayo Labode about filial responsibility law (the duty of a child to care for the parent) and that has been a popular post.  Colorado doesn’t have those archaic laws and I don’t think there’s much concern that our legislature is likely to adopt such legislation.  A more common question that is likely to elicit concern and fear, along with a variety of information and misinformation – concerns whether a parent’s debt can be inherited.

This was a much bigger concern a few years back when we were in the midst of economic downturn and grim employment prospects, and many Americans found themselves underwater in their mortgages and out of jobs.  During that time, many of us had to consider very carefully whether it was a good idea to open an estate to collect the assets (even if there were few of them).

A much broader concern however, concerns debts in a decedent’s estate.  Sometimes a parent or other loved one dies with large debts.  This can present many problems for surviving family members about what to do and how to proceed.  Here is an interesting article about this.  An interesting topic – alas, for another post – concerns what is considered or becomes probate property administered by an estate administration proceeding (whether there is a will or no will) and what is nonprobate property that will not typically be subject to probate estate administration.  But remember that it is a good idea to remember to make beneficiary designations for nonprobate assets, these can generally help maintain flexibility as I noted in my Inherited IRAs post a couple weeks ago, reprinted here in this CBA/CLE Legal Connection blog post.

Probably one of the most feared issues under this heading is “Medicaid estate recovery.”  This fearsome prospect does not appear to be widely used in Colorado at this time (based on anecdotal evidence I have collected).  In this context, a house (a typical “probate” asset) is the only substantial asset a person may keep and still qualify for Medicaid. So the state may place an estate recovery lien on a parent’s home to recover those Medicaid payments.  As Ayo explained in the post referred to above, Medicaid will not come after the children of a Medicaid institutionalized parent.

Once an estate is opened, it is open for all comers, so to speak.  This means the bill collectors of course.  Under our probate code, a creditor is entitled to open an estate of a deceased person if no other person has opened one after forty-five days following the debtor’s death.  Our probate code provides a list of claim and creditor priorities, so there is an order to who goes to the front of the line (like medical expenses of a last illness) and who gets relegated to the back (usually unsecured creditors like credit card companies).  Claims must generally be filed within one year of the death, but when an estate is opened for a decedent, it is typical to publish a “notce to creditors” which provides notice to the world and shortens the time period for claims to be filed.

This is why it is a good idea to consider carefully whether to open an estate – to avoid administering an estate that has no real assets or will benefit only creditors. Debts generally come off the top of the estate, so to speak – the beneficiaries (under a will) or distributees (where there is no will) get their share after creditors’ claims have been paid.

Let’s take a quick look at two basic kinds of debts and resulting claims.

Secured debt:

“Secured” means the debt has physical collateral that guarantees the balance. These are debts like mortgages (secured by the home itself) and car loans (typically secured by the car).

 Unsecured debt:

This is debt that is not secured by any collateral but simply is a promise to pay under an agreement.

This is already getting to be a rather long and complicated post, so let me conclude with WHAT TO AVOID.

The easiest way to inherit your parent’s debt:

  • Cosigning on an account. A cosigner will assume full responsibility of shared loans and credit cards.
  • Joint account holders whose income and credit history were used to acquire a loan or credit card are typically solely responsible for paying joint debts.
  • Signing as guarantor instead of as agent under a power of attorney.

To reiterate, sometimes the decision of whether to open estate must be made very carefully, in consideration of what is the asset/debt ratio of all property and whether an opening of probate is for some other reasons a good idea or required.   For example, under Colorado law (for the year 2014) a collection by affidavit can be used by a successor to collect assets not exceeding $64,000.00.  The use of such an affidavit is only appropriate where there is no estate opened on behalf of the decedent.  I will write more on this topic in the future, so stay tuned!

 ©Barbara Cashman  2014   www.DenverElderLaw.org