What If We Declared a War on Elder Abuse?

Diana in Venice

What will it take to raise the public’s awareness of the prevalence of elder abuse? Here is a recent New York Times article about a woman from Washington state, a granddaughter of a victim of elder financial exploitation, who has made her mission in life to secure further legal protection for vulnerable elders.  I tip my hat to the Elder Law Profs blog for the mention of this article.  For this post, I’m focusing primarily on financial fraud and exploitation of elders.

Colorado statistics over the last several years (since the change in law concerning mandatory reporting of elder abuse and investigation by law enforcement) indicate the numbers continue to rise dramatically.  Read this Denver Post article from last fall with some of the breathtaking numbers in Colorado.  The national numbers are a bit more complicated, due in part to the variances of state laws concerning elder abuse – not all states have made it a crime to financially exploit an elder, as well as how such crimes get reported.  In Colorado, law enforcement and county adult protective services are part of the investigative framework for suspected elder abuse and some district attorneys’ offices have specialized prosecutors for such crimes.  The federal law, the Elder Justice Act – about which I have previously written, could provide an important means for developing a more systematic approach to reporting (among other important things) remains only partly funded.

A 2011 study published by MetLife Mature Market Institute estimates the financial loss by victims of elder financial crimes and exploitation exceeds $2.9 billion dollars annually, but this number remains controversial as other studies have estimated $17 billion or $36 billion.  Read about the variety of those numbers here.

How do we define fraud on elders?  That is a big part of the problem with a lack of any “standardized” way to identify such fraud and abuse so as to generate reportable numbers for particular types of fraud and abuse.  One thing that most are certain of is that the exploitation and fraud are both widely underreported –due to the shame and embarrassment factor, particularly when the perpetrator is a family member, friend or neighbor (occupying a position of trust).

Know the risk factors

Forbes recently ran an article by John Wasik that had a great summary of four of these which consider the elder’s behavior:

  • Poor Physical Health. Those who are physically compromised are unlikely to be focused on financial matters. They are often vulnerable to swindles.
  • Cognitive Impairment. When the ability to do basic things like read a banking statement or balance a checkbook declines, that’s when you have to pay attention. Those with declining math skills will not be asking important questions about new investing “opportunities.”
  • Difficulty in Activities of Daily Living. If a person has trouble feeding themselves, bathing or shopping, that’s a big set of red flags. That also means that they will have trouble managing money.
  • Social Isolation.Are they all alone? Then they won’t have the support of a network of peers, who could warn about scams.

Recognize the signs

The signs are of course numerous and varied, but keep in mind that there are many ways in which the behavior of the perpetrator of the fraud or exploitation of the elder mimics that of a perpetrator of domestic violence.

  • Use and abuse of control of the elder’s finances, such as taking, misusing, or using without the elder’s knowledge or permission their money or property;
  • Forging, forcing, or using deception, coercion or undue influence to get an elder person’s signature on a legal document – this could include signing over title to a home or other asset, or a power of attorney or a will;
  • Forging or otherwise forcing, or using deception or other inappropriate means to misappropriate funds from a pension or other retirement income, to cash an elder’s checks without permission or authorization;
  • Abusing joint signature authority on a bank account or misusing ATMs or credit cards;
  • Exploitation through a fiduciary relationship – such as an agent under a financial power of attorney acting beyond the scope of the agent’s authority, or improperly using the authority provided by a conservatorship, trust, etc.
  • Misleading an elder by providing true but misleading information that influences the elder person’s use or assignment of assets, persuading an impaired elder person to change a will or insurance policy to alter who benefits from the will or policy;
  • Promising long-term or lifelong care in exchange for money or property and not following through on the promise, overcharging for or not delivering caregiving services; and
  • Denying elders access to their money or preventing them from controlling their assets or gaining information about their assets.

Keep in mind that neither of these lists is comprehensive or exhaustive!

Report suspected abuse, exploitation or fraud

If you aren’t sure who to call and the situation doesn’t require a 911 call, use the National Center on Elder Abuse’s resource page to determine who to call.

The only way we will get a better handle on the extent and pervasiveness of elder financial abuse and exploitation is to become more familiar with it so that we know how to ask those whom we seek to protect.

© Barbara E. Cashman 2017   www.DenverElderLaw.org

Medical Durable POA and Mental Health Services – a Volatile Mix

Orca near Vancouver BC

Orca near Vancouver BC

 

The medical durable power of attorney (MDPOA) is an important document that all adults should have.  Why? As our population ages and our longevity is extended, our chances of becoming unable to give informed consent for medical care increase.  I have previously written about informed consent in the context of medical care, but suffice it to say that when a person is unconscious, unable to communicate or otherwise too “out of it” to give informed consent to decide yes or no to a proposed course of treatment – it is extremely helpful to have a substitute decision maker named who can decide for you.  In this post, I will not revisit the smorgasbord of health care planning documents as I have done previously, but I will instead focus on a much more obscure and troublesome intersection in the elder law field: where persons attempting to assist with the requested care of an older adult who has previously been diagnosed with mental illness can get caught in a thicket surrounding access to the mental health information.

Why is this a big deal – can’t an adult (known as a “principal” in power of attorney terms)  with mental illness simply designate an agent under an MDPOA just like any person, assuming that person is not under a legal disability such as a guardianship?  Surely I am remembering that guardianship is not automatic by any stretch for an adult with mental illness or with developmental disabilities. . .

The answer is yes, but . . . well, it can be a bit more complicated than that.  As more adults – especially the aging baby boomer cohort – reach retirement age, there are more people who will have benefited from a more open attitude toward the provision of mental health services in this country.  Just because there are mental health diagnoses doesn’t mean they have to overly complicate that person’s naming of an agent under a health care power of attorney, but they sometimes result in that.  Most of us don’t think about this aspect in the context of “health care” and the MDPOA, but there are important details that can trip up our longevity planning and complicate access to information and assistance for an adult which otherwise might easily be provided by family members or other loved ones on whom we rely.

What does this scenario look like?  This doesn’t come up  very often, but when it presents itself, it is often very challenging to sort out and even more difficult to come to an arrangement that meets the needs of all those involved.  On a continuum, the most straightforward situation is with a family member who is seeking to name, in writing, particular persons as his or her agents.  In this scenario, it is a good idea to have a customized MDPOA which sets forth the scope of the agent’s powers, so it is clear that they include mental health matters.  Where it gets much more difficult is where the adult may want to name an agent but doesn’t feel clear about the mental health decision-making authority or where the person’s capacity to execute a MDPOA may be in question.  The most challenging situation is where a concerned family member seeks to petition the court regarding an elder adult, who might otherwise be a person who is incapacitated under the guardianship statute, and for whom a doctor’s letter would generally substantiate the nature, extent and cause of the incapacity, except that if mental illness is the primary diagnosis, then much different protocols apply to the protection of that information, and there may also be warranted a different type of proceeding in the probate court.  Let’s take a closer look at some of these issues.

Here’s a link to an overview of the treacherous terrain involved here.  There is also something known as a psychiatric advance directive (PAD).  In Colorado this means that a MDPOA may have instructions, or instructions may be given to the agent named in the MDPOA which specifically relate to the provision of mental health services, including psychiatric medications or hospitalizations.  These instructions must appear in the MDPOA as they may not otherwise be recognized in a “stand alone” document.

Some of the problems originate in the different sources of law – federal law of the Health Insurance Portability and Accountability Act HIPAA relating to protected health information, for example, and state law relating to protective proceedings (guardianships and conservatorship) and mental health proceedings. The appointment of an agent under an MDPOA is governed by state law.

HIPAA is a federal statute which has had a tremendous impact on health care providers since it was promulgated in 1996.  My own MDPOA form refers to the regulations (from the Code of Federal Regulations) which cover the statute’s provision regarding who is a person to whom information can be released.  The codified HIPAA rules cover protected health information and its access, including electronically transmitted health records and require consent for the disclosure of such information to third parties.  Where an agent is named to make decisions on behalf of the principal and the principal cannot give informed consent to treatment, the agent obviously requires access to the medial information in order to make a decision about treatment options.

Mental health matters are generally governed by state law.  In Colorado, a statute governs the particular types of providers in the mental health field, including psychologists, social workers, counselors, therapists and others.  See C.R.S. § 12-43-101 – 805.  Note that HIPAA gives an exception to the general rule requiring consent prior to sharing of information regards “psychotherapy notes” which are a special form of protected information and the regulation is fairly detailed.  See 45 C.F.R. § 164.508(b), (c).

The connection between federal HIPAA law and state mental health legislation and other sources of law generally concern the disclosure of information.  While HIPAA is a comprehensive federal statute, it is not designed to preempt state law.  The CFR relating to substance abuse regulation (which fall under the umbrella of mental health for HIPAA purposes) provides that the federal law is designed as a “backstop” of sorts in that if the state law is more protective, it controls, otherwise the federal law often provides the minimum standard.

There has been some recent criticism of Colorado’s rules relating to what constitutes an “imminent danger” for purposes of an involuntary commitment (a/k/a 72 hour hold).  Finally, for more information, see this article about HIPAA and mental health records.  That’s all for now, stay tuned for developments.

©Barbara Cashman  2015   www.DenverElderLaw.org

The Revised Uniform Fiduciary Access to Digital Assets Act

denver elder law

Siennese Door

This is an important development regarding the Uniform Law Commission’s Uniform Fiduciary Access to Digital Assets Act (UFADAA).  I learned that there is a new and revised version of the uniform law which has in the last few days been approved by the ULC.  It is known as the Revised Uniform Fiduciary Access to Digital Assets Act (2015).  In my last post on this topic in May, I described the short-lived history of HB 15-1189, the UFADAA in the Colorado legislature.

In June, yours truly was interviewed, along with Connie Smith of Fairfield & Woods, for the article “Assembling the Digital Legacy” which appeared in Law Week Colorado.  The article, written by Doug Chartier (sorry, no link as it is paid subscription only), described the ever changing landscape of identifying and managing digital assets for the living (as agent, conservator or trustee) or for the deceased (as personal representative).  The article reads a bit like an obituary for the UFADAA, which was enthusiastically presented in nearly two dozen state legislatures but met stiff opposition from diverse groups including (in Colorado) the Colorado Bankers Association and the ACLU.  Only one state has adopted the UFADAA so far and in most states where the legislation was introduced the UFADAA has already been rejected. This over what is broadly termed as “third party privacy concerns.”  The basic concern would be, to give one example, for those with whom the digital asset owner would have communicated – say via email, and whose private and protected information would be disclosed to a fiduciary acting on behalf of another (as defined in the UFADAA, but generally an agent under a POA, a personal representative of an estate and so forth) without the third party’s knowledge or consent.  It isn’t just about reading mail anymore, or emails for that matter!

Here’s a recent article in Forbes magazine about how forgetting to make plans about digital assets like social media can create post-mortem lawsuits.  One of the spot-on observations made in the article was about the difficulties in transferring digital assets and its potential to create unplanned business succession challenges as well as ongoing estate planning difficulties.  Getting back to the Law Week article, both Connie Smith and I agreed that online services for storage of passwords, usernames and other credentials for online accounts (digital assets, broadly defined) are problematic because of the concentration of personal data.  I give my estate planning clients an organizational “letter of instruction” which has a page for these online accounts and other digital assets. At this time I think the best way to maintain this information is in paper format, which can be easily updated on a personal computer and printed out periodically.  And no, you shouldn’t call the document “my online accounts and how to access them,” but maybe come up with something more creative!

In the meantime, don’t forget about making plans for those digital assets.  Here’s a helpful article from the American Bar Association on this topic.  Unfortunately, I wasn’t able to link to the revised version of the UFADAA on the Uniform Law Commisioner’s website – it does not yet appear to be available there.  I have a word version of the revised UFADAA, but haven’t had the chance to read it while comparing its previous version.  I’m sure that will be a topic of a future blog post. . . . !

©Barbara Cashman  2015   www.DenverElderLaw.org

New Colorado Law Regarding Joint Filing of Tax Returns for All Married Couples

denver elder law

my violets

 

I will start with a reminiscence. Back when I was in law school (alas, the previous century. . . !) I think I can remember at least one thing from my family law class.  That was the axiom “a marriage valid where celebrated is valid everywhere.”  That was thanks to the Full Faith and Credit Clause of the United States Constitution, which states

Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.

U.S. Const., Art. IV, section 1.  You U.S. history mavens may recall that the Articles of Confederation included a part of this language, but it didn’t [like the rest of the Articles, and the Confederacy as a whole] go quite far enough, so James Madison’s request for supplemental language at the Constitutional Convention was adopted.  If you really want to go crazy on this one, read The Federalist Papers, No. 42. . . .

It may not sound like such a pronouncement would really be necessary, but that conclusion would skip over much of our history.  In our present context of “domestic relations,” remember that Colorado, along with a handful of other “frontier” states, has for many years recognized common law marriage.  That was an issue for tax filing for those couples, as those common law marriages weren’t valid in other states.  Hence, the Revenue Ruling.  In Colorado, it remains one of the indicia of common law marriage – that a couple is “holding out” as married for federal tax purposes.  In case you’re wondering, I will cheerfully decline this opportunity to explain in any detail the legal significance of a “Revenue Ruling” by the Internal Revenue Service.  Under our administrative law system, I will cite Wikipedia:

A Revenue Ruling is “an official interpretation by the [Internal Revenue] Service that has been published in the Internal Revenue Bulletin. Revenue Rulings are issued only by the National Office and are published for the information and guidance of taxpayers, Internal Revenue Service officials, and others concerned.”26 C.F.R. sec. 601.601(d)(2)(i)(a).   Revenue Rulings are published “to promote correct and uniform application of the tax laws by Internal Revenue Service employees and to assist taxpayers in attaining maximum voluntary compliance by informing Service personnel and the public of National Office interpretations of the internal revenue laws, related statutes, treaties, regulations, and statements of Service procedures affecting the rights and duties of taxpayers.” 26 C.F.R. sec. 601.601(d)(2)(iii). See, generally, Mitchell Rogovin & Donald L. Korb, “The Four R’s Revisited: Regulations, Rulings, Reliance, and Retroactivity in the 21st Century: A View From Within”, 46 Duquesne Law Review 323, 330 (2008).

The federal Defense of Marriage Act changed all that Full Faith and Credit status quo. It was a reaction to the passage of state laws recognizing same gender marriage and “tweaked” if you will, the Full Faith and Credit Clause.  The old IRS Revenue Ruling from 1958 [Rev. Rul. 58-66] was re-engineered in light of the decision in United States v. Windsor, 570 U.S.___, 133 S. Ct. 2675 (2013) which held parts of the Defense of Marriage Act unconstitutional.    You can read the new Rev. Ruling 2013-17 here.  This Rev. Ruling basically reinterprets “husband” and “wife” to include same-sex spouses for purposes of the Internal Revenue Code.  The IRS also has a helpful FAQ on their website that basically says, if you were married somewhere in a domestic or foreign jurisdiction whose laws recognize the marriage of same-sex spouses, then you can file jointly.

I don’t usually say this in a blog post but this post is NOT to be used as any kind of tax advice, as this is educational information only about the new Colorado law.  Based on my reading, for educational purposes only as I have said – this in NOT tax or legal advice for your particular situation – the bottom line for Colorado same-gender partners is – you have to be married outside Colorado to avail yourselves of the joint filing benefits, as a Colorado civil union will not get you there.  I do not mean this to minimize the importance of the new statute to clarify an otherwise rather murky situation.

So what about the details of this bill signed into law by Gov. Hickenlooper on Feb. 27, 2014 (SB 14-109, entitled “Concerning the State Income Tax Filing Status of Two Taxpayers Who May Legally File a Joint Federal Tax Return.” )? Well, you can read it here.  It basically says that if federal law allows you, as a married couple, to file jointly for tax purposes (according to the Rev Rulings), then you can file jointly for Colorado purposes.  If you don’t meet the standard under federal law, then no Colorado joint filing is available. Fairly straightforward, but also very complicated.  I really thought this would be a short post . . .  I tried!  thanks to T and P for “calling for the question.”

  ©Barbara Cashman  2014   www.DenverElderLaw.org

PS No blog post next week. . . .

Conscious Living and Dying: Death and Depth – part 1

an empty bench

What is death?  Who dies? What if the fear of death is a simple reaction to our lifelong fear of the unknown or our indifference to immortality?

In my work as an attorney, I have many types of conversations with clients and others about life and death matters.  I wouldn’t have it any other way! For many of us, these conversations and topics about human mortality, the value and essence of a life, and other such topics, often have no other venue for discussion.  While many people may think that such topics are the more appropriate domain of medical professionals and the clergy, I know from my experience that this is the exception and certainly not the rule.  Our compartmentalization of modern life has resulted in so many walls erected in our daily existence that it is often difficult to imagine our lives without those dividers.  But make no mistake, those dividers are of our own making and while they may serve us in many respects, they tend to make us myopic, nearsighted in our assessment what our life is for.

Those dividers are sometimes like the rope floats in a swimming pool, marking the shallow end of the pool from the end of the pool that gets progressively deeper and darker.  The shallow end is the safe, visible, transparent and – surely with so many people splashing around in it – the “place to be.”  We often think of the noise and din of that shallow end as just how things are, even if we might question what all the commotion is about.  Certainly some of the noise must be resulting from happiness and joy, right. . . .?

I like the late theologian Paul Tillich’s two meanings of “deep” here: that it means either the opposite of shallow, or the opposite of high.  He also insightfully observed that there can be no depth without a way to that depth.

What is this place, this world in which we find ourselves?  When we surround ourselves with noise and busyness, it is difficult to remember that silence and repose are also part of our world.  These things are unfamiliar to us and often uncomfortable, painful even, when we are so accustomed to the hustle and bustle of the shallow end.  When we encounter the silence and the repose, we might also encounter unfamiliar questions.  What is our place in the world? Where do we find right relationship to our own imperfections?  Here the shallow end, with its easily recognizable surroundings, forms a barrier to us seeing beyond.  Many of us have seen a glimpse of that deep end and we know it’s “out there” somewhere.  Some of us even venture into it, but in order to experience it, we must shed the trappings of the familiar, the armor around which we have encased ourselves, the known and the identifiable of the shallow end must be abandoned in order to move toward the depth.

Death, the process of dying to be more precise, can be regarded as a letting go.  It is the one certainty of our lives and paradoxically the thing we seem to know the least about, hence the “mortal fear.”  If we think about the millions of people who have preceded us, oops, I mean billions – according to demographer Carl Haub the number is 108 billion.  Read the blog post on the Discover magazine site here.   Different wisdom traditions have many similar teachings about what happens during this process of letting go.  The late professor Mircea Eliade has written extensively about common aspects and themes in this regard. The theme “liberation and letting go” is the title of the latest issue of Parabola magazine.  In that issue I especially liked Andrew Holocek’s article “Preparing to Die,” in which he observes “in many ways, the entire spiritual path is about letting go.  It’s death in slow motion.”  This is what many folks would consider mindful living, mindful of our present attention and the detail that everything changes and that, of course, we will die someday.

Holocek examines the Buddhist notions of bardos, the “spaces in-between” that include the spiritual stages of dying, noting there is a body that dies and then there is another body, the very subtle body, which does not die.  I won’t go into the geography or cartography of soul migration here, but I have cited to Stephen and Ondrea Levine’s “Who Dies?” and Kathleen Dowling Singh’s book “The Grace in Dying: How We Are Transformed Spiritually As We Die” in an October post  about my father’s death.   The topic here is about depth, and why we are so afraid of it. . . .

©Barbara Cashman 2013     www.DenverElderLaw.org

Estate Planning and other Fearsome Topics: part II

Mesa Verde NP

This post is a continuation of an earlier post about fear-based tactics that are sometimes used to “help motivate” people to plan their estate.  This type of fear based motivation does not appear to help people think clearly about their values and priorities, but rather the fear is designed to sell.  Check out this recent Denver Post article that has helpful information and also instructs people to “walk away from high-pressure tactics.”  One definition I found of “advertising” goes along these lines:

the nonpersonal communication of information usually paid for and usually persuasive in nature about products.  Another definition talks about “driving behavior” and this post will focus on those two aspects in the estate planning context.

In an earlier post I introduced the first two Myths of fear-based estate planning as follows:

   Myth #1: You Need to Avoid Probate (as in probating a will) at All Costs and

   Myth #2: Getting a Trust Will Protect Your Assets from Nursing Home Costs and Medicaid Recovery

Let’s take a look now at two more myths of fear-based estate planning.

   Myth #3: A Living Trust is the Answer to All Your “Problems”

This is where the pitch might be at its most shrill.  Once I got a call from someone who actually hung up on me when I told her that sometimes probate wasn’t a bad thing. . . . !  In my practice, I have seen the dark side of several trusts.  There are many trusts that are generic and not tailored to an individual’s situation in any meaningful way, and because they are so long and complicated, clients don’t have a decent understanding of how the trust works.  The trust may create a completely unworkable management scenario, like when the adult children appointed as trustees can’t get along.  Another important factor to consider in this regard is that the trust document doesn’t usually accomplish anything on its own.  It merely creates the trust.  Often this important detail is not adequately explained to the client or it is completely neglected.  It requires the re-titling of a person’s assets into the trust’s name.    I have opened probates in such situations, where a probate asset was not, much to the surprise of the trustee and an heir, titled in the trust’s name but rather remained in the decedent’s name.  Trusts must be established properly as well as maintained.  Some are rather high maintenance.  If someone is telling you about how much an “average” probate costs – be sure to draw a distinction between the costs of probate and the costs of a probate lawyer.  Many times the trusts that are being sold are much more expensive than the probate alternative!

   Myth #4: Selling a Solution to a Problem You May Not Have

One of the sales tactics used might be for protection against things that people didn’t even know they needed to worry about.  One of these I’m familiar with is to use a trust to protect certain assets in the event an intended beneficiary might someday divorce.  It is always a good idea to ask questions about these kinds of arrangements, which appear to be based on the potential client’s intended response of “well, of course I would want this!”  The basic premise I am getting at here is that the options presented should be based on your own unique situation, and not a one-size-fits-all package that is being sold to you.

Bottom line for this post – find legal assistance that  involves communication that is personal to you.  How else will you know whether your plan is actually designed to work for you?  A hallmark of the attorney-client relationship, enshrined in our Colorado Rules of Professional Conduct,  is the obligation of “informed consent.”  You are probably familiar with this in the medical treatment context  –  but you might not have known that lawyers in Colorado are obligated to meet informed consent requirements.  This is often a two-step process:

(1) the lawyer must relay the necessary information to the client; and

(2) the lawyer must get the client’s consent regarding the lawyer’s next course of action.

What kind of information is relayed, how much information, and when the information is communicated, will typically vary according to the sophistication and experience the client has in legal matters and in making important decisions.  When you meet with an estate planning attorney who is able to ask questions and also listen to your concerns and find out what your unique situation presents, you will be more confident that  you are in good hands and that you are, as a result of informed consent, the one in charge of the attorney-client relationship in that the choices are made by you among a range of alternative communicated by the attorney to you.

There are alternatives available for any plan, and the best way for people to know they have made the decision that is right for them is to choose among the available alternatives.   This is the nature of informed consent.  If the estate planning documents do not suit a person’s or a family’s unique situation, there may be little point of putting a plan into place.

If you have a computer with internet access or you know how to find your local library, you can get plenty of information about estate planning and probate in Colorado (including the 2013 Senior Law Handbook) from the Colorado Bar Association, at www.cobar.org

PS Happy Birthday, Weird Al (Yankovic)!

©Barbara Cashman 2013     www.DenverElderLaw.org

 

Disabled adults, Special Needs Trusts and Medicaid: the Importance of Planning

Storm near Barr Lake, August 2013

Life can be complicated, especially if you are a parent or guardian of a disabled person who receives government benefits.  If you don’t make any plan or make an estate plan which fails to adequately address a disabled beneficiary’s receipt of government benefits, an inheritance can jeopardize a disabled recipient’s qualifications for needs-tested (income or asset-based) government benefits.  Sometimes a parent’s estate plan will effectively disinherit the disabled adult child, leaving a request encouraging a nondisabled adult child to “do the right thing.”  At the other end is a devise or inheritance left outright to a disabled beneficiary.  This post-mortem planning can create a lot of stress for everyone involved, and it can interfere with the grieving process and put strains on the ties between siblings and other family members.  In my estate administration practice, I have seen both of these scenarios play out.  I don’t recommend either as a viable choice for a thoughtful planner.  So – what are the alternatives?

I recently read the June 2013 issue of Bifocal (a really interesting e-zine published by the American Bar Association’s Commission on Law and Aging), which had a good article about pooled trusts.  These types of special needs trusts offer flexibility for families of modest means in planning for disabled family members.  Read it here.

So what would “modest means” be for purposes of a pooled SNT?  I recently spoke with Megan Brand, executive director of the Colorado Fund for People with Disabilities.  (CFPD is the longest-standing, locally administered pooled trust in Colorado.)  Her rule of thumb for a disabled young adult is to encourage a pooled SNT where there is less than $150,000 set aside for such person’s benefit.  If you’d like to learn more about the different types of trusts and planning for the needs of disabled family members and loved ones, I encourage you to attend the Colorado Guardianship Association’s  next educational presentation on Tuesday, September 10, 2013 at Porter Place,1001 E. Yale Avenue from 8:30 am – 10:15 am.  Megan will present on Pooled Trust, Individual Trust, Supplemental Needs Trusts, Disability Trusts, Special Needs Trusts Income Trusts,  1st Party, 3rd Party… What does all of this mean?  How do they differ? How are they the same?  What trust is the best fit for my client or family member?  Once they have a trust, what can it be used for and how do we actually make the purchase happen?   To register online for this program, click here.

Here’s a link to another helpful article about the importance of planning and considering the impact on SSI and Medicaid qualification of the disabled person.  But don’t be fooled into thinking that special needs planning involves merely trusts!  Trusts are important documents but it is a good idea to look at the big picture and talk with someone (like an elder law attorney) about how best to devise a plan assist a disabled person with financial, medical and personal care planning.  Another good resource is Hal Wright’s 2013 book entitled “The Complete Guide to Create a Special Needs Life Plan.”  I checked it out from my local library.    This book is a thoughtful approach (by a Certified Financial Planner) about how to devise a plan for a disabled child to ensure access to services to meet those special needs to maintain emotional, financial and other important resources.  At the top of his list of importance are the following three components of an estate plan: preparation of appropriate legal documents; establishment of an SNT; and getting guardianship and/or conservatorship status in place.  If you’ve been thinking about what you need to do to put a plan in place for a disabled adult – please don’t wait until it’s too late to plan.

©Barbara Cashman 2013     www.DenverElderLaw.org

Business Succession Planning for Breakfast

 

 

Last Thursday morning I attended a breakfast program hosted by The Denver Foundation at the J.W. Marriott.  The program was entitled “Beyond Tax Law: Non-tax Aspect of Business Succession Planning” and was presented by Stephan Leimberg.  I have been going to these breakfast programs for several years now and they always feature excellent speakers and timely topics.  The Denver Foundation also hosts the monthly meetings of The Women’s Estate Planning Council of which I am a member.

So – what about Leimberg’s presentation?  It was pretty snappy and hit home the focus that attorneys and other professional advisors need to consider and take to heart when dealing with small businesses – especially family businesses: focus on the tax and other technical aspects of business succession and exclude family and relationship dynamics at your (and the family business) peril!

In his materials, Leimberg presented some eye-opening facts – for example that one-third of the Fortune 500 is family-owned and that family businesses purchase more than $1 Trillion of goods and services annually.  Part of the presentation was about identifying the traits of the family businesses (about 55% of business are family controlled) that have been successful and how they managed and successfully manage to bridge the family/business divide.

In a family business context, there is not only the business future at stake but also the functioning of the relationships of the family members – both inside and outside the business context.  Part of Leimberg’s presentation focused on the reality-based aspects of a business:

will a business die with its owner?

should the family risk running the business?

on what is the success of the business dependent?

is there a strategy in place to overcome inertia?

What about all those different hats?  I will make reference here to “hats” thinking of DeBono’s six hat parallel thinking….

    • WHITE: facts and information
    • RED: feelings and emotions
    • BLACK: critical analysis of logical flaws
    • YELLOW: positive logic applied to seek harmony or benefits
    • GREEN: new idea or perspective, creativity
    • BLUE: the big picture

Edward  DeBono, Six Thinking Hats: An Essential Approach to Business Management (1985: Little, Brown) His idea for parallel thinking is that the brain can be “sensitized” to think in broader ways.   Okay, what also comes to mind is a kid lit fave of mine: Caps for Sale, by Esphyr Slobodkina  (remember the cap peddler and the mischievous monkeys?).

I thought Leimberg’s numbers about how many family businesses have done succession planning were a bit high.  Perhaps this is because of the relative size of the family business he was looking at.  When I presented at the CBA/CLE program “Advising Small Companies” in February  I looked at figures for small businesses that were akin to estate planning numbers for parents of young children – the vast majority of both groups, who are in greatest need of succession or estate planning – have nothing in place.  The Small Business Administration has some helpful resources available here.   What I covered in my February CLE presentation were “the four D’s”:

          • Detour
          • Dissolution
          • Disability
          • Death

Things don’t always go as planned!

“I feel as if I were a piece in a game of chess, when my opponent says of it: That piece cannot be moved.” 

Soren Kierkegaard

My main focus at that CLE  presentation was on discussing techniques to motivate clients who are focused on the success of their businesses to think beyond survival mode and make a plan for the unplanned and the inevitable.  For a definition of business succession planning, I used Louis Mezzullo’s (American College of Trust and Estate Counsel President) definition: “Planning for the orderly transfer of the management and the ownership of a business to new managers and new owners to avoid a liquidation of the business as well as unnecessary taxes and other expenses, and in a manner that carries out the family’s nontax objectives.”

Bottom line for my takeaway of Leimberg’s presentation – the importance of getting family business clients to really start thinking about succession planning (estate planning for a business) and its importance from a strategic point of view.  I liked this approach, which emphasizes relationship dynamics in the success or failure of a business – whether it is a family business or a small business that is not family owned.  Following a course according to a strategy is always preferable to reacting to an unforeseen event or an emergency.

©Barbara Cashman     www.DenverElderLaw.org

The Music of Family Relationships

It’s springtime somewhere, but definitely not in Denver this morning where the snow from Monday’s storm has melted only a little.  I got a blizzard alert on my iPhone at about 7:30 this morning!  It’s coming down right now.  We do need the moisture and I, for one, am not anxious to get started on the lawn mowing anytime soon. . . .  So here’s a picture of spring that I took last week in Ireland.

For all of you skeptics (or people who have been to Ireland before) the weather was beautiful and I took many pictures with visible blue sky! I took this picture on the grounds of Glenstal Abbey, where I was lucky enough to spend several days in a warm and welcoming Benedictine community.  I took this picture after walking back from a visit to Mass Rock.  There Irish soprano Noirin Ni Riain told our group about the history of the Mass Rock. She alo sang to us and finished by leading us in song.  She has an amazing voice and her music not only speaks to the soul, but moves it.  I purchased three of her CD’s when I was there and they are all available from Sounds True in Boulder.  Her songs are sung in Irish, but I find that the most moving music is not in my mother tongue of English.  I’m also thinking of Gorecki’s Third Symphony which you can listen to part of it (with beautiful visual accompaniment) here .  My favorite is the original million-seller with soprano Dawn Upshaw.

Music and spring and travel. . . .  That leads me also to an experience I had some years ago when I was visiting a local nursing home in my capacity as JFS para-chaplain.  I was there to lead a service and because I was lucky enough to be accompanied by a guitarist, I sang an old Yiddish song called Oif’n Prippitchik.  About midway into the song something very interesting happened.  One of the residents who attended was a woman with very advanced dementia who, it was reported to me later, had not spoken in over a year.  She started first to hum and then sing along with the song.  She spoke about her grandmother.  The song had transported her right back to a happy memory of childhood, when her grandmother had sung that song to her.  By the means of music, hearing that melody – she was moved in a sort of time travel.  I was most certainly moved witnessing that event.  Another story of music as a means of transport for the spirit comes to mind, it is from Megory Anderson’s book Sacred Dying.

So this post is about connections I suppose, and the beauty of writing blog posts is that I can incorporate things like . . . . a bumper sticker that I saw this morning on my way to work.  It read “love lasts longer than life.”  I nodded in agreement.  This post is also about new varieties of living arrangements in this country, which hearken back to some very old traditional arrangements.  I thought about the post after reading an article about it in the April 2013 AARP bulletin.

The title of the April Bulletin’s article is “Saving Money by Living Together,” and it is about money saving, but I suspect that the approximately 51 million Americans who live in a house with at least two generations in a single home, and many of these most likely have three generations, are enjoying more than just money savings from the arrangement.  The money savings factor in substantially for caring for an elder parent, and the arrangement also give an adult child or children the opportunity to give back to the aging parent some of the care they received from childhood.  This can be a beautiful way of modeling productive multigenerational relationships for young children.   I think it also can foster a productive stage of elderhood for many grandparents, a topic I’ve blogged about previously.

One of the biggest challenges that we face as a society is how to take care of the burgeoning number of elders, some of whom have meager savings and many whose savings have simply run out over the course of a long number of years of paying for health care not covered by Medicare and costs of living in retirement.  I sometimes hear the offhand lament “we don’t take care of our elders in this country,” to which I often quickly respond with the numbers of elders and the fact that the vast majority of those elders needing care receive some or all of their care from unpaid family members.  One of the side effects of longevity is reworking family relationships to support elders in their later years.  As an estate planning and elder law attorney, there are a number of legal arrangements that an individual and family can put in place to manage the legal aspects of these often complicated financial, medical and emotional considerations.  In a multigenerational housing arrangement, it is good to start with a plan.  I liked this article’s list of tips for making such an arrangement work which include:  discuss expectations and responsibilities like financial and privacy issues; talk about parental and filial (adult child to parent) responsibilities; check zoning restrictions about renovations for attached dwellings; and share the responsibilities.  I would also add that it might be wise to have a regular place for the family members to meet all together to ensure things are working and so any conflict can be managed productively and not allowed to proliferate.   Some of my clients have made such arrangements and they are usually mutually beneficial.  It is interesting to note the change in structure that economic and age-related considerations can have for families – for so many of us, it brings our dear ones closer to us.

©Barbara Cashman     www.DenverElderLaw.org