This week we celebrate Thanksgiving and already the end of 2009 is in sight. For many, especially in Michigan, this year will conclude with a sense of “good riddance.” And yet, particularly this week, we re-kindle that spirit of gratitude that helps to bind our families and our country. We count our blessings, look past each others’ weaknesses, and spend a brief time sharing laughter, memories and good food. We also find ourselves in stolen moments contemplating our priorities, our plans, and the future. It’s a funny thing how memories and merry-making so often turn our thoughts to the future. And so it is that the life and love of this season spur us to get our houses in order and plan for our loved ones and for our own future needs. This mindfulness is prudent and provident, and we are thankful for these gentle, natural nudges the season provides. Happy Thanksgiving to you and yours from Priority Elder Law & Estate Planning!

Many people develop and execute a tax plan between now and the end of the year. With just about seven weeks remaining in the year, it is time to move quickly.

But very few people need to plan their gifting for tax purposes anymore. With the estate tax being eliminated in 2010 and the estate tax exemption at $3.5 Million in 2009, there is very little tax planning to do anymore. The current $13,000.00 per person per year gift exclusion actually impacts very few people.

What is much more likely to be an issue is the 5 year look back period on all gifts for Medicaid purposes. What that means is that any gifts to family members can be reviewed in the event of needing long term care for up to five years. End of year planning should really be focused on protecting both an estate and gifts from the estate from the cost of long term care.

Think about the situation this way: gifts that you give now can be reviewed for up to five year in the event that you need long term care. If it is found that you have given a gift, your beneficiary could be asked to return that money in order to pay for your long term care. That is because Medicaid will not cover your expenses for a period time equal to the gifts you have given away within five years of qualifying for Medicaid divided by the average monthly cost of care. For Michigan residents, the monthly cost of care is $6,326.00 according to the state. That means that a gift of $31,810.00 will result in six months of ineligibility for Medicaid.

One way to avoid this problem is to create a family trust in advance of needing care. A properly drafted trust can help to protect assets, provide you with control of those assets, and avoid the concerns of penalties and look-back periods.

Caring for a senior gets complicated quickly. Even assuming that an ideal care regiment can be identified, financing that care, locating resources and working out the logistics of transportation, insurance and personalities can be more than a full time job. For these reasons, it is helpful to turn to a geriatric care manager. Geriatric care managers specialize full-time in the evaluation of seniors’ medical needs and the navigation of the healthcare system, and can even often provide “insider” knowledge of the options available. While a geriatric care manager’s services are generally not covered by insurance, they can certainly earn their keep by saving time that would otherwise be spent locating and evaluating resources. For busy baby-boomers with children and careers, money invested in a geriatric care manager can pay dividends in both time and peace of mind, while often, most importantly, securing better quality care for the aging loved one.

A recent New York Times article (“When Elder Care Problems Escalate, You Can Hire an Expert”) highlights several other ways a geriatric care manager can be helpful. For instance, being a trained, third party professional has its own value: “My mom doesn’t listen to us, but she listens to Audrey, [our geriatric care manager].” If the geriatric care manager can cut through the often complex emotional subtext of a family care-giving situation, she can provide tremendous value and peace of mind to families with acute elder care needs.  Indeed, in my own practice, I have often seen relationships deteriorate as family members second-guess each other and argue about care options.  Frequently it helps very much to have an objective third-party opinion that is both knowledgeable and outside of the family circle (the members of whom often stand to benefit from various courses of action).  As the Times suggests:

That is another great reason to use a care manager: they can play the bad cop, persuading the older person to stop driving or insisting that an aide move in, so you don’t have to.

That person can also be the voice of reason when a family is not seeing eye to eye. Reesa Tansey and her siblings agreed that their mother, Ruth Tansey Goldberg, should age at her home in Los Angeles. But their mother’s husband — their stepfather — did not think that was a good option for him or for her.

Mrs. Goldberg, 85, was suffering from Alzheimer’s, but her husband, 84, was going to work each day and still able to golf with his friends.

Bunni Dybnis, a care manager based in Los Angeles, helped the children navigate the complicated terrain. At first, Ms. Dybnis arranged for 24-hour home care for Mrs. Goldberg. When Mr. Goldberg concluded that his wife would be better off living elsewhere with more stimulation, Ms. Dybnis helped the family find a reliable and intimate residential home for Mrs. Goldberg to move to.

“This wasn’t our first choice,” Ms. Tansey, who lives in Berkeley, said. “But Bunni helped make it all work out. We never felt like we were drowning.”

A geriatric manager can swoop in, figure out what needs fixing and move on to the next case. Or the manager can provide continuing support for situations that cannot be resolved quickly. Because care managers charge by the hour — typically $50 to $200 — what you pay will be based on how long you choose to keep them on the case.

Ultimately, while the family is still where the buck stops and where that very important love and commitment exist for the elder family member, an elder care team that includes a geriatric care manager as well as a physician and elder law attorney, make navigating the transitions that come so quickly in the later years a manageable – and often an even joyful – task.

I would like to take a moment to address what I believe to be a huge misconception – if not deception – by some in the elder care industry: that the ranks of seniors today are on the brink of exploding due to Baby Boomers crossing the threshold to the elder world of significant physical and mental decline, limited mobility and difficulty with the tasks of daily living. Let’s be honest: There is no such boom! It is really a wonderful bit of news that Americans are living longer and longer, with life expectancies now hitting unprecedented highs of upper 70’s or even 80’s in the case of some demographic groups. But, truth be told, this means that the Boomers – allegedly on the cusp of their twilight years – are really decades away from their final days. That is a great blessing and a product of our countless advances in science – pharmaceutical advances, early screenings and therapies, and lifestyle adjustments. In my own practice I see day in and day out that the Baby Boomers who reach out to me are contacting regarding their aging parents who are now in their 70’s, 80’s and 90’s. They are the children, not the seniors!

In his insightful book, The Age Curve, Kenneth Gronbach demonstrates that the elder care world is mistaken in believing that a tidal wave of newly baptized seniors is just around the corner. In fact, he argues, the whole industry is a couple of decades ahead of schedule in scrambling to build assisted living facilities and making similar preparations for the imminent onslaught. One only need be 50 to join AARP, the American Association of Retired Persons –a rather outdated age given the climbing life expectancy and increased quality of life we are seeing for seniors well into their seventies, eighties and nineties. A 50-year-old these days might easily still be taking care of a beloved grandparent! So much for talking points on the “sandwich generation” – it’s not quite that simple!

Americans continue to age, of course; it’s simply that we are not seeing tangible declines in well-being, health and overall quality of life until much later than the common wisdom – or the industry – might suggest. In some ways, this doesn’t make anything easier for families. There may be a larger network of family members to care for the aging loved one, since grandchildren may more easily be available as adults to care for an elder. But that doesn’t make it any less stressful for the family or the elder, especially in light of the disconnectedness that characterizes so many American families in our age. Furthermore, extended lifetimes can mean extended costs, especially where debilitating diseases such as Alzheimer’s or Parkinson’s impact the extent and duration of caregiving. Critical end-of-life conversations and financial preparations still need to take place, and are perhaps more important than ever. We just need to be honest about the timetable.

Many people are not aware that long-term care costs are tax deductible medical expenses. Nursing home costs, defined as “necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services” for the care of a chronically ill individual and prescribed by a licensed health care practitioner, are fully deductible. Additionally, assisted living expenses can also be deducted under many circumstances. For those who are using tax-differed assets to pay for care, the savings of this deduction can be especially substantial. Discerning which expenses are tax deductible can be tricky. You should consult with your accountant or a Detroit area elder law attorney to be sure you receive your full deduction.

The Centers for Medicare and Medicaid Services (CMS) has published their long-anticipated 5 star rating system for nursing homes. The breadth of the new rating system is astounding: in Michigan alone, complete information can be found on 425 nursing homes. The system offers information on the number of beds available, the types of payment accepted and, most importantly, several indices of nursing home quality. Each nursing home is given an overall rating, as well as ratings on health inspections, staffing, and quality measures.

One quickly wonders how accurate the system really is. Given how much information is in the system, and how many people collected data, it seems difficult to believe that the system will be completely fair, objective and accurate. And indeed, several ratings for facilities that I know well have lower ratings than I would expect. CMS provides this Note to Nursing Homes to explain their methodology in collecting information. It is also helpful to note CMS’s policy that:

Each nursing home is also required by law to have the latest survey results on hand for the public to review. For the most recent survey results, contact the State Survey Agency. Their phone number is in the Helpful Contacts section of this website.

CMS also provides a number of useful publications related to nursing homes and care of the elderly generally. For instance, there is Medicare’s Guide to Choosing a Nursing Home, the Nursing Home Checklist, and a guide to Your Rights as a Nursing Home Resident.

And for those families seeking to avoid nursing home care, CMS has published resources on alternatives to nursing home care.

Private resources are also available to families seeking assistance with care management, financing, nursing home selection and other related issues. For instance, www.wheretofindcare.com is an extensive resource where patients and their families can both locate and comment on a wide variety of medical care providers. As an attorney who works with the elderly regularly, I publish several guides to Nursing Home Care, Hospice Care, and Medicaid Planning. Families with aging members can quickly become overwhelmed with the stress of caring for an aging person and our maze of a health care system. These resources are intended to help families find the information they need as quickly as possible.

Estate recovery has been permitted under the Federal law since 1965. In 1993, the Federal law was changed to require states to have some form of estate recovery. Since that time, many different kinds of estate recovery programs have been enacted in different states. Michigan became the last state in the union to enact estate recovery when it passed an estate recovery law in September of 2007. Despite being tremendously unpopular, the estate recovery law passed in Michigan during the state’s budget crisis in the fall of 2007.

There are probably two reasons why Michigan adopted estate recovery. First, with the state budget showing severe deficits, law-makers were interested in any possibility of increased revenues. Second, the Federal government was threatening to deny money to fund Michigan’s Medicaid program because Michigan had failed to comply with the 1993 mandate to enact some form of estate recovery. The loss of matching funds from the Federal government would have been a catastrophic blow to Michigan’s already ailing budget.

Whether estate recovery will do anything to balance Michigan’s budget is far from clear at this point. Estate recovery programs are costly to administer and the recovery is often meager. It is hard to say whether recovering an estimated 5% will be worth the trouble:

The Mackinac Center for Public Policy has estimated that Michigan could actually see a savings of up to $85 million per year if it implemented an estate recovery system, which was based on collections nationally from 2004 that totaled $362 million out of the $45.8 billion spent on nursing home Medicaid recipients.

“Oregon had the second highest rate of collection at 5.8 percent, or $13 million of its $238 million Medicaid nursing home care bill. Given the $1.7 billion Michigan spent on Medicaid nursing home care, a 5 percent recovery rate would save taxpayers $85 million,” wrote TaraLynn Velting, an estate attorney with Garan Lucow Miller in Grand Rapids and an adjunct scholar with the Mackinac Center.

There are always unintended consequences to laws that seek to increase revenues. The enactment of estate recovery is likely to contribute to anxiety among seniors and may actually result in more extensive Medicaid planning. Protecting a home from estate recovery often requires a combination of strategies that are only available to families who are proactive and begin the planning process sooner to avoid risk to the home. The net impact of estate recovery could therefore be an increase in the number of people receiving long-term care Medicaid.

I recently received a letter offering a “Certified Copy” of the deed to my home. The offer explains that the Federal Citizen Information Center recommends that every home owner have a certified deed and that the National Deed Service could provide a deed for just $59.95. There actually is an article at the Federal Citizen Information Center recommending that everyone have a copy of the deed to their home, which can be found here. And indeed, for estate planning, medicaid planning, or asset protection planning, it is a good idea to have a copy of the recorded deed to your home on hand. As the Federal Citizen Information Center article notes:

When was the last time you couldn’t find an important paper you knew you had carefully put away? How do people decide where to store and keep such records? And how do they know what to keep, what to throw away, and when? Do you have an easy to figure out system you or a loved one can refer to in case of an emergency?

If you take a look at the Medicaid Checklist, you will see that gathering important information can be a big job.

But the National Deed Service price of $59.95 for a copy of your deed is outrageous. Even the Federal Citizen Information Center has a warning about the problem. A copy of your recorded deed is available at your local register of deeds for $1.00 per page or less. In most cases, that is going to be just $2.00. Melissa Devaugh of the Lapeer County Register of Deeds echoes the warning about this deed scam here:

This company is not affiliated with Lapeer County Government in any way. This company is using tactics to persuade you to pay an outrageous fee (a whopping $69.50) to them and in return they will provide you with a copy of your deed. Please understand this company MUST obtain the Certified Copy from the Lapeer County Register of Deeds. Once they receive the certified document from US, they in turn provide it to you for the $69.50! Don’t be fooled! If you need a copy of your deed, please call the Lapeer County Register of Deeds. We will be happy to provide you a certified copy at a low cost of $1.00 per page plus $1.00 for the certification…A MUCH LOWER COST THAN WHAT THIS COMPANY IS ASKING!

It is unfortunately the case that scams like the National Deed Service take place every day. And indeed, the scams are often much more damaging than $59.95. Many of the victims of the scams are the elderly who cannot afford the unnecessary loss. Asset protection planning can help seniors to avoid falling victims to this and other more serious scams.

How lax is security at Alzheimer’s facilities in Germany? This story apparently answers that question and explains that fake bus stops are used to gather in patients who wander away:

“It sounds funny but it helps,” said Franz-Josef Goebel, the chairman of the “Old Lions” association.

The result is that errant patients now wait for their trip home at the [fake] bus stop, before quickly forgetting why they were there in the first place.

“Our members are 84 years old on average. Their short-term memory hardly works, but the long-term memory is still active.

“They know the green and yellow bus sign and remember that waiting there means they will go home.”

I have never seen a facility in Michigan that would allow patients out the door, never mind rely on a fake bus stop to retrieve the patients. I wonder, however, whether this story has been reported with complete accuracy or if something has been lost in translation. I cannot believe that an Alzheimer’s ward would allow patients to wander off unobserved. It makes more sense that the fake bus stops are used as a form of therapy: if the patients feel that they must try to return home, the bus stop can allow them to scratch that itch. And going out to the bus stop will give the patient some exercise. But I would be interested to hear the thoughts of others with some expertise in the care of Alzheimer’s patients. Can this story be accurate as reported?

The same technology that allows coffee and internet afficiandos to stay in one cafe for hours on end is now helping seniors to retain their independence and cope with serious health issues. A new Wi-Fi device is capable of alerting your physician in case of heart attack. Thoughtful implementation of new technologies offers a great deal of promise for those seeking to remain independent for as long as possible. Similar technologies offer the promise of helping seniors remain independent as long as possible. Advances in home design and remodeling are likewise helpful to seniors who wish to age in place.