Category Archives: Incapacity Planning

Ask the Expert: Legal and Ethical Question Regarding Refusal of CPR

Written by Evan Farr

Q: My parents are in an independent living home in Virginia.  I recently read a story about a nurse who refused to give CPR to a dying woman at a California independent living home. Was she legally right to refuse giving CPR and could this happen in Virginia?


A: The unfortunate story that occurred at Glenwood Gardens in California is disturbing on many levels and raises important legal and ethical questions for debate and review.

Starting with the issue of the facility type first, Glenwood Gardens and the place where your parents are staying are Independent Living facilities. Independent living facilities may consist of fully contained apartments or even stand-alone residences and are sometimes called retirement communities. Some facilities have communal dining rooms and provide housekeeping and laundry services, and while many have emergency call buttons in the apartments, typically there are no nurses or medical professionals on staff. The residents are presumed to be able to fully care for themselves.

In Virginia, Independent Living facilities are not licensed and not subject to any of the licensing regulations that apply to assisted living facilities. The facilities are therefore free to create their own policies regarding handling of emergencies.

In the Glenwood Gardens situation, there is conflicting information regarding whether the facility employee is a licensed nurse or not. If she is a licensed nurse her duties and obligations may be different than if she is not. In addition, her obligations may also depend on whether her position with the company was specifically as a nurse who was expected to render medical care to residents. Since this is an Independent Living facility it is unlikely that the course and scope of her position, even if she was a nurse, would include rendering emergency medical assistance.

Virginia, like many states, does have “Good Samaritan” laws (Code of Virginia – Section 8.01-225) to protect those who render emergency medical or nonmedical care at the scene of an emergency from civil liability resulting from any act or omission. However, these laws do not compel medical personnel to act in such situations, but simply provide encouragement to act.

This sad incident brings to light many ethical and legal issues. Choosing the best senior living situation can be tricky. Understanding the different types of facilities, their licensing, and the services provided is paramount to meeting the resident’s and family’s expectations. When choosing a facility it is important to understand the facility’s policies on emergency management. Also, before you decide on the best living situation for yourself or a loved one, make sure your Advance Medical Directives are complete and available when needed. This will ensure, in most cases, that your loved ones desires are communicated to physicians and loved ones, and that they take your preferred course of action regarding all forms of medical treatment.

An Advance Medical Directive (also called a Medical Power of Attorney or a Health Care Power of Attorney) authorizes another person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so. This document includes provisions that used allow you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life artificially in the event of a terminal illness or injury. You will also use this document to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements. Your Advance Medical Directive should also set forth your preferences with regard to organ donation, funeral arrangements, and disposition of remains. Our proprietary Four Needs Advance Medical Directive(TM) contains all of these elements plus our proprietary Long-Term Care Directive, which addresses a host of issues that might arise if you wind up needing Long-Term Care.

In order to be easily accessible when needed, your Advance Medical Directive should be registered with an electronic archive service that can immediately fax the document to any desired destination. This firm will provide such registration service to you at no charge unless you would prefer that the document not be registered. Don’t have a Advance Medical Directive or planning in place? Call The Fairfax Elder Law Firm of Evan H. Farr, P.C. at 703-691-1888 to make an appointment for a no-cost consultation.

Alzheimer’s Treatment: Non-Drug Therapies That Can Help

Written by Evan Farr

There are treatments available now that most families coping with Alzheimer’s or other dementia never hear about that can significantly improve their quality of life.

Called non-pharmacologic therapies (NPTs), these treatments do not come in a pill. Instead, NPTs such as personal counseling and occupational therapy-based strategies are proven to improve the quality of life for people with dementia and their families. NPTs support families and teach them the skills they need to protect their own health and cope with the intense demands of caregiving and help people with dementia stay independent and safe for as long as possible. Some of the NPTs currently used are proven programs that are actually more effective than any known drugs for Alzheimer’s disease.

One example of an NPT, developed at NYU, includes individual and family counseling to reduce conflict and improve communication among family members. Those caring for a spouse with dementia who received the NYU Caregiver Intervention were more satisfied with social support and less depressed, less bothered by difficult behaviors, had better physical health and were able to keep their ill spouses at home longer than those receiving usual care.

Another model developed at Thomas Jefferson University in Philadelphia, employs occupational therapists to assess the patient with dementia and identify preserved capabilities as well as the caregiver’s needs. Families are then provided with strategies to manage day to day care, such as communication techniques, safe-proofing the home, establishing daily routines and engaging the individual with dementia in meaningful activities. Families who participated have reported feeling more confident and less upset, and found that their ill family member functions better and exhibits fewer challenging behaviors.

Another NPT that is now being used is a stimulator device surgically implanted into the brain of a patient in the early stages of Alzheimer’s disease. The implanted device is seen as a possible means of boosting memory and reversing cognitive decline, and has already been used in thousands of people with Parkinson’s. The surgery involves drilling holes into the skull to implant wires into the fornix on either side of the brain.  The wires are attached to a pacemaker-like device, which stimulates the brain with tiny electrical impulses generated 130 times a second. The patients don’t feel the current.

Lastly, another effective non-drug Alzheimer’s treatment used to jog memory is music. In nursing homes that use music, the personalized playlists are often meaningful songs chosen by loved ones.  According to Alzheimer’s experts, music helps patients become more alert, more cooperative, more attentive, and more engaged. In many cases, even if they can’t recognize loved ones and they’ve stopped speaking, when the patients hear music, they “come alive”.

Geri Hall, a clinical nurse specialist at the Banner Alzheimer’s Institute, explains how music activates a part of the brain that stays active despite the dementia. “There is something about music that gets through to Alzheimer’s patients right up until the very end of the disease,” she said, adding that “familiar music from the past can help people with dementia feel at home. It calms them, increases socialization, and even decreases the need for mood controlling medications.” Read our blog post about Alzheimer’s and Music.

Alzheimer’s slowly robs its victims of a lifetime of memories and the ability to perform simple daily tasks.  Instead of focusing on drug treatments, many of which have failed in clinical trials, it may be a good idea to try non-drug treatment options. These programs have been proven effective in randomized controlled trials. And, unlike drug therapy, there are no adverse side effects. There is also an economic argument to be made for better caregiver support. Nearly 11 million family and other unpaid caregivers provided an estimated 12.5 billion hours of care to people with dementia. This care is valued at nearly $144 billion. The country can’t afford the consequences of these caregivers becoming too burned out or sick to carry on. See our recent blog post about the rising cost of dementia.

Moving a person with dementia to a nursing home, while sometimes unavoidable, is expensive. The NPTs described have helped to delay nursing home placement for more than a year. Unfortunately, you cannot delay the inevitable forever, but what you can do is plan ahead for you and your loved ones. Do you or a loved one need nursing home care in the near future or are you looking to plan ahead? Call 703-691-1888 to make an appointment for a no-cost consultation at The Fairfax Elder Law Firm of Evan H. Farr, P.C.  We can meet with you, access your situation and determine strategies for your long-term care plan.

Ask the Expert- Why is Autism So Common Now?

Written by Evan Farr

Q. My ten year old son, Cole, was diagnosed with an Autism Spectrum Disorder (ASD) when he was six. He is in a class of 20 children and there are two other boys and a girl who also have an ASD, all ranging in severity. These children spend half the time in the typical class and half the time in special education. When I was growing up, the only person I knew with autism was my friend’s brother, who didn’t talk and was very anxious about being around others. Why is ASD so common now, as opposed to 30 years ago, and what can I and other parents do to plan for our special needs children?

A. Autism spectrum disorder, or ASD, is a group of developmental disabilities that can cause significant social, communication and behavioral challenges. ASD affects each person in different ways, thus their impairment can range from mild to severe, but all those afflicted with autism share problems with social interaction.

What we know now is that there is no one cause of autism just as there is no one type. Different genes increase the probability of a child developing autism. We know that children who have a sibling or parent with autism are at a much higher risk of also having the condition or another developmental disorder. Genes may be affected by advanced parental age at time of conception.

But why is autism’s prevalence increasing? Thirty years ago, the rate of autism was typically quoted as 4 in 10,000. The most recent rate reported is 1 in 50. This is an alarming increase from one in every 88 children reported by the Centers for Disease Control and Prevention just four years ago.  Factors that have brought the startling levels of autism to our attention include:

  • Better Understanding: Thirty years ago, autism was first introduced as a separate diagnostic category in the Diagnostic and Statistical Manual of Mental Disorders III (DSM-3). Prior to that time, clinicians using the DSM applied other categories such as childhood schizophrenia.
  • More Awareness: Since the early ‘80’s, there has been extraordinary growth in awareness – both for professionals and parents. Pediatricians now screen for early warning signs, as do parents. These actions have all led to a much greater awareness of the symptoms of autism which has translated to more diagnoses being made. In addition, the increased awareness has permitted older kids to be diagnosed when the signs earlier in life were not recognized as autism.
  • Expansion of the Symptoms: Diagnostic changes that recognized autism as a spectrum, now referred to as Autism Spectrum Disorder (ASD), have helped capture the wide range of symptoms that go beyond “classic” autism. These symptoms can include social, communicative, and repetitive/stereotyped behaviors. Since autism became a spectrum disorder, many youth were diagnosed who would not have been in past years.
  • Changes in Etiological Factors: Less understood is the role of new causative factors that increase the risk for ASD. Much attention is being given to environmental factors and there is the suggestion that specific genetic mutations may be linked to autism.

Autism has come a long way in the past 30 years. We know now that autism is very common and that it may be influenced by genetic and environmental risk factors that are not well understood at this time. For these reasons, it is important for doctors, scientists, and awareness groups to keep researching the causes of autism, and to continue to promote awareness of the early signs and symptoms in order to support early diagnosis and intervention.

How can you plan for your son? More than $13 billion a year is spent to care for individuals with autism.  For the average affected family, this translates to $30K per year.  Many parents believe that needs-based programs such as Supplemental Security Income (SSI) and Medicaid will be enough to take care of their family members with special needs when they are gone.  This is a common misconception.

SSI is the federal needs based program that many special needs children and adults may be eligible for if they meet certain income limits. Many special needs children and adults may also get Medicaid to pay for hospital stays, doctor bills, prescription drugs, and other health costs.  However, once a person with special needs exceeds the $2,000 a year resource limit, he or she is no longer eligible for SSI or Medicaid.

Twenty million American families have at least one member with special needs, such as ASD, cerebral palsy, mental illness, blindness, and others.  Parents of those with special needs are tasked with planning for their children throughout their lifetime, as many of them will outlive their parents but might not be able to support themselves and live independently.

We here at The Fairfax Elder Law Firm of Evan H. Farr, P.C., know that the majority of American families who have a loved one with special needs require a Special Needs Trust.  These families typically have very little in tangible assets, second mortgages on their homes, and little to no savings (likely due to paying for the costly therapies). As a parent or guardian, you want to ensure that your child with special needs will remain financially secure even when you are no longer there to provide support.  A Special Needs Trust is a vehicle that provides assets from which a disabled person can maintain his or her quality of life, while still remaining eligible for needs-based programs that will cover basic health and living expenses.

In your situation, you can create a Special Needs Trust to benefit Cole that provides instructions as to the level of care you want for him. After you are gone, the people you have chosen to manage the trust (trustees) can spend money on certain defined expenses for Cole’s benefit without compromising his eligibility for needs based programs.

We invite you to call 703-691-1888 to make an appointment for a no-cost consultation with The Fairfax Elder Law Firm of Evan H. Farr P.C. to learn more about special needs planning.

Choosing a Guardian for Your Children: Things to Consider

Written by Evan Farr

Nancy and Nick have three children — Emmitt, Nicole, and Alexa. Very warm and loving parents, Nancy and Nick make education a top priority, and hope to instill their deep-rooted culture and values in their children. Neither Nancy nor Nick want to think about not being there to raise their children. If Nancy and Nick choose not to make a decision and take no action, who will care for their children should the unthinkable happen to them?

Various scenarios, none of them ideal, could happen should Nancy and Nick not choose a guardian for their children. Their relatives could end up arguing in court over who gets the children — or their relatives could agree but not on the people that Nancy and Nick would have chosen. Even worse, a court could end up choosing their guardian for them. That’s why it’s important for Nancy and Nick and for your family to nominate a guardian while it’s still up to you. Here are some actions to take to help you make your best choice:

  • Make a list of all the people you know who you would trust to take care of your children, including family members, extended family, close friends, people you know from your place of worship, or even child care providers with whom you and your children have a special relationship.
  • Consider values and philosophies. Ask yourself which people on your list most closely share your values and philosophies with respect to your religious/spiritual beliefs, moral values, child-rearing philosophy, educational values, and social values.
  • Consider whether each couple or person on your list is a good fit. Would they truly love your children, be good role models, have patience parenting your children, show affection, and are they mature enough to take on the guardian role?
  • Think about how raising your children would fit into their lifestyle.
    • If they’re older, do they have the necessary health and stamina? Would they really want to be parents of a young child at their stage in life?
    • Do they have other children? How would your children get along with theirs?
    • How close do they live to other important people in your children’s lives?
    • If a married couple divorced or one spouse died, would you be comfortable with either of them acting as the sole guardian, or would want an alternate married couple to become guardian instead.
    • Trust your instincts. If one couple or person meets all of your criteria, but doesn’t feel right, don’t choose them. By the same token, if someone feels much more right than any of the others on your list, there’s probably a good reason for it and you probably want to trust your gut instinct. Make your primary choice, then some backup choices. Ideally, both you and your spouse agree on your choices.
    • Use a Child Protection Plan to select a temporary custodian as well as your Last Will and Testament to nominate your permanent Guardian. Temporary custodians may be appointed if both parents become temporarily unable to care for their children – for example, as the result of a car accident. Depending on your choice for permanent guardians (for example, if your permanent guardians work and live in another state or another country and will have to take leave and make travel arrangements to come and care for your children), you may want to designate different people to act as temporary custodians. Temporary custodians are designated via a Child Protection Plan rather than via your Last Will and Testament.
    • Consider a guardianship panel. Because it’s difficult to predict what your children’s needs will be as they grow older, consider appointing a “guardianship panel” to decide who would be the best guardian when and if it becomes necessary. Choose trusted relatives and friends to make up the panel. The panel can consult with your children and assess their needs and desires to make the most appropriate choice based on the current situation.

 

Once you’ve narrowed down your choices, talk to everyone involved. Be sure to confer with the people you’d like to choose to ensure they’re willing to be chosen and would feel comfortable acting as guardians. If your children are old enough, you may even want to talk with them to get their input.  Create a Letter of Intent to convey information about your children, your parenting values and your hopes and dreams for your children. Set up an appointment with a Certified Elder Law Attorney, such as Evan H. Farr, to prepare the legal documents that are required to put your wishes into action.

If you’ve chosen friends over relatives or a more distant relative over a closer one, be sure to explain your decision in writing. That way – in the unlikely event your choice is challenged by people who feel they should have been chosen – a court should readily uphold your decision, knowing you’ve made your choice for good, solid reasons.

Set up a trust that will hold the assets you pass to your children, and instruct the trustee to provide necessary financial assistance to the guardians. Create specific instructions about special things you’d like the trust funds used for (for example, a particular summer camp, piano lessons etc.).

Having children means always planning ahead and thinking about the future, even as you try to enjoy the present and watch your children grow and thrive. Nominating a guardian (and, if necessary, a temporary custodian) for your children gives you the peace of mind that your children will be protected if something happens to you. Call 703-691-1888 and make an appointment for a no-cost consultation at The Fairfax Elder Law Firm of Evan H. Farr, P.C.

Planning for Long-Term Care (Part 5)

Written by Evan Farr

The Veteran’s Aid and Attendance Pension Benefit

The best advice that I can give you when planning for long-term care is not to delay. We never know what the future holds. While we are able, we must prepare for a variety of situations, and so it is imperative not just to plan for long-term care, but to plan properly.

Part 1 of this five part series began showing why establishing a good Long-Term Care Plan is a necessary and urgent matter. Part 2 outlined the three most essential documents found in a good Long-Term Care Plan and Part 3 explained how long-term care insurance might enhance that plan. The last installment, Part 4, discussed how a trust that is unique to our firm, the Living Trust PlusTM Asset Protection Trust, can protect your assets from the hassles and expenses of probate PLUS the expenses of long-term care. The Living Trust PlusTM is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted according to state Medicaid laws. What I have just described is the single most prominent feature of the Living Trust PlusTM and it is also what makes this type of trust be the preferred form of asset protection for most people.

The final installment of this series will now discuss an under-utilized, special monthly pension benefit available to wartime veterans and surviving spouses of deceased wartime veterans who are incapable of self-support and in need of regular personal assistance.

Who Is Eligible for the Veteran’s Aid and Attendance Pension Benefit?

To receive the Veteran’s Special Pension Benefit for Aid & Attendance, a veteran must have served on active duty, at least 90 days, at least one day of which occurred during a period designated as wartime.

 Periods Designated As Wartime:

  • World War II — December 7, 1941 through December 31, 1946
  • Korean Conflict — June 27, 1950 through January 31, 1955
  • Vietnam Era — August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975
  • Gulf War — August 2, 1990 through a date to be set by law or Presidential Proclamation

There must have been a not dishonorable discharge. If younger than 65, the veteran must be totally disabled. If age 65 and older, there is no requirement to prove disability. However, the veteran or spouse must be in need of regular aid and attendance due to: inability of claimant to dress or undress, or to keep clean and presentable; frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to eat due to loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.

Not all of the disabling conditions in the list above are required to exist. It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else, not that there be a 24-hour need.

Determinations of a need for the aid and attendance is based on medical reports and findings by private physicians or from hospital facilities.

What Is the Amount of the Aid and Attendance Benefit?

Effective December 1, 2011, the Veterans A&A Pension can provide:

  • $20,447 per year (~$1,704 per month) for a qualified veteran;
  • $24,239 per year (~$2,020 per month ) if the veteran is married;
  • $13,138 per year (~$1,095 per month ) for a surviving spouse of a qualified veteran;
  • $31,578 per year (~$2,631 per month ) if both spouses are qualified veterans.

Is Aid and Attendance Only For Low Income Veterans?

No, and this is the primary reason that this benefit is so widely misunderstood. If you speak to a Veterans Service Representative in a regional VA office and ask them about the Veterans Aid and Attendance benefit, they will typically ask for your household income. When you tell them your household income, they will compare it to a chart and most often tell you that you earn too much income to receive the benefit. While the information they provide may be technically accurate, what they typically don’t explain is the “income” for Veterans Administration purposes (sometimes called IVAP or “adjusted income”) is actually your household income minus your recurring, unreimbursed medical and long-term care expenses. These allowable, annualized medical expenses are such things as health insurance premiums, home care expenses, the cost of paying a family member or other person to provide care, the cost of adult day care, the cost of an assisted living facility, or the cost of a nursing home.

To be able to receive the Veterans Pension with Aid and Attendance benefit, the veteran household cannot have adjusted income (i.e., household income minus unreimbursed medical expenses) exceeding the Maximum Allowable Pension Rate — MAPR — for that veteran’s Pension income category. If the adjusted income exceeds MAPR, there is no benefit. If adjusted income is less than the MAPR, the veteran receives a Pension income that is equal to the difference between MAPR and the household income adjusted for unreimbursed medical expenses. The Pension income is calculated based on 12 months of future household income, but paid monthly.

How is the Aid and Attendance Benefit Calculated?

The monthly award is based on VA totaling 12 months of estimated future income and subtracting from that 12 months of estimated future recurring, unreimbursed medical expenses. Allowable medical expenses are reduced by a deductible to produce an adjusted medical expense which in turn is subtracted from the estimated 12 months of future income.

The new income derived from subtracting adjusted medical expenses from income is called “countable” income or IVAP (Income for Veterans Affairs Purposes). This countable income is then subtracted from the Maximum Allowable Pension Rate — MAPR — and that result is divided by 12 to determine the monthly income Pension award. This cash benefit is paid in addition to the family income that already exists.

Filing a Claim

Filing a claim for the Veterans Aid and Attendance Pension Benefit is complex and time-consuming. If you want to do it correctly, it’s important to get qualified assistance. Just knowing which form to fill out and how to complete it is a complex endeavor in itself. Even if the proper form is completed, failure to check a single box may result in a complete denial of your claim.

The application process involves: obtaining evidence of prospective, recurring medical expenses; appointments for VA powers of attorney and fiduciaries; and a thorough understanding of the application process. Often, qualification for this benefit involves reallocation of assets and shifting of income in order to qualify, and these re-allocations may have significant impact on Medicaid eligibility.

Given that many veterans who need the Aid and Attendance Benefit will eventually wind up also needing Medicaid, this process should not be attempted without the help of a qualified elder law attorney who thoroughly understands both the Veterans Aid and Attendance Benefit and the Medicaid program, as well as the interaction between these two benefit programs.

We assist Level 4 clients of our firm, at no charge, in completing the required paperwork.

Conclusion

Evan H. Farr is an Accredited Attorney with the U.S. Dept. of Veterans Affairs, and the Farr Law Firm is an Elder Law and Estate Planning Firm that helps Veterans and their spouses obtain the financial assistance to which they are entitled. If you are a Veteran or spouse of a Veteran and you need assistance in your home, or are living in or considering moving into an Assisted Living Facility or Continuing Care Retirement Community, please contact us to see if you might qualify for the Veterans Aid and Attendance Special Pension Benefit. Call us today and take the first step towards gaining the peace of mind that comes with a good Long-Term Care Plan. 

If You’d Like More Information About Veterans Aid & Attendance,
Please Fill Out the Form Below to Receive our Veterans Aid & Attendance Special Report!

Planning for Long-Term Care (Part 4)

Written by Evan Farr

The most important thing that you can do in planning for future contingencies is to act now. The future may hold limited resources or health problems for you and either one of these may prevent you from taking care of the things that you can easily achieve today.

In Part 1 of this series, I showed how making a good Long-Term Care Plan is an urgent and necessary step in preparing for the future. In Part 2, I outlined the three most essential documents found in that plan, namely, a General Power of Attorney, Advance Medical Directive with a Long-Term Care Directive and a Lifestyle Care Plan. In the last installment, Part 3, I discussed using long-term care insurance as part of a Long-Term Care Plan.  As we saw in Part 3, Virginia’s Long-Term Care Insurance Partnership Program offers government-endorsed “Medicaid Asset Protection” to consumers who buy long-term care insurance.
Part 4 will now discuss how our Living Trust PlusTM Asset Protection Trust can protect you from probate (as does a Revocable Living Trust) PLUS protect you from the expenses of long-term care.

You Can’t Afford to Ignore Long-Term Care Expenses

Whether you’re rich, poor, or somewhere in between, you cannot afford to ignore the potentially devastating costs of nursing home care and other types of long-term care. Nursing homes are the most likely and one of the most expensive creditors that most Americans are likely to face in their lifetimes. Remember the following statistics that I cited in Part 1 of this series:

  • About 70% of Americans who live to age 65 will need long-term care at some time in their lives, over 40 percent in a nursing home.
  • As of 2008, the national average cost of a private room in a nursing home was $212 per day or $77,380 per year.
  • The average person age 65 today will need some long-term care services for three years. Women need care for longer (on average 3.7 years) than do men (on average 2.2 years). Twenty percent of them will need care for more than five years.
  • Long-term care is not just needed by the elderly. A recent study found that 46 percent of group long-term care claimants were under the age of 65 at the time of disability.

Contrast the above long-term care statistics with statistics for automobile accident claims and homeowner’s insurance claims:

  • Between 2005 and 2007, an average of only 7.2% of people per year filed an automobile insurance claim.
  • Between 2002 and 2006, an average of only 6.15% of people per year filed a claim on their homeowner’s insurance.

Revocable Living Trusts Don’t Help

A revocable living trust is a wonderful tool to protect your assets from the expenses of probate, but it does not protect your assets from the expenses of long-term care while you’re alive. Because you have 100% unlimited access to the funds in a revocable living trust, so do your creditors, including nursing homes and State Medicaid programs.

Living Trust PlusTMProtect Assets from Probate PLUS Lawsuits PLUS The Expenses of Long-Term Care

In response to this limitation of revocable living trusts, I have developed a unique solution – a special type of irrevocable trust called the Living Trust PlusTM that functions very similarly to a revocable living trust but protects your assets from the expenses and difficulties of probate PLUS lawsuits PLUS the expenses of long-term care while you’re alive, in addition to a multitude of other financial risks during your lifetime. The Living Trust PlusTM protects your assets from lawsuits, auto accidents, creditor attacks, medical expenses, and — most importantly for the 99% of Americans who are not among the ultra-wealthy — from the catastrophic expenses often incurred in connection with nursing home care. For most Americans, the Living Trust PlusTM is the preferable form of asset protection trust because, for purposes of Medicaid eligibility, this type of trust is the only type of self-settled asset protection trust that allows a settlor to retain an interest in the trust while also protecting the assets from being counted by state Medicaid agencies.
Even though the Living Trust PlusTM is “irrevocable,” it can still be terminated so long as all interested parties (typically you and all of your beneficiaries) agree to terminate it. Additionally, you remain in control of your assets because:

  • you can be the trustee if desired;
  • you retain the right to receive all of the trust income;
  • you retain the right to live in and use your real estate;
  • you retain the right to change trustees; and
  • you retain the right to change beneficiaries.

The Living Trust PlusTM has no effect on your income or your income taxes.
If you’re a client or potential client who would like more information about the Living Trust PlusTM, please call us at 703-691-1888 to contact us for an appointment, visit the Living Trust PlusTM web site at http://www.livingtrustplus.com or click here to register for one of our upcoming Living Trust PlusTM informational seminars.
If you’re an attorney interested in more information about the Living Trust PlusTM or interested in the possibility of licensing the Living Trust PlusTM Asset Protection System, visit the Living Trust PlusTM web site at http://www.livingtrustplus.com and click on the link labeled “For Attorneys.”


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Planning for Long-Term Care (Part 2)

Written by Evan Farr

“Long-Term Care” refers to the broad spectrum of medical and support services provided to persons who have lost some or all capacity to function on their own due to a chronic illness or disabling condition, and who are expected to need such services over a prolonged period of time. Long-term care can consist of care in the home by family members (assisted by voluntary or employed help), adult day health care, or care in assisted living facilities or nursing homes.

In Part 1 of this series I mentioned that 60% of us will need long-term care at some point in our lives. When this statistic is put in perspective with the relatively low likelihood of making an automobile or homeowner’s insurance claim, the risk that you or I will need long-term care at some point in the future is shocking. Unfortunately, the majority of Americans are either unaware of these statistics or refuse to plan for the often catastrophic costs of long-term care. Part 1 of this series outlined the necessity to create a good Long-Term Care Plan in addition to, or as part of, your Estate Plan; Part 2 will now discuss the three most essential documents found in a good Long-Term Care Plan, as well as two additional documents that are often also part of a Long-Term Care Plan.

General Power of Attorney

A General Durable Power of Attorney (POA) containing Asset Protection Powers is the first essential document. Not all POA’s are created equal; it is crucial that this document be prepared by a knowledgeable and experienced Elder Law Attorney. One way to ensure the qualifications of your attorney is to look for one who is Certified as an Elder Law Attorney by the National Elder Law Foundation, the only organization accredited by the American Bar Association to certify lawyers in the specialty area of Elder Law. For a list of Certified Elder Law Attorneys, please visit http://www.nelf.org/findcela.asp.

A POA (always “durable” when used in connection with estate planning and long-term care planning) authorizes your “Agent,” sometimes called an “Attorney in Fact,” to act on your behalf and sign your name to legal and financial documents. It is an essential tool in the event that, due to age, illness, or injury, you are unable to carry on your legal and financial affairs. Asset Protection Powers written into the POA are essential in order for your Agent to protect your assets from the often-catastrophic expenses of long-term care. Attorneys who are not experienced Elder Law Attorneys often fail to put these essential Asset Protection Powers into the POA.

A properly-drafted POA is designed to avoid the need to go through a court-supervised conservatorship proceeding, which is a time consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Conservator. The Conservatorship process is often referred to as a type of “living probate” because the Conservator is subject to all the rules of the probate court, including the onerous requirement of filing annual accountings with the Court. State laws vary regarding the use and acceptance of a power of attorney.

Advance Medical Directive

The second essential document in a good Long-Term Care Plan is an Advance Medical Directive (AMD) containing a Long-Term Care Directive. As with General Powers of Attorney, every lawyer drafts AMDs differently, and most attorneys do not include a Long-Term Care Directive within the AMD. Therefore, it is again in your best interest to have your AMD written by an attorney who specializes in long-term care planning, such as a Certified Elder Law Attorney.

An AMD (also called a Medical Power of Attorney or a Health Care Power of Attorney) authorizes another person (called your “Medical Agent”), to make decisions with respect to your medical care in the event that you are physically or mentally unable to do so. This document includes the type of provisions that used to be in what was commonly called a “Living Will,” allowing you to indicate your wishes concerning the use of artificial or extraordinary measures to prolong your life in the event of a terminal illness or injury. In the AMD you will also appoint a “Medical Agent” and give that person the power to consent to medical and health care decisions on your behalf with regard to providing, withholding, or withdrawing a specific medical treatment or course of treatment when you are incapable of making or communicating an informed decision on your own behalf. A comprehensive AMD will also allow you to indicate your wishes with regard to organ donation, disposition of bodily remains, and funeral arrangements.

A properly-drafted AMD is designed to avoid the need to go through a court-supervised guardianship proceeding, which is a time consuming, expensive, and publicly embarrassing process whereby someone goes to court to have you declared incompetent and to be appointed as your Guardian, typically at the same time they are requesting appointment as your Conservator.

Long-Term Care Directive

Most importantly for your Long-Term Care Plan, your AMD should include a Long-Term Care Directive (or this could be drafted as a separate document), which will allow you to make your desires known in the event you need long-term care in the future. For instance, do you want to remain at home and receive home-based care as long as possible, regardless of cost, even if it drastically reduces or entirely depletes your estate? Or would you prefer to remain at home and receive home-based care only if it doesn’t drastically reduce or entirely deplete your estate? If nursing home care is absolutely required, would you like to protect as much of your assets as can be legally protected so that you can qualify earlier for publicly-funded Medicaid benefits? If so, do you prefer that the protected assets be used to enhance your quality of care, or to provide an inheritance for the beneficiaries of your estate?

In order to be easily accessible when needed, your AMD should be registered with an electronic archive service that can immediately fax the document to any desired destination. Some Elder Law Attorneys, including our firm, provide such registrations to clients at no charge.

Lifestyle Care Plan

The third essential document that is found in a good Long-Term Care Plan is a document called a Lifestyle Care Plan, also known as an Advance Care Plan.  The Lifestyle Care Plan is a document that is created by special software that gathers, organizes, stores and disseminates information provided by you in an interview, in order to guide those who you will depend or for future care. The Lifestyle Care Plan identifies your specific needs, desires, habits and preferences and incorporates all of this information into a document that your future caregiver can use to provide you with the best possible long-term care.

As an example, Alice wrote in her Lifestyle Care Plan that if Alzheimer’s disease or some other type of dementia inhibited her mental abilities to communicate or recognize her surroundings, she wished to be in a respectable facility and only asked that she be visited and brought chocolates. To her children this request seemed silly at the time, but when her mental capacities did diminish, the instructions were there. No one had to wonder if they should try to take care of Alice at home and how they would do it. Without guilt or question they placed her in a respectable facility that took care of her needs. All they had to do was make loving visits, and of course they brought chocolates.

Because of the importance of the Lifestyle Care Plan, the Farr Law Firm provides one to all of our clients as part our comprehensive Long-Term Care Planning services. To learn more about the benefits of having an Advance Care Plan, please click here or visit our Web site at:  www.farrlawfirm.com/advance-care-plan.htm

Living Trusts

A good Long-Term Care Plan will always include the three documents mentioned above, and will typically also include a Living Trust — either a Revocable Living Trust (RLT) or the  Living Trust Plus™ (LTP).

An RLT generally provides for the creator of the trust to have full use of the trust income and principal for life. On the death of the creator, the assets may continue to be held in trust (or may be distributed) for the benefit of the named beneficiaries, such as the grantor’s children. Although the most important benefit of the RLT is to avoid probate, a well-drafted RLT also can help protect from incapacity and can therefore be an important part of a Long-Term Care Plan. Similar to a General Power of Attorney, an RLT can provide uninterrupted management of your assets by your trustee if you become incapacitated, sparing you and your family from having to go through the expense and complexities of a court-appointed conservatorship. It is important to note that an RLT does not protect your assets from the expenses of long-term care. On the contrary, the assets in an RLT must be spent, if necessary, in providing long-term care, even if that means spending down all of the assets in the RLT to provide such care. For more information on RLTs, please click here or visit our Web site at: www.farrlawfirm.com/revocable.html

The Living Trust Plus™ is a living trust that is designed to protect your assets from probate PLUS lawsuits, PLUS nursing home expenses.  In other words, the LTP protects your assets from the complications and hassles of probate and from other financial risks, including the threat of lawsuits, auto accidents, creditor attacks, extended hospitalization, and — most importantly – the catastrophic expenses associated with nursing home care. Part 4 of this series will explore the LTP in detail.

Conclusion

A good Long-Term Care Plan will always include a General Power of Attorney, Advance Medical Directive, and Advance Care Plan, and will typically also include a Living Trust — either a Revocable Living Trust or the Living Trust Plus™.   However, as mentioned in Part 1, these essential legal documents are only part of the requirements for a good Long-Term Care Plan. The other important component is a plan for how to pay for long-term care. The next installment in this series will discuss protecting your assets by purchasing long-term care insurance.

The Farr Law Firm specializes in long-term care planning and we would be happy to assist you in your preparations. Please visit us at www.VirginiaElderLaw.com or call us at 703-691-1888.

Planning for Long-Term Care (Part 1)

Written by Evan Farr

Are you one of the millions of Americans over age 50 who has not yet started planning for long-term care?

As financially responsible adults, most of us are prepared for some unexpected disasters – we pay for health and property damage insurance, and many of us have taken some steps toward funding for our retirement. But very few of us have prepared for one of the most devastating of unexpected events – the need for long-term care. According to most estimates, more than 60% of us will need long-term care at some point in our lives. If you are a member of the “sandwich generation” – responsible for an older parent – the odds that either you or your aging parent will need such care are even higher, and the costs to your lifestyle, finances, and security can be catastrophic. Consider the following long-term care statistics:

• About 70% of Americans who live to age 65 will need long-term care at some time in their lives, over 40 percent in a nursing home.
• As of 2011, the average cost of a nursing home in Northern Virginia was over $100,000 per year.
• A recent insurance company study found that 46 percent of its group long-term care claimants were under the age of 65 at the time of disability.

Contrast the above long-term care statistics with statistics for automobile accident claims and homeowner’s insurance claims:

• An average of only 7.2% of people per year file an automobile insurance claim.
• An average of only 6.15% of people per year file a claim on their homeowner’s insurance.

The need for long-term care drastically alters or completely eliminates the four principal retirement dreams of elderly Americans:

1. Remaining independent in the home without intervention from others
2. Maintaining good health and receiving adequate health care
3. Having enough money for everyday needs
4. Not outliving assets and income

Unfortunately, the reality is that the majority of Americans make no plans for long-term care. Not only does this lack of planning affect older Americans, but it also often has an adverse effect on the older person’s family, with sacrifices made in time, money, and family lifestyles. The stresses of being a caregiver for an older parent often result in a deterioration of the caregiver’s own physical and emotional health. Because of changing demographics and improved health care, the current generation — more than ever — needs to actively plan for long-term care.

So what are basics of a good Long-Term Care Plan? First and foremost are two critical documents that need to be prepared by an experienced and knowledgeable Elder Law Attorney. These two essential documents are:

• A Financial Durable Power of Attorney containing Asset Protection Powers; and
• An Advance Medical Directive containing a Long-Term Care Directive.

The third essential document, which you can prepare on your own, is a Lifestyle Care Plan.

Part 2 of this article will explain and explore these three critical documents to give you a greater understanding of the need for and importance of these vital long-term care planning instruments.

These essential legal documents, however, are only part of the requirements for a good Long-Term Care Plan. The other important component is a sound financial plan for how to pay for good long-term care. There are three primary ways to plan in advance for how to pay for long-term care: (1) build up your income and life savings in order to be able to self-fund your future care needs; (2) protect your assets by purchasing long-term care insurance; or (3) protect your assets by using an asset protection trust designed to legally protect your assets and allow you to qualify for Medicaid, the governmental program that pays for about 70% of people living in nursing homes. For some families, a fourth way to pay for long-term care is a type of Veteran’s pension benefit called “Aid & Attendance.”

Unfortunately, option 1 (building up your income and life savings to self-fund future care) is not feasible for most Americans, especially in these troubled economic times. Accordingly, Parts 3 through 5 of this series will explain and explore these three methods of paying for long-term care. Part 3 will focus primarily on using long-term care insurance to protect your assets; Part 4 will explore the use of a special type of asset protection trust to protect assets and gain early access to Medicaid; and Part 5 will explain the Veteran’s Aid & Attendance benefit.

There are many things that you can do now to begin to put together a good Long-Term Care Plan. The most important thing you can do is to act now! You may have limited resources in the future or health problems that will prevent you from taking care of the things you can easily take care of today. The Farr Law Firm specializes in long-term care planning and we would be happy to assist you in your preparations. Please visit us at www.virginiaelderlaw.com or call 703-691-1888.

The “Power” of Peace of Mind

Written by Evan Farr
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Incapacity Planning is perhaps the most fundamental type of estate planning and yet it is also the most important.  Life is unpredictable; even someone in perfect health can become incapacitated from an accident or unforeseen medical condition.  If the unthinkable should happen, who would be in charge of making the most important decisions related to you or a loved one’s health and/or financial matters?  The answer to this question is determined by your power of attorney planning documents.

Since power of attorney documents are so important, it is critical that they are not outdated.  If your documents were not prepared by a licensed attorney, you should give us a call to schedule a free initial consultation.  You should also give us a call if it has been several years since they were created, or if you have gone through significant life changes.  Send us a message to get the process started here.

You can learn the answers to the most frequently asked questions at our website, here.  If you are not a member of our newsletter, subscribe by clicking here.

Click the slideshow below and a short video will pop up.  Click a second time once it has popped up, and it will play.  Enjoy!

 

 

 

The Reverse Mortgage Saga Part 5: “How the Farr Law Firm is Helping Clients Stay at Home”

Written by Evan Farr
Reverse Mortgages rules change frequently

Credit: (Deirdre O'Neill) / CC BY-SA 2.0

“Presume not that I am the thing I was,” wrote William Shakespeare in the play, 2 Henry IV, reminding us that nothing stays the same.

On the personal side, we all change over time; our families and our other assets grow and shrink.

On the business side, entities both small and large come and go; Internet and technology companies appear out of nowhere and just as often disappear into cyber-obscurity; and the economy has a mind of its’ own.  In the wake of the global financial crisis that began in 2007 and the collapse of so many financial giants, it is no surprise that the reverse mortgage industry has recently undergone a major shakedown.

For the past five years, I have chronicled the reverse mortgage industry – starting when its popularity was peaking back in 2007.  I exposed two major problems in 2010, leading me to conclude that I could no longer, in good-faith, remain a supporter of the reverse mortgage.   Those two problems I shall refer to as the “competency problem” and the “expense problem.”

This week and next week I will add two more articles to my continuing series on reverse mortgages.  This week I will explain how the Farr Law Firm has taken steps to help clients get around the “competency problem,” and next week I will provide an update that may signal an end to the “expense problem.”

Here’s a summary of, and links to, my previous articles in this series:

  1. I praised reverse mortgages in 2007 as a viable way for seniors to remain at home as long as possible in my article, Reverse Mortgage Home Equity Loans.
  2. I viewed reverse mortgages as an excellent choice for various reasons, explained in detail in my early-2010 article, Using a Reverse Mortgage to Pay for Home Care.
  3. By mid-2010, I wrote about what I perceived to be discrimination in the lending industry I completely explain why that was such a nefarious issue to my clients and the elderly at-large in the article, Huge Problems with Reverse Mortgage Industry.
  4. Merely a few months later I found myself writing about the “expense problem” in, Reverse Mortgage Rules Changing Again , noting Congress’ plan to increase HUD’s Mortgage Insurance Premium.
  5. In February, 2011, I reported on the fact that one of the reverse mortgage industry’s largest lenders, Bank of America, had dropped out of the reverse mortgage business in No More Reverse Mortgages, Announces Bank of America.

The “Competency Problem” Persists: How The Farr Law Firm is “Combating” This Issue

"Combating" the "Competency Problem"

After interviewing dozens of reverse mortgage lenders, it became readily apparent that it is practically an industry guideline to refuse to honor the Power of Attorney (POA) presented for use in connection with obtaining a reverse mortgage: it is systemic.  I first discovered this travesty when two of my own clients were sent on scavenger hunts for documents certifying the applicant’s competency when the POA was signed, and a second document certifying the applicant is now not competent, both to be completed by the applicant’s doctor.

I described why these steps were creating an “insurmountable roadblock” for some clients in detail in my May 5th, 2010 article, Huge Problem with Reverse Mortgage Industry, because I believed then – and still do today – that these practices are not only unfair, but illegal and discriminatory.  However, because of this unfair practice, the Farr Law Firm has made adjustments to its’ Incapacity Planning services in order to help our clients navigate these obstacles.

How is the Farr Law Firm Helping?

When our clients come in to sign their Incapacity Planning documents (including their POA), we provide them with an Affidavit of Competency to give to their doctor to certify competency as soon as possible after the document signing, thus satisfying the first major “competency” hurdle.  Of course, it is the responsibility of the client to actually go to the doctor and get the affidavit signed, but having the affidavit ready to hand to the doctor to sign helps the client get it done.

For clients with borderline competency who might wind up needing to use a reverse mortgage, we provide them with an Affidavit of Competency for their doctor to complete prior to the document signing.

Why Reform is Still Needed

Most people want to remain at home, as long as possible, before entering a nursing home for long-term care.  A reverse mortgage is a great tool to accomplish this desire, because in most cases significant in-home health care will become necessary at some point.  In-home caregiving is not cheap, and thus adequate funds are needed to ensure one can be hired.  Although our firm has taken steps to get around the “competency” hurdle, most attorneys have not, and even though our current efforts will be helpful for clients signing our documents today, they are no help for clients who come to us or other attorneys with an old POA and no Competency Affidavit.  So once again, I implore you to visit HUD’s Housing Discrimination Complaint Website and file a “lending discrimination complaint” if you believe you have experienced discrimination.  If enough people cry foul, perhaps HUD will outlaw arbitrary, harmful “scavenger hunts.”

Stay Tuned for Next Week

Next week I will provide an update that may signal an end to the “expense problem.”

Image Credits:

Portrait of Shakespeare (Deirdre O’Neill) / CC BY-SA 2.0

“Combating” the “Competency Problem” – Free images from FreeDigitalPhotos.net