Reverse Mortgages–Part 2

How much can I borrow?

What can be borrowed is not a set amount, it is a formula that takes the following into consideration.

1. The age of the borrower.

The older the borrower, the more that can be borrowed.

2. Current Interest Rates

The lower the interest rate, the more that can be borrowed.

3. The equity in the home.

The greater the value of the home, the more that can be borrowed.

4. The location (county) of the home

AARP has a very effective calculator that can help you determine how much money you might be able to take out of your home.

http://rmc.ibisreverse.com/rmc_pages/rmc_aarp/aarp_index.aspx

How is the Reverse Mortgage paid off?

Typically, the reverse mortgage is paid off by the borrower's estate.

The reverse mortgage can also be paid off from the proceeds of the sale of the house if the house is sold before the borrower is deceased.

What if I owe money on my home?

If you do not own your home outright (if there is an existing mortgage) you must pay off that mortgage, however, it can be paid off with the proceeds of the Reverse Mortgage.

 

to be continued…

Reverse Mortgages–Part 1

Introduction to Reverse Mortgages from an eldercare perspective.

Elders often struggle to find the resources to stay out of nursing homes, and stay in their home, but still need in-home care. A reverse mortgage can be used to help make that happen.

Medicaid can be used to pay for nursing home care, but stay at home care can be difficult under Medicaid.

A reverse mortgage is not a panacea and should be evaluated with the help of an elder care attorney or elder care financial advisor.

What is a reverse mortgage?

A reverse mortgage is a loan designed specifically for elders (62 years of age or older) to take money out of their home either in payments, in a lump sum, as a credit line, or as any combination of the three.

Repayment of a Reverse Mortgage

A Reverse mortgage is a LOAN, and that loan has to be repaid.

The loans do not have to be repaid until any of the following 3 events occur.

1. the last surviving borrower dies.

2. the home is sold.

3. the borrower moves out permanently.

What is the purpose of the Reverse Mortgage?

One must never forget that the first purpose of any financial instrument, is to make money for the lender.

The intention or motivation for a reverse mortgage was to give seniors that were real estate rich, but cash flow disadvantaged, fast and easy access to the equity in their home for any purpose, including home based elder care.

 

to be continued….

Elder Abuse, a growing crisis without leadership–Part 3 of 3

 

So who is responsible?  The Administration on Aging & Health and Human Services are supposed to be providing the leadership services to put this problem in the spotlight where it can get the resources it needs to support our seniors.  The Elder Justice Act of 2009 makes grants available to states for Adult Protective Services Programs.  The Act also puts forward the means of creating, and implementing national priorities.  The Act, however, does not speak to national Elder Abuse Studies.

The report recommends that no less than The Secretary of Health and Human Services should determine the importance of providing Adult Protective Services with dedicated resources, and work with the Attorney General to create and deploy a national Adult Protective Services database so that the true measure of this problem is understood.

It is our firm’s hope that once properly understood, and the real depth of elder abuse comes to light, and thereby appropriate resources will be finally granted to the states to stop this horrible crime.

The report does seem to point to a need for better information, better cooperation, and better standards.  However what the elder community needs is real support.

With big government’s seeming paralysis to act on almost 50 years of “good intent” the need for legal representation, specializing in Elder Law is very obviously paramount.  While the firm of Cohen & Oalican deplores the need for protection for the elderly, the rising tide of abuse, in share numbers and sophistication makes it obvious that qualified legal counsel needs to be retained to help protect our more vulnerable population. 

Please, if you are a victim of abuse, don’t hide it, seek out help from law enforcement, and with an attorney.   If you haven’t been a victim of elder abuse, engage the services of an elder law firm to help you in decisions where you might be vulnerable.

 

Abuse and neglect should be important to all of us. Contact the elder law offices of Cohen & Oalican to talk to us. A loved one in your life may be the victim of nursing home abuse and neglect. An attorney can help you understand the law and what to do next

Elder Abuse - a growing crisis without leadership Part 1 of 3

According to the March 2011 Government Accountability Office (GAO) report “Leadership could Enhance National Response to Elder Abuse”  over 14%  (14.1%) of elders (not institutionalized) have experienced elder abuse.

Below is a link to the study.

http://www.gao.gov/products/GAO-11-208

Elder Abuse is categorized as

·         Psychological

·         Physical

·         Sexual Abuse

·         Neglect

·         Financial Exploitation.

 

The study, and three similar studies preceding it, indicates that the numbers are likely higher due to non-reporting among seniors.

The factors that leave elder adults prey to abuse include:

·         Physical and Cognitive       Impairments

·         Mental Problems

·         Low social support among victims.

 

This abuse has been associated with a negative impact on health and longevity.  In short, we have a growing problem of elder abuse, that’s literally killing our elderly population.

 

Part 2 to be posted next week…

Cohen & Oalican acts aggressively against nursing home abuse and neglect. We proudly provide legal services to the elderly and persons with disabilities and their families. If you have an elderly parent or relative in a nursing home, and you suspect they are being abused or neglected, get help right away. Our nursing home abuse lawyers will advise you on nursing home abuse laws and the rights of residents under the care of nursing home staff.  Contact one of our nursing home attorneys to schedule a consultation. A specialist in nursing home neglect will investigate the abuse or neglect and help you decide what may be your best legal options.

Top 10 Most Important Cuts to MassHealth for Seniors, the Disabled, and their Families

 

continued from March 14th….

 

 

6. Elder Home Care

Approximately 2,500 frail elders each month are able to receive community based care services allowing them to stay in their homes and out of hospitals or other care facilities. There are now more than 2,700 elderly each month on waiting lists for these services. This program has experienced a $21.7 Million cut.

7. Elder Protective Services Cut

It’s no secret that the elderly are frequently preyed upon by the unscrupulous, and often loose whatever nest eggs they have managed to save and protect. The program that focuses on protecting the elderly has experienced a $1.5 Million (or 9% when adjusted for inflation) cut. More cases of elder abuse are likely to go uninvestigated. Fewer Guardians may be granted to Massachusetts most vulnerable elders.

8. Council on the Aging

The Council on the Aging sponsors locally focused programs that provide a variety of recreational and support service to elders. Adjusted for inflation this has been cut 11% since 2009. This year, it experience an almost Million Dollar cut in funding.

9. Geriatric Mental Heal & family Caregivers programs eliminated

This is a quarter of a million dollar program that has been entirely eliminated in the 2011 budget.

10. Home Care of the multi-Disabled

28% of the budget since 2009 for this program has been cut (adjusted for inflation). This program provides funding for home care of the multi-disabled, enabling a higher quality of life for those with multiple disabilities, who would otherwise be forced into institutional care.

 

If you have any concerns about how these cuts will affect you, contact our Elderlaw Attorneys at http://www.cohenoalican.com

Alternatives to Nursing Homes as Nursing Home Populations Swell With Younger Patients - Part 2

 

One of the main reasons cited for this movement of younger people into nursing homes are the budget cuts most states face in Medicare and Medicaid.  In the long term, it is more cost efficient to care for a younger person in their home with part time caretakers.  However, in the short term, this is a more expensive way of treating patients, as the caregivers need to be hired and trained.  In the budget crunch most states are experiencing, short term funding takes priority over long term spending.   Younger people are being moved into nursing homes earlier, as in the short term, this is a more economically viable way of treating them.

According to a study by the AARP Public Policy Institute, the cost of at home care is about a third the cost of providing care in a nursing home or institution.  Many states, however, simply do not have the funding for at home care in their Medicaid programs.

One of the most telling quotes about the movement of younger people to nursing homes is:

“Over the past 20 years, federal laws and policies have established a civil right to get long-term care at home. But NPR's investigation found that is only sporadically enforced.

More than 60 percent of what states spend on long-term care for the elderly and disabled goes to pay for people — like Michelle Fridley — to live in a nursing home. The amount spent on home-based care has grown steadily, but not nearly enough to meet the need. Nationwide, there are some 400,000 people on state waiting lists for home-based care, double the number 10 years ago.”

Frequently attorney’s like our firm, that specialize in caring for the elderly, and those that have long term care needs, must be engaged to support a patient’s right to at home care.  In 1999, the right to at home care was clearly established in the Supreme Court, in the “Olmstead Case”.   In that decision, the Supreme Court stated that the unnecessary institutionalization of people with disabilities is  a form of discrimination.

 

To be continued…

Alternatives to Nursing Homes as Nursing Home Populations Swell With Younger Patients - Part 1

We heard the other day on National Public Radio, that one of the fastest growing populations in Nursing Homes is not the elderly, but rather adults   aged 31 TO 64.

These patients that are victims of disease, accident, health failure, or mental health problems.  Many of these new patients could be cared for at home, or assisted living facilities, but are instead finding themselves in the Nursing Home System.  Young people aged 31 to 64 are the single fastest growing population of nursing homes.  This population has grown roughly 40% since 2000.

This report underscores the fundamental need for legal advocacy when considering nursing home care, or alternatives to nursing home care.

You can see the full report here.

http://www.npr.org/2010/12/09/131912529/a-new-nursing-home-population-the-young

 

All too often, people think of nursing homes as a repository for the elderly, and disability attorneys like Cohen and Oalican as being entirely elder law.  There is a huge sense of accomplishment for us, however, when  we can use our skills and help young people, and their families, to live a fulfilling life, perhaps outside of institutional care, and despite their disadvantages.  We have long been involved in special needs trusts to help protect family’s finances when there is a young (or younger) family member with special needs.

 

To be continued….

Preview of the Proposed New Tax Relief Act of 2010–Conclusion

 

 

Changes to Regulated Investment company (RIC). 
Do you have investments in an offshore owed Regulated Investment company (RIC).  Here’s what changes you might be able to expect if the current bill is extended.

 

Estate tax look-through of certain Regulated Investment Company (RIC) stock held by nonresidents. Although stock issued by a domestic corporation generally is treated as property within the United States, stock of a RIC that was owned by a nonresident non-citizen is not deemed property within the United States in the proportion that, at the end of the quarter of the RIC’s taxable year immediately before a decedent’s date of death, the assets held by the RIC are debt obligations, deposits, or other property that would be treated as situated outside the United States if held directly by the estate (the “estate tax look-through rule for RIC stock”). The proposal permits the look-through rule for RIC stock to apply to estates of decedents dying before January 1, 2012.

 

By the time you read this, much may have been changed.  What we know for sure is that there will be change and it will impact our elder and special needs clients.  Please consult with us, or with an appropriate elder law attorney as you make decisions that will impact your taxable situation for the coming years.

 

Your friends at…

 

Cohen & Oalican

Boston Elder Law Attorneys
Raynham Elder Law Attorneys
Andover Elder Law Attorneys

Preview of the Proposed New Tax Relief Act of 2010 - Part 1

 

 

There’s a lot of talk about the New Tax Relief Act of 2010. 

At the time of this writing, it isn’t law, and with our current political logjam, there is likely to be a fair bit of change between now and then. 

We thought, however, that our clients would like to hear some of the elements that are of most direct interest to their welfare, and to the health of their estate.

Once again.. this is a preview of what is currently under discussion.  It is NOT law, and should not be looked at as political, legal, or financial advice.  This is only  a brief look at some of the currently debated act, as it impacts our senior clientele.

Reductions in Individual Income Tax Rates

Under contemplation is to temporarily extend the 10% bracket. The 10% individual income tax bracket expires at the end of 2010, and this impacts a great deal of our elder law clients. If nothing happens, the lowest tax rate will be 15%. This proposal extends the 10% individual income tax bracket for an additional two years, through 2012.

 

Part 2 will look at the proposed changes to Capital Gains and Dividends as well as The Dependant Care Credit.

 

Your friends at…

Cohen & Oalican, LLP

Boston ElderLaw Attorneys
Raynham ElderLaw Attorneys
Andover ElderLaw Attorneys

Scams and our elderly clients

• Unlicensed contractors offering home repairs: "Hey, we just finished a job for the smiths two streets over, and there's leftover tile, would you like a great deal on....."  If it sounds too good to be true, it probably is.  Beware of home repair scams.   Look out for transient work crews, strangers claiming to have extra material, free inspections in your home.. All of these should be red flags.  You should look to licensed bonded and insured professionals.  It may feel more expensive at the outset than these street contractors that show up.. but nothing is more expensive than a botched job, or worse, paying and never seeing your money or the work again.  Shop around for a certified contractor insist on a detailed contract on the work to be done, estimated cost and timetable.

• The state of Massachusetts Executive Office of Elder Affairs should be notified of any scam, or scam attempt by calling 1-800-243-4636.

If you have been victimized, keeping quiet will not help the next victim in line.  Just last month (October 20/2010) in Ipswitch an elderly citizen was approached by someone saying that they were the recipient of funds from the federal government, and asked to provide personal information in order to claim his windfall.  The man intelligently informed local police, and the scammer was investigated and arrested.  We applaud this anonymous individual.  Our elders cannot be a doormat waiting for the next scam artist to come knocking. 

If you are subjected to a scam, contact local authorities, and your elder law attorney.

 

At Cohen & Olican we take pride in protecting our clients.

Scams and our elderly clients–Fake Charities

Fake Charities:  

Scam artists create fake charities, often sounding like a real charity... they can spend a few dollars at a local copy store to dummy up credible looking ID, and they go on the prowl.  These ruthless con men (and women) not only steal from the vulnerable, but they also make it harder and harder for legitimate charities to do the worthy work that they are chartered to do.  We recommend that you make a conscious decision and a real plan for your charitable giving and philanthropy.  Check out the organizations that you intend to support, and support them for the good works that they do.  Do not be moved by the compelling story of a young woman knocking on your doorstep.  Legitimate charities are registered with the state of Massachusetts.  Here's a website to go to to validate whether or not a charity is registered with the state. 

At Cohen and Olican we take pride in protecting our clients.

Sharing of Data Leads to Progress on Alzheimer’s Disease - Part 1

A project was initiated in the year 2003 when the National Institutes of Health, the Food and Drug Administration, the drug and medical-imaging industries, universities and nonprofit groups joined hands in a joint endeavor to find the biomarkers that reveal the progress and evolution of Alzheimer’s disease in the human brain. It was a unique project in the annals of medical research and it is yielding results now, which are evident in a deluge of research papers on the subject.

Early diagnosis of Alzheimer’s is being done with PET scans and spinal fluid analysis and more than 100 drug studies are in progress to find formulations that might slow down or even cure the disease. This remarkable collaborative effort is showing the way for more such projects and a similar one has begun for Parkinson’s disease. The Michael J. Fox Foundation has sponsored a $40 million study to find the biological markers for Parkinson’s disease that will enlist 600 subjects in Europe and the USA.

The project has generated great excitement among the research fraternity as the agreement to share all data and make all findings public was something unheard of in the scientific world. Anybody with a computer anywhere can access all the data and go through the findings of all the research studies on the subject. The objective was not just to raise funds, or do research but share all the facts and figures and everything going on in the project on a global scale. There would be no ownership or patent of the data or the research finding and everything would be in the public domain. Private pharmaceutical companies would of course benefit in the long run from the drug formulations or imaging tests that were being developed during the project.

Dr. John Q. Trojanowski, an Alzheimer’s researcher at the University of Pennsylvania is stunned by the amazing scope of the project. It is a project that is unique and path-breaking in scientific research, according to him. But it is the only way to do it, as unless we kept aside our egos and intellectual property issues, the task of finding the biomarkers for these diseases would be an impossible one, he says. It does not mean that a person having the biomarkers would definitely get the disease, but that is also part of the project. The study aims to find those biomarkers that herald the onset of the degenerative disease.

The Alzheimer ’s disease Neuro-imaging Initiative or ADNI came about during a normal conversation about 10 years ago. Neil S. Buckholtz, chief of the Dementias of Aging Branch at the National Institute on Aging was being driven to the airport in Indianapolis by Dr. William Potter who was himself a neuroscientist at Eli Lilly. Dr. Potter was seriously thinking about the ways to hasten the progress of the drug research on Alzheimer’s. He wanted to come out of the typical drug development syndrome of the 19^th century, where a drug was administered and then everyone waited around for it to work. He felt that there must be some other method, where one could view the brain as Alzheimer’s developed and then formulate drugs to halt that development. There were efforts to locate biomarkers, but there was not much progress as different scientists in many different parts of the world were doing their own studies in their universities and with their own patients. They were obviously coming up with different results due to this.

Could someone you love have Alzheimer’s? Do you have a long term plan to deal with the Medicaid issues surrounding this? Call Cohen & Oalican, LLP to draw up a plan.

PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE Part 5 Life Estates

Cohen & Oalican, LLP discuss: PROTECTING YOUR HOUSE FROM THE COST OF NURSING HOME CARE Part 5 of 7

Life Estates

Another option to protect your house is with a Life Estate deed. With a Life Estate deed a client is typically giving away their house to their children but they are retaining certain rights of ownership over the property. Most commonly, clients keep the right to live in the house and the rights to rental income. They also still have an obligation to pay the house expenses. However, the house cannot be sold or mortgaged without everyone’s consent. The parents retained interest in the house is called a Life Estate. A child’s right to receive the property at death is called a remainder interest. Because a Life Estate deed passes automatically at death outside of probate, a Life Estate deed avoids Medicaid’s claim at death. One drawback to a Life Estate deed is that the house will only be protected as long as it is not sold until after the death of the Medicaid recipient. If the house is sold during the person’s life, a portion (this value is based on Medicaid’s actuarial tables) of the proceeds will pass to the Medicaid recipient and the funds will be taken by Medicaid. On the other hand, if the house is held in an irrevocable trust, all of the proceeds from the sale stay in the trust and remain protected regardless of when the house is sold.

Consult with one of the attorneys at the offices of Cohen & Oalican, LLP for Mediciad planning.

This has been Part 5 in a series of 7, brought to you by Cohen & Oalican LLP, Elder Law Attorneys Boston, Raynham, Andover

Cohen & Oalican Answer: Can a Life Estate Still Protect Your House from Medicaid Part 2

Part 2

The three year look back period was the most important reason to choose a Life Estate deed instead of an irrevocable trust to protect a client’s house. That benefit has been eliminated. Now clients and attorneys must consider the limitations of Life Estates in relation to irrevocable trusts. Most importantly, the Life Estate only works if the house is not sold until after the Medicaid recipient’s death. If the house is sold during the person’s life a portion (this value is based on Medicaid’s actuarial tables) of the proceeds will pass to the Medicaid recipient and the funds will be taken by Medicaid. If a house is held in an irrevocable trust, all of the proceeds from sale stay in the trust and remain protected regardless of when its sold. Although families understand the issue when they create the Life Estate, this becomes a pressing issue when the client moves into a nursing home and the house is empty. At that point, families must either rent the house (taking on the aggravation of being a landlord) or leave the house empty and use their own funds to pay for the property taxes and insurance. Both options are not ideal.

There are also capital gains tax issues to consider when choosing between a Life Estate deed and an irrevocable trust. The tax questions are somewhat up in the air right now and many attorneys believe that unless Congress changes the tax laws, Life Estate deeds will no longer give clients a step-up in the tax basis resulting in children paying capital gains taxes on all of the gain accrued during the parents’ lives.

That all being said, a Life Estate deed does have one important benefit. Its simple. A Life Estate
deed is easy to put in place. Its just a deed. Also, if everyone on the deed is agreeable, its also
easy to unwind; everyone just deeds the house back to the original owners. Reversing an irrevocable trust is much more complicated (and sometimes not possible) with an irrevocable trust.

Everyone wants to protect their home. The question remains what is the best strategy to do the job. In weighing your options, consider, how much control you want to keep, when the house will be sold, your need to use the house equity and tax issues. Life Estate deeds do still work. However, irrevocable trusts are often a better option to protect your home.

Contact Cohen & Oalican to discuss a medicaid plan that works for you.

Cohen & Oalican Answer: Can a Life Estate Still Protect Your House from Medicaid Part 1

Part 1

Can a Life Estate Still Protect Your House from Medicaid?


We are often asked by clients and attorneys alike, whether Life Estates still “work”. In other words, can you protect your house from a Medicaid lien with a Life Estate deed. To cut to the chase, Life Estate deeds still work, but they may not be the best option. First, let’s clarify the question. If an individual applies for Medicaid (MassHealth in Massachusetts), their home is considered to be a noncountable asset. Although the regulations make it sound as if your home is a “protected” asset, that is far from true. As a noncountable asset, Medicaid cannot force you to sell your home to obtain eligibility (as long as the equity is less than $750,000). However, at the death of the Medicaid recipient, if the house is in that person’s sole name, the State will have a claim against the house for reimbursement for benefits provided during that person’s lifetime.

Frequently, our asset protection plans focus on a client’s home. Medicaid is only authorized to make a claim against an interest in a house that is in the sole name of the Medicaid recipient. These assets are referred to in legal jargon as “probate assets”. For example, a house that’s held as joint tenants passes to the survivor automatically by virtue of the deed and thus avoids probate and a Medicaid lien.

For many years a simple way to protect the house from Medicaid was by using a Life Estate deed. With a Life Estate deed a client is typically giving away their house to their children but they are retaining certain rights of ownership over the property. Most commonly, clients keep the right to live in the house and the rights to rental income. They also still have an obligation to pay the house expenses. However, the house cannot be sold or mortgaged without everyone’s consent. The parents retained interest in the house is called a Life Estate. The childrens’ rights to receive the property at death is called a remainder interest. Because a Life Estate deed passes automatically at death outside of probate, a Life Estate deed avoids Medicaid’s claim at death.

Prior to February, 2006 (when the federal Medicaid laws changed), Life Estates were quite common. At that time Medicaid imposed a three year “look-back” period for transfers to individuals and a five year “look-back for transfers to trusts. Consequently, clients and attorneys often preferred to use a Life Estate as part of their asset protection plan instead of an irrevocable trust because the house would be protected in only three years. That is no longer the case. Under current law, all transfers have a five year look-back period and in effect make the applicant and their spouse ineligible for five years.

Part 2 to follow

The experienced attorneys at Cohen & Oalican, LLP, can help you prepare for, and resolve, all of your medicaid planning and administration needs.

Boston Elderlaw Attorneys answer: What happens if my MassHealth (Medicaid) application is denied?

MassHealth looks for any reason they can to deny an application. Typical reasons for denials include: missing bank statement, missed deadlines, unexplained deposits or withdrawals or excess assets. At Cohen & Oalican we help clients with every step of the application process. We walk you through the process so that there are no surprises. We anticipate Medicaid’s questions and give them the information they need to accept the application as quickly as possible. Cohen & Oalican attorneys can know how to best describe your family’s assets to offer the maximum protection. If your application is denied we can quickly file an appeal to determine what your legal rights are and how best to move forward and get your application approved.

This is third in a series of questions and answers regarding your legal rights dealing with MassHealth, Medicaid. Thank you for your trust in our Elder Law legal practice, Cohen & Oalican, LLP

Boston MassHealth Lawyer Answers "How do I apply for Medicaid (also known as MassHealth)?

The Medicaid program, which is called MassHealth in Massachusetts is a confusing bureaucracy. It takes an expert to guide you through this maze. MassHealth workers ask for financial statements going back as far as five years looking to see if the applicant or their spouse has made any disqualifying gifts. It is critical to work with an expert in filing the MassHealth application. If you file too late you may lose coverage you would otherwise be entitled to. If you file to early, you may make yourself ineligible for months if not years.
The attorneys at Cohen & Oalican can help you through the process.

This is second in a series of questions and answers regarding your legal rights dealing with MassHealth, Medicaid. Thank you for your trust in our Elder Law legal practice, Cohen & Oalican, LLP