Wills, Trusts & Estates Prof Blog

Tips on Having a Successful Family Meeting

Family meetings are common after a medical crisis, but they can also be invaluable in resolving complicated financial issues as well as legal planning for elderly family members.  Here are some tips on starting, and getting the most out of, family meetings:

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    • Be inclusive by finding a date where everyone in the family can meet.  And ensure everyone has a chance to get their opinion across, especially any person you’re making decisions for.
    • Have family meetings before any serious health issues arise.
    • Hire a professional with expertise in the area of dispute to help resolve conflicts.  Consider a mediator if disputes get heated.
    • Set an initial agenda and invite any suggestions of other items that need to be discussed

See Kelly Greene, When It’s Time to Huddle, The Wall Street Journal, May 10, 2013.

Elderly Woman Prompts Guardianship Reform After Spending $100,000 to Prove Her Competence

Sophie Paulos, 91, spent three months and $100,000 trying to protect her independence.

The process began when two of her daughters suspected the third daughter of taking advantage of Paulos while her health was deteriorating.  After an investigation by the Adult Protective Services, Paulos had to pay $30,000 for a court-appointed guardian ad litem she never wanted.  She then hired her own attorney to fight the guardianship process and paid over $70,000 for this second lawyer and related legal expenses.

These outrageous costs have prompted proposed measures to reform the guardianship system such as shortening time periods for which to hold hearings and forcing those that initiate guardianship proceedings to sign affadavits.  Although these measures have gained support from organizations like AARP, judges and lawyers across Texas see any changes to the current system as unnecessary roadblocks.

See Andrea Ball, Woman’s Costly Court Battle Prompts Call for Reform of Guardianship System, Austin American-Statesman, May 12, 2013.

Article on Estate Planning Tools That Protect People With Declining Capacity

Jalayne J. Arias (JD, MA, Fellow, Cleveland Fellowship in Advance Bioethics, Cleveland Clinic) recently published an article entitled, A Time To Step In Legal Mechanism For Protecting Those With Declining Capacity, 39 Am. J.L. & Med. 134 (2013). Provided below is the introduction to their article:

Ms. Jones, a seventy-five-year-old widow, lives independently in a home located in a retirement community. Her neighbors watch over her by stopping in from time to time, often bringing groceries and cooking meals. A neurologist diagnosed Ms. Jones with amnestic mild cognitive impairment three years ago, shortly after her husband passed away. Her physicians believe her impairment is of the Alzheimer’s type and she will likely progress to dementia. She has two daughters and a son. Her daughters live out-of-state and visit regularly around the holidays and for special events. Her son lives thirty-five minutes away and comes to see her once a week. Recently, Ms. Jones began demonstrating apathy towards previously enjoyed hobbies and regularly complains of forgetting parts of books she has read or movies she has seen. During a recent visit, her son inquired about bank notices on the kitchen table. Ms. Jones calmly explained that her account was overdrawn and that it was a “silly mistake.” Her son is concerned that she may no longer have the capacity to manage her own finances. Yet, only Ms. Jones has access to her bank accounts, opened when her husband was alive. This prevents her son from reviewing bank records without her approval, which she refuses to provide. He struggles to determine whether to pursue legal actions. Because she has been able to get by thus far, he is reluctant to take away her freedom through a guardianship before it is necessary.

 An aging society in the United States will place an increased burden on families, probate courts, and others to manage societal and personal challenges. Current estimates approximate that the population over sixty-five years of age will increase from 40 million in 2010 to 72.1 million by 2030. As society ages, the number of elderly with cognitive deficits will also increase. While cognitive decline is commonly associated with normal aging, an additional subset of the population experiences an increased burden of cognitive and functional deficits resulting from neurodegenerative conditions. Age-associated neurodegenerative diseases include Alzheimer’s disease, Parkinson’s disease, and multiple classes of dementia. While similar cognitive decline may be associated with ““normal aging,” those that suffer from neurodegenerative conditions will experience significant impairments that heighten the types and frequency of challenges experienced by the individual and family. Attributes of neurodegenerative conditions, like Alzheimer’s, challenge caregivers and family members to address concerns relevant to the patient’s day-to-day living needs. Ms. Jones may be experiencing a decline in her executive functions and memory. These declines may cause her to forget that she made a specific purchase or cause challenges with balancing a budget. These progressive deficits will challenge her son, as well as her daughters, to address how to effectively help her manage finances and other daily tasks without prematurely restricting her autonomy. Individuals with cognitive deficits are at an increased risk of lacking capacity in one or more contexts (e.g., medical consent, financial management, and living independently). Family members who are unable to assist loved ones with these tasks through informal interventions often look to clinicians and the legal system for guidance.

The guardianship and probate system provides legal protections for those incapable of managing their own person or affairs. A legal determination of incompetency is a prerequisite to a judicial order appointing a guardianship or other protective mechanism. The significance of incompetency determinations challenges probate courts to balance an individual’s autonomy with necessary protective measures. Autonomy, an individual’s right to control her decisions and actions, requires that others respect her decisions or actions. For example, a healthcare provider must respect an individual’s request to refuse treatment. A legal determination of incompetence removes an individual’s legal authority to manage her own affairs and has broad implications for her daily interactions and activities. The right extends to those decisions that are objectively risky or dangerous. Nevertheless, when an individual lacks capacity or a court declares her incompetent, her decision-making authority may be restricted.

The dynamic relationship between competency and capacity are at the cornerstone of a state’s parens patriae right to limit autonomy. Though often used interchangeably, capacity and competency reside in two different contexts. A judicial body, usually a probate court, determines whether a person is legally incompetent. In contrast, clinicians--physicians, psychiatrists, or other experts--determine whether an individual has decision-making capacity. Yet, determinations of incapacity and incompetence result in similar restrictions of an individual’s autonomous decision-making authority. Standards for capacity and competency determinations are interrelated. Judicial decisions and statutory language inform clinical capacity criteria and assessments. Similarly, judicial and legal standards are derived from clinical capacity criteria and clinically based research. Despite the interrelated attributes of competency and capacity, these concepts adhere to different structures. Capacity is a continuum and is context-specific. Conversely, most state laws define competence without providing for an intermediate determination that allows for gradation. Instead, competency is determined largely through a global structure. Under this structure, an individual is declared either competent or incompetent. The complicated dynamic between competence and capacity leaves judges to determine where along the capacity continuum an individual becomes incompetent.

The current legal-medical model for competency determinations fails to accurately reflect the complexities of declining capacity in an aging population. A global structure for competency determinations leaves a critical gap between competent and incompetent. This not only raises concerns about how to classify those that fall between the two, but also highlights the lack of legal protections for those within the gap. Ultimately, it limits protections available to individuals who do not yet meet the threshold for incompetency. This leaves family members and caregivers with more questions than answers: When do I intervene? Who will serve as a guardian if my siblings live out of state? Where will my mother live? Who will manage her finances? Who will make medical decisions? Ultimately, family members, like Ms. Jones’s son, are left with the burden of protecting their loved one from potential risks related to cognitive and functional impairments.

A revised model is needed to provide protections to individuals who do not yet meet the threshold for incompetence but require additional protections for their personal or financial welfare. The cyclical relationship between law and medicine demands convergent approaches to evaluating an individual’s abilities to engage in financial, medical, and other critical decision-making processes. A revised legal model will include additional legal mechanisms that provide protective measures tailored towards individuals’ deficits. This Article provides an unprecedented examination of the legal model for determining competence through a comparison of the medical model for evaluating capacity. While a number of legal scholars have examined the appointment and oversight of guardians, few have critically examined the process by which individuals are declared incompetent. This Article presents a comprehensive overview of competency and clinical capacity determination procedures, legal mechanisms available to protect individuals with declining capacity, and policy recommendations for improving legal protections in light of inefficiencies related to legal competency determinations.

Part II provides an overview of the medical model for determining capacity, providing a basis for assessing the effectiveness of the legal model for competency determinations. Part III critically examines the current legal approach for competency determinations and protective mechanism orders. Through an overview of the current structure, flaws in the current approach are illustrated. Specifically, the current judicial process of declaring incompetency fails to provide a balance between autonomy and needed protections. Finally, Part IV discusses two recommendations to address faults in the current system: (1) judicial determinations of incompetence should adopt a gradient structure that reflects the realities of capacity; and (2) legal protections should be implemented and improved that apply to those who fall in the gap between incompetent and competent, such as limited guardianships. These recommendations seek to create a more effective system that provides needed protections, prevents overly restrictive measures, and provides families and caregivers mechanisms to intervene when necessary.

Craft A Proper Living Will

The importance of having a living will or advance directive cannot be understated. These are essential tools to have. The problem is that not many American's feel that these documents are necessary or are too scared to complete them. Remember, advance directives are important because they allow a person to expressly provide what they want in terms of health care treatment following their incapacitation and can provide a sense of comfort to family members when faced with an impossible choice. Unfortunately, there are still problems with advance directives, which can often lead to confusion among doctors, hospitals, and family members. The main problem is that advance directives are overly legalistic. Because of their nature, many people are uncomfortable about making life and death decisions on a form that they can barely understand.

A better approach might be to appoint a health care proxy. In this instance, the principal, or the person appointing a health care agent, can sit down with the agent and discuss what they want in terms of health care. Now, in this instance, it is not necessary for the principal to discuss every health care procedure and his or her opinions on them. What is important is that the agent know the principal's values and what sort of life that person would like to live should he or she become incapacitated. Most importantly, a principal should discuss the circumstances under which they would like to die if it ever came that circumstance.

See Ben Steveman, The Right Way To Craft A Living Will, Bloomberg, Apr. 9, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) and Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Today Is World Parkinson's Awareness Day: Medicaid Planning

As I have previously discussed, Medicaid could be a possible source of income for long-term health care planning. To qualify for Medicaid, a person needs to show that they have less than the disqualifying number of assets and income. Unfortunately, this determination is often complex "and varies from state to state." Generally, to qualify, a person needs to be over the age of 65, show that they cannot afford the care they need, and show that they "have not made a non-allowable transfer of assets during a certain period of time before your application."

One of the more important considerations that a person needs to make is that Medicaid is both a federal and state run program; therefore, many of the services that are offered can vary from state to state. Additionally, this means that qualifications for Medicaid also vary from state to state. Most states have adopted the simple rule that if a person's "net income after adjustment for certain allowable deductions — is less than the cost of your care, you will be eligible for Medicaid." Generally, a person cannot have more than $2000 in a bank account, but that person can still have their home, as long as its their Homestead property, personal effects, a burial plot, and any automobile worth $4,500 or less. A person can also have "an asset allowance for [their] spouse."

Another important consideration is that there are techniques that exist that allow person to protect assets without losing that person's Medicaid eligibility. In terms of transferring assets without losing a person's eligibility, the requirements have become stricter with the passage of recent laws. For example, a person now has to report what they have done with their assets over the past 5 years. The general rule here is that people may not give away their assets to become Medicaid eligible. A person can still make normal transfers, but it cannot be done for the purpose of becoming Medicaid eligible. The rules say that a person can make transfers to benefit a disabled person directly or to a trust that benefits a disabled person. This exemption also includes transfers of homestead property. There are also certain types of trusts, OBRA Trusts, that allow a person to transfer their assets to the trust to qualify for Medicaid. However, the trust must be irrevocable, and the trust will need to reimburse Medicaid if the beneficiary of the trust passes away.

See Janna Dutton, Medicaid For Long-Term Care, Parkinson's Disease Foundation, Spring 2011.

Special thanks to Cara Brewer (Texas Tech University School of Law, J.D. Candidate 2013) for bringing this article to my attention.

CLE on Advance Directives For LGBT Adults

The ABA will sponsor a 1.5 hour live webinar and teleconference entitled, Advance Directives and Estate Planning for LGBT Adults, on Wednesday, April 17, 2013 from 1:00-2:30 PM EST. Provided below is a description of the event:

This program will give an overview of the unique issues that arise when doing advance care and estate planning for same-sex couples, including relationship recognition, document preparation, financing elder care, and the impact of possible changes in the legal landscape.  

Not only will the program address the basics of estate planning but the panelists will also discuss Medicaid spousal impoverishment protections, transfer tax concerns, and employer sponsored retirement plans.  Finally, the program will conclude with a discussion on the possible changes in the legal landscape, including the CMS letter allowing states to extend spousal impoverishment protections to same-sex couples and the pending DOMA case in the Supreme Court.

Parkinson's Awareness Month: Appointing Health Care Proxies

It is important for anyone to have not only their advance directive completed but also their health proxy completed. A health care proxy is a legal document that allows a patient with Parkinson's Disease (patient) to appoint a health care agent (agent) to make decisions on their behalf in the event that the patient is unable to make decisions on their own. With Parkinson's Disease, the need to complete both of these documents is essential for a number of reasons. First, there is much more of a risk that at some point the patient will be unable to make health care decisions on their own. For example, "there is the additional possibility that communication difficulties, increased physical disability and/or cognitive impairment may interfere with the ability to convey preferences for different treatment options." To designate a health care proxy, the patient only needs to fill out the necessary legal form in their state. 

There are some criteria that a patient might want to take into consider when selecting a health care proxy. The basic rule is simply that it should be someone that the patient trusts and knows well. This person can be a family member or a friend. It is generally accepted that a patient should not choose more than one so that there is no disagreement among the different agents. Most importantly, it is a good idea for a patient to select someone who is an advocate and who will be willing to fight for and carry out the wishes of patient to the letter. Once a person has selected a health care proxy, the patient might want to take the time and talk with their agent. It is imporant that a patient keeps an open line with their agent so that the agent knows what the patient wants in terms of treatment. A patient might want to consider writing a living will to outline what he or she wants in the event of terminal illness.

See Janna Dutton, Delegating Decisions For Health Care, Parkinson's Disease Foundation, Fall 2010.

Parkinson's Awareness Month: Planning For Long-Term Care

While many people assume that long-term care only encompasses expenses incurred from staying in a nursing home, it can also encompass expenses incurred from living in an assisted-living facilities and in-home aides and other support systems, such as Meals-on-Wheels. For an individual suffering from Parkinson's Disease, one or more of these support systems might become necessary. This is based upon a number of factors, such as how far your Parkinson's Disease has progressed and your own personal preferences. The question then becomes, how will a patient with Parkinson's Disease pay for these expenses?

There are a number options that available to pay for long-term care expenses. The most common and probably one of the most important options is Medicare. Medicare can cover a number of expenses, including "doctor's visits, lab tests, hospital stays, physical, occupational and speech therapy," but requires that a person be 65 or older or disabled. This benefit is not tied to a the number of assets that a person possesses. To claim Medicare through disability, there is a two-year waiting period after a person becomes eligible to receive hospital insurance coverage under Medicare A. After the waiting period, a person can then enroll in Medicare Part B. Unfortunately, Medicare does not pay for individuals to stay in a nursing home. Still, this can be beneficial because Parkinson's medication can be expensive. 

There are other options that are available to supplement the expense not covered by Medicare. Private funds, long-term care and health insurance, and Medicaid are also available to supplement the health care expenses. It is important for a patient to review their assets to determine the appropriate means to cover their expenses. For Medicaid, it is important to note that this is only available to those who have almost no assets. Another source of income that patient's with Parkinson's Disease needs to take into consideration is Social Security Disability. 

See Janna Dutton, Planning For Long-Term Health Care, Parkinson's Disease Foundation, Summer 2010.

Tax-Free Exchanges Can Curb Long-Term Care Expenses

Many people fear long-term care expenses. The reality is these expenses can add up and put a dent into funds set aside for retirement. According to the Genworth 2012 Cost of Care Survey, the median for a private nursing room is $81,030 annually. One way to ease the long-term care cost concern is to secure a long-term care insurance policy.  

Premiums for long-term care insurance can be costly. However, for people thinking about purchasing long-term care insurance a tax-free exchange can help pay the premiums. A person considering this option should evaluate the different long-term care insurance options. Some other factors a person should reflect on include: costs, benefits, tax effects, and the impact on the policy or annuity. The IRS permits the exchange of a life insurance policy for an annuity contract without acknowledging taxable gain. Recently, legislators made it permissible to make tax-free exchanges of an annuity or life insurance policy for a long-term care insurance policy. A partial tax–free exchange can use part of an annuity or a life insurance policies worth to fund a new annuity or policy. However, the exchange must be a direct transfer of funds from one provider to another to be tax-free. The advantage to the tax-free exchange is it supplies funds for the care policy while simultaneously yielding tax benefits. Additionally, a tax-free exchange can allow a taxable gain to be engrossed by long-term care premiums.

See Alder Pollock and Sheehan P.C., Insight on Estate Planning - April/May 2013: How to Fund Long-Term Care Insurance with a Tax-Free Exchange, JDSupra, Mar. 28, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention. 

Asking a Pet Owner the Right Questions When Selling Long-Term Care Insurance

Being in tune to pet owners and asking questions about their pets can help those who sell long-term care insurance develop a sense of need and urgency in potential buyers. Asking questions about a potential buyer's pet or inquiring who will take care of his or her pet is a good way to start. Some carriers have benefits that help a client's pets. For example, in place of all other benefits, Transamerica allows the insured to choose to take a monthly lump sum equal to one-third of the monthly benefit.  This money could be used, in part, to pay for some pet expenses. 

See Matt McCann, Pets and Long-term Care Insurance--It's Not Just a Dog's Life, Producer'sWeb.com, Mar. 25, 2013. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Estate Planning Lessons Learned, Part 7

Dwayne Carter, otherwise known by this stage name Lil Wayne, was hospitalized in critical condition in the Intensive Care Unit this month after he suffered from several severe seizures. The primary lesson to learn is that it is important for a person to have their health care and advance directive documents ready in case they are needed. According to Evan Guthrie, "[a]dvance directives are legal documents that allow for a person to express what kind of health care they want or not want in a written form." The most common type of health care directive is a health care power of attorney. This type of document allows a person to appoint an agent to make decisions on behalf of the person who made the power of attorney. Without this type of document, a family member is usually left to make the difficult decisions.

Lil Wayne did not have this type of document and so his mother had to fly in to make his health care decisions. He was only 30 years old, which shows that really a person can never be too young to make a health care power of attorney. Lil Wayne did not also have a durable power of attorney, which would appoint someone to manage his financial assets. This could have also been helpful when Wayne spent time in jail in 2010. The durable power of attorney would have appointed someone to take care of his affairs.

See Lil Wayne: Estate Planning Lessons About The Rock Star Lifestyle, Estate Planning At Evan Guthrie Law Firm, Mar. 18, 2013.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Social Security As Easy As 1 2 3...

Larry Kotlikoff is developing software to solve the Social Security problem. As a result, he is very familiar with Social Security and has come up with three rules to maximize Social Security benefits.

1.  Wait to collect, you will get much higher benefits over fewer years.
2.  Take any other benefits available to you based on your spouse's earnings history.
3.  Make sure that following the first rule does not conflict with following the second rule and vice  versa.     

Social Security decreases in benefits if taken prematurely and increases in benefits if taken late. Typically, retirement benefits starting at age 70 are more common than age 62. Spousal and survivor benefits are much higher if taken at age 66, the “full retirement age.” According to Kotlikoff, benefits can be about 40 percent higher when taken at the full retirement age. While many people fear that they may die without collecting benefits, the real problem is outliving your life expectancy. If you believe you will outlive your life expectancy waiting to collect is likely the best choice. However, even if you do not believe you will outlive your life expectancy waiting to collect may allow your spouse to collect more survivor benefits.  It’s a good idea to figure out if you are available to receive benefits to figure out which benefits to take and when to take them. Kotlikoff states “The key to double dipping is to take the two benefits at different times and not lose anything, because the benefit you take last will have risen while you waited.”

See Larry Kotlikoff, Three Rules For How To Get The Highest Social Security Benefits, PBS NewsHour, Mar. 13, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this to my attention.

CLE on the Fundamentals of SNT Administration

Professor Rebecca C. Morgan and the Center for Excellence in Elder Law will sponsor a webinar entitled, Fundamentals of Special Needs Trusts Administration Webinar on Friday, April 19, 2013 from 1:00 to 5:00 pm EDT. Provided below is a description of the webinar from the Stetson Law Registration Page:

This webinar will address challenging SNT administrative issues faced by trustees, attorneys and others involved in SNTs. The faculty of nationally known leaders will discuss:

• Changes to the POMS
• Taxation of SNTs
• Impact of the ACAs
• Medicaid expansion for trustees, beneficiaries and families
• What attorneys want trustees not to do

The webinar will also feature a Q&A session. Questions can be submitted ahead of time on any topic dealing with SNT administration. The cost to participate in the webinar is $125....

In order to participate in this webinar, please note our technology guidelines below. We recommend that participants perform the following procedures:

To view the webcast on PC/Mac Desktop computer:

• Install/Update the latest Flash Player

Users of mobile devices will need to download a free Ustream app.  

To view webcast on iPad/iPhone:

• Download free Ustream app from iTunes Store

To view webcast on Android phone/tablet:

• Download free Ustream app from Google Play Store

You can register here. For registered parties, the login information for the event will be sent before the event. 

Article on Reforming Medicare

Daniel P. Kessler (Professor, Law School, Graduate School of Business, and Hoover Institution, Stanford University) recently published his article entitled Reforming Medicare, 65 Tax L. Rev. 81 (2012). The introduction to the article is available below: 

As the Congressional Budget Office's Long-Term Budget Outlook shows, Medicare is not fiscally sustainable in its current form.  Under plausible assumptions about government revenues, continuation on the current path of health care entitlement spending will lead the debt held by the public to exceed 100% of GDP by 2021 and approach 190% by 2035.  This "fiscal gap" cannot be closed through revenue increases. At current spending levels, even the increases in taxes on high-income individuals proposed by the Obama administration (through the estate tax, top income tax rates, capital gains and dividend taxes, and re-imposition of the phase-outs of itemized deductions and personal exemptions) will not stop U.S. debt levels from rising at an increasing rate. 

There are three schools of thought on how to reform the program. The first would transform it into a marketplace of regulated, private plans with government-provided subsidies for the premiums. This "premium support" model has been proposed most recently by Senator Ron Wyden and Congressman Paul Ryan, but versions of it have been suggested by Alain Enthoven, Gail Wilensky, the Domenici-Rivlin Debt Reduction Task Force, and the National Bipartisan Commission on the Future of Medicare. The second would empower an independent commission to issue recommendations for reform that would be required to be implemented if Congress fails to achieve savings targets. President Obama and the Congress adopted this model in the recent health reform law through their creation of the Independent Payment Advisory Board (IPAB). The third would leave the program basically as it is, and seek to control spending by changing the way that it pays doctors and hospitals. These payment reforms, known as "bundled payment," involve consolidating payments for an "episode of care," for example, the hospital charges, surgeon's fees, and follow-up visits for a hip replacement. The idea behind bundling is to create incentives for providers to manage care better, which would ultimately lead to better value.

Proponents of the first two approaches emphasize the role of public choice failures. According to their reasoning, Medicare spending benefits doctors, hospitals, other health care providers, and the elderly (who are identifiable and organized) but hurts future taxpayers (who are neither) in the form of increased public debt that must ultimately be repaid. As a consequence, politicians seeking re-election have the incentive to expand the program beyond the point that would be in the long-run public interest.

These approaches see premium support and IPAB as mechanisms to commit Congress to limit spending by delegating responsibility for particular cuts to an entity that is less subject to political pressure. In the case of premium support, the institution is the market. The magnitude of and the formula behind the support payment would be determined through the political process, but decisions about which benefits and/or payment rates to cut would be determined by supply and demand (although subject to significant political oversight through regulation). In the case of IPAB, the institution is the appointed board. Recommendations made by the board would move to Congress for fast-track consideration, and if Congress does not act, would be required to be implemented by the Secretary of Health & Human Services.

Proponents of the third approach emphasize technical flaws in traditional Medicare's reimbursement rules, which reward providers for delivering services rather than value for money. This view has more confidence in traditional Medicare's ability to adapt to a more constrained future and/or less confidence in premium support and IPAB as commitment devices.

Because each approach has strengths and weaknesses, the choice between them involves a series of trade-offs. This Article describes the terms of these trade-offs and evaluates how the three approaches are likely to perform. It proceeds in four parts. Part II describes the first set of trade-offs, between premium support and IPAB on one hand, and bundled payment on the other. Premium support and IPAB involve broad changes to the Medicare program; bundled payment is more narrow but targeted. Part II explains why broad, fundamental reform is necessary to make the program sustainable. It also explains why successful reform must be able to precommit to spending limits. It therefore favors premium support and IPAB over bundled payment alone (although, as discussed below, bundled payment reforms are likely to be complementary and should therefore be part of either premium support or IPAB).

Parts III and IV explore the second set of trade-offs, between premium support and IPAB. Part III documents why IPAB is unlikely to commit Medicare to a sustainable spending path, why premium support is more likely to do so, and other advantages of premium support. Part IV describes the key drawback of premium support: It may allow providers greater ability to exercise market power, market power that is currently checked by traditional Medicare's ability to bargain on a nationwide, take-it-or-leave it basis.

Part V concludes. It acknowledges that neither premium support nor IPAB may provide sufficient political cover to enforce sustainable spending limits; that bundled payments have the potential to improve Medicare's efficiency; and that the drawbacks of premium support are nontrivial. Because bundled payments have been unable to achieve savings of the magnitude necessary to close the fiscal gap, and IPAB carries a greater risk of allowing the fiscal gap to widen to unacceptable levels, Part V concludes that fundamental change in the form of premium support is the best alternative, even if its prospects for success are uncertain.

Looking Out For Aging Parents This Holiday Season

Now that the holiday season is upon us, this is an excellent opportunity to ensure that our aging parents are doing well. Sometimes parents would like to re-assure us that they are doing well and that everything is fine. The holidays are an excellent chance to make sure that this is what is actually happening. Unfortunately, in some instances, it is obviously to their adult children that their parents might have lied to them about how well they are doing. 

The purpose of this is to ensure that our aging parents can still maintain their independence. Therefore, the son or daughter of an aging parent might want to look for signs of trouble. For example, they might want to see if their parents have kept up with their bills, the mail, or even the food in their refrigerator. They might also want to check to see if the house that they are living in is still safe for them or if there are any potential falling hazards. If they discovers that their parents can no longer sustain themselves independently, they might want to consider discussing the matter with their parents and begin looking into long term care insurance. Some insurance providers note that the holiday period is the time when insurance policies increase by 15%. 

See Things To Look For When Visiting Aging Parents This Holiday Season, PRNewswire, Nov. 20, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Estate Planning Lessons Learned, Part 4

Hector "Macho" Camacho, the four time World Championship boxer, tragically passed way as the result of a gunshot wound that he received "outside of a bar in Puerto Rico." Shortly after being wounded, doctors pronounced that Camacho was brain dead. This left his family with a difficult choice about whether to keep Camacho on life-support. Camacho and his family could have avoided this difficult decision; however, he did not have an advance directive that could instruct his family on whether to keep him on life-support. Thus, the decision to remove him from life-support was placed on his family.  In this case, there was a disagreement between family members about whether to keep him on life-support. His father wanted to remove him from life-support and his aunts wanted to continue medical treatment. 

The lesson that we can learn from this tragic event is that it is important to have an advance directive in place to not only give guidance to one family members but also give piece of mind in an already stressful and horrible situation. An advance directive can also remove any responsibility a family member might feel in removing a close family member from life-support. While it is true that all people should have an advance directive, people who are in professions that are at a higher risk for incapacity, such as professional boxing, should make an advance directive as soon as possible.

See Evan Guthrie Law Firm, Estate Planning: Lessons Learned From Hector "Macho" Camacho, JD Supra, Nov. 11, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Estate Planning Lessons Learned, Part 3

Mike Ditka, Head Coach of the Super Bowl XX Champion Chicago Bears, recently suffered from a stroke in November of 2012. While Ditka is thankfully expected to recovery from this ordeal, we can still take a lessons from his illness. 

The most obvious lesson that this incident reminds us about is that estate planning is not only used to determine what happens to our property after we die. Many people are under the delusion that the only document that they need is a will. However, that is not case. It is important to remember that a person should also plan for incapacity. A will alone does not provide for incapacity. In the absence of instruction, a probate court will likely "appoint a conservator or guardian to make financial and health decisions for" him or her. Now, a person can avoid the extra costs and paperwork with the courts by creating a durable power of attorney, which allows them to appoint someone to step-in and make decisions when that person is no longer able to. This type of incapacity could occur when a person has a stroke like Mike Ditka had. Thus, it is important to get ones affairs in order here so that there can be someone to take care that person's affairs should they become incapacitated.

See Evan Guthrie Law Firm, Estate Planning: Lessons Learned From Mike Ditka, JD Supra, Nov. 20, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

Lessons From Zsa Zsa Gabor's Estate Gone Awry

As I have previously discussed, Zsa Zsa Gabor has had her share of probate problems. Most recently, her husband Prince Frederic von Anhalt won a temporary conservatorship over her and the management of her property. Now, it looks as if the probate court is set to invalidate the power of attorney that granted her husband nearly unlimited power in controlling both her health care and her finances. The court has stated that he must now provide monthly reports to her daughter, Francesca. Furthermore, the court stated that he can no longer keep Francesca from her mother. Francesca won a huge victory because it was she who originally alleged that Prince von Anhalt was abusing his position of power. Francesca alleged that he abused his power by using her "money for birthday parties, billboards, and his own mayoral campaign in L.A." As I have discussed in the past, Francesca also accused Prince von Anhalt of sedating her mother and intentionally keeping Francesca from seeing her.

The lesson that we can learn from this instance is the importance of choosing a good fiduciary. A person should make a thoughtful decision considering who should be appointed to make decisions on that person's behalf. Not only will it ensure that the fiduciary follows the person's wishes, but it very well could prevent probate fights over the control of that person's property. 

See Bonnie Bowles, Zsa Zsa Gabor Might Have Chosen A Better Fiduciary, examiner.com, Nov. 15, 2012.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

The ABLE Act

Disability advocates are pushing Congress to pass legislation before the year ends that would offer a new way to save money without jeopardizing government benefits. Currently, disabled individuals cannot have more than $2,000 to their name without sacrificing government benefits. The ABLE Act aims to change this  by allowing disabled individuals to create a special savings account where they can accrue up to $100,000 without losing access to social security or Medicaid. Three dozen national organizations are backing the effort to support the ABLE Act legislation. 

See Michelle Diament, Congress Urged To Create Tax-Free Disability Savings Accounts, disability scoop, Nov. 13, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention. 

Kansas City Lawyer Accused of Killing Her Father Loses Control Over His Will

As I have previously discussed, the state has accused Kansas City Lawyer, Susan Elizabeth Van Note, with forgery and first-degree murder of her father, William Van Note. More specifically, the state alleges that Susan murdered her father by forgery his medical power of attorney to give her the right to refuse him life sustaining treatment. Now, a Clay County Probate Court has removed her "as the personal representative of her father's estate." At the moment, Van Note is out on a $1 Million bond. 

See KC Lawyer Charged In Dad's Death Loses Will Fight, KFVS12, Nov. 15, 2012. 

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.