Elder Law Prof Blog

Those Baby Boomers-They Just Keep on Working and Working

According to a June 4, 2014 report from Economic Modeling Specialists Intl, or EMSI (a CareerBuilder company), titled Interactive Metro Map: Baby Boomers Gaining Jobs, Millennials Standing Pat, those Boomers are working away. The article states that "[t]he number of young workers aged 22-34 nationwide is basically unchanged since 2007, while the number of jobs for boomers (55-64) — fueled by mega population growth — has climbed 9% over that time..." The article is accompanied by very cool interactive maps. The report notes that the health care field is growing well for boomer jobs and, here is one that may surprise you "[c]omputer jobs grew 10 times faster for boomers than millennials..."

The report does address the reasons behind the discrepancies for these two groups. Of course, we can suggest the sheer number of baby boomers are the cause, but it isn't that simple

The decline of millennial jobs and upswing of baby boomers in the workforce can be explained, at least in part, by demographic and behavioral factors. As our colleagues at CareerBuilder noted, the population of 55 and older Americans has grown 20% since 2007 — four times as fast as prime-working age millennials (ages 25-34). The same 55-and-over age group is the only to increase its labor force participation rate and employment-to-population ratio over that time.

Check out the New Release from NGN & ABA

The National Guardianship Network (NGN) in collaboration with the American Bar Association Commission on Law & Aging, has announced the release of their new publication,  WINGS Tips: State Replication Guide for Working Interdisciplinary Networks of Guardianship Stakeholders. The publication may be downloaded as a pdf from the ABA website here.  The accompanying description explains the publication's importance

Working Interdisciplinary Networks of Guardianship Stakeholders (WINGS) are broad-based, collaborative working groups that drive changes that affect the ways courts and guardians practice, and improve the lives of people who have or may need guardians.

This publication, produced by the Commission on behalf of the National Guardianship Network, highlights the hallmarks of successful WINGS groups and outlines ten steps for launching and maintaining your own WINGS program.

For those of you unfamiliar with NGN, their website explains it "is a  collaborative group of national organizations dedicated to effective   adult guardianship law and practice.  First convened in 2002, the   National Guardianship Network has played a leadership role in advancing   guardianship standards, best practices and education."

The WINGS Tips Manual can also be downloaded from the Center for Elders & the Courts here.

New ACL Educational Tool Helps LGBT Residents of Long Term Care Facilities

The U.S. Department of Health and Human Services’ Administration for Community Living (ACL) is proud to announce the release of a new online learning tool: Building Respect for LGBT Older Adults. The tool is designed to increase awareness of the issues faced by lesbian, gay, bisexual, and transgender (LGBT) individuals living in long term care (LTC) facilities.

After completion of the online training, program participants will be prepared to:

• Increase visibility of the issues facing LGBT individuals in LTC facilities.
• Provide easy access to information on serving LGBT individuals in LTC facilities.
• Encourage LTC facilities to provide opportunities for staff to take the online training.
• Change the way individuals and facilities approach older LGBT adults.

The Building Respect for LGBT Older Adults tool was developed in collaboration with the HHS Office of Public Affairs, the Centers for Medicare & Medicaid Services, and the ACL-funded National LGBT Resource Center, with input from aging and LGBT advocates.Read more.

Additional LGBT Resources for the Aging Services Network

Since 2010, the ACL Administration on Aging has funded Services and Advocacy for Gay, Lesbian, Bisexual and Transgender Elders (SAGE) to develop and operate the National Resource Center on LGBT Aging (NRC), the country's first and only technical assistance resource center aimed at improving the quality of services and supports offered to LGBT older adults.  This resources clearinghouse website was recently revamped and includes great local and national resources, as well as a new database of all the organizations that have received one of NRC’s trainings. Also, the NRC’s most popular guide, A Practical Guide to Creating Welcome Agencies is now available in Spanish titled Servicios Inclusivos Para Personas Mayores LGBT. Request a copy today!

Also, read the Presidential Proclamation -- Lesbian, Gay, Bisexual, and Transgender Pride Month, 2014.

Related articles

LGBT Latino Seniors Face Housing Crunch, Isolation in San Francisco

LGBT Undocumented Immigrants Face an Increased Risk of Hate Violence

LGBT Groups Working to End Seniors' Isolation

Black LGBT Seniors Struggle with Double Discrimination

LGBT Face Challenges With Aging

Safeguarding Projects for Older Persons -- on Both Sides of the Atlantic

I'm at the mid-point in a three-week period of fairly intense focus on elder protection issues. 

Last week, I accepted the invitations of Dickinson Law alum Bob Gerhard and Judge Lois Murphy to join them at the Montgomery County Elder Justice Roundtable to discuss  practical concerns about elder abuse at the local level.  Bob and I conducted two sessions on Powers of Attorney.

This week, I've had the privilege of being part of working sessions of the Pennsylvania Supreme Court's Elder Law Task Force.  Judge Murphy, right, is also a part of this effort.  A fascinating mix of trial and appellate level judges, district attorneys, legal aid specialists, solo practitioners, "big firm" lawyers, court administrators, state officials, protective service case workers, social workers (and a couple of us academic types) spent two intense days discussing a year's worth of research on how better to serve the interests and needs of adults who may be at risk of neglect or intentional harm, including financial abuse.  Guided by the charge of Justice Debra Todd of the Pennsylvania Supreme Court, we're looking to issuance of a comprehensive report and recommendation for actions, probably in the early fall 2014.

Next week, I land in Belfast, Northern Ireland for several days of working group meetings on law and aging topics. On Tuesday, June 24, I am part of a research team's Roundtable discussion on recommendations regarding "social care" for older persons. hosted by the independent Commissioner of Older Persons in Northern Ireland (COPNI).  Our team leader for that project is Dr. Joseph Duffy of Queen's University Belfast.   The following day, I will attend the COPNI's launch of "Protecting our Elder People in Northern Ireland: A Call for Safeguarding Legislation in Northern Ireland." Commissioner Claire Keatinge and her team have been tireless in pursuing a full agenda of safeguarding, care and dignity goals for seniors.  Last winter I worked on research findings and recommendations with team leader Dr. Janet Anand, also of Queens University Beflast, that served as a base for the Safeguarding Law proposals.  These two projects have involved amazingly talented scholars from diverse backgrounds, including social work and law in Scotland, England, Wales, Australia and, of course, both the north and south of Ireland. The truth is that I've been an avid "student" during my opportunities in Northern Ireland, often facing the reality that those on the other side of the Atlantic are ahead of the U.S. in thinking about key concepts, especially "social care" goals.  I look forward to more work, writing several follow-up articles in collaboration with team members as a result of the rich research environment of the last year. 

Following this schedule, I'm probably going to take a break from "daily" blogging for a few weeks.  I fear my brain may explode if I don't give it a bit of a rest, and I hear the green hills and fields of Ireland calling to me. 

Related articles

All-Ireland 'census' highlights differences and similarities, north and south: We're bit older and more atheistic

What Happens to Upfront Fees Paid by Residents of CCRCs -- Especially in Bankruptcy Court?

Last week's news of a Chapter 11 Bankruptcy proceeding in the Texas-based senior living company Sears Methodist Retirement Systems, Inc. (SMRS)  has once again generated questions about "entrance fees" paid by residents at the outset of their move to a Continuing Care Retirement Community (CCRC).  CCRCs typically involve a tiered system of payments, often including a substantial (very substantial) upfront fee, plus monthly "service" fees.  The upfront fee will carry a label, such as "admission fee" or "entrance fee" or even entrance "deposit," depending on whether and how state regulations require or permit certain labels to be used. 

As a suggestion of the significance of the dollars, a resident's key upfront fee at a CCRC operated by SMRS reportedly ranged from $115,000 to $208,000. And it can be much higher with other companies.  So, let's move away from the SMRS case for this "blog" outline of potential issues with upfront resident fees.

Even without talking about bankruptcy court, for residents of CCRCs there can be a basic level of confusion about upfront fees. In some instances, the CCRC marketing materials will indicate the upfront fee is "refundable," in whole or in part, in the event the resident moves out of the community or passes away.  Thus, residents may assume the fees are somehow placed in a protected account or escrow account.  In fact, even if the upfront fee is not "refundable," when there is a promise of "life time care," residents may assume upfront fees are somehow set aside to pay for such care. How the facility is marketed may increase the opportunity for resident confusion. Residents are looking for reassurances about the costs of future care and how upfront fees could impact their bottom line. That is often why they are looking at CCRCs to begin with.  "Refundable fees" or "life care plans" can be important marketing tools for CCRCs. But discussions in the sales office of a CCRC may not mirror the "contract" terms.

One of the most important aspects of CCRCs is the "contract" between the CCRC and the resident. First, smaller "pre move-in" deposits may be paid to "hold" a unit, and this deposit may be expressly subject to an "escrow" obligation.  But,  larger upfront fees -- paid as part of the residency right -- are typically not escrowed. It is important not to confuse the "escrow" treatment of these fees.  Of course, the "hold" fee is not usually the problem.  It is the larger upfront fees --such as the $100k+ fees at SMRS -- that can become the focus of questions, especially if a bankruptcy proceeding is initiated.

The resident's contract requires very careful reading, and it will usually explain whether and how a CCRC company will make any refund of large upfront admission fees.  In my experience of reading CCRC contracts,  CCRCs rarely "guarantee" or "secure" (as opposed to promise) a refund, nor do they promise to escrow such upfront fees for the entire time the payer resides at the CCRC.  In some states  there is a "reserve" requirement (by contract or state law) for large upfront fees whereby the CCRC has a phased right to release or use the fees for its operation costs.  Thus, the contract terms are the starting place for what will happen with upfront fees. 

Why doesn't state regulation mandate escrow of large upfront fees?  States have been reluctant to give-in to pressure from some resident groups seeking greater mandatory "protection" of their upfront fees.  There's often a "free enterprise, let the market control" element to one side of regulatory debates. On the other side, there is the question of whether life savings of the older adult are proper targets for free enterprise theories.  Professor Michael Floyd, for example, has asked, "Should Government Regulate the Financial Management of Continuing Care Retirement Communities?"  

My research has helped me realize how upfront fees are a key financial "pool" for the CCRC, especially in the early years of operation where the developer is looking to pay off construction costs and loans.  CCRCs want -- and often need -- to use those funds for current operations. and debt service.  Thus, they don't want to have those fees encumbered by guarantees to residents. They take the position they cannot "afford" to have that pool of money sitting idle in a bank account, earning minimal interest.  This is not to say the large entrance fees will be "misspent," but rather, the CCRC owners may wish to preserve flexibility about how and when to spend the upfront fees.

The treatment of "upfront fees" paid by residents of CCRCs also implicates questions about application of accounting and actuarial rules and principles. That important topic is worthy of a whole "law review article" -- and frankly it is a topic I've been working on for months. 

In additional to looking for actuarial soundness, analysts who examine CCRCs as a matter of academic interest or practical concern have looked at whether CCRC companies and lenders may have a "fiduciary duty" to older adults/residents, a duty that is independent of any contract law obligations. Analysts further question whether a particular CCRC's marketing or financial practices violate consumer protection or elder protection laws. 

There can also be confusion about what happens during a Chapter 11 process. First, during the Chapter 11 Bankruptcy process, a facility may be able to honor pre-bankruptcy petition "refund" requests or requests for refund of fees for a resident who does not move into the facility.  Second, to permit continued operation as part of the reorganization plan, a facility will typically be permitted by the Court to accept new residents during the Chapter 11 proceeding and those specific new residents will have their upfront fees placed into a special escrow account, an account that cannot be used to pay the pre-petition debts of the company. 

But what about the upfront fees already paid pre-petition by residents who also moved in before the bankruptcy petition?  Usually those upfront fees are not escrowed during the bankruptcy process.  Indeed, other "secured" creditors could object to refunds of "unsecured" fees. The Bankruptcy Court will usually issue an order -- as it did in SRMS's bankruptcy court case in Texas last week -- specifying how current residents' upfront fees will be treated now and in the future.  A bit complicated, right?  (And if I'm missing something please feel free to comment.  I'm always interested in additional viewpoints on CCRCs.  Again, the specific contract and any state laws or regulations governing for handling of fees will be important.)

Of course, this history is one reason some of us have been suggesting for years that prospective residents should have an experienced  lawyer or financial consultant help them understand their contracts and evaluate risks before signing and again in the event of any bankruptcy court proceeding. "Get thee to a competent advisor."   See also University of New Mexico Law Professor Nathalie Martin's articles on life-care planning risks and bankruptcy law. 

As I mentioned briefly in writing last week about the SMRS Chapter 11 proceeding, CCRC operators have learned -- especially after the post-2008 financial crisis -- that the ability of a CCRC to have a viable "second chance" at success in attracting future residents will often depend on the treatment of existing residents. Thus, one key question in any insolvency will be whether the company either (a) finds a new "owner" during the Chapter 11 process or (2) is able to reorganize the other debts, thereby making it possible for the CCRC company to "honor" the resident refund obligations after emerging from the Chapter 11 process.

During the last five years we have seen one "big" default on residents' upfront. refundable entrance fees during the bankruptcy of Covenant at South Hills, a CCRC near Pittsburgh.  A new, strong operator eventually did take over the CCRC, and operations continued. However, the new operator did not "assume" an obligation to refund approximately $26 million in upfront fees paid pre-petition by residents to the old owner. In contrast, Chapter 11 proceedings for some other CCRCs have had "gentler" results for residents, with new partners or new financial terms emerging from the proceedings, thereby making refunds possible as new residents take over the departed residents' units. 

For more on how CCRC companies view "use" of upfront fees, here's a link to a short and clear discussion prepared by DLA Piper law firm, which, by the way, is the law firm representing the Debtor SMRS in the Texas Chapter 11 proceeding. 

NIHSeniorHealth.gov offers info on quitting smoking for older adults

The National Institutes of Health has released a new Web resource to help older adults stop smoking. Quitting Smoking for Older Adults, a new topic from NIHSeniorHealth, offers videos, worksheets, interactive features, strategies, quizzes, and more for older smokers who want to or are thinking of quitting.

 

Cigarette smoking is the leading cause of preventable, premature death and illness in the United States, responsible for almost half a million deaths each year. In addition to lung and other cancers, smoking can cause heart disease, stroke, and chronic obstructive pulmonary disease, commonly known as COPD. The recent Surgeon General’s report, The Health Consequences of Smoking - 50 Years of Progress,provides new data that links smoking to bone disease, cataract, diabetes, macular degeneration, and erectile dysfunction. Research shows that people who quit smoking, regardless of their age, are less likely than those who continue to smoke to die from smoking-related illness. Although the rates of smoking have declined in recent years for all age groups, nearly 10 percent of adults over 65 - almost 4 million older Americans - continue to smoke.

 

“Most older adults know that smoking is harmful, and many have tried unsuccessfully to quit, often a number of times. But stopping smoking is a difficult goal that still eludes many older smokers,” says Erik Augustson, program director of the Tobacco Control Research Branch at the National Cancer Institute (NCI), which developed the topic for NIHSeniorHealth. “This new topic, which offers a mix of tips and tools geared to the needs and experiences of older smokers, is an important, easy-to-use resource that can benefit those trying to quit for the first time as well as those who have tried before.”

 

NCI, which based the topic on its resource, Clear Horizons: A Quit Smoking Guide for People 50 and Older, has also included information about the challenges and advantages of quitting when you’re older, smoking’s effect on medications, and how to handle withdrawal, cravings, and more.

Pennsylvania Legislature Sends New POA Law Reform Measures to Governor

On June 18, the Pennsylvania House of Representatives approved  House Bill 1429 (Printer's No. 3708), thus sending the long-debated bill's new provisions on Powers of Attorney to the Governor for signing.  If, as anticipated, the bill is signed by the Governor, the new rules would be effective for POAs created on or after January 1, 2015. 

Pennsylvania pracitioners?  That means the Elder Law Institute offered by the Pennsylvania Bar Institute on July 25-26 in Philadelphia will have new relevance to your practice to prepare for the changes.  The opening session of the Institute is the always valuable "Year in Review" by elder law and estate planning specialists Marielle Hazen and Rob Clofine.

A detailed summary of the history and key provisions in H.B. 1429 is provided by Pennsylvania Attorney Neil Hendersthot on his blog. 

Turkey's elderly population to go up 3 million by 2023

Via Cihan:

By 2023, Turkey's elderly population will have risen by 2.9 million people to 8.6 million, according to a statement released by Turkish Family Health Association (TAPD) Chairman Hakan Şatıroğlu on Monday.   Şatıroğlu indicated that the number of elderly people -- consisting of people who are at least 65 years old -- in Turkey is estimated to rise by 10.2 percent from this year to 2023, 20.8 percent by 2050 and 27.7 percent by 2075.   “The elderly population in 2012 stood at 5.7 million. This number will rise to 8.6 million. It is expected that the population of Turkey in 2023 will be around 85 million and will steadily increase until 2050. By then, we will be looking at a figure of almost 90 million people [in the country],” Şatıroğlu said.  He attributed “world changes” to the population increases. “By 2100, more than 2.5 billion people will be living on the continent of Africa. In that time, the population of Asia will also have increased by 432 million people, and there will be 97 million more people in Latin America and 182 million more in North America. On the other hand, the European continent's population will decrease by 63 million people,” Şatıroğlu said.

Read more here.

 

It's Not Your GrandParents' Retirement Community.

Remember those retirement communities that cropped up in the sunbelt states, with age restrictions?  Today's retirement communities are not those retirement communities of the past. Instead, according to an article in the May 30, 2014 N.Y. Times, Rethinking the Traditional Retirement Community, developers have to be creative in their design and amenities

developers [must]... think more creatively about housing options for a demanding generation that has begun to reach retirement age. Instead of focusing on traditional Sun Belt retirement communities, builders are seeking to lure older people who want to remain active or continue to work. Pleasing retirement-age customers is crucial for developers. At a time when many housing markets remain stagnant, projects catering to older people rank as one of the hottest fields...

One of the trends discussed in the article is the desire of retirees to be within driving distance of families, rather than moving states away to one of the sunbelt states.  The article features the stories of a number of retirees who have moved into these newer versions of retirement communities and note that even though the communities may cater to an active population, there are still designs for the aging population.

What's New In the War on Alzheimer's?

Psychiatric Times has an update on "What's New in the World on Alzheimers," written by Alisa J. Woods, PhD.    Here's the intriguing opening, minus the footnotes:

"It’s hard to believe that 40 years ago it was proposed that Alzheimer disease (AD) is caused by brain aluminum. Some people even threw out their cookware, in fear of acquiring the memory-impairing disease. The aluminum hypothesis has long since been discounted, and research has marched forward: β-amyloid (Aβ) protein was identified in 1984 in brain plaques of patients with AD, and hyperphosphorylated τ protein was identified in 1986. These are true AD markers; possible culprits behind neuronal death and memory impairment....

 

In the trenches of Alzheimer research, the battle continues . . . but where do we stand? Is the war on AD dementia nearing conclusion, or are we simply in the initial throes of the fight? In interviews with Psychiatric Times, 3 AD experts, Murali Doraiswamy, MD, of Duke Medicine; James Lah, MD, PhD, of Emory University; and Dagmar Ringe, PhD, of Brandeis University weighed in on this important topic."

To read the full article, you can register with the publication on-line, free of charge. 

India: Study says 50% of elders face abuse

Via the Times of India: 

According to a recent study conducted by HelpAge India, half the elderly population in the country faces abuse of various kinds.    This was the tenth year that the study was undertaken by the NGO, whose results were released days before the World Elderly Abuse Day observed on Sunday. Conducted in six tier I and six tier II cities of the country, including Nagpur, the survey aims to bring forth the reasons and incidences of abuse faced by the senior citizens.  "A decade ago, we saw that even those elderly people who are living with their families are very lonely and sad. This was mainly because of the changes in the family unit concurring with the many social changes that were happening in the country. We started the study on elderly abuse 10 years ago but the results are being made public only since last three years," said Sunil Thakur, a senior manager in the NGO. He added that highlighting this abuse in numbers may result in some concrete action for the protection of the elderly.

Read more here.

Access the report.

Schedule for 2014 Int'l Elder Law & Policy Conference, Chicago, July 10-11

John Marshall Law School in Chicago has released the schedule for its International Elder Law and Policy Conference for July 10 and 11.  John Marshall is partnering with Roosevelt University in Chiacgo and East China University of Political Science and Law in Shanghai in hosting the event, with plans for a second conference in 2015 in China.  As the conference "parallels the current discussions of the United Nations Open-Ended Working Group on Ageing," the plan is for conference participants to "draft a model international Declaration of Rights for Older Persons."

Looks to be quite the happening!  Speakers include scholars, practicing lawyers and judges from Ireland, Israel, Australia, Italy, Macedonia, Belgium, Taiwan, United Kingdom, and, of course, China and the U.S. 

There are three keynote addresses planned, by Gerard Quinn, Professor and Director of the Centre for Disability Law and Policy at the National University of Ireland in Galway; Israel Doron, Professor of Law and Social Work at University of Haifa in Israel; and Ellionoir Flynn, Senior Lecturer and Deputy Director of the Centre at National University of Ireland in Galway. 

Over the course of the two days there are five separate panels, touching on topics such as (1) dignity, equality and anti-ageism; (2) health care, caregiving and legal decision-making; (3) social security, pensions  and economic rights; (4) capacity protection and prevention of abuse; and (5) advocacy, representation and access to justice.  I'm going to be returning from a roundtable on social care policies and laws in Northern Ireland just in time for the Chicago conference and I'm looking forward to co-moderating the second session of panelists with Becky Morgan. 

Here's the link to the full schedule and the array of speakers.

 

Elder Justice Roadmap Project

The National Center on Elder Abuse has announced the release of  a new report, The Elder Justice Roadmap Project Report. Thesummary of the report from the website explains

Given the widespread health, legal, social and economic implications of elder abuse, the Department of Justice and the Department of Health and Human Services sponsored  the Elder Justice Roadmap Project and Report.  The Roadmap Project sought the input of experts and stakeholders from across the country in order to develop a strategic plan—by the field and for the field—to combat elder abuse, neglect and financial exploitation.  The report identifies and prioritizes actions that direct service providers, educators and researchers can take to benefit older adults facing abuse, neglect or financial exploitation.  Likewise, it provides a roadmap for strategic investment and engagement by policymakers in both the public and private sectors to advance our collective efforts to prevent and combat elder abuse at the local, state and national levels.

The full report can be accessed from here.

New Article from Dick Kaplan

Our dear friend and elder law prof rock star Dick Kaplan from U. of Illinois College of Law  (a/k/a Richard L. Kaplan, Peer and Sarah Pedersen Professor of Law) has written a new article, "Desperate Retirees: The Perplexing Challenge of Covering Retirement Health Care Costs in a YOYO World” which is published in volume 20  Connecticut Insurance Law Journal 443.  (The volume also features an article by another elder law prof rock star, Larry Frolik). Dick provided me with the abstract

A retiree’s single largest and most unpredictable expense is paying for health care, and this article explains the various choices and options that a retiree confronts regarding that expense. The article examines the traditional components of Medicare (Parts A and B), prescription drug plans (Medicare Part D), Medigap coverage, and managed care alternatives, as well as long-term care insurance. Each section addresses the financial trade-offs and time-sensitive decisions that are involved.

His paper is also available here on SSRN. Rock on Dick!

May-June 2014 Issue of Clearinghouse Review Focuses on Advocating for Persons with Disabilities

 

A United Nations treaty, civil rights, guardianship, protection from school bullies, free appropriate public education, and emotional-support animals are topics covered in this disability-themed May-June 2014 Clearinghouse Review issue. Also covered: making the most of current resources to increase legal services.

Why Expanded Opportunities for Legal Immigration Are Important to Long-Term Care Providers...

Recently Artis Senior Living CEO Don Feltman joined CEOs from 10 other high profile corporate employers, such as Coca-Cola, Tyson Foods, and Loews Hotels & Resorts, to urge Congress to fix the "broken" immigration system, to permit expanded lawful avenues for foreign-born workers in the U.S.   In their June 10 letter, they write in part:  

All our companies rely on legal immigrants working alongside Americans to keep our businesses growing and contributing to the economy. This is a reality driven by demographics. In 1950, more than half of America’s workers were high school dropouts willing to do physically demanding, low-skilled work. Today, the figure is less than 5 percent. But our businesses still need less-skilled workers – and the need will only grow in years ahead. Baby boomers are retiring: 10,000 older workers are leaving the workforce every day. And after a long downturn, most of our operations are expanding and looking to hire workers.

 

The problem: there is virtually no legal way for less-skilled foreigners without family in the U.S. to enter the country and work in year-round jobs – effectively no temporary or permanent visas available for non-seasonal workers. Congress has an obligation to fill this gap – we need a visa program for less-skilled foreign workers seeking year-round jobs. Employers should have to try to hire Americans first. But if they can’t find enough U.S. workers, they should be able to hire foreign workers quickly, easily and legally.

Sears Methodist Retirement Files for Chapter 11 Reorganization in Texas

According to news reports, on June 10 Sears Methodist Retirement System, Inc. filed a voluntary petition in bankruptcy court in Texas, seeking relief under Chapter 11.  Apparently the private company, organized as a nonprofit that currently operates eleven senior living properties in Texas, including Contining Care Retirement Communities (CCRCs), Assisted Living facilities and Veterans homes, is seeking to reorganize some $160 million in debts. The multi-company operation provides housing and services to some 1,500 residents.  A detailed early report by Peg Brickley at Daily Bankruptcy Reports explains the initial relief sought: 

The Texas nonprofit organization is asking the U.S. Bankruptcy Court in Dallas to authorize it to quickly borrow $600,000 from existing bondholders, warning that it would be forced to cease operations without access to the funds. 

 

"Such an abrupt cessation of the...businesses would have devastating effects on the residents at the senior living facilities such debtors own and/or operate, including leaving many residents without food, medical supplies, and the health and support services that they require," Chief Restructuring Officer Paul B. Rundell said in court papers.

 

"In fact, many residents may be forced to immediately relocate, causing extreme hardship and putting both their lives and health at risk," added Mr. Rundell, of Alvarez & Marsal's Healthcare Industry Group.

 

Sears Methodist blamed the declining property market for some of its troubles. Older people are having trouble selling their homes and liquidating their stock portfolios to raise the money for the upfront payment to get into the senior-living communities, according to court papers.

I would expect some of the SMRS properties to be financially stronger than others, and thus could be spun off or taken over by other senior living operators, perhaps those with expertise in the specific type of property. When CCRCs are involved, residents have often paid very large "entrance" fees and must continue to pay substantial monthly service fees.  Even when their entrance fees are described as "refundable," CCRC residents are usually treated under bankruptcy law as "unsecured" creditors and thus become especially nervous during the proceedings.

Over the last several years, I've seen growing recognition that reassurance of existing residents, if possible, is critical to the continuation of the CCRC as a viable operation once it emerges from bankuptcy. Fortunately, despite continuing ups and downs (downs and ups?) in senior living markets since the 2008 financial crisis, the market has seen fairly strong players emerging.  There is also better appreciation for appropriate -- and inappropriate -- levels of risk and the importance of maintaining resident confidence over the long-term.

Is Rosie the Robot the Future of Caregiving?

For those of us of a certain age, we were aficionados of the TV series, The Jetsons. We will remember their housekeeper, Rosie the robot.  (Admit it, who of us hasn't at one time or another, wished we had a Rosie). In the Pew Research Center April 2014 report, US Views of Technology & the Future, one of the items surveyed was the use of robotic caregivers.  According to the key findings

65% think it would be a change for the worse if lifelike robots become the primary caregivers for the elderly and people in poor health.

Page 8 of the report expands on this finding:

 

Countries such as Japan are already experimenting with the use of robot caregivers to help care for a rapidly aging population, but Americans are generally wary. Some 65% think it would be a change for the worse if robots become the primary caregivers to the elderly and people in poor health. Interestingly, opinions on this question are nearly identical across the entire age spectrum: young, middle aged, and older Americans are equally united in the assertion that widespread use of robot caregivers would generally be a negative development.

And although we aren't likely to be jetting around in our personal spaceships a la George Jetson, we have written several posts on autonomous cars, and the survey question on this point shows a keen interest:

Of the three inventions we asked them about, Americans are most interested in riding in a driverless car: 48% would like to do this if given the opportunity, while 50% say this is something they would not want to do. College graduates are particularly interested in giving driverless cars a try: 59% of them would do so, while 62% of those with a high school diploma or less would not. There is also a geographical split on this issue: Half of urban (52%) and suburban (51%) residents are interested in driverless cars, but just 36% of rural residents say this is something they’d find appealing.

Now if I could just get that theme song out of my head....

 

 

When Senior Living Facilities Face NIMBY Complaints...

Dedham, Massachusetts, established as a town in 1636 just to the west and south of Boston, has a long history, including an interesting early debate on governance, as suggested by one protest.  According to historian and University of Chicago Law School Professor Geoffrey R. Stone, a group of local Dedham citizens erected a "liberty pole" in protest of the evils of the Federalist government, with a placard reading:

"No Stamp Act, No Sedition Act, No Alien Bills, No Land Tax, downfall to the Tyrants of America; peace and retirement to the President; Long-Live the Vice President."

Wishing "happy retirement" to the then-president, John Adams, was not a message of good will or appreciation.

In light of this history, a modern debate in Dedham caught my eye, involving opposition to construction of a senior living community in a residential neighborhood of that town.  As reported in a local Dedham news source:

"'Can you imagine waking up in the morning … there’s a house next door with 72 people in it with a very large staff and a whole lot of friends visiting?' Paul Reynolds said at a May 13 Dedham Zoning Board of Appeals meeting. 'If it could happen in this neighborhood where we can change the rules and change the definition of what single family is, where else could that happen?'

 

Artis Senior Living officials applied a month ago for a special permit that would allow the company to build an Alzheimer's and dementia care facility at 255 and 303 West Street—two residential properties on 7.71 acres that include conservation land. The ZBA decided to continue the hearing after several precinct one residents objected.

 

The Virginia-based company had initially proposed to build a 37,000 square foot, single story facility and about 21 feet tall. However, representatives presented a slightly different footprint last week after the board and residents raised concerns regarding the size of the property at an April 22 meeting."

In deference to the opposition, the developers changed the design, from a one story complex to a two story building centered on the 7 acre plot, thus allowing a greater buffer zone of more than 300 feet (that's a football field, right?) between the buildings and any of the closest neighbors. 

The protests apparently continue, however, thus demonstrating that in additon to opposing prisons and half-way houses for drug treatment, Not-In-My-Back-Yard" or NIMBY  movements can target seniors.  John Adams would appreciate the history, perhaps.

U.S. Supreme Court Addresses Status of "Inherited" IRA Accounts in Bankruptcy

On June 12, the U.S. Supreme Court issued its decision in Clark v. Rameker, concluding that "inherited" IRAs are not protected from a holder's creditors during bankruptcy.  Justice Sotomayor delivered the opinion for a unanimous court.  In so ruling, the Court rejected application of the "retirement fund" exemption, because unlike a holder's self-funded IRA, inherited accounts lack the "planning" motivation that justified protection of the funds as a retirement asset.  

 Forbes described the result as "an opinion with far-reaching implications."   

Hat top to ElderLawGuy Jeff Marshall as the first to send the link this decision.