Monday, October 29, 2018
Law students from Penn State's Dickinson Law attended sessions hosted by LeadingAge and National Continuing Care Residents Association (NaCCRA) on October 28 in Philadelphia. It was my pleasure to share this experience with students. I see these opportunities as a great way to think about the wider world of business and law opportunities, and to consider how law and aging can intersect.
In the morning, we heard from A.V. Powell about best practices for actuarial evaluations to promote greater understanding of financial issues for continuing care and life plan communities across the country. At lunch we met Parker Life's CEO Roberto Muñiz, shown here on the right with Dickinson Law student Mark Lingousky, and discussed Roberto's ongoing projects such as working to established coordinated care options not just in Parker's center of operations in New Jersey, but also in Roberto's family home in Puerto Rico.
After lunch we attended a LeadingAge educational program on "Legal Perspectives on Provider Operational Issues," presented by four attorneys from around the country. Afterwards the students commented that they were surprised by how many of the topics had come up in one of Dickinson Law's unique 1L courses, on Problem Solving and Lawyering Skills. It is great to see such correspondence between real life and law school life. Of particular interest was hearing how residential communities are coping with issues connected to legalization of marijuana, including medical marijuana and so-called recreational marijuana, both from the context of resident use and potential use by employees.
On the drive home from Philadelphia, I had the chance to debrief with the students about what most interested them at the conferences. They quickly said they appreciated the opportunity to talk with engaged seniors about what matters concerned them. Indeed, after the attorneys leading the afternoon program took a quick poll at the outset to ask how many of the members of the audience were attorneys (outside or inside counsel), operational staff, or board members, one student leaned into me and said, "They forgot to ask how many people in the audience were residents or consumers of their services!"
Music to our ears, right Jack Cumming?
October 29, 2018 in Consumer Information, Current Affairs, Ethical Issues, Health Care/Long Term Care, Housing, International, Legal Practice/Practice Management, Programs/CLEs, Property Management | Permalink | Comments (0)
Friday, October 26, 2018
My first close look at filial support law in Germany arose in 2015, when I met a German-born, naturalized U.S. citizen living in Pennsylvania who had received a series of demand letters from Germany authorities asking her to submit detailed financial information for the authorities to analyze in order to determine how much she would be compelled to pay towards care for her biological father in German. Her father had become seriously ill and did not have inadequate financial resources of his own. As I've come to learn, the name for Germany's applicable legal theory is elternunterhalt, which translates into English as "parental maintenance."
Since 2015, I've heard from other adult children living in the U.S., but also in Canada and England, about additional cross-border claims originating in Germany. They write in hopes of getting objective information and to share their own stories, which I appreciate. In some instances, such as the first case I saw in Pennsylvania, a statutory defense becomes relevant because of past "serious misconduct" on the part of the indigent parent towards the child. The misconduct has to be more than mere alienation or gaps in communication. Sometimes misconduct such as abuse or neglect is the very reason the child left Germany, searching for a safer place.
Most of the adult children who reach out to me report they had never heard of elternunterhalt. Their years of estrangement are often not just from the parent but from the country of their birth. Even those who still have a relationship with the parent in Germany often learn of the potential support obligation only after their parent is admitted to a nursing home or other form of care. They face unexpected demands for foreign payments, while they are often still looking to fund college for children or their own retirement needs.
National German authorities began to mandate enforcement of elternunterhalt in 2010 in response to increasing public welfare costs for their "boomer" generation of aging citizens. Enforcement seems to have been phased in slowly among the 16 states in the country. I've read news stories from Germany about confusion and anger in entirely domestic cases.
A claim typically begins with letters from a social welfare agency in the area where the needy parent is living. The first letters usually do not state the amount of any requested maintenance payment, but enclose forms that seek detailed, documented information about the "obligated child's" income and certain personal expenses or obligations (such as care for minor children). The authorities also seeks information about any marital property and for income for any spouse of "life partner."
Whether or not the information is supplied, at some point in a wholly domestic German case the social welfare office may initiate a request for a specific amount of back pay as well as current "maintenance." Such a request cannot be enforced unless the child either agrees to pay or a court of law decrees that payment must be made. The latter requires a formal suit to be initiated by the agency and litigated in the family divisions of the German courts. The amount of any compelled payment is determined by a host of factors, including the amount of the parent's pension, savings, and any long-term care insurance, and the child's own financial circumstances.
Cross border cases have been pursued within the EU with some reported results. As for parental maintenance claims presented to U.S. children, enforceability is less clear. According to some of the letters sent by German authorities, Germany takes the position that a German court ruling in a cross border elternunterhalt claim can be enforced in the United States under "international law." The letters do not explain what legal authorities are the basis for such enforcement.
The Hague Convention on International Recovery of Child Support and Other Forms of Family Maintenance was approved by the European Union, thereby affecting Germany, in 2014. The treaty is mostly directed to the mechanics of international child support claims and is built on past international agreements on child support; however the treaty also provides that the Convention shall apply to any contracting state that has declared that it will extend the application "in whole or in part" to "any maintenance obligation arising from a family relationship, parentage, marriage or affinity, including in particular obligations in respect of vulnerable persons." See Article 2(3).
October 26, 2018 in Consumer Information, Current Affairs, Ethical Issues, Federal Statutes/Regulations, Health Care/Long Term Care, International, Legal Practice/Practice Management, Property Management, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (1)
Thursday, October 4, 2018
I teach contract law and I teach elder law, and often those silos overlap. But recently someone asked me whether a "power of attorney" was a contract. Somehow I had not not considered this topic before. My first reaction was "no, not usually," although certainly POAs have contract-like implications once the agent takes action using the POA as authority. I tend to think of POAs and similar appointments of an agent as bound by rather distinct "fiduciary law" obligations, as well as the limitations of the language in the POA itself and any statutory law, rather than traditional contract law principles. But perhaps my first instinct is wrong. One significance of categorization is when determining what statutes of limitation applies to any violation. It turns out the issue usually arises in the context of liability for allegations of misuse of authority.
What do you think? At least one court believes POAs are contracts, at least for purposes of applying principles of interpretation. A Court of Appeals opinion notes, when deciding whether family-member agents had authority to "self-deal" when handling real estate transactions in the name of the principal, that "Because a power of attorney is a contract, we interpret its provision pursuant to the rules of contract interpretation. . . . " See Noel v. Noel, 225 So. 3d 1114, 1117(Louisiana Ct. of Appeals, 2017).
For additional perspectives see the discussion of the Alabama Supreme Court, including the dissent, in Smith v. Wachovia Bank, 33 So. 3d 1191, 1202 (Ala. 2009).
October 4, 2018 in Consumer Information, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (3)
Friday, September 28, 2018
The Aging, Law and Society Collaborative Research Network (CRN) invites scholars to participate in a multi-event workshop as part of the Law and Society Association Annual Meeting scheduled for Washington D.C. from May 30 through June 2, 2019.
For this workshop, proposals for presentations should be submitted by October 22, 2018.
This year’s workshop will feature themed panels, roundtable discussions, and rapid fire presentations in which participants can share new ideas and research projects.
The CRN encourages paper proposals on a broad range of issues related to law and aging. For this event, organizers especially encourage proposals on the following topics:
- The concept of dignity as it relates to aging
- Interdisciplinary research on aging
- Old age policy, and historical perspectives on old age policy
- Sexual Intimacy in old age and the challenge of “consent” requirements
- Compulsion in care provision
- Disability perspectives on aging, and aging perspectives on disability
- Feminist perspectives on aging
- Approaches to elder law education
In addition to paper proposals, CRN also welcomes:
- Volunteers to serve as panel discussants and as commentators on works-in-progress.
- Ideas and proposals for themed panels, round-tables, or a session around a new book.
If you would like to present a paper as part of a the CRN’s programming, send a 100-250 word abstract, with your name, full contact information, and a paper title to Professor Nina Kohn at Syracuse Law, who, appropriately enough also now holds the title of "Associate Dean of Online Education!"
September 28, 2018 in Current Affairs, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Health Care/Long Term Care, Housing, International, Programs/CLEs, Property Management, Retirement, Science, Social Security, State Cases, State Statutes/Regulations, Statistics, Web/Tech, Webinars | Permalink | Comments (0)
Thursday, September 27, 2018
The FTC has announced that effective September 21, 2018, financial caregivers can now request security freezes for those for whom they manage money. Managing someone else’s money: New protection from ID theft and fraud explains that "[a] security freeze restricts access to your credit reports and makes it hard for identity thieves to open new accounts in your name. Under the new law, it’s free to freeze and unfreeze your credit file at all three of the nationwide consumer reporting agencies – Equifax, Experian, and TransUnion." The law extends the ability to those who have "certain legal authority [to] act on someone else’s behalf to freeze and unfreeze their credit file. The new law defines a “protected consumer” as an incapacitated person, someone with an appointed guardian or conservator, or a child under the age of 16." The article explains that the law does require proof of legal authority, which the article notes includes a DPOA or guardianship order. This is a great idea! Make sure you tell your clients about this.
September 27, 2018 in Cognitive Impairment, Consumer Information, Crimes, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Federal Statutes/Regulations, Property Management | Permalink
First the bad -- or at least frustrating -- news. On Thursday, September 27, we received word that Senate Bill 884, the long-awaited legislation providing key reforms of guardianship laws in Pennsylvania, was now "dead" in the water and will not move forward this year. Apparently one legislator raised strong objections to proposed amendments to SB 884, amendments influenced by recent high-profile reports of abuse by a so-called professional guardian who had been appointed by courts in multiple cases in eastern Pennsylvania.
The objections reportedly focused on one portion of the bill that would have required both law guardians (typically family members) and professional guardians to undergo a criminal background check before being appointed to serve. The amendment did not condition appointment on the absence of a criminal record, except where proposed "professional guardians" had been convicted of specific crimes. For other crimes or for lay guardians, the record information was deemed important to permit all interested parties and the court to make informed decisions about who best to appoint.
What is next? Pennsylvanians will look to new leadership in the 2019-20 session in the hope for a new bill that resolves differences and that can make it through both houses. In the meantime, the courts are already moving forward with procedural reforms, adopted in 2018 at the direction of the Pennsylvania Supreme Court.
And that leads us to a more positive note about guardianship reform in Pennsylvania. Pennsylvania Common Pleas Judge Lois Murphy testified this week during a Senate Judiciary Committee meeting about the Pennsylvania Courts' new Guardianship Tracking System (GTS). It is now operational in 19 counties (out of 67 total counties) in Pennsylvania, including coming online in the major urban counties for Philadelphia and Pittsburgh. Judge Murphy reported that GTS is "already paying dividends," and she gave the example of a case in which the reporting system triggered a red flag for an estate worth more than $1 million, much higher than originally predicted, making appointment of different guardian more appropriate.
Judge Murphy predicts that as the tracking system becomes operational statewide, it should generate valuable answers, such as how many persons are subject to guardianships at any point in time, how much in assets are under management, what percentages of the pointed guardians are family members (as opposed to professionals), and what percentages of those served are over or under age 60. The hope is that GTS will also permit coordination of information about appointed guardians in state courts with information in the federal system on those appointed as Social Security representative payees, thus, again, providing more comprehensive information about trustworthiness of such fiduciaries.
You can see Judge Murphy's testimony, and hear her reasons for criminal background checks and appointment of counsel to represent alleged incapacitated persons, along with the views of retiring Senator Greenleaf and Senator Art Haywood, in the recording of the September 24 hearing recording below.
Judge Murphy testifies from approximately the 35 minute mark to the 43 minute mark, and again from 1 hour 33, to one hour 44.
Bottom line for the week -- and perhaps the session? You can certainly grow old just waiting for guardianship reform in Pennsylvania.
September 27, 2018 in Consumer Information, Crimes, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Property Management, Social Security | Permalink | Comments (0)
Recommended reading! The Rhode Island Providence Tribute published a series of in August and September 2018 that flow from a student journalism project at Brown University in Rhode Island. The team of students conducted an investigation over the course of a year, looking for the outcome of elder abuse allegations in the state. What they found were plenty of arrests but very few successful prosecutions.
Over two semesters, four student reporters pulled hundreds of court files and police reports of people charged with elder abuse to explore the scope of the problem and the way law enforcement and prosecutors handle such cases. In addition, the reporters used computer data purchased from the Rhode Island judiciary to track every elder-abuse case prosecuted in Rhode Island’s District and Superior courts over the last 17 years.
The student project, sponsored by a new journalism nonprofit, The Community Tribune, was overseen by Tracy Breton, a Brown University journalism professor and Pulitzer Prize winner who worked for 40 years as an investigative and courts reporter for The Providence Journal.
As part of the year-long investigation, the students analyzed state court data to evaluate how effective Rhode Island has been at prosecuting individuals charged with elder abuse. This had never been done before — not even the state tracks the outcomes of its elder-abuse cases. The data, based on arrests made statewide by local and state police, was sorted and analyzed by a Brown University graduate who majored in computer science.
The investigation found that 87 percent of those charged with elder-abuse offenses in Rhode Island over the 17-year period did not go to prison for those crimes. Moreover, fewer than half of those charged were convicted of elder abuse. This left victims in danger and allowed their abusers to strike again and again.
The above excerpt is from the first article documenting the students' amazing investigation. I definitely recommend reading the following articles. Caution: there is a paywall that appears after you open some number of articles on the Providence Tribune website, so if you aren't in the position of being able to pay for all the articles, you may want to prioritize the order in which you "open" the individual parts.
Part 6 is somewhat different, as it tracks the "successful" prosecution of a court-appointed guardian who pled "no contest" in 2015 to charges of embezzling money from an 80-year old elderly client. The embezzlement scheme allegedly involved false claims for services and double-billing. According to other news sources, the guardian, an attorney who was eventually disbarred in connection with her plea, was required to pay more than $130k in restitution and serve 30 months of home confinement in lieu of a "suspended" sentence of seven years in prison.
September 27, 2018 in Consumer Information, Crimes, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Legal Practice/Practice Management, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Friday, September 21, 2018
This is the third of three postings about adult guardianship reform, with an eye on legislation in Pennsylvania under consideration in the waning days of the 2017-18 Session.
Senate Bill 884, as proposed in Printer's No. 1147, makes basic improvements in several aspects of the law governing guardianships as I describe here. A key amendment is now under consideration, in the form of AO9253. These amendments:
- Require counsel to be appointed for all allegedly incapacitated persons;
- Require all guardians to undergo a criminal background check;
- Require professional guardians to be certified;
- Require court approval for all settlements and attorney fees that a guardian pays through an estate (reflecting recommendations of the Joint State Government Commission's Decedents’ Estates Advisory Committee).
Most of these amendments respond directly to the concerns identified in the alleged "bad apple" appointment cases in eastern Pennsylvania, where no counsel represented the alleged incapacitated person, where there was no criminal background check for the proposed guardian, and where the guardian was handling many -- too many -- guardianship estates.
A key proponent of the additional safeguarding language of AO 9253, Pennsylvania Senator Art Haywood, has been working with the key sponsor for SB 884, retiring Senator Steward Greenleaf. His office recently offered an explanation of the subtle issues connected to mandating a criminal background check:
The PA State Police needed to fix some technical issues for us regarding national criminal history record checks only to make sure that when we send the legislation to the FBI for approval, they won’t have anything with which to take issue. The FBI requires an authorized agency to receive these national background checks; DHS is an authorized agency, but the 67 Orphans’ Courts in PA are not. Further, the FBI prohibits us from requiring recipients of national background checks to turn them over to a third party for this purpose, so we can’t require DHS or receiving individuals to send the national background check to the court.
As such, we had to develop a procedure that would still get courts information about whether someone under this bill has a criminal background from another state that would otherwise prohibit them from serving as a guardian. We switched the language around a bit to require DHS to send a statement to the individual that verifies one of 3 things, either: (1) no criminal record; (2) a criminal record that would not prohibit the individual from serving as guardian; or (3) a criminal record that would prohibit the individual from serving as guardian. The individual would then have to bring this statement from DHS to the court when seeking to become a guardian. As in previous versions, the individual has an opportunity to respond to the court if there is a criminal record that would prohibit the individual from serving, and the response should assist the court in determining whether that person nevertheless is appropriate (for example, a person can voluntarily provide their own copy of their national background check – or other types of evidence – for the court to review).
The devil is in the details for any legislative reforms. It is often an "all hands on deck" effort to secure passage, especially in an election year.
Will the Pennsylvania Legislature pass Senate Bill 884 to make changes appropriate for safeguarding of vulnerable adults?
September 21, 2018 in Cognitive Impairment, Consumer Information, Crimes, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Wednesday, September 19, 2018
Will Pennsylvania Pass Long-Awaited Adult-Guardianship Law Reforms Before End of 2017-18 Session? (Part 1)
For the last few years, I've been quietly observing draft bills addressing needed reforms of Pennsylvania's adult guardianship system as they circulate in the Pennsylvania legislature. Over the next few days, drawing upon a detailed update memorandum I prepared recently for interested parties, I will post reasons why the legislature can and, many would argue, should move forward in 2018.
Today, let's begin with background. First, here is the status of pending legislation and the timetable that could lead to passage:
Pennsylvania Senate Bill 884 (Printer’s No. 1147) presents an important opportunity to enact key reforms of Pennsylvania’s Guardianship Laws. The bill is based on long-standing recommendations from the Pennsylvania Joint State Government Commission. The Senate unanimously passed an earlier identical measure, S.B. 568, during the last legislative session (2015-16). The current bill was approved and voted out of Senate committee in June 2018, but then tabled. Although the schedule is tight, there is still time for action by both house before the end of the session in November. If not fully passed and signed this year, a new bill must be introduced in the next legislative session.
The Pennsylvania Senate has scheduled session days before the November election on September 24, 25, and 26 and October 1, 2, 3, 15, 16, and 17. The Pennsylvania House of Representatives also has scheduled session days for September 24, 25 and 25, and October 9, 10, 15, 16 and 17. If S.B. 884 is passed by the Senate in September, it appears there may be adequate opportunity for the House to move the legislation through the House Judiciary Committee and to the floor for final passage.
Second, let's review the steps taken most recently towards reform of existing Pennsylvania law:
In 2013-14, the Pennsylvania Supreme Court formed an Elder Law Task Force to study law-related matters relevant to the growing population of older persons in Pennsylvania. The team included members of all levels of courts in the Commonwealth, plus private attorneys, criminal law specialists, and perhaps most importantly, members of organizations who work directly with vulnerable adults, including but not limited to seniors. Guardianship reform quickly became a major focus of the study. I was a member of that Task Force.
Statistics available to the Task Force in 2014 show that some 3,000 new guardianship petitions are filed with the Pennsylvania Courts each year, of which approximately 65% are for alleged incapacitated persons over the age of 60. The number of new petitions can be expected to increase in the very near future. During the last six years, the cohort of Pennsylvania’s population between the ages 64 and 70 grew by a record 31.9%. Soon, that aging cohort will reach the years of greatest vulnerability with the increased potential for age-related cognitive impairments or physical frailty. Appointment of a guardian is usually a choice of last resort, sometimes necessary because of an emergency illness or because individuals have delayed using other means, such as execution of a power of attorney or trust, to designate personally-chosen surrogate decision-makers.
When a determination is made that an individual is incapacitated (as defined by statute) and in need of certain assistance (again, as defined by law), courts have the duty and power to appoint a person or an entity as the “guardian.” Once appointed by a court, guardians can be given significant powers, such as the power to determine all health care treatment, to decide where the individual lives, and to allocate how money can be spent. While Pennsylvania law states a preference for “limited guardianships,” in reality, especially if no legal counsel is appointed to represent the individual to advocate for limited authority, it is more typical to see a guardian be given extensive powers over both the “person” and the “estate.”
The Task Force began its work by undertaking a candid self-assessment of existing guardianship processes. Based on its review of the history of guardianships in Pennsylvania, the Task Force issued detailed findings as part of its final Report released in November 2014, including the following:
- Guardianship monitoring is weak, if it occurs at all.
- Training is not mandated for professional or non-professional guardians.
- Non-professional guardians are not adequately advised as to the duties and responsibilities of managing the affairs of an IP [incapacitated person].
- The quality of guardianship services varies widely, placing our most vulnerable citizens at great risk.
The Pennsylvania Supreme Court identified a need for better information about the actions of appointed guardians; such information would be central to all recommended reforms. The Task Force recommended a new system enabling statewide accountability and consistent oversight.
Following the Task Force Report and Recommendations, and under the leadership of the Supreme Court, the Administrative Office of the Pennsylvania Courts began working on procedural reforms, beginning with creation of an Office of Elder Justice in the Courts. The Courts developed a new, online Guardianship Tracking System, and in June 2018 the Supreme Court adopted new Orphans Court rules (14.1 through 14.14) that establish certain procedural safeguards for guardianships and require use of uniform, state-wide forms and reporting standards for all guardians. These rules are scheduled to become fully effective by July 2019.
Pursuant to a Judicial Administration Rule adopted August 31, 2018, the Supreme Court mandated a phased implementation of the tracking system, with workshops offering training for guardians on how to use the system to file inventory and annual reports. See Guardianship Tracking System Workshop.
Not all recommended reforms, however, can be accomplished by the Courts adopting procedural rules. Key substantive reforms require legislative action. Senator Stewart Greenleaf, the chair of the Senate’s Judiciary Committee and a frequent sponsor of child and adult protective measures, introduced Senate Bill 884 (and its predecessor). After many years of service and leadership in the Capitol, Senator Greenleaf is retiring this year; therefore, any necessary renewal of the legislation must attract new leadership.
September 19, 2018 in Consumer Information, Current Affairs, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Property Management, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0)
Tuesday, September 18, 2018
Do you read Robert Fleming's elder law newsletter? Tim Takacs' blog? I wanted to point out two recent blog posts I thought very useful. First is Tim's blog post, What To Do With Your Estate Planning Documents.Tim, in his blog post, discusses with whom to share your documents, discuss your plans with those affected by them, review joint ownerships and beneficiary designations, review your papers organize them and make sure they are current. Then comes Robert Fleming's newsletter where he writes in inspired response, What NOT to do With Your Estate Planning Documents..Here Robert offers these not to dos, such as: client, do not hide your documents, or write on them, or sign other documents, fail to take the documents to your next attorney, or fail to recall what you've done. I'd also like to suggest don't use your estate planning documents as a coaster or a napkin-in other words, keep them secure and in a safe place.
Monday, September 17, 2018
Jack Cumming, a California CCRC resident, frequently comments on Elder Law Prof Blog posts, bringing to bear his deep expertise in financial planning matters and his equally engaged commitment to historical accuracy in a wide variety of issues. Jack is a Fellow of the Society of Actuaries, and a Certified Aging Services Professional by Examination. During what I might call Jack’s “official career” as a professional actuary, he served as an independent consulting actuary for life and health insurance operations, and before that as a corporate officer and chief actuary for insurance companies.
I first came to know Jack during what I’ll call his “second” career. Jack helped many, including me, understand concerns about actuarial soundness issues in Continuing Care Retirement Communities. He came to his specialized expertise in CCRCs in a unique way, by moving to a California CCRC with his wife and discovering issues that can benefit from actuarial analysis. Over the last 12 years, Jack has advised CCRC residents and providers, as well as their organizations across the nation.
Jack recently commented on an item I posted on September 12, that described a particular history of poor actuarial decisions contributing to failure of a large Pennsylvania long-term care insurance company. In that post, I also reported on a new hybrid type of long-term care product, announced by New York Life Insurance Company. Jack’s response was, as usual, so insightful that, with Jack’s permission, I am posting his commentary here, elaborated by him, as a blog post in its own right.
A number of thoughts come to mind when reading the recent Elder Law Prof Blog post on long term care insurance (LTCi). The Elder Law post lists a perfect storm of what turned out to be foolhardy expectations. Morbidity was underestimated, so were contract lapse rates and mortality. Anticipated investment returns turned out to be overstated, medical and care costs escalated, and efforts to raise premiums without triggering shock lapses proved insufficient. The result for the industry has been devastating, as anyone who has been close to LTCi, is well aware. Fortunately, LTCi was a small part of the business of many insurers offering the product, so losses were absorbed. Penn Treaty, an LTCi specialist company, was not so lucky.
Now, with the benefit of hindsight, it thus appears that there were significant and material optimistic misjudgments made in bringing LTCi to the market. First, the data used for the initial pricing were not sufficiently vetted. Pricing actuaries used what data they could find but, for the most part, they failed to take into account the fact that the very existence of such insurance, then being introduced for the first time, would make it more likely that people would use the benefits.
Moreover, the opportunity for LTC providers to receive payments promoted the growth of the provider industry to deliver services that the insurance would cover. Thus, historical data from the time before there was insurance was misleading. Since the products lacked incentives for policyholders, or those offering services to them, to restrain their use, it was predictable that people would seek to make the most of their coverage. And they did and continue to do so.
Long Term Care Insurance developed originally to give the sales agents of the large life insurance companies a product that they could sell as part of a product portfolio centered on the sale of life insurance. Such a portfolio, in addition to life and long term care insurance, often included disability income and health insurance. Most of the pricing actuaries who were involved in the early development of LTCi products were life insurance specialists influenced by life insurance concepts. There’s little discretion or volunteerism about dying, so mortality data used in setting life insurance premiums tend to be relatively stable and predictable. The consequence is that underwriting and claims in large life insurance companies are principally administrative, e.g. for claims, confirm the death and send a check. More subjective risks, such as disability income (DI) insurance and LTCi, require active management over the duration of a claim by highly skilled executives experienced and specialized in those particular undertakings.
September 17, 2018 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Property Management, State Statutes/Regulations, Statistics | Permalink | Comments (0)
Thursday, September 13, 2018
State Regulators Seek to Revoke Licenses of California Facilities for Failures During Fire Emergency Response
Flying into California for Labor Day weekend was a vivid reminder for me as an East Coast resident of the devastation being wrought by wildfires on the West Coast.
News articles also call attention to the need for careful advance planning and training by senior care communities -- however labeled or regulated, and wherever located -- for emergencies such as fires. Reading recent articles also demonstrates that just because you are in a "high-end" facility, administrators may not have a functional plan.
As detailed in a written complaint filed the first week of September 2018, California regulators are seeking to revoke the licenses of two Santa Rosa facilities operated under the umbrella of Oakmont Senior Living endangered by wildfires on October 8-9, 2017. The complaint also seeks lifetime bans for individual administrators. While there were no deaths of residents or staff at either location, one location, Villa Capri, was completely destroyed in the fire.
The state's complaint alleges inadequate staffing to handle nighttime evacuations, plus failure to comply with emergency and evacuation procedures, either because of inadequate knowledge or training on the plans for the administrators and staff that were present. The complaint describes a bus that could have been used to facilitate evacuation, but the on-duty staff did not have keys. It is alleged that because of these failures, "no staff were at Villa Capri to assist with the evacuation of more than 20 remaining elderly and infirm facility residents." Family members of the residents and emergency responders conducted the remaining evacuations at both locations.
The facilities, described in news articles by various labels ranging from "nursing homes" (the label used in the first line of a New York Times article) to "luxury retirement communities" (as described in the Mercury News), were licensed under California law as "residential care facilities for the elderly." As such, they were subject to regulations requiring appropriate emergency plans, including evacuation plans. It appears that Villa Capri had 62 units devoted to "memory (dementia) care" and assisted living. The second community, Varenna at Fountaingrove, is reported to have had 228 residents, including many who lived in individual "casitas," and 14 residents who needed "care and supervision" or "hospice."
The state's suit comes a few days after news of a reported settlement of a civil suit for undisclosed terms, filed on behalf of 17 residents of Villa Capri.
September 13, 2018 in Consumer Information, Current Affairs, Ethical Issues, Health Care/Long Term Care, Housing, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Tuesday, September 11, 2018
I'm preparing for an upcoming program in North Carolina and residents of senior living communities have sent me questions in advance. The questions I've received are a reminder that "transparency" is a big issue. As one resident candidly explained, "No population is more vulnerable than seniors living in managed care.... I consider myself among the vulnerable." I've come to believe that lack of transparency impacts virtually all of the options for financing of senior living, including long-term care insurance and continuing care communities. The problem is that many prospective clients do not know who they can trust, and many end up trusting no one. They end up not making any advance plan.
For example, this week there is industry-sourced news that 33 facilities operated under the umbrella of Atrium Health and Senior Living, a New Jersey-based company, are going into receivership. These include 9 "senior living communities" and 23 "skilled nursing facilities" in Wisconsin, plus a skilled nursing facility in Michigan. Atrium is also reported as operating 3 senior living communities and 9 skilled nursing facilities in New Jersey that "are not part of the receivership." If you look at the company's website today, however, it won't be easy to find news that insolvency is already impacting this company's sites. At least as of the time of my writing this blog post, there's only "good news" on the company's website.
The public tends not to distinguish between different types of senior living options, at least not until individuals get fairly close to needing to make choices about moving out of their own homes. I can easily imagine anyone who has done enough advance research to know about troubled companies to simply make a decision to steer clear of all facilities operated under a particular company name. But, I suspect there is also a much larger population of prospective residents who view reports of troubled senior living companies or facilities as a reason to reject all of the options.
Some providers will say that the problem is that "bad news" is over-reported. I don't think that is actually true. Rather, I think that there in most states is it hard to distinguish between financially sound or unsound options. Certainly, I've known state regulators who decline to talk about troubled properties on a theory that bad news may make it harder for struggling operations to work out their problems as they cannot attract new customers. Lack of transparency is argued as an explanation for giving operators a fair chance to recover, and recovery helps everyone.
States, however, have unique opportunities to learn from their roles as receivers for troubled operations. Wouldn't it be helpful for states to publish accurate information about what factors they have discovered that contribute to success or lack of financial success? And if not the regulators, why not have the industry itself publish standards of financial health.
September 11, 2018 in Consumer Information, Current Affairs, Estates and Trusts, Ethical Issues, Health Care/Long Term Care, Housing, Legal Practice/Practice Management, Property Management, Retirement, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0)
Monday, September 10, 2018
Abigail Kawananakoa, age 92 and the heiress of a legendary Hawaiian estate as the descendant of a family who once ruled the islands, is at the center of a court dispute about whether she is able to manage her own affairs -- and a $215 million trust.
The money should go toward helping Native Hawaiians, they [Foundation Board Members] said at a news conference Thursday in front of Honolulu’s Iolani Palace. They are asking a judge to appoint a guardian for the elderly heiress, whose riches come from being the great-granddaughter of James Campbell, an Irish businessman who made his fortune as a sugar plantation owner and one of Hawaii’s largest landowners.
Many Native Hawaiians consider Abigail Kawananakoa to be the last Hawaiian princess because she’s a descendent of the family that ruled the islands before the overthrow of the Hawaiian kingdom.
A key court hearing in a legal fight over the trust is scheduled for Monday.
Her longtime lawyer, Jim Wright, persuaded a judge to appoint him as trustee, arguing a stroke last year left her impaired. Kawananakoa says she’s fine.
As trustee, Wright appointed three prominent Native Hawaiian leaders to serve as board members for the $100 million foundation Kawananakoa created in 2001. The foundation has a right to participate in the court battle because it is a beneficiary of her trust.
Kawananakoa “has reached a point in her life where she needs us to stand up and fight for her and her legacy,” said foundation board member Jan Dill. Kawananakoa intended that the foundation serve the Hawaiian community in arts, language, culture and education, he said.
For more, read Foundation Board: Protect Hawaiian Heiress' Millions.
While the above article does not fully explain the family dynamics, a photo accompanying the article depicts Ms. Kawananakoa and her wife, Veronica Gail Worth, who appears to be younger. Another article describes Ms. Worth as a "longtime caregiver." See A Cautionary Story of Elder Financial Abuse. Still other new reports describe Ms. Worth as Kawananakoa's "partner of 21 years," prior to their October 2017 marriage ceremony, conducted before a retired Hawaii Supreme Court Justice. See Hawaiian Heiress, 91, Marries Longtime Partner Amid Court Battle.
September 10, 2018 in Cognitive Impairment, Crimes, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Property Management, State Cases, State Statutes/Regulations | Permalink | Comments (0)
Friday, September 7, 2018
As recent readers of our Elder Law Prof Blog will know, at Dickinson Law this semester I'm offering a unit on long-term care financing that is taking a hard look at long-term care insurance. Thus, it was great to receive a recent email from a reader, Samantha Stein, sharing her timely report for the Association for Long Term Care Planning on "Group Long Term Care Insurance vs. Individual Policy: Which Is Better?"
This should interest people beyond my student group!
For example, Samantha explains who sells each type of product, and how to look for reviews and ratings of companies offering products.
Tuesday, September 4, 2018
Thanks to Julie Kitzmiller for sending me the link to a podcast at AARP on the Brooke Astor case. Brooke Astor: Famous Socialite Robbed is one in a series (this one is #18) of podcasts on "the Perfect Scam". The podcast runs about 25 minutes. Here's a description:
A prominent philanthropist and the epicenter of the New York society scene, Brooke Astor lived a tumultuous but glamourous life. Left a fortune by her third husband, Vincent Astor, Brooke planned to live out her later years at her country estate. But when Brooke’s son refuses to let her do so, then sells his mother’s favorite painting (worth over $30 million), grandson Philip decides to step in. Philip’s efforts to return his grandmother to the country home she loved would uncover one of the most prominent cases of financial elder abuse in U.S. history, with millions lost and a family torn apart.
A time-coded transcript accompanies the podcast and is available here.
September 4, 2018 in Cognitive Impairment, Consumer Information, Crimes, Current Affairs, Dementia/Alzheimer’s, Elder Abuse/Guardianship/Conservatorship, Health Care/Long Term Care, Property Management, State Cases, State Statutes/Regulations | Permalink
Friday, August 31, 2018
Professors Adam Hofri-Winogradow (Hebrew University of Jerusalem) and Richard Kaplan (University of Illinois) have an interesting new article, addressing how different countries analyze property transfers to caregivers. They recognize that, broadly speaking, reviewing authorities tend to treat family members differently than they treat professional caregivers when it comes to questions about undue influence or other theories that may invalidate a transfer as unfair. Further, they recognize that policies may differ for live-in caregivers versus hourly helpers. Also, on a comparative basis, countries may differ on how a governmental unit provides employment-based public benefits for home carers, thus perhaps influencing how family members view pre- and post-death gifts to caregivers.
From the abstract:
In this Article, we examine how the United States, Israel, and the United Kingdom approach property transfers to caregivers. The United States authorizes the payment of public benefits to family caregivers only in very restricted situations. The U.K. provides modest public benefits to many family caregivers. Israel incentivizes the employment of non-family caregivers but will pay family caregivers indirectly when assistance from non-relatives is unavailable. All three jurisdictions rely on family caregivers working for free or being compensated by the care recipients. We examine the advantages and disadvantages of several approaches to compensating family caregivers, including bequests from the care recipient, public benefits, tax incentives, private salaries paid by the care recipient, and claims against the recipient's estate. We conclude that while the provision of public benefits to family caregivers clearly needs to be increased, at least in the United States, a model funded exclusively by public money is probably impossible.
For more, read Property Transfers to Caregivers: A Comparative Analysis, published in June by the Iowa Law Review.
Monday, August 27, 2018
New Jersey Governor Signs New Law Helping CCRC Residents Get More Timely Refunds of "Refundable" Fees
Back in April, I posted here about legislation pending in New Jersey, inspired in part by litigation. Residents of Continuing Care Retirement Communities in New Jersey were advocating for mandatory limits on how long a CCRC could hold "refundable" entrance fees after the death or departure of a resident from a facility. New Jersey CCRC residents are well-organized and they have earned the ear of legislators. Final passage on an amended version of Assembly Bills 2747/880 occurred on July 1.
On August 17, 2018, New Jersey Governor Phil Murphy signed Public Law 2018, c.98 into law. The old New Jersey Law required CCRCs to repay refundable fees, but the refunds were not mandated until 60 days of "the unit" being resold. Data collected by residents and disclosed during litigation revealed that some facilities were holding refundable fees for more than a year after the vacating of the particular unit, while marketing and selling "other" units first. In essence, the companies preferred to sell new units or other units unencumbered by a refund obligation, to maximize their income and asset picture.
The new law creates a preference list for the 60-day refunds, a type of "first out, first repaid" system. Key language of the new law provides:
"In the case of a continuing care agreement that provides for a refundable entrance fee, the facility shall assign the vacated unit a sequential 'refund' number among all available units with refundable entrance fees. Any balance [due on refundable fees] shall be payable based on the sequential 'refund' number assigned to the unit. . . . "
A compromise among facility owners and residents in the drafting of the legislation permits a facility to apply to the New Jersey regulatory body for CCRCs for permission to use an alternative methodology for making refunds, but "approval shall not be granted unless the facility can demonstrate that the use of the alternative methodology is resident-focused and provides for a more equitable and timely payment of refundable fees."
This final language appears to be more resident-friendly than an earlier proposed exception, which would have expressly recognized the possibility of conditioning refunds on the resale of "similar" units. Resident councils will probably need to be careful to review any alternative proposals submitted by their own CCRCs.
The act takes effect in 90 days from date of enactment. For more on the history of the legislation, see Signed: Bateman Law to Stop Retirement Communities From Taking Advantage of Seniors and Surviving Estate Holders.
Current residents did not get a clear win, as the new rules for refunds are mandatory only for CCRC agreements entered into on or after the effective date of the new law. Nonetheless, congratulations to CCRCs and residents in New Jersey on making changes that better respect the expectations of customers and their families about the use of funds that function, in essence, as an interest fee loan to the CCRC during the residents' tenure in the facilities.
Friday, August 17, 2018
I'm teaching a "short course" on long-term care insurance for my law students this semester. Therefore I'm collecting as much current information on policies and costs as possible to share with my students. Along that line, WTOP-News in the D.C. area recently posted a two part discussion on "Weighing the Costs and Need for Long Term Care Insurance."
From the first part of the series:
Based on a 2016 Department of Health and Human Services study, about half of Americans turning 65 today will require long-term care services during their lifetimes (47 percent for men and 58 percent for women) with most needing assistance for an average of two years. About 12 percent will need between two and five years of long-term care, and nearly one in seven adults will require five or more years. . . .
Now let’s turn to the potential costs of long-term care services which varies by state and type of care. Genworth, a provider of long-term care insurance, released its 2017 Cost of Care Survey stating the national average annual cost of a private room in a nursing home is $97,452 which is an increase of 5.5 percent from one year ago and a five-year annual inflation increase of 3.5 percent. Interestingly, the biggest increase in long-term care costs was for a home health aide, which increased 6 percent from 2016 to 2017, to $49,162 per year for 44 hours per week.
Summary of Genworth’s median annual 2017 long-term care costs are below:
Adult Day Care (5 days/week) $18,200
Assisted Living (one-bedroom) $45,000
Homemaker Services (44 hours/week) $47,934
In-Home Health Aide (44 hours/week) $49,192
Nursing Home (semi-private room)$85,775
Nursing Home (private room) $97,455
Source: Genworth 2017 Cost of Care Study
The article also has a good summary of key features of LTCI, including inflation riders, elimination periods, maximum daily benefits vs. maximum benefit period, lifetime maximums, guarantees on renewability, nonforfeiture options and shared care.
The writer, Nina Mitchell, who is a advisor for The Colony Group, says that she plans to focus on "alternative long-term care solutions, such as hybrid policies that combine life insurance with long-term care insurance" in Part 2.
Thursday, August 16, 2018
On June 5, 2018, a Michigan Appellate Court issued an order demonstrating the tension between two concerns, respect for autonomy and a goal of protection, that can arise when a court is asked to determine who will be appointed a guardian or conservator. The case strikes me as a good vehicle for classroom discussion.
The appellate court concludes that the trial court abused its discretion by appointing a professional fiduciary, in lieu of the alleged incapacitated person's adult daughter, where there was a failure to make specific findings to explain why the state law''s "order of priority and preference" was not followed. The opinion for In re Guardianship of Gerstier notes:
While the probate court's focus on [the father's] welfare is commendable, the court missed a critical step in the analysis. When Milbocker [a private, professional guardian] resigned as [the father's] guardian and conservator, [the daughter] petitioned to be appointed to fill those roles. At that juncture, the probate court was required to reconsult the statutory framework before appointing another public administrator. The court never articulated any findings regarding [the daughter's] competence and suitability to serve. Absent those findings, the court erred by appointing [a new professional guardian].
The history recounted by the appellate court suggests that the man's daughter, living in Texas, and the man's sisters, living in Michigan, were both seeking control over the father's estate, with the sister making allegations that the daughter's personal and financial history made her an inappropriate choice. The daughter made counter allegations about the sister's motives and behavior. In addition, the father had signed conflicting POAs. In 2013 and again in 2015, the father identified the daughter in two powers of attorney as his preferred agent; however, in 2016, after being diagnosed with Alzheimer's disease and after his wife died, the father began living in Michigan with his sister, where he signed a new POA designating that sister as the agent.
Michigan law grants priority to "a person nominated as guardian in a durable power of attorney or other writing." Further, in the absence of an effectively designated individual, the statute provides an ordered list of preferences, beginning with the spouse and next with "an adult child of the legally incapacitated adult."
The Michigan appellate remanded the case to the trial court with directions to reconsider the appointment of a new guardian and conservator and to make "specific findings of fact" regarding the daughter's "competence, suitability and willingness" to serve. Further, the court directed that if the sister provided evidence during the remand, the court must "weight her credibility carefully in light of incorrect information she provided in her initial petition...."
Reading between the lines of the court history here, one can see how the trial court decided to go with a professional guardian, probably seeing appointment of a "neutral" professional as the safer option where money seemed to be the main focus of the control issues. (The father seemed to be comfortable traveling between his daughter in Texas and his sisters in Michigan.) State guardianship/conservatorship laws that have adopted lists of preferred individuals, however, require additional steps to explain why party autonomy will not be respected, or why the state's preference list will not control. Such laws significantly alter the discretion once accorded to the court under many state's older appointment laws. Will more careful adherence to the laws change the result in this case on remand? For the classroom exercise, ask students what they predict will be the trial court's next ruling.