Jun 30, 2015

Supreme Court upholds Obamacare: Good news for parents of special needs children

On June 25 the Supreme Court rejected the last judicial challenge to the Affordable Care Act. Parents of special needs children are breathing a sigh of relief, because the law prevents insurance companies from denying coverage to their children based on pre-existing conditions. 

With "Obamacare" the law of the land, parents with sufficient assets to provide private health insurance for their child may now find that a Special Needs Trust is no longer their best planning tool. A Special Needs Trust can preserve a disabled child's access to Medicare health benefits, among other federal benefits. However, federal law severely restricts how the trust assets may be used. Just giving the beneficiary pocket money may imperil the individual's access to governmental benefits.

If you are a parent who can afford to furnish your child with private health insurance and don't need to preserve his/her access to Medicare, it may make sense to do away with the Special Needs Trust. Instead, you may want to consider leaving assets for your child in a discretionary trust, which gives you broader latitude to determine how the beneficiary may use the money. Or, if your child is capable of managing his/her own financial affairs, you may even wish to leave funds to him/her directly.

One caveat to the above: There is still talk about Congress taking future action to eviscerate the Affordable Care Act. If we have a president in 2016 who agrees with that agenda, special needs children could still be in peril. Please contact The Karp Law Firm to discuss your options.

Jun 26, 2015

Good reverse mortgage news, but caution still advised

In my September 2014 post I told you about a change in HECM reverse mortgage regulations. That change eliminated the requirement that the non-borrower spouse pay the loan in full when the borrower dies. The new rule eliminated the threat of foreclosure for surviving non-borrower spouses, provided they continue to pay required tax and insurance on the property. 

Unfortunately, there was a BIG fly in the ointment: The new rule applied only to reverse mortgages assigned case numbers on or after August 4, 2014. That still left many non-borrower spouses at risk of being thrown out of their homes. To remedy that situation, HUD has now expanded the new policy to include reverse mortgages initiated even before August 4, 2014. You can read the new rule here.

This new ruling helps revamp the much-troubled reverse mortgage industry, as do the stricter eligibility critera for HECM loans introduced earlier this year. But caution is still in order. Beneficial under the right circumstances, taking out a reverse mortgage can wreck your financial security if you don't know all the facts ahead of time. Risks and rewards must be carefully evaluated and coordinated with your overall  estate plan. 

And those ubiquitous ads for reverse mortgages? Well, they do little to educate the public about the product's complexity. According to a recent study from the Consumer Financial Protection Bureau, such ads often contain statements that are incomplete or just plain inaccurate. The report also presents a good general introduction to the product and its risks and rewards. It's worth reading if you are considering a reverse mortgage. Read it  here.

Jun 22, 2015

Couple's estate plan left everything to America - a Fourth of July story

With Independence Day around the corner, it's fitting to pass along this article I recently read. The story's central figure did not give his life for America, but evidently, he felt American gave life to him.

Peter Petrasek fled Nazi-occupied Europe and ultimately ended up living in Seattle, where he died in 2013 at the age of 85. His wife predeceased him. They had no children. What Petrasek apparently did have was a vast appreciation for his adoptive nation. In their wills, he and his wife left everything to "America." So in May of this year, the Petrasek estate deposited a cashier's check for $847,215.57 into the U.S. Treasury.

U.S. Assistant Attorney Peter Winn, who helped arrange for the transfer of the Petraseks' funds into the U.S. Treasury, commented: "This case is interesting because it seems to be that these were two immigrants who felt grateful to have this adoptive country open its arms to them after having a hard time in eastern Europe during World War II. It really reminds you how this country was founded by immigrants, and it's pretty obvious these folks felt pretty proud they were U.S. citizens."

As an estate planner, I know first-hand that people don't want to pay a penny more in taxes than they must. So the Petrasek story is certainly unusual. But not entirely unique: One of my own clients, Maria Woods, had the same idea. Maria left Germany for the U.S. during World War II, becoming a U.S. citizen in 1970. She built a small and successful rental property business in Florida, where she died in 2004. Maria was absolutely committed to leaving the bulk of her assets to the government, and that is the way we drew up her estate plan. I think of Maria often and fondly, especially around this time of year. You can read Maria's story here.

To all, a happy and healthy Fourth of July. 

Jun 17, 2015

New Florida law to help curb elder guardianship abuse

In my post last month I told you about the flaws in Florida's elder guardianship system that have been exposed in recent investigative reports. Most court-appointed guardians of incapacitated older people try to do the right thing, but as the reports reveal, there are clearly some bad apples in the bunch. Structural problems and weak oversight in the guardianship system make it too easy for those bad apples to  mismanage a ward's funds or engage in other kinds of elder abuse.

Any competent adult may petition the court to have a guardian appointed for an allegedly incapacitated person. Because petitions are frequently filed on an emergency basis, the process can move very swiftly, and a judge may appoint an emergency guardian even before a three-person panel has had the opportunity to examine the person and render its findings. Once stripped of the right to manage his/her own finances, health care, to decide where and how to live and who to associate with, it may be nearly impossible for the ward to have those rights restored.

In an effort to curtail abuses, Florida Governor Rick Scott recently signed Florida HB5. While critics say the law does not go far enough, it's at least a start. The law goes into effect on July 1, 2015. Here, briefly, are some of its major provisions:
  • Provides specific criminal penalties for abuse or exploitation of a ward.
  • Requires that an allegedly incapacitated person and his/her attorney receive written notice no less than 24 hours prior to the hearing to determine the person's capacity.
  • Medical professionals called on to examine an elderly person's competence will be paid for their time - even if the person is found competent and the petition for guardianship is dismissed.
  • If the person is found to be incapacitated, the court must specify precisely which rights the individual is not competent to exercise that are being vested in the guardian.
  • If there is a dispute over who should be appointed guardian, the courts are required to give more consideration to the person's next of kin before appointing a professional guardian. 
  • If a professional guardian is appointed, he/she can be made the permanent guardian only if requested by the ward's next of kin (unless there are other special circumstances, or the guardian has certain skills that make that person the best choice).
  • Until now, the authority of the person's agent under his/her durable power of attorney has been automatically suspended once the process to determine the person's incapacity begins. Under the new law, if the agent is the spouse, child, parent or grandchild of the allegedly incapacitated person, the agent's authority will continue unless one or more of the following conditions are met:  (1) The person seeking guardianship provides evidence that the agent is abusing his/her power; (2) the agent's actions conflict with the person's known desires; (3) assets are being mismanaged; or (4) the power of attorney document is found to be legally invalid.
  • Similarly, if the allegedly incapacitated person has an advance health care directive, the court must indicate which powers will remain with the agent, and which will be given to the appointed guardian. The court must provide factual data to back up its decision.
Read the text of the bill here.

Jun 15, 2015

Joseph Karp named one of Florida's top attorneys

Attorney Joseph S. Karp has been named to the 2015 Super Lawyers List by Super Lawyers, a division of Thomson-Reuters. 

Less than five percent of Florida's attorneys receive this honor. Attorneys are rated based on peer review, and on several measures of professional competence that include experience, education, honors, awards, special certifications and licenses, scholarly writings and other criteria.

Mr. Karp is the founder of The Karp Law Firm, an estate planning and elder law firm with Florida offices in Palm Beach Gardens, Boynton Beach and Port St. Lucie.

Jun 13, 2015

Should parents tell their adult children what's in their estate plan?

A recent article in Wealth Management attempts to answer the question, Should parents tell their adult children about their   estate planning? Author Avi Kestenbaum advises against it, noting, "the parents are essentially begging their children to complain to them: 'Why am I getting this, or why can’t I have more or have it sooner?' Also, 'Why is that sibling getting this?' ” 

Let me weigh in on this. I agree with Kestenbaum that telling children about specific amounts and specific assets has its risks. But that doesn't mean that it's always the wrong approach, or that you can't give your children a general idea of what to expect. How much to tell, if anything, is highly personal and must be determined by your own comfort level, your assessment of your child's temperament and maturity level, and the family dynamic. Is your child responsible and hard-working, and will remain so no matter what? Do you have a child who may be inclined to get lazy if she expects a windfall? If one child is getting more than the other and you let them know, how will that knowledge affect their relationship with one another, and with you? Do you have a disabled child whose siblings will be involved in that child's future and therefore must know about the plans you are making for that child?

Just remember, you are under no obligation to tell your adult children about what you're leaving to whom. For that matter, you are not obligated to leave them anything at all! It is all up to you.
One parent-adult child discussion that is NOT optional concerns the parent's incapacity. I urge my clients to talk to their children about their incapacity plans, since more than likely they are relying on the children to step up to the plate if incapacity strikes. Discuss with your child your health care preferences, how you want your finances managed, and point your child in the direction of the documents (health care power of attorney, living will, durable power of attorney, etc.) that will give him the legal authority to manage your affairs. I am always sympathetic when I get a call from an adult child whose parent never prepared him for this eventuality. Not only is the child upset over the parent's health crisis, but is also feeling disoriented and unprepared to handle the parent's legal, financial and health issues. Talk to your child in advance - it's only fair to him, and you, that he know what will be expected of him!

Jun 4, 2015

Columbo's daughter does just one more thing for dad: The Peter Falk Bill

Actor Peter Falk is best known for having portrayed Columbo in the TV series of the same name. The crumpled, crackerjack detective's interviews with murder suspects always concluded with his puzzled statement, "Oh... just one more thing..." That was the "gotcha" moment when the smug suspect and audience alike knew Columbo had nailed the killer.

Now Falk's daughter is doing "one more thing" in honor of her father: Spearheading efforts to give adult children greater rights to visit ailing parents and to get information about their status.

When Catherine was five, Falk divorced her mother. He and Catherine continued to enjoy a close relationship. When in 2008 Falk began to suffer with dementia, his second wife, Shera, made it difficult for Catherine to visit her father and did not give her updates on his health. The situation was similar to what I told you unfolded in the families of the late Mickey Rooney, Casey Kasem, and now, Glen Campbell. 

During his period of incapacity, Catherine went to court in California. At great cost, she tried to get guardianship over her father. She learned then that children have few rights in this regard. The court instructed Shera to allow Catherine to visit her father, but Shera did not fully comply. In 2011, Falk passed away at age 83. Shera did not notify Catherine of her father's death; she heard about it from the media. Nor did she tell Catherine about her father's burial, or even his final resting place.

To prevent other adult children and their parents from enduring a similar experience, Catherine is promoting legislation to expand children's rights with respect to incapacitated parents. "There's no legal recourse that adult children have currently that allows them to get any visitation to their parents," says Falk. "They're isolated, and isolation means elder abuse. We need a law to protect us and to protect our parents so that we can have a relationship in their final years and days of their life."

As a result of her efforts, California is considering a bill - the Peter Falk Bill - that would recognize a child's right to visit an incapacitated parent. There is movement in other states to introduce similar bills. Here, from the Catherine Falk Organization website, are the provisions in the California bill. (Note that in that state, the word "conservatorship" is used instead of "guardianship"):
(a)  A conservator shall have the duty to keep the parents and adult children of a conservatee reasonably informed regarding the health of the conservatee.  A conservator must provide notice within 24 hours to any parent or adult child of the conservatee of any hospitalization or death of the conservatee.

(b)  Parents and children of conservatees have a right to reasonable visitation of the conservatee.  A conservatee shall not reject visitation made upon reasonable request unless the conservatee determines that visitation would be harmful to the conservatee.

(c) Any parent or child of a conservatee may bring a petition to enforce the right of visitation in the Court that appointed the conservator.  Such a petition may be brought in conjunction with a petition for appointment of a conservator.

(d) The court shall grant the petition for visitation unless the court finds, by clear and convincing evidence, that visitation would be harmful to the conservatee.  The court may place any reasonable restrictions on such visitation that it determines to be in the best interests of the conservatee.

(e) If the court finds that a conservator rejects a reasonable request for visitation, the court shall award the petitioner his or her costs, including reasonable attorney’s fees, unless the court finds that the conservator acted with a good faith belief that visitation would be harmful to the conservatee.

Further, the Proposed Bill would require cemeteries to open their records regarding interments to the public in order to allow persons to locate the graves of loved ones.

Have you had experiences similar to Catherine Falk's? Tell us your thoughts. Do you think similar laws are needed in Florida? 

May 28, 2015

Karp Law FIrm a Sponsor of 2015 Prime Time Awards

The Karp Law Firm was a sponsor of the 24th annual Prime Time Awards Breakfast held at the Palm Beach Gardens Marriott on May 21. The event was presented by the Area Agency on Aging and honored the work of the many dedicated senior volunteers in Palm Beach County and the Treasure Coast. Representing our law firm were Deeanna Farrington, MSW, the firm's supervising case manager; and Deborah Karp, marketing director.
The full list of award winners in every category is too lengthy to list here, so I will just mention a few: Ellen and Frank Simon were recognized for their 20 years of delivering Meals on Wheels to homebound seniors in Lake Worth. When asked why they do it, Mr. and Mrs. Simon said, "Because we can!" Also recognized was William Merkle, who along with his adorable beagle Sarah, visits with Hospice patientss. Kim Induck and Gladys Delfin nabbed Foster Grandparent awards for their mentoring work in local schools. 

A few photos of the event:
L-R: Steve DeLach of Cresthaven East; Case Manager Deeanna Farrington, MSW, of The Karp Law Firm; and Judith Jones, one of the Prime Time Award nominees.

William Merkle won the Paw Pal award in recognition of his visits to Hospice patients with his dog Sarah, above.

The Community Action Team. Kelly Wilson, Regional Director of the Florida Assisted Living Association, is second from right, top row.

May 27, 2015

No elder abuse charges to be filed against Casey Kasem's wife

In August 2014 I told you about the battle between Casey Kasem's wife and his adult children from a prior marriage over how and where the ailing radio icon should be cared for. Incapacitated with Lewy body dementia, Kasem passed away in June 2014 at age 82 in Washington State, where his wife Jean had taken him over the objections of the children. Then, after petitioning Norway, she was granted permission to bury his body in that country, again against the wishes of his children, who claimed their father had wanted California to be his final resting place.

Three of Kasem's children alleged that Jean's removal of their father from the Santa Monica facility to Washington hastened his death, and filed elder abuse charges against Jean. But last Friday, May 22, Los Angeles prosecutors announced that they would pursue the case, noting that "Because of Mr. Kasem's longstanding profound health issues, this case cannot be proven beyond a reasonable doubt to a jury."  

Daughter Kerri Kasem is not giving up. She has announced that she intends to file elder abuse charges against her stepmother in Washington State. "The Los Angeles County District Attorney, with her professed interest in ending elder abuse, could do more," she said in a statement. 

So the legal and media circus continues. It's a sad footnote to Kasem's stellar career. And we still haven't gotten to the matter of the money...yet.

May 23, 2015

Documents your 18-year-old needs

Has your child turned 18? Then he's an adult, says the law - even if he's still on your insurance plan, even if you're paying his tuition, even if he's living in your house and you're doing his laundry. From a legal perspective, your parental rights have terminated. That means that if he experiences a medical emergency, you may not be able to help or even get information about his condition - unless he has given you the authority to do so.

Why? Privacy laws. Two come into play here: The first is HIPAA, the Health Insurance Portability and Accountability Act, which limits those to whom health care providers can release data. The second is FERPA, the Family Educational Rights and Privacy Act, which restricts the information a school can release about an adult student.

Adults are entitled to their privacy, of course. And nobody wants to discourage an 18-year old from seeing a doctor or visiting the college infirmary because he's afraid mom and dad will find out about his personal life. On the other hand, most parents want to be there in the event of a child's health emergency, without having to go to court to get a guardianship over their child. And in my experience, once a young adult understands how the law works and its ramifications, he/she too wants the parent to be able to assist in the event of emergency.

There are numerous examples of well-intentioned privacy rules gone awry. Consider one incident reported by Consumer Reports in its 8/26/14 article, "Will You Be Able to Help Your Child in A Medical Emergency? Sheri Warsh, an Illinois resident and mother of a University of Michigan student, learned that her son had been rushed to the hospital when her son's roommate contacted her. (The hospital did not contact her.) In a panic, Warsh phoned the hospital to find out what was going on, but was rebuffed by the person who took her call. "She told me I had no right to talk to the doctor," Warsh says. Can you imagine how you would feel if this was your child? Fortunately, her son recovered.
Another instance is reported by Deborah Jacobs in a Wall Street Journal article of 8/15/14. Alex Franc, a Penn State sophomore, had been vacationing in Mexico during a school break. After returning to the U.S. he fell ill and was admitted to the school infirmary. His father rushed to the school to see him, but the doctors refused to talk with him, citing privacy concerns. Alex was "out of it" at that point and unable to give consent even if he wanted to.

With regard to mental health issues, the risks inherent in our privacy laws have come under intense scrutiny in the wake of recent violent incidents, from Sandy Hook to Virginia Tech to Aurora. In an attempt to recalibrate the balance between protecting privacy and protecting the public, U.S. Representative Tim Murphy (R-Pennsylvania), a clinical psychologist and co-chair of the Congressional Mental Health Caucus, has introduced the Helping Families in Mental Health Crisis Act. One section of the bill would give mental health professionals more leeway to release information about severely mentally ill adults under certain circumstances.  

So what to do when your child turns 18? First, he/she should sign a health care power of attorney that gives you the authority to get information and make medical decisions for him if he cannot do so. This may be easier said than done, of course: As a father myself, I realize some 18-year- olds will not take kindly to this idea, viewing it as an intrusion on their adulthood. If this is your child's attitude, he may be more receptive to making someone other than you his agent. It could be a sibling, or perhaps an aunt or uncle. Or he might consider meeting, independently, with a good estate planning attorney who can explain the legal facts of life to him. Lastly, there's always the old-fashioned carrot-and-stick approach. No health care power of attorney? Fine - then no car.

Age 18 is also a good time for a child to create a property power of attorney, so that someone else - probably mom or dad - can manage his financial life if he is unable to do so. Most young adults have little in the way of assets to manage, but there are still occasions when he may need someone to act on his behalf. Example: Your child is out of the country and needs money wired to him out of his account; or wants you to handle an insurance claim or hire a lawyer to handle a lawsuit in the event of an accident. 

We all remember the Terri Schiavo case. All of the litigation involved fighting over who should be able to serve as her court-appointed guardian. That would have been a non-issue if she had executed a health care power of attorney and a durable power of attorney.

Many young adults feel that they are invulnerable. We know better. Even newly minted adults need someone watching their backs in the event of a medical emergency. If your child has the proper estate planning documents, you can be there for him.
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