Jun 19, 2016

Medicare observation status notices, set to begin August 7, causing concern

Hospital patients on observation status are considered too sick to go home, but not sick enough to be formally admitted. Beginning August 7, Medicare beneficiaries in the hospital on observation status must be notified of that status within 24 hours, both in writing in "plain language" and verbally. Hospital staff must also be available to answer questions. 

The purpose of the NOTICE Act (short for Notice of Observation Treatment and Implication for Care Eligibility) is to inform Medicare patients of the costs they may incur when not formally admitted to the hospital. From the perspective of someone in a hospital bed, observation and formal admission may be indistinguishable, but there could be a huge difference when it comes to Medicare coverage. Patients under observation may not be covered for certain hospital services and doctors' fees, and their stay in the hospital is not counted toward the three-day minimum required for Medicare to cover 20 days of subsequent skilled nursing care. 

June 17 was the last day for comments on the draft notice hospitals are required to give observation patients. Critics claim that because it is written on a twelfth-grade level, not the eight grade level that is standard for consumer materials, some patients may not understand it. And Rep. Lloyd Dogett of Texas, bill co-sponsor, finds the draft inadequate for several reasons: it does not document the actual reasons a patient is on observation status; it fails to clearly distinguish between Medicare Part A and Part B; and it does not address the fact that observation days do not count toward the three-day minimum stay required for Medicare to pick up a portion of any subsequent skilled nursing home costs. Others have expressed concern about the wording regarding drug coverage: "Self-administered drugs" - for example, blood pressure and cholesterol medications that patients usually take at home - are not covered by Medicare when administered in-hospital to an observation status patient. 

These concerns are prompting the American Hospital Association to ask for an extension of six months before they begin notifying patients. But YOU need not wait for Medicare and the hospitals to get their act together. As I noted in my prior post on this topic, Medicare patients and their loved ones must be proactive whenever a patient goes to the hospital. Find out - do not wait to be told - if you or your loved one are on observation status. If you are, you may be able to persuade your physician to reclassify your stay.That could make a huge difference in your financial responsibility.

Jun 16, 2016

Higher standard for advice on tax-advantaged retirement accounts

Federal law requires a financial advisor to put the client's best interest first when providing advice on tax-advantaged retirement accounts.    

Believe it or not, that was NOT the law until just recently. But it is today.

In the past, financial advisors working with 401ks and IRAs were required only to steer clients into "suitable" investments. With that leeway, clients might sometimes be steered into "suitable" investments that were riskier and/or paid higher fees or other incentives to the advisor, rather than into less pricey, more prudent investments. According to a report from the White House Council of Economic Advisors, such conflicts of interest, "backdoor payments" and "hidden fees" have been sucking $17 billion from Americans' retirement accounts every year. (Read report here)

Now, Americans saving for retirement will get a fairer shake. Under direction from the Obama Administration, the Department of Labor has issued a new rule requiring those advising you about tax-advantaged retirement accounts to adhere to a higher standard: a fiduciary standard. As fiduciaries, advisors will now be legally obligated to put your best interest over any other considerations. The law will go into effect in April 2017. Secretary of Labor Thomas Perez characterizes the new regulation as “…a huge win for the middle class.”

Note that the new rule does not apply to standard retail accounts. And even for retirement accounts, neither commissions or riskier investments are banned, but advisors will have to explain why they are recommending a particular investment if a less expensive or less risky one is available. 

Very important: The new rule is not at all new for "Registered Investment Advisors," who have ALWAYS been governed by the fiduciary standard. Like physicians and lawyers, they must prioritize their clients' interests over all other considerations. At Karp Financial Services, we are available to assist our clients with their retirement planning or other financial issues. If you do not currently have a Financial Advisor, want to establish a relationship with one, or just get a second opinion on your investment accounts or any other financial issue, feel free to contact us at 561-626-1130.

Jun 15, 2016

Named to Florida Super Lawyers list again!

I am delighted to announce my ten-year anniversary! Well, sort of. This is the 10th year that I have been named to Thomson Reuter's list of Florida Super Lawyers. The honor is given to outstanding attorneys who have achieved a high level of professional proficiency and peer recognition. No more than 5% of Florida lawyers earn the award each year. I am thrilled to be part of this elite group!

The Karp Law firm has three South Florida offices. Our lawyers assist clients and their families in the areas of elder law, estate planning, estate administration and litigation. You can learn more about our services here. For my professional qualifications, click here.

Jun 13, 2016

Alzheimer's Disease: Today's Realities

An online search for "Alzheimer's Disease" yields countless articles: New reports appear daily about recently discovered biomarkers, diagnostic tests, possible treatments, new medications, the latest research into potential cures. We are learning more all the time. But despite research efforts, we have yet to find the holy grail: a way to prevent or cure this increasingly prevalent disease.

How prevalent? If you are over 65 you have a one in nine chance of having the disease, according to The Alzheimer's Association's 2016 Facts and Figures report If you are lucky enough to live to age 85, your chances increase to one in three. Alzheimer's is the cause of 60% to 80% of all cases of dementia, and women are significantly more likely to be afflicted. If things keep going as they have, the nationwide incidence will triple by 2050. In Florida alone, the number of residents with Alzheimer's is expected to increase 41% by the year 2025.  

The 2016 report also presents revealing data about the toll the disease takes on caregivers. There are currently 16 million unpaid caregivers in the U.S. who are affected economically, emotionally and physically by a loved one's Alzheimer's Disease. The costs of care, the report concludes, "...can make it more difficult for individuals and families to maintain their own health and financial security." 

While it's widely believed that maintaining a healthy lifestyle has some preventive value, no steps will absolutely guarantee that you will remain untouched by Alzheimer's. There are, however, steps you can take that can ease the toll a diagnosis would take on your family. Assessing how your family can shoulder the staggering cost of long-term care, should it be necessary in the future, should always be part of your estate and life planning. An experienced Florida Bar Certified Elder Law Attorney can assist you.

Your attorney can also help you put in place legal documents that will smooth the road and make the transition easier for family members in the event of your incapacityA Durable Power of Attorney for Property will allow someone to handle your financial affairs. A Health Care Surrogate will authorize someone else to make your health-related decisions if you cannot do so. All these plans should be made well in advance. But even if you have already been diagnosed with Alzheimer's Disease, so long as your mental capacity remains, you can execute these important documents. Don't delay too long, though: the progress of the disease is unpredictable and, once incapacity occurs, the only recourse may be a court-ordered guardianship. That's a trying and expensive process you and your family will want to avoid.

Perhaps in the near future, it will no longer be necessary to advise clients about how to deal with the legal and financial ramifications of Alzheimer's Disease, because it will no longer exist. That is my hope. I'm sure it's yours, too.

Jun 8, 2016

Downsizing Tips for Seniors

Downsizing - simplifying, organizing and getting rid of clutter - can improve quality of life at any age. For seniors, it can be especially beneficial. See the tips below for seniors who are considering downsizing. This guest post is from community outreach manager Daniel LoFaso of Lourdes McKeen, a retirement and independent living facility in West Palm Beach, Florida. 

Downsizing can be helpful for seniors, creating less stress and fewer responsibilities during a time when it may be most beneficial. There are many ways to downsize various areas of your life, from cleaning out a house to getting finances in order. Some practical ways for seniors to downsize include the following suggestions:

Lighten up your life. Seniors can make a proactive move in their downsizing efforts by getting rid of clutter now. This includes the items that you are planning to give to others, such as cherished keepsakes and family heirlooms which typically are belongings that might get saved over the course of time. When cleaning out the house, you may consider starting a posterity box, which is intended for these items, and giving them to relatives or friends now in order to help downsize and make a positive step toward simpler living.

Consider communal living. When you are truly ready to downsize, consider moving into a communal living situation. This doesn’t mean that seniors have to move in with family or friends, but rather it might be pragmatic to consider relocating to a like-minded community. Many of these living situations, such as senior living communities, offer step-down living facilities that make planning for the future easier and more secure.

Some communities may offer independent living for seniors who desire the ability to come and go as they desire, while others may offer assisted living or skilled nursing (or a combination of all three) in the event that residents need more comprehensive care. Many may offer subsidized housing for those seniors with limited resources, too.

Take a look at your finances. It pays to spend some money to gain insight and information related to financial downsizing. Invest in legal representation with expertise in elder law, probate, and estate planning to make important decisions about your finances and investments. This may include setting up trusts, making charitable contributions, making long term care (LTC) considerations, and preparing a will.

Warm up to the idea of moving South. There is a reason why seniors flock to Florida once retired; the warm weather is a pleasant reprieve for many but it may also reduce the cost of living for many that are accustomed to colder climates and higher energy costs. Florida, in particular, has a lot to offer seniors and many areas are known as retirement communities. These regions might be the perfect reprieve for aging consumers looking to downsize and make life simpler. It also doesn’t hurt that Florida doesn’t have state income tax, making your retirement dollars go farther.

Do you really want to drive? If you enjoy driving or plan on using your vehicle during retirement, then by all means, do so. However, extra vehicles equate to extra costs and burdens. Where will you park? Have your insurance rates recently risen? Consider, instead, using public transportation or other means in lieu of the costs and commitments of owning or operating a vehicle. Some senior communities may offer shuttles to get residents where they need to go.

Make a donation. Downsize your life by donating goods, belongings, or resources to a worthy charity of your choice. This has the advantage of helping others that may be less fortunate, while also providing a helpful tax break for those that request documentation of the donation. Ask for a receipt of the transaction and use online calculators to figure out the tax break when completing your return.  

Downsizing has many benefits, particularly for seniors: Taking care of important matters now will make planning for the future easier, while ensuring your loved ones aren't left making decisions on your behalf. Talk with your legal expert to determine the best approach to fulfilling your final wishes and naming someone to have power of attorney over your affairs, should the time come that warrants this appointment. Be sure to complete a living will to ensure that your wishes are met and that there are no questions later regarding your care or treatment.Keep a copy with your insurance information, financial papers, and other important documents.

There are many ways to look at downsizing and it can make life a lot simpler and relaxed, particularly if you are a senior. Consider your living situation and how this may be contributing to your burdens; does it make sense to move?

Be sure to talk with a legal expert to determine how to best plan and address your finances to keep life simple but funded. Prepare documents now to ensure your final wishes are laid out and that there are no questions regarding your finances, care, and treatment when the time comes to make these tough decisions.

Downsizing now can provide a sense of security that makes retirement and aging a lot less worrisome, and that can help to make it a time to relax and enjoy the things that bring personal joy, satisfaction, and fulfillment.

May 31, 2016

Newlyweds, tend to these important plans

Across the country, thousands of eager couples, young and perhaps not-so-young, are busy with preparations for a June wedding. Guest lists, flowers and bridesmaids' dresses take center stage right now. But after the honeymoon, newly married couples should attend to something definitely not as glamorous, but definitely important: a basic estate plan. If you and your spouse have already discussed your budget and your finances, that's wonderful - but there's more to be done.

Hopefully your life together will be a healthy, happy, and long one - but let's face it, sometimes life has other ideas for us. For your financial and legal health, and most importantly for your peace of mind, you should address the following issues without delay:

Beneficiary designations
You'd be surprised at how many people fail to update their beneficiary designations when they marry. (This happened in my own family, when a relative found out her deceased husband's ex-wife had not been removed as the beneficiary of his life insurance policy.) Examine your retirement accounts, insurance policies, annuities, bank accounts, brokerage accounts. Also consider naming a contingent beneficiary, in case your spouse predeceases you.  

Titling of assets
Do you already own property with your spouse? There are three legal forms of titling when spouses co-own an asset: tenants in common, joint tenants with rights of survivorship, and tenants by the entirety. Consider ownership as tenants by the entirety, which is available only to married couples and can provide additional credit protection not afforded by the other forms of ownership.

Last Will and Testament
Your marriage has brought a new spouse into your life, and perhaps, new real property or other assets. A will allows you to name who you want to get your assets when you pass away. If you or your spouse do not already have wills, you should create them. If you have existing wills, have them reviewed. The law makes provisions for a "pretermitted spouse," i.e., a spouse who became your spouse after you wrote your will. The pretermitted spouse is legally entitled to 50% of your probatable assets. In addition, regardless of whether you change your will, your spouse has certain legal rights to your homestead property and elective share rights against your estate, including all non-probatable assets, unless you have a pre- or post-nuptial agreement that states otherwise. Bottom line, see a qualified elder law/estate planning attorney to get your ducks in a row.

Durable power of attorney
Do not assume that your spouse automatically has the legal authority to handle your financial affairs if you are incapacitated. Each of you should establish a durable power of attorney that  explicitly names the other (or some other responsible person) to handle your financial affairs if you are not able to do so. Once you have established your durable power of attorney, submit it to each of your financial institutions to be sure the institution will honor it.

Health Care Surrogate
Under Florida law, if you are no longer able to make your own wishes for medical care known, your spouse (after a court-appointed guardian, if there is one), gets priority as your health care decision maker. It is necessary to execute a health care surrogate naming your spouse as your health care agent. That assumes, of course, that you want your spouse to have that authority. If you want someone else to act as your health care agent - for example, a sibling - your health care surrogate must explicitly reflect that desire. Naming a contingent agent is also wise, if your first choice is unable to serve for any reason.

Children from a prior marriage?
If you have a child from a prior marriage, who will be the child's legal guardian if you pass away or are incapacitated, particularly if the child's other parent is no longer in the picture? Who will handle the child's money? These are important issues to be discussed with your attorney without delay.

Changed your name? 
Let your financial institutions know about your name change. Change your name on other documents, such as your passport and drivers license. Discrepancies between your new legal name and existing documents may seem like a minor issue, but can mushroom into a major inconvenience and bureaucratic nightmare. (Try getting through airport security when your drivers license says Mary Smith and your boarding pass says Mary Jones!) 

In summary: Enjoy your honeymoon - then make an appointment to see a certified and experienced elder law or estate planning attorney to get your plans underway. And keep the attorney's number on hand. As your married life evolves - perhaps with children, a new home, new assets - your estate plan will have to keep up. Congratulations!

May 29, 2016

Veterans Choice Program falls short of the mark

Our veterans have not always gotten what they deserve from our nation. With Memorial Day here, it's time to recommit ourselves to doing a better job.

The Veterans Aid and Attendance program provides disabled and elderly veterans financial help to cover the cost of at-home care, assisted living or nursing home care. In our experience, too many veterans do not know that the program exists. Among those who do know, too many wrongfully believe they are not eligible because they do not have a service-connected disability. 

Aid and Attendance is only one of a myriad of Veterans Administration health-related programs. Unfortunately, applicants often experience so much stress and frustration getting access to benefits that the process becomes, well, almost like fighting a war. No doubt the V.A. has its heart in the right place But it is a vast, lumbering bureaucracy that falls short more often than it should.

Take, for example, the Veterans Choice Program I told you about in 2014. Veterans Choice was introduced to shorten the horrifyingly long wait times veterans experienced trying to get medical care from the V.A. Under the program, a veteran could receive care from a private medical provider, at V.A. expense, if the veteran (1) faced a wait time of over 30 days, or (2) had a medical issue that required timely attention, or (3) lived more than 40 miles from a V.A. health facility.

Simple idea, right? As it turns out, deceptively simple. The program has been plagued by problems since inception. A recent NPR article notes that wait times have actually increasedVeterans and medical providers alike are still struggling to understand the program. Providers have difficulty getting authorized to provide care, and are not compensated by the V.A. in a timely fashion. According to a February 2016 report in Military Times, many veterans using the Choice program have even seen their credit scores compromised when unpaid providers go after them for payment.  

Critics attribute the problems to the fact that the V.A., under enormous pressure to lessen wait times, put together the complex $10 billion dollar program so quickly - about nine months. Not a small amount of blame is also pinned on TriWest and HealthNet, the two private contractors to which the V.A. outsourced day-to-day responsibility for administering the program. 

In short, the V.A. Choice program has not proved to be the solution that veterans, Congress and the V.A. expected it to be. As Senator John Tester of Montana, one of the program's proponents, has said, "Bottom line is the Choice program is broken. We need to fix it and we need to fix it as soon as possible." On March 3 Tester introduced a fix: Senate Bill 2633, the "Improving Veterans Access to Care in the Community Act." The proposed law would allow the V.A.'s own community care programs to be consolidated into one program, with streamlined and consistent rules. Proponents of the bill believe that would solve many of the original program's flaws. You can read the text of the bill here. 

By next Memorial Day - preferably much, much sooner - I want to be able to report that our veterans have a Choice program that really works for them. They deserve it!
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