Dec 15, 2014

New rules on caregiver pay coming January 1, 2015

Many thanks to Scott Greenberg and Jacky Purje of ComForcare Senior Services in Palm Beach Gardens, Florida, for providing this legal update. Scott and Jacky are always on top of things. Anyone who hires a caregiver needs to know this information!

Effective January 1, 2015, the current overtime exemption for home health aides (HHAs) and certified nurse assistants (CNAs) is repealed. Under the new rule, a caregiver who works more than 40 hours a week must be paid overtime. Also, any live-in caregiver must be paid at least minimum wage, plus overtime for all hours worked over 40 per week. 

The new law has enormous practical implications, particularly as it relates to live-in caregiver situations. Issues to be considered now include: 

Will the new law apply to you even if you have a private caregiver in place? If you do not pay your caregiver in conformity with the new rule, could you be sued for violation of labor laws and be required to pay overtime and attorney's fees for your caregiver's lawyer? 

Do not assume that just because you consider the caregiver an independent contractor and not an employee, that the law will not apply to you. Even if you think you'll never get caught, it's wrong, first and foremost. Secondly,  what happens if the person quits or is fired? All bets about your "private agreement" could be off. It doesn't matter even if you have a written contract in which the caregiver and you agree that he/she is an independent contractor. The law will define what the caregiver's role was, notwithstanding your agreement. 

Are all health care agencies affected, and what will the new rates be? Many people use nurse registries for their caregiving need rather than home health agencies. Although you may pay a registry directly, most registries take the position that they are acting as a placement service and referral source, and that you are the actual employer. That means you will have to comply with the new rules for minimum wage and overtime pay. Therefore, it may be preferable to use a home health agency in lieu of a registry. At a minimum, speak with a labor lawyer to determine if your private arrangements with the caregiver comply with the new law.

Lastly, it is obvious that this legislation will increase what you pay for caregiver services. If you have avoided applying for long-term care insurance because of the expense, and because you've assumed you can pay an unlicensed caregiver less, you may want to rethink that strategy now.

Dec 11, 2014

Joan Rivers' will made public

The late Joan Rivers made us laugh. But to the late comedienne, her estate plan was no laughing matter. Rivers' will, filed December 9 in New York State Surrogate Court, shows great concern for the people she cared most about,  and leaves nothing to chance. Rivers died in September at age 81 following throat surgery.

Some of the major points: As expected, Rivers' only child, Melissa, inherits the bulk of the estate, estimated at about $150 million. Rivers also provided for her only grandchild, her niece and nephew, and her longtime assistants. She didn't forget her beloved dogs, either - she had two in New York and two in Los Angeles. Her favorite charities will also get a piece of the estate, among them the Jewish Guild for the Blind, the Cystic Fibrosis Foundation, the Simon Wiesenthal Center, and Guide Dogs for the Blind.

Rivers named her good friends, business manager Michael Karlin and interior designer Robert Higdon, to assist her daughter to administer the estate. 

Her will is a matter of public record and you can read it below. Her trust which is a private document specifies precisely who gets what.

Dec 7, 2014

Signing parent's nursing home admission agreement as a "responsible party" could be a costly mistake

Facing growing financial pressure and withering funding sources, nursing homes will be more likely to pursue residents' children for unpaid bills. With the average cost of a Florida long-term care nursing facility now nudging upwards of $9,000 per month, few adult children will be able to pay up. Of course, that won't stop a facility from trying. 

Will you be on the hook for your parents' nursing home bills not covered by Medicaid, Medicare or other insurance? It depends largely on how you sign your parents' admission forms. Take the recent case of Andover Retirement Village vs. Richard Cole: When Richard Cole admitted his mother into an Ohio  nursing home, he was presented with two sets of papers: The first form, the admission agreement, he signed clearly as his mother's power of attorney, indicating he would pay the nursing home out of his mother's funds. But he signed the second form, a financial responsibility contract, as the "responsible party." After his mother died, the nursing home sued him for her unpaid bills. The court found him liable, and the ruling was upheld on appeal. You can read the case here

In another case, a nursing home in Pennsylvania's used that state's seldom-used "filial responsibility" statute as the basis for suing a child. In  Health Care Retirement Corporation vs. Pittas, the Pennsylvania courts found John Pittas responsible for his mother's $93,000 nursing home bill -- even though in that case, he had signed nothing. (His mother had applied for Medicaid but had left the country before the application was finalized.) Many states have a filial responsibility statute on the books. Those laws historically have been historically ignored. However, the demographic tsunami that is the Baby Boomer generation, along with diminishing sources of revenue for nursing homes, could well find such laws  revived in states where they are on the books, and instituted in states - like Florida - that don't have them.  

How to ensure that you are not responsible for your parent's bills? Right now, the best way to protect yourself is to be vigilant if you sign your parent's nursing home admissions forms. If your case is typical, your parent will not be capable of signing for himself/herself. The admission will likely be a tough decision for you and the family, and you may be overwrought and exhausted. Even so, read the fine print, and pay attention to what you are signing. If you are your parent's attorney-in-fact under his/her power of attorney, you may sign in that capacity, specifically indicating that you are signing ONLY in that capacity, and not as the financially responsible party or a guarantor.  If you do not have a power of attorney that authorizes to act on behalf of your parent, sign nothing, letting the nursing home know that you do not have the authority to act.

Nov 28, 2014

Federal estate tax increasing in 2015, but you may still be on the tax hook

On January 1, 2015 the federal unified estate and gift tax exemption will increase from $5.34 million per person to $5.43 million. The top tax rate is now 40% on the portion of a taxable estate in excess of the cap. This means you may give away, without paying any federal estate/gift taxes, a total of $5.43 during your lifetime and/or at death. A married couple can pass twice that amount. And because the federal estate tax is "portable," a surviving spouse may utilize any unused portion of the deceased spouse's exemption.

Most Americans do not have taxable estates and need not incorporate federal estate tax reduction strategies into their estate plans. But it is prudent to remember that the government will always get revenue from somewhere. If it's not from one pocket, it's from another. Keep an eye on your other pockets as you approach your estate planning! Other tax traps may await you:

Capital Gains Taxes:  Do you have a highly appreciated asset that you wish to pass to your heirs? If so, one of the goals of your estate plan will be to reduce capital gains taxes.

One way to do this is to pass the highly appreciated asset to your loved ones at your death, rather than give it away during your lifetime. Assets that you pass at death are inherited with a "step-up" in basis. For example, let's say you bought a home for $100,000 in 1975 and it's now worth $500,000. You'd like to give it to your daughter. But if you give it to her now, and she then sells it, she will owe taxes on $400,000 (the difference between the cost basis and the current value). You would be better off hanging on to the house and passing it your daughter at your death, when she will get it with a step-up in basis. In other words, the government will consider her cost basis to be $500,000, its value on the date she inherits it, not its value on the date you bought it. This will significantly reduce or even eliminate any capital gains tax whenever she chooses to sell it.

Another way to avoid capital gains tax is with a Charitable Remainder Trust. When you place highly appreciated assets in a Charitable Remainder Trust whose ultimate beneficiary is a charity (or charities) of your choice, you receive an immediate income tax deduction. Your designated trustee then sells the asset - without any capital gains tax because charities are exempt from the tax -  and invests the monies in income-producing investments. You then receive income for life from the trust. When you die, your designated charity receives the principal of the trust. Although the trust is irrevocable, you may retain the power to change or add charitable beneficiaries at any time. 

State Estate Taxes: Florida does not have an estate tax, but several other states do. If you are a transplant to Florida, is it possible you will end up back in your original state of residence? Many people relocate in order to be closer to their family. If the state you end up is one that has an estate tax of its own, it's a whole other ballgame from an estate planning perspective.

Here's a sampling of estate tax exemptions in a few places many of my clients hail from:

New Jersey: $675,000. Top tax rate of 16%
District of Columbia: $1 million. Top tax rate of 12%
Maryland: $1.5 million. Top tax rate of  with a top tax rate of  16% 
Connecticut: $2 million. Top tax rate of  with a top tax rate of 12%
New York: $2.062 from Jan. 1 to April 14, 2015. Starting April 15, 2015, $3.125 million with a top tax rate of 16%

When I meet with clients and ask if there is even a remote possibility of their returning to their state of origin, or relocating to a state where their children currently reside or may reside in the future, most don't rule it out. That's why we always try to build in state estate tax planning, in anticipation of this possibility. 

And to put aside the tax issue entirely, don't forget the most important thing to get right with your estate plan: Creating harmony and security for your family and for yourself! See a qualified estate planning/elder law attorney to discuss your estate planning needs.

Nov 20, 2014

Facing a 30-day plus delay for a V.A. medical appointment? You can now apply to see a private provider

On November 17, 2014 the Veterans Administration began mailing "Veterans Choice" cards to veterans facing extended wait times for treatment at a V.A. facility. Veterans who qualify for the program will be permitted to seek treatment from private medical providers in their community who are V.A.-approved. To qualify for the program, a veteran must be facing a wait time of 30 days or more for his preferred appointment date, or the date his/her physician indicates is medically required. The Choice Program is a three-year, temporary program funded by the 2014 Veterans Access to Care Through Choice, Accountability and Transparency Act.

If you qualify for the program, you must call the Veterans Administration at their dedicated phone number for the Choice enrollment program, 866-606-8198. You will have to choose from a list of V.A.-approved private medical providers in your area and provide the V.A. with information about any other medical insurance you may have, as well as other data. The V.A. will schedule your appointment.For more information, check out the V.A. website here

For information on V.A. long-term benefits for elderly and disabled veterans, click here.

Nov 14, 2014

Walk to End Alzheimer's

"Karp's Kommandos" - our attorneys, staff and our families - turned out for the Walk to End Alzheimer's on October 18 in West Palm Beach and October 25 in Jensen Beach. The Alzheimer's Association-sponsored event raises funds for research and for services to local patients and families.

West Palm Beach walk, October 18, 2014

 Jensen Beach walk, October 25, 2014

Nov 12, 2014

New book on the downside of "medicalizing" the aging process

Surgeon and author Dr. Atul Gawande's newest book, "Being Mortal," was recently released. Its sensitive subject matter has sparked serious debate among physicians, the clergy and the public. Gawande argues that our society has "medicalized" aging, resulting in a greater concern with extending life rather than helping people maximize the time they have left. Gawande believes that the medical community's focus on keeping people "safe" at all costs does a tremendous disservice to the aging, the sick, and their families. 

All of us have our own opinions on this most personal of issues. It's a subject that invariably comes up when my elder law clients discuss their preferences for health care, whether they want to establish a living will, etc. But whatever your personal feelings, you will probably find the book worth a read. Here are some recent reviews:

Another thought-provoking commentary on this topic is "Why I Hope to Die at 75 - An Argument that society and families - and you - will be better off if nature takes its course swiftly and promptly," by Dr. Ezekiel Emmanuel. To be clear, the title is a bit of a misnomer. The author is not not actually hoping to die at 75, nor does he advocate that anyone else should. He simply says he just doesn't want to live to a very old age if the years prove to be too painful for him and his loved ones.

What do you think? My readers and I would be interested to hear your input. Post a comment!

Nov 10, 2014

Dealing with digital assets in your estate plan: it's the Wild West today

Shortly after comedy icon Robin Williams died, his daughter's Twitter feed filled up with gruesome fake photos of her father. She was forced to temporarily abandon the social media site. As a result of the incident, Twitter was pressured into changing its policy: It now allows family members to request removal of a deceased relative's online photos.

A good friend of my family passed away two years ago. While cleaning up his home, his brother stumbled upon papers indicating his brother had owned a large quantity of bitcoins (virtual currency) at the time of his death. We are now struggling to access the information and document his ownership. It's an uphill battle, made more complicated because many of the companies and individuals we're dealing with are located in Australia.

When University of Minnesota freshman Jake Anderson was found dead in a snowbank last year, his distraught parents tried to get access to his social media messages, cell phone data and email, hoping the information might clarify the circumstances of his death. The providers turned down their request. (Click here to view a TV clip about this story.) 

And then there's the poster child of all cases, Ajemian v. Yahoo. John Ajemian  died in a car accident in 2006. His siblings wanted access to his Yahoo email password so they could notify friends of his passing. Yahoo refused to give it them. Once the siblings were appointed personal representatives of his estate, they went to court, arguing they needed access to his account to help them locate assets, creditors, etc. in order to properly administer the estate. In the latest installment of the legal battle, the court sided with Yahoo in May 2013, noting that the decedent had agree to Yahoo's terms of service (yes, the gobbledydygook virtually no one reads). It read: "No Right of Survivorship and Non-Transferability. You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted."  (You can read the court's decision here.)

An uphill battle for your fiduciaries?
All these cases demonstrate the uphill battle fiduciaries can face when trying to access a deceased or incapacitated loved one's digital assets. These days, much of our financial life is lived online. Banking and brokerage statements are accessed in the "cloud."  Then there are other assets: photos, email accounts, domain names, Facebook accounts, online magazine subscriptions, Paypal accounts, blogs, frequent flyer accounts. And that's just the tip of the iceberg for most people.

Florida law and federal law are fairly clear regarding who can access a decedent's traditional physical assets, and when. But for digital assets, it's a legal Wild West out there, governed by different state laws; by the federal Stored Communications Act (also known as the Electronics Communication Privacy Act) which limits the ability of online providers to provide surviving family members with a decedent's account information; and of course, by those cryptic internet terms of service. Every online service provider, tech company and social media site has its own terms of service. Some will automatically delete an account after a given period of activity, or after a duration that you specify. Some providers will not provide passwords or transfer ownership, but will, with the proper documentation, provide the account contents to certain individuals. 

Take control!
If you are reading this, chances are you have digital assets, and  probably more than you think. What will become of them when you are gone?  Even if an asset does not have financial value per se - an online photo-sharing account, for example - it may have sentimental value to your family and you will want your loved ones to be able to access it. On the other hand, you may have private accounts -- emails, others, use your imagination - that you want to die with you, and don't want anyone to see, ever.

Having your desires carried out requires some planning. I suggest that at the very least, you make a list of all your digital assets. Check to determine each provider's terms of service, then write down how you want those accounts handled if you become incapacitated or when you pass away. Make a separate list of user names and passwords, as well as the answers to the security questions that pertain to each account. Do not include that list with your will or trust. That list should be tucked away somewhere safe, and your agent and Personal Representative should know how to access it.

Some people use online password storage services, such as last pass and secure safe. Another possibility: Back up all your data and information onto your own hard drive. Create a password-protected file with the information - and be sure to let your personal representative and agent know the password! 

Your elder law/estate planning attorney will be able to guide you on how to handle your digital assets in the event you become incapacitated or pass away. (Another compelling reason to plan for the disposition of your digital assets: once your death is part of the public record, your existing digital financial data becomes more attractive for would be identity thieves (read my prior post on this topic).

Any changes on the horizon to make this all easier?
Delaware was the first state to adopt the Uniform Fiduciary Access to Digital Asset Act (UFADAA), which gives fiduciaries the same access to digital assets that they have to physical assets. The Florida Bar has recommended that our state legislature incorporate the Uniform  code, but there are no guarantees that it will, or when. In fact, the Uniform code has come under attack from privacy advocates who argue that it is an infringement on an individual's right to have his/her digital assets kept private, even in death and disability. Yahoo recently stated that the uniform code is based on the "faulty presumption that the decedent would have wanted the trustee to have access to his or her communications" and that the model statute sets "the privacy default at zero." 

So for now, as far as your digital assets go, you are not living not in the South... you're in the Wild West! Plan accordingly.

Nov 7, 2014

IRS announces 2015 estate tax exemption

The estate tax certainly isn't what is used to be. And that's a good thing. Before 2001, a significant percentage of my estate planning clients were concerned with finding ways to minimize estate taxes. But with the current generous estate tax exemption, today's client typically is more concerned with minimizing capital gains taxes and income taxes. 

Of course, if you are among the minority of individuals with a potentially taxable estate, you still need to be concerned about estate taxes. You'll be glad to hear that in 2015, the lifetime unified estate and gift tax exemption will increase to $5.43 million per individual, up from $5.34 million. This is the amount that you may give away free of estate and gift taxes during your lifetime and at your death. If you are married, you and your spouse may double that amount. Moreover, a surviving spouse may use any portion of the deceased spouse's unused estate tax exemption (provided that the survivor elects the "portability" option on the final tax filing). The top tax rate for anything above the exemption is 40%. 

The annual gift tax exclusion will remain unchanged in 2015, at $14,000. This is the amount that you may transfer to another person other than your spouse, free of gift tax and without impacting your lifetime exemption. If you are married, you and your spouse may double that amount. For example, a married couple could give each of their three children $28,000 per year without any gift or estate tax ramifications. Certain gifts may exceed $14,000 per year and still incur no gift tax, such as a check written for a child's college tuition when the check goes directly to the educational institution. 

Learn more about estate and gift taxes here.

IRS announces 2015 deductibility limits for long-term care insurance premiums

Taxpayers will be able to increase the amount they deduct on their federal taxes for long-term care premiums in 2015. To qualify for the deduction, certain conditions must be met: 

The policy must be "qualified." If issued after Jan. 1, 1997, the policy must be in compliance with the regulations established by the National Association of Insurance Commissioners, and offer inflation and non-forfeiture protection (whether or not the insured party chooses those options).  Additionally, the policy must contain certain 'triggers' under which benefits can be paid. The insured individual may be able to collect benefits only when he/she requires assistance with two of six "activities of daily living" for at least 90 days; or when a physician certifies that there is cognitive impairment to warrant supervision for safety purposes. Any policy purchased before Jan. 1, 1997 will be grandfathered in and treated as qualified so long as it has been approved by the insurance commissioner of the state in which it was sold. 

Premiums, plus unreimbursed medical expenses, may not exceed 10% of gross income for those under age 65; for those over 65, the threshold will remain at 7.5% through the year 2016. (The rules are slightly different if you're self-employed; check with your accountant.)
Here are the IRS' deductibility guidelines for 2014. The figures are based on the attained age of the taxpayer before the end of the taxable year: 
40 years or younger: $390 (was $370)
41 - 50: $710 (was $700)
51 - 60: $1430(was $1400)
61 - 70: $3800 (was $3720)
71 and older: $4750 (was $4660)
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