Sep 18, 2014

New reverse mortgage rule to protect non-borrower spouse

The Department of Housing and Urban Development has issued a new rule to protect spouses of reverse mortgage holders from eviction after the borrower passes away. 

To qualify for a Home Equity Conversion Mortgage (HECM), the most popular type of reverse mortgage, a homeowner must be age 62 or older. In the past, if a HECM borrower had a spouse under age 62, the spouse had to be left off the loan. Even if both spouses were over 62, the younger spouse  was often omitted from the loan because that enabled the homeowner to borrow more money. The amount that can be borrowed increases with the age of the borrower. 

The problem: Under those rules, the younger non-borrower spouse could end up evicted from the home when the borrower spouse died. Why? Because at the death of the borrower, the younger spouse who wanted to remain in the home was required to pay the loan in full. This was not possible in many cases, particularly given the recent financial crisis that pushed property values below the loan amount. 

HUD's new rule is aimed at better protecting younger spouses from being evicted from their homes. Effective August 4, 2014, a spouse over 62 who takes out a reverse mortgage may list a younger spouse as a "non-borrowing spouse." Should the borrower die first, the non-borrowing spouse will be entitled to remain in the home if two conditions are met: 
  • The non-borrowing spouse must provide proof within 90 days of the spouse's death that he/she is entitled to remain in the home. Documentation may include a lease, deed, etc. 
  • The non-borrowing spouse must continue to meet all other financial obligations associated with the reverse mortgage - pay property taxes, pay insurance premiums, etc. 

This is good news, but pay attention to these three important caveats:
  1. Unlike the borrower, the non-borrowing spouse may not access the loan balance. 
  2. The new rule applies only to non-borrowing spouses who were married to the borrowing spouse at origination of the loan. Spouses who marry the borrower after the loan is taken out are not protected. 
  3. The amount of the reverse mortgage will now be based on the age of the younger spouse, hence less money will be available the borrower.
To read the new HUD rule in its entirety, click here

Many of my clients who need cash have found the reverse mortgage to be a useful tool - a lifesaver, even. But approached without full awareness of its financial and legal implications, a reverse mortgage can become a nightmare. The process is not the cakewalk or panacea some television commercials would have you believe. As with any financial product, you should do your homework and proceed with caution.

Sep 13, 2014

Karp Law Firm at Alzheimer's Association Lunch of Laughter

The Karp Law Firm helped sponsor the recent Alzheimer's Association "Lunch of Laughter" at the West Palm Beach Improv. All proceeds from the fundraiser benefited the Walk to End Alzheimer's. The Karp Law Firm will also participate in the upcoming fundraising walks in West Palm Beach on Oct. 18 and Jensen Beach on Oct. 25.  Photos from the Lunch of Laughter: 



Karp Law Firm attendees included (L-R): Office Administrator Audrey Yeager; Case Manager Supervisor Deeanna Farrington; Marketing Director Deborah Karp; Attorney Joseph Karp; and Executive Assistant Julie McKeon. At far right is Steve DeLach of Cresthaven East.

 Official "heckler" Attorney Karp accepts a certificate of appreciation from Alzheimer's Association CEO Ann May. At right, emcee Cindy Schoolmaster of Encore Senior Living.

L-R: Andrea Brennan, Terry Forgie and Elayne Forgie of the Elder Care Resource Center with, far right, Ann May, CEO of the Alzheimer's Association of SE Florida

Dr. Mark Brody of Brain Matters Research stretches his comedic chops.

 Headliner Frank Del Pizzo

Sep 12, 2014

Retirees with student debt: Social Security benefits may be compromised

It's no secret: There's a student debt crisis in this country. But who imagined that student debt is a growing problem for the senior population?

While few households headed by individuals 65 or older carry student loans, there has been a dramatic uptick in the amount of student debt held by seniors overall, skyrocketing from $2.8 billion in 2005 to to $18.2 billion in 2013, according to a recent report from the General Accounting Office. (You can read the full GAO report here.)

While carrying student debt into retirement is obviously undesirable, the bigger sticking point is the default rate, which is far higher for seniors than for their younger counterparts. According to the GAO, the default rate for those ages 25 to 49 is 12%; among those ages 65 to 74, 27%; and for those 75 and up, 51%. Unlike other forms of debt, student loan debt usually cannot be discharged in bankruptcy. Aggravating the situation even more, the law permits Social Security benefits to be garnished to repay student debt. According to the Treasury Department, in 2013 152,000 Social Security beneficiaries had their checks garnished to repay defaulted student debt, triple the number in 2006.

How did these seniors get into this situation? The GAO study reveals that 80% of those loans were originated to fund the borrower's education, perhaps to get a college or advanced degree, or to obtain retraining. Those hoped-for jobs may not have panned out, or ill health may have reduced borrowers' ability to repay the loan. The other 20% were incurred to cover educational expenses for the borrower's children or other dependents. And given the tenuous economy, children for whom loans were taken out are not always able to repay their parents.

It's hard enough to recoup financially when you are young. In retirement or approaching retirement, second chances are harder if not impossible to come by. States the GAO: "As the baby boomers continue to move into retirement, the number of older Americans with defaulted loans will only continue to increase. This creates the potential for an unpleasant surprise for some, as their benefits are offset and they face the possibility of a less secure retirement."

There's not much seniors can do if they are stuck with old student loans. But if you are getting on in years, think long and hard before borrowing money for your or your children's education. Student debt can quite literally haunt you forever, and even reduce the Social Security benefits you may be depending on to help finance your golden years.

Sep 9, 2014

Take HIPAA seriously - your doctors do

Just how serious is the medical community about HIPAA, the Health Insurance Portability and Accountability Act? According to an article in The New York Times of August 10, privacy concerns are responsible for the increasing disappearance of the traditional baby photos from obstetricians' offices. The article states: "Baby photos are a type of protected health information, no less than a medical chart, birth date or Social Security number... Even if a parent sends in the photo, it is considered private unless the parent also sends written authorization for its posting, which almost no one does." Read the  article in its entirety here. 

HIPAA is not just about babies, though. As a patient, you should take HIPAA as seriously as your health care providers do, and incorporate it into your legal planning. Here are some tips: 

Durable Power of Attorney: A HIPAA release must be part of your durable power of attorney if it is a "springing" power. That will enable your agent to obtain proof of your incapacity from your health care providers, so that he/she can manage your affairs. (NOTE: The Florida Power of Attorney Law changed on Oct. 1, 2011. A Springing Power of Attorney executed before that date continues to be honored. However, for documents signed on and after Oct. 1, 2011, only the Immediate Power of Attorney is valid in Florida.) 

Revocable Trust: Most revocable trusts also require medical certification of your incapacity in order for your successor trustee to take over your affairs for you. Therefore, a HIPAA release should also be part of this document. 

Health Care Power of Attorney: While this document enables one or more people to make your medical decisions if you cannot, it does not automatically approve the release of all privileged health care information to that individual(s). Therefore, your health care power of attorney should also include a HIPAA release. The release may be incorporated into the document, or included in a separate document. In my experience, Many Floridians are relying on old, pre-HIPAA documents, unaware of how their families may be impacted by the change in the law.

Our Certified Elder Law/Estate Planning attorneys can review your documents for HIPPA compliance and make sure you and your family are protected. Contact us here

Sep 1, 2014

Joan Rivers: Life turns on a dime sometimes

I saw Joan Rivers perform at Florida Atlantic University about 30 years ago. Whether you love or loathe the comedienne, it's undeniable she exuded incredible energy. She maintained a full schedule right up until her cardiac arrest a few days ago, turning in a Broadway performance the night before her throat surgery. The operation was an out-patient procedure - nothing to be concerned about for the otherwise  healthy 81-year-old.

These kinds of events remind us that sometimes, life turns on a dime. We can't dwell on them; we would drive ourselves crazy if we do. Better to live our lives with confidence, anticipating the best. And the best way to do that: prepare ourselves and our families for that turn-on-a-dime event. If you want to be truly free from unnecessary worry, you have to know you're prepared for whatever life throws your way.

My own family faced a similar, unexpected health crisis one year ago Sept. 5. My 76-year-old brother-in-law fell and hit his head on the sidewalk after exiting a restaurant, apparently because of aortic stenosis. While awaiting cardiac surgery to repair the valve, he sustained a brain aneurysm, had a stroke, and remained on life support for days, until we consented to disconnect life support. He was a gifted classical pianist who on the day of his fall, was practicing for a particularly challenging performance. The unveiling of his gravestone will be at a cemetery in New York State at the end of this month. 
Back to Rivers: The press releases say that her family will soon consider removing her from the breathing apparatus. I do not know for sure, but I suspect her daughter Melissa, who has become something of a Dean Martin to Rivers' Jerry Lewis in recent years, may be the decision-maker. I hope for her sake that her mother had a living will and other health care documents in place to guide her daughter's decision and spare her any more agony than she is already experiencing.  My brother-in-law's written wishes were certainly a help to my family.

Wishing peace to Rivers' family, and to the thousands of families each day who find that their lives have turned on a dime.

Aug 24, 2014

Florida Medicaid managed care workshops hosted by Karp Law Firm for local professionals

The Karp Law Firm presented three breakfast workshops in August for social work and health care professionals. Over 150 attended the events in Jupiter, Boynton Beach and Port St. Lucie to learn about the statewide Florida Medicaid managed care program. We want to thank the beautiful facilities that opened their doors to our group and served a scrumptious breakfast: Allegro Senior Living in Jupiter (thanks to Regina Natoli-Sanchez and her staff); and The Brennity at Tradition in Port St. Lucie (thanks to Cary Friedlander and his staff). 

Our terrific special guest speakers were:
  • William Albury, Manager, and Ivy Newton and Andrea Ferguson, District 9 of the Florida Agency for Health Care Administration
  • Kim Clawson, Helpline Director, Your Aging and Disability Resource Center
  • Paola Wierzbicki, Director, and Rebecca Love-Wilson, Case Manager, PACE program  (Program for All-Inclusive Care for the Elderly)
  • Marianne Hall and Kim Nelson, Provider Relations Specialists, American Eldercare
  • Hylan Bryan, Regional Supervisor, and Dejuana Johnson, Outreach Coordinator, Coventry 
  • Kathy Rupp, Provider Relations Manager, Sunshine State

    L-R: Attorney Karp; Andrea Ferguson, Florida Agency for Health Care Administration; Dejuana Johnson, Coventry; Kathy Rupp, Sunshine State; Nancy Partin, Department of Elder Affairs CARES unit; and Marianne Hall, American Eldercare

    Kathy Rupp, Sunshine State

    Paola Wierzbicki, PACE Program

    Karp Law Firm Attorney Gina Grandinette

    L-R: Karp Law Firm Executive Assistant Julie McKeon; Case Manager Assistant Zamara Rosete

    Marianne Hall, American Eldercare

    L-R: Attorney Karp; Kim Clawson, Your Aging and Disability Resource Center; Ivy Newton, Florida Agency for Health Care Administration; Marianne Hall, American Eldercare

Aug 21, 2014

No peace for Casey Kasem or his family

Where is the body of Casey Kasem? It was in Washington State. It was in Montreal. Apparently, it's now in Norway. This is like asking Where's Waldo? Only this is no game. 

In a prior post, I discussed the battle between Kasem's wife Jean and his children from his first marriage regarding the late radio icon's end-of-life care. Yet even after his passing, neither he nor the family battle has yet to be put to rest.

His children claim their father wanted to be buried in Los Angeles, his home for over half a century. His wife however, who moved Kasem's body from a Washington state funeral home to Montreal without notifying the children, is now asking Norway for permission to bury Kasem in that country. The children contend that Jean's request is a ruse, designed to prevent California medical examiners from examining their father's body for signs of abuse. They also say Jean's claim to Norwegian ancestry is a fabrication. In fact, her nephew has stated that as far as he knows, the family doesn't have "an ounce of Norwegian blood." Along with several family friends, including a former California lieutenant governor, the children are are now petitioning Norwegian authorities to deny Jean's request.
(September 29 update: According to Kasem's daughter, the funeral home in Norway has refused Jean's request to bury her husband.)

Surely all of Kasem's loved ones deserve some peace at this sad time, not an ugly public circus. I suspect, though, that this episode is just a forerunner to an even more protracted conflict that will eventually unfold over Kasem's multimillion dollar estate.

The sickness or death of a family member sometimes brings families closer together. In other cases, it creates animosity, or deepens existing tensions. The Kasem saga is an excellent, if gruesome, demonstration of why people should plan for the possibility of disability, and the certainty of death. A smart estate plan can ensure that your wishes are carried out, and help keep peace in your family. 

Aug 16, 2014

New legislation would help families of children with autism, other disabilities

Over the years, growing numbers of parents and grandparents have requested our help to create estate plans that provide for an autistic child. The statistics bear out what we see in our practice: According to the CDC, in 2010 one in 68 American children fell on the autism spectrum, up from 1 in 150 a decade earlier. The dramatic increase over the last decades is only partially explained by better screening and diagnosis.

Fortunately, many on the autism spectrum go on to lead fully functional lives. But for others, it is a severe and chronic disability that requires loved ones to make thoughtful legal and financial plans. One of the strategies we recommend to parents in these circumstances is the creation of a special needs trust to benefit the child.  You can read more about special needs trusts here.

We caution our clients against using a UGMA (United Gift to Minors Act) account as a vehicle to set aside money for a disabled grandchild - in fact, for any grandchild. A UGMA account is easy to set up, but beyond that, this type of account has little to commend it. Read more about UGMA accounts.

A recent and hopeful development in the fight against autism is the ABLE (Achieving a Better Life Experience) Act, currently under consideration in Congress. The bill would allow the creation of non-taxable 529 savings accounts that may be used to cover medical and other expenses of disabled children, while preserving the individual's access to key government benefits and services like Medicaid. Read more about the ABLE Act here. To contact your congressperson in support of the legislation, click here. To contact your senator, click here. 

Also this past week, funding was renewed for the Autism Collaboration, Accountability, Research, Education and Support Act (Autism CARES, for short) that had been set to expire in September. The Act provides funds for education and research, and for the first time, calls for the appointment of someone at the Department of Health and Human Services to oversee all autism-related initiatives. 

Aug 10, 2014

New Veterans Bill to begin system overhaul

The Veterans' Access to Care Through Choice, Accountability and Transparency Act of 2014 was signed into law by President Obama on August 7.  A too-rare example of bipartisan cooperation, the law provides $16 billion to address the urgent and chronic problems that have come to light at the troubled Veterans Affairs Department. "This will not and cannot be the end of our effort. Implementing this law will take time,” the President said. “Even as we focus on the urgent reforms we need at the VA right now, particularly around wait lists and the health care system, we can’t lose sight of our long-term goals for our service members and our veterans.”

Of the $16 billion allocated in the bill, $10 billion will be used to allow veterans to see private doctors, at government expense, over the next three years. The private option is open only to those veterans who (1) face a waiting period in excess of one month to see a doctor at a V.A. clinic or hospital; or (2) live more than 40 miles from a facility. Eligible veterans will be receiving a "choice card" that will allow them to receive services outside the V.A. system.

The law also allots $1.3 billion to open 27 new clinics nationwide, and $5 billion to hire additional doctors, nurses and other medical staff. The V.A. is tasked with fleshing out the details of the law within three months.

For an abstract of the new law, click here. To read about V.A. Aid and Attendance Benefits for elderly and disabled veterans, click here.

Jul 20, 2014

Casey Kasem: America's Top 40 host's final countdown

Over his long career, radio personality Casey Kasem helped Americans count down the the solid gold hits. Unfortunately, Kasem's latter years were anything but golden. His end-of-life story offers a high profile, sad illustration of why your estate planning should focus on the twists and turns that may occur during your lifetime - not just on what happens after you're gone. Planning for life is of particular importance if you are in a second marriage and have children from a first marriage; that situation is often a fertile breeding ground for family disagreements over how to care for a disabled loved one.

When Kasem died on June 15 at age 82, he was married to his second wife, Jean, 60. Kasem also had three children from his first marriage. After being diagnosed in 2007 with Lewy body dementia, Kasem signed a health care power of attorney that gave his children from his first marriage, not his wife, the authority to make his health care decisions. He stated that he did “not desire any form of life-sustaining procedures, including nutrition and hydration,” if all it accomplished was “mere biological existence, devoid of cognitive function." 

Kasem quickly declined and lost the ability to communicate. Family turmoil ensued. His wife, and his children from his first marriage, became embroiled in a series of court battles regarding caregiving arrangements and who had the authority to make Kasem's decisions. At one point the children even alleged that Jean was preventing them from visiting their father.

As the end drew near, the children wanted Kasem to live out his final days peacefully at home, as his instructions stated. Jean objected, saying, "My husband's a fighter! He's an American treasure. He would have never, ever wanted this." In June, without notifying the children, Jean removed Kasem from his Santa Monica home and drove him to Washington State. When they discovered their father was missing, they took their search to the airwaves.

Kasem died in Washington on June 15. His body was taken to a Tacoma funeral home. That's not where the story ends, though. Apparently Jean and the children also disagreed on what to do with the body. Jean said she wanted Kasem cremated; the children want their father buried in Los Angeles, and now, also want an autopsy conducted to determine whether he was physically abused. On June 16 Kasem's daughter Kerri obtained a restraining order from a Washington court preventing Jean from cremating the body or removing it from the funeral home. But when Kerri called the funeral home, she was told the body had already been taken from the premises.

Where is Kasem right now? The children believe that Jean took his body to Montreal, where they suspect she has a boyfriend. The Santa Monica police department is investigating.

If and when Kasem's body is found, don't think for a minute that is the end of the saga. Kasem's estate is estimated to be worth about $80 million. That's eighty million more reasons for the family to fight on. Daughter Kerri Kasem says she will not contest the estate -- unless Kasem signed a will or other document when incapacitated, or Jean somehow manipulated his will.

Bizarre situations like this happen in non-famous families, too; the stories just don't make it into the press. I encourage everyone to establish a well-crafted, crystal-clear estate plan that covers both death and life. A health care power of attorney is essential. While Kasem is to be commended for executing one, he might have spared his family grief with an additional step: A conversation with his family to fully explain his values and wishes, and answer their questions. It's a conversation no one really wants to have, but it can be a real gift to your family, especially when future friction seems likely. Most people know that it's important to talk about these sensitive issues before incapacity strikes. But most put it off until it's too late. For hints on how to approach the subject with your family, check out the Conversation Project.
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