|
|
Elder Law Update
North Carolina Edition
|
Vol 2
Issue Three
|
August 2008
|
|
| |
|
PLEASE VISIT MASON
LAW
|
 |
|
I WANT TO KNOW
|
|
If you have an idea or
comment that will help me
make this a better
newsletter
please send it to me.
Just
click! |
|
|
Dear Bob,
Hope you are having a good
summer. For us at Mason Law,
it has been a busy one.
I'll hold my comments down,
because this edition of
Elder Law Update is a
big issue. In fact, it is
our biggest issue yet.
I welcome Penny Louis to
Elder Law Update.
Penny has an interesting
article below on how seniors
most often get into
financial trouble. She
should know! Penny is a
financial manager for
seniors who have difficulty
managing their own financial
affairs. I've seen her in
action in Savannah. She can
do everything from "help
straighten out some things"
to complete financial
management.
Trusts and FDIC Insurance
A client recently joked that
I could change the name of
Mason Law, PC to
"Trusts-R-Us" because we so
often use planning
techniques that involve
trusts. Lately, I have been
receiving many questions
about the FDIC insurance
program and how it applies
to trusts. Finally, I
promised the last client who
asked that I would devote an
article to the topic . . .
which appears below.
Brittle Bones and Running
From Hurricanes
Dr. Beth Hodges gives us
some advice regarding a very
serious topic: bone
fractures in seniors. It is
well worth reading . . . and
even takes a dig at lawyers.
Beth and I are friends, so
she was worried I would be
offended. I told her not to
worry, because she is
actually down on personal
injury lawyers (as are most
doctors), and I am not a
personal injury lawyer as
you all know. In fact, have
you EVER heard an Elder
Lawyer joke? I am sure NOT.
We aren't funny. On the
other hand, if anyone knows
any good doctor jokes,
please do send them my way
and I'll forward them to Dr.
Beth.
Part III of Barbara Dunn's
series on emergency
preparedness runs below.
Hurricane season is headed
into the busiest three
months, so the article is
timely.
Finally, Warren Coble shows
us how spousal Social
Security benefits are
calculated. I haven't told
Warren this, but I was
gratified to hear that at
least one reader has
bookmarked the
Elder Law Update
Boneyard (Archives) and
regularly goes back to look
at Warren's articles for a
Social Security "refresher".
So there ya go, Warren!
Bob Mason
Certified Elder Law Attorney
Certified by the
National Elder Law
Foundation,
recognized by the American
Bar Association as the
certifying entity for
specialization in Elder
Law. |
|
FDIC
INSURANCE AND TRUSTS
Bob Mason
Recent bank failures have
rattled a few clients
lately. It would be easy to
dismiss these concerns
because the rate of failures
is extraordinarily low and
bank deposits generally are
quite safe. On the other
hand, when it is your money
involved . . . . well . . .
.
As many know, I use a
variety of trusts in the
many techniques used to help
clients. Naturally, many
clients are concerned about
FDIC insurance coverage with
respect to those trusts.
In a couple of earlier
columns contributor Rose
DeVries wrote about FDIC
coverage generally. It may
be helpful to go back and
reread her columns to get a
general orientation. Click
HERE for the first;
click
HERE for the second.
. . . .
At this point, either you've
refreshed your memory or you
know the basic FDIC rules. I
will assume that is the
case. Now that you're
oriented, here is a general
description of FDIC rules
applicable to trusts. Keep
in mind the limits apply at
each bank . . . in other
words if a trust has
coverage limited to $100,000
only because of one of the
rules below, the limit
applies at each bank in
which the trust has an
investment.
First, the FDIC has
different rules that apply
to Revocable Trusts and to
Irrevocable Trusts. As a
starting point, determine
which type of trust you are
analyzing.
Revocable Trusts
Revocable trusts, of course,
are trusts over which the
settlor or grantor (a/k/a
"The Person Who Set The
Trust Up") retains the right
to freely add or remove
assets, make amendments and
even terminate the trust.
Mason Law uses these often
for a variety of purposes.
To make things really
confusing, the FDIC
classifies Pay On Death, or
POD, accounts as one of two
types of revocable trusts,
which is ludicrous because a
POD account isn't a trust at
all. Read Rose's article on
POD trusts by clicking
HERE.
In summary, FDIC will insure
a POD account up to $100,000
for each "qualifying
beneficiary" listed to be
paid upon the death of the
primary account holder. A
"qualifying beneficiary" is
a spouse, a child, a
grandchild, a parent, or a
sibling. The beneficiary
must be clearly listed on
the books and records of the
bank.
The POD rules, of course,
caused much confusion when
applied to the sort of
living trusts attorneys use.
Sort of like pounding a
square regulatory peg into a
round hole.
As a result of the confusion
and in order to "spread
around" FDIC coverage, many
people were setting up
accounts owned by revocable
trusts as POD accounts with
the children listed. Others
were setting up trust
accounts as joint
survivorship accounts with
children. Because POD and
most survivorship accounts
pay automatically to the
listed beneficiary, the
arrangement might completely
frustrate the careful plans
laid out in the trust.
In 2004, FDIC published new
regs that added some
clarity.
A "living trust account", to
use the new regulation's
term, is entitled to up to
$100,000 FDIC coverage for
each "named qualifying
beneficiary", which means
the beneficiary must be
related to the
Grantor/Settlor and it must
be possible to determine
from the trust document who
the beneficiaries are (no
need to list them at the
bank, although most banks
want to retain a copy of the
trust agreement). It doesn't
matter at all that the
Grantor/Settlor has retained
complete authority to
terminate the trust.
If Mom and Dad have set up a
joint revocable trust (which
we at Mason Law often do),
each qualified beneficiary
will be entitled to FDIC
coverage of up to $100,000
with respect to each of Mom
and Dad (i.e., $200,000).
If the bank goes under, the
FDIC will look at the trust
document and pay up to
$100,000 for each
beneficiary who would be
entitled to a trust
distribution if the Grantor
died on the day the bank
went down. That is in
addition to other accounts
Mom and Dad had in her or
his own name.
Irrevocable Trusts
We also assist clients with
irrevocable trusts. Of
course, an irrevocable trust
is a trust over which the
Grantor/Settlor has
surrendered ALL right to
amend or revoke the trust.
Some Grantors completely
surrender any right to
receive any sort of
distribution whatsoever.
Others retain the right to
receive all of the income,
but nothing else. This is an
important distinction to
keep in mind.
If the Grantor has not
retained any income interest
and if it is not possible
for the trustee to later
shift benefits between
various beneficiaries, then
each beneficiary is entitled
to up to $100,000 FDIC
coverage. Again, it must be
possible to identify the
beneficiaries from the trust
instrument. It is not
necessary for a beneficiary
to be related . . . any
person, or even a charity,
will do.
On the other hand, if the
Grantor has retained an
income interest, and if the
trustee or others have the
discretion to allow unequal
distributions to others (for
example, the Grantor's
children), then the trust is
limited to $100,000 coverage
(separate, by the way from
insurance the Grantor may
have under her own name).
That is important to
understand. Many trusts
designed by Mason Law
feature an income stream to
the Grantor, and many allow
the trustee (perhaps with
others' cooperation) to make
distributions to one or more
people (other than the
Grantor). If that is the
case, the trust will be
limited to $100,000 coverage
at each institution.
Final important point. The
features that might limit an
irrevocable trust to
$100,000 very likely are
worth retaining (they were
put in the trust because
they were valuable
features). If FDIC coverage
is a concern, then the
trustee simply needs to make
sure to "spread around" the
investments between a number
of different banks.
Confused? Send me an email!
|
BRITTLE BONES
Beth Hodges, MD
I try with each article to
write about issues that are
current, and since five of
my
patients have fallen and
suffered hip fractures this
month, osteoporosis wins.
Osteoporosis, or abnormal
thinning of the bones, is
actually the third leading
cause of mortality (death)
in our elderly population
and is an even higher cause
of morbidity (decline in
function.)
Yes, I did say death. It
happens like this: Aunt
Suzy falls outside Walmart
and after the personal
injury lawyers descend and
take down all the pertinent
information an ambulance is
called and transfers her to
the local hospital, where an
overworked emergency room
physician determines she has
a broken hip. The
orthopedist marches in to
the rescue and whisks Aunt
Suzy off to surgery, where
he does a simply splendid
job fixing her hip.
However, postoperatively,
Aunt Suzy develops a) severe
anemia leading to a heart
attack from the stress on
the cardiovascular system,
or b) pneumonia, or c)
kidney failure, or d) some
severe hospital-acquired
infection, or e) just
doesn't do well in rehab,
falls and breaks the other
hip, and starts the whole
process over. We in the
medical community do all we
can to watch over Aunt Suzy
in the perioperative period,
but a better solution is to
keep Aunt Suzy's bones
strong, so she bounces off
that curb like an Olympic
gymnast.
How, you ask? First, check
the status of Aunt Suzy's
bones with a test called
bone densitometry.
Guidelines call for
screening every two years in
women 65 or over OR
postmenopausal with risk
factors (Caucasian race,
slight of build, history of
smoking, family history of
osteoporosis, sedentary
lifestyle, chronic use of
corticosteroids, history of
broken bones with minimal
trauma.) Men also can be
prey to osteoporosis and are
overlooked for screening
purposes.
Next, all women and some men
over age 50 need at least
1500mg calcium with Vitamin
D daily. That is the
MINIMUM DAILY REQUIREMENT,
so getting extra calcium in
the diet is generally not a
problem.
Then, make sure Aunt Suzy's
doing some daily
weight-bearing exercise,
like walking. If she can
handle some light hand
weights, too, all the
better. Mild stress on the
bones makes them stronger.
If osteoporosis is present,
treat it. There are oral
medications that can be
given once weekly or
monthly. They work very
well, but have to be taken
correctly to be safe, so if
Aunt Suzy's faculties went
to lunch in the 90's and
never came back, pick
something else. That same
medication can be given
intravenously in the
doctor's office once yearly,
which is a good option for
some people. Alternatively,
there is a medication called
a selective estrogen
receptor modulater, which
has to be taken daily, but
is effective. It is not a
good choice for someone at
risk for blood clots, as it
does thicken the blood.
Also, the most common side
effect is hot flashes, so
Aunt Suzy might be hunting
you down for that one.
Lastly, there is a nasal
spray that pushes calcium
back into the bones, but it
has the least impressive
data, so I usually reserve
it for patients who cannot
tolerate any of the other
options.
I hope this has shed some
light on a poorly recognized
issue and its prevention.
Osteoporosis generally isn't
painful but it is serious.
Take your Aunt Suzy to see
her doctor today.
Beth Hodges, MD, is a
principal in Hodges Family
Practice, with offices in
Asheboro and Ramseur, North
Carolina.
|
|
Evacuation Planning for
Older Adults - Part III
Barbara J.
Dunn, RN, MSN
 Editor's
note: This is the third (and
final) installment in a
three part series telling
you how to begin devising an
emergency evacuation plan
for the elderly.
We are in the middle of
hurricane season. Often the
victims of an evacuation
fiasco are unprepared older
adults. In the previous two
issues of Elder Law Update I
stressed the need to work
with your older loved ones
to draft a written
evacuation plan, and I
discussed a number of
critical areas. In this last
installment, I'll address
one last usually overlooked
(but very important) issue,
and give you a few summary
pointers.
Pet Needs
Don't laugh!
We all know how elders feel
about leaving pets behind. A
cherished pet. It is
imperative to have proof of
the pet's rabies shot. Other
pet health records are
important too. Is there a
pet carrier for the pet? A
carrier is required in order
to transport a pet on public
transportation and to enter
a shelter. Is a supply of
pet food listed in the
evacuation plan? Talk with
your vet about your pet's
evacuation needs.
And Finally . . .
Share your evacuation plan
with all who need to know
it. If your loved one lives
in a senior living facility,
be sure to provide the
administrator in charge with
a copy. Make an appointment
with the administrator to
discuss the plan. Senior
living facilities have their
own evacuation plan and it
may not be consistent with
your wishes or with the
needs of your loved one.
If your loved
one lives alone, and at a
distance, communicate with
local emergency management
authorities about the best
approach. Many communities
maintain a list of older
adults who will need help
evacuating. Contact James
Drinnon at Chatham Emergency
Management Agency (CEMA) at
(912) 201-4500 for
information on assisting
older adults with
evacuation. CEMA's web site
is full of up to date
preparedness info. Check it
out by clicking
HERE.
We've skimmed the surface of
a vast topic. For further
help with planning, call you
local chapter of the
American Red Cross with your
planning questions and for
two excellent publications:
#A4499 and #A4497.
Publication A4497 deals with
planning for people with
disabilities and other
special needs. YOU MAY REACH
THE SAVANNAH CHAPTER OF THE
AMERICAN RED CROSS BY
CALLING 912-651-5371 or stop
by 906 Drayton, Savannah,
GA 31412. Both CEMA and the
Savannah Chapter of the
American Red Cross offer
speakers on all emergency
preparedness topics.
Barbara Dunn, MSN, is owner
of Elder Care of Coastal
Georgia, as well as Chair of
the Disaster Services
Committee of the Savannah
Chapter of the American Red
Cross. You may email
comments and questions to
Barbara by clicking
HERE.
|
SOCIAL SECURITY BENEFITS FOR
THE FAMILY
-Warren Coble
 Previously,
we discussed the categories
of Social Security benefits
payable to family members of
retired, disabled, or
deceased workers who have
earned enough credits to be
"insured" for benefits.
This month we will address
how spouse benefits are
computed.
Benefit computations under
Social Security always
derive from a computation
formula (Primary Insurance
Amount, or PIA) which is
determined from average
annual earnings of the
worker on the record. It
should be noted that any
benefits payable on the
record always go to the
retired or disabled worker
first. Any family benefits
payable are in addition to
the benefits of the worker.
The family maximum limit on
a record is usually 150 -
180 per cent of the worker's
benefit. If the total
benefits due to the spouse
and children are more than
this limit, their benefits
will be reduced. Again, the
worker's own benefit will
not be affected.
A spouse who has not worked
or who has low earnings can
be entitled to as much as
one-half of the retired
worker's full benefit. If
you are eligible for both
your own retirement benefits
and for benefits as a
spouse, SSA always pays your
own benefits first. If your
benefits as a spouse are
higher than the retirement
benefits, you will get a
combination of benefits
equaling the higher spouse
benefit.
If you file for spouse
benefits prior to full
retirement age (currently
age 66), you are also
considered to have filed for
reduced retirement
benefits. The amount of the
benefits will be reduced
permanently. However, if
you have reached your full
retirement age, and are
eligible for a spouse's or
ex-spouse's benefit and your
own retirement benefit, you
may choose to receive only
the spouse's benefits and
continue accruing delayed
retirement credits on your
own Social Security record.
You may then file for
benefits at a later date and
receive a higher monthly
benefit based on the effect
of delayed retirement
credits.
An example: Jane Doe is
eligible for a reduced
retirement benefit of
$300.00 per month based on a
Primary Insurance Amount of
$400.00 per month. Her
husband, John Doe files for
retirement and his Primary
Insurance Amount is $1500.00
per month, with a family
maximum amount of $2400.00
per month. The potential
full spouse's benefit (at
Jane's full retirement age,
66) for Jane would be
$750.00 (50% of Jack's full
benefit).
From the $750.00 full
unreduced spouse's benefit,
Social Security would deduct
Jane's own full Primary
Insurance Amount of $400.00,
leaving $350.00 payable to
her as a spouse. If Jane
files for the $350.00 prior
to age 66, the benefit would
be reduced proportionately.
Jane's eligibility for the
spouse's benefits has no
effect on John's benefits.
Next month, we'll consider
divorced spouse and widow's
benefits.
Social Security expert
Warren Coble welcomes your
questions regarding
Medicare, Social Security
and Senior Life in general!
Email Warren by clicking
HERE.
|
Money
Management 101: Top 8
Reasons Why Seniors Get Into
Money Trouble and How to
Avoid the Pitfalls
- Penny
Louis, MPA
 I
provide personal financial
management services for
seniors. Often I am called
upon to clean up a financial
mess and to put a client's
affairs on a more orderly
basis. Here are the most
common causes of the
financial woes I often
encounter.
1. Clutter!
Are you an "accumulator"?
Can't throw anything away?
This results in piles of
papers with no system to
keep track of the important
papers you really need.
Develop a simple filing
system for these, check
current guidelines on
retaining financial records
and shred excess documents
you don't need.
2. Paying late
Create a system to keep
track of bills and when they
are due. Open mail every
day and mark due dates on
bills and file in order of
when they are due. Schedule
at least 2 days a month to
pay bills. Late payments
result in higher interest
rates on credit cards and
negatively affect your
credit score limiting your
ability to borrow money.
3. Failure to reconcile
accounts
Get familiar with your bank
statement and use it to
balance each month.
Accurately record all
transactions, particularly
ATM and check card
transctions which are easy
to lose track of if you
don't record them as they
happen. Don't get caught
paying overdraft charges.
It's just throwing money
away.
4. Double payment of bills
or paying bills you don't
owe
Look back in your checkbook
to make sure the bill you
are paying is a new charge
and not one already
paid-sometimes payments
cross in the mail and are
not posted when the new bill
is issued. Medical bills
and Medicare and
supplemental insurance
explanation of benefits
forms often are not bills at
all but have been billed to
insurance.
5. Responding to
Telemarketers and phone
solicitations
Seniors are especially
vulnerable to phone
solicitations either to
purchase or contribute to
something. Don't feel
obligated to say yes to
everyone who calls, or even
to listen to their pitch.
If you're not interested,
say so politely and hang
up. If you are interested,
never give your personal
information over the phone.
Ask them to mail you the
offer in writing to give you
time to review it. If it is
a legitimate organization
they will do this. If they
say they can't send you
anything, don't commit over
the phone. They probably
aren't "legit".
6. QVC, Internet and
Catalog shopping-Your Enemy!
Many Seniors watch QVC and
other infomercials out of
boredom or loneliness. They
buy merchandise impulsively
that they don't necessarily
need and probably can't
afford. If you must watch,
establish a "waiting period"
before "pulling the
trigger". Often what seems
like a good deal on TV
actually carries hidden
charges in the form of
"Shipping and Handling"
which are not advertised and
can cost as much or more
than the merchandise
itself! Get off catalog
mailing lists to avoid the
temptation of impulse
buying. Contact the Direct
Marketing Association's Mail
Preference Service at
abacusoptout@epsilon.com or
by writing to Abacus, Inc.,
P.O. Box 1478, Broomfield,
CO 80038.
7. Failure to make and
adhere to a budget.
Most people don't have a
budget of what they can
afford and don't keep track
of what they spend. Credit
card use and abuse is
rampant. It's easy to get
deep into debt if you use a
credit card and don't pay it
off each month. Further,
fixed expenses go up
periodically and such
increases in utilities,
phone, rent, food and gas
need to be factored into
your budget periodically.
It may mean less money for
discretionary spending,
especially for those, who
like most Seniors, are on
fixed incomes.
8. Failure to protect your
credit rating and protect
yourself from identity
theft.
Refrain from giving personal
information, especially your
social security number, out
over the phone or internet.
Elder abuse is rampant and
can be abuse by "outsiders"
(phone solicitors that prey
on the elderly) or
"insiders" (caregivers or
unqualified advisors-can
even be family members!).
You are entitled to a free
credit report from the 3
major credit bureaus,
Equifax, Experian and
TransUnion once a year.
This enables you to check
your credit score, dispute
inaccuracies, and monitor
your credit for suspicious
activity. For access to
your free credit report
visit
www.annualcreditreport.com
or call 877-322-8228.
Penny Louis, MPA is the
Managing Partner of
Financial Care for Elders,
LLC which provides personal
business assistance to
clients who have difficulty
managing their personal
monetary affairs. She is a
member of the American
Association of Daily Money
Managers. You may email
Penny by clicking
HERE.
|
|
The Usual Disclaimer:
This newsletter is for
general information only.
Please do not rely on
anything you read in this
email as definitive legal
advice applicable to you.
All situations are
different, including yours.
Nothing you read in this
newsletter is a suitable
substitute for professional
advice you may receive from
your attorney, your
accountant, or your tax
advisor.
All contents copyrighted
2008 by Mason Law, PC.
Contents may be republished
with written permission of
Mason Law, PC (which
permission will usually be
given!). |
|
|
|
|
Mason Law, PC | 350 N. Cox St. No. 9 | ASHEBORO | NC | 27203
|
|
