The older you get, the harder it is to qualify for long-term care insurance. If you are interested in buying this insurance, it is better to act sooner rather than later.

Many people put off purchasing long-term care insurance until they need it, but by then, it may be too late. Not only do premiums increase as you age, you also may not even qualify for insurance due to your health. The older you are, the more likely you are to have a pre-existing health condition that will disqualify you from getting long-term care insurance.

According to a recent study by the American Association for Long-Term Care Insurance, 44 percent of applicants who were age 70 or older had their applications denied due to health reasons. And those are the applicants who completed applications. Insurance agents frequently discourage unhealthy applicants from applying in the first place.

In contrast to older applicants, only 22 percent of applicants who are between 50 and 59 years old and 30 percent of applicants between 60 and 69 years old had their applications declined. Generally, the best (and cheapest) time to buy long-term care insurance is when you are in your 50s.

Long-term care insurance is not the best option for everyone, but if you are thinking about it, don’t put off the purchase until it is too late. To find out if a long-term care insurance policy fits into your long-term care plan, consult with your attorneys at MSW.

How much you need for retirement depends a great deal on how long you expect to live. There are now many Web-based calculators that can give you an idea of your life expectancy based on your current age, gender, family health history, smoking and drinking habits, exercise patterns, stress level, and other important lifestyle choices.

Here are four life expectancy calculators that we have identified as particularly detailed (although we cannot yet vouch for their accuracy!). Most require you to sign up with an email and a password before sharing the results. Click on each site name below to access the calculators.

Living to 100

LifeSpan Calculator from Northwestern Mutual

MetLife Longevity Calculator

BlueZones True Vitality Test

According to court documents, legendary singer Aretha Franklin did not have a will when she died, opening up her estate to public scrutiny and potential problems. Failing to create an estate plan can cause lots of headaches for heirs, in addition to unnecessary costs.

Franklin, who died August 16, 2018, at age 76, left behind four sons, but no guidance on how to distribute her reported $80 million estate. According to The New York Times, her sons filed paperwork in Oakland County, Michigan, indicating that she died intestate — that is, without a will. The sons nominated Franklin’s niece to serve as the personal representative of the estate. When someone dies without a will, the estate is divided according to state law. Under Michigan law, an unmarried decedent’s estate is distributed to his or her children. (Franklin had been married twice but long since divorced.)

Even if the “Queen of Soul” had wanted her estate to go solely to her children, by not having a will or trust, her estate will have to go through a long public probate process, which will likely cost her estate considerable money. If Franklin, who was quite private in life, had created an estate plan that included a will and a trust, she could have avoided probate and kept the details of her financial circumstances private.  Her eldest son reportedly has special needs, which presents other potential complications.  In addition, by not having a will, Franklin has opened her estate up to potential challenges that could drag out the probate process. Without a will to clearly state the decedent’s intent, litigation resulting from family conflicts often eats into estates.

Also, because Franklin did not plan her estate, the estate will be subject to unnecessary estate taxation. Although she may not have been able to avoid estate tax entirely, there are steps she could have taken to reduce the amount her estate will have to pay.

“I was after her for a number of years to do a trust,” attorney Don Wilson, who represented Franklin in entertainment matters for the past 28 years, told the Detroit Free Press. “It would have expedited things and kept them out of probate, and kept things private.”

Estate planning is important even if you don’t have Aretha Franklin’s assets. It allows you, while you are still living, to ensure that your property will go to the people you want, in the way you want, and when you want. It permits you to save as much as possible on taxes, court costs, and attorneys’ fees; and it affords the comfort that your loved ones can mourn your loss without being simultaneously burdened with unnecessary red tape and financial confusion.

Contact your attorneys at MSW to begin working on your estate plan now.

A California daughter and granddaughter’s fear of losing their home to Medicaid may have contributed to a severe case of elder abuse. If the pair had consulted with an elder law attorney, they might have figured out a way to get their mother the care she needed and also protect their house.

Amanda Havens was sentenced to 17 years in prison for elder abuse after her grandmother, Dorothy Havens, was found neglected, with bedsores and open wounds, in the home they shared.  The grandmother died the day after being discovered by authorities.  Amanda’s mother, Kathryn Havens, who also lived with Dorothy, is awaiting trial for second-degree murder. According to an article in the Record Searchlight, a local publication, Amanda and Kathryn knew Dorothy needed full-time care, but they did not apply for Medicaid on her behalf due to a fear that Medicaid would “take” the house.

It is a common misconception that the state will immediately take a Medicaid recipient’s home. Nursing home residents do not automatically have to sell their homes in order to qualify for Medicaid. In some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home; in other states, the nursing home resident must prove a likelihood of returning home. The state may place a lien on the home, which means that if the home is sold, the Medicaid recipient would have to pay back the state for the amount of the lien.

After a Medicaid recipient dies, the state may attempt to recover Medicaid payments from the recipient’s estate, which means the house would likely need to be sold. But there are things Medicaid recipients and their families can do to protect the home.

A Medicaid applicant can transfer the house to the following individuals and still be eligible for Medicaid:

• The applicant’s spouse
• A child who is under age 21 or who is blind or disabled
• Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances)
• A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home
• A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

In addition, with a little advance planning, there are other ways to protect a house. A life estate can let a Medicaid applicant continue to live in the home, but allows the property to pass outside of probate to the applicant’s beneficiaries. Certain trusts can also protect a house from estate recovery.

The moral is: Don’t let a fear of Medicaid prevent you from getting your loved one the care they need. While the thought of losing a home is scary, there are things you can do to protect the house. To find out the best solution for you, consult with your attorneys at MSW.

To read the Record Searchlight article about the case, click here.

A promissory note is normally given in return for a loan and it is simply a promise to repay the amount. Classifying asset transfers as loans rather than gifts can be useful because it sometimes allows parents to “lend” assets to their children and still maintain Medicaid eligibility.

Before Congress enacted the Deficit Reduction Act (DRA) in 2006, a Medicaid applicant could show that a transaction was a loan to another person rather than gift by presenting promissory notes, loans, or mortgages at the time of the Medicaid application. The loan would not be counted among the applicant’s assets, unlike a gift. Congress considered this to be an abusive planning strategy, so the DRA imposed restrictions on the use of promissory notes, loans, and mortgages.

In order for a loan to not be treated as a transfer for less than fair market value (and therefore not to interfere with Medicaid eligibility) it must satisfy three standards: (1) the term of the loan must not last longer than the anticipated life of the lender, (2) payments must be made in equal amounts during the term of the loan with no deferral of payments and no balloon payments, (3) and the debt cannot be cancelled at the death of the lender. If these three standards are not met, the outstanding balance on the promissory note, loan, or mortgage will be considered a transfer and used to assess a Medicaid penalty period.

It’s good practice when lending money to use a promissory note, whether or not the loan is related to Medicaid. To learn more about using promissory notes in Medicaid planning, contact your elder law attorney.

Medicare is proposing a new flat rate reimbursement system for doctors who treat Medicare patients. Some worry that the plan may reduce payments to specialists and cause fewer doctors to accept Medicare patients.

The Centers for Medicare and Medicaid Services (CMS) says the proposed changes are designed to reduce paperwork by combining four levels of forms required for reimbursement into one form and one fee paid to doctors. Under the new system, doctors who see generally healthy patients and doctors who see more complicated patients would receive the same flat fee. According to a report by NPR, the flat fee would mean doctors who specialize in complex medical areas would receive a smaller reimbursement than under the current system. Doctors would receive the same amount regardless of whether they spent 15 minutes with a patient complaining of a head cold or an hour with a patient with stage 4 cancer.

As NPR reports, doctors are worried the new payment system will cause more specialists to refuse to see Medicare patients. In addition, doctors who do see Medicare patients may spend less time with them. And the implications extend beyond Medicare because private insurers often follow Medicare’s lead.

Due to the possible implications of the flat fee, advocates are asking CMS to start with a demonstration project rather than changing the entire reimbursement system for all physicians at once.

CMS is accepting public comments until September 10, 2018. The new fee structure would go into effect in January 2019.

For more information about the proposed changes, click here and here.

A lawsuit in New York state highlights an issue with some assisted living facilities: No wheelchairs allowed. The lawsuit claims that state regulations and facility policies discriminate against residents and potential residents who use wheelchairs.

Filed on behalf of the Fair Housing Justice Center and an anonymous assisted living resident, the lawsuit alleges that four assisted living facilities in New York refused to admit applicants who were in a wheelchair and threatened to evict or actually evicted residents who started using wheelchairs. According to the lawsuit, state regulations are to blame. The regulations prohibit assisted living facilities from admitting residents who are “unable to transfer” or “chronically chairfast.” The lawsuit argues that these regulations, which predate federal anti-discrimination laws, are outdated and violate current federal disability discrimination law.

Assisted living facilities, unlike nursing homes, are not governed by federal law and regulations. State law dictates the rules for these facilities, and each state has different laws. Some states require assisted living residents to be able to transfer themselves or transfer with minimal help. Other states, like New York, allow facilities to prohibit wheelchairs altogether. Individuals in wheelchairs are often told they need to go to a nursing home, which is more expensive than an assisted living facility.

The lawsuit is asking the facilities to stop discriminating against wheelchair residents and the state to revise its regulations to comply with federal law. The lawsuit argues that admission to an assisted living facility should be judged on a case-by-case basis according to the individual’s needs rather than with a blanket “no wheelchair” policy.

For a New York Times article about the lawsuit, click here.

To read the lawsuit, click here.

One of the most commonly asked questions we hear from our estate planning clients is “How often should I update my estate plan?” As a general rule, our recommendation is that – no matter your age or your health – you should review your plan every two to three years, and more frequently if you experience a significant life event.

Life events that merit an estate plan review include: the death of a close family member, the birth of a child, a marriage or divorce, a relocation to a different state, or a significant change in your financial circumstances. Basically, it’s anything that alters the course of your life or those you love and count on.

For example, one of our clients asked to change the person who was appointed guardian of her children when that family member became less available, geographically and emotionally; in another instance, the death of a spouse meant a widow selected each of her three children to take on the roles of medical decision-maker, executor and power of attorney.

As always, planning for your death or disability can be a difficult and confusing process. Failing to plan, however, can leave your loved ones facing greater confusion and added expenses at a time when they are most vulnerable.

We understand that our clients come to us for our depth of technical knowledge but we know, first-hand, they appreciate our sensitivity to their current circumstances, which may, at times, be challenging and overwhelming.

If you are a client of our firm, look for a reminder if it has been more than a few years since your documents were updated or executed. Or, if a significant life event has and you are not sure if you should review or update your plan, feel free to Kristen Prull Moonan here.

While Barbara Bush’s family recently made public her decision to pursue “comfort care” at the end of her life, it is estimated that nearly two out of three Americans do not have a health care directive in place. According to an April 2018 Forbes article, “This is no surprise to those who knew Mrs. Bush and worked with her over the years, as she was an early champion of hospice programs for the terminally ill.”

A health care directive (sometimes known as a living will, health care proxy, personal directive, advance directive, or medical directive) is a document that allows you to express your wishes with regard to end-of-life care should you be too ill or incapacitated to speak on your own behalf. You may also appoint a trusted agent to step in and make critical end-of-life decisions for you.

Your directed agent can make a wide range of decisions for you including which treatments or medicines you do or do not want to receive, where you received care, and who can access your medical records. Of course, these decisions should be based on candid conversation regarding your wishes with your proposed agent while you are still heathy.

When selecting an agent, consider a family member, a friend, or a spiritual advisor. Choose someone who you can trust and who will carry out your wishes … even if doing so may be difficult or upsetting.

Because we believe health care directives are critical – no matter your age or your health — to a solid estate plan, they are included in all of our estate planning packages. Other documents used in planning may include wills, revocable living trusts, irrevocable trusts, and financial powers of attorney. We also offer more sophisticated planning services including estate tax planning, charitable planning and asset protection planning.

Contact Kristen Prull Moonan if you want to learn how a health care directive will be valuable for you.