Vacek & Thain, PLLC

Nursing Home Arbitration Clauses Can Be Difficult

Mandatory arbitration clauses are being worked more and more into nursing home contracts and those clauses aren't aimed at helping the patient.

According to the fine print, any dispute between the consumer and the company are handled under contract by arbitration if the company has its say. Nursing homes and other elder care facilities are increasingly inserting similar arbitration clauses into their contracts.

Companies are quick to note that arbitration is normally faster and cheaper than going to court. However, consumer advocates and elder law attorneys point out that these clauses do not necessarily benefit consumers. In reality, arbitration can make it more difficult for consumers to prevail and remedies that might be available in court are sometimes not available in arbitration.

The Wills, Trusts & Estates Prof Blog reports that a court in Arizona recently refused to enforce the arbitration clause in one nursing home's contract in "Arizona Court Overturns Home Arbitration Agreement."

In this case, the man who signed the contract on behalf of his mother did not have any legal authority to bind her to arbitration. He was not her power of attorney.

Going further, the court also signaled that such a ruling could apply more broadly. According to the court, the arbitration clause could be seen as an unenforceable contract of adhesion.

As the article notes, in many states consumers have a legal right to strike out the arbitration clauses before signing the contracts.

Before you sign any contract about nursing home care it would be beneficial to consult with an elder law attorney.

Reference: Wills, Trusts & Estates Prof Blog (Feb. 2, 2016) "Arizona Court Overturns Home Arbitration Agreement."

Please visit our website for more information on estate planning.

Children Can Be Blocked from Your Estate

It can be a tough decision but you can prevent your children from receiving any part of your estate.

As a teenager a man had a relationship that resulted in a daughter but he did not find out until the daughter wrote to him with the news that her mother had identified him as the father while the mother was on her death bed.

This story appeared in an article entitled "Can my 40-year-old long-lost daughter get my estate?", recently featured in Market Watch with a question from a reader.

The man paid for DNA testing which confirmed that she was his only child.

Unfortunately, the father and daughter ultimately did not get along and ceased communication. The man lives with a partner who wishes to give him her house when she passes. However, this partner is reluctant to do so. It seems she does not want the daughter to inherit the house when the father passes away.

The man wonders how he can ensure that the daughter will not inherit the house.

The answer to the reader's question is very short and simple. He can have a will or living trust prepared to specifically exclude the daughter and any of her children.

Nevertheless, the article does not elaborate regarding why this needs to be done.

Accordingly, a more complete explanation would have noted what happens when a single person passes away without a will. In such circumstances, the laws of intestate succession apply. Consequently, the estate passes to any living children.

So, if you do not want a child to inherit your estate, you need a will or a living trust. However, that is not all that must be done.

The law assumes that if a child is not mentioned in a will, it was an oversight. The judge can reconstruct the will to include the child. For that reason the child must be mentioned in the will and specifically disinherited.

A meeting with an estate planning attorney can help you accomplish your goals.

Reference: Market Watch (Feb. 5, 2016) "Can my 40-year-old long-lost daughter get my estate?"

Feel free to visit our website to register for a free upcoming seminar or for more information on estate planning.

It is Possible to Go out of State for an Executor

Your first choice of an executor may not reside in your state of residence but they can be appointed to the position. However, it is important to know the potential problems.

Your first choice as the executor of your estate may not live close by or even within your state of residence – but, if you are comfortable with them, they are someone you trust and someone with strong financial knowledge and experience it is still possible to designate that person as your executor. It is important, however, to realize there can be problems.

This subject was considered in a recent NWI Times article entitled "Pros and cons of an out-of-state executor."

The two biggest drawbacks are availability and time.

Executors are often required to make personal appearances at court hearings. It can be burdensome and expensive for an out-of-state executor to make the travel arrangements. Logistically, paper correspondence may also take longer.

According to the article, some states have additional requirements when the executor is a non-resident. For example, the state of Indiana requires out-of-state executors to post a bond and appoint someone who is a state resident as a registered agent for service of process. Other states have similar requirements.

On the plus side, appointing an out-of-state executor allows you to designate the best person for the job. Many of the negatives of doing so can be mitigated if the executor hires a local estate attorney to assist with the administration.

Consider contacting an estate planning attorney to guide you in the selection of filling the important position of executor.

Reference: NWI Times (Feb. 7, 2016) "Pros and cons of an out-of-state executor."

Please visit our website for more information on estate planning.

Use the Tax Season to Look at Your Estate Plans

Your estate plan should be reviewed occasionally and linking it to the annual tax season could be beneficial.

The tax season is a time for gathering all of your key financial information and is an excellent time to take a look at your estate plan. While doing your taxes you will be gathering much of the same documentation needed to review an estate plan. In addition, the documentation will be fresh in your mind.

Accounting Web recently offered some tips about estate planning during the tax season in "Estate Planning Reminders for This Tax Season."

The advice includes:

• Review or Get a Will – Spend a little time to review your will and make sure everything is up to date. If you do not already have a will, visit with an estate planning attorney about getting one.
• Prepare a Letter of Instruction – Make a list of your assets, where they are located, and how they should be handled in your estate.
• Review Beneficiaries – Since you should have the asset documentation available as part of your tax preparation, make sure all beneficiary designations are up to date.
• Consider a Trust – Again since you already have the documentation handy, tax time is a good time to have a trust drawn up and to transfer assets into the trust.

The person who prepares your taxes and your estate planning attorney could work together. Consider it as tax time comes around.

Reference: Accounting Web (Feb. 8, 2016) "Estate Planning Reminders for This Tax Season."

For more information on how to plan your estate or better: attend a free seminar, please visit our website. 

States Evaluate Importance of Estate Taxes

Since wealthy elderly residents have been known to relocate to states with more favorable estate tax laws, a clear trend has developed with more and more states reducing or eliminating estate taxes.

A dilemma has been presented to state governments facing revenue declines. They can raise tax revenue by taxing the estates of the wealthy but they then risk their own residents relocating to more lenient states before they pass away.

When such citizens move away that means these state governments with estate taxes do not receive income or capital gains taxes from those wealthy people. In the end, such states must determine which taxes are more important to them and their budgets.

Kiplinger's Personal Finance reports in "More States Giving Heirs a Break on Estate Taxes" that the majority of states have chosen to keep their citizens rather than impose an estate tax.

So, how many states still have an estate tax? At present, this number includes only 14 states and the District of Columbia. Tennessee is the latest state to do away with its estate tax and six other states have increased their estate tax exemptions recently.

Although it might be tempting to say this trend is clear evidence that estate tax revenue is not as important as other revenue, there probably is not enough definitive evidence to make that claim. The political controversy surrounding the estate tax might play some role in this trend amongst the states.

It will be worth watching if the states still imposing the tax continue to face pressure to repeal it to keep the wealthy from fleeing to other states in their retirement years.

An estate planning attorney could be helpful in guiding you through these important issues.

Reference: Kiplinger's Personal Finance (February 2016) "More States Giving Heirs a Break on Estate Taxes"

Please visit our website for more information on estate tax or to register for a free living trust seminar.

Trump's Actions Involving Father's Estate Spark Media Attention

Family disagreements can sometimes rise into public view as seen in Donald Trump’s campaign for president.

Given presidential candidate Donald Trump’s temperament for blunt, off-the-cuff comments, it should come as no surprise that a challenge to his father's will caused Trump to act out of anger and he is now answering questions about it.

Trump's older brother was not interested in the family real estate business. He instead became a pilot until alcoholism forced him out of the sky. He died from the disease in 1991.

When Trump's father passed away in 1999, Fred Trump III, Donald's nephew from his brother, spoke at the funeral. That night Fred III's child was born with cerebral palsy. Donald Trump pledged that the Trump family would take care of the child's medical needs.

However, when his father's will was read it was discovered that his brother's family was cut out of the will.

Donald Trump had helped create the will.

His nephew's family claimed Donald and his other siblings had unduly influenced their father who suffered from dementia. They challenged the will. This angered Trump and he cut off support for the child with cerebral palsy.

The Daily Mail has more on this story in "Donald Trump admits cutting off medical treatment for his nephew's sick baby after will dispute with alcoholic brother's family."

Undoubtedly this story will be used for political reasons as long as Donald Trump remains a presidential candidate.

There is, nevertheless, a non-political lesson in all of this.

When families feud over estates, the feuds have a way of affecting others, like the medical treatment of a sick child.

Contacting an estate planning attorney could possibly help avoid such issues.

Reference: Daily Mail (Jan. 3, 2016) "Donald Trump admits cutting off medical treatment for his nephew's sick baby after will dispute with alcoholic brother's family."

Please visit our website to learn more about handling estates with special needs or to register for a free living trust seminar.

A Headache Can Accompany Long-Term Care Insurance

The possibility of acquiring a long-term care insurance policy can bring confusion, a waste of time and a headache.

The cost of nursing home care can be extreme and more and more people are looking at possible solutions to paying those costs. An industry arose to answer those concerns and insurers began offering policies to cover those costs. While it sounds like it might be a simple solution to a difficult problem, it appears the process isn't so simple.

Recently, The New York Times discussed the complexities in an article entitled "Long-Term Care Insurance Can Baffle, With Complex Policies and Costs."

The key thing to understand is that 90% of the companies that offered long-term care policies in the past no longer do so. These companies discovered it is very difficult for insurers to make money on the policies.

Those companies still in the market offer a confusing array of policies with benefits and costs that are not always easily understood. It can be migraine-inducing for people to figure out what they are getting if they purchase a policy.

It can also be a complete waste of time for a couple of reasons.

First, 40% of people who apply for the policies are turned down for health reasons. Second, the policies do not offer life coverage. They are short term policies and if your need for coverage exceeds the policy term then the money spent on premiums is wasted.

If you are looking into long-term care insurance it might be wise to seek independent advice such as from an estate planning attorney or elder law attorney to be sure the policy is of value to you and what benefits you would actually receive.

Reference: The New York Times (Dec. 18, 2015) "Long-Term Care Insurance Can Baffle, With Complex Policies and Costs."

Please visit our website for information on estate planning.

Brain Dead Declaration Creates a Lawsuit

The issue of when a person can be removed from life support is making headlines in California as a family files a lawsuit.

A 13-year-old girl checked into an Oakland hospital for routine surgery in December of 2013 but complications soon followed for Jahi McMath that made the surgery anything but routine as she began bleeding profusely.

She suffered from brain swelling and cardiac arrest. A few days after the surgery, McMath was declared to be brain dead by the doctors. The designation is important because when a person is declared brain dead, hospitals are no longer required to provide life support or other treatment.

However, McMath's mother would not consent to her daughter being taken off life support.

After a court battle, a judge agreed with the doctors and declared McMath brain dead. Her mother continued to believe otherwise and quickly arranged for her daughter to be transferred to New Jersey as that state has a religious exemption that allows families to keep brain dead people on life support for religious reasons.

For two years McMath has continued to "live" in New Jersey on life support and her family insists that she shows signs of not being brain dead, but California has refused to remove the designation. Now, her mother has filed a lawsuit in federal court demanding that California be forced to do so.

Courthouse News Service reported this story in "Family Wants Brain-Dead Girl Declared Alive."

What this case highlights is the importance of advanced health care directives, especially living wills. The one person who does not have a say right now regarding whether she remains on life support is McMath. She is a minor so her parents' wishes would take precedence over hers in any case.

Adults can avoid this situation by visiting an estate planning attorney and making a living will part of an estate plan.

Reference: Courthouse News Service (Dec. 24, 2015) "Family Wants Brain-Dead Girl Declared Alive."

You can find more information on living wills during one of our free living trust seminars.  You can register through our website or by calling us at 281.531.5800. 

Just How Healthy Are Elderly Baby Boomers?

The baby boomer generation may be living longer than previous generations but a real concern has arisen over health issues the generation may face.

As the last of the baby boomer generation becomes eligible for Medicare in 2030, the average life expectancy is expected to be an additional 20.1 years but health issues may present major challenges.

A recent study suggests that those elderly people who will live longer will do so in poorer overall health than the elderly people from previous generations. It appears, in part, this is because medical science has done such a great job of finding treatments for diseases that often kill people early, such as cardiovascular problems. As people will be living longer, however, they will get other diseases, such as cancer and Alzheimer's, in greater numbers.

The Bangor Daily News reported this story in "Baby Boomers are more likely to spend their last years in worse health than past generations."

This has important implications.

While an individual cannot know for certain whether he or she will be one of the people who live longer and suffer from disease, individuals can play it safe and plan ahead.

Baby boomers should consider getting estate plans that include powers of attorney and advanced health care directives so if they become sick or incapacitated, the people handling their affairs will have been chosen by them.

Reference: Bangor Daily News (Dec. 29, 2015) "Baby Boomers are more likely to spend their last years in worse health than past generations."

Please visit our website for more information on estate planning.

Guardianship Laws May Need to Be Expanded

There is a growing concern that guardianship laws need to be expanded in order to protect the elderly from abuse.

Nearly every state has a similar process when an elderly person needs help handling their affairs and they do not have powers of attorney in place. A guardianship petition is submitted to probate court and someone is appointed guardian to take care of the elderly person's financial and personal affairs.

However, many people believe there is an inherent bias in most states' guardianship laws.

Guardians are required to make regular reports about the financial affairs of the ward. Although it does not always work, this helps prevent the guardian from taking financial advantage of the ward. However, most of the time guardians are not required to report on the well-being and care of the elderly person.

Consequently, courts do not know if the ward is being abused or neglected unless a third-party makes a report.

Some states are attempting to change this bias by updating their laws to add new reporting requirements.

As the Jackson Free Press reports in "State Eyes Changes to Guardianship Laws," Mississippi has appointed a task force to consider changing its requirements.

Changing guardianship laws to make elder abuse less likely is good and important work. No elderly person should have to suffer from financial or personal abuse.

However, it is also important not to rely on guardianship laws as the only way to take care of incapacitated elderly people. Everyone should get the necessary powers of attorney in place, or better, a living trust, before they become incapacitated to make it less likely that a court will see the need to appoint a guardian in the first place.

An estate planning attorney can advise on these issues.

Reference: Jackson Free Press (Dec. 22, 2015) "State Eyes Changes to Guardianship Laws"

For more information on how to prevent dealing with a guardianship or to register for our free seminar on how to protect the one's you love most, please visit our website.