For years, attorneys, accountants, financial planners, and insurance sale persons have been touting the benefits of long-term care insurance. “Buy in your 50s and you will never have to worry about your future long-term care expenses ever again” was the common refrain. It was sound advice. With the right long-term care policy your problems were solved. Daily benefit rates typically covered the lion’s share of the daily private pay rate preserving assets for much-needed extras and, in many cases, a tidy inheritance for the next generation.

Unfortunately, any aging population, the unexpected popularity of assisted living facilities, and a steady increases in the cost of care has made it all but impossible for insurance companies to continue to provide the promised levels of benefits without increasing premiums. It can be argued that insurance companies should have seen the baby-boomers coming but no one anticipated that so many seniors would prefer to transition to an assisted living facility foregoing the in-home care option. Insurance companies also expected a much higher percentage of customers to cancel coverage. A common theme across all types of elective insurance coverage types. The constant refrain from professional advisers to clients recommending that they retain long-term care insurance at all costs had the unintended effect of making LTC insurance untenable for insurers.

All of these unanticipated and unintended consequences has had a real impact on seniors. In some cases, premiums have as much as doubled in the past two years and Mass Mutual, one of the largest LTC insurance underwriters, is about to ask regulators to authorize an average increase in premiums of 77 percent.

Recently, a lawsuit was filed against the Illinois Department of Human and Family Services over delays in the processing of claims for Medicaid benefits. Although the lawsuit focuses primarily on applications for community Medicaid and health insurance benefits, delays by IDHFS in processing Medicaid claims for long-term care benefits can have a dramatic effect on those seniors requiring assistance to pay for long-term nursing home care.

A quick synopsis of the Medicaid system as it applies to nursing home benefits:

Medicaid (not to be confused with Medicare) is a government program funded by both state and federal resources to help seniors and disabled individuals with limited resources pay for long-term care. Although Medicare will cover short-term stays in a nursing home for rehabilitation and some respite care, Medicare provides no benefit to those seniors that need to move to a nursing home on a permanent basis.

The latest the telephone scam  is the “IRS Phone Call” from an IRS agent.  The scam works like this:  The caller who claims to be an IRS agent tells the person that he/she is an employee of the IRS and that he owes back taxes and must pay them immediately.  The ” agent” then tells them that the victim must pay by wire, credit card, prepaid debit or gift card.  The scammer goes on to say if these taxes are not paid immediately, they are risking losing his home, being arrested or even deported.  According to Kiplinger Tax Letter (vol.93, no.7), Seniors and low-income individuals are the most at risk. (This scam is much akin to the “grandson”  calling the grandmother (usually an older adult that has grandkids) that he is in jail and needs bail money to get out.  Of course, the grandson is a scammer who pretends to be her grandson asking for some quick money.) Most of these fraudulent calls are perpetrated around April 15th- tax time.

The truth is that the IRS never makes phone calls stating that you owe taxes or that a refund is coming your way.  The procedure is that the IRS contacts you by mail.

The latest scheme is for the scammer  to file a fake income tax return with your private information and have the refund distributed to one of your accounts.  Then the scammer calls as an IRS agent telling the victim that there was fraud in the tax return and that the victim must send the refund back to the scammer’s address or wire destination.(Business Insider, The IRS isn’t calling you-it’s a scam and here’s what to do if it happens to you, by Tanya Loudenback 4/4/18.)

Medicaid funds long-term care services for low-income individuals, but 48 states have opted to give assisted living residents the ability to receive Medicaid benefits, mostly through Medicaid “waiver” programs that promote home health care.  More than 330,000 people in assisted living are receiving more than $10 Billion in benefits to pay for those services.  Because the number of individuals receiving long-term care services from Medicaid in ALFs is only expected to grow, the Government Accountability Office (GAO) surveyed state Medicaid agencies and interviewed officials for a report on federal oversight of these facilities.

The GAO found that there are both gaps in state reporting of cases of harm to assisted living residents–such as abuse, neglect and exploitation-and lack of guidance from the federal government on what needs to be reported.  States are required to monitor “critical” incidents that may harm a beneficiary’s health or welfare, but they have leeway in determining what the consider a critical incident. While all states considered physical assault, emotional abuse, and sexual assault to be critical incidents, three states don’t monitor unexpected or unexplained deaths and seven states don’t monitor the treat of suicide at the ALFs.

“Medicaid beneficiaries receiving assisted living services include older adults and individuals with physical, intellectual or developmental disabilities, some of whom can be particularly vulnerable to abuse, neglect, and exploitation,” the report notes.

Medicare has terminated your coverage for a physical therapist, nurse or speech therapist.  The health care provider states that you have “plateaued” , ‘have not improved” or require “maintenance services” only.  In addition, the health care provider states that you must pay out of pocket if you want to continue these services.  However, you and your physician opine that you need these services and that they are medically necessary. So what should you do?  Appeal Medicare’s decision.

The initial document you will receive before termination is a “Notice of Medicare Provider Non-Coverage” or a” Generic Notice” from your health care provider.  When you receive this notice, immediately call the Beneficiary and Family-Centered Care Quality Improvement Organization, or BFCC-QIO.  The phone number will be on the notice that you have received.  Fax to them a written opinion by your physician that the services are “medically necessary” and that your health will be jeopardized if services are dis continued.  In addition, have the health provider deliver your records to BFCC-QIO and a copy to you.

The BFCC-QIO must make a decision within 72 hours of receipt of your appeal.  If they agree with you coverage will be continued, if they don’t then you have to pay out of pocket for those services.

Older parents are becoming more common, driven in part by changing mores and surrogate motherhood.  Comedian and author Steve Martin had his first child at age 67.  Singer Billy Joel just welcomed his third daughter. Janet Jackson had a child at 50. But later-life parents have some special estate planning and retirement considerations.

The first consideration is to make sure you have an estate plan and that estate plan is up to date.  One of the most important functions of an estate plan is to name a guardian for your children in your will and this goes double for a parent having children late in life.  If you don’t name someone to act as guardian, the court will choose the guardian.  Because the court does not know your kids like you do, the person they choose may not be ideal.

In addition to naming a guardian, you may  also want to set up a trust for your children so that your assets are set aside for them when they get older.  If a child is the product of the second marriage, a trust may be a particularly important.  A trust can give your spouse rights, but allow someone else-the trustee-the power to manage the property and protect it for the next generation.  If you have older children, a trust could, for example, provide for a younger child’s education and then divide the remaining amount among all of the children.

When a non-lawyer ventures into the world of probate or guardianship, one item that usually causes confusion is the requirement for the representative to post a bond. Under Illinois law, a court-appointed representative is required to post a bond which covers 150% of the value of the personal estate. This requirement is in place for anyone serving as guardian of an estate for a person with a disability. It is also required for the administrator or executor of a decedent’s estate. Although in the case of decedents estates, the requirement for a bond can be waived, but only if the waiver is explicitly stated in the decedent’s will.

So what does a bond do? In essence, it acts like an insurance policy that protects the estate from the actions by the representative. The representative (although it can usually be paid out of the estate’s funds) is required to pay an annual premium which is a fraction of the full amount of coverage. The bond company then insures and protects the assets of the estate from any potential losses.

How does one actually acquire a bond? Most counties have their own standardized forms which the representative would need to sign called a “surety bond” form. This document needs to be signed and notarized and then sent to the bond company for execution. The bond companies also have their own forms and applications which need to be completed by the representative before they will approve the bond. In some counties, the bond companies have representatives who spend a portion of their day in the courthouse, which makes it easier to obtain a bond on short notice.

One of the most common questions we receive from clients is where to keep original wills and other estate planning documents. Generally, there are two main options as to where these documents should be kept. The first option is to keep them in your home with your personal items and other important documentation. The advantage of this option is that it is usually easier for your family to find the documents should something happen to you. However, storing items in your own home can also carry some risk. The main drawback is the potential danger for fire or flood. If your original will is destroyed, you would need to re-execute a new document. To combat this risk, some people prefer to use a fire-proof safe to keep their important documents. If this is your choice, I would recommend sharing the code to your safe with your next of kin. Otherwise, it will be difficult to access the documents in an urgent situation.

The second option people choose for storing original estate planning documents is to use a safety deposit box at a bank. The primary advantage here is that the clients know the documents are being kept in a safe and secured location. The downside to this option can be the difficulty in gaining access to the safety deposit box once the client passes away. Some people will choose to list a family member as a co-owner of the safety deposit box, but some banks have restrictions on the number of people who can be listed.

If a family member is not listed on the account, the safety deposit box can still be accessed after the person passes away under the Illinois Safety Deposit Box Opening Act 755 ILCS 15/1. However, the family member, or interested person, must present an affidavit and can only open the safety deposit box for the purpose of checking for a will. In this situation the only items that may be removed are a will, a codicil, or any burial documents.

Leaving those who survive you an organized estate with accurate records will save time and money.

At a minimum, leave information regarding the following in a place where your family can easily find it:

  • Your personal history including names, addresses and telephone numbers for yourself and all of your current family members and family members from previous marriages;
  • Your military service including your branch and dates of service;
  • Your employment including present employer and employment benefits (life insurance, stock options, pension plans and contact information for each);
  • Real estate you own including copies of deeds;
  • Financial accounts including name of institution and account numbers;
  • Stocks and bonds held in brokerage accounts and the name and phone number for the brokerage firm;
  • Automobile make, model and year and location of title of any loan information;
  • Business interests including type and amount of ownership;
  • Safe-deposit boxes
  • Insurance policies
  • Funeral/Burial instructions
  • Tax returns
  • Wills
  • Trusts
  • Power of Attorney for Property
  • Power of Attorney for Health Care
  • Living Will
  • Name and phone number for your lawyer, accountant and doctor
  • Important friends to notify upon your death

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A small estate affidavit may be used in place of a formal estate proceeding (opening an estate before a judge) to collect the decedent’s (person who died) assets when the total value of the decedent’s assets are less than $100,000 and include no real estate.

An affidavit must be completed which states the names and addresses of the heirs at law (individuals who will receive the assets) if the decedent died without a will or the beneficiaries’ names and addresses if the decedent had a will. The affiant (individual who signs the affidavit) must state that no estate proceeding before a court is pending nor is one comtemplated. He must also state that all funeral expenses have been paid and that there is no unknown claimant (debtor) and no known claims against the assets which have not been paid. All assets must be listed on the affidavit as well.

No notice is required to heirs, beneficairies or creditors. The affiant can be held financially responsible to creditors of the decedent who rely upon the affidavit and who suffer a loss because of their reliance.

The small estate affidavit does not need to be filed with the court.

It is a useful tool whern there is no question about the debts of the decedent and there are assets in the decedent’s name which need to be accessed. Continue reading

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