For Clients, Advisors and Community.  There was recent news that Facebook users could register as organ donors.  This development gave great publicity to the fact that 70% of individuals would accept a donated organ if needed but only 30% are registered to be organ donors.  The result has been a well publicized shortage of needed organs for transplantation.

Please note that looking for an organ donor page on FaceBook and reading the stories there is an ineresting source of information.  However, “liking” a page on FaceBook does not register you as an organ donor.  You must find a specific website for organ donation to be registered.  There are several on FaceBook. 

How in Illinois do we most effectively indicate our desire to act as organ donors?  Or, conversely, how do we indicate that we do not want to be organ donors?  There are several steps.

First and foremost, make sure that your loved ones and, in particular, your agent under durable power of attorney for health care knows your intention.

Second, the new statutory form of health care power of attorney has a place to indicate whether or not you want to be an organ donor.  And, if you do, whether or not you want to place any limitations on donation.

Finally, if you want to be an organ donor, you should know that the best way to indicate your desire is to register with the donor registry sponsored by  the Illinois Secretary of State.  The indication on your driver’s license is not legally binding.  However, if you register at http://www.lifegoeson.com your decision will be legally binding upon your loved ones, perhaps reducing or eliminating conflict at a difficult time.

I’m a believer in organ donation.  I’ve seen how this selfless act has enriched the lives of others.  As an attorney, however, my obligation  is to see that my clients’ desires are fulfilled irrespective of my personal beliefs.

Indicating your desires via Facebook is one way to inform your family and loved ones about your intentions.  It is also a great way to remind your friends and family concerning this important and timely topic.

For Professional Advisors:

If your clients are shopping for long-term care insurance, they should expect higher costs and a tougher approval process.

That’s the message in a recent Wall Street Journal article (http://tinyurl.com/873zaco) about the decision by an increasing number of insurers to stop selling such policies.

Most recently, Prudential Financial announced plans to stop taking applications for individual policies that pay for nursing homes, assisted living and in-home care. Prudential plans to continue offering group care coverage through employers.

Prudential is the 10th of the top 20 insurers by sales to quit this market in recent years, the article said.

For insurers that continue to sell individual long-term care policies, many employ nurses or social workers to screen applicants’ health. Some even check prescription drug databases to learn all the medications your clients have ever been prescribed.

What Does This Mean to Clients?

People used to shop for long-term care coverage when they were well into their 60s. That may be too late for most clients.

In light of this trend, we believe it has become more important than ever to buy a policy now rather than take too long to shop and put off the decision until later. Procrastination will end up costing much more.  Estate planning options are much more flexible when there is a long term care policy in place.

With the skyrocketing cost of long-term care and premiums rising as much as 20 percent for certain policy holders, it is becoming more common for people to buy three to five years of benefits, rather than lifetime coverage.

Clients can also consider buying one policy with a “shared-care rider” so that benefits can be used by either spouse or split between them, the article said.

“Hybrid” Strategies

Finally, the article discussed two “hybrid” products as an alternative:

• A deferred fixed annuity packaged with long-term care benefits;
• A life insurance policy in which a portion is paid to cover the cost of long-term  care.

These alternatives can help cover the cost of care, while still providing a payout to your client or his heirs.

As always, I hope this article has helped you and your clients. If you have a specific concern or questions, please contact our office.

For Clients, Advisors and Community

In my 32 years of practice, I have watched my clients age, enjoying long years with their children and grandchildren. In our senior care (elder law) practice, I am increasingly counselling my clients about long term care issues including, the transition from independent living to getting assistance whether it be with medications, getting to and from their doctor appointments, daily errands and the activities of daily living (including dressing, toileting, eating and other basic daily activities). Recently, I have experienced this dilemma in my own family.

In the 1990′s, assisted living facilities came into vogue on a stand alone basis or, more often, as part of more comprehensive long term care communities (including perhaps acute and skilled nursing care facilities). In an assisted living facility, each individual (or couple) has his or her (or their) own small apartment and typically takes meals in a community dining room or can make small meals themselves. There is 24 hour supervision, medication assistance, daily activities, a shuttle bus to and from local shopping and often other services available on an a la carte basis. The 2011 MetLife Market Study revealed that the average cost of assisted living in Illinois is $3,490 per month.

Many people think that assisted living care is covered by Medicare. Generally, it is not. Expenses for long-term care (caregivers, medication management and the like) for individuals that are living in the community (not in a hospital or in a nursing home) are not covered by health insurance programs. Individuals who have purchased long term care insurance and who need help with two or more ADLs (activities of daily living described above) may qualify for benefits if they need to live in an assisted living residence for that reason.

A recent Wall Street Journal article describes many families who have been frustrated by the care for their loved ones received in an assisted living facility. They describe a low ratio of caregivers to residents and long response times when they need help.  (In my experience, there are a few really good facilities in the Chicago metropolitan area that offer services from people who care. Nonetheless, I have heard the complaints of my clients’ loved ones about uncaring personnel, attitudes bordering on abusive behavior on the part of the staff, bad food and occasionally, medication mistakes at some facilities.)

The WSJ article describes some families who have started to look for long term care solutions offshore. For the same cost of a small apartment, some families have been able to secure a luxury residence in Costa Rica shared by three patients including a nurse, three staff members and a chauffeur. There was a community of U.S. citizens, they were able to go to church every Sunday and have a full life there. The family reports that they paid about the same cost as assisted living here, including the cost of childrens’ travel back and forth to visit the parents regularly. It’s certainly an “out of the box” solution.

As we baby boomers, and our parents, age, we will need to develop creative solutions to keep us happy as we live longer. Here’s one alternative.

For Clients, Community and Advisors. 

I’ve spent 30 years counseling clients in making choices and giving directions concerning durable powers of attorney for health care and end of life treatment.  In the last week, I came face to face with the inevitable decisions that families of my clients have been forced to make.  Being a “client” makes me more aware of the very real gut wrenching decisions that families have to make every day.  I should explain.

Two weeks ago, my 85 year old father was to have a minimally invasive aortic valve replacement and a stent put into an artery.  We were delighted we’d found a young surgeon whose “niche” was this type of surgery.  Unfortunately, once the operation started, they discovered that the blocked artery would not take the stress and he had a conventional “open heart” surgery.  He subsequently got pneumonia and other complications and has been in intensive care for the last two weeks.  I just spent a week in Tucson where they live helping my mother and coordinating his care.

Dad was on a ventilator on at least three occasions.  Over last weekend, they recommended that he have a tracheotomy so that they could deal more effectively with the pneumonia.  You see, my Dad would never want to live unable to talk or eat.  That is not the quality of life he would want.  My Mom was certain of it.  But, also, Dad is a fighter.  He wouldn’t want us to give up.  Should Mom consent to placement of the tracheotomy?  His health care power of attorney gives her the authority.

I insisted that we consult with the surgeon who stated emphatically that we were not at a futile point.  After a  very difficult afternoon of phone calls with my sisters, Mom decided to consent to the procedure (which was performed yesterday without incident).  We hope that the “trache” will allow him to recoverf from the pneuonia quickly and get him on his way to recovery.  It will certainly be a long, slow road.

What lesson can I offer my clients and their advisors from my own family’s recent experience?  Of course, it is important to have a durable power of attorney for health care.  That determines who gets to make the final decision.  It also gives some general direction on end of life care.

But, most importantly, talk to your spouse or your agent about what you would want and, perhaps even more importantly, what you would not want.  (Some of our clients, for example, don’t ever want to be put in a nursing home.  Others don’t want to be given psychotropic medications.)

The durable power of attorney is only a starting point.   We are pleased to add any and all specific directions clients want in their health care power.  Our objective is to customize your estate plan to exactly what you want.

More and more of our clients have annual reviews of their estate plans with our firm.  This is the case exactly and precisely to ensure that their important and current objectives are incorporated into their plan.   In the end, we want their estate plans to work just as they wanted.

On first glance, it looks like the recently signed “Illinois Residential Real Property Transfer on Death Instrument Act” would only interest lawyers, title companies, and the government.  In fact, this new law, which goes into effect on January 1, 2012, will allow a majority of our clients to “have their cake and eat it, too”, just by addressing how their residence title is issued.

Until now, assuming there are no estate tax considerations, we have been faced with a dilemma when planning for the asset protection of a married couple’s primary residence. We could have the residence titled in the name of one or
both spouse’s revocable trusts, avoiding probate costs, delays, and creditors. Unfortunately, doing so meant that both husband and wife had to previously surrender important asset protection against potential judgment creditors and others.

When a residence is held as “tenancy by the entireties”, a spouse’s creditors could not foreclose on the residence because of the other spouse’s interest. So, if there were a car accident with a large judgment, financial mistakes, or other circumstance, the property was at least temporarily protected for the remaining spouse.

Last year, the General Assembly tried to create a law where married clients could put property in trust AND still retain the asset protection benefit of tenancy by the entireties. But, the legislation was drafted in a way that no
attorney could understand how to accomplish it, so we were stuck without a solution.

One solution we’ve recommended for clients is to have the residence owned by an Illinois land trust, which gives them the advantages of a trust (including flexibility, private administration and reduced costs) and the asset protection of entireties property. But, this solution comes with an annual cost to a bank or trust company, so it’s not perfect.  And, only one residence can have entireties protection from judgment creditors.

Now, using the new “Transfer on Death Act” provisions, we can help clients protect their property assets without the attendant cost of maintaining a land trust. We draft these provisions into the conveyance instruments, and
once they are properly recorded, they are immediately effective.

The residence can be owned by the spouses as tenants by the entireties.  Upon the death of the first spouse, the survivor is instantly and automatically the owner. Upon the death of that surviving spouse, the property is conveyed into the trust, by providing only a copy of the death certificate and a form affidavit.  There is no probate, no delays, no creditor interference.

The Residential Real Estate Transfer on Death Act doesn’t just apply to married couples.  Single individuals can convey their property to heirs through a Transfer on Death Deed, and avoid the probate process. Under most circumstances, holding a single individual’s property in a revocable trust may be a better, more comprehensive solution.

The act also simplifies planning for non-traditional couples, including those taking advantage of Illinois’ new civil union laws, though the benefits of entireties property do NOT apply in these cases.

In light of the new legislation, we will take time at each client’s annual review to re-examine how the residence title is held. If changes are appropriate, based on client objectives, we will recommend and implement them.

If you have questions about how your residence is titled, please call our office.

For Clients, Advisors, Community

A recent published case emphasizes the importance of clients checking their beneficiary designations of their retirement plans including; profit sharing, 401(k) and pension — on a regular basis. The general rule is that if the participant is married, he or she must name his or her spouse as beneficiary (unless the spouse signs a waiver in the presence of a notary or a plan representative).  This law is to protect the interest of spouses.

Here is a good example of where problems with unchecked beneficiary designation can occur: After his first wife passed away, the plan participant named his three adult children as his plan beneficiaries.  Subsequently,
he remarried. He never changed the beneficiary on his plan accounts. His intent was that his three adult children become the beneficiaries of his retirement plan account. No spousal waiver was executed. Six weeks after he remarried, he died. His new wife and his three adult children both made claim for his 401(k) account balance.

The plan administrator filed suit asking the court for directions on who was the rightful beneficiary. The court awarded the account balance to his wife because no waiver had been signed. This was not the participant’s intention!

This litigation occurred in Federal District Court. These situations can be messy, cause family disharmony and are extremely expensive.

The lesson is clear: Double check your beneficiary designation on an annual basis. Make sure that it is properly coordinated with your estate plan and structured to defer income taxes as long as possible. This is a simple step. The retirement plan account is sometimes the largest asset in the estate.

We are increasingly finding the need to stay on top of these changing circumstances.  So, it makes sense to pay attention and review the plan every year.   We have developed a program which provides annual review and estate plan enhancement every that helps our clients ensure that these problems do not occur.

There are new techniques, particularly for larger plan benefits or IRAs which allow the family to “stretch” the benefits deferring taxes over an extended amount of time. We often discuss this topic with our clients during their annual estate plan enhancement meeting. For more information, call us.

For Clients, Advisors & Community

On June 1, 2011, legislation establishing civil unions went into effect in Illinois.  This is a major step in marital rights for gay and lesbian couples.  What’s interesting, however, is that the law potentially impacts, perhaps in a major way, heterosexual couples as well.

This article will outline the features of the new law as well as its impact on some of our clients and their families.  A follow-up article will discuss the choice of civil union versus marriage and the tax and benefits issues relevant to civil unions.

What is a civil union?  A “civil union” is a legal relationship between two persons of either the same or opposite sex.  It excludes relationships involving more than two people.  The parties to a civil union in Illinois are “spouse”, “family”, “immediate family”, “dependent”and  “next of kin”.

There’s a set procedure in Illinois for a civil union to be valid.  It requires a license and a certificate be issued, much like a marriage.  The Illinois law recognizes civil unions legally entered into in another state. It does not apply to common law marriage.  It also allows issuance of licenses and certificates for civil unions to individuals who live in or intend to live in another state,  as long as that jurisdiction does not have its own law prohibiting civil unions.

Many laws that apply to a married couple apply to unions under the civil union act including separation, divorce, alimony, custody, child support, inheritance, right to take a minimum share under will, right to make health care decisions and right
to visit in a hospital.

Also, under the Illinois Spousal Continuation Act, a spouse and dependent children who lose health care coverage due to the death or retirement of the employee (or due to divorce of the employee) are entitled to continuation of coverage under certain circumstances.  It appears that the civil union spouse of an employee would be entitled to this benefit.

This is by no means a comprehensive list of benefits available.  Suffice it to say that there are many benefits
available to a spouse under the new civil union law in Illinois.

There are some questions, burdens, and responsibilities that come along with being a “spouse” under the new law.  First, under the Family Expense statute, married couples are responsible for family expenses including, in particular, medical expenses.  A spouse under the civil union law would be responsible for the medical expenses of his or her spouse under this statute.

In addition, the law concerning “tenants by the entireties” protects a husband or wife from a creditor taking their home due to a judgment against the other spouse.  However, the law in this case specifically states, “husband” or “wife”.  Hence,  unions under the civil union law do not at this time appear eligible for protection as tenants by the entireties.  Once the legislature changes the statutory language from “husband and wife” to “spouse”, this benefit might become available.

Because of the (Federal) Defense of Marriage Act, there is a “disconnect” between Federal law and Illinois law when it comes to taxes and certain Federal benefits.  These significantly impact the decision, particularly of whether an older same-sex couple should choose the traditional marriage route or a civil union.  I will address these and other related concerns in the follow-up article on civil unions.

For Community, Clients, Advisors

In the first installment of this blog series, I described how, for one family we recently represented, procrastination caused unnecessary delay, expense and worry that their objectives would not be achieved. In the second installment, I discussed a case currently in my office where delay and a reliance on joint tenancy property caused husband and wife’s estates to be court supervised.

The final installment in this series is simpler. It applies particularly to older folks, but really to anyone.

Betty is 91 years old. She is very proud that she has been living independently. In the last few months, however, her two sons have begun to notice that her short-term memory has been limited. She does not remember what happened earlier the same day and asks the same question several times within a 20-minute period. They are concerned about this.

Earlier this year, Betty fell and required surgery. Her sons were told that she might not be able to walk again. Betty made it very clear: She wanted to continue to live at home. She did not want to be admitted to a nursing home facility under any circumstance. However, an individual with early dementia who cannot ambulate requires round-the-clock care.

I met with her sons. We made a plan to create a new trust for Betty and use her assets to hire round-the-clock aides to care for her. (The objective was not to spend down her assets to qualify for Medicaid).

I drafted the trust and other instruments to implement the plan. Unfortunately, Betty did not return to her home for very long. She passed away a week later. The plan was never signed or implemented.

Lesson learned. It can, of course, happen to anyone. But after a serious illness or a fall, folks in their 80s and 90s can be subject to rapid decline. Sometimes, even with the best intentions, it’s not possible to implement a plan at the last minute.

The best course of action is not just to think about it “some day”, but to ensure that your estate plan is always up to date.

For Community, Clients, Advisors

In the first installment of this blog series, I described how procrastination caused unnecessary delay, expense, and worry for one family we recently represented.  Here is another.

What I now describe is a matter in our office right now.  I have the family’s permission to write and publish this expressly for the purpose of helping other families.

Phyllis and Sam.

Phyllis and Sam were in their 80s.  They lived comfortably in Skokie.  They had two adoring daughters and several grandchildren.  They lived frugally during their lifetimes and have accumulated some assets in brokerage accounts, IRAs, stocks and bonds (share certificates and reinvestment accounts with the share transfer agent) and their home.  They had no debt.  Some of the accounts were in Phyllis’s name only.  Some were in Sam’s name only.  But, mostly, the accounts and the house were titled in joint tenancy.

They had wills prepared in 1992 by another firm.  They were “simple” wills that made bequests to their grandchildren, generous gifts to several charities and left the remainder equally to their two daughters.  No trust was prepared.  As they got older, they began to have some health problems.  Of course, the Number One priority was taking care of Phyllis and Sam.  Sam had severe diabetic problems that led to the need for regularly scheduled dialysis.

Phyllis Dies.

Soon, Phyllis began to forget things and increasingly needed help in managing daily affairs.  In 2010, the family was informed that she had a brain tumor and that her life expectancy was likely quite limited.  The family rallied.  Both daughters live in adjoining suburbs and were there to help.  However, they weren’t really worried about their estate because they had wills and most of the assets were in joint tenancy.  Phyllis died just a few weeks ago.

Sam did okay for a short while.  But soon, without his wife, he realized that, with multiple health issues, his quality of life was simply not what he wanted it to be.  His daughters were with him, helping him constantly.  His grandchildren came to see him.  He made a very clear, knowing decision that he would stop dialysis, fully understanding the consequences of his actions.

Soon thereafter, his daughters reviewed his 1992 will with him.  They asked, “Dad, does this will reflect what you want to happen now?”  His answer was, “No, not really”.   He described for them the relatively minor changes he wanted made.   The next day, the daughters met with me to review the changes that Sam wanted.

I looked at all of the assets – the brokerage accounts, stocks, bonds, real estate.  I wanted Sam to have a revocable trust because all of the property could be distributed exactly as he wished by the two daughters without government interference upon his death.

Sam Dies.

We needed to revise his will very quickly.  There was no time to implement and fund a trust. Sam’s daughters knew that his mental condition could change at any time.  He had stopped dialysis.  His other medical conditions had forced another hospital stay.  I had to draft a new will over the weekend.

On Monday, Karen and I went to the hospital and met with Sam to ensure that the will reflected what he wanted done.  The will was signed in accordance with the legal requirements on Monday afternoon.  Sam would not have had the legal competence to sign a new will had we come the next day.

Sam passed away on Friday, just a few short weeks after Phyllis died.

Estate Settlement.

So, how do we settle Sam’s estate?  What do we have to do?

Suzanne and I have now met with the heirs and have an inventory of all the assets.  All of Phyllis’s assets will become the property of Sam’s estate.  All of Sam’s sole property and the property received from Phyllis’s estate will be distributed to the other heirs and the daughters.

Unfortunately, the only way to settle both these estates is to bring two probate estates in the Circuit Court of Cook County.  It makes the estate settlement laborious and time consuming compared to a private trust settlement.

The good news?  There are provisions for “independent administration” in Illinois probate law.  This will allow the daughters to handle most of the administration work without court supervision.  It will ease the burden to a great degree.

Lessons Learned.

So, what lesson have Phyllis, Sam and their family taught us?  There are two.  First, procrastination in estate planning limits the options available.  Don’t wait.  No one expects both spouses to die in rapid order, but, it does happen.  Second, while joint tenancy accounts are a simple solution and work well if one spouse dies, there can be severe complications, and they don’t work in the event of a common disaster or in the event that one spouse dies soon after the other.

I’m going to do everything I can to make the estate settlement as easy as possible.  However, I wish I could have helped this family more.

For Clients, Advisors & Community.

An attorney who represents seniors is concerned about their well being. He is often involved as well helping the “sandwich generation” children who are concerned about the parents they love.

But I also speak from experience as one of those “sandwich” children. A few years ago we had to take the car keys from my father-in-law. It was a difficult experience, but one we had to do.

Those who know me would think this article about senior driving dangers would be about my parents or Karen’s, not my own. I’m not 78 or 85 years of age. I’m only 57. I’m a proud member of the “baby boomer” generation. I still work in my profession. In most places, I can’t even get a senior discount on a movie ticket!

I bought a new car in October, 2010. In the three months following, I was involved in two car accidents involving significant damage to my car and to other vehicles involved in the incidents. Thankfully, no one, was hurt. Legally, both were my fault. And because I’d had a couple other little fender benders in the past, my family was increasingly uncomfortable with my driving.

Instead of chalking it up to coincidence or bad luck, we decided to see if something was really wrong.

I am currently in the midst of a complete “driver rehabilitation” evaluation through a local hospital. For example, I today had a four hour eye examination from a nationally recognized ophthalmologist and her residents at the University of Illinois. She looked in depth at an uncorrected vision problem I’ve had since I was an infant. I learned that I don’t need eye surgery.

Most importantly, though, I’m recognizing that I’ve become much too cavalier about day-to-day driving. Until very recently, an installed radar detector was standard equipment in my car, so I could evade the speed traps. Now I adhere to the speed limit. Period.

Until very recently, I talked on the phone and returned client calls while I was on the road. Now, I ignore the phone while I’m in the car, and I have my passengers do my texting for me.

I’m learning that when we hit our 50s and 60s, our reflexes slow down and cognitive changes happen. These may be subtle. However, they can make a major, perhaps life altering difference, at 60 or more miler per hour. With the addition of so many distractions into our daily lives, it’s time to reassess, change our habits, and make sure that we’re safe on the road.

Karen and I are going to take the AARP Senior Driver Education class at the end of April. Some of our friends have taken it and say that it’s time well spent. In short, I’m learning to drive – all over again.

So, if you call my cell or text me, and I don’t respond right away, I’m not ignoring you. I’m keeping my focus on the road. I’ll get back to you when I’m safely at my next stop.

We “baby boomers” don’t quite yet consider ourselves to be “seniors”. Though at the same time subtle cognitive changes are occurring and our reflexes are becoming gradually slower. Please believe me when I tell you that an ounce of prevention is better and far easier than a pound of cure.

My car was in the shop for two months after my last accident. It was just returned to me on Friday. I want to keep it. So, I’ll be driving the speed limit. Care to join me in the right lane?