Lawyers With Purpose

Your Legal Hour - February 24, 2014

Welcome to Your Legal Hour!

This week's topic is Trust Design (Part 2).

Questions about the materials presented? Contact us at [email protected]

Supporting Materials from This Session

• Enhanced Trust Design Template (PDF)

Supporting Materials from Prior Sessions

• Your Legal Hour Overview
• Week 1 Materials
• Week 2 Materials
• Week 3 Materials
• Week 4 Materials
• Trust Summaries
• Week 5 - Case Study (PDF)
• Week 5 - Medicaid Overview (PowerPoint)
• Who Should Consider Medicaid Planning? Crisis vs. Pre-Planning
• Who Should Consider Medicaid Planning? Relevant Law vs. Plan Design
• Boost Your Closing Rate with the Vision Clarifier - Slides (PDF)
• Boost Your Closing Rate with the Vision Clarifier (Part 2) - Slides (PDF)

Medicaid: Understanding The Six Activities of Daily Living Standards (ADL's)

Many times in complicated Medicaid planning cases, the attorney is trying to work out the funding plan before figuring out what rules apply.  Before you go any further, you've got to determine whether the client is eligible, and what the qualification standards are.

Everyone focuses on the assets and income test, but that's not the only test. Number one is, does the client meet the needs test? By that we mean the “Activities of Daily Living,” or ADL's. They are necessary in determining eligibility for Medicaid.

The six ADL standards for Medicaid clients are whether they can:

1. Bathe themselves.
2. Dress themselves.
3. Transfer from a bed or chair, which usually means from a sitting position to a standing position.
4. Walk.
5. Feed themselves.
6. Toilet themselves.

If your client is unable to do one of those six things, the client would be considered in need of adult care, which is the lowest level of care. If the client is missing two of the six, that would earn a rating of assisted living. If the client needs help in three or more of those areas, that would be considered chronic care need or nursing home need, which in most states is the threshold that qualifies the client for Medicaid.

There is a major exception to the ADL standards, however: severe dementia. Usually severe dementia will inhibit the client's ability to do one or two of the six ADLs, but not always. If you can bathe and dress yourself - and you can do all six of these things, but you don't know why you’re doing it or how to do it or when to do it, then you will be considered to have severe dementia, which is an automatic qualifier for chronic care or nursing home care.

One other note: Traditionally, Medicaid only covers the chronic care level. Some states, including New York, will cover assisted living, but those rules are dependent on your state.  Most states do not cover assisted living. So knowing your state's standard is essential to serve your Medicaid clients.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder of MPS, Founder and Senior Partner of Estate Planning Law Center

 

Financial Abuse of Elders & Other At Risk Adults - Part Six

Adult Protective Services: First Responders for Reporting Elder Financial Abuse

All 50 states and the District of Columbia have an Adult Protective Service (“APS”) agency to investigate reports of elder abuse, neglect or exploitation, as required by Title XX of the Social Security Act.  The stated mission of an APS program is generally “to ensure the safety and well being of elders and adults with disabilities who are in danger of being mistreated or neglected, are unable to take care of themselves or protect themselves from harm, and have no one to assist them.”  The primary guiding value of an APS program is as follows: “every action taken by Adult Protective Services must balance the duty to protect the safety of the vulnerable adult with the adult’s right to self-determination.”

The general process for generating an APS investigation of alleged financial abuse of an elder includes the following steps.

 

• A report is made to APS by someone who suspects elder abuse, exploitation, or neglect.  The reporter may call an abuse “hotline” or a state APS office.  The National Center on Elder Abuse maintains a database of all state APS contacts, which can be accessed by calling the Elder Care Locator Service at 1-800-677-1116 during regular business hours, or by visiting https://ncea.acl.gov/Resources/State.aspx.  The reporting person is protected from both civil and criminal liability.If the case meets all eligibility criteria, (e.g. age of victim, type of abuse, victim’s vulnerability), APS assigns a priority response time to the report based on the level of victim risk; involves emergency responders, if necessary; and assigns the report to APS for investigation.

• APS staff contacts the elder victim within the state regulated timeframe (keyed to the urgency of the situation) to assess any immediate risk, and to investigate and substantiate the alleged abuse (with the assistance of law enforcement, if necessary).  Caseworkers then assess the current risk factors for the victim, including her ability to understand her risk and to give informed consent to further investigation and provision of protective services.If the victim consents, the APS caseworker develops a service plan, which may include both short-term emergency services (shelter, meals, transportation, home health services, medical or mental health services) and long-term services that are monitored by APS to assure that the risks to the victim are reduced or eliminated.  Substantiated criminal activity is referred to the prosecuting attorney.If the victim has the capacity to understand her circumstances and refuses an investigation or protective services, the APS caseworker may refer her to other resources before closing the case.  However, if APS has been able to substantiate if an elder has been abused, neglected or exploited by another person, it is required to report this to law enforcement even if the victim does not consent to the report.
• While the demand for APS services has increased dramatically, program funding has either remained level or decreased in recent years.  In Georgia, APS case referrals in 2012 were up 22% from 2011 and up 67% from 2008.  Nevertheless, funding has not increased to meet this demand.

Part 7 of this series will discuss the Long-Term Care Ombudsman programs mandated by the Older Americans Act for addressing the elder abuse complaints of persons residing in nursing homes or other long-term care settings.

 

Kristen M. Lewis, Esq., Member of the Special Needs Alliance and Fellow of the American College of Trust and Estate Counsel. 

 

February 2014 Member of the Month - Alan Hougum / Wausau, WI

What is the greatest success you've had since joining LWP?

Our greatest success since joining LWP™ has been to move our team forward from basic tax and estate planning to being able to provide comprehensive asset protection and elder law solutions, as well as being able to serve veterans and their families.

What is your favorite LWP tool?

Our favorite tool is the underappreciated Estate Plan Audit. Other tools may get the headlines, or get invited to the glamorous parties, but we get the most mileage from the Estate Plan Audit because it helps us to further identify and clarify client goals and convert those goals into definable solutions as we transition to the Vision Clarifier.

How has being part of LWP impacted your team and your practice?

Being part of LWP™, including the retreats and the team coaching, has made our team a much more cohesive unit. The coaching has been instrumental in helping us to think and act with one voice working toward a common goal rather than as individuals performing separate, unrelated tasks. In addition, the support from LWP™ member firms is unsurpassed through the listserv,
phone conferences, or site visits from our favorites.

Your Legal Hour - February 17, 2014

Welcome to Your Legal Hour!

This week's topic is Trust Design.

Questions about the materials presented? Contact us at [email protected]

Supporting Materials from This Session

• Enhanced Trust Design Template (PDF)

Supporting Materials from Prior Sessions

• Your Legal Hour Overview
• Week 1 Materials
• Week 2 Materials
• Week 3 Materials
• Week 4 Materials
• Trust Summaries
• Week 5 - Case Study (PDF)
• Week 5 - Medicaid Overview (PowerPoint)
• Who Should Consider Medicaid Planning? Crisis vs. Pre-Planning
• Who Should Consider Medicaid Planning? Relevant Law vs. Plan Design
• Boost Your Closing Rate with the Vision Clarifier - Slides (PDF)
• Boost Your Closing Rate with the Vision Clarifier (Part 2) - Slides (PDF)

Medicaid Planning: Who Should Consider It, Part 2

As you saw in my prior post titled “Medicaid Planning: Who Should Consider It,” it can be a shock to clients when they realize how much it can cost to provide for their care. So what did this piece inspire you to think?

The purpose of the analysis in the previous post was to identify whether people have properly planned for the long-term care they may incur. Our job as counselors is to advise people on the impact of their decisions.  Fact by fact case analysis.

The conclusion was that, if you have anything short of $3.5 million, you aren't going to be able to pay for that care; the payment is going to come out of your assets. Most people want to protect their assets, and they hire us to help them with that. So the question is, are you having this conversation with people? Finding our what they want?  If not, you need to.

Medicaid has a set of rules that determines whether someone qualifies.  It’s the client's choice, not ours to decide for them.  Our job to advise them and let them decide. We help them identify the long-term impact their decisions would have, and whether they will be able to protect their legacy. 

Long-term care insurance is another option, and it can be a great solution. But it doesn't mean you have to give up on qualifying for Medicaid – find the “and” by figuring out how the client can qualify for both. If you've helped your client meet the legal guidelines for that, you've done something that will make a lasting impact.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder of MPS, Founder and Senior Partner of Estate Planning Law Center

 

Community Means Being There

Our latest Enhancement Retreat brought home a powerful message: Community can be a difference-maker. I simply cannot articulate the sense of community that we all felt there;  you had to experience it firsthand.  I have personally attended all nine of our Enhancement Retreats, and this year we are kicking it up a notch. 

Over thirty five elder law and estate planning firms from across the nation, along with their dedicated team members – 125 people – in a room together for two and a half days, three times a year.  We were sharing values and goals with other like-minded entrepreneurs, law students, paralegals, client service coordinators, marketing coordinators – all of these different roles coming together to make their firms shine.

Members were blow away with what they have accomplished since our last retreat in October – just four short months ago. 

Community played a big role in making that happen. It’s important to be able to communicate what community is.  People join clubs and organizations on some level for the community they get.   If it’s a gym, you get the accountability of people saying “Where were you on Tuesday?  We missed you at cycling class!” People are dependent on you and they feed off of your energy and the excitement you bring.  The collaboration and accountability that comes from community meant the goals that were set in October were going to get met.  No.  Matter.  What. So being in the room is key; that's a message we can't articulate with a marketing piece.

Being there means you hear things from other members – we call them your Board of Directors – like “You have to slow down and manage that growth,” or “You have to speed up.”  It means you can talk more and share what has worked and what hasn’t.  One of our  members declared in the room that he would be launching consistent workshops starting in April.  His Board of Directors responded, “You can’t wait!  You’ve got to do it now to leverage your time!” 

These conversations with others support you with controlled and consistent growth.  Most people are afraid of growth and success.  It’s scary.  They don’t know if they are doing it right.  They are afraid they are going to blow up what they’ve done before. Community can be the antidote for those fears.

And it goes way beyond the attorneys. For the perfect storm, we also have your team centric. It’s great that you're getting ideas from other attorneys, but the beauty is that they have teams together that are on the front lines.  They’re talking, sharing, gaining confidence and getting fired up!  I was hammered with emails when I got back asking how they can get their hands on tools, webinars and training pieces, to get whatever they need in their bones to support the firm with reaching its goals.

Our attendees are definitely on a high this week – so come April they may gap out.  But June is just around the corner, and they’ll be back in the room for the next Enhancement Retreat.  That will bring accountability.  Collaboration.  Meeting with their Board of Directors.   You will only get so much from the ListServ, the Live ListServ, Your Legal Hour, member webinars, marketing roundtables, etc.; they are no substitute for being in the room.

Molly L. Hall, Co-Founder, Lawyers with Purpose, LLC, and author of Don’t Be a Yes Chick: How to Stop Babysitting Your Boss, Transform Your Job and Work with a Dream Team Without Losing Your Sanity or Your Spirit in the Process.

Medicaid Planning: Who Should Consider It.

The first question you'll run into in Medicaid planning is, who needs it? Attorneys will bump up against a variety of scenarios, from those clearly in need to others who are convinced they're "all set." So which ones truly need your help?

The safe answer is, more people need this than you might think. Let's run through a typical case, and you'll see what we mean.

Most of our Medicaid clients here have income of around $2,500 and live on $2,000, so we'll use those numbers for our typical case. The difference between those two means there's $500 in disposable income every month.

Now let's see how far that gets us. In this area, typical long-term care costs are about $6,000. Subtract the $500 in disposable income from that and you've got a shortfall of $5,500 per month in paying for the client's care. That's $66,000 per year, and that will have to come from the client's principal.

 So the next question is, how much investment do we need to cover that shortfall? To figure that out, choose an expected rate of return. Let's say 5%; if we went any lower, you might freak out. You'll see why in a minute.

The $66,000 divided by your .05 rate of return tells you how much money you would need in investable assets to generate the funds to cover the shortfall. In this case, that amount would be $1.32 million. If you can only manage a 3% return instead of 5%, which is more likely, then you would need $2.2 million in investable assets. So, as you can see, someone who thinks he is set because he has $1 million is in for a shock, because he's not even close to covering his costs of care.

For the attorney, this is a powerful way to explain who should be scheduling a Medicaid conversation with you. Because a client who does not have the total net worth to pay his own way has to understand that it’s going to be eating up his principal, and it becomes a planning issue for you as the attorney to be able to solve. And that’s really a powerful tool to help you identify whom in your community this would apply to.

A word of warning: You're probably better off presenting the above math to a referral source, not directly to a client. If  you drop this on your clients, our experience is that it can seem too technical, and you really want to keep it simple for them. Do the math for your client, then just ask the big question: "Did you know that you don't have sufficient assets to pay your way if needed?"

Factoring in the numbers that are relevant to your region and your practice. If in you area, for instance, the cost of nursing homes is more like $9,000 per month, the client would need $3.4 million sitting in a brokerage account generating 3% to cover that. So being a multimillionaire might be just enough.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder of MPS, Founder and Senior Partner of Estate Planning Law Center.

 

 

Equanimity - Lawyers With Purpose

There is a famous quote by theologian Reinhold Niebuhr that says, “God, give us the grace to accept with serenity the things that cannot be changed, the courage to change the things which should be changed, and the wisdom to distinguish the one from the other.” 

For the past three years in the month of January, I have enrolled in a 40 day challenge through my yoga studio. The premise of the challenge is based on the book “40 Days to a Personal Revolution” by Baron Baptiste. The 40 day program integrates physical, nutritional and mental exercises, all with the goal of leading us to a place of greater clarity and presence. I have yet to complete the 40 day challenge and come out as the same person I was at the beginning.

Throughout the program we work with Baptiste's “12 Laws of Transformation.” This week we are working with “Equanimity.”

 

Baptiste explains equanimity as “the art of meeting life as it meets you – calmly, without drama or fuss.” It got me thinking about the day-to-day life of working in a small/non-corporate/family-like office environment. It’s impossibly easy to get reactive when we feel like we aren’t in control. It happens in a million small (and big) ways throughout the day. You overhear the DOFI (LWP terms = "Director of First Impressions") telling the client X, the boss takes his or her lack of X out on the team, our kids act up, we have a slammed day with tons of money appointments on the books when a snowstorm shuts down the town. We react. And it all has a trickle-down effect with an endless cycle of stress, reactivity and blame. But we don’t get out of the cycle by wrestling for control. It’s all in how we handle it.

We think we can change things by taking charge, by “grabbing the bull by the horns.” But, as Baptiste says, “If you think about it, grabbing a bull by the horns would be a crazy thing to do.” We change by finding equanimity and learning to relax right in the middle of conflict-filled moments. And THAT is where those in our lives mirror what they witness. There is a saying you hear endlessly at LWP, “So go the coach, so go the coachee.”

We all known there are innumerable things we cannot change – we all witness that too many times throughout our day. I am learning this week, through working on equanimity, that when I give myself the permission to stop and pause, to be still, I actually do have the ability to accept the things I cannot change. With the team member I have been personally investing my time to “coach” and realizing I want it more than she does,  I am able to instantly and humbly admit that willpower and ego are ultimately ineffective over the reality. And then I let go. And in essence, that is equanimity. It is the way out of frustration and force. I’m learning – IN REAL TIME – this week that resisting and control only lead to more struggle, and I am experiencing how to move through them from a less reactive space. No matter what arises.

 Here’s a question: Can you see yourself as the person on a sinking ship who maintains composure, allowing you to help save the lives of others on board? I invite you to stop and power down for a few minutes and jot down where you may be holding on a bit too tightly for control, which is always harder and much more work. And think about where you can find equanimity. Because the power to do so can summon courage and save lives – yours, your team's, your business's and those of everyone you impact in your community.

Molly L. Hall, Co-Founder, Lawyers with Purpose, LLC, and author of Don’t Be a Yes Chick: How to Stop Babysitting Your Boss, Transform Your Job and Work with a Dream Team Without Losing Your Sanity or Your Spirit in the Process.

 

Open Enrollment Period To Expire Soon For Same-Sex Couples' Survivor Benefits - Lawyers With Purpose

In compliance with the repeal of the Defense of Marriage Act, the Department of Defense (DoD) has opened enrollment for the Survivor Benefit Plan (SBP) to retired military personnel who are gay and married.  The Survivor Benefit Plan is income that a widow receives when that person's retired military spouse dies. It replaces, up to 55%, the pension the retiree was receiving prior to death. When the military retiree dies, the pension terminates. Without the SBP, the widow could face financial hardship.

Enrollment in the program is not automatic. Retirees or their widows must act before June 25, 2014 to participate in the SBP Open Enrollment Window. 

DoD guidance is as follows:

• Any claims to SBP spouse coverage for same-sex spouses of eligible participants of the SBP for periods before June 26, 2013, are not valid, as the Defense of Marriage Act was still the law and in effect prior to June 26, 2013.  As a result, no SBP premiums for such coverage will be charged prior to that date.  Further, no SBP annuity payments for such coverage will be paid for deaths occurring before that date.

• Effective from June 26, 2013, a person who becomes eligible to participate under 10 U.S.C. 1448 (a)(1) and is married to a same-sex partner shall have the SBP program applied as for any other married couple under section 10 U.S.C. 1448, including the requirements for spousal consent for less than full annuity coverage of the spouse.

• A person who was married to a same-sex partner upon becoming eligible to participate in the plan prior to June 26, 2013, and who had married that same-sex partner before June 26, 2013, shall have one year from June 26, 2013, to make a spouse election under 10 U.S.C. 1448(a)(3).  Such person may not participate at less than maximum coverage described in 10 U.S.C. 1448(a)(3) without the concurrence of the person’s spouse unless they already had provided an annuity for a dependent child.  If an election is not received on or before June 25, 2014, full spousal coverage shall be entered and the member shall be responsible for payment of premiums effective from June 26, 2013.

• A person who is married to a same-sex partner on June 26, 2013 and has insurable interest coverage under the SBP may terminate the insurable interest coverage and elect spouse coverage.  This election must be received on or before June 25, 2014. 

• A person who was not married upon becoming eligible to participate in the plan, but who married a same-sex partner before June 26, 2013, shall have one year from June 26, 2013, to make a spouse election under 10 U.S.C. 1448(a)(5).  The election must be received on or before June 25, 2014, or the person shall be prohibited by law from making such election.

• Generally, a person who is a participant in the plan and is providing coverage under the SBP for a spouse, who later does not have an eligible spouse beneficiary may, under 10 U.S.C. 1448(a)(6), elect not to provide coverage for a new spouse in the event of a remarriage. 

• For a person who enters into a same-sex marriage after June 26, 2013, the election to discontinue participation under 10 U.S.C. 1448(a)(6) must be made within one year of the remarriage.  If a member does not discontinue participation, then pursuant to 10 U.S.C. 1448(a)(6), spouse coverage will resume effective on the first anniversary of the marriage. 

• If the remarriage took place prior to June 26, 2013, the participant has one year from June 26, 2013 to elect out of SBP.  If a member does not make such an election within one year of June 26, 2013, then pursuant to section 10 U.S.C. 1448(a)(6), spouse coverage will resume effective no earlier than June 25, 2014.

• Additionally, any such person falling within the parameters of section 10 U.S.C. 1448(g), shall have one year from June 26, 2013, or the date of any marriage subsequent to that date, to elect to increase the level of coverage under 10 U.S.C.  1448(g).

Now that marriage rights are recognized, more benefits are becoming available. However, some, like SBP, have open enrollment periods and deadlines to receive the benefits. To protect your spouse, ACT NOW.  Lawyers may want to send a letter to all of their clients advising them of this change.

Victoria L. Collier is a Veteran and Certified Elder Law Attorney, Fellow of the National Academy of Elder Law Attorneys, Co-Founder of Lawyers With Purpose LLC, and author of “47 Secret Veterans’ Benefits for Seniors—Benefits You Have Earned … but Don’t Know About.”