ElderLaw Answers Blog

One of the reasons our country and many of our citizens are in such an economic mess now has been the extension of too easy credit in the form of credit cards and mortgages.  Many of the lenders never really cared if the money lent was paid back because they were making so much from interest and fees.

While the mortgage market has tightened up — perhaps a bit too much — we’re all still getting unsolicited credit card offers in the mail.  Mostly this is just a bit of a bother, more mail to go through and dump in the recycling bin.  (It also kills trees in terms of wasted paper.  On the other hand, it means more payments to the U.S. Postal Service, which may keep our postage rates a bit lower.)

But these credit card offers are still bad for those people who accept them and bad for the economy.  When having lunch with a client recently, we came up with a way to make this business a bit more expensive for the credit card companies.  Rather than tearing up and discarding the offers, remove the business reply envelope, seal it, and drop it in the mail.  The credit card company will then have to pay twice the postage — 84 cents — for every empty envelope it receives back.

This, we hope, will be a small deterrent to all of the junk mail we receive.  If we all do it and start a movement, it can become a big deterrent and save some of our fellow citizens from getting in over their heads in debt.

While probably not entirely scientific, 28% of those users of the ElderLawAnswer.com web site who answered our July survey said they have long-term care insurance and 3% said they did not, but their spouses did. 

This tells us more about people who use the web site than it does about the general public.  While I haven’t been able to find a statistic, penetration of the market for long-term care insurance is quite small.  Those who use the web site, not surprisingly, are more aware than the general public and more likely to be prepared for potential long-term care costs.

According to the AARP, in 2005 there were 7 million LTCI policies in force and the average age at purchase was 61.  This is a small percentage of those over age 50, meaning that most seniors and soon (or want) to be seniors are covered.  The major reasons for failure to purchase LTCI seem to be cost and lack of perceived need.

ElderLawAnswers.com users are much better prepared than the average consumer, but still almost 70% of them are not covered (making them a good potential market for any long-term care insuance broker who may be interested).

My law partner, Jeffrey A. Bloom, is writing the elder law book for the Massachusetts Practice series published by West Publishers.  He asked me to write the introduction, including a definition of the term “elder law”.  Here’s what I wrote.  I’d be curious to know your definition.

Most simply put, elder law is a legal speciality focusing on the legal needs of seniors. But that begs the question a bit. What are those legal needs? How do they differ from the legal needs of non-seniors? How do we define “seniors”?

Unfortunately, many of the legal issues seniors face arise from their loss of mental capacity or the onset of physical incapacity. The increased likelihood that we will need care as we age, especially after age 85, the failure of the American health care system to provide for such care under standard insurance, the high cost of such long-term care, and the complicated and piecemeal public “system” of subsidizing long-term care combine to create the need for legal expertise to guide seniors either experiencing or anticipating long-term care needs. This is the core service of elder law.

However, elder law also includes more standard estate planning, simply with an eye towards the future need for long-term care, and more urgency given the higher age and likely sooner death of the client. Elder law also includes guardianships and conservatorship proceedings over seniors who may have lost or be losing their mental capacity (or defense against such proceedings), protection of seniors from those who may take advantage of them, the resolution of disputes with nursing homes and assisted living facilities over care and related issues, and the resolution of disputes among family members about the care of their parents and the financial cost of such care.

The term “seniors” often refers to anyone over age 65. While individuals age at different rates, as a group there’s a huge difference between those between 65 and 85 and those over 85. The vast majority of those in the first age group are healthy and enjoying their so-called “golden years”, while over half of those in the latter group need some assistance getting through the day. In fact, often it is those in the first group who are caring for their parents in the second group. Elder law attorneys help those in the first group prepare for their post-golden years, and help those in the second group deal with the legal and health care issues they come up against.

Social Security and Medicare have always been based on the premise that programs for all seniors will receive the broad political support the need to survive and will perform at a higher level if more affluent seniors as well as poorer ones demand a high level of service.  This has worked, but some suggest that it is no longer affordable.

While there has been much press about the financial insecurity of Social Security, its financial challenges are dwarfed by those of Medicare.  Tyler Cowen, a professor of economics at George Mason University suggests in a column in last Sunday’s New York Times that the only way that Medicare can survive is to limit its coverage for higher-income beneficiaries.  Income for this purpose would be recorded on a lifetime basis rather than year-to-year, so that beneficiaries do not hide income and are not affected by sudden fluctuations in income.

It’s an interesting proposition that must be considered with other ideas for avoiding the train wreck to our national finances that many are predicting.  Take a look at http://www.nytimes.com/2008/07/20/business/economy/20view.html?scp=3&sq=Tyler%20Cowan&st=cse.

My co-editor, Ken Coughlin, has informed me that the last issue of The ElderLaw Report began Volume XX. In other words, we’ve been putting the newsletter out every month (not counting August) for 19 years. That makes this the 211^th issue – but who’s counting?

A lot has changed over the last two decades, and I’m not just talking about our sagging body parts. The newsletter started out being published by Little, Brown & Company, whose offices were just down the street from where I now practice law in Boston. They sold their legal and medical publishing division to Aspen Law & Business, which itself was soon swallowed up by the large Dutch publisher, Wolters Kluwer, though we’re still part of their Aspen Publishers division. 

Twenty years ago, few lawyers and fewer consumers had ever heard of “elder law.” Now we practice an accepted specialty with many state bar associations having elder law sections. The National Academy of Elder Law Attorneys (NAELA) has grown from some 32 members at its inception to approximately 4,500 members today. It held its 20^th anniversary conference in Maui this past May.

As a mature specialty area, many more consumers are seeking elder law counsel. That is good for them and good for those practicing in the field. On the other hand, there are now a lot of us practicing in the field (not all of whom are members of NAELA), meaning there’s much more competition for elder law business.

Also, partly in response to our representation of clients and partly due to the increasing cost of providing long-term care to more and more seniors, Congress and the states have continually tightened the rules of eligibility for Medicaid, still the primary source of payment for long-term care – that has not changed over 20 years. This has made it more difficult for us to represent our clients. The most recent rules change, the Deficit Reduction Act of 2005, has resulted in more differences among the states in how they interpret and apply the Medicaid rules. This has created more uncertainty and anxiety for our clients.

So, what do the next 20 years have in store for us and our clients?

First, elder law is not going away. The legal needs of our clients will continue, and as the Baby Boomers age, the number of potential clients will double.

Second, the practice will be less and less focused on planning for nursing home care and more on planning for care in other settings, such as the home, assisted living, and congregate care communities. Many states have recognized that nursing homes are not the ideal places to care for most seniors and have begun to offer assistance for other types of care. But the services are often disjointed and difficult to navigate, requiring the kind of expert guidance elder law attorneys can provide.

Third, the practice will become less focused on planning for Medicaid as the eligibility rules become more stringent and more Baby Boomers purchase long-term care insurance to pay for future care.

Fourth, the practice will become more integrated with traditional estate planning as Baby Boomers reach the age where they do estate planning which includes a look forward to planning for their later years. Baby Boomers are even less likely than their parents and grandparents to accept the traditional nursing home with its institutionalized setting and care and its shared rooms. Likewise, many Baby Boomers who hope to stay forever young may shy away from the term “elder” law, and be more comfortable with estate planning which happens to include long-term care planning.

Fifth, the original founders of elder law 20 years ago, will begin retiring. These pioneers, many of whom came from a legal services background, have been and will be replaced by younger practitioners who view this specialty like any other. They will be able to benefit from the experience of their predecessors and the methods they developed by trial and error to do a better and better job of representing their clients.

Sixth, the practice of law itself will change in some ways we can foresee and in some ways we cannot. Computers and document assembly systems will enable practitioners to be increasingly efficient in the delivery of services to clients, allowing them to spend more time interacting with clients and providing the value-added counseling that helps each client find the unique path to her goals. That’s the good side of advances in computer technology. On the other side, there’s the risk that what we provide will be seen more and more as a commodity as computer-generated forms and solutions are provided over the Internet directly to the ultimate consumer. The challenge will be to provide the kind of hands-on, experienced-based counsel that cannot be distilled into a computer system and to make sure that consumers understand the value of that counsel.

Seventh, whatever the future holds, the original founders of elder law were flexible and creative, able to meld the public benefits representation they provided legal services clients with traditional estate planning. Future elder law attorneys will have to be equally flexible and creative to respond to future needs of clients, the demands of the marketplace, the challenges of limited government funding, and the changes brought by the Internet.

A recent column in the Conde Nast’s Portfolio.com explored what economist call “negative inheritance.” People who don’t prepare to care for sick and aging parents could fall victim to such “negative inheritance.” The term (which was likely first used in the study of economics by Boston University Professor Laurence Kotlikoff) describes the situation when the costs to children of caring for aging relatives outstrip any gifts or bequests they might receive in return.

Those costs may be financial, physical and emotional, as children and other relatives give up jobs and homes to care for family members. The following posting to the ElderLawAnswers.com Discussion Forum is not unusual:

My parents are in their mid-eighties and continue to live at home. We sold our large home 2 years ago and moved in temporarily with my parents while awaiting the purchase of our new home. Alas I discovered how much they needed more care than just each other during our stay. My husband and I now stay at my parents home and we do not even visit our own home. I quit my job last summer to increase the level of care necessary for them. We pay all their bills except for food as well as our own bills. I am taking CNA classes so that I may continue to take care of them at home as opposed to the option of nursing home care. We are now dipping into our personal retirement savings to continue to care for them.

While a supermajority — 91% — of boomers report being “generally pleased to be helping their parents,” according to a survey by Putnam Investments, it doesn’t relive the negative effects it may have on a caregivers own life. Planning by purchasing long-term care insurance or making use of available public benefits can help eliminate these costs, decrease the stress on all concerned, and thus preserve and enhance the care family members can provide their parents.