ElderLaw Answers Blog

Our most recent home page survey asked the question, “Do you have an elderly family member whose driving is unsafe due to the effects of aging?” We were astonished to learn that almost three-quarters (74 percent) of those who responded answered “Yes.” Extrapolate that to the population at large, and you have an awful lot of people who, in the opinion of at least one relative, shouldn’t be on our roads.

A 2008 report by the Insurance Institute for Highway Safety shows the rate of motor vehicle-related deaths by drivers 70 and older has decreased steadily from 1975 through 2008. The 2008 rate for seniors ages 70 to74 was 14 per 100,000, and the rate for drivers 85 and older was just 17 per 100,000. Compare this to the death rate for drivers between the ages of 16 and 24 of more than 20 per 100,000.

Still, as people age, driving can become more difficult and more dangerous — as our survey results suggest. But in our car-based society, the fight to wrest control of the keys can be fierce and painful. For the past 80 years or so, most U.S. communities have been built around the assumption that adults will drive to obtain the essentials of life, including the proverbial quart of milk. Taking away a driver’s license usually imposes a sentence of immobility or dependency on others. Over the next several decades, as our society ages, millions of Americans will be facing this sentence.

All state Departments of Motor Vehicles, Highway Safety, or Transportation have an office where a family member or doctor can make a referral about an unsafe driver, but succeeding in getting the impaired driver off the road is another matter. Often families will want to sit down with the unsafe driver and see if the individual will voluntarily relinquish the keys or limit driving. In The Driving Dilemma: The Complete Resource Guide for Older Drivers and Their Families, author Elizabeth Dugan devotes a large section of the book to how to discuss the issue of driving with a loved one who may be showing deficits. ElderLawAnswers has also written about confronting an unsafe driver.

But this is easier said than done. The bulk of the baby boom generation will become senior citizen drivers over the next 15 years. What we need are more communities that are navigable on foot, by bicycle and by public transportation. There appears to be a trend in this direction as our fascination with sprawl fades and gas prices climb. Witness, for example, the rise of the New Urbanism movement. But whether we will locate the off-ramp from our car-centered culture in time for the coming tidal wave of elderly ex-drivers is another question.

Our new home page survey asks, in light of the news that Al and Tipper Gore are calling it quits after 40 years of marriage, whether 40 years is too long for any marriage.

There’s an old saying about the weather that everyone complains about it, but no one does anything about it.  Applied to taxes, it could be everyone complains about them, but few actually pay them. 

According to the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, with new tax credits introduced by the Obama administration nearly 47 percent of Americans paid no federal income tax in 2009.   That’s a lot of people not paying taxes when we’re facing a $1.6 trillion budget deficit this fiscal year.

But who are those people who don’t have to pay federal income tax, and how much do they pay in other taxes, such as sales, Social Security and state taxes?  According to the Tax Policy Center report, most of them aren’t making much money, most under $50,000 a year.  Virtually no one making under $10,000 paid any federal income tax.  Less than 17% of those making between $10,000 and $20,000 owed tax.  The percentage owing federal income tax increased as follows:

$20,000 – $30,000       38%

$30,000 – $40,000       53%

$40,000 – $50,000       64%

$50,000 – $75,000       79%

$75,000 – $100,000     91%

$100,000 – $200,000   97%

$200,000 – $1 million    98%

More than $1 million        99%

As mentioned above, these figures only reflect the incidence of federal income tax liability in 2009, not the cumulative taxes paid on puchases, through employment, or to states and municipalities.  It’s worth noting as well that neither ExxonMobil nor General Electric paid any federal income tax in 2009 despite earning billions of dollars in profits.

In a recent matter in our office we had to find a client legal document prepared several years earlier.  The client could not place her hands on it, so we tried to contact the attorney who drew up the document, only to learn that he had retired to Florida.  When we were finally able to reach the attorney, he had no way of putting his hands on the client files.

This is not unusual.  (In fact in this case what was unusual was that we were actually able to find and talk to the retired attorney.)  Lawyers change firms, choose another profession, retire, or pass away.  They may have no legal duty to preserve their client files or even to let them know if their situation changes.  But that doesn’t mean they shouldn’t plan for a way to give clients access to their papers.

As a client or potential client, you want the best attorney for you.  What that means is different for each client.  Some are more concerned about cost, some about expertise and others by the location of the lawyer’s office.  And in many instances, the client views the representation as for a single action, whether the drafting of an estate plan, shepherding a real estate transaction, or a discrete litigation matter.

Yet, especially in the field of estate planning, the legal representation stops and starts over the years.  Clients’ situations change.  The laws changes.  Clients lose track of documents.

Therefore, especially when considering hiring a solo practitioner or small firm attorney, it is appropriate for the prospective client to ask about the attorney’s succession plan.  How long does she plan to practice?  What will she do with her client files when she retires?  Who covers for her when she goes on vacation or if she became ill or disabled?

While most attorneys don’t consider these questions, or if they do, they still don’t make a plan, they need to, for themselves, for their families and for their clients.

According to the National Alliance for Caregiving, almost 50 million Americans care for other adults.  The amount of such care varies greatly, from some shopping and chauffering to doctor appointments, to hands-on care 24/7. 

The question often arises as to whether such care should be compensated or is simply something family members do for one another.  The answer can depend on a number of factors, the amount of care needed, the availability of family members to share in the caregiving, the sacrifices one or more familymembers must make, and the relative financial status of the caregiver and the family member receiving care.

Whatever decision the family comes to, future problems can often be avoided if all family members participate in the discussion and if the final decision is documented in writing in a family care agreement.  Otherwise, misunderstandings are almost certain to develop.

One question that often arises is if a senior pays a child or other family member for services and later moves to a nursing home, runs out of money and applies for Medicaid coverage, how will the Medicaid agency treat the payments.  Will they be treated as a legitimate spend down of the parent’s assets, or as an uncompensated transfer that will cause up to five years of ineligibility for Medicaid coverage?

In Massachusetts, where I practice, the Medicaid agency (called “MassHealth” here) is inconsistent on this issue.  In many instances, it disapproves payments as uncompensated transfers forcing the applicant to prove she needed the services, that they were provided, and the a fair market value was paid.  The agency is opposing a bill in the legislature that would permit and set out guidelines for such payments.

On the other hand, MassHealth has another program that pays family caregivers as stipend under some circumstances so that they can keep frail family members at home and out of a nursing home.  What was it that Mark Twain said about consistency?

A strange anomaly exists in our system of regulating prescription medications.  While pharmaceutical companies must go through a long and careful process to win Food & Drug Administration approval of new drugs for sale, once approved, physicians can prescribe the medication for any medical condition, not just those for which the FDA has granted approval.  This is known as “off-label” drug use.

While this may help some patients for whom the “off label” use of the drug provides a benefit, in all cases the drug is being prescribed without the careful analysis comparing the benefit of the drug for a particular medical condition against its potential side effects that is necessary for FDA approval.  The prescribing physician cannot explain such potential risks to the patient because no one has completed the analysis.  Nor can they say whether this drug is more likely to be effective than another that may be less expensive or have fewer side effects.

Further, while pharmaceutical companies may not market the use of their drugs for “off-label” purposes, under a 1997 change to the law, they can distribute journal articles to physicians about studies of alternate uses of their drugs.  While these articles are an important part of the scientific process, they are often only a piece of the picture, reporting on relatively small and limited studies.

Prof. James T. O’Reilly of the University of Cincinnati College of Law reports on the growing trend of “off label” use of drugs in the NAELA Journal, suggesting that not only can this lead to adverse side effects for patients, but it is adding to the billions of dollars paid to drug companies by individual, insurance companies and federal and state governments through Medicare and Medicaid.

He recommends that whenever a physician prescribes a new drug to a patient, that the patient ask the following questions:

“Does the FDA-approved label for this drug say it is effective for my condition?”

And if the answer is “no.”

“Is there a specific reason for prescribing this product?”

“Is there another FDA-approved label drug for my condition?”

With this vigilance, we can each take a step towards avoiding harmful side effects and saving money for ourselves and our fellow taxpayers.

In our April survey on the Web site’s home page, we asked site visitors whether they thought that, on balance, the new health insurance reform law would be beneficial. The majority, 56 percent, said no. Thirty-five percent thought the law will be helpful, while 4 percent were undecided and 5 percent said they didn’t know enough about it to answer.

Perhaps that last figure is the most surprising. The complexity of the more than 2,000-page legislation, not to mention modifications to it enacted only a week later, understandably confused many Americans. I recently attended a forum in my own community where a local congressman took 15 minutes to explain the law’s benefits, and his remarks were on the level of a college lecture that required close attention. And yet 91 percent of our respondents considered themselves expert enough on the new law’s provisions to pass judgment.

My guess is that people’s negative opinions of the health reform law will recede as their worst fears are not realized or they themselves, or people they know, are helped by the law in some way. It may be a parent who receives a $250 rebate when she hits the Medicare Part D coverage gap this year, or an ailing spouse whose Medicare prescriptions are suddenly cheaper starting next year, or a neighbor with a pre-existing condition who finally qualifies for affordable coverage, or a child under age 27 who now can receive coverage under the parent’s plan, or an elderly aunt who suddenly will pay nothing for preventive care and certain screenings, or a grandparent who finds it easier to locate a primary care physician in his area thanks to an increase in Medicare reimbursements starting in 2011.

Polls already show a trend emerging of a brighter outlook on the health care system in general. The latest Rasmussen poll, reported May 3, found that 55 percent of likely voters rate the current health care system as good or excellent. That’s a 20 percent jump from a year ago when President Obama first proposed his reform ideas. Moreover, the percentage of insured Americans who believe they will have to switch coverage as a result of the law has dropped by nine points since February, from 49 percent to the current 40 percent. As unfounded fears recede in the face of reality, those numbers should continue to fall.

Our May survey asks: “Do you have an elderly family member whose driving is unsafe due to the effects of aging?” To answer it, go to the ElderLawAnswers home page.

                Our new clients are a young couple with two young children, both with limited disabilities.  The boy, who is eight years old, has severe attention deficit disorder.  His younger sister, who is six, suffers from hearing loss.  At this time, both are in regular public school classes and their parents hope will be able to develop and function normally.  They’ll know better in another decade.

                The precipitating circumstance that brought them to our office was the death of the father’s aunt, who named the eight-year-old boy as the sole beneficiary of her $1.1 million IRA.  At the time she named him as beneficiary, the girl had not yet been born.  This act of generosity by the great-aunt raises many issues, including the following:

• Within a year, the boy must begin taking minimum distributions based on his age.
• At age 18, the boy will have control over these funds, whether or not he has a disability due to his ADHD or simply due to teenage hormones.  Misuse of the funds can lead drug abuse, extreme tax consequences, or simply waste resulting from bad decisions.
• Not only will the boy be much wealthier than his younger sister, he’s already wealthier than his parents.
• Since the funds are all tax-deferred, they could be put into trust only after paying taxes on them.  If this were done immediately, much of the taxes would be paid at the top income tax bracket.

While this is an object lesson on why the aunt should have sought legal advice – everyone would be better off if the IRA had been payable to a trust for the boy’s benefit (as well as the girl, if the aunt was so inclined – the question now is what should the parents do.

Our recommendation is to create a trust for the boy’s benefit and to transfer funds from the IRA to the trust every year for the next 10 years.  The amount withdrawn from the IRA will be taxable, but at a lower rate than if it were all withdrawn all at once.  Further, most tax professionals expect tax rates to increase due to the nation’s large budget deficit, so paying taxes today may in fact save money.

The trust would protect the boy from his own potentially poor decisions while he is young.  It could also be drafted as a special needs trust to permit him to qualify for public benefits.

One question is whether the parents actually have the legal power to transfer their son’s funds into a trust, since doing so prevents his access at age 18.  In fact, the son could challenge this action.  But our feeling is that it’s better to put up this wall of defense, which may be attacked by the son when he reaches the age of majority, rather than leave the funds totally exposed.

What would you suggest?

Last Month, I visited the first nursing home I wouldn’t mind living in myself some day.  The Leonard Florence Center for Living in Chelsea, Massachusetts (just over the Tobin Bridge from Boston), is built on the “Green House” model.

All rooms are private!  And they are designed in units of 10, all organized around a common area that includes a kitchen, dining area and living room.  The aides are trained to cook and food is commonly available, so that residents can eat what they want, when they want.

Each unit is designed for patients with similar disabilities.  Thus a younger resident with ALS or multiple sclerosis lives with similar individuals, rather than being placed with older residents suffering from dementia.

This level of privacy and individual attention doesn’t come cheap.  The facility charges $425 a day to private-pay residents, but it also accepts Medicare and Medicaid.

I have seen the future and it’s not half bad.  They even have a day spa.

Now that health care reform is settled, at least for now, a battle over a new area of policy reform is quietly gaining momentum – Social Security. The fear is that Social Security is going “broke” or “bankrupt” (pick your fiscal disaster) and something needs to be done, and fast.

Holders of this view got fresh ammunition when it was recently reported that due to the Great Recession, this year the Social Security system will be paying out more in benefits than it takes in from taxes — six years ahead of what had been predicted only a few years ago. Calls for benefit cuts – such as raising the age of retirement — in order to head off fiscal chaos are being heard, and many younger Americans assume that Social Security won’t be there for them, at least in any form they recognize now.

But how close to the brink is Social Security and do we need to cut benefits to pull it back? From what I’ve been reading, the brink is a long way off and it could disappear from view entirely with a few very painless changes to the way we raise revenue for the program.

First, the Social Security program’s trust fund currently stands at a massive $2.5 trillion. As Zach Carter, an economics editor at AlterNet puts it, “If the federal government makes absolutely no changes to Social Security whatsoever, the program is currently projected to remain fiscally fit through 2037.” Carter also points out that as the economy recovers, Social Security’s revenues will increase and the 2037 date will likely be pushed back. More happy news came in the form of a RAND Corporation study, which found that “the number of older Americans who delay retirement is likely to continue and even accelerate over the next 20 years, a trend that should help ease the financial challenges facing both Social Security and Medicare.”

If we want to shore up Social Security so that it remains fiscally sound for the foreseeable future, there are several ways to do it without cutting the benefits of retirees who have “worked hard and played by the rules,” to use Bill Clinton’s famous phrase. I’ve always wondered why everyone pays the same percentage of their income in Social Security taxes, no matter how much they earn, and why income subject to the payroll tax is capped. The cap currently is $106,800, meaning that someone who makes $250,000 a year is paying no Social Security tax on more than half their income. CounterPunch columnist David Lindorff agrees that not taxing such income makes no sense, and he also suggests increasing the employer’s contribution to Social Security tax payments. He makes a persuasive case that this will hardly make American business uncompetitive.

In any case, we’re not even close to facing “crisis” in what Mark Miller of Retirement Revised calls “the most successful and valuable part of our retirement safety net.” We would do well to study the agendas of those who claim that a Social Security crisis is at hand and that benefit cuts will have to be part of the solution.

The Alzheimer’s Association has issued its 2010 report on Alzheimer’s Disease Facts and Figures finding that 5.3 million Americans suffer from the illness.  Their care costs $172 billion a year, which does not include any charges by 10.3 million caregivers.

Alzheimer’s Disease has become the seventh leading cause of death in large part because medical care has been making such gains against other diseases, such as stroke, cancer, HIV and heart disease.

The report includes a special study on the high rates of Alzheimer’s disease among African Americans and Hispanics, which it attributes to underlying health issues.

Click here to read the entire report.