Elder Law | Legal Services

ElderlyNo matter where we live, what our income, what political views we hold, all of us face the prospect that we are growing older in a world that is constantly changing. Navigating this changing economic and cultural environment can create anxiety and uncertainty for the elderly.

Seniors provide a rich source of untapped knowledge, experience and wisdom yet; many fail to plan adequately for a time when they may be faced with challenges unique to an older population. Aging is made more difficult, if adequate planning hasn’t been done to anticipate expected future life changes.

We need to learn how to adapt on a timely basis to: Decreasing income and perhaps a smaller family to assist us as we inevitably become older and less able to handle the physical chores we once handled with ease.

We offer you these legal services:

    • Preservation/transfer of assets seeking to avoid spousal impoverishment when a spouse enters a nursing home.
    • Medicaid and Medicare claims.
    • Disability planning, including use of durable powers of attorney, living trusts, “living wills,” for financial management and health care decisions, and other means of delegating management and decision-making to another in case of incapacity.
    • Conservatorships and guardianships.
    • Estate planning, including planning for the management of one’s estate during life and its disposition on death through the use of trusts, wills and other planning documents.
    • Administration and management of trusts and estates.
    • Assistance with long-term care placement in nursing home and life care communities.
    • Nursing home issues including questions of patients’ rights and nursing home quality.

This article is for general reference only, and it is not intended to be a substitute for the hiring of an attorney. It is always best to consult an attorney about your legal rights and responsibilities regarding your particular case.

Common Medicare Sign-Up Error Can Bring Penalties

medicare2Most people should sign up for Medicare when they reach 65; if they wait until later, they have to pay a significant penalty when they do sign up.

There’s an exception, though, for people who are still employed at age 65 and are covered by a group health plan. These people can delay signing up for Medicare without a penalty.

But here’s a common problem: Suppose you’re no longer working when you turn 65, but you’re still covered by your old employer’s group health plan under COBRA?

COBRA is a federal law that allows many workers to continue on their employer’s health plan for up to 18 months after their employment is terminated or their hours are reduced.

Many people assume that they can delay signing up for Medicare if they still have COBRA coverage when they turn 65. But that’s not true. If you’re no longer employed when you turn 65, you have to sign up for Medicare Part B or you will face a penalty, even if you still have COBRA coverage.The penalty for delaying can be very significant – there’s a 10 percent premium penalty for each year that enrollment is delayed. For example, if you turn 65 in 2012 but wait until 2014 to enroll in Medicare, your monthly Part B premium will be 20 percent higher than the standard premium.. .and this will be true for the rest of your life.

The rules for signing up for Medicare Part D, which covers prescription drugs, are a little differ­ent. People who aren’t employed when they turn 65 but still have COBRA coverage can delay signing up for Part D without a penalty, but only if the prescrip­tion drug plan they have under COBRA amounts to “creditable coverage,” which means that it’s expected to pay on average as much as the standard Medicare Part D plan.

The penalty for delaying enrollment in Part D is also more complicated; it’s calculated by multiply­ing 1 percent of the national base premium by the number of months that you were without creditable coverage.

Medicare enrollment begins three months before you turn 65, and runs for seven months.

Some Seniors Losing Their Homes Due To Unpaid Property Taxes

Woman With Shocked Surprised ExpressionAn 81-year-old woman in Rhode Island was evicted shortly before Christmas from the home she had lived in for more than 40 years – because she failed to pay a $474 sewer bill. A corporation then bought her house at a tax sale for $836… and later resold it for $85,000.

While this is an extreme case, it’s a symptom of a growing trend. More and more seniors around the country are being forced to pay large, unnecessary fees – or even losing their homes – as a result of unpaid property tax bills.

Because property taxes aren’t regular monthly expenses like utility or cable bills, they’re often among the first things that seniors overlook if they begin to have some difficulty managing their own affairs. And they’re frequently missed by children and caretakers as well.

Many older people who have recently finished paying off a mortgage aren’t used to paying their property tax bills, because for decades they were paid directly by the lender. Surprisingly, every year about $7 billion to $10 billion in local property taxes aren’t paid on time.

When a homeowner fails to pay a property tax bill, what happens next varies from state to state. However, typically the taxing authority will obtain a “lien” against the property, meaning that, in certain circumstances, it can foreclose on the property and sell it to pay the tax debt.

Of course, cities and towns usually don’t want to go to the trouble and expense of foreclosing on people – they just want to get their taxes paid. In most states, a city or town can solve this problem by selling its tax liens to someone else, at an auction.

Who would buy a tax lien? Sometimes big financial companies buy them, and sometimes it’s individual investors who are looking to make money from someone else’s misfortune. Some states require local authorities to wait for a year or two before selling a tax lien, but some allow them to sell a lien after just a few months – which means that an elderly person who misses a payment could have a problem escalate quickly.

Once a tax lien is sold, there’s usually another period that the buyer has to wait before it can foreclose and sell the owners property. This is called a “redemption” period, because during this time the homeowner can redeem the property by paying off the debt. The problem is that at this point, the property owner doesn’t just have to pay off the debt; he or she might also have to pay interest on the debt, plus interest to the investor who bought the lien, plus various fees and penalties.

These can add up quickly, in part because the rate of interest is usually determined by state law, and most of these laws were passed many years ago when interest rates were much higher. A rate of 10 to 12 percent is common, and in some places rates can be 18 percent or even much more.

In one recent case, a homeowner in Baltimore didn’t pay a $362 water bill. By the time she sought to redeem her property, the amount she had to pay had increased to about $3,600, due to interest, fees and penalties. Sadly, she wasn’t able to come up with the $3,600 in time, and was evicted from her home.

We’d be happy to help if this is an issue for someone you know. It’s much better to act quickly, because the problem only gets worse the longer a homeowner delays.

May 2014 Shouldn’t You Go Forward With a Reverse Mortgage?

reversemortgagesAs we age, our financial resources and priorities begin to shift; we may no 
longer be receiving a bi-weekly paycheck, but we also may no longer have 
dependent children. However, a lot of stress can result from living on a limited 
income in the shadow of increased costs associated with healthcare and estate planning.

There are a number of financial tools and arrangements that can help you finance 
your retirement years, including pensions, 401(k)s, and various trusts and insurance 
programs. Another option exists that is not as widely known-reverse mortgages. This 
option may be right for you if you own the home you live in and are looking for some 
extra cash.

A reverse mortgage lets you borrow against the equity in your home without having 
to repay the loan while you still live in the house. You can get the money in a lump 
sum, in monthly cash payments for life, or by drawing on a line of credit, or you can 
choose a combination of these options. The amount you can borrow and the sizes of the loan installments are based on several factors, including: your age, the value of the 
home and of your equity in it, the interest rate, and the kind of loan you select. Reverse 
mortgages can be costly, but the relative costs lessen over time, and you will never owe 
more than the value of your home.

Most reverse mortgages place no restrictions on how you use the money. The loan usually does not have to be repaid until you sell your home, move, or die. In 
years past, there were loans that had to be repaid at the end of a specified number of years. Very few, if any, of these types of loans still exist. Some lenders combine a 
reverse mortgage with an annuity that allows you to receive payments under the 
annuity even after you sell your home and move. However, there can be complicated 
tax implications resulting from such an annuity; make sure you understand how an 
annuity would impact your tax obligations and estate planning before agreeing to such 
an arrangement.

If you enter into a reverse mortgage, you will be required to repay the money you 
have borrowed plus the accrued interest and fees when you sell your home or move, or at the end of the term. The house can be sold to repay the loan, or the funds can be 
collected some other way (for example, out of your savings). The lender is not permitted 
to collect more than the appraised value of the home at the time the loan is repaid, even 
if the loan exceeds that amount. Therefore, you will never end up owing more than the 
current value of the home, which can provide some important peace of mind.

You will never end up owing 
more than the current value of 
the home, which can provide 
some important peace of mind.

The most widely available reverse-mortgage 
product is the federally insured Home Equity 
Conversion Mortgage (HECM). Under this 
program, the Federal Housing Authority (FHA) 
provides insurance for reverse mortgages 
acquired through private financial institutions. 
Another reverse-mortgage program is the 
Home Keeper Mortgage, which is backed by 
Fannie Mae. Over the years, a few private 
companies have started to offer their own 
reverse-mortgage products. These tend to be more costly than the HECM or the Home 
Equity Keeper Mortgage because the lender 
must charge customers more in order to self- 
insure against potential losses. Federal law 
requires all reverse-mortgage lenders to inform you, before making the loan, of the total amount 
you will owe throughout the course of the loan. This allows you to compare the costs of 
different mortgages.

Your eligibility for a reverse mortgage 
depends on the specific loan you apply for, but 
most programs have rules similar to those of 
the HECM program. Generally, you and anyone 
who is listed on the deed must:

Be at least 62 years old; andOwn the property free and clear, except 
for liens or mortgages that can be paid off 
with proceeds from the loan.In addition, the property must be:The borrower’s primary residence (so, a 
vacation home won’t work); andA single-family home or in a one- to four- 
unit building. (Some condominiums are 
eligible depending on the program.)

If you are considering a reverse mortgage, it is important to think through how it might 
impact your estate planning. Reverse mortgages 
allow you to spend your home equity while you are alive. This can be a useful way to get 
more cash to spend now; however, it may also 
result in your using up all of your equity and 
not having any left to pass along to your heirs. 
It is important to talk to the attorney who 
helped you craft your estate plan to determine 
if a certain reverse mortgage option is best for 
your needs. There can also be complicated tax 
implications connected with certain reverse 
mortgage options that your lawyer or tax 
advisor can help you understand.