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As boomers age, lawyers seeing new trends in estate and health care planning

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In 2010, the oldest members of the “baby boomer” generation began reaching retirement age. Born between 1946 and 1964, boomers are not like generations that came before them with regard to estate-planning needs. Many of them are living longer and will be working longer – some by choice and others because the value of their retirement accounts has plunged in recent years. As they look toward their future, the boomers’ top concerns are asset protection and paying for long-term care, although each person may have a different approach about how to accomplish those goals.

Tax laws

Sullivan attorney Jeff Hawkins, chair of the Indiana State Bar Association’s Probate, Trust & Real Property Section, said that boomers are primarily concerned with planning for disability – not death.

huffman-keith-mug Huffman

“Death tax is not a concern for the majority of people, but now with long-term care costs rapidly approaching $100,000 per year, per person, suddenly that’s a much bigger issue,” he said.

Hawkins said that federal tax legislation enacted in December 2010 increased the estate and gift tax exemptions from $1 million to $5 million per decedent. He predicts that won’t change with the next Congress in 2012. But as South Bend attorney Richard B. Urda explained, estate planners are in a holding pattern until they know whether Congress will extend the tax breaks.

If the tax exemptions don’t change, a husband and wife could each pass $5 million to their children. But if in 2013 the tax rate reverts to its pre-2010 level of $1 million per person, about half of anything above and beyond $1 million will belong to the Internal Revenue Service.

“It’s kind of hard to tell a couple which way to jump at this point,” Urda said.

Long-term care

Sarah Pierce, an estate attorney for Muncie firm DeFur Voran, said long-term care is a top concern for clients.

“The number one question seems to be, ‘Am I going to lose everything if I have to go into a nursing home?’” she said.

Keith Huffman, attorney for Dale Huffman & Babcock in Bluffton, said he thinks long-term care may be the biggest threat to accumulated assets. Census population projections showed about 79,000 people were age 100 or older in 2010. By 2050, projections say about 600,000 people will be 100 or older. And that increase in life expectancy could mean longer, financially-draining stays in nursing homes.

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“The first thing you always look at is genetics,” Huffman said. Someone who has many relatives that have lived well into their 90s is probably going to need long-term care at some point. Medicaid may pay for that care, but if an applicant for Medicaid has recently shifted assets to someone other than a spouse, paying for long-term care – at least initially – may be impossible.

In determining an applicant’s eligibility for Medicaid, the Family and Social Services Administration will consider a “look-back” period – the five years preceding the application date. If an applicant has, during that time, transferred money to anyone other than his or her spouse, penalties will apply.

In the case of Lola Austin v. Indiana Family and Social Services Administration, No. 64A04-1008-MI-514, the Indiana Court of Appeals affirmed the FSSA’s finding that a $35,500 payment Lola Austin made to her niece and nephew was a “transfer penalty,” making her ineligible for Medicaid benefits for the eight months following the gift.

Huffman said that a simple loan to an adult child could end up counting against a parent’s Medicaid eligibility unless a promissory note shows the loan is actuarially sound, has periodic payments with no balloon payment, and is not cancelled at the death of the lender.

“No one’s ever heard of any of these rules until they’ve seen an elder law attorney,” he said.

Huffman advises clients to invest in long-term care insurance, which he said is the best way to protect assets. But he also advises clients to work toward a solid foundation first.

“You need to own your own home and have $150,000 in the bank before you look at nursing home insurance,” he said.

Late-life divorce and marriage

Connie Bauswell, a certified elder law attorney who practices in Schererville and Valparaiso, said that late-life divorce is becoming more prevalent.

“We’re going to continue to see that more and more people that are at retirement age and older are going to be getting divorced,” she said. Many factors may be to blame for late-life divorce, she explained, including the stress that comes from a lack of adequate financial planning.

Bauswell said that the generation that lived through the Depression was much more concerned than baby boomers about saving for retirement from an early age.

“And I’m not saying that baby boomers on the whole aren’t frugal,” she said. “They just weren’t of the same mindset, because they didn’t go through the Depression.”

Bauswell said Indiana statute nullifies a will that names a spouse as a beneficiary when the couple divorces. She encourages clients to revisit their estate plans periodically, especially in the case of divorce or other developments.

While some relationships may end after age 65, new romances pose challenges for estate planners as well.

“Increasingly, we’re having people living longer and marrying late in life,” Hawkins said. “They have a lifetime of assets accumulated and a desire for their kids to have those assets.” But, Hawkins said, even if a couple sets up separate wills that disinherit their spouse, the surviving spouse can still claim a $25,000 survivor’s allowance. That’s one reason why more couples are turning to prenuptial agreements – the only way to get around the survivor’s allowance, Hawkins said.

Pierce said she’s seen an increase in prenuptial agreements for second marriages.

“What I usually see is a client has basically been burned in a divorce,” she said. “So they’re very cautious when they remarry. That’s the reason that they want to have such an agreement, to protect their kids (of) their first marriage.”

Powers of attorney

With a longer life expectancy comes the possibility that at some point down the road, older people may lose the ability to make informed decisions about their own medical care. Urda, who has been practicing law for more than three decades, has noticed a significant increase in clients requesting powers of attorney.

“When I first started, powers of attorney were something that mostly elderly clients would use,” he said. “Now the clients will consider, no matter what their age, whether they want powers of attorney that would cover financial matters, health matters, and financial and health matters.”

Huffman, who is on the board of directors for Bluffton Regional Medical Center, said that health care decision-making is extremely important for clients to consider.

Huffman said that Indiana’s living will may not be the best choice for an advanced directive, as it puts doctors in the position of stating a patient is dying. “Each facility has to act if (a patient) has an advanced directive, but there’s very little uniformity from hospital to nursing home – very often, the patient’s wishes for end-of-life care don’t get heard. There really needs to be a focus on educating people about health care decision-making.”

Bauswell said she strongly believes clients should have a health care power of attorney. She said it’s one of the most cost-effective ways to ensure that a person will have the best quality of life possible. She urges people to choose wisely, noting that simply picking the oldest child or the relative who lives closest may not always be the best fit.

“My recommendation is to look at it through a different looking glass, to pick based upon who would make decisions that are most closely aligned with the decisions you would make, if you were able to,” she added.•

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  1. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  2. A high ranking bureaucrat with Ind sup court is heading up an organization celebrating the formal N word!!! She must resign and denounce! http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  3. ND2019, don't try to confuse the Left with facts. Their ideologies trump facts, trump due process, trump court rules, even trump federal statutes. I hold the proof if interested. Facts matter only to those who are not on an agenda-first mission.

  4. OK so I'll make this as short as I can. I got a call that my daughter was smoking in the bathroom only her and one other girl was questioned mind you four others left before them anyways they proceeded to interrogate my daughter about smoking and all this time I nor my parents got a phone call,they proceeded to go through her belongings and also pretty much striped searched my daughter including from what my mother said they looked at her Brest without my consent. I am furious also a couple months ago my son hurt his foot and I was never called and it got worse during the day but the way some of the teachers have been treating my kids they are not comfortable going to them because they feel like they are mean or don't care. This is unacceptable in my mind i should be able to send my kids to school without worry but now I worry how the adults there are treating them. I have a lot more but I wanted to know do I have any attempt at a lawsuit because like I said there is more that's just some of what my kids are going through. Please respond. Sincerely concerned single parent

  5. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

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