In This Issue
Cohabiting Seniors Should Protect Their Rights 
More and more senior citizens are living together .without getting married. According to U.S. census data, the number of cohabiting seniors nearly doubled between 1989 and 2000. For some seniors, marriage isn't financially worth it because they don't want to lose their former spouses' military, pension, or Social Security benefits. Others don't want to have to pay their partners' medical expenses or get entangled with the objections of children worried about their inheritance. But there are risks to cohabiting without marriage, as well. For instance, you have no rights concerning your partner's health care decisions. In addition, you may be considered married at common law by a court after you die - possibly causing a dispute between your partner and your children. If you and your partner plan to live together without getting married, you can take a number of steps to ensure that you are protected and your wishes are followed. We are available to help you assess your situation and prepare the necessary legal documents to protect your rights. Sign a cohabitation agreement. This type of agreement can state your intentions not to be considered legally married at common law, or to make any legal claims against each other or be responsible for each other's debts. It can also specify the division of household expenses and what will happen to your house in the event of death or breakup. Provide access to health care decision making. If you are not married, you have no right to participate in your partner's health care decisions, or even in some circumstances to visit your partner at the hospital. To avoid this, you need several documents.You can sign a medical release under a federal law (the Health Insurance Portability and Accountability Act, also known as HIPAA) to allow each other access to medical information. In addition, you should have a health care proxy or a durable power of attorney for health care designating your partner as your agent to make health care decisions. Sign a durable power of attorney. A power of attorney allows your partner to make financial decisions for you ifyou become incapacitated. Without a power of attorney, a court will have to appoint a conservator or guardian to make those decisions and the judge might not choose the person you would prefer. Update your will. Your will should be clear about what happens to your possessions when you die, including your house and its contents. It is particularly important to specify what will happen to your house if you don't own it jointly with your partner. Think about the tax consequences of gifts. Married couples can leave each other as much as they want without paying estate taxes, but unmar ried couples cannot. If you want to leave money to your partner, you can speak with us to find ways to limit estate taxes. Look into registering as domestic partners. Some cities and states have domestic partnership laws, which may allow unmarried couples to take advantage of their partners' health insurance or to participate in health care decisions.
Can an Employer Cut Retiree Health Benefits?
Some fortunate workers belong to employer- provided health care plans that carry over to retirement. But how secure are those benefits after retirement? Under what circumstances may the company reduce or terminate them? In fact, nothing in federal law prevents employers who offer retiree health benefits from cutting or eliminating them - unless they have made a specific promise to maintain the benefits. The key to understanding your particular rights lies in the so-called Summary Plan Description (SPD), which employers are required to provide within 90 days after you become a participant in the plan, or other plan documents, If your employer has reserved the right to change the terms of the plan, you may lose coverage at any time during your retirement. But if your employer mates a clear promise that you will have specific health care benefits for a definite period of time or for life, and did not reserve the right to change the plan, you should be covered. But benefit plan documents are often difficult to interpret. To help employees and retirees eval uate their documents, the U.S. Department of Labor has a website that explains, among other things, what to look for in these documents, the implications of conflicting or ambiguous lan guage, and special cautions for early retirees. The Department's advice can be found at http://www.dol.gov/ebsa/pubiications/retiree_ health_benefits.html. We are also available to help you assess your rights under these plans.
QUESTION. My 88-year-old father appointed me as his "attorney-in-fact" through a durable power of attorney (POA). Although he is in good physical and mental health, it has become necessary for me to take over his financial affairs. Before I took them over, he let three credit cards exceed the maximum and is late on payments.There are 25.9 per cent finance charges on each, plus late fees. I'd like to pay these accounts off at a nego tiated amount from my father's available savings, but cannot get anyone at the cred it card companies to speak with me, even though I have sent them copies of the POA. What can I do? - D.H.
ANSWER. Your best bet may be to call the companies when you are visiting your father - or by conference call if you are out of state. Then your father can authorize the companies to speak with you and put you on the line. Those finance charges sound quite high. Does your state have any usury laws, which prohibit excessively high interest rates on loans? Perhaps a threat to call the local media might help. In the meantime, it would make sense to tear up those cards. Case Highlights Need To Use an Estate Planning Expert A recent case in Washington, D.C. is a reminder that it pays to use an attorney specializing in estate planning when creating a will and estate plan. In the case, an attorney drafted a will as a favor to friends, even though he had no prior estate planning experience. A man who was a relative and caretaker of an elderly woman asked the attorney to draft a will for the woman. He told the attorney that the will should give the woman's entire estate to him. The attorney, who was a family friend, slightly modified a "form will" and gave it to the woman for her signature. He did not ask her whether any other relatives might object to the will. At the time, the attorney was also helping the caretaker respond to a government agency's investigation into whether the elderly woman was being exploited and neglected. The lawyer drafted a power of attorney for the woman to sign giving the caretaker full control of her assets. Following the woman's death, several of her nieces and nephews contested the will. The case eventually settled, with the caretaker receiving 40 percent of the estate and the other heirs receiv ing the rest.
Will disputes can be costly and emotionally draining. It's very important that your wishes on inheritance be spelled out clearly and correctly. Also, to avoid a possible will contest, it's important that you make your will now, in the event you become incapacitated later on.
How to Prepare When Elderly Parents Move In
But having a parent move in is a big adjustment for everyone, and it's important to be prepared - from making physical adjustments to the house to figuring out finances. Below are some more issues to think about. To avoid fostering resentment and guilt among family members, try to resolve as many of these issues as you can before the big move. Work out the financial details first, [f the adult children have siblings, the question of whether the siblings are going to contribute to the parents' room and board can be sensitive. Even if there are no siblings, there is still the question of how much the parents can or should contribute to the household. It can get costly if you need to do major renovations or hire a home health care worker. Many considerations can have tax or other consequences. Should the parents have a contract in which they pay the childrenfor caring for them? If the parents contribute to remodeling the house, do they gift their portion of the house to the children, retain an interest, or put it in a trust? These and other decisions can affect the parents' eligibility for Medicaid if it becomes necessary for the parents to enter a nursing home at some point. An elder law attorney can help your family create a plan that takes all the various contingencies into account. Look into a tax deduction. When considering the financial details of this new arrangement, keep in mind the children may be able to claim the parents as dependents and get a tax deduction if they provide more than half of the parents' support during the year. Know where to go for help. If family members are serving as caregivers, they don't need to feel like they are doing this all alone. There a number of services designed to help caregivers. From home health care workers to meals programs and transportation services to adult day care centers and respite services, there are a number of different sources of help. Contact your local Area Agency on Aging program to locate services in your area.
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As the costs of nursing homes and other long-term care facilities continue to climb, some adult chil dren and their elderly parents are finding that living together is a bet ter arrangement, both financially and emotionally.