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NOTES and Updates -Spring
2007
"Spring hangs her infant blossoms on the trees, rocked in the cradle of the western breeze."
--William Cowper
Spring is always a delight in Los Gatos, and this year is no exception. Bright, new blossoms rule the day, and fragrant breezes carry a burst of energy guaranteed to refresh the winter-weary soul, awaken the senses, and make all things seem possible. We at Carney & Sugai can think of no better time to thank our valued clients for allowing us to serve you, and we want to reaffirm our dedication to providing the quality, specialized legal assistance you have come to expect from our firm. It is simply a pleasure associating with you!
Our Spring 2007 Seminar, "The 10 Best & Worst Planning Ideas for Your Retirement Benefits," is based upon an excellent and informative seminar by Natalie Choate, a renowned expert in estate planning for retirement benefits. We hope you will join us Tuesday, May 15th at 7:00 pm to find out more about planning for your own retirement benefits. Feel free, as always, to invite family and friends who would like to take advantage of the opportunity to hear about those strategies which have proven to be most successful (and unsuccessful!) for others. Experience is definitely the best teacher.
Have you navigated our web site lately? Recent updates include the Spring and Fall newsletters for 2006, new client/elder alerts, Medicare Prescription Drug Plan details, information about new laws and statutes, various forms for client use, and more. Why not take a few moments to visit us at www.carneysugai.com. Feel free to make suggestions and sign our guest book!
Federal Law Changes
As part of our nation's concern regarding national security and the efforts to combat terrorism, we must now be able to prove our citizenship to ensure eligibility for a number of public benefits. For all persons wanting to apply for public benefits, primarily Medicaid (Medi-Cal in California), the law now requires proof of citizenship in the form of a birth certificate or passport. Although this law has currently been put on hold due to the difficulty (for many elders) in producing this information, we expect it will be required in the near future. To that end, it is critically important that everyone obtains either a U.S. passport or a copy of his/her birth certificate to keep with his/her estate planning documents. If you or your aging parent do not have one of these documents, it is best to begin the process to obtain the birth certificate or passport now, while you are not in crisis mode and the elder is still able to assist.
Estate Taxes
As we have been saying for a number of years, we are still waiting for the estate tax law to be changed so that we can finally give advice for estate tax planning. Unfortunately, we remain in a state of limbo, unable to accurately predict the future of estate taxes. As you may recall, the current estate tax law will sunset in 2011. From now through 2008, the estate tax exemption amount is $2 million per person, with a tax rate of 45% for all assets above the $2 million. In 2009, the exemption will increase to $3.5 million per person, with the same tax rate of 45% for excess assets. In 2010 the entire estate tax is scheduled to go away. However, in 2011 the prior law returns with only a $1 million exemption and a top tax rate of 55%. Given this uncertainty, effective planning has been difficult, and most practitioners believe that some sort of estate tax change will come. Our best guess is that a new law will bump the exemption per person to somewhere between $3.5 and $5 million and either tie the tax rate to the capital gain rate or set it at 33%. We will let you know as soon as any change is enacted. In the meantime, if you have concerns regarding your existing estate plan and the impact of the current tax law, please contact us.
The Federal Deficit Reduction Act was passed
in February, 2006. This very complex legislation
includes changes to the Medicaid system, which
in California we call "Medi-Cal." These changes
will greatly impact eligibility rules with greater
emphasis on prior transfers (i.e. gifts), the
transfer period, and the valuation of certain "exempt" assets,
including the personal residence.
The good news for us is that California must pass regulations to enact this legislation before it becomes law here in California. The Department of Health Services in California is notoriously slow at promulgating such regulations and, to date, no drafts of such regulations have been circulated. Thus, while we do expect these changes to become effective in California eventually, we have a bit of time before that occurs.
Having said that, those of you who are interested in doing Medi-Cal planning to protect your assets in case of a prolonged need for long-term care in a skilled nursing facility should consult with us as soon as possible, before the stricter eligibility regulations are enacted.
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California Law Changes
Medi-Cal Update
You may have heard that major federal changes were enacted for the Medicaid system (Medi-Cal in California). However, California has not yet adopted the federal changes and, in fact, operates under very old law. This affords us, in California, a number of planning opportunities that are unavailable to other states. The latest information we have from the Department of Health Services is that we will not have new Medi-Cal regulations in California until 2008. The new law (whenever it gets enacted here) is expected to be very extensive and impact both eligibility and recovery. Thus, if you or anyone else is concerned regarding planning for Medi-Cal benefits, please call us for an appointment.
Conservatorship Changes
In response to perceived abuses in Southern California, our legislature has enacted stringent changes to our conservatorship laws. These changes require notice of substantially all conservatorship matters to a wider range of the conservatee's family members. In addition, the court investigator's office will be required to do repeated investigations and interview many of the conservatee's family, friends and other important/interested parties for its reports to the Court. These additional requirements will place a huge burden on the court investigator's office, with no increased funding. The cost of all the extra work by the court's staff will likely be passed on to elderly conservatees and their families, which means that planning to avoid a conservatorship has become ever more crucial.
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Scam Alerts
Jury Duty Scam
Due to the tendency of some people to skip out on jury duty, a new identity theft opportunity has emerged. A caller phones a person at home, posing as a jury coordinator, and threatens that there is a warrant out for that person's arrest because he/she didn't show up for jury duty. When the intended victim asserts that he/she has not ignored a summons for jury duty, the scammer demands a social security number and birth date to verify the information and "cancel the warrant." These criminals have even been known to ask for credit card numbers to "cover a court fee to cancel the warrant." Remember, it is risky to give personal data over the phone. The FBI and federal court system have both issued nationwide alerts warning of this fraud.
Phishing Scams
"Phishing" involves e-mailing someone with the intent of tricking that person into revealing personal data for purposes of identity theft. The e-mail (or sometimes a pop-up message) often appears to originate from a business or organization you do business with, your bank or online payment service, for example. You are frequently asked to "confirm," "validate," or "update" your information by clicking on a link. As motivation to do so, you are warned that your security has been breached in some way or you are threatened with some other dire emergency, the inference being that if you don't click on the link quickly and correct the situation it will be too late. When you do click on the link, it may ask you to "log in" to a site that looks exactly like the genuine one. Once you do so, of course, you have given up access to your information on the site and the process of identity theft has begun.
Other phishers are not quite so sophisticated and may simply ask you outright for the information, hoping that the authentic look of the site will lull you into a false sense of security. You can avoid being fooled by a bogus site by choosing not to click on the link, typing in the website address by yourself (if you know it), and then verifying whether there is a real problem or not. Most likely, there is not, as banks and other such entities do not solicit personal data via e-mail.
Another way to test a site's validity before giving information is to see if "https" appears in the url address. This is not foolproof, as some con men have learned now to counterfeit the "https" designation. A good rule is to never click on links in e-mails from businesses or organizations. Also, do not open attachments to questionable e-mails, as they may contain malicious code that will infect your computer.
IRS Phishing Scams Revisited
With tax time rolling around, it pays to be aware of the latest information from the IRS relative to phishing scams directed specifically at taxpayers. First and most important, the IRS does not initiate taxpayer communications through e-mail. Furthermore, the IRS will not request detailed personal information through e-mail or ask taxpayers for PIN numbers, passwords or similar secret access information for their credit cards, banks, or other financial accounts. Finally, all IRS.gov web page addresses begin with
http://www.irs.gov/.
If you receive an unsolicited e-mail claiming to be from the IRS, please forward it to
phishing@irs.gov, being careful not to open any attachments. In fact, it is safer not to open the e-mail at all, but merely to highlight and forward it, as some programs (especially Windows) allow the malicious code to execute upon the mere opening of an e-mail. Report misuse of the IRS name, logo, forms or other IRS property to the Treasury Inspector General for Tax Administration at 1-800-366-4484. Forward bogus e-mails to Federal Trade Commission at spam@uce.gov, or contact them toll-free at 1-877-438-4338. You may also visit them at www.consumer.gov/idtheft.
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Elder Law Corner
Getting Reluctant Seniors to the Doctor
Recently our firm learned of a situation where a female conservator of her father's person and estate (including medical powers) could not get him to keep necessary appointments with the doctor. This woman was concerned about the negative effects on her father's health. Realizing she would be held accountable if his physical condition worsened due to inadequate health care added to her worries.
Most of us will never become conservators, but a number of us will take our turn as adult children of elderly parents, assuming we are not in this category already. With that in mind, it might be useful to list some of the methods and strategies caretakers can utilize to ensure that a senior's health and well-being are monitored regularly by a qualified physician. Predictably, finding the solution has much to do with understanding the problem.
For instance, sometimes an elderly person's avoidance of the doctor's office is little more than anxiety over having to undergo testing, submit to an unpleasant procedure, or take new medication. Anxiety also can be based upon fear of receiving a dire diagnosis, learning of a chronic condition, or experiencing a bad outcome. Other patients dread meeting with the doctor because they have not complied with a prior prescribed treatment regimen or protocol. It may be enough, in situations like these, to do a little hand-holding, accompanying your elder to the doctor and assuring him or her of your support in any and every circumstance. If that approach fails, the physician may need to get involved by refusing to reissue medication without an office visit, or in extreme cases, even making a house call.
Knowing when to intervene is not easy. A good caretaker wants to respect a mentally competent senior's right to self-determine as much as possible, especially in light of the fact that an aging person's fears and concerns could be valid. Some doctors do over-medicate elderly patients, and chronic or hard-to-treat conditions may be unaffected or even exacerbated by the interventions of medical professionals. Having said that, caretakers need to help their seniors be proactive in seeking a doctor's assistance when necessary. Because assessing that need can be difficult, having a trusted physician to advise you is critical. A certain degree of fear about one's health is natural for the elderly, even appropriate, but when anxiety gets in the way of good medical care, action is required.
Depression and denial are additional common contributors to the doctor-adverse elder. At times, multiple health problems can be so disheartening that a patient just shuts down. Whether this takes the form of pretending nothing is wrong or insisting that everything is wrong, the result is often the same, avoidance of medical care. Again, finding the right doctor can break down barriers and bolster a patient's hope for the future. A talented, trusted physician may well persuade a patient to accept medical services even where a caretaker has failed to do so.
A last resort is to get Adult Protective Services (APS) involved. This may be initiated by a doctor, caretaker, banker, hospital emergency room or other interested party. Sometimes, the doctor or caretaker is able to get a reluctant senior to accept needed medical care by presenting APS as a consequence without actually having to invoke it.
Beating the Summer Heat
When Summer arrives, Spring's lovely, warm weather can turn to not-so-lovely, unbearable heat! Such very hot days can be more than just an annoyance. In some cases, they are lethal, with seniors and children at greatest risk. Last year, in 14 days of three-digit temperatures across California, over 126 people died of heat-related causes. The majority were senior citizens, even though seniors were warned by the National Institute on Aging to avoid the heat.
Signs of heat-related illness are fatigue, muscle spasms, headache and nausea. Heat stroke (a body temperature over 104 degrees) can cause confusion, combativeness, rapid pulse, fainting, odd behavior, flushing, and inability to sweat. If ignored, delirium, coma or death can result. This risk is increased in victims with poor circulation, inefficient sweat glands, heart, lung and kidney disease, chronic disease, high blood pressure, medications, over-medication, over or underweight, and salt-restricted diets. Alcoholic beverages, overheated rooms, and overdressing also raise the risk.
Initial treatment is fairly simple. Lie down and rest in a cool, preferably air-conditioned, area. Drink water, vegetable and fruit juice; avoid alcohol or caffeine. Take a bath or shower, or sponge off with cool water.
Prevention can make the difference! Avoid the sun; wear loose, light clothing. Ask a doctor about medications. Have friends check in on you regularly. Stay hydrated. Don't ignore muscle cramps, weakness, confusion, fatigue, loss of concentration, lightheadedness, nausea, labored breathing, chest discomfort, and rapid or erratic pulse. Be sure to get medical help if symptoms do not respond quickly to treatment.
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