ABA ELDER NewsFall2007

ABA ELDER LAW COMMITTEE Newsletter Fall 2007 ABA General Practice, Solo and Small Firm Division Chairs - Kenneth Vercammen, Edison, NJ and Jay Foonberg, Beverly Hills, CA In this issue: 1. Alzheimer's Lesser Known Devastation - Is Your Family Poised to avoid it?

2. ESTATE PLANNING FOR BLENDED FAMILIES

1. Alzheimer's Lesser Known Devastation - Is Your Family Poised to avoid it?

By: Dana E. Bookbinder, Esquire With the incidence of Alzheimer's disease growing at an alarming rate, no one can afford to postpone long term care planning. The June 18, 2007, issue of Newsweek as well as the June edition of AARP Bulletin both report that Alzheimer's currently afflicts over 5 million Americans, and the numbers are expected to rise dramatically, especially as millions of baby boomers are reaching their 60s. According to the recent AARP Bulletin, one in eight people 65 and older currently has Alzheimer's, and half of those 85 and over are afflicted with it. While scientists search for drugs to prevent and remove deposits of plaque in the brain and Congress considers legislation to double funding for Alzheimer's research, families must work to protect themselves.

Alzheimer's takes a tremendous emotional, physical, and financial toll on families who must contend with it. The disease can last many years, and its course is unsteady and varies with each case. Caring for an Alzheimer's victim is also a round-the-clock job. Our office has worked with many individuals caring for a relative prone to wandering at any time of the day or night. The caregiver must tend to both the physical needs of the Alzheimer's patient and his or her safety.

Many caregivers intend to keep their loved one at home, but once the disease has substantially progressed and the afflicted individual exhibits erratic behavior and physical problems, a long-term care facility becomes the only viable option.

Otherwise, the burdens of providing care eventually would cause the caregiver's own health to diminish.

Because an individual with Alzheimer's eventually does not recognize his or her closest relatives and may even be subject to bouts of yelling or violent behavior, the disease puts enormous strains on family relations. Relationships between siblings are strained as well as relationships between parents and their children.

Having worked with families who are contending with Alzheimer's disease for

many years, our firm has assisted in many situations where one son or daughter is shouldering the burden of caring for an elderly parent while having to address criticisms by other siblings who do not appreciate the severity of their parent's condition. Sibling relationships often deteriorate when it becomes necessary to hire care providers outside the family. Today, nursing homes charge over $8,000 per month in our area and even home care runs a few thousand dollars a month.

Often, the siblings who are not providing care wish to avoid these expenses to preserve a potential inheritance. Contrary to popular misconception, Medicare only covers extremely limited long-term care expenses. Even a home health aide can cost over $20 an hour. Siblings who are not the primary caretakers are best advised to witness the everyday limitations of their parent first-hand and to support their sibling who is the primary caretaker by providing short term respite care or help with errands.

According to the recent Newsweek article, the number of Alzheimer's cases is expected to more than double by the year 2050. In light of this chilling prediction, all individuals must have their estate planning documents in order. These include a Will, Advanced Directive for Health Care, and General Durable Power of Attorney. It is equally critical that family members communicate with one another to discuss health care wishes as well as financial issues and whether long-term care insurance policies are in place. When interviewed by Newsweek, Mark Shalloway, president of the National Academy of Elder Law Attorneys, explained the necessity of a General Durable Power of Attorney by stating that even after a catastrophic illness occurs, routine financial and legal decisions must continue to be made with banks, doctors, etc. For those who are concerned that entrusting others with their financial affairs is risky, the law requires agents under powers of attorney to act in good faith. Otherwise, they may be subject to court proceedings.

Families who are engaging in asset protection planning already know that Medicare cannot be counted on for long term care expenses. They understand that affording assisted living or nursing facilities, home care, or continuing care retirement facilities requires advanced planning. Though scientists are now hopeful that the next generation of Alzheimer's drugs currently under testing will be more effective than previous treatments, our current health care system demands that each of us takes responsibility for our own care in our later years.

Proactive legal planning brings the astronomical cost of this care within reach for families of diverse financial means. For those who seek counsel, family finances and relationships are much healthier.

Begley & Bookbinder, P.C. is an Elder & Disability Law Firm with offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey and Oxford Valley, Pennsylvania and can be contacted at 800-533-7227. The firm services southern and central New Jersey and eastern Pennsylvania. Tom Begley Jr. is one of the speakers with Kenneth Vercammen at the NJ State Bar Association's Annual Nuts & Bolts of Elder Law and co-author with Kenneth Vercammen, Martin

Spigner and Kathleen Sheridan of the 400 plus page book on Elder Law 2. ESTATE PLANNING FOR BLENDED FAMILIES By: Thomas D. Begley, Jr., Esquire

A blended family is a family where parents have children by previous marriages. It can also be a situation where children have children from prior marriages. Death and divorce result in larger numbers of second marriages.

Second marriages present certain planning problems that need to be addressed.

(1)

Emotional Issues. There are often emotional issues. A recently divorced client may have strained relationships with his or her children, because of the attachments those children have with the previous spouse.

(2)

Children from Two Marriages. The stepparent may have a difficult relationship with the natural child of the other spouse. An additional issue is providing for a child of a previous marriage without placing the assets intended to benefit that child under the control of the “other� and biological parent.

Life insurance is a useful tool in dealing with this situation.

(3)

Obligation Set Forth in Divorce Decrees, Settlements Agreements and Prenuptial Agreements. A settlement agreement negotiated in connection with a final order of divorce may impose obligations on a divorcing parent, such as establishing and funding trusts and designating beneficiaries to fund those trusts. It is important that the estate planning attorney obtain copies of any such agreements to ensure that the estate plan complies with those agreements.

If there is a prenuptial agreement, after the marriage has lasted for some years, the wealthier spouse often wants to deviate from the prenuptial agreement and give the other spouse a larger, more generous provision than anticipated in the agreement. If there

is to be a variation from the prenuptial agreement, this should be documented in the estate plan or it may even require an amendment to the prenuptial agreement. In that event, spouses must obtain separate counsel.

(4)

Significant Age Differences. If there is a significant age difference between spouses, certain issues must be addressed. Special rules for computing minimum distributions apply if there is more than a 10 year difference in ages between the spouses.

Additionally, the children of the older spouse may resent having to wait for the death of the younger spouse to receive their inheritance. Again, life insurance is a useful vehicle to solve this problem.

(5)

Wealth Disparities Between Spouses.

Generally, to achieve maximum federal and state estate tax savings, the estates between spouses are balanced. If one spouse has most of the family assets and the other spouse predeceases, the family will not have taken advantage of the opportunity to fund a credit shelter trust to take advantage of the federal or state estate tax exemption. Normally, the solution would be to have the wealthier spouse transfer assets to the opposite spouse so that the maximum funding could be achieved. This may cause resentment among children of the wealthier spouse.

If the wealthier spouse supports his children in a more lavish manner than the less wealthy spouse, there may be resentment not only from the less wealthy spouse but her children as well. The situation is acerbated if the less wealthy spouse is male. The solution may be a joint revocable trust.

(6)

Apportionment of Estate Taxes. A common method to designate payment of estate taxes is through the residuary estate. This could result in certain beneficiaries receiving virtually the entire inheritance and the tax being paid by other beneficiaries. This issue is particularly acute when inheritance passes outside the will through non-

probate assets, such as beneficiary designations or jointly-owned property. There are three telltale warning signs: •

large non-probate assets passing to beneficiaries or large specific bequests passing to less than all of the beneficiaries;

•

beneficiaries of each spouse’s will or trust are not the same; and/or

•

beneficiaries of non-testamentary trust assets are not the same.

Begley & Bookbinder, P.C. is an Elder & Disability Law Firm with offices in Moorestown, Stone Harbor and Lawrenceville, New Jersey and Oxford Valley, Pennsylvania and can be contacted at 800-533-7227. The firm services southern and central New Jersey and eastern Pennsylvania. Tom Begley Jr. is one of the speakers with Kenneth Vercammen at the NJ State Bar Association's Annual Nuts & Bolts of Elder Law Seminar and co-author with Kenneth Vercammen, Martin Spigner and Kathleen Sheridan of the 400 plus page book on Elder Law. _______________________ 4. WE PUBLISH YOUR FORMS AND ARTICLES To help your practice, we feature in this newsletter edition a few forms and articles PLUS tips on marketing and improving service to clients. But your Editor and chairs can't do it all. Please mail articles, suggestions or ideas you wish to share with others in our Tort and Insurance Committee.

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General Practice, Solo and Small Firm Division: Elder Law Committee and the ESTATE PLANNING, PROBATE & TRUST COMMITTEE Who We Are This committee focuses on improving estate planning skills, substantive law knowledge and office procedures for the attorney who practices estate planning, probate and trust law. This committee also serves as a network resource in educating attorneys regarding Elder Law situations.

To help your practice, we feature in this newsletter edition a few articles and tips on marketing and improving service to clients. But your Editor and chairs can't do it all. Please send articles, suggestions or ideas you wish to share with others.

Let us know if you are finding any useful information or anything you can share with the other members. You will receive written credit as the source and thus you can advise your clients and friends you were published in an ABA publication. We will try to meet you needs.

We also seek articles on Elder Law, Probate, Wills, Medicaid and Marketing. Please send your marketing ideas and articles to us. You can become a published ABA author. ________________________________________ The Elder Law Committee of the ABA General Practice Division is directed towards general practitioners and more experienced elder law attorneys. The committee consistently sponsors programs at the Annual Meeting, the focus of which is shifting to advanced topics for the more experienced elder lawyer.

This committee also focuses on improving estate planning skills, substantive law knowledge and office procedures for the attorney who practices estate planning, probate and trust law. This committee also serves as a network resource in educating attorneys regarding Elder Law situations.

Kenneth Vercammen, Esq. co-Chair Jay Foonberg, Beverly Hills Co-chair, Author of Best Sellers "How to Start and Build a Law Practice" and "How to get and keep good clients', Beverly Hills, CA JayFoonberg@aol.com> We will also provide tips on how to promote your law office, your practice

and Personal Marketing Skills in general. It does not deal with government funded "legal services" for indigent, welfare cases.

KENNETH VERCAMMEN & ASSOCIATES, PC ATTORNEY AT LAW 2053 Woodbridge Ave. Edison, NJ 08817 (Phone) 732-572-0500 (Fax) 732-572-0030 Kenv@njlaws.com http://www.njlaws.com/ http://elder-law.blogspot.com/