Buyer Beware

A colleague recently handed me a flyer she had received and asked if I knew anything about the service. Here are some of the claims made in the flyer:

Important Elder Law Update
Congress has passed legislation that standardizes entitlement provisions for persons 60 and over. These laws provide the following benefits:

Seniors may apply to completely avoid all probate and estate taxes
I don't even know what that means. The way it reads, it implies that there are probate taxes. There are not. If they mean that you can "apply" to avoid probate, they are wrong. You can't "apply" to avoid probate. You can plan to avoid probate.

In 2009, unless your estate is over 3 million dollars, there won't be any estate taxes anyway. Again, there is no "application" to complete to avoid estate taxes. If you have to pay estate taxes, you may be able to minimize the tax liability through proper planning.

Exempt assets from collection by government or nursing home if ill (with no need for nursing home insurance!)
I assume they are talking about paying for nursing home care. The government does not collect assets. Neither will the nursing home.

If you do not have long term care insurance and you need nursing home care, you can either pay privately for your care, or you can apply for Medicaid assistance. If you apply for Medicaid assistance, certain assets, like a homestead up to a certain value or one vehicle of any value are considered "exempt" (This is the rule in Texas. Medicaid rules vary from state to state). If the state pays for your nursing home care, they do have the right to recover expenses from your estate, this is the Medicaid estate recovery program. With proper planning, it may be possible to avoid estate recovery. Even so, the state isn't going to take your assets. They will file a claim against your probate estate, just like any other creditor.

The key is proper planning, done by qualified professionals. Many elder law attorneys are well versed in Medicaid laws, as well as estate tax planning. You would probably not let an electrician work on your plumbing system, so why would you let a someone with no credentials or questionable credentials give you tax planning or Medicaid planning advice?

I would also be cautious getting advice from someone whose main business appears to be selling financial products. Sometimes annuities are a perfectly fine financial product, but if an annuity won't mature until you're 114 years old (I have seen this, really), then it may not be the best product for you.

When I went to the website listed on the flyer, annuities figured prominently, as well as other financial products. There was no information on the "advisors", so there was no way to tell if they were Certified Financial Planners or if they held any other certification or designation.

I just don't think you can be too cautious when it comes to doing research on the folks who are going to help you plan for your retirement. If you need an elder law attorney, you can find one at www.naela.org. If you need a financial planner, you can find one at www.cfp.net. Another resource for a financial planner is the National Association of Personal Financial Planners.

It may be hard spending a little money for the right advice, but in the long run it could save you a bundle.

To Keep or Not to Keep

Writing and keeping up with a blog is hard work. I find more often than not that I'll get an idea, even think about it for a bit, then just never get around to actually writing anything. I've been re-inspired this week, thanks to the daughter of a former client. She and I have had several emails about the blog, and networking, our facebook page, and networking, our website, and networking. But the thing she said that inspired me the most is that she feels the information I provide is easy to understand about practical topics.

Now that I'm inspired to write, what to write about...

...So, I'm going to muse a little bit about the issue of hoarding, because it's on my mind a lot lately, for more than one reason.

I learned a couple of years ago from my childhood best friend (I'll call her Ann) that her mother had become a hoarder. At the same time I also learned from Ann that her mother had been diagnosed with a rare form of cancer, and was not expected to live much longer. As we talked, I learned that Ann's mother, in an effort to control vermin, sprinkled Sevin dust everywhere in her house. Now, Sevin dust is a dangerous pesticide, and according to Ann, it was not possible to go anywhere in the home without coming into contact with Sevin dust, and her mother lived in it. It was no surprise to learn that the type of cancer her mother had has a strong correlation to chemical exposure. While no doctor had suggested the Sevin exposure caused the cancer, Ann, being in health care, firmly believed the exposure caused the cancer.

Around the same time I found out that a former neighbor also had a problem with hoarding. When her son went in and cleared out more than 20 trash bags full of her stuff, she basically disowned him. By her son's report, there wasn't even room on her bed for her to sleep, and her husband had all but left her.

I am currently working with a gentleman with similar issues, and his friends and family are struggling to help him deal with making the decision to move, which means sorting through a lifetime of belongings, and deciding what stays and what goes.

What I know about hoarding is that not enough is known about it. I went to a very informative presentation on hoarding at the American Society on Aging conference in March. The speakers reported that while hoarding has been commonly understood to be related to obsessive compulsive disorder, current research is finding a strong link to depression and dementia. Some researchers now believe that the changes in the brain that come with depression and dementia make it difficult for people to distinguish between "important" stuff and trash, so they just keep it all. Of course this is a major simplification, but it does make sense.

The other thing I learned is that for family to go in and just toss stuff out is often the worst way to deal with the problem, as my neighbor's son found out. Hoarders are often very attached to their stuff, even things that are obviously trash to the rest of us. When all that stuff is gone, the hoarder grieves, and I have heard of instances where psychiatric treatment was required, although that rarely repairs the damage done to the family relationships. We saw a film clip from the movie My Mother's Garden, which is a very poignant documentary about a family's struggle with this problem.

So how do you deal with it? It seems that often the best way to deal with the issue is to use a "good cop/bad cop" type of strategy.

The good cops are family members, friends, mental health professionals and other support systems. The bad cops can be code enforcement, law enforcement or Adult Protective Services (APS). Basically, the bad cops spell out why things need to be cleaned up and what will happen if it doesn't happen. The good cops then provide support, encouragement and assistance to help the hoarder maintain control of the situation while they clean things up. This is certainly a very labor intensive method, as my client's family and support system knows, but it can work.