ENSIGN LAW FIRM NEWSLETTER
June 11, 2004
Americans this week marked the death of President Ronald Wilson Reagan. They joined as one nation to remember a remarkable President and his accomplishments. Laying aside political differences, we witnessed and participated in the outpouring of respect for one who brought optimism to America. With so many video and movie clips, the events of this week reminded us all of his life of service.
President Reagan was born into humble means but with diligence and hard work he rose to be the leader of the free world. As a nation, we honored him with solemn events such as we have not seen since the death of President Johnson. The highlights included the unexpected announcement of his death; his lying in repose in his library where over 100,000 people stood in line for hours to pay their respects; his lying in state in the Capitol Rotunda where another 100,000 people came to remember; the funeral service this morning; his final departure from Washington this afternoon; and his burial at sunset.
In 1980 I was honored to meet and be photographed with Ronald Reagan when he was a candidate for President. I was a candidate for the Potter County Commission. So these solemn events have recalled many memories. They also reminded me of some aspects of my professional life, my service to my clients and my relationships with my colleagues. I’d like to share some of these thoughts with you.
President Reagan’s passing actually began many years ago as he progressed into what has been called the long goodbye. He bid farewell to his nation as he entered into the journey through Alzheimer’s disease. It separated him from his family and the American people that he loved until his death. Surely the nation’s awareness of the severe consequences of this disease has been heightened in the last week. Perhaps we all will be more aware of those around us who are in various stages of the long goodbye.
Who could fail to draw strength from the love and care demonstrated so clearly by Mrs. Reagan? She has cared for her beloved Ron throughout his long goodbye. While she is surely the most prominent spouse/caregiver for one who embarked on this journey many years ago, there are untold numbers of spouses who are also giving loving, unselfish care to their beloved every day. They, too, endure the pain of seeing their beloved drift farther and farther away. Sadly, many spouse/caregivers travel through the long journey alone with little assistance from family or friends. Perhaps the Reagan’s story will help us to see their need for assistance and motivate us to provide what we can.
Many comments were made about the detailed planning of the solemn events of this week many years in advance, in fact, shortly after leaving the White House. This reinforced my belief that good funeral planning should be completed before the need arises. Doing so will help those left behind endure through the difficult days following the death of a loved one. Would you consider pre-need planning for yourself and your loved ones, encouraging all to complete their plans before they go?
It remains to be seen in the weeks ahead if the public will learn much, if anything, about Mr. Reagan’s estate and the probate of his will. This is because California attorneys strongly recommend the use of living trusts to avoid probate and protect the privacy of the affairs of the deceased. President Reagan probably intended to protect his privacy and took steps to do so. But if news does come out about Mr. Reagan’s estate, perhaps you will consider it as a reminder to do proper estate planning before the need arises. Doing so will assist your loved ones in the transition after your gone. Perhaps a living trust would be appropriate to protect your privacy as has been the case for many of our clients. Just as with pre-need funeral planning, proper estate planning will be a great benefit to those left after you’re gone.
Fewer Americans Are Planning
An article in the Wall Street Journal yesterday reported that fewer people have a will now than four years ago. Furthermore, in just one year, between 2002 and 2003, the number of people who believe having a will is important dropped from 85% to 75%. That means that 10% more of the American families will experience difficulties following the death of their loved one. Dying without a will or living trust means your assets will be distributed according to the mandates of the state rather than your wishes. And in Texas, not having proper planning in place will burden your survivors with a more difficult estate settlement (probate) process than would be the case with either a will or living trust.
There are a number of factors contributing to this recent decline in estate planning. Procrastination is probably the most common factor. The downturn in the markets means some people have fewer assets to pass along to their heirs so they don’t think planning is needed. Others think estate planning is only for those who will have estate tax problems. This is simply not the case because proper estate planning is designed to help all people give what they have to whom they want when they want them to have it and how they want them to receive it. Without proper estate planning, this is not likely to happen.
Typically people who do not undertake proper estate planning before their demise will cause their loved ones to expend substantially more time and financial resources in the settlement of their estate than if they had done proper planning. You may remember that old Fram air filter commercial where the mechanic holds up a dirty filter and says, “Pay me now or pay me later.” That message is all too true in estate planning and the consequences of not doing it.
While we’re on the subject, you need to know that in the estate planning process, we do prepare wills as well as living trusts. The decision of which to use rests with the clients based upon their particular facts and circumstances. These are just two of the many tools that are in our tool kit for comprehensive estate planning. Other basic tools include powers of attorney, medical powers of attorney, advance directives to physicians (living wills), HIPAA authorizations and declarations of guardian in advance of need.
A lot of people also think that estate planners only plan for death. You need to know that we not only plan for death but more importantly we plan for the benefit of the living who survive. And we actively participate and help the survivors in the settlement of estates of all sizes. This means that we do probate wills and even assist with those whose loved ones died without a will or living trust. So if we may be of assistance to you, your family, your loved ones, your friends, or your clients, in any of these ways, we would certainly appreciate your referrals. We look forward to your calls.
There are some developments in Elder Law to share with you. Our Elder Law practice is growing as more people become aware that we are serving seniors with their need for Medicaid qualification and related legal issues that are arising for our aging population.
Estate Recovery
As we have reported in the past, estate recovery continues to be the big topic for Elder Law attorneys in Texas. After the legislature passed the estate recovery statute, the Texas Health and Human Services Commission (HHSC) was directed to establish a Medicaid estate recovery program. The HHSC created a framework that was promulgated prior to holding six public meetings around the State in February. The HHSC issued Proposed Rules in April and opened a comment period of one month. This was closed with a public hearing on May 27 in Austin. A number of persons spoke and others submitted written responses to the Proposed Rules. Now we are waiting for the HHSC to issue the Final Rules. It has already submitted the Proposed Rules to the Federal government for review and approval.
To help you understand more about estate recovery in Texas, I have enclosed Texas Medicaid Estate Recovery Program: Questions and Answers. Please feel free to reproduce this page and share it with others who may be interested in this topic. For those who would like more detailed information, the Texas Health and Human Services Commission has established a web site that currently contains the Proposed Rules, a Summary of the Proposed Rules and other relevant information. The web site URL is http://www.hhsc.state.tx.us/medicaid/EstateRecovery/ER1.html
As people become more aware of the potential impact of estate recovery upon the estates of Medicaid recipients after their death, we are receiving inquiries for further information and assistance in planning for this new complication. Until the Final Rules are adopted by the Commission, we will not formulate or apply final strategies to clients’ situations. Estate recovery will not apply to those whose Medicaid applications are filed before September 1 or who are currently receiving Medicaid assistance.
DHS Seeking Ways to Limit Medicaid Eligibility
In addition to estate recovery, the Department of Human Services (DHS) is seeking ways to limit Medicaid eligibility. This is because of the crunch caused by the ever-increasing demand for long-term care and the ever-decreasing funds budgeted by the Legislature of Texas.
One way DHS is exploring would further limit the amount of resources one can own and still qualify for Medicaid. The approaches DHS seeks to implement this limitation would particularly impact couples who have low non-countable resource income.
DHS is also considering changing the calculation of the transfer penalty and its application to gifts. This would reduce the effectiveness of accelerated gifting that has been advantageous in the past.
As the budget crunch continues in Austin and the population ages, resulting in more needs for Medicaid qualified long-term care, I expect to see ever-increasing attempts by DHS to limit eligibility. Also, because of the budget crunch in Washington, I would not be surprised to see the next administration, whether Republican or Democrat, institute a major change in the method of federal funding of Medicaid that would seriously impact Texas residents.
Continuing Education
In April I attended the Guardianship and Elder Law conferences held by the State Bar of Texas in Austin. Both conferences provided excellent educational information from some of the top practitioners across the state. It also provided opportunities for networking with other Elder Law attorneys and probate judges from around the state. I renewed acquaintances with my colleagues and these contacts are proving fruitful as we expand our practice to our aging population.
Web Site and E-mail Address
Thanks to the efforts of my secretary, Trina Froschheiser, we are pleased to announce the launching of our web site at http://www.ensignlaw.com This web site is a work in progress and we will be adding more information that we trust will be useful to you and others. We welcome your suggestions too.
With the launch of the web site, my e-mail address is now mrensign@ensignlaw.com Please add this to your e-mail address book for easy access. Feel free to contact me here if I may be of service.
If you would like to receive occasional updating e-mails regarding estate planning and elder law topics and developments, would you please take a moment to drop me an e-mail message asking to be placed on this list. I promise not to bombard you with irrelevant information. And you can always ask to be removed from the list at any time.
Speaking to Groups
At the invitation of the BSA Hospice, I will speak to a Senior Citizen Seminar on June 24. The location is the Canyon Community Center. The program begins at 6:00 p.m. and will last about two hours. My topic will be medical powers of attorney, advanced directive to physicians and HIPAA. Other speakers will include an insurance agent discussing long-term care insurance, a Medicaid specialist from the Department of Human Services and BSA Hospice personnel telling about the services they offer. For information about attending, please contact Karen Jeffers at BSA Hospice at (806)212-8673. Please tell her I informed you about this seminar in my newsletter.
Speaking of speaking. If you are a member of a group that would be interested in a presentation on any topic regarding estate planning or Elder Law, please call me or ask the Program Chairman to call.
As we approach the middle of the year, my staff and I hope for you that each day will be better than the previous one and the rest of the year will be better than the first half of the year. Whenever we may be of service with any legal matter pertaining to you, your family, your friends or clients, please don’t hesitate to call to discuss it. We do appreciate your referrals and will do our best to serve them well.
Best wishes for a cool summer. And let’s pray for God to bless us all with plenty of rain.
Not Certified by Texas State Board of Legal Specialization