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Tips For Paying Off That Holiday Debt

By Jennifer Rossettini, CFP®

Shoppers in the U.S., on average, incurred $1,054 in debt over the 2017 holiday season. If those shoppers chose to pay only the minimum payment of $25, they would still be paying off that debt (until 2023) and, at the average interest rate of 15.9%, would end up paying a total of $500 extra in interest. If you find yourself with unwanted debt once the 2018 holiday season winds down, you may be wondering what to do about it.

The first step is to take an inventory of your debt. For each credit card used, write down the outstanding balance and the interest rate. Once you are armed with that information, you can decide where you want to begin. Logic often tells us to pay off the highest interest rate cards and/or largest balances first, and that is often the best course of action. However, there are some reasons you may want to start with the lowest interest rate cards. For example, those retailers that get you to buy big ticket items with the promise of 0% interest during a promotional period often have a catch: they defer the interest, and if you do not pay off every cent of that purchase before the end of the promotional period, the retailer will add all of the interest that would have accrued onto your balance. Another reason for paying off smaller balances first is that it motivates you to continue onto the next one.

 Other than deciding which debts to pay off first, one needs to determine where the extra outflow will fit into their budget. One consideration is to look for ways to generate more cash. For example, if your credit card offers a rewards program, you can often use cash back rewards to pay down the balance or even trade frequent flier miles for cash. Jean Chatzky also suggests selling your unused electronics, reselling unused gift cards, checking for unclaimed money, cashing in on insurance policy dividends and rewards, and taking advantage of shopping portals and cash back applications.[1]

Another consideration is to look for ways to reduce other expenses in order to free up some extra cash to pay off those debts. For example, packing lunch instead of buying lunch every day could save you $50 per week or $200 per month. Try not to add to the debt during this pay back period. Avoid using your credit card to make up a budget shortfall and instead use “envelope budgeting”: set aside actual cash to pay for certain variable budget items, such as eating out, entertainment, transportation, etc., and when that cash is gone, spending on that item ends for the month.

Of course, the best way to avoid a similar problem next year is, once this year’s debt is paid off, take advantage of the above budgeting techniques and save that extra cash for next year’s holiday spending.


[1] https://www.nbcnews.com/better/business/how-pay-holiday-debt-faster-ncna836256

Ask Kit Kat – Loyal Dog in CA

Hook Law Center: Kit Kat, what can you tell about Madison, the  Anatolian shepherd dog, who reunited with his 75-year-old owner after the California Camp Fire?

Kit Kat: Both are Anatolian shepherds, large dogs with thick fur, who need a lot of space. She says, “These dogs are livestock guardian dogs, they do not do well in heat, they do not do well in small enclosures. They protect their property.” Temporarily, she and her husband are living in a mobile home park, so the dogs are staying at their home site alone, with Gaylord bringing them their food on a daily basis.

According to Marlene Johnson, who owns Anatolian shepherds and founded a Facebook group called Livestock Guardian Dogs and Positive Training Methods, “Madison is a perfect example of a livestock guardian dog. He braved a natural disaster and went right back to where he belonged and stayed there until his owners and working buddy returned.” How he survived the fire is a mystery, but one of the rescue workers hypothesizes that he somehow managed to outrun the fire, and then circled back to his home area. Quite a dog, wouldn’t you say? (Hilary Hanson, “Loyal Dog Found Guarding Home Weeks After Wildfire Burned It to the Ground,” Huffington Post, Dec. 10, 2018)

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Posted on Monday, December 31st, 2018. Filed under Senior Law News.

No! You Cannot Disinherit Your Spouse.

By Shannon Laymon-Pecoraro, CELA

Many clients come to our office and want to limit an inheritance to, or completely disinherit, a spouse, due to a number of reasons.  It could be that they want to ensure their children are provided for after their death, or that the spouse does not want to disrupt eligibility for public benefits. Regardless of the reason, the law clearly outlines rights your spouse has to your estate. As a result, with few legal defenses, such as abandonment,agreement or murder, you cannot completely disinherit your spouse.

Under the current law, a spouse is entitled to a percentage of your estate based on the length of the marriage,with the maximum percentage vesting after fifteen years of marriage. The elective share calculation is based off the decedent’s augmented estate, which takes into account not only the assets in the probate estate, but accounts for such things as the value of assets in the spouse’s personal estate, assets received by the spouse outside of the estate (for example, a fifty percent interest in a house that was held jointly), and the value of assets received by others before and after death. Historically, the value of the elective share was required to pass outright to the spouse, but, under current law, you can satisfy this claim by having such share pass to a marital trust, and if the spouse is incapacitated, to a special needs trust.

In addition to the claim for an elective share, a spouse may have other claims and allowances. The spouse may claim a family allowance, which may be paid as a lump sum not to exceed $24,000 or in periodic installments not to exceed $2,000 per month for one year.  There may also be a claim for exempt property and a homestead allowance, each valued at $20,000.

Because various factors and deadlines apply to the various items addressed herein, you should not attempt to file these claims on your own. In some circumstances, if you claim an elective share in lieu of the gift provided to you under a Will, you may receive less than was originally provided to you. Similarly, planning around the elective share can be complicated and a failure to seek qualified legal advice could result in an unintended expensive legal process. Many experienced estate planners will be able to help navigate these issues and recommend alternative solutions. 

Kit Kat

Ask Kit Kat – Talking Blue Jay

Hook Law Center: Kit Kat, what can you tell us about the blue jay at the Virginia Aquarium & Marine Science Center in Virginia Beach who meows like a cat?

Kit Kat: Well, it’s a male and his name is Chi. As a hatchling, he was raised by an elderly woman who mistook him for a cockatoo. There were several cats in the household, and he picked upon their meowing. After a while, the woman was no longer able to care for her pets, so she asked a wildlife rehabilitator to find the jay a home. The rehabilitator realized immediately that this was a wild bird who had been raised in captivity and would not make a good candidate to be released outdoors permanently. So Chi was offered a home at the Virginia Aquarium & Marine Science Center. He lives in the Upland River room near the front entrance of the main building, along with some turtles, fish, ducks, and other birds native to the area.  He’s been there since 2009.Chi is estimated to be about 16 years old.

Chi is extremely social. He has a girlfriend—another blue jay—whose name is Nigel. He and Nigel happily greet visitors and munch on seeds and meal worms, staples of their diet. Not only can Chi make cat-like meows, but he can sing half a musical scale, as well as make a catcall sound—when he sees someone he deems attractive. He’s quite a character! (Stacy Parker, “Kitty twitter—Blue Jay at Virginia Aquarium, raised as a pet, meows like a cat,” The Virginian-Pilot, Nov. 22, 2018, p.1 & 4)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Thursday, December 13th, 2018. Filed under Senior Law News.

Don’t Become a Victim of the “Grandparent Scam”

By Emily Martin, Esq.

What is the “grandparent scam” and how does it work?

Unfortunately, seniors are often the targets of scams looking to cheat them out of their money – often to the tune of tens of thousands of dollars. Although it has been around for years, in recent months, there has been a resurgence in the number of seniors falling victim to the “grandparent scam.”

Typically, the “grandparent scam” works like this: you get a call from someone pretending to be your grandchild. This person explains that she is in trouble and needs money immediately. Perhaps she is in jail and needs money for bond or is stuck in a foreign country in needs money to get out. Typically the caller will include enough detail to make the story seem realistic. The “grandchild” will often ask you not to tell your child (their parent) that they are in trouble. They ask you to wire money to a specific location or to give it to a third party, who is usually someone posing as a lawyer or police officer. Once you wire the money, the scammers break off all contact – usually making it impossible to recover your losses.

There are many ways these scammers choose their targets. They may purchase “lead lists” with information about older people or people they can get lots of personal information about. Often, scammers peruse social media to find information about potential targets, such as whether they have grandchildren or how old they may be.

How to handle the scam it if happens to you

The first and most important step to take is not to panic if you get this type of call. Often the scammers call in the middle of the night, when you may not be thinking clearly and may be more likely to believe what you hear. Always verify the person’s identity by asking questions someone else could not answer – such as the name of their first pet. Call other family members to see if they have heard from your grandchild – or even try to call your grandchild’s personal telephone to see if they are okay. In no circumstances should you send money until you are absolutely positive that your grandchild is in trouble and that the money is going to the correct party.

If you realize you have been scammed after you have sent money but before it has been picked up, you may be able to retrieve it. Unfortunately, if the money has already been picked up, it is most likely gone for good – along with the scammers who took it.

How to protect yourself from being targeted by scammers

In order to prevent your email and computer from being hacked, use a firewall and anti-virus/anti-spyware software. Don’t open email attachments from strangers or even from friends and family when the attachment seems strange.

Make sure all of your social media accounts are private, so that scammers cannot see your personal information. And if you receive a telephone call from a number you don’t recognize, it may be best to screen the call until you determine it is legitimate.

 

Kit KatAsk Kit Kat – What Can Horses See?

Hook Law Center: Kit Kat, what can you tell us about how horses see color and distance as compared with humans?

Kit Kat: Well, this is extremely interesting. Some new information is coming out of Britain. Research at the University of Exeter indicates that horses neither perceive color nor distance in the same way that humans do. Obviously, improving our understanding could not only make it safer for the horses, but for humans, too, who are riding or jumping on these majestic animals.

To examine how horses actually see, researchers at the University of Exeter did some research. What they found is that horses cannot tell the difference between reds, like true red and orange, and green. Therefore, the ubiquitous use of orange on crossbars and take-off boards for fences and hurdles is probably not very helpful for the horse. They see orange as green, so to use it as a marker is absolutely no help at all. Humans have three types of cone cells in their eyes, while horses only have two.

Also, according to other scientists such as Janel L. Jones, who has a Pd.D. in cognitive science and wrote an article in Equus magazine, horses cannot see items from as far away as humans do. What a human can see at 30 feet from an object, a horse can only see that same object when at a distance of 20 feet. With the speed at which horses are travelling, that could make a significant difference. Poor color perception combined with poor depth perception could be responsible for some of the accidents which occur at a track.

With this new information in hand, the British Horseracing Authority (BHA) will begin experimenting with different colors in some of their training locations and gathering input from trainers and riders. Already the use of white and yellow for fences and jumps has yielded improved data for the way the horses jumped. “If it’s clear that horses are confident, respectful of the fence and jumping cleaner and better, then the authority will look at rolling it out to a number of racetracks.” Traditional orange marking may be a thing of the past! Stay tuned.  (Bianca Britton, “New research on horse eyesight could improve racecourse safety,” www.CNN.com, October 23, 2018)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, December 10th, 2018. Filed under Senior Law News.

Estate Planning with IRA’s and Retirement Plans: Pitfalls and Opportunities

By Jennifer Rossettini, CFP®

If your annual income falls somewhere between $50,000 and $200,000, chances are that more than half of your assets consist of 401(k), 403(b), IRA and/or other retirement plan assets (for purposes of this article, all non-pension retirement plans will be referred to as “IRA’s”). If this statistic is true for you, it is critically important to make sure that the beneficiary designations on your IRA’s are consistent with your overall estate plan. Moreover, as the federal estate tax exemption continues to increase, income tax planning for future generations becomes even more relevant. This article will discuss some of the estate planning pitfalls that go along with estate planning with IRA’s as well as some of the planning opportunities.

As you may be aware, the IRA is an investment vehicle that allows for tax-deferral during your earning years.  In exchange for allowing you to defer the taxes during your earning years, the IRS requires that you begin withdrawing from your IRA when you turn 70 ½. This is the Required Beginning Date (“RBD”). At that time, these Required Minimum Distributions (“RMD’s”) are taxed as ordinary income. When you designate a beneficiary to receive your IRA at your death, that beneficiary can generally choose among three options for taking the distribution: (1) take the whole IRA in a lump sum, in which case the entire lump sum will be taxed as ordinary income to the beneficiary; (2) withdraw from the IRA over a 5-year period, in which case, each withdrawal will be subject to income tax; or (3) take withdrawals from the IRA over the beneficiary’s life expectancy. For greatest tax deferral, the IRA owner should want their beneficiaries to choose the third option. Despite the owner’s wishes, however, improper beneficiary designations could thwart their best-laid plans.

Pitfall Number 1: Failing to Name a Beneficiary or Naming a “Non-Qualified Beneficiary”:

This can happen if the IRA owner fails to name a beneficiary and the plan does not have default beneficiaries, or when the owner names their estate, a charity, a non-qualified trust, or other entity.  In this case, the beneficiary only has limited options. If the IRA owner died before his/her RBD, the beneficiary must take the IRA assets out over a five-year period. If the IRA owner died after his/her RBD, the beneficiary can choose to take distributions over a five-year period or over the remaining life expectancy of the IRA owner.

Potential Solution: Be sure to name individual beneficiaries consistent with your estate plan. For example, if your estate plan requires that your assets be distributed equally to your two children, be sure to name those two children as equal beneficiaries of your IRA.

Pitfall Number 2: Naming your Revocable Living Trust as Beneficiary:

If your estate plan involves the use of a Revocable Living Trust so that assets remain in Trust for your spouse and/or your children after you pass away, many people make the mistake of just naming their Trust as the beneficiary of their IRA.  There are two problems that arise when you name your Trust as beneficiary. First, if the Trust is not a “Qualified Designated Beneficiary Trust,” the Trust will be subject to the less desirable payout options discussed above. Second, even if you have named beneficiaries of various ages, the IRS will use the life expectancy of the oldest beneficiary to determine the proper RMD.

Potential Solution Number 1: Make sure your Trust is a Qualified Designated Beneficiary Trust, which means (1) the Trust is valid under state law; (2) the Trust is irrevocable or becomes irrevocable at the death of the IRA owner; (3) the beneficiaries of the Trust can be identified in the Trust document; and (4) the Trust document is provided to the account administrator by October 31st of the year after the IRA owner’s death.

Potential Solution Number 2: Instead of naming your Trust as beneficiary of your IRA, you could name the individual sub-trusts created therein as the beneficiaries. For example, instead of naming “The John Doe Revocable Trust” as the beneficiary, you could name “The Marital Trust f/b/o Jane Doe under the John Doe Revocable Trust.”

Please keep in mind that estate planning with IRA’s can be complicated and that this article only scratches the surface. As such, we highly recommend that you seek the advice of an experienced estate planning attorney to walk you through your unique situation.

 

Ask Kit Kat – Magic in Cat’s Tongue

Hook Law Center: Kit Kat, what can you tell us about the uniqueness of a cat’s tongue?

Kit Kat: Well, first of all look at this cute little girl, daughter of one of our staff, who just got her very own kitty from a local shelter. The little girl, Allison, has named her kitty, Elliott. It’s a girl kitty, but that’s what her name was, so the family kept it.

Anyway, back to the original subject for this week—the magic in a cat’s tongue. We all know that cat tongues are rough and not smooth like other animals’. However, under a microscope, what the surface of a cat’s tongue is like is revealed by looking at it under a microscope. It may look just a bit scratchy or rough to the unaided eye, but under the microscope it is shown to have tiny, claw-shaped hooks which lay flat, until they come to life in the grooming  process. These tiny hooks are also hollow, so they can carry saliva from the cat’s mouth to reach deep down into the cat’s fur when it is grooming.  The average cat has 300 hooks or papillae, which is the technical name. Interestingly, the length of each papillae is roughly the length of each strand of the cat’s fur, except for Persian cats, which have extremely long hair strands.  All kinds of cats—tigers, lions, cougars, bobcats, leopards, etc. have the same kind of tongue. And it is a virtual cleaning machine!

This discovery was made by Alexis Noel, the lead researcher on a team of   mechanical engineers from Georgia Tech. She thinks the knowledge could lead to inventions for both pets and humans. (Lauran Neergaard,  “The scoop on your feline’s tongue,” The Virginian-Pilot, November 20, 2018, p.1 & 4)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Thursday, November 29th, 2018. Filed under Senior Law News.

Will People With Disabilities Be Forced Into Nursing Homes?

By Letha Sgritta McDowell, CELA

On November 9, 2018, the Deputy Administrator and Director of the Centers for Medicare and Medicaid Services issued a notice regarding the sunset of certain provisions and protections which allowed married individuals with disabilities to receive services and supports in their homes.  While it is unclear how either the Commonwealth of Virginia or State of North Carolina will implement the guidance issues, the mandate has the potential to cause major upheaval for many of the 3.2 million people nationwide who are receiving services and supports in their home.[i]

States which participate in the federal Medicaid plan receive funding from the federal government as well as funding which is included as part of their state budget.  Participating states must offer certain programs which have certain eligibility requirements.  These programs are often referred to as entitlement programs– an example of which is the Medicaid program which pays for nursing home costs for some individuals.  A Medicaid waiver program is one in which the federal government waives the rules that usually apply to Medicaid programs, but for which the federal government still provides some funding.  Conceptually, the waiver programs allow states to try certain programs to expand coverage, reduce costs, or improve care.

One series of waiver programs are those which are aimed at assisting persons with disabilities of any age needing long-term services and supports in the community (i.e. home care).  The waiver programs allowed states to offer long-term care services in a home-based setting which ideally reduced state costs and improved quality of life for those individuals by offering and alternative to nursing home placement.

While, by definition, waiver programs authorize the waiving of certain eligibility rules, in 2014 Congress mandated that certain rules protecting married couples be applied to married couples when one was applying for a waiver.  The resulting mandate allowed a spouse not needing care to retain certain income and assets in the same manner as if the spouse needing care was entering a nursing facility, but without the resulting disruptive move.  In many instances, the financial protection for the spouse not needing care, along with the waiver program, was the only way to avoid a move into a nursing home.

The 2014 mandate for spousal protections was only extended through the end of 2018.  Therefore, beginning on January 1, 2019, states are no longer required to distinguish between an institutionalized spouse (spouse needing care) and a community spouse for purposes of the waiver programs.  The directive issued by CMS states that the reevaluation of all married couples should begin on January 1, 2019.  Should the income or assets of a spouse not needing care be considered upon re-evaluation, many married couples needing services and supports may find themselves forced into a nursing facility.

While the CMS mandate does state that re-evaluation should begin in January, the mandate also acknowledges that states will have the option to continue to allow for the protection of the spouse.  At this time, it is not clear what states may choose regarding this.  State budgets have been squeezed for quite some time and the practical impact of this may temporarily reduce spending. However, long term, the election not to provide protections for the spouse without a care need will likely result in more people with disabilities needing care in an institutional setting which ultimately will have a greater impact on state budgets.

A number of advocacy organizations are working on a bi-partisan solution to this potentially major problem; however, it is difficult to predict whether Congress will act prior to the end of the year.  Until a solution is passed, people with disabilities receiving these services should carefully review any notifications received regarding their services and be prepared for advocacy if necessary.

[i] https://www.kff.org/report-section/medicaid-home-and-community-based-services-results-from-a-50-state-survey-of-enrollment-spending-and-program-policies-report/

 

Kit KatAsk Kit Kat – End to Greyhound Racing in Florida

Hook Law Center: Kit Kat, what can you tell us about the results of the Florida election and Amendment 13, which proposed outlawing greyhound racing in Florida?

Kit Kat: Well, on November 6, 2018, 67% of the voters in Florida overwhelmingly approved Amendment 13 which will shut down the greyhound racing industry there as of January 2021. This will put a huge dent in the greyhound racing industry nationwide, since 11 of the 17 active dog tracks in the United States operate in Florida. Dog racing has long been criticized by opponents as being extremely cruel. Dogs typically race for 2 years, and then are discarded like throwaways. Even when they are used for racing, they can be kept in cramped quarters, and let out to exercise infrequently.

The success of Amendment 13 was the result of a lot of hard work. Groups like GREY2KUSA and the Humane Society of the United States (HSUS) mobilized support, and the effort paid off. Kitty Block, acting president and CEO of HSUS commented afterwards, “ We are so grateful to the volunteers, campaign members, coalition partners, contributors and endorsers who came together in support of this historic effort to end the cruelty of greyhound racing.”

The next step is to find homes for the approximately 6,000 dogs who will need to find new homes. Adopt-a-Greyhound.org is one group who is leading the way in this effort. According to them, greyhounds make great pets. They’re used to being around lots of different people, having been handled by vets, trainers, and strangers. Also, they are easy-going, and don’t have the killer instinct. They are trained to chase a mechanical lure, but in their spare time, can be quite lethargic. If you are interested in adopting an adult greyhound, contact them or the HSUS.

(Cindy Boren, “A greyhound racing ban in Florida means thousands of dogs will need new homes,” The Washington Post, November 8, 2018)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, November 26th, 2018. Filed under Senior Law News.

Working Grandparents Raising Grandchildren May Qualify for EITC

By Amanda L. Richter, CPA

Grandparents who work and raise dependent grandchildren may be eligible for the earned income tax credit (“EITC”), which is a refundable tax credit, even if the grandparent is 65 years of age or older. This means that those who qualify and claim the credit could pay less federal tax or even receive a tax refund. To qualify, the grandchild must meet the dependency and qualifying child requirements. These requirements are the same for parents claiming the EITC.

Here are some of the basics:

To claim your grandchild as a dependent, the child must be 18 years or younger or a student under 24 years of age as of the end of the year. If the child is permanently and completely disabled, there is no age limit.

In addition, a qualifying child must live with you for more than half of the year and must be your (1) child or stepchild (or descendants), (2) brother, sister, stepbrother, stepsister (or their descendants), or (3) eligible foster children.

If your grandchild meets the above requirements, you may qualify for the credit if your income does not exceed the following amounts and have investment income of less than $3,450:

Filing Status Income Limit for 1 Child Income Limit for 2 Children Income Limit for 3 + children
Single/Head of Household $40,320 $45,802 $49,194
Married filing joint $46,010 $51,492 $54,884

 

The amount of the EITC varies by family size, for instance if you have three or more qualifying dependents, the maximum EITC for 2018 is $6,431. Families with two qualifying dependents have a $5,716 maximum credit and one qualifying dependent has a maximum credit of $3,461.

Be aware that by law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the additional child tax credit. The law requires the IRS to hold the entire refund – even the portion not associated with the EITC.

Please call our office at 757-399-7506 if you wish to discuss these rules further as they apply to your situation.

Kit KatAsk Kit Kat – Llamas & Flu

Hook Law Center: Kit Kat, what can you tell us about llamas and what they have to do with the flu?

Kit Kat: Well, it turns out that llamas are actually contributing to a new type of flu vaccine. It’s still in the preliminary stages, but the research sounds quite promising. Apparently, what is unique about llamas is that they make “an array of immune system antibodies so tiny they can fit into crevices on the surface of an invading virus,” according to Melissa Healy, a writer from the Los Angeles Times, who wrote an article on the subject. This capability is critical to developing a nasal flu vaccine which may have the added benefit of being administered only once in a lifetime! Who knew the humble llama had such capability to help humans?

Leading the way in this research is the Scripps Research Institute in La Jolla, CA. The Scripps study has international participation and partial funding from the National Institutes of Health. What the scientists there are attempting to do is design a universal vaccine against the flu. If such a thing is possible, it will no longer be necessary to design a new flu shot every season to target a specific strain. So, the scientists vaccinated the llamas to fight several types of A and B strains of flu. Next, they extracted blood samples from the llamas which contained antibodies their bodies had developed to fight the flu. They found four extremely small antibodies, which had the ability to destroy many different types of flu. They dubbed these “nanobodies.” Then, here is where the scientists got creative. They realized that it might be difficult to transfer these nanobodies to humans, so they developed a gene delivery system to transfer the nanobodies to humans. This is complicated stuff, so more trials will have to be conducted on other animals and in humans, but the process appears to be sound and shows great promise. Stay tuned for further updates on this fascinating subject. (Melissa Healy, “Llamas may be  key to flu vaccine,” The Virginian-Pilot, November 3, 2018, p.6)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, November 19th, 2018. Filed under Senior Law News.

Beware of Arbitration Clauses in Nursing Home Admission Contracts

By Jennifer Rossettini, CFP®

A recent Court decision out of West Virginia has many trial lawyers concerned about nursing homes being able to enforce the arbitration clause in an admission contract, despite the fact that the person who signs the admission contract, usually an agent under a Power of Attorney, may not have the authority to waive a jury trial.

In the case of AMFM LLC v. Shanklin on behalf of Est. of Nelson, Ms.Shanklin, who was Ms. Nelson’s successor agent under a Power of Attorney, signed nursing home admission documents, including an arbitration agreement, on behalf of Ms. Nelson. After Ms. Nelson passed away, Ms.Shanklin, on behalf of Ms. Nelson’s estate, filed suit against the nursing home. The nursing home moved to dismiss the case from court and compel arbitration based on the arbitration agreement that Ms.Shanklin signed on Ms. Nelson’s behalf. Ms.Shanklin argued that the arbitration agreement was invalid, because she did not have the authority as a “successor” agent to sign the arbitration agreement. The West Virginia Supreme Court found that, under Section 119 of the state’s Uniform Power of Attorney Act, the nursing home properly relied on the Power of Attorney presented by Ms.Shanklin because it was without actual knowledge (1) that the Power of Attorney was void, invalid or terminated; (2) that Ms.Shanklin’s authority was void, invalid or terminated; or (3) that Ms.Shanklin was exceeding or improperly exercising her authority. The end result was that the court dismissed the case, and the parties were compelled to engage in arbitration, instead of a jury trial, pursuant to the arbitration agreement.

A similar provision is found in Virginia’s Uniform Power of Attorney Act at §64.2-1617(B) of the Virginia Code and reads as follows:

“A person that in good faith accepts an acknowledged power of attorney that has been signed in accordance with § 64.2-1603 without actual knowledge that the power of attorney is void, invalid, or terminated, that the purported agent’s authority is void, invalid, or terminated, or that the agent is exceeding or improperly exercising the agent’s authority may rely upon the power of attorney as if the power of attorney were genuine, valid, and still in effect, the agent’s authority were genuine, valid, and still in effect, and the agent had not exceeded and had properly exercised the authority…”(emphasis added).

In light of these rules, how can an agent under a Power of Attorney make sure that they are not binding their loved one/principal to arbitration when filling out those nursing home admission forms?  According to our good friend and personal injury attorney, Carlton F. Bennett, Esq., a relatively simple solution is to be sure to cross out the arbitration clauses when filling out the paperwork. Another solution is to put the nursing home on notice that the agent DOES NOT in fact have the authority to agree to arbitration by including such language in the Power of Attorney document. We encourage all of our readers to review their Power of Attorney documents to make sure arbitration authority is specifically excluded.

Kit KatAsk Kit Kat – Protecting Whales

Hook Law Center: Kit Kat, what you can tell us about what the Navy is doing to protect endangered whales off the East Coast of the United States?

Kit Kat: Well, this is interesting, and the Navy should be commended for taking these steps. What the Navy is trying to do is help save the endangered North Atlantic right whale. Back in the 1890s, the right whale was plentiful. It roamed from New England, where it fed and mated in the warmer months, to Florida where it had its young in the winter. Now the National Marine Fisheries Service estimates there are only 450 left. The right whale is not one of the more glamorous whales—it’s dark in color, has no dorsal fin, and has raised patches of rough skin on top of their heads.

What the Navy has decided to do is limit their use of sonar in the entire area the right whale frequents and limit explosions in the same areas. This represents an expansion of protected areas, so much more area is included. Sonar, especially, could be considered as a type of noise pollution. Their delicate hearing cannot take the subtle (to our ears) sonar pings. It interferes with their whale-to whale-communication, which in turn, affects their behavior. In the Jacksonville, FL area, for example, they will not conduct shock trials on ships based there Nov.15-April 15, which is calving season. Shock trials are done on new ships to test their capability to withstand underwater explosions. The Navy, will also alert any ships, even commercial ones, if they happen to see a right whale in a certain location, so that speed can be reduced in order to lessen the chance of a possible collision and to reduce undesirable noise. Navy vessels based in Hampton Roads don’t normally interfere with the right whale, because they train in much deeper water as a matter of course, which are beyond the normal migration pattern of the whale.

The Navy will also alter some of its practices in the certain areas of the Gulf of Mexico in order to protect the Bryde’s  whale. They are even more endangered than the right whale—only 100 remain. There they will limit the use of explosives, except during mine warfare  training. It is hoped these efforts will help both types of whales make a gradual comeback. The Navy should be applauded for being respectful of their seafaring neighbors and fellow mammals! (Brock Vergakis, “Navy to limit sonar; explosions in more areas off East Coast to protect endangered whales,” The Virginian-Pilot, November 2, 2018, p.1 &4)

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Friday, November 9th, 2018. Filed under Senior Law News.

Purchasing a Pre-Paid Funeral Plan is An Important Part of a Well-Rounded Estate Plan

By Emily Martin, Esq.

As you approach retirement, it is always a good idea to plan for your future, including developing a plan for what will happen when you pass away. One way to make things easier for your children and loved ones after you’re gone is to purchase a pre-paid funeral plan. This can include buying your grave plot (including closing and opening of the grave, gravestone, and any engravings that you may want), purchasing your coffin, paying for funeral home expenses, or pre-paying for cremation. Because the cost of purchasing a pre-paid funeral plan doubles every five to ten years, it is always a good idea to purchase a plan sooner rather than later. While taking care of all of this before you pass away can be a great way to take some of the burden off of your loved ones, you need to make sure that you purchase a plan that will endure beyond your lifetime, so that it will still be available after you pass away. Below are a few tips that will help steer you in the right direction:

Compare plans before you decide. According to the National Funeral Directors Association, the average cost of a funeral is $6,500 – not including extra expenses such as flowers, obituaries, and cemetery costs. What most people don’t realize is that they are not required to buy the first package the funeral director quotes them. In fact, the Federal Trade Commission requires funeral directors to provide itemized prices for goods and services. This allows you to choose what you need the most. Another good tip – you don’t have to buy every service from one funeral home. Funeral providers are not legally permitted to refuse to handle a coffin you bought elsewhere, nor can they charge an extra fee for handling a coffin they did not sell you.

Understand how your funeral plan affects your eligibility for public benefits. In Virginia, prepaid burial contracts are not considered a countable asset for Medicaid eligibility purposes as long as the burial contract is irrevocable. Purchasing a prepaid burial contract is often an important strategy to implement when planning to protect assets when you or a loved one is preparing to enter a nursing home or needs in-home care and may need to apply for Medicaid. When purchasing this type of prepaid funeral plan, it is important to notify the funeral home that you intend to purchase a Medicaid-compliant plan. It is also vital that you seek the advice of an experienced elder law attorney who will be able to explain how this type of plan works with your overall strategy to protect your assets from being exhausted in the event that you need to apply for Medicaid.

Know what will happen to your money. If you decide to pay the entire cost of your funeral plan up front rather than in installments, make sure you find out where your funds are placed and whether the funeral home will place your funds in a trust account, where it can be kept until it is needed. While the funeral home is required to disclose this information, many people fail to ask where their money is kept.

Ask about refunds and cancellations. One thing many people don’t realize is that funeral homes are not always required to give you a full refund if you cancel your plan. Read your contract carefully to learn what circumstances allow you to cancel the contract and how much money you’ll be able to recoup if you do cancel. Another good question to ask is whether the plan is transferable to a different funeral home in the event that you relocate to a different area. Finally, make sure your contract spells out what will happen if the funeral home goes out of business or comes under new ownership.

Make sure your wishes are clear to your family and loved ones. While thinking about and making plans for your death is not pleasant, it is an important step to take in order to make sure a plan is in place for when you pass away. Many people have specific wishes with regard to their funeral and death, including whether they would like to be an organ donor or whether they prefer to be buried or cremated. It is important to document these wishes, so that your loved ones are able to be sure they are doing what you would have wanted them to do. Making sure that you have an advance medical directive, in which you document your wishes for end-of-life care among other wishes, is an important part of this process. When drafting this document, which is an essential part of a well-rounded estate plan, it is important to seek the advice of an experienced estate planning attorney such as the attorneys at Hook Law Center.

Kit KatAsk Kit Kat – Animals and Workers’ Compensation

Hook Law Center: Kit Kat, what can you tell us about people who get bitten or injured through contact with an animal, and how they may or may not qualify for workers’ compensation.

Kit Kat: Well, this is a complicated issue, but I will attempt to shed some light on some of the factors which affect eligibility for workers’ compensation. Of course, this is coming from a non-lawyer, so I want to make that clear from the start. However, from my reading, this is what I have learned. In Virginia, the decision for eligibility seems to be rather narrow. The risk of a detrimental encounter with an animal must be above the general risk to the public. So, perhaps these two examples will clarify the critical issue. In the case of a carpet installer who was bitten by a snake while on the driveway of a property which had several wood piles along the sides of the driveway, workers’ compensation damages were not awarded to the carpet installer. The judge did not feel the particular house in question had an increased risk of exposure to snakes, nor did he feel that it was common knowledge that snakes inhabit wood piles. In the case of a pet store employee who was bitten by a spider, the opposite occurred. The judge, in that case, ruled in favor of the employee, because the judge ruled that the employee’s work exposed him to an unusual risk.

So you can see that each fact situation is extremely important. The field is an extremely interesting one with many, almost humorous (to the outside observer) situations. One more story to pique your interest. This is called “The Cat on Pizza Box.” In this case, a warehouse employee was bitten by a cat who was sitting on top of a pizza box. The employee went to get a piece of pizza from the box, and when he approached, the cat bit him. The warehouse was not well sealed, and there were many openings for animals like cats, snakes, birds, and even a possum had entered in the past. Because of the unusual situation where the warehouse was not well maintained which created an unsafe work setting, the employee prevailed, and he was awarded workmen’s compensation.

To read more about this fascinating subject, go to Commissioner Wesley G. Marshall’s article entitled “Bites, Nips, and Stings, Animal Encounters, “Arising Out of,” and Workers’ Compensation,” The Virginia Lawyer, October 2018, p.34-37.

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Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, November 5th, 2018. Filed under Senior Law News.

Guns and Dementia

By Letha Sgritta McDowell, CELA

A recent New York Times article highlighted a subject which is not often discussed but should be.  While gun ownership is generally on the decline in the United States, ownership is still common, and is more common among older adult men than the rest of the population in general.  Gun ownership is higher in rural areas than in urban ones. Thus, while not every household in America has a gun, there are many which do.  While discussions about guns and gun ownership are common political talk, gun ownership and possession is almost never considered when discussing dementia.  However, research has shown that since 2012, more than 100 gun-related deaths have occurred when a person with dementia used firearms within their home and, as the number of people with dementia in the US will increase, the number of injuries or deaths is likely to increase.

In the cases discussed above, the violence occurred during an episode of confusion, paranoia, delusion, or aggression.  In addition to these episodes which are often related to the cognitive impairment, suicide is not uncommon among older adults, especially those suffering from a chronic illness.  While not all individuals living with dementia will demonstrate aggression, delusion, or depression, it is impossible to predict who will.  Therefore, while planning for the future by reviewing and updating legal documents and financial plans, practical considerations should be made as well.

The conversation about gun ownership and dementia may arise in any setting and can be initiated by a professional such as an elder law attorney or financial advisor.  Many are hesitant to reveal gun ownership but, for those who do, they often don’t want to reveal locations, nor do they want to voluntarily give up possession of their firearms.  When the discussion focuses on “taking things away” for a person with a diagnosis of dementia, this may feel like additional loss of control and can be extremely unpleasant.  Instead, the conversation should be approached as one of safety.  Unfortunately, dementia can often interfere with a person’s reasoning and decision-making skills, and the person may lack insight into the potential problem.  However, when the discussion is presented as one of safety for themselves and loved ones, the conversation feels like less of an intrusion.

Once the barrier of having the discussion is breached, next is the matter of what should be done with firearms. Some may suggest simply locking up any guns in the home.  However, the Alzheimer’s Association advises that securing guns may not be enough, because a person with dementia may “misperceive danger” and force their entry into the safe or cabinet; therefore, removing guns from the home is a safer alternative.

Family members and professionals should use caution when removing firearms from a home and when advising individuals.  Many states allow the temporary transfer of a firearm to a family member without a background check but 7 states, including North Carolina, do not allow such transfers.  Individuals convicted of a felony are not allowed to have possession of a gun in any state, and states have strict laws about allowing the private sale of guns.  Some gun stores and ranges offer storage and transportation options.  If removing a firearm from a home is the option all parties feel to be appropriate, be sure to talk to an attorney about what options are available.

The issue about gun ownership and dementia is not one which has been highlighted or much explored given the publicity about other gun violence; nevertheless, it is an issue which exists and will likely increase with the aging population.  Early discussion and planning about how to manage gun ownership and dementia will increase the safety of all involved.

Kit KatAsk Kit Kat – Feline Agility

Hook Law Center: Kit Kat, what can you tell us about feline agility competitions?

Kit Kat: Well, it’s rather new, but yes, felines can compete in agility competitions. Heretofore, it was thought felines would not cooperate, but that is so untrue. International Cat Agility Tournaments (ICAT) have gained some prominence after their appearance at the famed 2016 Westminster Dog Show. Cats were even noted in a NY Times article. According to ICAT, cats are a natural for agility—they can jump 6 times their height, can run up to 30 miles per hour, and have superb short-distance visual acuity.

The nice things about feline agility competitions is that participants do not have to be purebred. Your ordinary domestic shorthair can compete as well. According to Niki Feniak, a certified feline agility ringmaster from Hillside, NJ, a couple of domestic shorthairs won national awards this past season. She also says that a blind cat from a few years ago was a standout and completed an agility course in 32 seconds. “She followed the sound of her owner’s voice. The owner had taught her ‘up’ for when she wanted her to jump. It was amazing.”

Ideally, training for agility competitions should start early—ie., when the cat is a kitten. If the cat is older, he/she may need a little more coaxing, but as long as there is some reward at the end of the training session, older cats, too, can be taught to run and jump on command. The reward can be a nibble, but sometimes playing with a favorite toy like a feather on a string works quite well. If your cat seems to enjoy performing on command, more tips can be gleaned from checking out the websites catagility.com and agility.cfa.org. There are even some YouTube videos on the subject. Who knew feline agility had risen to this level? (Arna Cohen, “The cat jumped over the moon-Agility is not just for dogs anymore,” All Animals, September/October 2018, p. 32-33)

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Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, October 29th, 2018. Filed under Senior Law News.

4th Quarter Review of Estimated Taxes

By Amanda L. Richter, CPA

The U.S. tax system is a pay-as-you-go system, which means that individuals must make four quarterly installment payments (due on April 15th, June 15th, September 15th and January 15th) of estimated tax based on the amount of his/her “required annual payment” to avoid an underpayment penalty. The required annual payment is the lesser of:

  • 90% of your tax bill for 2018, or
  • 100% of your tax bill for 2017 (110%, for higher income individuals).

While you may not view it as major disaster if you owed some money when you filed your return – after all, you would rather have the use of the funds for as long as possible and hope to earn interest or invest the funds. But what you want to avoid is having to pay the Internal Revenue Service (“IRS”) a penalty for underpaying your taxes during the year. If you owe the estimated tax underpayment penalty, which is nondeductible, you are in effect paying the IRS interest for part of the money you should have prepaid during the year for taxes, but did not. On the other hand, if you received a large refund on your prior year return, you essentially made an interest free loan to the government – something you may want to avoid this year. If that happened, you should consider reducing the amount of withholding taken from your wages and/or the amount of estimated tax payments you make.

Let’s go over a few basic rules:

  • For 2018, there is no estimated tax underpayment penalty if your tax due on the return (total tax less withholding) is less than $1,000, or if other specified exceptions or waivers apply.
  • If the amount you owe on your individual return is $1,000+ after factoring in your withholding, the estimated tax underpayment generally will not apply if you have met your required annual payment.

Here is an example: Let’s say your 2017 tax bill was $10,000 and your tax bill for 2018 will be $20,000. You will need to prepay $10,000 during 2018 in order to avoid the underpayment penalty. (90% of 2018 tax liability = $18,000 and 100% of 2017 tax liability = $10,000. The lessor of the two is $10,000)

What happens if your 2018 tax bill is expected to be lower? Take the same scenario for 2017 but now your 2018 tax bill is $5,000. In this scenario you will need to prepay $4,500. (90% of 2018 tax liability = $4,500 and 100% of 2017 tax liability = $10,000).

Now that we are in the 4th quarter and the extended due date for individual returns (October 15th) has now passed, it’s time for a checkup! You already know what your 2017 tax liability was but you may not be quite sure what your 2018 tax bill will be due to all of the new tax law changes that went into effect this year. At Hook Law Center, we can assist you with projecting what your 2018 tax liability will be based on your current financial picture in order to help you determine whether or not changes should be made to your 4th quarter estimated tax payment. If you decide you want to tackle this on your own, make sure you review our Publication on the Tax Cuts and Jobs Act of 2017 that was issued earlier this year so that you can familiarize yourself with the new changes that will impact your 2018 return including higher standard deductions and the elimination of personal exemptions.

Kit KatAsk Kit Kat – Animal Intelligence

Hook Law Center: Kit Kat, what can you tell us about animal intelligence? I’ve always heard dogs are smarter than many other animals. Is that true?

Kit Kat: Well, there is some interesting new research from Great Britain that indicates some  refinement in what is known about animal intelligence. Stephen Lea, an emeritus professor in psychology at the University of Exeter, England, has recently published in the journal Learning & Behavior about his recent study on the subject. The study compared  dog cognition among three different groups: carnivores, social hunters, and domestic animals. Some of the animals they considered were wolves, cats, chimpanzees, dolphins, horses, and pigeons. The result: “dog cognition does not look exceptional.” What is meant by that is that there are many animals that display intelligence, however, they may not be as affectionate as dogs.

Some of the examples Dr. Lea cites are in the fact that dogs, unlike dolphins, New Caledonian crows, and chimpanzees, cannot use tools. Chimpanzees have been observed to use plant stems to dislodge termites in a piece of wood. Homing pigeons are trained to return home, even when it involves flying hundreds of miles in unfamiliar territory. “Far be it for me to suggest that pigeons are smarter than dogs; they are not intellectual giants. But if you want to get 1,000 miles, I trust a pigeon over a dog.” Horses, too, can perform complicated tasks. And cats—they have been known to return to their original home, even if lost several hundred miles away.

Dogs do stand out, according to Dr. Clive Wynne, the director of the Canine Science Collaboratory at Arizona State University, in their capacity for affection. He comments that Dr. Lea’s study is not negative about dogs, but that actually “he is putting them in context.” Dogs are intelligent, but just not any more so than a host of other animals. (Laura M. Holson, “Your Dog May Be Smart, but She’s Not Exceptional,” The New York Times, Oct. 8, 2018)

Upcoming Seminars

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Posted on Monday, October 22nd, 2018. Filed under Senior Law News.
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