Thursday, September 27, 2007


The Section of Real Property, Trust and Estate Law (formerly the Section on Real Property, Probate and Trust Law), of the American Bar Association, is holding its Fall, 2007 Continuing Legal Education meeting in Vancouver, BC, Canada, on September 27-29, 2007.

Yes, that's right, the "RPTE" Section -- not the "RPPT" Section -- is holding that meeting. That ABA law practice section has changed its name!

The change in name is noted in an announcement posted in its latest quarterly eReport:

Section Name Change

The name of the Section of Real Property, Probate and Trust Law (RPPT) has been changed to the Section of Real Property, Trust and Estate Law (RPTE). The two divisions will be Real Property Law (RP) and Trust and Estate Law (TE).

The reason for the name change is the industry’s decreased use of the word “probate” when referring to trust and estate law.

The ABA House of Delegates approved the name change on August 13th at the ABA Annual Meeting.

Look for our new Section name and logo on all upcoming materials!

On its website, the list of committees is now divided into its two divisions reflecting the new name of the Section:

And the articles in its latest posted eReport now appear under headings of "Real Estate Law" and "Trust and Estate Law".

Speaking of that eReport, there are three good articles posted relevant to the subjects of this Blog, all authored by Jim Roberts:

I am sure that they will get around to renaming the "RPPT eReport" as the "RPTE eReport" for its next issue.

Similar bar association substantive law sections in Florida, New Jersey, & Texas have not changed their names from the former ABA model. On the other hand, the practice section in Maryland is a stand-alone "Estate & Trust Law" section; and there are many other variations.

Should we, in Pennsylvania, consider changing the name of the "
Real Property, Probate & Trust Law Section" of the Pennsylvania Bar Association in a parallel fashion?

"What's in a name?
That which we call a rose by any other name would smell as sweet.

-- William Shakespeare, quoted by BrainyQuote

Wednesday, September 26, 2007

"Pet Owners Planning" and PBI Course

As a teaching aid for the Pennsylvania Bar Institute Call-In Course, "Estate Planning for Pets" scheduled for Friday, September 28, 2007, from 12 noon to 1:30 PM, I created a website, "Pet Owners Planning", available for course registrants.

A course description, with sign up information, was circulated by PBI last Friday, September 21, 2007, by email:

1.5 Total Substantive CLE Credits

Join Neil Hendershot and Professor Gerry Beyer as they explore the issues you need to know to help your clients plan for the future care of their pets. Professor Beyer is the national expert on planning for pets, as well as a recognized scholar on estate planning in general. He joins us from the Texas Tech University School of Law. This Call-In CLE will explore estate planning for pets both in Pennsylvania and nationally with a focus on Pennsylvania pet trust laws which are identical to those in the model Uniform Trust Code.

Friday, September 28, 2007; 12:00 - 1:30 pm
PBA member or member of any co. bar assn. $89/Nonmember $109

Please remember that 4 credits of the required 12 may be obtained through distance education. Distance education includes Call-In CLE, On-Line CLE and Podcasts.

Please note that only the person registered for the program may receive credit. Others may listen in, but if they wish to receive CLE credit they must register separately and call in on a different phone.

For more information about telephone seminars please see our FAQ page.

To register or receive additional information, please contact our customer service department at (800) 932-4637, or click here to register online.

Professor Beyer mentioned the course on the Wills, Trusts & Estates Prof Blog, which he authors, in a posting on September 24, 2007, entitled "Estate Planning for Pets Telephone Seminar":

PetsOn September 28, 2007, Neil Hendershot (editor of the PA Elder, Estate & Fiduciary Law Blog) and Gerry W. Beyer (Governor Preston E. Smith Regents Professor of Law, Texas Tech University School of Law) will explore this issues important to estate planning for pet owners both in Pennsylvania and nationally.

The seminar entitled Estate Planning for Pets is sponsored by PBI. Follow the link for details about the program and registration information.

The program was also mentioned by another blogger, David M. Goldman, who authors the Florida Estate Planning Lawyer Blog, in his posting dated September 24, 2007, entitled "Pet Estate Planning Seminar".

I had mentioned the need for the seminar in prior postings. See: PA EE&F Law Blog postings Learning About "Estate Planning for Pets" (07/25/07), and Pets, as Property in PA, Need Planning (07/20/07).

During the hour & a half session, Gerry & I will discuss the reasons justifying special planning for owners of pets, and the development of laws. Then we will review techniques for short-term planning (during health of the owner), disability planning (during incapacity of the owner), and long-term planning (after the death of the owner). Gerry will mention some "current events", like Leona Helmsley and her dog "Trouble". Then we will review both the "statutory" form of "pet trust" and also a more "customized" version of a "pet trust". We will finish by reviewing other provisions that can be made in testamentary documents to distribute "companion animals" into a new environment with a new owner.

I recommend that you have access to a computer when you are on the telephone, listening to the course, so you can view the online materials that Gerry & I separately prepared, and access links that we provide.

If this topic interests you (or your clients), join us this coming Friday. You can register until a few minutes before the call begins, but, if you are interested, why wait?

Tuesday, September 25, 2007

Verizon's "HopeLine": Phones in PA?

On September 19, 2007, Verizon Wireless received publicity from a press release about its "HopeLine" community service, which recently expanded to address elder abuse.

Its press release was entitled "Verizon Wireless' HopeLine Program Raises Awareness of Elder Abuse and Provides Assistance Across the Country". It was reproduced & posted on various business news services, such as here on PR Wire, here on TechWeb, and here on TMCNet.

Verizon Wireless, headquartered in Basking Ridge, New Jersey, is a joint venture of
Vodafone Group, PLC and Verizon Communications, Inc. The Verizon parent is based in New York. Verizon was formed in 2000 with the merger of Bell Atlantic Corp. and GTE Corp.; and in 2006 it completed acquisition of MCI, Inc.

Presently, m
ore than 100 million Americans connect to a Verizon network daily. I am one of those customers, both at home & at work.

Verizon maintains a significant presence in the Commonwealth through Verizon Pennsylvania. For example, its Verizon Wireless unit will provide citywide wireless access services to Philadelphia in one of the most aggressive such plans in the country. See: "Philly, Verizon strike agreement on city's wireless plans", by Marc Levy, dated December 1, 2004, posted by the Associated Press.

As to the rest of the Commonwealth, Verizon has what has been called a "right of first refusal" to provide broadband services within Pennsylvania under legislation signed in December, 2004.

Competitors & opponents then said that Verizon was legislated into "
a position of ultimate power to determine both the pricing and availability of future telecommunications services in the Commonwealth." See: "Verizon OKs Philadelphia Wi-Fi project", by Donny Jackson, posted online by Telephony Online.

Pennsylvania Gov. Edward Rendell on Tuesday signed into law HB 30, a controversial broadband bill, after receiving a last-minute assurance that Verizon Communications would not challenge a plan by the municipality of Philadelphia to provide Wi-Fi services throughout the city.

Under the new law, Verizon is required to provide broadband services--with download speeds of at least 1.5 Mbps--throughout its Pennsylvania service territory by 2015.

In return, Verizon and other incumbent carriers effectively are given the right to veto government initiatives to offer services comparable to those planned by the ILEC. * * *

Since then, Verizon's various Pennsylvania news releases indicate aggressive infrastructure development occurring both in rural areas and in heavily populated regions (such as Berks, Bucks, & Chester Counties, and southwestern Pennsylvania).

Verizon had already benefited the Philadelphia community with a named sponsorship of "Verizon Hall", a 2500-seat, specially-designed, music performance space within the Kimmel Center for the Performing Arts, which is the home of the Philadelphia Orchestra.

With this background of activity in the Commonwealth, consider the "HopeLine" program sponsored & publicized by Verizon Wireless recently. See: Descriptions of HopeLine posted by Verizon Wireless,
including Preventing Elder Abuse, History & Background, and Fact Sheet.

HopeLine collects wireless phones that are no longer being used, as well as batteries and accessories in any condition from any wireless service provider at the company’s Communications Stores nationwide. Phones that can be refurbished are sold for reuse and those without value are disposed of in an environmentally sound way.

Proceeds from the HopeLine program are used to provide wireless phones and cash grants to local shelters and non-profit organizations focusing on domestic violence prevention and awareness.

Verizon has taken a socially active stand against a common, but often ignored problem. The advent of the cell phone provided more than just convenience. It can also be an important tool in regards to safety. * * *
For an online video featuring Verizon Wireless employees speaking on the topic of HopeLine as a community service, see: Building Better Communities -- HopeLine.

The HopeLine program has been applied in a few communities nationwide to remedy elder abuse as a particular form of domestic violence.

Wireless' corporate philanthropy program, HopeLine(R), which provides wireless phones and services to victims of domestic violence, has launched initiatives and partnered with elder abuse prevention agencies across the country to raise awareness and help end this type of abuse.
The Press Release reports that, as a part of its HopeLine program, Verizon Wireless:
  • Launched a campaign in St. Louis [Missouri] entitled "Abuse Ignores Age" in which the company created brochures and posters to raise awareness of the elder abuse issue, and promoted a free, 24-hour helpline. The information was displayed in public spaces frequented by seniors including grocery stores, banks and houses of worship. * * *
  • [Partnered with the state attorney general in Ohio to raise awareness of elder abuse. Verizon Wireless printed 100,000 public-awareness posters and 200,000 educational brochures explaining various forms of elder abuse and signs of victimization. The posters and brochures were delivered to local government agencies throughout the state.
  • Worked with the Lexington County, South Carolina Sheriff's Department by using HopeLine phones in a program call S.A.F.E. (Senior Adults with Fones for Emergencies). The phones give senior citizens in their community a way to call for help in an emergency -- whether they themselves are in an emergency situation or if their neighbor is in danger.
  • Joined forces with the Mid-America Regional Council (MARC), the Wyandotte and Johnson County Area Agencies on Aging, and the Metropolitan Family Violence Coalition in Kansas to create public education campaigns aimed at raising awareness of elder abuse and encouraging victims to seek help.
  • Donated phones to the Providence House in New Jersey, which serves people over 50 in the Toms River area who are in abusive situations. Phones donated by HopeLine were used in Project Reach, which distributes an average of three phones per month to men and women who are abused.
Gosh, I don't see any projects on this list that are occurring in Pennsylvania.

There should be, considering the business that Pennsylvanians provide -- and certainly will provide in the future -- to Verizon & Verizon Wireless.

In Pennsylvania, there is no need for a privately-operated "elder abuse hotline", since one is run by state government. Indeed, most states already operate such elder abuse reporting lines, as listed by the National Center on Elder Abuse, here.

The PA Department of Aging maintains & promotes a statewide "Elder Abuse Hotline". Complaints or leads regarding potential criminal or civil elder abuse are forwarded to local offices of its Area Agency on Aging system, to the PA Attorney General's "Elder Abuse Unit", or to other appropriate advocacy organizations.

So, instead, I suggest a potential alternative project for HopeLine in Pennsylvania, derived from HopeLine's basic premise and supported by Verizon's core telecommunications business.

I suggest that Verizon provide a supply of mobile telephones and line service for the communal, supervised use of residents in selected personal care homes in Pennsylvania.

Most of these residents have few assets and little income beyond that required for their PCH expenses. Thus, they are unlikely to own mobile phones due to both initial cost & ongoing expense.

Furthermore, operators of personal care homes, who often make little profit, are unlikely to provide such service to residents. For example, see: PA EE&F Law Blog posting, "
PA DPW Closes a Personal Care Home" (09/19/07).

Yet, availability of a mobile telephone on a shared & "as needed" basis could provide numerous benefits to PCH residents, both in the facility and on trips away:
  • Calling 911 for emergency services, including the proposed statewide 911 system being studied by the PA 911 Task Force.
  • Calling general helplines, such as the CONTACT Helpline in Central Pennsylvania.
  • Reporting elder abuse complaints to the PA DoA's "Elder Abuse Hotline".
  • Reporting personal care home violation incidents to the PA Department of Public Welfare.
  • Calling relatives or long-time friends on special days, or just periodically, to maintain personal contact.
  • Communicating with health care professionals & facilities.
  • Contacting professionals or aging advocates for advice.
  • Contacting the local area agency on aging for information or assistance.
  • Checking the programs of a local senior center or other community social services.
  • Communications with the PCH staff when residents leave the PCH for short visits away.
  • Ordering takeout pizza or chinese food (Just kidding -- I wanted to see if you were still reading my list.)
I suggest that Verizon Wireless investigate a pilot program under HopeLine in Pennsylvania, in conjunction with the Pennsylvania Department of Public Welfare, to determine if there really is a need in personal care homes that could be met by limited mobile phone service.

If not, I urge Verizon & Verizon Wireless to keep looking for a need that HopeLine could meet in Pennsylvania for the benefit of our elderly residents.

Monday, September 24, 2007

"BODIES" in Pittsburgh, with Reactions

The Carnegie Science Center, in Pittsburgh, PA, announced that a touring museum exhibition, titled “BODIES …The Exhibition”, will be offered at CSC beginning October 8, 2007, through April 2008. The Exhibition stirred concerns held by the Catholic Diocese of Pittsburgh, which recently published its position.

The BODIES exhibition bears the tagline "A phenomenal look at the phenomenon we call the human body".

Its opening was promoted by CSC (one of the four Carnegie Museums of Pittsburgh) in a Press Release, dated September 6, 2007, entitled "Tickets for BODIES Exhibition on Sale September 6".

Tickets go on sale today for the highly anticipated BODIES … The Exhibition at Carnegie Science Center. Due to the overwhelming popularity and subsequent long lines for BODIES in previous cities, the Science Center will begin selling timed tickets on September 6 at ticket counters, by calling 412.237.3400 or online at

The Exhibition will open its doors October 8 in a specially designed section of the SportsWorks™ facility at Carnegie Science Center.

BODIES provides visitors with an up-close look inside the body’s systems using real human body specimens. Many of the whole-body specimens are dissected in vivid athletic poses, allowing the visitor to relate to everyday activities.

In addition, authentic human specimens illustrate the damage caused to organs by lifestyle choices, such as over-eating and lack of exercise. A healthy lung is featured next to a black lung ravaged by smoking in a striking comparison more powerful than any textbook image.

The human body specimens in the Exhibition are preserved through a revolutionary technique called polymer preservation. In this process, human tissue is permanently preserved using liquid silicone rubber that is treated and hardened.

The end result is a specimen, preserved to the cellular level, showcasing the complexity of the body's many bones, muscles, nerves, blood vessels and organs. The full-body specimens can take more than a year to prepare.

The Exhibition will be open daily from 10 am – 9 pm. Tickets can be purchased at Carnegie Science Center ticket counters, online or by calling 412.237.3400.
BODIES … The Exhibition was organized by Atlanta-based Premier Exhibitions, Inc. Some display locations in addition to Pittsburgh are noted currently on its website:
  • Domestic Displays: Branson, Missouri; Cincinnati, Ohio; Columbus, Ohio; Las Vegas, Nevada; New York, New York; San Diego, California; & Washington, D.C.
  • International Displays: Buenos Aires, Argentina; Lisbon, Portugal; & Prague, Czech Republic.
The upcoming Pittsburgh presentation is described on web pages posted by CSC:
More information about BODIES … The Exhibition can be gleaned from Frequently Asked Questions and Origin of the Specimens documents also posted by CSC.

The scheduled
BODIES exhibition stirred concerns of the Catholic Diocese of Pittsburgh. Its responses were contained in a Statement from the Diocese of Pittsburgh on "Bodies . . . The Exhibition", dated September 14, 2007.

This Statement began with a general statement about the Catholic perspective on "bodies".

It is a fundamental Catholic understanding that the human person, composed of body and soul, is made in the image and likeness of God. The Church witnesses to this in many ways, including the requirement that the bodies of the deceased be given care, dignity and appropriate burial.

The Church has long supported the donation of bodies for scientific research and educational purposes as long as the bodies are treated with dignity and are not displayed for entertainment purposes or for profit alone. It is also critical that whenever possible, the previous permission of the deceased or family members has been obtained. * * *
That Press Release then considered the upcoming exhibition, in view of the Catholic perspective on human remains:
The exhibit features dozens of preserved cadavers in posed positions, fetuses in various stages of development, and other body parts. The bodies were obtained by Premier Exhibitions from the Dalian Medical University in China, a leading international institution in anatomical studies.

BODIES … The Exhibition” has raised a number of concerns, most particularly the fact that the bodies were obtained without valid and informed consent. The bodies had been unclaimed and unidentified and were obtained by Dalian Medical University from Chinese police.

Representatives of the Diocese of Pittsburgh met with those involved in the exhibit at Carnegie Science Center to discuss the issues involved. All agreed that the educational benefits of “BODIES … The Exhibition” were clear. Additionally, the location of the exhibition allows manifold opportunities for reflection and exploration of the issues involved in the display, while making an extraordinary visual presentation of the dignity and miracle of human creation.

Our concern remained the source of the bodies, particularly when noting China’s record on human rights and mandatory abortion policies. The Carnegie Science Center supplied documentation and affidavits assuring that the bodies were of those who had died from natural causes and had been deceased and unclaimed for no less than four years. In addition, the bodies will be returned to China at the proper time for cremation or interment. Finally, we were assured that the fetuses had died naturally in utero and were not the result of abortions. * * *
Then followed the Diocese's recommendation to its members:
The Diocese of Pittsburgh recognizes the extraordinary opportunity this exhibit can provide in teaching on health issues, poverty and justice, and the dignity and sacredness of every human life.

Bodies…the Exhibition” is also being held in the proper educational setting in a non-profit institution. Serious efforts will be undertaken to work with the Carnegie Science Center to provide further information and dialogue on the ethical and moral teachings of the Church concerning the human body. We hope that other faith communities will do the same.

With the assurances that the affidavits provide over the source of the bodies and fetuses, and the understanding that it is morally ethical that bodies unclaimed over a definitive period of time can be used for medical study and education, the Diocese of Pittsburgh concludes the following:
1. "BODIES … The Exhibition” can provide worthwhile and effective opportunities to promote learning and to explore issues in the natural sciences, morality and spirituality;

2. “BODIES … The Exhibition” is certainly not appropriate for all audiences. Individuals in general and parents in particular must consider their own and their children’s sensitivities when determining whether or not to attend the exhibit;

3. The discussion generated in the public arena in anticipation of this exhibit is a valuable one that has raised serious questions about the dignity of the human person and how that dignity is expressed, protected and promoted. We applaud this public discourse on a matter so important to the fostering of a good society. We encourage continued dialogue on these important topics and welcome the opportunity to participate in them over the course of the exhibit’s stay in Pittsburgh.
I agree that there should be public dialogue on such issues. This dialogue should include the important related topic of "end of life" treatment & decision making. Other denominations conduct such discussions presently. See: PA EE&F Law Blog post, "UCC to Study Physician-Assisted Death" (June 29, 2007).

The last posted pronouncement by the Catholic Bishops of Pennsylvania about "living wills" occurred more than fourteen years ago. See: "Living Will for Proxy and Healthcare Decisions. (June, 1993). This predates significant Pennsylvania court decisions on these issues.

With the passage of Act 169 of 2006, effective on January 29, 2007, as new Chapter 54 ("Health Care"), of Title 20, of PA Consolidated Statutes, this publication also predates a sweeping change in Pennsylvania statutory law.
See: PA HealthCare DecisionMaking website, and this Blog's "tag" for "End-of -Life Care".

Perhaps a starting point for an updated statement for Catholics would be the statement published by the Catholic Bishops of Florida, dated January 1, 2005, entitled "Understanding the Catholic Declaration on Life and Death".

The Catholic Declaration on Life and Death is a health care advance directive for Florida’s Catholics and is approved by the Bishops of Florida. This directive conforms to both Florida law and the teaching of the Church.
Despite that relatively recent statement of faith & law, the Florida Catholic Conference continues to explore these issues at its Statewide Florida Respect Life Conference, scheduled for October 12-14, 2007. See: "Respect Life: Witnessing the Sacredness of All Life" brochure (243 KB, PDF, 4 pages). That Conference begins with a session entitled "Theology of the Body".

Representatives of The Vatican also have made statements about the role of a "living will" in end-of-life decision making. See: PA EE&F Law Blog posting "
Vatican Favors Living Wills" (11/28/06). See also: "A Catholic Guide to End-of-Life Decisions -- An Explanation of Church Teaching on Advance Directives, Euthanasia, and Physician-Assisted Suicide", posted by Life Issues, as reproduced with permission from the The National Catholic Bioethics Center; and also, "End-of-Life Ethics -- Preparing Now for the Hour of Death", by Kenneth R. Overberg, S.J., posted by in the August, 2006 issue of the American Catholic Newsletter.

[Note: I reference these resources only as an an observer, being Protestant.]
Perhaps the upcoming discussions initiated in Pittsburgh around the BODIES exhibition could lead into additional discussions among Catholics in our state, that might manifest in posted guidance about end-of-life decision making under Pennsylvania's new law.

UPDATE: 09/24/07:

After posting this earlier today, I came across additional news reports or editorials regarding the BODIES exhibition. See:

Friday, September 21, 2007

"Win-Win" Way to Sell Your Life?

Following is another article on a topic relevant to this Blog, written by a law student in the Elder Law class (Fall, 2007) at Widener University School of Law (Harrisburg Campus), as edited & revised by me.

The topic: Expansion of the "viatical settlement" market for life insurance into "life settlements".

Selling your life

By David Liebhaber
(edited & revised for online posting by Neil Hendershot)

It is reported that well-financed companies, such as Credit Suisse First Boston and Deutsche Bank, and wealthy investors, like Warren E. Buffett, are spending billions to buy life insurance policies that insure the lives of elderly policyholders.

Why would sophisticated companies and individuals make such an investment?

The 2000 United States Census had reported that an annual premium cost for $6 million of life insurance coverage for a person 80 years of age is approximately $400,000. But if an 80-year old's personal circumstances have changed to exert increased financial pressures, can that level of premium payment be sustained?

Some companies and investors are able and willing to meet such obligations -- as an investment with an uncertain term. Some savvy business investors have calculated the risks and concluded the outlay in premiums would be worth the potential payoff when the insured dies.

How does it work?

Let us take a hypothetical elderly gentleman, Mr. Smith. He is an 82-year-old man in good heath (for his age). He is retired and now receives annual income of $40,000 from social security and his pension plan. But Mr. Smith previously had acquired life insurance to benefit his heirs big time -- in the range of $6 million.

The insurance company now is charging that hefty annual premium. On his retirement income, he can't afford it, right? Or could he?

Selling existing life insurance policies is not new. In some situations, it serves social purposes and also meets the parties' personal needs. See: "Selling Your Life Insurance", Fact Sheet 208, posted by AIDS InfoNet.

The concept is known as a "viatical settlement" on a existing life insurance. The principles are explained in an online article entitled "
Selling Your Life Insurance Policy --Understanding Viatical Settlements", posted by the National Association of Insurance Commissioners.
A viatical settlement is the sale of a life insurance policy to a third party. The owner (viator) of the life insurance policy sells the policy for an immediate cash benefit. * * *
There is an established market for "viatical settlements". See, for example, the website "Sell Your Life Insurance Policy", posted by one, among many, of the commercial entities involved in this market.

Financial and investment advisors also participate in the process.
See: "When Your Life Insurance Is A Pot Of Gold", by Jeffrey D. Voudrie, CFP, dated Nov. 15, 2005, posted on the website of the Senior Journal:
Don’t cancel your life insurance policy without reading this first! Depending on your situation, you may be losing tens of thousands of dollars if you do. If you have a life insurance policy that you no longer can afford or need, consider selling the policy. Read on to find out how. * * *
But this niche, secondary market has outgrown its original intended purpose, according to one commentator/blogger, Richard Reich, who wrote about it on his LifeInsure blog on November 16, 2006:
This business [involving viatical settlements] has now grown beyond the original small market to an ongoing large market described by the Chicago Tribune as the $13 billion secondary life insurance market and one promoted by insurance agents.

Recently some abuses have been investigated by the “ever diligent” Elliot Spitzer for the potential abuses by a company in this business called Coventry First, LLC a large buyer of life insurance policies.

As the Chicago Tribune quoted Coventry: ” Coventry issued a strong denial, arguing that its existence has helped break insurance companies’ hold on policy owners.”

Here’s some advice I agree with and again quoted from the article: "Policy owners need to determine if a life settlement is in their best interest in the first place.” * * *
A variation on the "viatical settlement" was the subject of an article published by Business Week on October 31, 2005, entitled "Wanted: Your Life Insurance", with the byline Investors are keen to offer "life settlements" -- Seller beware.
Remember the hard sell you got when you bought that insurance policy 20 years ago?

Well, times have changed. It's quite possible the agent who sold you that policy now represents investors who want to buy it.

They'll pay you a lot more than you could get from surrendering it to the insurance company, though the sum will be much less than the death benefit. * * *
What if, as a "life settlement", an investor would agree to pay Mr. Smith’s yearly $400,000 annual premium in conjunction with a further contract. This would be the deal: If Mr. Smith should die during that first year, the insurance company would pay Mr. Smith's designated beneficiaries the $6 million, subject to repayment by the beneficiaries of the premium advanced by the investor, plus 17% interest, for a total of $468,000. Thus, the beneficiaries would net $5,532,000.

But, if Mr. Smith would survive that first year of the arrangement, then the deal would give Mr. Smith an option: either sell the $6 million policy to the investor for $2 million then, or continue with the annual premium payments under the same arrangement, always subject to that, or an adjusted, interest rate. The option chosen would then apply throughout the rest of Mr. Smith’s life, until the policy would "mature" and its benefits would be claimed, subject to the investor's recovery provisions.

If Mr. Smith needs or wants the money quickly, he could “cash out” his policy and get the $2 million from the investor. But, if he does not need the money immediately, he could allow the investor to continue paying his premiums for the rest of his life. His designated beneficiaries will receive a diminishing amount from the $6 million payout at Mr. Smith’s death.

A nascent, but growing, and largely unregulated market has developed around investors who are hoping to make money from a large generation of Americans who are reaching retirement age.

Insurance executives point out that this market may cripple their industry and make life insurance for the elderly nearly extinct. They argue that insurance companies will no longer be able to afford to insure the elderly due to an increase in the number of policy holders and an increase in payoffs.

Insurers are worried because they count on many customers to cancel their life insurance policies before they die. This may occur because dependent children grow up, because pensions supplant wages, or because the policy premiums become too expensive. If far more policies are maintained and ultimately result in payouts, the insurance business becomes much less profitable.

Insurance executives say that this emerging market could be ruinous to the industry as a whole. Indeed, industry analysts say they expect the cost of life insurance to rise as companies prepare to pay out more claims. Over the next decade, the insurance industry could be forced to pay out unexpectedly more than $100 billion in death benefits as spin-life policies come to maturity, investors estimate.

Just as with "reverse mortgages" using one's home as an asset to lien, many people have come to rely on selling their policies to provide urgently needed money for medical care and living expenses when their income declined or their savings disappeared.

In such an unorthodox matching of contrary interests based upon a highly-complex life insurance arrangement, there is room for shoddy agents, unscrupulous marketers, and outright swindlers to work much harm.

Specifically, this speculation or “spin-life” market could be dangerous to the elderly. The deals are so lucrative to the investors and their agents, it is reported that older people are being wooed aggressively to participate.

Fox example, in Florida, investors sponsored free cruises for seniors willing to undergo physical exams and apply for life insurance while onboard. Spammed messages and blanket mailings containing solicitations for such arrangements are received by millions of the elderly.
An elder individual who is not careful may agree to such a plan without an understanding of the details of how it works. And once the commitment is made, it is difficult to undo.

Elderly individuals could even be victimized by their own named beneficiary.
Let us assume that Mr. Smith's son convinced him to maintain or take out such a life insurance policy, based on the son's promise to pay the policy premiums in exchange his nomination as the policy's beneficiary. Later, the son might assign his rights to one of these investment firms in the second year, leaving Mr. Smith with nothing.

And consider the larger question of social policy: Does such an arrangement exploit the elderly, where the interests of the investor clearly favor Mr. Smith's early demise?

In other words, is there really any "win-win" way to sell your life?
For a detailed examination of such insurance buyout arrangements and their effects -- for the individual, for the industry, and for society -- read the excellent article "Late in Life, Finding a Bonanza in Life Insurance", by Charles Duhigg, published on December 17, 2006, in The New York Times, which was a primary source for the article above.

Update: 12/27/07:

In late November, 2007, The San Francisco Weekly published an extensive article reviewing such insurance arrangements on the elderly. The author labeled the arrangement -- as to one investigated company --an "Elder Insurance Scam". See: "
Roll of the Die - Human Life Speculators Bet on Elder Deaths" (11/28/07), by Matt Smith.

The article quotes an offer made to elderly
"We pay your monthly premium and will be the beneficiaries of your policy," the ads declared. "IN RETURN, YOU RECEIVE A LUMPSOME [sic] OF $120,000 to $150,000 within 60 days! All you need to do is pass the physical examination (again, FREE of charge), and you're set."

But beware, warns the article. There is far more to this arrangement than that simple offer.
The practice of reselling life insurance policies to strangers began with the onset of the AIDS epidemic in San Francisco, when relatively young sufferers condemned to death by the disease sold life insurance policies to investors to obtain money during their final years. The practice has evolved into an industry called "viatical settlements," in which people with terminal illnesses sell their life insurance benefits to brokers.

Entrepreneurs have expanded this business to include policyholders who haven't been diagnosed with terminal illnesses, calling this line of investments "life settlements."

Lately, the business has expanded further still to include people who don't yet have life insurance policies, but are encouraged to take out new, very large ones specifically for the purpose of reselling them. * * *

Entrepreneurs in this line of business say it has the humanitarian effect of providing money to seniors during what may be a time of great need.

Detractors, however, call stranger-originated life insurance a macabre business in which investors, brokers, and speculators sit around hoping people they've bet on will die. Industry experts I've spoken with said they haven't heard of any murders associated with this business practice. But many find it disturbing just the same. * * *
Update: 02/26/08:

This posting was cited by Donald E. Kelley in his review of software that calculates the values in life settlements. See: "Life Settlement NumberCruncher -- Software designed to help you decide whether to keep or settle life insurance policies", posted on February 14, 2008, by Trusts & Estates as a "Technology Review":
As wealthier clients age, there may come a time when they need to decide whether to continue paying premiums on a life insurance policy or dispose of the policy through a life settlement.

These days, even Wikipedia is claiming that: "A growing number of experts now believe that informing clients about offering life settlements should fall under the fiduciary duty of a financial advisor." During the estate-planning process, this concern extends to other advisors, such as attorneys and accountants.

The new Life Settlement NumberCruncher program by Steve Leimberg and Mike Weinberg is an excellent tool that helps you evaluate whether to keep or settle a policy.

The secondary life insurance market has exploded in recent years. It typically involves the insured/policy owner, the insurance agent or broker, the life settlement provider (who assembles and prices the deals) and the funder (such as a hedge fund.)

For a quick description and analysis of the secondary life insurance market, see Jay Vadiveloo (Deloitte Consulting), "The Life Settlements Market, an Actuarial Perspective on Consumer Economic Value," ACORD LOMA Life Insurance Forum (May 23, 2006).

The market for life settlements targets situations in which there are large policies and elderly insureds with impaired mortality. Life Settlement NumberCruncher will help you address the numerical component of the decision to retain or sell the policy. This program also should help you fulfill your professional (and perhaps even fiduciary) responsibilities to give well-reasoned responses if a client consults you regarding an offer to purchase such a policy or asks later why you didn't recommend a life settlement -- or if, after the client's death, the policy beneficiaries question why you recommended a life settlement.

The New York State Insurance Department -- "Life Settlements -- Top Ten Questions" and "Life Settlements -- Life Insurance Rescue" from the Quatloos website help explain the life settlement process. For a description of the life settlement process and a discussion of the pros and cons of life settlements, also see the PA Elder, Estate and Fiduciary Law Blog (Sept. 21, 2007). And see J. Alan Jensen's and Stephan R. Leimberg's, "Stranger-Owned Life Insurance," ACTEC Journal, Fall 2007, at p. 110, and James C. Magner & Stephan R. Leimberg's, "Life Settlement Transactions: Important Tax and Legal Issues to Consider," Estate Planning (April 2007). * * *

Wednesday, September 19, 2007

PA DPW Closes a Personal Care Home

On September 16, 2007, in an article entitled "38 people displaced as Pa. officials close personal care home", the Centre Daily Times reported the closure by the PA Department of Public Welfare of a personal care home due to safety violations.

The state Department of Welfare shut down a personal care home due to safety concerns, moving its 38 adult residents to other housing, according to county officials and employees at the home.

The closure came Friday after at least three days of inspections at Whispering Pines, a privately run, family-owned home, said Troy Zimmerman, 32, son of owner David Zimmerman.

The state's complaints included the condition of a fire-alarm system and the strength of a wood-plank bridge that must be crossed to get to the home, said Troy Zimmerman and his sister, Heather.

State officials said the bridge would collapse if fire trucks had to cross it, said Zimmerman, who is also a cook at the home. He disputed that, however, saying the bridge can carry a tractor-trailer or an 18-ton piece of heavy equipment. Zimmerman also said it could have been made sturdier in a single day. * * *

Whispering Pines residents need assistance for their physical or mental well-being. * * *

The county Office of Aging participated in the shutdown Friday because of its role as ombudsman for elderly residents, Exarchos said.
The Whispering Pines Retirement Home had been fined in 2003 for violations regarding disposal of hazardous materials. See: DEP Press Release, "DEP Fines Whispering Pines Personal Care Home $3,000 For Infectious Waste Violations" (2003):
Department of Environmental Protection (DEP) Regional Director Robert Yowell today announced that DEP has fined Whispering Pines Personal Care Home, located in Boggs Township, Centre County, $3,000 for the illegal disposal of infectious waste that was discovered at Bald Eagle State Park in March.

“The improper disposal of infectious medical waste is not something DEP takes lightly, and finding used hypodermic needles at a state park is a serious concern,” Yowell said.

A Bald Eagle State Park employee found a cardboard box containing the infectious waste at the park on March 26. Besides used needles, there also was a hand-written note in the box with insulin instructions for a diabetic resident of Whispering Pines Personal Care Home. * * *
The Centre County Times published a follow-up article on September 18, 2007, entitled "Violations plagued home", by Anne Danahy, which provided more details:
Several serious problems coupled with a history of violations were behind the state’s unusual decision Friday to immediately shut down a personal care home in Boggs Township, according to the Department of Public Welfare.

The department closed Whispering Pines, citing malfunctioning fire alarms, a roadway bridge in need of repair, improperly fencing in a resident’s porch and other code violations.

The family that runs the home thinks the problems were fixable and the decision was unfair. But a DPW spokeswoman said a history of noncompliance at Whispering Pines raised concerns.

“A lot of those complaints were repeat violations, which is very problematic, and there were also serious violations,” said spokeswoman Stacey Witalec. “They all build up to a very dangerous environment for people to live in.”

Witalec said Whispering Pines’ owners have 10 days to appeal the decision.

Troy Zimmerman, son of the owner, defended the facility and how it is run. But, he said, his family will probably not try to reopen the home as a personal care facility.

Instead, he said, they can continue to have three privately paying special care residents live there “without state regulations and all the baloney that goes along with it.” He said the home can also have boarders.

The privately run facility is one of 15 personal care homes in Centre County. It had 38 residents as of Friday and was licensed to have 58. Zimmerman said his father, David

Zimmerman, has run the home for 26 years and it housed many special-needs residents and people without family. He said the state pays $900 a month for a resident, and the home was just breaking even. * * *

Zimmerman said he thinks the state was looking for a reason to close the home and picked problems with the bridge as a reason. And he said the home has been spraying to get rid of flies and has planks that could have been used to fix the bridge.

“They didn’t give us that opportunity. They just came in and shut us down,” Zimmerman said. * * *

Witalec said more facilities are being closed under stricter regulations that took effect in October 2006. But a sudden closure like that of Whispering Pines is uncommon.
Because DPW regulates personal care homes, it offers consumer resources & licensing information on its website under the heading "Personal Care Homes".
The Department of Public Welfare strives to give older Pennsylvanians and people living with disabilities the freedom to live in or near their homes, near or with their families and friends, in their communities where they want to live and where they can contribute best to society.

The links on this page provide information on a range of options, services and funding sources for home and community based services.
DPW also offers a list of licensed personal care homes, searchable by county, here.

The regulations presently applicable to personal care homes are found in the Pennsylvania Code, Chapter 2600 ("Personal Care Homes").

However, new Pennsylvania laws were adopted in July, 2007, regarding "Assisted Living Facilities". These laws will result, eventually, in new regulations applicable to personal care homes. See: PA EE&F Law Blog posts, "PA's Act No. 56 on Assisted Living Facilities" (07/26/07), and "PA's "Assisted Living Facility" Bill (likely, Law)" (07/16/07).

These laws were adopted following publication in March, 2007,
by The Philadelphia Inquirer of a scathing investigative series about personal care homes in the Commonwealth, and following initial efforts by DPW to address such concerns. See: PA EE&F Law Blog post "PA DPW's Plan for Personal Care Homes?" (04/16/07).

In the meanwhile, any objectionable or suspicious incidents occurring at personal care homes still can be reported for investigation using a form posted online by DPW.

Tuesday, September 18, 2007

CMS Offers Caregiving Presentation

The Centers for Medicare & Medicaid Services will offer a live broadcast program on Wednesday, September 19, 2007, from 1:00 - 3:30 pm, at regional locations on the subject "Supporting Caregivers Across the Life Span".

The broadcast will deliver the program about caregiving via satellite to various link sites around the nation at no cost to registered participants.

CMS stated two objectives for the presentation:

1) Bring greater awareness and sensitivity to the challenges in caregiving.

2) Improve the coordination of resources and services for caregivers, providers, and partners.

This is a general description of the presentation:
The New Freedom Initiative (NFI) Subcommittee on Caregiving presents this broadcast designed to bring awareness to the range of programs and services the Department of Health and Human Services (DHHS) offers that support caregivers across the lifespan.

NFI is a government-wide effort to eliminate the barriers that prevent people with disabilities from participating in community life.

A panel of experts will provide information about these programs to increase knowledge of partners and providers, and improve service delivery for caregiving Americans.
HHS & CMS already provide resources online regarding "caregivers":
The presentation on Wednesday afternoon, September 19, 2007, offers these speakers and their topics, in order of appearance:
  • Kerry Weems, Acting Administrator for the Centers for Medicare & Medicaid Services, and Josefina Carbonell, Assistant Secretary for Aging for the Administration on Aging, will introduce the DHHS programs that support caregivers across the lifespan.
  • Dr. Margaret Giannini, Director, DHHS Office on Disability, will provide an overview of the New Freedom Initiative
  • Gail Gibson-Hunt, National Alliance for Caregiving, will set the current context for caregiving in the United States.
  • Rick Greene, Administration on Aging, will describe and explain the National Family Caregiver Support Program at AoA, including program background, new eligibility requirements, services provided, and how to access these services.
  • Susan Hill, Centers for Medicare & Medicaid Services, will discuss the home and community based Medicaid waiver program and its impact on family caregivers.
  • Susie Butler, Centers for Medicare & Medicaid Services, will review Medicare prescription drug coverage, preventive services, Medicare Advantage, and new developments in “My Health. My Medicare.”
  • Gary Quinn, Indian Health Service, will describe the caregiver support programs within the Indian Health System as well as programs inside and outside tribal communities.
  • Yvonne Jackson, Administration on Aging, will summarize the Native American Caregiver Support Program at AoA, including its mission, eligibility requirements, and services provided through the program.
  • Faith McCormick, Administration on Developmental Disabilities, will discuss how caregivers for persons with developmental disabilities can be supported and access available resources.
  • Diana Denboba, Health Resources and Services Administration, will discuss HRSA’s support for family caregivers of children with special health needs.

Additional information about the presentation & its broadcast is available here. Also, CMS made available online a brochure for the program: New Freedom Initiative Caregiver Satellite Broadcast Flyer (PDF, 13MB).

You can register up to 30 minutes before the presentation using this link. Registration occurs under an organizational affiliation, with a site selection.

These are the viewing sites available in Pennsylvania:

  • Altoona -- James E. Van Zandt VA Medical Center, 2907 Pleasant Valley Boulevard, Altoona, PA 16602-4377 (814-943-8164)
  • Butler -- VA Medical Center, 325 New Castle Road, Butler, PA 16001-2480 (724-287-4781 or (800-362-8262)
  • Coatesville -- VA Medical Center, 1400 Black Horse Hill Road, Coatesville, PA 19320-2096 (610-384-7711)
  • Erie -- VA Medical Center, 135 East 38 Street, Erie, PA 16504 (814-868-8661 or 800-274-8387)
  • Lebanon -- VA Medical Center, 1700 South Lincoln Avenue, Lebanon PA 17042 (717-272-6621 or (800-409-8771)
  • Philadelphia -- CMS Regional Office, 150 South Independence Mall West, Suite 216, Philadelphia, PA 19106 (215-861-4304)
  • Philadelphia -- VA Medical Center, University and Woodland Avenues, Philadelphia, PA 19104 (800-949-1001 or 215-823-5800)
  • Pittsburgh -- Allegheny General Hospital, 320 E. North Avenue, Pittsburgh, PA 15212 (412-359-3271)
  • Pittsburgh -- VA Pittsburgh Healthcare System, H. John Heinz III Progressive Care Center, Delafield Road, Pittsburgh, PA 15260 (866-482-7488 or 412-688-6000)
  • Pittsburgh -- VA Pittsburgh Healthcare System (Highland Drive Division), 7180 Highland Drive, Pittsburgh PA 15206 (412-365-4900 or 866-4VA-PITT)
  • Pittsburgh -- VA Pittsburgh Healthcare System (University Drive Division), University Drive, Pittsburgh, PA 15240 (866-482-7488 or 866-4VA-PITT)
  • Wilkes-Barre -- VA Medical Center, 1111 East End Blvd., Wilkes-Barre PA 18711 (570-824-3521 or (877-928-2621)

Other locations nationwide are listed, current as of September 17, 2007. See: Caregiver Satellite Broadcast Downlink Sites (PDF, 168KB).

This presentation demonstrates the importance placed by HHS & CMS on the role and services of the caregiver -- a role that will grow in importance as the population ages.

Update: 09/17/08:

CMS will launch a new online resource directed towards caregivers on September 18, 2008.
See: PA EE&F Law Blog posting New "Ask Medicare" Caregiver Tools (09/17/08).

Monday, September 17, 2007

"Boomer Moments" on NPR

National Public Radio mentioned the maturing "boomers" again today, September 17, 2007, in a Digital Culture spot, entitled "Social Networking Sites for Boomers Blossom".

Morning Edition, September 17, 2007 · New social networking Web sites vying for screen time are targeting the older set. These sites are aiming to grab the attention of people who find that joining or feels like crashing their kids' party.

The gist of the audio article is that the aging "boomer" generation is healthy, active, social, technologically attuned, and relatively wealthy. These characteristics attract marketers to its members.

These marketers include the creators of online social websites, like Myspace and Facebook, which have been promoted to a younger set. Hear also, Social Networking on the Web Grows Up (Jun-27-2007), on NPR's "Talk of the Nation".

NPR has featured other activities -- some offbeat indeed -- of the "boomer" generation in segments broadcast recently on its "Talk of the Nation" series.

Rather than having a "senior moment", try having a "boomer moment" in a new activity:

  • Can Exercises Help Us Hold On to Our Memories? (Sep-03-2007)
  • Doctors tell us to exercise our bodies, but what about our brains? Crosswords are said to help with memory, and new video games promise to give your mind a workout. Does any of it work?
    • A List of To-Dos Before You Die (Aug-28-2007)
    • Life lists are becoming more popular as Americans seek meaningful ways to spend their time, energy and money. Aspiring artists, sky-divers and travelers are increasingly putting their life goals down on paper — and on the Internet. List-makers say that "To do before you die" lists have changed their lives.
    • Tattoos No Longer Reserved for the Rebellious (Aug-02-2007)
    • Tattoos were once a signature mark of the disaffected and dangerous, but in recent years, body art has moved into the mainstream. Guests and callers discuss how tattoos became trendy, and whether employers need to re-think their policies about visible tattoos in the workplace.