Wednesday, April 30, 2008

Resource Links Updated on PA EE&F Law Blog

Recently, I updated and expanded links for Pennsylvania online Register of Wills and Orphans' Court Division resources, as listed on the right side column of this PA Elder, Estate & Fiduciary Law Blog.

Those links now include:

  • PA Orphans' Court and Register of Wills forms,
  • PA Model Account forms,
  • PA Department of Revenue Inheritance Tax forms, &
  • Websites of County Registers of Wills in Pennsylvania.
PA Orphans Court and Register of Wills Forms:

In 2006, the Pennsylvania Supreme Court, through its Administrative Office of Pennsylvania Courts, issued new uniform Orphans' Court forms for practice before the Registers of Wills and the Clerks of the Orphans' Court Divisions, in certain standard matters, including guardianships, estate probate, fiduciary accountings, and audits & administrations. For background, see: PA EE&F Law Blog posting "New Uniform Orphans' Court Forms in PA" (10/18/06).

The forms originally were provided by AOPC online (as linked in that prior posting) in a graphical PDF format only. Thereafter, AOPC provided fill-in PDF formats for each, which are now linked from the Orphans' Court Procedural Rules Committee website, under the heading "Forms".

In this Blog's sidebar, I have retained the links to the original graphical forms (which the AOPC website no longer list), and also included links to the newer fill-in forms. See both under this Blog's sidebar heading, "PA ORPHANS' CT & REG/WILLS FORMS (PDF, per AOPC)".

PA Model Account forms:

In 2007, the PA Supreme Court mandated model forms of fiduciary accounts for use in the Orphans' Court Division. These are also included in this Blog's sidebar, under the heading "PA OC ACCOUNTING FORMS (per AOPC)".

For background & relevant links about the Model Account Forms, see prior PA EE&F Law Blog postings:
PA Department of Revenue Inheritance Tax forms:

Under the heading, "PA INHERITANCE TAX: INFO & FORMS", I posted links to the most commonly-used Pennsylvania Inheritance Tax forms & instructions, in both graphical and fill-in PDF formats where available, as posted by the PA Department of Revenue.

There are other forms of a more unusual or specific nature, all of which can be accessed from PA DOR's Forms & Publications: Pennsylvania Inheritance Tax webpage.

Websites of County Registers of Wills in Pennsylvania:

I just added, under the heading "PA REGISTERS OF WILLS WEBSITES", a list by county, of those local registers of wills offices that maintain separate webpages or websites. This list was compiled by Daniel B. Evans, Esq., of Philadelphia, PA, and is used with his permission.

His complete online list of Registers of Wills, posted on his Pennsylvania Estate & Trust Cybrary, includes those offices' addresses & telephone numbers, and also lists links for their fee schedules & forms, where posted online by a local office.

Note that a few counties/judicial districts do not have webpages or websites dedicated to their registers of wills; and so that county's general website should be viewed instead.

These new or updated sidebar listings supplement other, prior Blog sidebar listings, which include:
  • SEARCH THIS BLOG
  • RSS FEED VIA EMAIL
  • CONTACT DATA
  • LABELS FOR PA EE&F LAW BLOG TOPICS
  • NOTABLE LEGAL BLOGS
  • PA JUDICIAL LINKS
  • PA OFFICIAL LAW & GOVERNMENT LINKS
  • PA ESTATE PLANNING COUNCILS; & MORE PA EPCs
  • PA PROBATE, ESTATES & FIDUCIARIES CODE
  • PA LAW SOURCES
  • CONTACT NOTICE; & SITE USAGE NOTICE
  • PA EE&F LAW BLOG ARCHIVE (by Month & Year)
Update: 05/15/08:

I noticed that my selected graphic for this posting was not entirely appropriate. The words on the scroll are written in German.

Well, as a "Hendershot" -- and therefore being of distant Teutonic background myself -- I am too proud to change the graphic. So there.

[Newkirk and Carter are found near the Stalag 13's fence]
Colonel Klink: Schultz, into the cooler they go.
Throw away the key.
Carter: Don't we get a trial or anything?
Colonel Klink: This is Germany.
Although I do appreciate your sense of humor.

-- Memorable quotes from "Hogan's Heroes" (1965)

Posted by Unknown on Wednesday, April 30, 2008

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Tuesday, April 29, 2008

Financial Planning "Through the Years"

On April 9, 2008, the Janus Report: Investor Newsletter posted an article online entitled "Through the Years -- Financial Planning for Each Life Stage", by David Alexander.

I knew that David was writing the article for Janus Capital Group, since he interviewed me by phone in January as a source, and then he sent me a draft before finalization.

The article can be accessed on the Janus website, under the "Inside this Issue" tab of its Investor Newsletter home page.

Other current articles posted by Janus include: "A Happy Medium"; "Time to Fuel your IRA"; "Smart Growth"; and "Investing for College".

Janus also offers various "Investment Tools & Calculators" on its website for public use , as well as primers on the topics of education financing, personal investing, retirement saving, portfolio management, and more.

The author of the article consulted two sources to illustrate his ideas. For the financial aspects, he interviewed Jonathan Pond, who is a public television host and the author of such books as You Can Do It! The Boomer's Guide to a Great Retirement and Grow Your Money-Plan, Save and Invest. For the legal aspects, he interviewed me, identified as "an estate and fiduciary law attorney with Goldberg Katzman, P.C., in Harrisburg, Pa., and an adjunct professor at the Widener University School of Law."

In considering "what makes people financially successful," Jonathon Pond identified five elements:

  • living beneath your means;
  • investing wisely;
  • avoiding serious mistakes between now and the time you retire;
  • being adequately insured; and
  • never borrowing to buy a depreciating asset."
The author suggested a sixth factor: "maintaining a flexible perspective and being willing to adapt your strategies over time in response to changing conditions."

The article then specified, with examples, various elements of a sound financial plan, stretching across four life stages.
  • Young Adult (18-30)
    • Establish good credit and avoid excessive debt.
    • Invest aggressively for retirement, taking. advantage of compound growth.
    • Buy a first home and build equity.
    • Consider crafting a will and health directives.
  • Middle Adult (30-45)
    • Create an estate plan.
    • Buy adequate life and disability insurance.
    • Keep investing as much as you can.
    • Save for your children's college.
  • Pre-Retirement (45-65)
    • Leverage peak earning years to build financial security.
    • Shift retirement savings as necessary.
    • Review estate plans regularly as assets grow and to reflect changing life circumstances.
  • Retirement & Beyond (65+)
    • Appropriately rebalance assets to manage risk.
    • Plan portfolio and Social Security distribution strategies.
    • Take action to minimize estate taxes and facilitate wealth transfer to descendants.
    • Make sure health insurance is adequate.
My comments noted that "[t]he legal frameworks you use -- wills, trusts, health directives and guardianships for minor children -- don't change * * *. But the accumulation of substantial assets and the increased possibility of health issues make it imperative that estate concerns are adequately addressed."
"Perhaps the most distinctive aspect of growing older is a concern about long-term care and housing. As they grow older, people want to know where they are going to live and how they will pay for the health care they will need." * * *
I also reinforced a core principle of the estate planning process -- involve more than one professional, and, if possible, a "team" of professionals from different disciplines. Beyond the lawyer (who drafts legal documents), as complexity increases, a qualified investment or financial advisor should be involved.

Read the posted article on the Janus website for further advice about planning "through the years", during the four life stages.

Posted by Unknown on Tuesday, April 29, 2008

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Monday, April 28, 2008

PA Elder Law Section's "Strategic Plan"

At its general membership meeting on Monday, April 28, 2008, the Elder Law Section, of the Pennsylvania Bar Association, unanimously adopted its "Strategic Plan" for work.

That Plan first recounts the Section's "Mission", and then details five "Strategies" to accomplish it by Section members.

The Strategic Plan was presented by the current Chair of the PBA Elder Law Section, Leslie Wizelman, Esq., of Wyalusing, PA, who had guided its development by Council Members & Officers.

That business item was one of various activities conducted during the Section's meeting, which included addresses in the morning by Senator Patricia Vance (R), Chair of the Senate Aging & Youth Committee, and in the afternoon by Representative Phyllis Mundy (D), Chair of the House Aging & Older Adult Services Committee. See: PA EE&F Law Blog posting "PBA Elder Law Section's Spring '08 Newsletter & Meeting" (04/23/08).

With permission from Leslie, granted on behalf of the Section, I post its "Strategic Plan":

PBA ELDER LAW SECTION
STRATEGIC PLAN

INTRODUCTION

MISSION: The purpose of the Elder Law Section is to enable Pennsylvania attorneys to meet the needs of their clients through the exchange of ideas and information on substantive elder law issues. The Section also shall promote improvement in substantive law, legal education and ethical guidelines.

FIVE STRATEGIES TO ACHIEVE THE MISSION:
  1. Evaluate and influence legislation and regulations to improve the quality of life of the elder population of Pennsylvania.
  2. Improve relationships between the Elder Law Bar and the Executive and Legislative branches in order to be better able to advocate on behalf of Pennsylvania’s elderly.
  3. Promote the improvement of the practice of Elder Law through legal education and ethical guidelines.
  4. Provide litigation support for appropriate cases that will benefit the elder population of Pennsylvania and monitor pending and prospective cases.
  5. Maintain and enhance the positive image of the Elder Law Bar.
ORGANIZATIONAL STRUCTURE OF PLAN:

Each of the above strategies is listed on a separate page that follows, under which objectives are listed with regard to each strategy. These objectives have been approved by Council. It will be the responsibility of the Elder Law Section Council to develop an Action Plan to achieve each objective. Some Action Plans already have been completed. The people working on a specific subject can further develop the contents of the Action Plans. Objectives can be added, deleted and modified.

PURPOSE OF PLAN:

The purpose of this planning process is to develop an organized approach to the Section’s goals in order that we may make efficient use of our limited time and resources to achieve our mission. Planning is a continuous process that asks, “How can we best use our resources to achieve our mission?”
FIRST STRATEGY

Evaluate and influence legislation and regulations to improve the quality of life of the elder population of Pennsylvania

ADOPTED PRIMARY OBJECTIVES:

1. DRA regulations. Advocate for the regulatory implementation of the Deficit Reduction Act of 2005 in a manner that will be least detrimental to Pennsylvania’s elderly and will be consistent with Federal law.

2. Assisted Living regulations. Participate in the regulatory process authorizing assisted living facilities in Pennsylvania.

3. Track Proposed Legislation and Regulations. Create a system for the section to monitor and track pending and proposed legislation and regulations that are relevant to the Elder Law Section.

4. Family Caregivers Support Act. Support legislation and administrative initiatives to assist family caregivers.

5. Prevention of Financial Abuse of Elderly. Support legislation to prevent and remedy the financial abuse of the elderly.

ADOPTED SECONDARY OBJECTIVES:

1. Act 43 - Filial support law. Monitor cases and determine an effective position of the Section and the PBA with possible collaboration with the Family Law Section.

2. Penalty Divisor. Monitor implementation of annual changes.

3. Long Term Care Partnership. Monitor long term care partnership program regulations and implementation.

4. Estate Recovery Regulations. Monitor changes to Estate Recovery regulations.
SECOND STRATEGY

Improve relationships between the Elder Law Bar and the Executive and Legislative Branches in order to be better able to advocate on behalf of the elder population of Pennsylvania

ADOPTED OBJECTIVES:

1. Legislative Outreach. Identify, develop and utilize relationships of Section members with legislators.

a. MACC. Participate on the Medical Assistance Advisory Committee
b. Caucus. Support the formation of a Legislative Elder Caucus.

2. Policy forum. Hold a policy forum to examine issues affecting the elderly and to explore and develop policy initiatives.

3. Meetings. Host events and meetings to develop relationships with key players.

4. Communications. Develop succinct White Paper/Talking Points on relevant discussion issues.
THIRD STRATEGY

Promote the improvement of the practice of Elder Law through legal education and ethical guidelines.

ADOPTED OBJECTIVES:

1. Newsletter. Publish two newsletters per year. Members of council are encouraged to contribute to the newsletter.

2. Section Day. Continue regular participation in Section Day, seeking to host a speaker at such meetings.

3. Continuing Legal Education. Continue to plan the Elder Law Institute through PBI, and work to improve coordination of CLE events with the PBI Board.

4. Web Site. Improve access to and visibility of the web site by working with PBA staff and issuing press releases of website postings to appropriate recipients, such as blogs.

5. Fair Hearing Repository. Create a repository for fair hearing decisions, with names redacted, for posting on the section web site with the focus being assisting members to be better advocates for their clients.
FOURTH STRATEGY

Provide litigation support for appropriate cases that will benefit the elder population of Pennsylvania and monitor pending and prospective cases.

ADOPTED OBJECTIVE:

1. Litigation feasibility committee. Appoint panel to develop guidelines for litigation support and format for reviewing and monitoring cases, including monitoring prospective cases.

2. PA NAELA chapter. Support creation of NAELA Chapter.

3. Decision Bank. Collect decisions and disseminate to section members by posting on website.
FIFTH STRATEGY

Maintain and enhance the positive image of the Elder Law Bar.

ADOPTED OBJECTIVES:

1. Public Relations. Broaden public awareness through the use of press releases, talking points, and the development of a speakers’ bureau in order to promote the dissemination of quality, accurate information to the public.

2. Coalition Building. Develop relationships with key organizations with common interests.

Posted by Unknown on Monday, April 28, 2008

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Friday, April 25, 2008

"Guns in Estates & Trusts" Seminar

On Friday, April 25, 2008, at noon, a one-hour seminar was presented at the Cumberland County Bar Association, in Carlisle, PA, by Neil E. Hendershot & Joshua G. Prince on the topic "Weapons in an Estate or Trust: What to do with the Guns?"

This was the outline for the presentation:

  1. Introductions, Handouts, and Audience Poll
  2. Concerns raised by possession of a weapon
  3. Legal References:
  4. Overview of relevant federal & PA firearms laws:
  5. Review of articles by Joshua G. Prince (edited by Neil E. Hendershot) as posted on the PA Elder, Estate & Fiduciary Law Blog:
  6. Guns in an Estate:
  7. Guns in a Trust; and a "Gun Trust":
  8. Online resources (see below)
Both Josh & I are firearms owners & users (he far, far more than me). However, this seminar was not about the politics of gun ownership, including the effects of gun availability on crime or self-protection, or local governmental regulation of firearm possession, as recently argued before the United States Supreme Court on March 18, 2008, in the case District of Columbia v. Heller.

Instead, this seminar considered what to do when a firearm falls into the hands of an estate's personal representative or a trust's fiduciary.

In connection with the seminar, I post below some additional online resources that Josh & I recommend for the proper "care and feeding" of weapons, whether held by an individual, or by an estate/trust:

Pennsylvania:
Federal & National:
Update: 04/27/08

After the seminar, Josh made postings about it on the Pennsylvania Firearm Owners Association Discussion Forum. See:
Update: 06/27/08:

See: "Right to Keep and Bear Arms: Part I", posted on this Blog.

Posted by Unknown on Friday, April 25, 2008

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Thursday, April 24, 2008

Reduced Rates for PA Senior Drivers

Do you recognize this woman driver from the mid-80s?
On April 14, 2008, Tyrone-PA online posted an article entitled "New PA law says only ‘refresher’ course needed for previous Seniors for Safe Driving participants", by Amanda Golden. She highlighted recent changes in Pennsylvania law regarding "Senior Driver Improvement Classes" that result in a mandatory 5% reduction in driver insurance rates for three years.

The Pennsylvania Department of Transportation has maintained a web page explaining the special rules for "mature" or "older" drivers -- those over the age of 55 -- entitled "Older Driver Info Center", which offers these further links:
On November 30, 2008, PennDOT issued a Press Release, entitled "PennDOT Approves 4-Hour Mature Drive Improvement Course", which announced changes in its senior driver improvement refresher courses to qualify over-55 drivers for discounts in vehicle insurance rates.
The Pennsylvania Department of Transportation has approved a 4-hour Mature Driver Improvement Refresher Course, which will allow drivers 55 and older the opportunity to hone their driving skills and continue to qualify for discounted vehicle insurance.

The refresher course will be offered to individuals who have completed the PennDOT approved, 8-hour Mature Driver Improvement Basic Course within the last three years. Currently, individuals are required to complete this course every three years to continue to qualify for discounted vehicle insurance.

Under Pennsylvania law, drivers 55 and older are eligible to receive a five percent discount on their vehicle insurance by completing the basic course. The requirements for receiving this discount are that each individual named on the policy must be 55 years of age or older and must have completed the course within the past three years. Individuals should check with their insurance carrier for specifics of their program.

“PennDOT is pleased to authorize a refresher course for Pennsylvania’s mature driving population,” said PennDOT Secretary Allen D. Biehler, P.E.

“The basic and refresher courses help mature drivers understand how aging affects driving abilities. They also provide insights about driving on today’s roadways, including recently enacted laws that affect all motorists.” * * *
The Press Release noted the "four state-approved organizations that conduct courses across the commonwealth" addressing the specific safety needs of the mature driver. These courses do not involve any tests on knowledge or driving skills.

PennDOT refers further inquiries to those approved organizations:
  • AAA (Check local offices for availability)
  • AARP (1-888-227-7669)
The recent article by Amanda Golden reflected implementation of the revised training program in one community -- Tyrone, a borough in Blair County, PA, located 15 miles northeast of Altoona, on the Little Juniata River.
The two-day courses have been offered many times in Tyrone, with one class being held recently at Epworth Manor.

With the change in Pennsylvania law, individuals over 55 years of age who have successfully completed a Senior Education Program in the past, now only have to attend a one day refresher course to renew their insurance discount, as opposed to taking the two-day course again. The one-day course lasts a total of three and a half hours.

Seniors who have never participated in a Senior Driver Improvement Program in the past, must still attend a two-day seminar to earn the automobile insurance discount. The two-day course is a total of seven hours, broken down to three and a half hours each day.

The course covers a variety of topics and is designed to help participants do a better job:
  • understanding the element of risk;
  • managing the area around your vehicle with good visual techniques;
  • sharing the highway with other drivers;
  • managing vehicle speed;
  • managing vehicle space as you share the road with others;
  • handling driving emergencies;
  • understanding and compensating for visual changes;
  • understanding techniques for improving night vision and safety;
  • understanding anti-lock braking systems;
  • understanding supplemental inflatable restraint systems;
  • understanding children and air bags -- why they're a dangerous combination;
  • understanding Pennsylvania's road signs;
  • understanding seniors and prescription drug problems;
  • understanding why expressway driving is a problem; and
  • understanding road rage related problems.
The course is presented in a non-threatening environment. The class is informative, entertaining, and there is no testing. There is no on the road driving. The course is strictly classroom theory. A nominal tuition fee is charged. * * *
If you recognize the lady driving the car in the photo above, then you may already have qualified to take such a refresher course.
"Where's the Beef?"
-- Clara Peller (1984) in a Burger King Ad

Posted by Unknown on Thursday, April 24, 2008

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Wednesday, April 23, 2008

PBA Elder Law Section's Spring '08 Newsletter & Meeting

On April 14, 2008, the editors of the Newsletter of the Elder Law Section, of the Pennsylvania Bar Association, announced release of the Spring, 2008 Newsletter issue (PDF, 36 pages).

An email message to Section Members from Robert C. Gerhard III, Esq., of Glenside, PA, announced that issue's availability on the PBA's website:

I have attached a link to the most recent edition of the Elder Law Section's Newsletter. I wish to thank the contributors for their time in writing some terrific articles.

Patricia Graybill from PBA, Julian Gray, Esq. and Ellen Wase Esq. and I were the editors this time around. If you have an article idea that you would like to write for the next newsletter -- or have somebody else write -- please just let me know.
The articles are timely, well-researched, practical, and helpful, both to practitioners and to their clients.

The Table of Contents on the first page lists the articles in the Spring, 2008 issue of the Section's Newsletter:
  • Message From the Chair (p. 1)
  • PBA Elder Law Section Day and Annual Meeting (p. 3)
  • Other Upcoming PBA Events (p. 3)
  • Invitation to Join the Newly Created PAELA (p. 4)
  • Status of Assisted Living in Pennsylvania (p. 4)
  • Residency and Spousal Impoverishment Protections (p. 5)
  • Elder Law Numbers Quick Reference (p. 8)
  • Section Leadership List (p. 9)
  • Jeffrey Marshall Receives Excellence in Elder Law Award (p. 9)
  • Renewal of the PDA Over-60 Waiver (p. 10)
  • PAELA’s Comment Submission on the PDA Waiver Renewal (p. 17)
  • Contact the Editors (p. 18)
  • Medicare Savings Programs — Save Your Clients Nearly $100/Month! (p. 19)
  • Understanding and Working with Nursing Homes: Things Attorneys Really Need to Know (p. 20)
  • Practice Pointers: Post-Eligibility Medicaid Planning (p. 23)
  • Penn State Dickinson Clinical Law Students Expand Outreach Through “Senior Law Day” (p. 25)
  • Check Out the Pennsylvania SeniorLAW Helpline (p. 26)
  • Help with Your PBA Elder Law Section Listserv (p. 27)
  • Legislative Update (p. 29)
The Newsletter also announced the next membership meeting of the PBA Elder Law Section to be held on Monday, April 28, 2008, at Pennsylvania Bar Institute headquarters, 5080 Ritter Road, Mechanicsburg, PA 17055.

This is the published Agenda:
  • 11:00 a.m. -- Section Business meeting/Election of Officers and Council members
  • 12:00 Noon -- Buffet lunch
  • 2:00 p.m. -- Adjournment
The registration form for the meeting is found on page 3 of the current Newsletter.

Posted by Unknown on Wednesday, April 23, 2008

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Tuesday, April 22, 2008

Who Gets a "Negative Inheritance" and Why?

On April 21, 2008, the Lancaster Intelligencer Journal published an article by Patti S. Spencer, Esq., entitled Will you receive a 'negative inheritance?'.

She addresses an unwelcome, but growing, situation not often discussed in estate planning -- more parental debts borne by beneficiaries than assets remaining to pay them. With the costs of heath care and long-term care both escalating, a "negative inheritance" is a possibility for many "middle-class" offspring.

This problem has been discussed recently in publications & postings. For example, see the posting, dated March 24, 2008, on Elder Law Issues, by the Phoenix, AZ law firm Fleming & Curti, PLC, entitled Some Seniors Leave “Negative Inheritance” For Their Children:

What is a “negative inheritance?” It is what happens when the amount your children pay to provide for your care exceeds what they will inherit. * * *

Media attention has recently focused on this concept of "negative inheritance," with articles from The Wall Street Journal and MSN touting the phrase. Other attention has come from online radio and, not surprisingly, the long-term care insurance industry.

One of the better articles comes from our friends at Oast & Hook, a Virginia law firm well-known nationally for its advocacy in elder law and special needs planning * * *. [Some links have expired.]

That referenced Wall Street Journal article, entitled "When Inheritance is Negative", by Marshall Eckblad, was published on January 22, 2008. Various blogs had mentioned it after publication. Its free link has expired. However, I found it posted in PDF format by The Strategic Counsel here.

This concept of a "negative inheritance" is also the subject of that recent, interesting article by Patti S. Spencer, which I repost.

Patti practices in Lancaster, PA. She is the author of a book, Your Estate Matters: Gifts, Estates, Wills, Trusts, Taxes and Other Estate Planning Issues, intended for clients, and also the Pennsylvania Estate Planning, Wills and Trusts Library: Forms and Practice Manual (2007), intended for attorneys. She can be reached at 717-394-1131 or patti@spencerlawfirm.com. I thank her for reprint permission.
Will You Receive a "Negative Inheritance"?

By Patti S. Spencer
(Copyright © 2008 by Spencer Law Firm)

"Negative inheritance," a term coined by Laurence Kotlikoff, a professor at Boston University, describes the situation when the costs to children of caring for aging relatives outstrip any gifts or bequests they might receive in return.

A large portion of baby boomers find themselves becoming the caregivers for their parents. Many of these caregivers want to care for their parents and are pleased to be able to help, but it takes a huge financial and emotional toll.

They are called members of the "sandwich generation" — sandwiched between the often conflicting demands of raising and educating children and caring for aging parents and other relatives. Almost three in 10 of those ages 45 to 64 with unmarried children under 25 in the home were also caring for a senior. About 20 percent of workers 45 and older provide financial support to a parent. About 33 percent of workers 45 and older with a grown child over age 25 pay rent or provide housing for that child.

Providing financial help for both children and parents often means delaying retirement. According to a survey conducted by Brightwork Partners for Putnam Investments, 42 percent of those supporting their parents said they'll work in retirement as a result, while 26 percent said they'll delay their retirement. Thirty-five percent of retirees have returned to the job market, according to the survey. A year ago, the figure was 29 percent.

What to do? Financial planners recommend a combination of family dialogue, long-term care insurance and proactive management of aging parents' remaining assets. Family dialogue — what's that? That means actually talking about plans for the future with your parent and siblings — something that for many families is very hard to do. Family dynamics around "money talk" are very difficult. If you are one of the parents be a grownup and start the conversation yourself. No one knows what the future will bring. Discuss various possibilities. And don't start out by saying, "You'll never put me in a nursing home, will you?"

For those boomers who are at a higher risk of supporting and caring for their aging parents, determining the parents' financial health and finding out what plans they have, if any, is important. If the parents are likely to run out of money, the first priority is to buy long-term care insurance.

If the parents can't or won't pay for it, the children should. It makes much more financial sense than paying for care or sacrificing career and income when the time comes. The long-term care insurance has to be purchased before the injury or illness occurs. The parents need to be relatively healthy to qualify for a plan.

When parents can't qualify for long-term-care insurance, it becomes even more important to manage their assets and make plans for the future.

It may be necessary to sell the family home. You might try to get help from other adult children. Your parents may be able to borrow against life insurance policies or sell them on the secondary market. Perhaps your parents should take out a reverse mortgage on their home.

The cost to an adult child of caring for parents is not necessarily an out-of-pocket payment of Mom and Dad's bills. Instead, the child may have to stop working to care for elderly parents or work part-time. Being stretched thin may affect performance and advancement on the job.

Caring for an elderly relative itself can be a part-time job, if not a full-time job. The mental, physical and emotional pressures can be devastating for the caregiver.

I agree with Stephen W. Follett, Esq., who says, "I dislike the term 'negative' inheritance'. I believe that it demeans the legacy of loving parents. Similarly, it diminishes the return of love by children.

"Caring for parents is a labor of love. Inheritances are not a right. Everything wrong with this term begins with the underlying premise that we should expect a financial inheritance from our parents."

In other words, what is negative about caring for your parents? Recognize that you have no right to an inheritance.

How different this is from the attitude of another planner who asks, "What is the Black Death of a financial plan?"

The answer: "It's your parents."

Posted by Unknown on Tuesday, April 22, 2008

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Monday, April 21, 2008

PA Governor Plans Electronic Health Info Exchange

On March 26, 2008, Governor Edward G. Rendell signed Executive Order 2008-03, on the subject of the new "Pennsylvania Health Information Exchange (PHIX) Governance Structure" (PDF, 3 pages), drawn as another element of the Governor's Prescription for Pennsylvania Program to reduce medical costs and expand health insurance coverage.

The Governor announced the new project in a Press Release, dated March 26, 2008, entitled "Governor Rendell Signs Executive Order Implementing Information Technology Initiative from RX for PA".

He identified PHIX as "a framework that will give health care providers improved access to clinical data and lead to safer and more efficient patient-centered care."

“By offering health care providers the ability to electronically share patient information, we will be able to improve patient care and safety and reduce health care costs that are a result of today’s independent information technology systems,” Governor Rendell said.

The Pennsylvania Health Information Exchange – or PHIX – will provide the information technology architecture to support statewide interoperable electronic health records and electronic prescribing by sharing data that is captured at the point of care in a physician office or hospital.

Most doctor’s offices, hospitals, laboratories, and pharmacies now have their own separate information systems. With an information exchange, those entities will be able to share information with various health care providers and other authorized parties for treatment purposes. Health information exchanges will help to provide clinicians with important medical details about the patients they treat. * * *

The ability for the physician to have access to the patient’s recent laboratory tests, radiology exams, hospital discharge notes and medications prescribed gives him the ability to quickly make the appropriate treatment decisions. Having access to all of the care given to this patient keeps the physician from ordering duplicative tests that may have been recently preformed, thereby reducing costs. * * *

“Giving clinicians access to data about their patients’ care by other providers will result in fewer medical errors and better continuity of care. Less time will be wasted waiting for patient’s charts and for processing referrals. And, reporting of vital statistics and diseases will be more efficient and complete.” * * *
The Executive Order also established an advisory council and other advisory organizations for PHIX:
The advisory council is made up of representatives from state agencies, legislators, insurers, physicians, hospital executives, pharmaceutical organizations and nurses who will advise on IT strategies and issues.

The advisory organizations may provide research, analysis and recommendations relative to the unique needs of the state. The Pennsylvania Health Initiative is recognized as an advisory organization to PHIX.
For another recent press release from the Governor's Office regarding the Rx for PA program, see: "Governor Rendell Says Pennsylvania is One Step Closer to Providing Access to Health Care for Pennsylvania's Uninsured" (03/18/08). For background about the "Prescription for Pennsylvania" Program upon its introduction, see: PA EE&F Law Blog posting "PA Governor Unveils New Health Care Proposals" (01/19/07).

The creation of PHIX was noted on April 4, 2008, by Alice McCreary, Reference Librarian, in a posting on the Jenkins Law Blog, entitled "Gov. Rendell Signs Executive Order Creating Health Data Exchange". She ended by repeating concerns about the privacy and confidentiality of health care information converted into electronic form, per her prior posting, "Online Personal Health Records and the Privacy Issue" (03/04/08).

However, it is cost that drives the creation of the new PHIX program.

In the budget report entitled "Prescription for Pennsylvania -- 2008-2009 Budget Overview", dated March 4, 2008, PHIX was mentioned as one of numerous cost-saving measures:
Pennsylvania Health Information Exchange (PHIX) -- $5 million to begin a 5-year project to create a platform to share patient health care information. Funding will be augmented with investment from health care providers and insurers. PHIX will be the statewide framework necessary to implement such initiatives as e-Prescribing and Electronic Medical Records. * * *
Other, broader proposals to make the health care system more efficient and to provide health care coverage more universally in Pennsylvania are outlined in that report.

That budget report concluded with a page containing a single sentence to make its point: "The Cost of Inaction is Too Great."

Posted by Unknown on Monday, April 21, 2008

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Friday, April 18, 2008

Fundamentals of Taxation, before Reform

On April 15, 2008, the U.S. Senate Finance Committee held a hearing on the topic "Tax: Fundamentals in Advance of Reform", with four witnesses testifying. A replay of the hearing is available here for viewing online (through RealPlayer software).

This is the information, with links to the witness statements submitted, on the web page relating to that hearing.

Tax: Fundamentals in Advance of Reform

April 15, 2008, at 10:00 a.m.

in 215 Dirksen Senate Office Building

Witness Statements:

  • Daniel N. Shaviro, Wayne Perry Professor of Taxation, New York University School of Law, New York, NY
  • Michael Graetz, Justus S. Hotchkiss Professor of Law, Yale Law School, New Haven, CT
  • Jason Furman, Director, The Hamilton Project, Brookings Institution, Washington, DC
  • Robert Carroll, Vice President for Economic Policy, The Tax Foundation, Washington, DC

Opening comments by the Chair, Senator Max Baucus, set a tone for this hearing.
Tax reform sounds simple because it’s two little words.

But those two little words can represent a huge task for Congress.

It’s a task that requires a lot of cooperation and a lot of working together.

Today we’ll start to address that daunting task. We’ll start by discussing our current system. And we’ll discuss what has led to the current complexity.

Justice Felix Frankfurter wrote: “A tax can be a means for raising revenue, or a device for regulating conduct, or both.”

For example, you get a charitable deduction for donations, because Congress wants to encourage donations. The tax code also has a tax deduction for mortgage interest and real property taxes, because Congress wants to encourage home ownership.

And we’ll discuss how Congress has used the tax code for economic policy. A recent example of this is the economic stimulus package that Congress passed in February. In that case, Congress used the tax code to give a boost to the sagging economy.

The last time that Congress reformed the tax code from top to bottom was 1986. That year, we enacted a comprehensive reform bill that was meant to set us on a stable course.

Since then, however, Congress has passed tax bill after tax bill. And that has caused confusion and complexity for taxpayers and the IRS alike. * * *

Let’s see what it would take to get tax law back to being mostly a means for raising revenue, rather than mostly a device for regulating conduct.

And let’s start the process of making the tax law a little easier. * * *
Federal tax reform will, again, be an agenda item for the next Congress and for the next Administration.

“The hardest thing in the world to understand is the income tax.”
-- Albert Einstein

Posted by Unknown on Friday, April 18, 2008

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Thursday, April 17, 2008

Identity Theft Crimes on the IRS

On April 9, 2008, the Pittsburgh Post-Gazette published an article entitled "IRS not doing enough to stem tax fraud identity theft, internal report finds", by Jim Abrams.

The article highlighted scams perpetrated upon the Internal Revenue Service that steal government money and also confound taxpayers' records.

Fraudulent tax returns filed as a result of identity theft jumped more than sixfold over the past five years, but the Internal Revenue Service rarely pursues or prosecutes such cases, a Treasury Department watchdog said in a report released yesterday.

J. Russell George, the Treasury inspector general for tax administration, said the IRS must do more to combat the growing problem of employment-related and tax-fraud identity theft.

The agency has placed only limited emphasis on these issues, George said. "The IRS' policy is that identity theft will only be investigated if it is committed in conjunction with other criminal offenses having a large tax impact." * * *

A prior article by the same author, entitled "Report Finds IRS Computer Security Flaws", published on April 7, 2008, and posted online by Comcast News, reviewed the internal computer problems at the IRS:

Treasury watchdogs said Monday that poor controls over IRS computers could allow a disgruntled employee, agency contractor or outside hacker to steal taxpayers' confidential information.

Indeed, a hacker might even "gain full control of the IRS network," said a report Monday from the office of the Treasury Inspector General for Tax Administration.

Investigators did not cite any specific cases of wrongdoing within the IRS, which processes some 137 million tax returns. But they suggested a lack of review means someone could get sensitive information and no one would ever know.

The report comes amid increasing scrutiny of the IRS and the problems posed both by security concerns within the system and identity theft threats from outside * * *.

Many of the points in these article derived from a report by he Treasury Inspector General for Tax Administration, entitled "Outreach Has Improved, but More Action Is Needed to Effectively Address Employment-Related and Tax Fraud Identity Theft", Ref. No. 2008-40-086 (PDF, 40 pages), dated March 25, 2008.

See also: "IRS Knocked on Identity Theft", posted April 11, 2008, by WebCPA.

An article that appeared in the Washington Post on April 14, 2008, as reposted online in a bulletin by AARP, entitled "A Call for Action On Tax Scams", by Stephen Barr, then provided a few examples of such "scams" perpetrated upon the IRS or citizens who deal with the IRS:
  • A bogus tax return using a stolen Social Security number is submitted to the Internal Revenue Service early in the tax-filing season. Because the IRS does not know the return involved identity theft, it sends a refund. When the real tax return is filed, it gets flagged as a duplicate, freezing any refund. It sometimes takes months for the innocent, legitimate taxpayer to sort it all out with the IRS.
  • [Other] cases involve illegal immigrants and undocumented workers who use another person's identity -- name, Social Security number or both -- to obtain employment. The employer files a wage and tax statement, the W-2, under the stolen identification information, and the IRS computers attribute the earnings according to the Social Security number. Then the IRS levies an additional tax on the lawful owner of the Social Security number, creating consequences for the innocent person.
Such examples derived, instead, from testimony offered to the U.S. Senate Finance Committee on April 10, 2008, in a hearing entitled "Identity Theft: Who’s Got Your Number?".

Witness Statements:

  • The Honorable Douglas H. Shulman, IRS Commissioner, Internal Revenue Service, Washington, DC; accompanied by Linda Stiff, IRS Deputy Commissioner for Services and Enforcement, Internal Revenue Service, Washington, DC
  • Nina Olson, IRS National Taxpayer Advocate, Internal Revenue Service, Washington, DC

For years, the IRS has warned consumers and employers about various scams & cons involving federal tax filings. See: "Tax Scams/Consumer Alerts" on the IRS website.

Such scams have expanded, recently, to the federal "stimulus payments" authorized by Congress in 2008. See: "Scam Alert: Stealing Your Rebate, and Your ID - AARP Bulletin Today, by Katharine Greider (April 2008).

Now, it is time that the IRS put measures in place to stop such scams & cons targeting the Service as the victim.

Posted by Unknown on Thursday, April 17, 2008

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