America`s elderly are increasingly in need of a lawyer.
Ruth Spino found that out the hard way. First, her father was diagnosed with Alzheimer`s disease when he was in his early 50s. Then, last August, when her mother-in-law began mishandling her finances, forgetting how to find familiar places and getting into car accidents, Spino correctly suspected that the 66-year-old woman was suffering from the same disease.
As a result, Spino and her husband, Ray, joined a legion of Americans who have found themselves in need of a growing legal specialty: elder law.
The demand for such legal expertise was highlighted last week because of the controversy over a $28,750 inheritance royalty received and distributed by Edna Moseley, mother of U.S. Senate candidate Carol Moseley Braun.
In the Spino case, Ray Spino, a construction superintendent, got power of attorney-the legal right to act in a person`s behalf-for his mother. For Herbert Oppenheimer, Ruth Spino`s father, the power of attorney went to his wife, while Ruth Spino became her father`s guardian to make sure someone would be available to carry out the family`s wishes in case her mother became ill.
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Ray and Ruth took complete control of her mother`s finances. They transferred nearly all her assets and the title of her house to their names, making sure that if she does eventually require nursing home care, she will be financially eligible for Medicaid coverage.
The Spinos, all of Chicago, also wanted to ensure there would be adequate assets left to take care of Ray`s uncle, who is mentally disabled.
Such actions are becoming more and more necessary as families try to protect assets of the elderly and to make sure that the family-and not the courts-has decision-making power in the event of a crisis.
”They are very hard things to do, but they are critical,” Ruth Spino said. ”This was a very self-sufficient woman who had done everything for herself for 25 years, and she was still very high-functioning in many ways.
”It was hard to explain why she couldn`t even carry any money, because she was losing it. But there are no if`s, and`s or but`s about it; we had to follow the lawyer`s advice.”
Medical science created the market for elder law. Few people used to live long enough to see the onset of Alzheimer`s or worry about spending their final years in a nursing home. But with increasing life expectancies have come problems once rarely envisioned.
If families once only worried about who paid the burial expenses, they now worry about the bill for an extended hospital stay or what to do if illness affects mental capacities and the ability of elderly relatives to make decisions about the future.
The number of Americans age 65 or older is expected to grow by 25 percent by the turn of the century and to double over the next 40 years. There are 4 million victims of Alzheimer`s today, and there are predictions there will be 14 million victims by 2030.
According to the Illinois Council of Senior Citizens, the average cost of nursing home care in Illinois is $3,000 a month, an expense that would quickly deplete the savings of a family of middle-class means.
And so today there are 1,800 members in the National Academy of Elder Law Attorneys. Four years ago, there were 35.
Attorneys familiar with problems of the elderly can advise families about the best strategies to protect assets legally. They can also make sure couples make the right preparations-such as delegating power of attorney-and avoid a court-appointed guardianship during a crisis.
In addition, these attorneys can advise on insurance policies designed to cover the cost of nursing home care.
Elder law attorneys handle a host of other problems having to do with old age, including age discrimination, elder abuse and the right to die.
”Medicare and Medicaid get the most publicity,” said Laury Adsit, executive director of the National Academy of Elder Law Attorneys. ”But the field is (also) . . . Social Security and age discrimination and elder abuse. It is probate and estate planning and dealing with how to care for an adult disabled child.”
An increasing number of families are being forced to confront questions about Medicaid and nursing homes and estate planning.
In Braun`s case, the controversy is over a $28,750 inheritance royalty received by her mother. The transaction has raised questions about whether the money should have gone to pay Moseley`s expenses at a Near North Side nursing home, which are being paid by Medicaid, rather than to her children.
Had the money been properly reported, some experts say, the Medicaid payments would have been suspended until the money was used up paying for Moseley`s nursing home care.
”You are supposed to immediately declare money with Public Aid,” said Sally Hurme, an attorney with the American Association of Retired People.
”Then the person is declared ineligible for Medicaid as long as the money lasts, until you are back down to the Medicaid eligibility level.”
Hurme said Medicaid recipients who receive inheritances or other cash windfalls cannot give the money away as gifts, but are permitted to use the money to pay legitimate debts.
”If you give away your assets or sell something for less than fair market value, then you are penalized for up to 30 months (during which time an individual would have to pay for nursing home costs out of his or her own pocket),” Hurme said.
It is not yet to be seen what the political consequences of the episode will be for Braun and her Senate campaign, but it has brought to the surface a dilemma that faces thousands of families every year.
Even attorneys schooled in the field say that navigating the Medicaid and Medicare maze is no easy task. But many senior citizens delay seeking legal help, scared as much by the cost as by the fact that few believe they will ever need to plan for catastrophe.
”My clients tend to be really terrified of impoverishment,” said attorney Janna Dutton, who concentrates on elder law. ”I do a lot of counseling.
”They have spouses who have been diagnosed with Alzheimer`s, Parkinson`s, multiple sclerosis, catastrophic degenerative diseases. If you know the law well, there is a lot of legal planning to protect assets.”
”Unfortunately,” said Margaret Lewis, an elder law attorney in Chicago, ”by the time I see people, it is too late, too late to do any planning.”
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While most inquiries from family members about their elderly parents are benign, attorneys say they frequently get calls from adult children trying to intercede over their parents` assets, as they try to find out how they can protect the parents` money while still assuring that Medicaid covers the costs of nursing home care.
”There are times where they will just come out and say, `My parents worked hard all their lives for their money and they don`t want it all going to the state,` ” said Chicago attorney Cynthia Farenga.
Despite its connotation as some form of tax evasion, attorneys say asset divestiture, as they like to call it, is perfectly legal. The technique is more commonly known as asset dumping.
In simple terms, what it involves is shielding assets so that a wife, for example, can still have money to live on while Medicaid picks up the costs of nursing home care for her husband.
It wasn`t until 1989 that federal law first recognized the need to address the financial demands placed on a family by the high costs of nursing home care.
Prior to that, the only way a spouse could protect assets financially was by filing for divorce. Otherwise, the healthy spouse was required to totally impoverish himself or, more often, herself, giving over almost all the couple`s assets to cover the cost of nursing home care.
Regulations now allow a husband or wife to qualify for Medicaid coverage as long as the spouse has assets of less than $68,700.
If the elderly couple have given away assets to become Medicaid eligible within 30 months of entering the nursing home, they will have to pay nursing home fees for up to 30 months, depending on the amount of assets they had originally.
The regulations exempt assets distributed more than 30 months before entering the nursing home, a residence, two cars, most personal possessions and a burial policy.
Experts say the rules are less liberal for individuals, who basically are only allowed to keep $2,000 to qualify for Medicaid.