Your end-of-life plans won’t work if you don’t talk about them

The headline seems obvious, right? But unfortunately, failing to tell your loved ones what type of care you would want if you suffer from an illness which will eventually lead to your death is all too common. The Boston Globe had an essay a few weeks ago, which was written by a young physician who had observed the results of a failure to communicate:

Mrs. M found herself at home, unable to breathe. Her husband called 911 and she was rushed by ambulance to the emergency room. As her shortness of breath worsened, all she could say was “help me.” The medical team immediately jumped into action ordering blood work and a chest X-ray, placing an IV line and administering antibiotics. Eventually, anesthesia was called to insert a breathing tube and Mrs. M was placed on a ventilator because she could not breathe adequately on her own. Unfortunately — and unbeknownst to anyone present — this was not the type of help she sought.

Mrs. M had spent the last few months under the care of a hospice nurse with whom she had developed a close relationship. On several occasions, she explained to this nurse that she had no desire to be placed on a ventilator again, as she had been so many times in the past. The next time her lung disease worsened, she wanted medicines to make her comfortable so that she would not feel the awful sensation of ‘air hunger’ that accompanied her severe shortness of breath. She knew that her lung disease was slowly killing her, and she hoped to spend her final days at home, comfortable and at peace, rather than in a hospital hooked up to a machine.


To ensure that her wishes would be met, Mrs. M designated her husband as her official “health care proxy” should she lose the ability to make her own decisions. In Massachusetts, this involves signing a document designating a spouse, family member, or friend to take responsibility for health care decisions if an individual is unable to do so. When we as doctors can no longer communicate directly with a patient because of their mental or physical illness, we seek the advice of the health care proxy so as to best honor our patient’s wishes.


While Mrs. M had outlined her desire for comfort-focused medical care to her nurse, she never broached this difficult subject with her husband. He was unaware that she never wanted a breathing tube or ventilator, or to be re-admitted to the hospital. Only later, after speaking with Mrs. M’s nurse, did he understand how much his wife had quietly suffered from her disease and why she hoped to pass naturally at home rather than in the midst of aggressive medical care.

You can’t blame the doctors for taking action if you do not communicate your wishes to your health care agent. I’ve had conversations with clients who wanted to name their children as their health care agents but were reticent to have candid discussions about the full extent of their medical problems or did not want to have a difficult conversation about death. At the same time, there are some adult children  who simply cannot stand the thought of having to talk to their parents about the parents’ eventual demise.

But at the same time, even when you communicate with your primary care providers (here, the hospice nurse), it doesn’t mean that those wishes will be passed on to other doctors and hospitals. There is a new tool in Massachusetts called MOLST (Medical Orders for Life-Sustaining Treatment) which promises to help. Unlike a health care proxy, which is a legal document, a MOLST is supposed to be entered into the medical record of a patient facing late-stage illness. The MOLST form contains specific information completed by the treating physician and patient concerning the patient’s desires for how end-of-life care should be managed under different scenarios. MOLST is being gradually rolled out, with the goal of widespread use throughout the state by early 2014.

This sounds like a good idea — as long as the paperwork actually follows the patient in either electronic or paper form. I’m not convinced that will happen if there is more than one hospital chain in the area like there is in the Boston area. I’ll be interested to see how MOLST pans out.

Being female continues to get more expensive

As an elder law attorney, I regularly suggest to my clients that they investigate purchasing long-term care insurance as a hedge against the cost of costs associated with aging, especially if they have any interest in planning for the cost of long-term care and asset protection. I still think it’s generally a good idea. However, one thing that purchasers should be mindful of is that there is no guarantee that the price of the premium will remain the same over time or that they will even be able to get coverage at an affordable rate.

In the last two years, several major insurers, including MetLife, Prudential, and Allianz, have stopped selling policies; while others, like Genworth, are significantly restructuring their underwriting rules and premiums.  One major change in the rules is to start charging women more for coverage. From an insurer’s point of view, this change is understandable. Women live longer, so they have more time to become disabled — a fact which the industry seemed to have overlooked when they started selling these in the 1980s. Seven out of ten residents of nursing homes, 76% of assisted living residents, and 66% of recipients of home care services are female. As a result, insurers are now charging new female policyholders more than they are charging male policyholders. Single women searching for new policies will be hit particularly hard, with insurance commissioners approving rate hikes of as much as 40%.

However, the head of one trade group argues that the real culprit is the low interest-rate environment. Insurers need to make enough money through fairly conservative investments to pay out claims. The combination of very low interest rates and unexpected demand for payment of claims is forcing rate hikes.

Whatever the reason may be, shop carefully for a policy. Work with an experienced long-term care insurance agent who sells for a number of different policies, so you can compare your options.

Emergencies and independent retirement communities

Here’s a very disturbing article concerning the death of an elder who resided in an independent living facility in California. Despite the rather obvious risk that elderly people living in their facility may have medical emergencies that require CPR or other life-saving interventions,the facility has a policy forbidding staff–including the nurse on duty –from providing medical help beyond calling 911.  The facility’s executive director said that the nurse acted appropriately under the terms of its policy, even though the 911 operator begged the nurse to perform CPR or get someone who would.

We’ll never know, of course, whether the elder would have survived had CPR been provided while waiting for the ambulance to arrive. Statistics show that as few as 3% of persons administered CPR survive. But that’s not the point. The nurse apparently was just following orders, even though most states have “Good Samaritan” laws which waive liability for anyone responding to an emergency. Further, it’s possible that unless the nurse knew the elder had a Do Not Resuscitate order, her failure to provide CPR might result in a legitimate complaint to the California agency which licenses nurses.

So what’s the takeaway here? In Massachusetts, independent senior residences and assisted living facilities are governed by landlord-tenant law and are not created with the intent to provide medical care. However, medical emergencies happen and the staff may be the only persons who are physically capable of reacting quickly and providing care until the ambulance arrives. So you need to ask some questions about the facility’s medical emergency policies and procedures before signing your lease or rental agreement. Ask whether the facility will provide additional assistance beyond calling 911 in the event of an emergency or if its policy bars employees from providing that assistance. Ask for a written copy of its policy and if they don’t have one, ask why. Ask what training employees have had in CPR and other types of emergency care. Ask whether there are any portable defibrillators on the premises and whether the staff has had training in using them. And above all, have the lease or rental agreement reviewed by an attorney to be sure that you won’t be giving the landlord carte blanche to walk away from its ethical duty to allow its staff to provide CPR or other non-invasive lifesaving care.

Betting on Death — Part Two

My last post discussed one form of betting on your death – “stranger oriented life insurance” (“STOLI”) –a practice which is illegal in Massachusetts. However, another variation of betting on your death – life settlements – is trending towards legitimacy. Unlike STOLI, which involves third party solicitation of a person to purchase then “flip” a life insurance policy, the life settlement industry focuses on persuading people who already own life insurance policies to sell their policies. Though heavily regulated, life settlements are legal in most states, including Massachusetts.

In a life settlement, a life insurance policy holder can sell rights to the payout of his insurance policy in exchange for a lump sum. Since the buyer also agrees to take on the cost of premiums upon a sale, how much a buyer is willing to pay for the policy depends in part on the cold reality of how soon the buyer thinks the seller is likely to die. In order to value a life insurance policy, prospective buyer companies do actuarial research and request medical examinations of policyholders to try to determine whether the policy holder’s life expectancy will likely to be short enough to make the deal worth it. Owners of life insurance policies may be able to “shop” the policy among potential buyers various and entertain multiple offers from interested investors.

Proponents of life settlements argue that allowing people to sell their life insurance policies gives them another opportunity to lead financially comfortable and self-sufficient lives. This opportunity is especially powerful since prospective sellers of life settlements are often elderly or infirm individuals who see the sale of their policy as one of the only means available to them of generating significant funds in a short amount of time. Critics of the industry counter that a life settlement reduces the value of the assets that would otherwise be passed onto loved ones after the insured’s death – funds which may be needed by the survivor. Further, life settlements subvert the traditional model of the insurance industry. While traditional insurers benefit from having their policy holders living and paying their premiums as long as possible, companies buying policies perversely benefit from an earlier death of the original policy holder. There can also be significant tax consequences for the insured which must be carefully considered.

Ultimately, the decision to sell a life insurance policy to a third party is a highly personal decision and one that may be replete with significant legal and tax consequences. Speak with a trusted elder law attorney, accountant or financial adviser before moving forward with such a sale.

Betting on Death — Part One

Imagine that you are an elderly retiree who has recently been hit with a sizable amount of debt.  One day you receive a phone call from an insurance agent who proposes the following deal:

1.         You take out a good-size life insurance policy.

2.         For the first two years, the insurance company would pay your premiums and allow you to name your beneficiary on the policy.

3.         After two years pass, you would be required to sell your insurance policy to the insurance company in exchange for a sizable lump sum.

Even though this plan seems vaguely macabre, you appear to benefit either way:  Either your loved ones would get the policy payout upon your death, or you would get the lump sum sales payment after two years seemingly for free – all you would have to give the insurance company is your name and some personal information about your health.   The company may even sweeten the deal by offering you a cash sign-up bonus.  Would you accept the agent’s offer?

The above scenario illustrates an increasingly common example of “stranger oriented life insurance” (“STOLI”). Massachusetts and several other states have banned STOLI because life insurance contracts specify that a life insurance policy must be taken out in order to benefit the policy holder and his loved ones.  When a policy holder is persuaded to take the policy out for a third party’s benefit, the “life insurance” no longer serves its intended purpose of financially protecting the insured’s loved ones after the insured’s death.

There are several risks for seniors who get involved in a STOLI scheme.  For one, if the insurer is told that the STOLI policy is void because it is illegal, the insurer may turn around and sue the policy holder or her estate for damages even though it was not the policy holder’s idea to take out the insurance policy in the first place.  (However, since these policies are illegal in Massachusetts, the policy holder or his estate would have a strong counterclaim against both the insurer and the salesman under our state’s consumer protection laws.)  Also, since insurance companies who buy STOLI policies benefit after the policy holder dies, these companies often want to keep careful records of the policy holder’s health status.  Consequently, many elders involved in STOLI schemes complain of being harassed by insurance companies demanding that they complete frequent and lengthy surveys about personal health questions long after they sold their policies.  Finally, the purchase of a STOLI insurance policy might create a disincentive to taking out a legitimate insurance policy, which could become problematic if the senior’s health declines and the senior becomes uninsurable. Thus, even if these policies were legal in Massachusetts, I wouldn’t recommend them to my clients.

However, there is another way to bet on death that is legal in Massachusetts – life settlements. I’ll explore this issue in my next posting.

Don’t fall victim to this scam against aging veterans and their families!

There was an excellent article in the May 2012 edition of Kiplinger’s Retirement Report (subscription required) on a little –known scam which is run by some less-than-scrupulous insurance agents on frail elderly veterans and their surviving spouses. The deal they present is this:  buy an annuity from me and I’ll help you qualify for the Veterans Administration’s Aid and Attendance (A&A) benefit.

The A&A benefit is available for veterans who served during wartime and their surviving spouses. You qualify by meeting an income and assets test (generally about $80,000 or less, plus the value of your home and a car). You must also provide proof that the cost of your care to help you with activities of daily living (bathing, dressing, walking, eating and the like) exceeds your monthly income. This benefit is very useful for residents of assisted living facilities, where the cost of care can easily be double the resident’s income.

The A&A regulations have nothing to do with Medicaid regulations. Part of the elder law attorney’s job is to advise clients that what may work for one program will not necessarily work for the other and to provide options and counsel. This is not what these “helpful” salespeople do. Instead, they will convince elderly veterans and their families that they must unload assets, and the “best” way to do that is by purchasing an annuity. What the veteran is not told is that these are more often than not deferred variable annuities. The money in these accounts will not be accessible to the veteran for a number of years without payment of a premium, and may not begin paying out income for many years (I’ve seen deferred variable annuities sold to 75-year-olds that would not begin to make payments until the consumer turned 90!) What’s more, these annuities are generally treated as being either available assets or disqualifying transfers (depending on what state you’re in) by the state Medicaid agency, thus making the veteran or his spouse unable to get Medicaid benefits unless the annuity is cashed in. In the meantime, the salesman has gotten a nice, juicy commission.

Even if the annuity is an immediate payout annuity, the amount of the payment might be so high as to cause the veteran to have too much income to qualify for A&A – but because the payout is immediate, the investment cannot be undone.

What’s particularly shameful is that some assisted living facilities seem to see nothing wrong in allowing these salesmen to put on seminars and encouraging their residents to use their services. While I understand the facility’s desire to be sure that their residents have sufficient funds to pay their bills, they have a legal and ethical duty to make sure that their residents aren’t getting fleeced as a result of programs which they promote.

Massachusetts is fortunate in that every town is served by a Veterans Service Agent (VSA) paid for by the taxpayers, whose job includes doing this sort of paperwork. These applications are also handled at no charge by VSAs who are affiliated with such organizations as the Veterans of Foreign Wars. Before you ever think of applying, see an elder law attorney for counseling on your options and advice about whether your income, assets and infirmities may make you eligible for the A&A benefit and important information about how the trust and transfer-of-assets rules differ from those of Medicaid. Then contact a VSO for help with the application. Your elder law attorney may also handle the application at no charge as a courtesy to you.

Mom may not be the only one on the hook for her nursing home bill.

Imagine this scenario:

You’re struggling to pay your mortgage.

You’re trying to help your kids get through college.

And now your mother’s nursing home is suing YOU for payment.

This can’t happen, right? Wrong.

Thirty states, including Massachusetts, have seldom-enforced “filial responsibility” laws, requiring children to pay for the need of their indigent parents. The wonder is that these suits don’t happen more often. It’s a particularly frightening thought that persons in their 60s who are still trying to save for their own retirement needs  while trying to help their underemployed children may be sued to pay for the care of a parent who has outlived her money.

One thing that children can do to both protect themselves and their parents is to get Mom and Dad to sit down with an elder law attorney and carefully review how their assets are set up, and to make a plan for when to apply for Medicaid coverage for the nursing home. If Mom and Dad are still insurable, buying them a long-term care insurance policy may be insurance for your own assets. But it all starts with a frank discussion within the family about how health care will be paid for and who will pay for it.

Social Security Survivor’s Benefits and Kids Conceived After a Parent’s Death

In a unanimous decision today, the Supreme Court made it clear that in deciding whether a child born well after a parent’s death as a result of artificial insemination or surrogacy, the law governing what happens to you assets after you pass away without a will shall determine if the child has the right to receive Social Security Survivor’s Benefits. The Court ordered that if state law explicitly says that the child conceived after a parent’s death does not have a right to inherit, then he is not eligible to receive Social Security Survivor’s Benefits off of the deceased parent’s work record.

Although there are currently over 100 cases of this nature pending before the Social Security Administration, this decision may not be all that helpful, because most states’ intestacy statutes simply don’t address the possibility of conception after death. Mind you, the technique of freezing sperm for future use has been around since the 1960s, but many state legislatures have not caught up to the issue of the rights of inheritance of children conceived in this way after the father’ s death. It’s an interesting issue to watch.

The Rosa Parks Estate Mess — an exercise in needless litigation

When Rosa Parks died in 2005, she left no children, but she did have a will, a revocable trust, and a priceless collection of memorabilia. First, a lawsuit was brought in 2007 challenging the will on the grounds of lack of capacity when Mrs. Parks signed it and her revocable trust in 2000. Now there’s more litigation over the disposition of the collection and the conduct of the trustees who were appointed to take over from the trustees Mrs. Parks had appointed. Depending on which side’s attorneys you believe, there’s either been $595,000 or $150,000 spent on legal fees relating to how to sell off the assets and dispose of the profits — so far.

I have to believe that a lot of this mess would have been avoided with more appropriate estate planning that could have occurred at a younger age. Title to this collection and the intellectual property — her image and words  – could have been transferred at that time to her institute, which is now facing a significant loss of value as a result of the litigation. No one is going to look good coming out of this case.